Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Wednesday 25 February 2015
Man sentenced for lying about role in Arch Coal kickback schemeRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced today that Ronald Barnette, 54, of Holden, West Virginia, was sentenced to three years of probation, including six months of home confinement and a $20,000 fine for lying about paying kickbacks at Arch Coal’s Mountain Laurel mining complex.
In July 2014, Barnette pleaded guilty to making a materially false statement in a federal matter by lying about paying kickbacks to David Runyon, Mountain Laurel’s general manager. Barnette owned and operated Mining Repair Specialist, Inc., which rebuilt mining equipment from Mountain Laurel. Barnette admitted that from 2009-2010, he paid around $300,000 in kickbacks so Runyon would continue hiring his company to do work at the mine. Barnette further admitted to lying to agents when asked about paying cash kickbacks.
Barnette forfeited $400,000 to the Federal Bureau of Investigation in connection with the kickback scheme.
United States District Judge Thomas E. Johnston imposed the sentence.
This case stems from a larger investigation conducted by the FBI, Internal Revenue Service Criminal Investigation, United States Postal Inspection Service and West Virginia State Police. Assistant United States Attorney Meredith George Thomas handled the prosecution.
###
Man Who Operated ‘Revenge Porn’ Website Pleads Guilty in Hacking Scheme That Yielded Nude Photos from Google Email AccountsRead the Press Release
LOS ANGELES – A Northern California man who operated the Internet’s best-known “revenge porn” website pleaded guilty late this afternoon to federal computer hacking and identity theft charges for hiring another man to hack into e-mail accounts to steal nude photos that were later posted on his website.
Hunter Moore, 28, of Woodland, California, who operated the now-defunct isanyoneup.com, pleaded guilty today to one count of unauthorized access to a protected computer to obtain information for purposes of private financial gain and one count of aggravated identity theft.
As a result of his guilty pleas, Moore faces a statutory maximum sentence of seven years in federal prison, and a mandatory minimum sentence of two years.
Moore pleaded guilty before United States District Judge Dolly M. Gee, who is scheduled to sentence the defendant on June 24.
The alleged hacker – Charles Evens, 26, of Studio City, California – still faces a host of federal charges and is scheduled to go on trial before Judge Gee on March 17.
Evens faces charges contained in a 15-count grand jury indictment that accuses him of conspiracy, seven counts of unauthorized access to a protected computer to obtain information and seven counts of aggravated identity theft.Moore operated the website http://isanyoneup.com, where he posted, among other things, nude or sexually explicit photos of victims. The pictures were submitted by individuals, without the victim’s permission, for purposes of revenge, Moore admitted in court. However, to obtain more photos for the website, Moore instructed Evens to gain unauthorized access to – in other words, to hack into – Google e-mail accounts, according to Moore’s plea agreement. Moore sent payments to Evens in exchange for nude photos unlawfully obtained from the victims’ accounts. Moore then posted the illegally obtained photos on his website, without the victims’ consent, he admitted in the plea agreement.
The plea agreement discusses one specific incident in late 2011 when Moore sent an email to Evens that stated Moore would like as many nude pictures from hacked emails accounts as possible. In response, Evens accessed a victim’s e-mail account without authorization and obtained pictures, Evens provided the pictures to Moore, and Moore paid $145.70 to defendant Evens using Paypal. One of the nude photos was posted on isnayoneup.com on December 29, 2011, according to the plea agreement.
The indictment alleges that Evens hacked into email accounts belonging to hundreds of victims.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The investigation in this case was conducted by the Federal Bureau of Investigation.
Release No. 15-021
Major Marijuana Trafficker Sentenced to More Than 10 YearsRead the Press Release
Tampa, Florida – U.S. District Judge James Moody today sentenced Aaron Edwin Remaley (39, Riverview) to 10 years and 1 month in federal prison for conspiring to distribute and possessing with intent to distribute 100 kilograms or more of marijuana. As part of his sentence, the Court also entered a money judgment in the amount of $284,250, representing part of the proceeds of the charged criminal conduct. Remaley pleaded guilty on August 26, 2014.
According to court documents, Remaley conspired with a group of associates to ship thousands of pounds of marijuana via UPS from the Texas border to Sarasota, Hillsborough, and Polk Counties. Evidence presented at his sentencing hearing revealed that in 2014, he had arranged for the shipment of at least 1,860 pounds of marijuana and funneled at least $927,000 of related drug proceeds back to his suppliers in Texas.
This case was investigated by the Drug Enforcement Administration, the Sarasota County Sheriff’s Office, the Florida Department of Law Enforcement, the Hillsborough County Sheriff’s Office, and the Polk County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Patrick Scruggs.
Local Musician Charged in Stolen Identity Tax Refund SchemeRead the Press Release
St. Louis, MO – OLUFUNSHO ADESHINA, of St. Louis, Missouri, has been charged in a criminal complaint in U.S. District Court alleging his participation in a stolen identity tax fraud scheme. IRS Criminal Investigators discovered tax refunds purportedly due to various individuals being deposited in numerous financial accounts across the St. Louis area in the name of Adeshina or businesses he controlled. Because of the suspicious nature of the deposits, a number of financial institutions froze the funds and brought the matter to the attention of law enforcement.According to the criminal complaint filed on Friday, nearly $200,000 from the United States Treasury has flowed into more than 20 financial accounts controlled by Adeshina since the beginning of 2015. Tax authorities have been able to confirm at least one of these deposits was generated by a false and fraudulent tax return prepared in the name of an individual taxpayer identified as "R.F."
Public records and research suggest Adeshina, a native of Nigeria, is a local guitarist. When federal agents attempted to contact Adeshina, it appeared Adeshina had recently left the St. Louis area. Anyone with information on Adeshina’s whereabouts is asked to contact the St. Louis Office of IRS Criminal Investigation at 314-612-4097.
As is always the case, charges set forth in a criminal complaint are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.Lebanon Man Sentenced to 2½ Years for Illegal Possession of a FirearmRead the Press Release
Contact: Michael J. Conley
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Lawrence Young, 54, of Lebanon, Maine, was sentenced today in U.S. District Court by Judge D. Brock Hornby to 2½ years in prison for being a felon in possession of a firearm. Young pleaded guilty on September 30, 2014.
According to court records, on May 1, 2014, Young was discovered hunting with a 16-gauge shotgun in the Acton, Maine area. Young was prohibited from possessing firearms based on prior felony convictions for illegally possessing a firearm in 2013 and violating conditions of release in 2011.
The investigation was conducted by the Maine State Police; the Maine Warden Service; and the Bureau of Alcohol, Tobacco, Firearms and Explosives.Las Cruces Resident Sentenced for Trafficking Heroin in Doña Ana CountyRead the Press Release
ALBUQUERQUE – Nathan Andrew Maestas, 31, of Las Cruces, N.M., was sentenced today in Las Cruces federal court to 72 months in federal prison followed by three years of supervised release for heroin trafficking charges in connection with five cases filed in 2013 as the result of a multi-agency investigation into drug trafficking in Doña Ana County, N.M.
Maestas, together with a Mexican national and 19 other Las Cruces residents, were charged with heroin trafficking offenses in five indictments filed in Nov. 2013, as a result of a multi-agency investigation led by the FBI that targeted the heroin trafficking activities of Jovita Belmonte-Gonzalez in Doña Ana County. Belmonte-Gonzales, 43, a Mexican national from Ciudad Juarez, Chihuahua, Mexico, was named as the lead defendant in four of five indictments which charged her with supplying heroin to five drug trafficking organizations that distributed heroin in Doña Ana County.
The lead defendant, Belmonte-Gonzalez, pled guilty to heroin trafficking charges in four of the five cases in June 2014, and admitted conducting frequent heroin transactions with her co-defendants between June 2013 and Oct. 2013. Court records reflect that Belmonte-Gonzalez typically negotiated heroin sales by telephone from Juarez and her co-defendants traveled from Doña Ana County to Juarez where they purchased the heroin from her and later distributed the drugs in Doña Ana County. Belmonte-Gonzales faces a mandatory minimum of ten years in prison and a maximum of life in prison, and will be deported after she completes her prison sentence. She remains in federal custody pending her sentencing hearing, which has yet to be scheduled.
Maestas entered a guilty plea to the indictment on June 16, 2014, and admitted conspiring with Belmonte-Gonzalez and two other codefendants to distribute heroin in Doña Ana County from Sept. 25, 2013 through Oct. 27, 2013. Maestas also admitted being a felon in possession of a firearm.
To date, 20 of the 21 defendants charged as a result of the investigation have entered guilty pleas. Defendant Patrick Gonzales has entered a not guilty plea. Indictments are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
These cases are being prosecuted by Assistant U.S. Attorney E. Garreth Winstead, III, of the U.S. Attorney’s Las Cruces Branch Office. The investigation leading to the charges in the four cases was led by the Las Cruces office of the FBI in collaboration with U.S. Customs and Border Protection, the U.S. Border Patrol, the Las Cruces office of the DEA, the U.S. Marshals Service, the Las Cruces Police Department and the Doña Ana County Sheriff’s Office.
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.
This case is being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Las Acusaciones Federales Retornaron Contra Residentes Del Area De Jackson - En Esquema De Fraude A Los Servicios De Atencion Medica A Titulares Del MedicareRead the Press Release
Jackson, Tennessee - Calvin Bailey, de 64 años, de Jackson, Tennessee.; Sandra Bailey, de 64 años, de Jackson, Tennessee; y Cindy Mallard, de 49 años, de Bradford, Tennessee; han sido acusados en una acusación que alega una conspiración para cometer fraude a los servicios de atención médica y al pago de comisiones ilegales en relación con los servicios de salud, anunció el fiscal federal para el Distrito Oeste de Tennessee, Edward L. Stanton III. Sandra Bailey también fue acusado de ocho cargos de fraude de atención médica y nueve cargos de pago de comisiones ilegales a proveedores de salud y fuentes paciente-referencia.
Las comparecencias iniciales para los tres acusados se celebraron hoy en el Palacio de Justicia de Estados Unidos en Jackson, Tennessee, y todos fueron puestos en libertad bajo fianza. Sandra Bailey y Mallard cada una trabajó durante varios años en negocios dedicados al cuidado de la salud en el àrea de Jackson, Tennessee. Calvin Bailey ha sido empleado como el director de la escuela secundaria Medina en Medina, Tennessee, y también ha sido empleado para empresas de suministro de equipos médicos.
Según la acusación, Sandra Bailey y Calvin Bailey pagaron sobornos ilegales a fuentes de referencia para identificar los titulares de la tarjeta de Medicare. Sandra Bailey y, al menos en una ocasión, Calvin Bailey, le vendían sillas de ruedas eléctricas comercializadas y soportes de la espalda a los titulares de la tarjeta de Medicare. Sandra Bailey le dijo a titulares del Medicare que el equipo sería gratis y que necesitaban conseguir las sillas de ruedas aunque las necesitan o no porque Medicare podría dejar de pagar por ellos. Aunque Medicare paga sólo el 80% de los costes para las sillas de ruedas, algunos de los titulares de la tarjeta tenían seguros secundarios con otras compañías, incluyendo TennCare y TriCare, que pagan el 20% restante. Para los pacientes sin seguro secundario, los acusados ayudaron a los pacientes a llenar los formularios que los dispensen a cualquier pago por la tarjeta de titular.
Ademàs de las comisiones ilegales a las fuentes de referencia, Sandra Bailey también hizo pagos de soborno ilegales a algunos médicos que realizaron - o que se supone que han realizado evaluaciones - cara a cara con los titulares de la tarjeta para calificarlos a obtener las sillas de ruedas eléctricas. Cindy Mallard, quien era la directora de la oficina en la Clínica de Medicina Familiar Medina en Medina, Tennessee, asistida por Sandra Bailey para visitar titulares con Sandra Bailey y llenarle los formularios que debían ser llenado durante una evaluación cara a cara de un paciente por un médico u otro proveedor de salud calificado. Mallard entonces asistió a Sandra Bailey en conseguir los formularios firmados por los proveedores que se supone que tengan evaluaciones realizadas cara a cara de los titulares de la tarjeta. Mallard también recibió pagos de soborno en nombre de uno de los proveedores de atención médica que firmaron los formularios.
Después que los acusados identificaban a los titulares de las tarjetas y arreglaban los documentos de evaluación que iban a presentar a Medicare para pagar el equipo médico, recibían comisiones de las ventas que eran pagadas a Calvin Bailey, Sandra Bailey, Mallard, u otros miembros de la familia de Bailey y Mallard.
Esta investigación està siendo realizada por el Departamento de Salud y Servicios Humanos, Oficina del Inspector General, la Oficina Federal de Investigaciones y la Oficina de Investigaciones de Tennessee. El fiscal federal adjunto John Fabian representa al gobierno.
Los cargos y alegaciones contenidos en las acusaciones son meras acusaciones y los acusados son considerados inocentes hasta que se demuestre su culpabilidad.
Version en Inglés
Justice Department Settles Second Pregnancy Discrimination Lawsuit Against the Davie, Florida, Fire DepartmentRead the Press Release
The Justice Department today announced that it has reached a consent decree with the town of Davie, Florida, to resolve allegations that the Davie Fire Department discriminated against firefighter/paramedic Lori Davis because of her pregnancy and retaliated against firefighter/paramedic Monica Santana because she complained about gender discrimination. Title VII of the Civil Rights Act of 1964 prohibits discrimination in employment on the basis of race, color, sex, national origin and religion.
According to the Justice Department, the consent decree resolves allegations of disparate treatment based on pregnancy that resulted from light duty policies implemented by the Davie Fire Department. In 2012, the Department of Justice challenged those discriminatory light duty policies in a related pattern or a practice Title VII case resulting in the filing of a complaint and consent decree to resolve the case. The consent decree entered by the U.S. District Court for the Southern District of Florida required that the fire department abandon its existing discriminatory light duty policies and adopt new, non-discriminatory policies. This new complaint is the result of individual charges of discrimination referred to the Justice Department by the Equal Employment Opportunity Commission.
As alleged by the Justice Department in this complaint, Davis worked for the Davie Fire Department under its prior policies and was adversely affected by those policies which were implemented in violation of Title VII. Under Title VII, discrimination based on sex includes discrimination due to pregnancy, and requires that women affected by pregnancy be treated the same as other employees who are similar in their ability or inability to work. Under federal law, an employer may not retaliate against employees because they complain about discrimination based on sex.
As alleged in the complaint, Davis’s doctor wanted Davis on light duty during her pregnancy. The fire department’s policy, however, would not allow her light duty during her first trimester. Davis continued to work and eventually was required to fight a fire while pregnant. She suffered a miscarriage after doing so. The complaint also alleges that Santana complained about other policies and practices at the fire department that she reasonably believed discriminated against female firefighters. After she complained about the discriminatory treatment, the fire department responded to her complaints by taking adverse actions against her designed to discourage similar complaints.
The consent decree, filed simultaneously with the complaint in U.S. District Court for the Southern District of Florida must still be approved by the federal court. Under the terms of the agreement, the fire department must review and adopt appropriate anti-retaliation policies to protect its employees from further violations of Title VII and conduct training of its personnel to ensure that they properly handle future complaints under Title VII. The fire department must also pay monetary awards to compensate Davis, Santana, and two other similarly-situated, pregnant firefighters. The total monetary awards to all four women will exceed $400,000.
“Every day, expectant mothers after consulting with their doctors make difficult decisions about how and, more importantly, when to restrict their work duties due to pregnancy,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “The Civil Rights Division is firmly committed to vigorous enforcement of Title VII’s prohibitions against pregnancy discrimination and retaliation so that women can make decisions regarding their pregnancies and try to remedy discriminatory treatment without fear of unwarranted repercussions in the work place after doing so.”
“Firefighters are dedicated public servants who put their lives at risk every day to protect the citizens of our community,” said U.S. Attorney Wilfredo A. Ferrer of the Southern District of Florida. “We are committed to enforcing the federal laws that protect expectant mothers against discrimination so that they will not be forced to choose between their job and their decision to have a family.”
The continued enforcement of Title VII has been a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.usdoj.gov/crt/.
Justice Department Reaches Settlement with Santander Consumer USA to Resolve Allegations Concerning over 1,100 Illegal Car Repossessions Against Service MembersRead the Press Release
Santander Consumer USA Inc. has agreed to pay at least $9.35 million to resolve a lawsuit by the Department of Justice alleging that the motor vehicle lender violated the Servicemembers Civil Relief Act (SCRA), the Justice Department announced today. The complaint and the settlement, which is subject to court approval, were filed today in the U.S. District Court for the Northern District of Texas.
The settlement covers the improper repossessions of 1,112 motor vehicles between January 2008 and February 2013. The proposed consent order represents the largest settlement for illegal automobile repossessions ever obtained by the United States under the SCRA.
“This is a just resolution that will provide service members with financial relief and help repair their bad credit caused by Santander’s improper repossessions and fee collections with respect to more than 1,100 cars,” said Acting Associate Attorney General Stuart Delery. “The Department of Justice will continue devoting time and resources to protect our service members and their families from such unjust actions and hold bad actors accountable."
“Those who answer this nation’s call to duty understandably have much on their minds while they are in military service,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “Whether their car will be seized and sold at auction should not be an additional worry. We will continue to vigorously pursue lenders who fail to take the simple steps necessary to determine, before repossessing a car, whether it is owned by a service member.”
The SCRA protects service members against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the service member took out the loan, and made a payment, before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the service member, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the service member. By failing to obtain court orders before repossessing motor vehicles owned by protected service members, Santander prevented service members from obtaining a court’s review of whether their repossessions should be delayed or adjusted in light of their military service.
The lawsuit alleges that Santander initiated and completed 760 repossessions, without court orders, of motor vehicles owned by SCRA-protected service members. The agreement requires Santander to pay $10,000 plus compensation for any lost equity (with interest) to each of these service members. The lawsuit also alleges that Santander sought to collect fees arising from an additional 352 repossessions that unrelated motor vehicle lenders had conducted in violation of the SCRA before Santander acquired the loans. The agreement requires Santander to pay $5,000 to each of these service members. Santander also must repair the credit of all affected service members.
“The SCRA is an important protection for the men and women serving our country in the armed forces, and this settlement not only will rectify the past improper repossessions of service members’ vehicles, but will work to prevent such improper repossessions in the future,” said Acting U.S. Attorney John Parker of the Northern District of Texas.
For future repossessions, the settlement requires Santander to check the Defense Department’s automated database to see if a car’s owner is in military service prior to conducting a repossession.
The Department of Justice first learned of Santander’s repossession practices through a referral from the U.S. Army’s Legal Assistance Program. The referral involved a claim that Santander illegally repossessed the car of a service member, U.S. Army Specialist Joshua Davis, in the middle of the night, after having been informed that he was at basic training. The department also opened its investigation after learning that Santander used an arbitration clause included in its loan documents to prevent a second service member from pursuing systematic relief through a class action lawsuit he filed alleging that Santander had repossessed service members’ vehicles in violation of the SCRA.
As part of its investigation, the United States has already identified Santander’s illegal repossessions, and efforts to collect unlawful repossession fees, occurring between January 2008 and February 2013. Service members identified based on that investigation will be contacted by an independent settlement administrator later this year. The settlement also requires Santander to conduct a review and provide compensation for any additional unlawful repossessions that may have occurred since February 2013. All service members who are eligible for compensation from the settlement will be contacted by the administrator, and do not need to contact the Department of Justice.
The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Right Division. Since the Fair Lending Unit was established in February 2010, it has filed or resolved 37 lending matters under the Fair Housing Act, the Equal Credit Opportunity Act, and the Servicemembers Civil Relief Act. The settlements in these matters provide for over $1.2 billion in monetary relief for impacted communities and individual borrowers. The Attorney General’s annual reports to Congress on ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications.
The Civil Rights Division is a member of the Financial Fraud Enforcement Task Force. President Obama established this task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
The Civil Rights Division is the component within the Department of Justice authorized to enforce the SCRA. This federal law provides protections for active duty service members in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about SCRA enforcement by the Justice Department, please visit www.servicemembers.gov or call 1-800-896-7743, Mailbox 91.
Justice Department Reaches Settlement with Santander Consumer USA to Resolve Allegations Concerning over 1,100 Illegal Car Repossessions Against Service MembersRead the Press Release
WASHINGTON – Santander Consumer USA Inc. has agreed to pay at least $9.35 million to resolve a lawsuit by the Department of Justice alleging that the motor vehicle lender violated the Servicemembers Civil Relief Act (SCRA), the Justice Department announced today. The complaint and the settlement, which is subject to court approval, were filed today in the U.S. District Court for the Northern District of Texas.
The settlement covers the improper repossessions of 1,112 motor vehicles between January 2008 and February 2013. The proposed consent order represents the largest settlement for illegal automobile repossessions ever obtained by the United States under the SCRA.
“This is a just resolution that will provide service members with financial relief and help repair their bad credit caused by Santander’s improper repossessions and fee collections with respect to more than 1,100 cars,” said Acting Associate Attorney General Stuart Delery. “The Department of Justice will continue devoting time and resources to protect our service members and their families from such unjust actions and hold bad actors accountable."
“Those who answer this nation’s call to duty understandably have much on their minds while they are in military service,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “Whether their car will be seized and sold at auction should not be an additional worry. We will continue to vigorously pursue lenders who fail to take the simple steps necessary to determine, before repossessing a car, whether it is owned by a service member.”
The SCRA protects service members against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the service member took out the loan, and made a payment, before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the service member, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the service member. By failing to obtain court orders before repossessing motor vehicles owned by protected service members, Santander prevented service members from obtaining a court’s review of whether their repossessions should be delayed or adjusted in light of their military service.
The lawsuit alleges that Santander initiated and completed 760 repossessions, without court orders, of motor vehicles owned by SCRA-protected service members. The agreement requires Santander to pay $10,000 plus compensation for any lost equity (with interest) to each of these service members. The lawsuit also alleges that Santander sought to collect fees arising from an additional 352 repossessions that unrelated motor vehicle lenders had conducted in violation of the SCRA before Santander acquired the loans. The agreement requires Santander to pay $5,000 to each of these service members. Santander also must repair the credit of all affected service members.
“The SCRA is an important protection for the men and women serving our country in the armed forces, and this settlement not only will rectify the past improper repossessions of service members’ vehicles, but will work to prevent such improper repossessions in the future,” said Acting U.S. Attorney John Parker of the Northern District of Texas.
For future repossessions, the settlement requires Santander to check the Defense Department’s automated database to see if a car’s owner is in military service prior to conducting a repossession.
The Department of Justice first learned of Santander’s repossession practices through a referral from the U.S. Army’s Legal Assistance Program. The referral involved a claim that Santander illegally repossessed the car of a service member, U.S. Army Specialist Joshua Davis, in the middle of the night, after having been informed that he was at basic training. The department also opened its investigation after learning that Santander used an arbitration clause included in its loan documents to prevent a second service member from pursuing systematic relief through a class action lawsuit he filed alleging that Santander had repossessed service members’ vehicles in violation of the SCRA.
As part of its investigation, the United States has already identified Santander’s illegal repossessions, and efforts to collect unlawful repossession fees, occurring between January 2008 and February 2013. Service members identified based on that investigation will be contacted by an independent settlement administrator later this year. The settlement also requires Santander to conduct a review and provide compensation for any additional unlawful repossessions that may have occurred since February 2013. All service members who are eligible for compensation from the settlement will be contacted by the administrator, and do not need to contact the Department of Justice.
The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Right Division. Since the Fair Lending Unit was established in February 2010, it has filed or resolved 37 lending matters under the Fair Housing Act, the Equal Credit Opportunity Act, and the Servicemembers Civil Relief Act. The settlements in these matters provide for over $1.2 billion in monetary relief for impacted communities and individual borrowers. The Attorney General’s annual reports to Congress on ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications.
The Civil Rights Division is a member of the Financial Fraud Enforcement Task Force. President Obama established this task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
The Civil Rights Division is the component within the Department of Justice authorized to enforce the SCRA. This federal law provides protections for active duty service members in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about SCRA enforcement by the Justice Department, please visit www.servicemembers.gov or call 1-800-896-7743, Mailbox 91.
Judge Sentences Pittsburgh Man to 5 Years in Prison for Participating in Heroin Distribution RingRead the Press Release
PITTSBURGH - A resident of Pittsburgh, Pennsylvania, has been sentenced in federal court to 60 months in prison for conspiring to possess with intent to distribute and distribution of 100 grams or more of heroin, United States Attorney David J. Hickton announced today.
Chief United States District Judge Joy Flowers Conti imposed the sentence on Samuel Brooks, 28, formerly of Pittsburgh, Pennsylvania.
According to information presented to the court, from in and around June, 2013, and continuing thereafter to in and around May, 2014, the Brooks conspired with others to possess with intent to distribute and distribute 100 grams or more of heroin.
Assistant United States Attorneys Amy L. Johnston and Cindy K. Chung prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation, the FBI Greater Pittsburgh Safe Street Task Force, Wilkinsburg Police Department, Allegheny County Sheriff’s Office, Pennsylvania Office of the Attorney General, Munhall Police Department, Duquesne Police Department, Monroeville Police Department, Allegheny County Police Department, West Mifflin Police Department and the Pittsburgh Bureau of Police for the investigation leading to the successful prosecution of Brooks.
Jefferson County Man Sentenced to 162 Months on Crack Cocaine ChargesRead the Press Release
Kenez K. Parks, 28, of Mt. Vernon, Illinois, was sentenced to 162 months in federal prison, to be followed by three years’ supervised release, and fined $150, on crack cocaine charges, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Parks had previously pleaded guilty to three counts in a federal indictment. Count 1 charged that on August 8, 2013, in Jefferson County, Parks knowingly and intentionally distributed crack cocaine. Count 2 charged that on August 9, 2013, in Jefferson County, Parks knowingly and intentionally distributed crack cocaine. Count 3 charged that on August 12, 2013, in Jefferson County, Parks knowingly and intentionally distributed crack cocaine.
The investigation in this case was conducted by the Joint Narcotics Unit of the Mt. Vernon Police Department and the Jefferson County Sheriff’s Department.
The case is being handled by Assistant United States Attorney George Norwood.
Jefferson City Bank Officer Indicted for Stealing $410,000Read the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Jefferson City, Mo., woman was indicted by a federal grand jury today for embezzling $410,000 from the bank where she was employed.
Katherine Nicholle Brown, 28, of Jefferson City, was charged in an indictment returned by a federal grand jury in Jefferson City.
Brown was previously employed as the lead teller at Hawthorn Bank in Jefferson City. Today’s indictment alleges that Brown embezzled $410,000 from December 2012 to Sept. 19, 2014, by taking money from the bank vault for her personal use.
Dickinson cautioned that the charge contained in this indictment is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the FBI.
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney’s Office announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Judge Johnston in Great Falls on February 24, 2015 and entering pleas of Not Guilty were:
- NICOLE MARIE BROCKIE, a 41-year-old resident of Harlem, appeared on charges of theft of federally provided welfare benefits by fraud, federal welfare assistance fraud, and theft from an Indian tribal organization. If convicted of the most serious charges contained in the indictment, BROCKIE faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by Health and Human Services Office of Inspector General. PACER Case Reference: 15-05
Appearing before U.S. Magistrate Judge Lynch in Missoula on February 24, 2015 and entering pleas of Not Guilty were:
- JOSEPH BRENT LOFTIS, a 60-year-old resident of Irving, Texas, appeared on charges of wire fraud and money laundering. If convicted of the most serious charges contained in the indictment, LOFTIS faces 20 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Internal Revenue Service and the Federal Bureau of Investigation. PACER Case Reference: 15-11
Appearing before U.S. Magistrate Judge Johnston in Great Falls on February 23, 2015 and entering pleas of Not Guilty were:
- FRANK GREGORY HENRY, a 51-year-old resident of Box Elder, appeared on charges of willful failure to file a federal income tax return and federal income tax fraud/filing a false return. If convicted of the most serious charge contained in the indictment, HENRY faces 3 years in prison, $100,000 in fines and 1 year supervised release. The case was investigated by the Internal Revenue Service, U.S. Department of Interior Office of Inspector General, Federal Bureau of Investigation, Environmental Protection Agency Office of Inspector General and Health and Human Services Office of Inspector General. PACER Case Reference: 15-06
- MELODY BILLY HENRY, a 50-year-old resident of Box Elder, appeared on charges of willful failure to file a federal income tax return and federal income tax fraud/filing a false return. If convicted of the most serious charge contained in the indictment, HENRY faces 3 years in prison, $100,000 in fines and 1 year supervised release. The case was investigated by the Internal Revenue Service, U.S. Department of Interior Office of Inspector General, Federal Bureau of Investigation, Environmental Protection Agency Office of Inspector General and Health and Human Services Office of Inspector General. PACER Case Reference: 15-06
Appearing before U.S. Magistrate Judge Ostby in Billings on February 20, 2015, and entering pleas of Not Guilty were:
- ANDREW WAYNE HULEN, a 25-year-old resident of Billings, appeared on charges of failure to register as a sex offender. If convicted of the charge contained in the indictment, HULEN faces 10 years in prison, $250,000 in fines and lifetime supervised release. The case was investigated by the U.S. Marshals Service. PACER Case Reference: 15-12
- WILJO CLEVE SPANG, a 23-year-old resident of Lame Deer, appeared on charges of failure to register as a sex offender. If convicted of the charge contained in the indictment, SPANG faces 10 years in prison, $250,000 in fines and lifetime supervised release. The case was investigated by the U.S. Marshals Service. PACER Case Reference: 15-16
Appearing before U.S. Magistrate Judge Ostby in Billings on February 19, 2015, and entering pleas of Not Guilty were:
- JACQUELINE SUE SPITZER, a 47-year-old resident of Laurel, appeared on charges of bank fraud. If convicted of the most serious charge contained in the indictment, SPITZER faces 30 years in prison, $1,000,000 in fines and 5 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference: 15-08
Appearing before U.S. Magistrate Judge Lynch in Missoula on February 18, 2015, and entering pleas of Not Guilty were:
- DOUGLAS JAMES GOSNELL, a 61-year-old resident of Anaconda, appeared on charges of possession of a firearm by a person under a domestic order and receipt of a firearm while subject of an indictment or information. If convicted of the most serious charge contained in the indictment, GOSNELL faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. PACER Case Reference: 15-09
- ANGEL ITURBE-GONZALEZ, a 36-year-old fugitive, appeared on charges of conspiracy to distribute controlled substances and possession with intent to distribute controlled substances. If convicted of the most serious charge contained in the indictment, ITURBE-GONZALEZ faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by Homeland Security Investigations and Montana Highway Patrol. PACER Case Reference: 14-23
Appearing before U.S. Magistrate Judge Lynch in Missoula on February 18, 2015, and entering pleas of Not Guilty were:
- MARK ANTHONY FOREMAN, a 56-year-old resident of California, appeared on charges of conspiracy to distribute methamphetamine and possession with intent to distribute methamphetamine. If convicted of the most serious charge contained in the indictment, FOREMAN faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by the Drug Enforcement Administration and the Missoula HIDTA. PACER Case Reference: 14-42
Appearing before U.S. Magistrate Judge Lynch in Missoula on February 13, 2015, and entering pleas of Not Guilty were:
- LAURI L. SHAFFER, a 54-year-old-resident of Pryor, appeared on charges of misappropriation of postal funds. If convicted of the charge contained in the indictment, SHAFFER faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the U.S. Postal Service Office of Inspector General. PACER Case Reference: 14-132
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Home Health Care Company Owner Indicted for Tax & Health Care Fraud, Money LaunderingRead the Press Release
COLUMBUS – A federal grand jury has charged JoAnna Ochieng, 66, of Columbus, Ohio, with tax fraud, health care fraud and money laundering in an indictment returned in Columbus.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Lamont Pugh, Special Agent in Charge, Department of Health and Human Services Office of Inspector General, Ohio Attorney General Mike DeWine and Kathy Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), announced the indictment which was unsealed today.
Ochieng was charged with five counts of filing false partnership income tax returns, one count of conspiracy to commit health care fraud, one count of health care fraud scheme, 20 counts of health care false statements and three counts of money laundering.
According to the indictment, from November 2011 until March 2013, Ochieng allegedly defrauded Ohio Medicaid in excess of $400,000. The defendant allegedly instructed parents whose children were receiving home health care services to “swap” time sheets with other parents who were providing home health care services to their own children. This would give the false appearance that parents were providing home health services to children other than their own. Ochieng would then allegedly instruct individuals to bill for care, knowing that it was illegal to bill for care that parents provided to their own minor children.
Furthermore, Ochieng allegedly directed these individuals to inflate the hours of care permitted and encourage doctors to sign off on these inflated hours without making a determination of medical necessity. It is also alleged that she falsely billed for split nursing visits.
In addition, Ochieng allegedly defrauded the Ohio Medicaid Program relative to the delivery of and the payment for health care benefits.
The 30-count indictment alleges that Ochieng, who owned and operated Healthy Solutions Home Health Services LLC, under-reported her earnings. The defendant allegedly filed a false partnership income tax return and under-reported the gross receipts for her health services company for 2006 by $536,838; for 2007 by $493,978; for 2008 by $20,920; for 2009 by $185,693 and for 2010 by $287,228.
Healthy Solutions Home Health Services LLC operated at locations in Columbus, Bexley, Washington Courthouse and Hillsboro, Ohio.
It has been alleged that Ochieng transferred approximately $1 million from the U.S. to Turk and Caicos. The indictment contains two forfeiture allegations relative to funds on deposit at the financial institution in Turks and Caicos, as well as the gross proceeds traceable to these offenses in an amount of money equal to $436,305.69.
Conspiracy to commit health care fraud is a crime punishable by up to 10 years in prison. Filing a false partnership return is a crime punishable by up to three years imprisonment. Health care fraud scheme carries a maximum penalty of 10 years imprisonment. Making health care false statements is a crime punishable by up to five years in prison. Ochieng is charged with two money laundering counts carrying a maximum penalty of 20 years in prison and one money laundering count carrying a maximum penalty of 10 years in prison.
Ochieng was arrested today by agents of IRS Criminal Investigation and Health and Human Services, Office of Inspector General.
“The Medicaid Fraud Control Unit within my office is dedicated to working with federal authorities to investigate and prosecute those who manipulate the health care system to collect money that they are not entitled to,” said Attorney General DeWine. “Those who believe that they can outsmart the investigators trained to identify this type of fraud should think again.”
“Money gained through illegal sources, such as healthcare fraud, is part of the untaxed, underground economy,” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “To combat healthcare fraud, CI provides financial investigative expertise to multi-agency task forces where we follow the money trail from the crime to the culprit.”
U.S. Attorney Stewart commended the cooperative law enforcement investigation, as well as Assistant U.S. Attorneys Ken Affeldt and Dan Brown and Maritsa Flaherty with the Ohio Attorney General’s Office, who are prosecuting the case.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
Heroin dealers plead guilty to federal chargesRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced today that Randolph Ingram, 55, of Detroit; and Rachel Jade Corrigan, 26, of Huntington, West Virginia, pleaded guilty to heroin charges.
Ingram admitted that on Sept. 27, 2014, he used a phone to arrange a heroin sale with a confidential informant in Lewisburg, West Virginia. Corrigan admitted to assisting Ingram by transporting the heroin from Huntington to Lewisburg, and taking the money from the sale back to Huntington.
Immediately following the drug deal, authorities arrested Ingram and Corrigan, and recovered the heroin and money.
Ingram faces up to four years in federal prison and a $250,000 fine. Corrigan faces up to 20 years in federal prison and a $1 million fine. Both are scheduled to be sentenced on June 17, 2015.
United States District Judge Irene C. Berger presided over the plea hearings.
This case is being investigated by the Greenbrier Valley Drug and Violent Crime Task Force. Assistant United States Attorney John File is handling the prosecution.
This case is being prosecuted as part of the Greenbrier Valley Heroin and Pill Initiative, an ongoing effort by the United States Attorney’s Office for the Southern District of West Virginia to combat the sale of heroin and the illicit sale of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down the spread of opiate painkillers in communities across the Southern District.
###
Henryetta Man Pleads Guilty to Methamphetamine DistributionRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that TRAVIS L. SMITH age 32, of Henryetta, Oklahoma, pled guilty to Distribution of Methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(B).
The charge arose from an investigation by the Oklahoma Bureau of Narcotics.
The Indictment alleged that on or about October 22, 2014, within the Eastern District of Oklahoma, the defendant did knowingly and intentionally distribute 50 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II Controlled Substance.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion.
The statutory range of punishment is not more than 20 years imprisonment and/or up to a $5,000,000.00 fine. The defendant will remain in the custody of the United States Marshal Service pending sentencing.
Assistant United States Attorney Shannon Henson represented the United States.
Harvard-Trained Owner of Financial Services Firm Indicted on Charges of Fraud, Obstruction of JusticeRead the Press Release
BOSTON – The Harvard-educated founder of a Boston-based financial services firm was indicted today on multiple charges of fraud and obstruction of justice for allegedly defrauding investors in a $40 million mutual fund.
Daniel Thibeault, 40, of Framingham, was charged in an eight-count indictment with securities fraud, wire fraud, aggravated identity theft, and obstruction of justice. Thibeault was previously arrested on a complaint in December charging him with a single count of securities fraud.
As alleged in the indictment, Thibeault, a 2004 graduate of Harvard Business School, is the founder and principal owner of Graduate Leverage, LLC, an asset management and financial advisory firm. Thibeault also served as the co-portfolio manager of the GL Beyond Income Fund, a mutual fund launched in March 2012 that purported to invest in consumer loans to individuals with graduate degrees – including medical doctors, dentists, veterinarians, and attorneys – who the fund described in marketing materials as “less susceptible to economic downturns.”
The indictment alleges that many of the loans purportedly issued by the fund were fictitious, and the individuals in whose names they were issued – friends and associates of Thibeault – never applied for them and did not receive the money. Instead, Thibeault allegedly used the fictitious loans to divert a portion of the fund’s assets into the operating accounts of his company, and then used the money for business and personal expenses. In an effort to perpetuate and conceal his scheme, Thibeault occasionally used the proceeds of new loans to make interest payments on fictitious loans he had previously caused the fund to issue.
The indictment also alleges that Thibeault sought to obstruct a Securities and Exchange Commission (SEC) investigation of the fund by intentionally misleading SEC examiners about the fund’s operations. Specifically, Thibeault told the SEC during an unannounced examination in December 2014 that the loans in the fund were issued to individual consumers, that the proceeds of the loans went to the individuals listed on the promissory notes or to their creditors, and that neither Thibeault nor Graduate Leverage ever made interest or principal payments on the loans. In fact, Thibeault knew that none of those statements was true.
“The defendant’s alleged lies didn’t stop with investors, but continued even when regulators showed up on his doorstep to examine his books and records,” said United States Attorney Carmen M. Ortiz. “Protecting investors and the integrity of the securities markets from this kind of criminal behavior is a top priority for federal law enforcement agencies and regulators.”
Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, said: “Mr. Thibeault allegedly used his position to steal over $15 million from honest and unsuspecting investors for his own personal piggy bank to prop up his business and personal lifestyle. The FBI hopes this case will serve as a warning to others who are thinking about using their positions within the financial market for their own personal gain. We’re not going to tolerate it.”
The charges of securities fraud, wire fraud and obstruction of justice provide for sentences no greater than 20 years in prison and three years of supervised release. Securities fraud also carries a maximum fine of $5 million, and wire fraud carries a fine of $250,000 or twice the gross gain or loss from the scheme, whichever is greater. The charge of aggravated identity theft provides for a mandatory sentence of two years in prison, which term must be imposed consecutive to any underlying fraud sentence. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Ortiz and SAC Lisi made the announcement today. The United States Attorney’s Office received valuable assistance from the Securities & Exchange Commission in the course of investigating this case. The case is being prosecuted by Assistant U.S. Attorneys Stephen E. Frank and Brian Perez-Daple of Ortiz’s Economic Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Grand Jury Returns 15-Count Indictment Charging Deyoung with Mail Fraud in Connection with Fraud SchemeRead the Press Release
Indictment Alleges He Misappropriated More Than $24 Million In Funds From More Than 5,000 CustomersSALT LAKE CITY - A federal grand jury returned an indictment Wednesday afternoon charging Curtis Lynn DeYoung, age 58, of Draper, Utah, who acted as president and Chief Executive Officer of American Pensions Services (APS) with 15 counts of mail fraud. The indictment alleges DeYoung misappropriated more than $24 million from the accounts of more than 5,000 customers without their knowledge or consent.
U.S. Attorney for Utah Carlie Christensen and FBI Special Agent in Charge Mary Rook announced the indictment this afternoon.
APS was a Utah corporation formed around 1983. It acted as a third-party administrator for self-directed individual retirement accounts. These investments followed a self-directed account structure in accordance with the IRS code, granting beneficiaries broad discretion over investment decisions. According to the indictment, as a third-party administrator, neither APS nor DeYoung had discretionary authority or control over the APS customer funds. APS was responsible only to disburse funds as directed by the beneficiaries.
According to the indictment, beginning in 1998 and continuing until April 2014, DeYoung devised a scheme to defraud and obtain money from APS customers through the use of false and fraudulent representations, promises, and omission of material facts. The indictment alleges DeYoung misappropriated the funds of more than 5,000 APS customers held in two of the three APS bank accounts known as the “Master Trust” accounts which comingled all APS customer cash, including cash deposited into customer IRA accounts and cash generated from customer IRA investments.
The indictment alleges DeYoung used the misappropriated funds from the Master Trust accounts to make personal high-risk, unsecured investments. DeYoung misappropriated the money without notifying APS customers, knowing that the money did not belong to him and that he was using it for purposes not authorized by APS customers, the indictment charges.
According to the indictment, around Oct. 31, 2009, DeYoung made a false accounting entry in APS records in the amount of $24,789,313.65 to conceal the fact that he misappropriated these funds. DeYoung continued to solicit new customers to engage APS as a third-party administrator and concealed the fact that the total cash balances in customer accounts did not equal the amount of cash available in the APS Master Trust accounts because he had misappropriated more than $24 million dollars, the indictment alleges.
In an effort to conceal his scheme, beginning in 1998 and continuing until January 2014, DeYoung mailed false APS account statements to all APS customers that contained inflated cash balances. These inflated cash balances did not equal the amount of cash actually available in the APS Master Trust accounts. The indictment alleges DeYoung knew that APS customers would rely on these statements in determining the value of their APS accounts.
The indictment also includes a notice of intent to seek forfeiture of a sum of money equal to the value of the proceeds of the scheme to defraud, which is approximately $24,789,313.65, upon conviction of any offense in the indictment.
The potential maximum penalty for each count of mail fraud in the indictment is 20 years in prison and a fine of $250,000. A summons will be issued to DeYoung to appear in federal court for an arraignment.
The case is being investigated by special agents of the FBI and prosecuted by Assistant U.S. Attorneys in the U.S. Attorney’s Office in Salt Lake City.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
Georgia Man Plead to Conspiracy to Manufacture and Pass Counterfeit CurrencyRead the Press Release
Contact Person: Bill Day (803) 929-3000
Columbia, South Carolina ---- United States Attorney Bill Nettles stated today that Austin Lee, age 21, of Dallas, Georgia; Morris O. Mega, age 31, of Smyrna, Georgia; and Edward N. Pope, age 24, of Roswell, Georgia each have entered a guilty plea in federal court in Columbia, to conspiracy to manufacture, possess and pass counterfeit currency, a violation of 18 U.S.C. § 371. United States District Judge J. Michelle Childs of Columbia accepted the guilty pleas and will impose sentence after she has reviewed the presentence reports which will be prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that Lee, Mega and Pope and another individual manufactured counterfeit $20 Federal Reserve Notes in Dallas, Georgia, in October 2013, then travelled to North Augusta, S.C. Along the way they passed the counterfeit at various restaurants. Once in North Augusta, Lee purchased an I-pad at a Walmart using $500.00 in counterfeit $20's. The defendants then travelled to Lexington, S.C., where Lee was arrested trying to purchase another I-Pad at another Walmart. The investigation revealed that the defendants had passed 107 counterfeit notes in 6 states resulting in losses of more than $6,000.00.
Mr. Nettles stated the maximum penalty for conspiracy to manufacture, possess and pass counterfeit currency is imprisonment for 5 years and/or a fine of $250,000.
The case was investigated by agents of the Lexington Police Department and the United States Secret Service. Assistant United States Attorney William E. Day, II of the Columbia is prosecuting the case.#####
Fort Smith Career Offender Sentenced to over 10 Years in Prison for Distribution of MethamphetamineRead the Press Release
Fort Smith, Arkansas - Conner Eldridge, United States Attorney for the Western District of Arkansas, announced that Joe Gordon, age 30, of Fort Smith, was sentenced today to 130 months in prison followed by three years of supervised release for the Distribution of Methamphetamine. The Honorable P. K. Holmes, III presided over the sentencing in the United States District Court in Fort Smith.
U.S. Attorney Eldridge commented, “Our office remains steadfast in our commitment to rid our communities of those who choose to participate in the trafficking of illegal narcotics. As a career offender, this defendant’s actions displayed a lack of respect for law enforcement and his fellow citizens. His history of committing crimes merited the lengthy sentence that he received, and his removal from our community will make the Western District of Arkansas a safer place.”
“Today’s sentencing closes the door on a career criminal who felt untouchable and beyond the reach of aggressive, cooperative law enforcement,” said DEA Assistant Special Agent in Charge David Downing. "DEA and our law enforcement partners stand firmly to ensure that criminals who peddle in these poisons and wreak havoc in our communities will never escape from facing the consequences of their criminal activities.”
According to court records, on May 29, 2014, officers with the Fort Smith Police Department arranged for a controlled drug transaction with Joe Gordon at a local place of business in Fort Smith. During the transaction, Gordon provided what he represented to be methamphetamine in exchange for U.S. currency. Following the transaction, officers sent the recovered substance to the Arkansas State Crime Laboratory where it tested positive for methamphetamine. Since this instant offense of conviction is a felony that is a controlled substance offense and Gordon has at least two prior felony convictions of either a crime of violence or a controlled substance offense, he is a Career Offender. Gordon pleaded guilty to the charge on October 16, 2014.
This case was investigated by the Drug Enforcement Administration (DEA) and the Fort Smith Police Department. Assistant United States Attorney Clay Fowlkes prosecuted the case for the United States.
* * * E N D * * *
Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Fort Hall Man Pleads Guilty to Theft from a Tribal OrganizationRead the Press Release
POCATELLO - Demetrius Anthony Gomez, 28, of Fort Hall, Idaho, pleaded guilty yesterday in United States District Court to theft from a tribal organization, U.S. Attorney Wendy J. Olson announced. Gomez was indicted by a federal grand jury on May 28, 2014.
On April 2, 2014, Gomez, an off-duty employee of the Sage Hill Travel Center, a gas station, convenience store and casino on the Fort Hall Indian Reservation, near Exit 89 from Interstate 15, entered the travel center at about 3:50 am. The defendant told his fellow employee at the front desk that he was checking the schedule. The defendant went to the rear office and a few minutes later walked out and exited the store. The fellow employee became suspicious of the defendant and checked the back room. He reviewed the surveillance recording of the room and saw that the defendant had removed money from the safe in the room. A review of the surveillance recording in the front part of the store later showed that the defendant re-entered the store while the fellow employee was checking the back office. The defendant then removed additional money from a box under the cash register. An audit showed $1,984.00 missing. The money belongs to the Sage Hill Travel Center, which is an Indian tribal organization of the Fort Hall Shoshone-Bannock Tribes.
Theft from a tribal organization is punishable by imprisonment up to five years, a fine of up to $250,000, and up to three years of supervised release. Sentencing is scheduled for May 12, 2015, before U.S. District Judge Edward Lodge.
The case was investigated by the Fort Hall Police Department.
Former State Senator Pleads Guilty to Mail FraudRead the Press Release
LITTLE ROCK – Patrick C. Harris, Attorney for the United States, Acting Under Authority Conferred by 28 U.S.C. §515, Jack McQuary, Special Prosecutor for the State of Arkansas and Special Assistant United States Attorney, David T. Resch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation, and Colonel William J. Bryant, Director of the Arkansas State Police, announced today that former Arkansas State Senator Paul J. Bookout, age 52, of Jonesboro, Arkansas waived indictment and entered a plea of guilty to a felony information charging him with one count of mail fraud related to a scheme in which Bookout converted contributions for his 2010 and 2012 election campaigns to his personal use and profit. The waiver and plea hearing took place today in Little Rock before Chief District Judge Brian S. Miller.
“In a betrayal of his oath of office and his duty to the citizens of Arkansas, Mr. Bookout violated the integrity of our government and disrespected those he served by selfishly and brazenly spending campaign funds for his personal use,” stated David Shepard, Assistant Special Agent in Charge of the Little Rock FBI, “The FBI will continue to work together with the United States Attorney’s Office and the Arkansas State Police to ensure that all those who participate in political corruption will be held accountable for their actions.
“I appreciate the cooperation of the United States Attorney’s Office, the FBI, and the Arkansas State Police, who assisted in this case in order to effectively bring a resolution to both the State and Federal violations committed by Mr. Bookout,” stated Special Prosecutor Jack McQuary. “State prosecutors will continue to work with our federal counterparts to bring justice to the citizens of the State of Arkansas with regard to public corruption.”
In 2006, Bookout was elected to the Arkansas State Senate, representing Arkansas Senate District 14. In 2011 and 2012, Bookout served as President Pro Tempore of the Arkansas State Senate. He resigned in August 2013. According to the Information filed today, Bookout deposited campaign contributions for his 2010 and 2012 elections into two bank accounts. Between May 2009 and December 2012, campaign donations totaling $126,500 were deposited into one of those accounts. Between March 2012 and July 2013, campaign donations totaling $62,750 were deposited into the second account. The Information alleges that between May 2009 and July 2013, Bookout unlawfully made payments totaling $150,048.12 from those accounts for personal items and expenses, including clothing for Bookout and family members, a sound system installed in Bookout’s home, golf clubs, country club pro shop expenses, sporting goods, liquor, household furnishing, tanning sessions, manicures, and travel expenses unrelated to his re-election campaigns.
During his 2010 and 2012 re-election campaigns, Bookout was required to file monthly Campaign Contribution and Expenditure Reports (“CCE reports”) with the Arkansas Secretary of State’s office in Little Rock to evidence compliance with campaign finance disclosure laws and provide a public record of all contributions and expenditures related to his campaigns. According to the Information, the monthly CCE reports prepared, signed, and filed by Bookout in 2010 and 2012 falsely claimed that the unlawful payments made from his campaign accounts were legitimate campaign related expenses. Additionally, the Information alleges that in filing false CCE reports, Bookout represented to the Secretary of State’s Office, the public, and his contributors that all of the claimed expenditures were lawful and related to his campaigns, when in fact they were not. The mail fraud count charged relates to Bookout’s mailing of a fraudulent CCE report to the Secretary of State’s Office on about December 28, 2012.
The statutory penalty for mail fraud is not more than twenty (20) years imprisonment and a fine of up to $250,000.
The investigation was conducted by the Federal Bureau of Investigation and the Arkansas State Police. This case was prosecuted in the Eastern District of Arkansas by Assistant United States Attorney Patricia S. Harris and Special Assistant United States Attorney and Special Prosecutor for the State of Arkansas Jack McQuary.
Former New Hampshire Financial Consultant SentencedRead the Press Release
To Prison For Fraud, Money Laundering And Tax EvasionCONCORD, NEW HAMPSHIRE – Frederick V. McMenimen, III, 53 formerly of Exeter, NH was sentenced in United States District Court for the District of New Hampshire to 42 months in prison for mail fraud, money laundering and federal income tax evasion, announced United States Attorney John P. Kacavas.
Beginning in September 2008, through October 2011, McMenimen fraudulently solicited more than $1 million in purported investments from some of his financial advisory clients. Each of the clients was an elderly widow whose family had long-standing personal relationships with his family.
McMenimen advised each client to liquidate existing annuities or other investments, to deposit the proceeds in their checking accounts and to then write checks payable to PSB. In most instances, McMenimen caused the clients to write those checks by falsely leading them to believe that PSB was another investment vehicle that was better for them than their existing annuities. In actuality, PSB was a shorthand reference to a defunct retail sporting goods business, PSB Sports LLC, that McMenimen had once owned and operated.
McMenimen deposited the checks into a bank account he maintained in the name of PSB. He then used those funds to purchase official bank checks which he directly or indirectly deposited into a checking account maintained in a relative’s name at an FDIC insured financial institution. The relative in whose name the account was maintained provided McMenimen with several books of pre-signed but otherwise blank checks, thereby affording McMenimen complete access to the fraudulently obtained funds.
Despite expending all of the proceeds on personal expenses, McMenimen did not record any of the fraudulently obtained funds as income on the tax returns he filed for tax years 2008, 2009 and 2010. Since McMenimen underreported his income for those tax years, his tax returns reflected a tax due and owing that was substantially less than his true tax liability.This case was investigated by the Bedford (N.H.) field of the Federal Bureau of Investigation, the Portsmouth (N.H.) field office of the IRS’s Criminal Investigation division and the Department of Education. The case was prosecuted by Assistant United States Attorney Bill Morse.
Former Mayor of Río Grande, Puerto Rico, Sentenced to 64 Months in Prison for BriberyRead the Press Release
The former mayor of the municipality of Río Grande, Puerto Rico, was sentenced today to 64 months in prison and ordered to forfeit $39,000 for soliciting and receiving cash bribes from a contractor who sought construction inspection contracts with the municipality.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico and Special Agent in Charge Carlos Cases of the FBI’s San Juan Division made the announcement. U.S. District Judge Carmen C. Cerezo of the District of Puerto Rico imposed the sentence.
Eduard Rivera-Correa, 61, pleaded guilty on Oct. 24, 2014, to one count of bribery. According to the plea agreement and statement of facts, while mayor of Río Grande in early 2010, Rivera-Correa requested that a contractor make regular kickback payments in exchange for the award of three construction inspection contracts worth a total of $329,000. After the contracts were awarded and while payments were being disbursed by the municipality, the contractor delivered envelopes containing approximately $39,000 in cash to Rivera-Correa’s office and placed them in his drawer.
In his plea agreement, Rivera-Correa also admitted to obstructing justice by threatening the contractor who paid the bribes. On or about April 16, 2012, in a recorded conversation, Rivera-Correa threatened the contractor in an effort to intimidate him and dissuade him from cooperating with law enforcement.
This case was investigated by the FBI and prosecuted by Trial Attorney Charles R. Walsh of the Criminal Division’s Public Integrity Section and Criminal Chief Jose Ruíz of the District of Puerto Rico. The Puerto Rico Office of Government Ethics provided assistance in the investigation.
Former Maverick County Commissioner Sentenced to Ten Years in Federal Prison in Connection with a Bribery, Kickback and Bid-Rigging SchemeRead the Press Release
In Del Rio today, former Maverick County Precinct 4 Commissioner Cesar Flores was sentenced to ten years in federal prison for his role in a bribery, kickback and bid-rigging scheme that caused Maverick County to lose more than $1.3 million announced Acting United States Attorney Richard L. Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
In addition to the prison term, United States District Judge Alia Moses ordered that Flores be placed on supervised release for a period of three years and complete 1,500 hours of community service after completing his prison term. Judge Moses also ordered Flores to pay a maximum $546,170.81 restitution to Maverick County.
On September 5, 2013, Flores pleaded guilty to one count of receiving a bribe. By pleading guilty, Flores admitted that he agreed to be influenced and rewarded for using his position to ensure that certain Eagle Pass contractors, including Javier Gonzales, Hipolito Amaya and Roberto Lopez Macias, were awarded construction contracts in Maverick County Precinct 4 in 2010 and in 2011.
“The corruption in the cases sentenced this week works like a cancer on the body politic, eating away public confidence in local government. We will make every effort to counter its effects and hold accountable those who abuse the public trust for their personal gain,” stated Acting United States Attorney Richard L. Durbin, Jr.
“These defendants created a culture of corruption that spread throughout Maverick County, enabling theft and waste to thrive while taxpayers and honest businesses suffered,” stated FBI SAC Christopher Combs, San Antonio Division.
Authorities are still looking for two defendants in this case: San Antonio businessman German Garcia Cano and 47–year-old Eagle Pass businessman Alejandro Wheeler. Cano, 55-year-old owner of GGC Enterprises (GGC), failed to appear for sentencing yesterday. Wheeler, owner and operator of TVAW Ch. 20, a now defunct media outlet based in Eagle Pass, has been a fugitive since being indicted by a federal grand jury in November 2013.
In October 2014, Cano pleaded guilty to one count of paying a bribe. According to court records, Maverick County paid GGC hundreds of thousands of dollars between 2009 and 2012 for leasing heavy equipment used in construction projects throughout the County. Cano admitted to paying bribes to two Maverick County employees to ensure that GGC secured those leasing contracts with Maverick County and to receive his checks from the County.
Wheeler is charged with one count of aiding and abetting paying a bribe to an agent of an organization receiving federal funds and one count of aiding and abetting theft concerning programs receiving federal funds. According to authorities, in 2010 and 2011, Wheeler allegedly assisted in paying bribes in the form of cash payments as well as discounted campaign advertising and media time to Maverick County commissioners on behalf of contractors looking to secure County construction contracts.
Arrest warrants have been issued for both Cano and Wheeler. Individuals with information as to their whereabouts or first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741.
To date, seventeen (17) individuals have been convicted and sentenced in connection with this investigation.
This case is part of an ongoing investigation being conducted by the Federal Bureau of Investigation with assistance from Customs and Border Protection Office of Internal Affairs, Texas Department of Public Safety Criminal Investigative Division, Texas Rangers, Drug Enforcement Administration, and the Eagle Pass ISD Police Department. Assistant United States Attorneys Bryan N. Reeves, Michael Galdo and Katie Griffin prosecuted this case on behalf of the Government.
Former Iowa State Researcher Pleads Guilty to Making False StatementsRead the Press Release
DES MOINES, IA – On February 25, 2015, Dr. Dong Pyou Han appeared in United States District Court before the Honorable Celeste F. Bremer and pled guilty to two counts of making false statements to the National Institutes of Health, announced United States Attorney Nicholas A. Klinefeldt.
According to the Indictment, while conducting research on behalf of Iowa State University, Dr. Han falsified scientific data to make it appear an experimental HIV/AIDS vaccine, gp41, neutralized, or controlled, the HIV/AIDS virus in rabbits, when in fact the vaccine did not. The Indictment further alleges that Dr. Han spiked sera samples from gp41-immunized rabbits with human sera containing HIV antibodies. The spiking of the rabbit samples made it appear that gp41 produced neutralizing antibodies against the HIV/AIDS virus. The false data was reported to the National Institutes of Health in a research grant application and funded grant progress reports.
Dr. Han, in the Plea Agreement, admitted he provided false data reported in National Institutes of Health Grant Application, “Enhancing B cell immunity against HIV-1 using novel vaccine delivery platforms” and National Institutes of Health Progress Report, “Characterization of immunogenic and structural properties of HIV-1 envelope.” Dr. Han also admitted that data derived from his spiking rabbit sera samples with human antibodies was reported to the National Institutes of Health.
Dr. Han is scheduled to be sentenced before the Honorable James E. Gritzner on May 29, 2015. Each count of making a false statement carries a maximum term of five years imprisonment, up to a $250,000 fine, and up to three years of supervised release.
(Download Press Release)
Former Head of Albuquerque-Based Drug Trafficking Organization Pleads Guilty to Federal Cocaine Trafficking and Money Laundering ChargesRead the Press Release
ALBUQUERQUE – Christopher Roybal, 35, the former leader of an Albuquerque-based drug trafficking organization, entered a guilty plea in federal court this morning. Roybal pled guilty to a cocaine trafficking conspiracy charge and four money laundering charges under a plea agreement that requires him to serve a 14-year prison sentence.
Roybal is one of the 19 defendants charged in Dec. 2012, with drug trafficking and money laundering charges in a 60-count indictment. The indictment was superseded twice; first in Feb. 2014, to add a 20th defendant and a witness tampering charge, and again in Sept. 2014, to add another witness tampering charge and a heroin trafficking charge. With today’s guilty plea, all but three of the defendants have entered guilty pleas in this case.
The charges filed in the case were the result of a 16-month multi-agency investigation into a drug trafficking organization headed by Roybal by which was led by the FBI, IRS and Albuquerque Police Department with assistance from the DEA, the HIDTA Region I Narcotic Task Force and the Bernalillo County Sheriff’s Office. The investigation, code-named “Operation Rain Check,” was designated as part of the Organized Crime Drug Enforcement Task Force (“OCDETF”) program. OCDETF is 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.
According to the original indictment, Roybal and ten others conspired to distribute large quantities of cocaine in New Mexico between Aug. 2011 and Dec. 2012. It further alleged that Roybal and nine others conspired to distribute marijuana between Oct. 2011 and Dec. 2012. The indictment also included three separate money laundering conspiracies, 22 money laundering offenses, and 18 “telephone counts,” offenses alleging the use of a communications device to facilitate a drug trafficking offense. The indictment was superseded in May 2014, to add a new charge against defendant George Roybal, 53, of Albuquerque, alleging that he threatened an FBI informant to prevent the informant from testifying at the trial of this case which was then scheduled to begin on May 19, 2014. It was superseded again in Sept. 2014, to add two new charges against defendant Kenneth Ulibarri, 36, of Albuquerque. The new charges alleged that Ulibarri attempted to murder an FBI informant to prevent that informant from testifying at the trial of this case which was then scheduled to begin on Nov. 10, 2014, and also charged Ulibarri with distributing heroin in Bernalillo County, N.M., in May 2014.
During his change of plea hearing, Roybal pled guilty to Counts 1, 37, 38, 39 and 40 of the second superseding indictment, charging him with participating in a cocaine trafficking conspiracy, three money laundering conspiracies, and a substantive money laundering offense. In entering his guilty plea, Roybal admitted that between Aug. 2011 and Dec. 2012, he conspired with others to distribute kilogram quantities of cocaine in Albuquerque and Las Vegas, N.M. Roybal also admitted participating in three conspiracies that laundered the proceeds of his drug trafficking organization. One conspiracy involved the transportation of drug proceeds from Albuquerque to California to pay for marijuana that was distributed by Roybal’s organization. The second and third conspiracies involved the laundering of Roybal’s drug proceeds through accounts at a bank and a credit union. As part of his plea agreement, Roybal agreed to forfeit his Albuquerque residence and a 1967 Chevrolet Camaro.
Three of the defendants charged in this case have entered not guilty pleas and are pending trial. Charges in indictments are merely accusations and criminal defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
This case was investigated by the FBI, IRS Criminal Investigation and the Albuquerque Police Department, with assistance from the DEA, the HIDTA Region I Narcotics Task Force and the Bernalillo County Sheriff’s Office, and is being prosecuted by Assistant U.S. Attorneys Joel R. Meyers and Shana B. Long. Assistant U.S. Attorney Stephen R. Kotz is responsible for litigating the related civil asset forfeiture actions.
Former Connecticut Resident Pleads Guilty to Attempting to Send Sensitive Military Documents to IranRead the Press Release
Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Deirdre M. Daly for the District of Connecticut announced that Mozaffar Khazaee, 60, formerly of Manchester, Connecticut, pleaded guilty today before U.S. District Judge Vanessa L. Bryant in Hartford to violating the Arms Export Control Act, in connection with his efforts to send to Iran sensitive, proprietary, trade secret and export controlled material relating to military jet engines for the U.S. Air Force’s F35 Joint Strike Fighter program and the F-22 Raptor program, which he had stolen from defense contractors where he had previously been employed.
“While employed with U.S. defense contractors, Mozaffar Khazaee stole sensitive, proprietary and controlled technology to send it to Iran,” said U.S. Attorney Daly. “The illegal export of our military technology compromises U.S. national security and reduces the advantages our armed forces currently possess. As today’s case demonstrates, we will aggressively investigate and hold accountable those who attempt to steal trade secrets and sensitive military technology from U.S. industries, whether for their own personal gain or for the benefit of foreign actors.”
“Today’s guilty plea demonstrates the ongoing cooperation with our federal law enforcement partners to prevent U.S. technology from falling into the wrong hands,” said Special Agent in Charge Bruce Foucart of HSI Boston. “Across the globe, the magnitude and scope of threats facing the United States has never been greater, and that's why one of Homeland Security Investigations highest priorities is to prevent illicit procurement networks, terrorist groups and hostile nations from illegally obtaining U.S. military products and sensitive dual-use technologies. Homeland Security Investigations takes pride in protecting our country, and today’s guilty plea is the latest example of our effective investigative efforts.”
“This joint investigation has emphasized the need for American companies to remain vigilant against the theft of valuable and sensitive technologies,” said Special Agent in Charge Patricia M. Ferrick of the FBI’s New Haven Division. “As our nation continues to lead the way in research and development, we are constantly reminded that there are those who seek to advance their own causes by stealing the hard work of others, and we owe it to ourselves and to the American public to guard against it. The FBI vigorously investigates these matters in cooperation with our law enforcement partners, both domestic and abroad.”
“This investigation demonstrates the dedication of the Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service and our federal and military partners to ensure that critical technology is not exploited by criminals acting on behalf of governments hostile to the U.S.,” said Special Agent in Charge Craig W. Rupert of the Defense Criminal Investigative Service’s Northeast Field Office. “Foreign governments continue to actively seek U.S. military technology in an effort to advance their own military development. Today’s plea represents our continuing efforts to safeguard sensitive technology and to shield America’s investment in national defense by thwarting those who try to illegally acquire our national security assets.”
According to court documents and statements made in court, at different times between 2001 and 2013, Khazaee was employed by three separate defense contractors. From at least 2009 through and including late 2013, Khazaee attempted to use trade secret, proprietary and export controlled material that he had obtained from his employers to gain employment in Iran.
In November and December 2009, Khazaee corresponded by email with an individual in Iran to whom he attempted to send, and in some cases did send, documents containing trade secret, proprietary and export controlled material relating to the Joint Strike Fighter Program. In one email Khazaee wrote “some of these are very controlled . . . and I am taking [a] big risk. Again please after downloading these two Power Point files delete everything immediately.”
Analysis of Khazaee’s computer media revealed not only additional documents containing proprietary, trade secret and export controlled material belonging to the U.S. defense contractors at which he had been employed, but also cover letters and application documents, dating from in or about 2009 through in or about 2013, in which Khazaee sought employment with multiple state-controlled technical universities in Iran. In multiple letters Khazaee described the knowledge and skills he had obtained while working for the U.S. defense contractors and wrote: “[a]s lead engineer in these projects I have learned some of the key technique[s] that could be transferred to our own industry and universities.” Khazaee stated that he was “looking for an opportunity to work in Iran, and . . . transferring my skill and knowledge to my nation.”
In or about November 2013, while residing in Connecticut, Khazaee caused a shipment to be sent by truck from Connecticut to a freight forwarder located in Long Beach, California, which was intended for shipment to Iran. The shipment included numerous boxes and digital media containing thousands of documents consisting of sensitive technical manuals, specification sheets, technical drawings and data, and other proprietary material relating to military jet engines and the United States Air Force’s F35 Joint Strike Fighter (JSF) program and the F-22 Raptor. Many documents were labeled as “Export-Controlled,” as well as stamped with “ITAR-controlled” warnings. Khazaee did not apply for nor did he obtain any export license or written authorization to export any of the documents, and the export or attempted export of such material to Iran is illegal.
On Jan. 9, 2014, Khazaee was arrested at the Newark Liberty International Airport before boarding a flight with a final destination of Iran. Search warrants executed on Khazaee’s checked and carry-on luggage revealed additional sensitive, proprietary, trade secret and export controlled documents relating to military jet engines, in both hard copy and in electronic form on Khazaee’s computer media. Khazaee has been detained since that time.
Judge Bryan scheduled sentencing proceedings for May 20, 2015, at which time Khazaee faces up to 20 years in prison and a $1,000,000 fine.
This investigation is being led by the United States Department of Homeland Security’s Homeland Security Investigations in New Haven, in coordination with the New Haven Division of the Federal Bureau of Investigation, the Defense Criminal Investigative Service in New Haven and the Department of Commerce’s Boston Office of Export Enforcement.
Assistant Attorney General Carlin joins U.S. Attorney Daly in commending the efforts of the many other agencies and offices that were involved in this investigation, including U.S. Attorney’s Offices for the Central District of California, the Southern District of Indiana and the District of New Jersey, Homeland Security Investigations in Los Angeles, the U.S. Customs and Border Protection Service in Los Angeles, the U.S. Air Force’s Office of Special Investigations in Los Angeles and Boston, as well as HSI, CBP, and FBI in New Jersey, and HSI, FBI and DCIS in Indianapolis.
This case is being prosecuted by Assistant U.S. Attorneys Stephen Reynolds and Krishna Patel of the National Security and Major Crimes Unit of the District of Connecticut, and Trial Attorney Brian Fleming of the Justice Department’s National Security Division.
Former Connecticut Resident Pleads Guilty to Attempting to Send Military Documents to IranRead the Press Release
Follow @USAO_CT
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Assistant Attorney General for National Security John P. Carlin announced that MOZAFFAR KHAZAEE, 60, formerly of Manchester, Connecticut, pleaded guilty today before U.S. District Judge Vanessa L. Bryant in Hartford to violating the Arms Export Control Act, in connection with his efforts to send to Iran sensitive, proprietary, trade secret and export controlled material relating to military jet engines for the U.S. Air Force’s F35 Joint Strike Fighter program and the F-22 Raptor program, which he had stolen from defense contractors where he had previously been employed.
“While employed with U.S. defense contractors, Mozaffar Khazaee stole sensitive, proprietary and controlled technology to send it to Iran,” said U.S. Attorney Daly. “The illegal export of our military technology compromises U.S. national security and reduces the advantages our armed forces currently possess. As today’s case demonstrates, we will aggressively investigate and hold accountable those who attempt to steal trade secrets and sensitive military technology from U.S. industries, whether for their own personal gain or for the benefit of foreign actors.”
“Today’s guilty plea demonstrates the ongoing cooperation with our federal law enforcement partners to prevent U.S. technology from falling into the wrong hands,” said Bruce Foucart, special agent in charge of HSI Boston. “Across the globe, the magnitude and scope of threats facing the United States has never been greater, and that's why one of Homeland Security Investigations highest priorities is to prevent illicit procurement networks, terrorist groups and hostile nations from illegally obtaining U.S. military products and sensitive dual-use technologies. Homeland Security Investigations takes pride in protecting our country, and today’s guilty plea is the latest example of our effective investigative efforts.”
“This joint investigation has emphasized the need for American companies to remain vigilant against the theft of valuable and sensitive technologies,” said FBI Special Agent in Charge Patricia M. Ferrick. “As our nation continues to lead the way in research and development, we are constantly reminded that there are those who seek to advance their own causes by stealing the hard work of others, and we owe it to ourselves and to the American public to guard against it. The FBI vigorously investigates these matters in cooperation with our law enforcement partners, both domestic and abroad.”
“This investigation demonstrates the dedication of the Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service and our federal and military partners to ensure that critical technology is not exploited by criminals acting on behalf of governments hostile to the U.S.,” said Craig W. Rupert, Special Agent in Charge, Defense Criminal Investigative Service, Northeast Field Office. “Foreign governments continue to actively seek U.S. military technology in an effort to advance their own military development. Today’s plea represents our continuing efforts to safeguard sensitive technology and to shield America’s investment in national defense by thwarting those who try to illegally acquire our national security assets.”
According to court documents and statements made in court, at different times between 2001 and 2013, KHAZAEE was employed by three separate defense contractors. From at least 2009 through and including late 2013, KHAZAEE attempted to use trade secret, proprietary and export controlled material that he had obtained from his employers to gain employment in Iran.
In November and December 2009, KHAZAEE corresponded by email with an individual in Iran to whom he attempted to send, and in some cases did send, documents containing trade secret, proprietary and export controlled material relating to the Joint Strike Fighter Program. In one email KHAZAEE wrote “some of these are very controlled . . . and I am taking [a] big risk. Again please after downloading these two Power Point files delete everything immediately.”
Analysis of KHAZAEE’s computer media revealed not only additional documents containing proprietary, trade secret and export controlled material belonging to the U.S. defense contractors at which he had been employed, but also cover letters and application documents, dating from in or about 2009 through in or about 2013, in which KHAZAEE sought employment with multiple state-controlled technical universities in Iran. In multiple letters KHAZAEE described the knowledge and skills he had obtained while working for the U.S. defense contractors and wrote: “[a]s lead engineer in these projects I have learned some of the key technique[s] that could be transferred to our own industry and universities.” KHAZAEE stated that he was “looking for an opportunity to work in Iran, and . . . transferring my skill and knowledge to my nation.”
In or about November 2013, while residing in Connecticut, KHAZAEE caused a shipment to be sent by truck from Connecticut to a freight forwarder located in Long Beach, California, which was intended for shipment to Iran. The shipment included numerous boxes and digital media containing thousands of documents consisting of sensitive technical manuals, specification sheets, technical drawings and data, and other proprietary material relating to military jet engines and the United States Air Force’s F35 Joint Strike Fighter (“JSF”) program and the F-22 Raptor. Many documents were labeled as “Export-Controlled,” as well as stamped with “ITAR-controlled” warnings. KHAZAEE did not apply for nor did he obtain any export license or written authorization to export any of the documents, and the export or attempted export of such material to Iran is illegal.
On January 9, 2014, KHAZAEE was arrested at the Newark Liberty International Airport before boarding a flight with a final destination of Iran. Search warrants executed on KHAZAEE’s checked and carry-on luggage revealed additional sensitive, proprietary, trade secret and export controlled documents relating to military jet engines, in both hard copy and in electronic form on KHAZAEE’s computer media. KHAZAEE has been detained since that time.
Judge Bryant scheduled sentencing proceedings for May 20, 2015, at which time KHAZAEE faces up to 20 years in prison and a $1 million fine.
This investigation is being led by the United States Department of Homeland Security’s Homeland Security Investigations in New Haven, in coordination with the New Haven Division of the Federal Bureau of Investigation, the Defense Criminal Investigative Service in New Haven and the Department of Commerce’s Boston Office of Export Enforcement.
U.S. Attorney Daly and Assistant Attorney General Carlin also commended the efforts of the many other agencies and offices that were involved in this investigation, including U.S. Attorney’s Offices for the Central District of California, the Southern District of Indiana and the District of New Jersey, Homeland Security Investigations in Los Angeles, the U.S. Customs and Border Protection Service in Los Angeles, the U.S. Air Force’s Office of Special Investigations in Los Angeles and Boston, as well as HSI, CBP, and FBI in New Jersey, and HSI, FBI and DCIS in Indianapolis.
This case is being prosecuted by Assistant U.S. Attorneys Stephen Reynolds and Krishna Patel of the National Security and Major Crimes Unit of the U.S. Attorney’s Office for the District of Connecticut, and Trial Attorney Brian Fleming of the Justice Department’s Counterespionage Section (CES).
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Former Comptroller of Albuquerque Construction Company Arraigned on Federal Fraud and Identity Theft ChargesRead the Press Release
ALBUQUERQUE – Stephanie Pyle, 39, of Albuquerque, N.M., was arraigned this morning in federal court on a 12-count indictment charging her with six counts of access device fraud and six counts of aggravated identity theft. Pyle entered a not guilty plea to the indictment and was released pending trial on conditions of release and under pretrial supervision.
The indictment, which was filed on Feb. 10, 2015, alleges that between Jan. 2010 and May 2014, Pyle used credit cards and account numbers in the name of a company without authorization and with the intent to defraud the company. The indictment alleges that Pyle defrauded the company of approximately $1,531,124.00 during the five-year period. Counts 6 through 12 of the indictment allege that Pyle used the identity of another person to commit the fraudulent acts charged in Counts 1 through 6. At the time of the offenses charged in the indictment, Pyle was employed as the comptroller for the Albuquerque-based construction company that was the victim of Pyle’s alleged criminal conduct.
If convicted, Pyle faces a statutory maximum penalty of ten years in prison on each of the six access device fraud charges. She also faces a mandatory two years in prison on each of the six aggravated identity fraud charges which must be served consecutive to any sentence imposed on the fraud charges. Charges in indictments are only accusations and defendants are presumed innocent until proven guilty beyond a reasonable doubt.
The case was investigated by the Albuquerque office of Homeland Security Investigations and is being prosecuted by Assistant U.S. Attorney Jeremy Peña.
Former Clark County Family Court Judge Steven Jones Sentenced to over Two Years in Prison for Investment Fraud SchemeRead the Press Release
LAS VEGAS, Nev. – Former Clark County Family Court Judge Steven E. Jones was sentenced today by U.S. District Judge Jennifer A. Dorsey to 26 months in prison, three years of supervised release, and ordered to pay approximately $2.9 million in restitution for participating in an investment fraud that bilked over 50 investor victims out of millions in cash for almost a decade, announced U.S. Attorney Daniel G. Bogden for the District of Nevada and Laura Bucheit, Special Agent in Charge of the FBI for Nevada.
Jones, 57, of Henderson, Nev., who served for almost 20 years as a family court judge in Clark County, pleaded guilty in September to one count of conspiracy to commit wire fraud. He was permitted to self-surrender to federal prison by May 25, 2015. Jones’ sentence was enhanced for violating his position of trust, and because the loss amount was over $200,000 and there were more than 10 victims. Jones resigned his position as judge and surrendered his Nevada law license in September as one of the conditions of his plea agreement.
“Former Judge Steven Jones played an integral part in this investment fraud scheme and was the most prominent and indispensable member,” said U.S. Attorney Bogden. “This crime was not a “one-off” for Jones, but a calculated and deliberate decision that he replicated for years. He knew right from wrong, but engaged in the conduct anyway because he could.”
"This sentencing reaffirms to the public that the FBI will continue to make certain that no one is above the law, and when public corruption is identified, it will be aggressively investigated and prosecuted,” said Special Agent in Charge Bucheit.
All of the co-conspirators charged in the fraud scheme have also pleaded guilty. Thomas A. Cecrle, Jr., 57, of Henderson, Nev., and Constance C. Fenton, 70, of Gig Harbor, Wash., are scheduled to be sentenced on March 2. Terry J. Wolfe, 59, of Henderson, was sentenced on Feb. 19, to time served, three years of supervised release, and ordered to pay approximately $2.9 million in restitution. Mark L. Hansen, 56, of Corvallis, Ore., was sentenced on Jan. 27, 2015, to four months in prison, three years of supervised release, and ordered to pay approximately $2.9 million in restitution. Ashlee M. Martin, 31, of Las Vegas, Nev., entered into a 12-month pretrial diversion agreement with the government.
According to the plea memoranda, defendants lured victims into a fraud scheme by falsely telling them that Cecrle worked as a contractor for the U.S. Department of Homeland Security, purchasing and selling water rights worth millions of dollars as part of a secret government program. The co-conspirators then solicited money by falsely claiming that Cecrle needed short-term cash loans to complete his phantom water deals, loans he promised to repay in short order along with a very large return. Cecrle and his co-conspirators concocted a similar story involving a land deal on the Las Vegas Strip where Cecrle needed short-term loans to supposedly close a deal with Sir Richard Branson. In truth, however, Cecrle held no position with the federal government and there were no land or water rights deals.
Using his office as an elected state court judge, defendant Jones knowingly vouched for Cecrle and the legitimacy of the deals to potential investors when he knew the deals were, in fact, scams. According to the plea memorandum, Jones continued to further the conspiracy by receiving money from a victim in the parking lot of the Family Division Courthouse, meeting with at least one potential investor in his chambers and elsewhere in the courthouse to discuss the investment, obtaining an “Own Recognizance” bond to release Cecrle from custody after he was arrested for bad checks he had passed to a victim, and opening and maintaining a joint checking account with Cecrle, through which flowed over $260,000 in illegal proceeds. During the entire conspiracy, which lasted from about September 2002 to October 2012, the defendants defrauded at least 22 victims of more than $2.6 million, money they quickly converted to their own use.
The case was investigated by the FBI and prosecuted by First Assistant U.S. Attorney Steven W. Myhre and Assistant U.S. Attorney Daniel R. Schiess of the U.S. Attorney’s Office for the District of Nevada.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.com.
Florida Telemarketer Pleads Guilty in Multimillion Dollar ScamRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on February 25, 2015, James Currey, 55, of Orlando, FL, pled guilty to one count of conspiracy to commit mail and wire fraud in connection with telemarketing. The investigation determined that Currey was a telemarketer for National Solutions and related companies from October 7, 2010 until June 10, 2011.
Located in Orlando, Florida, National Solutions defrauded consumers across the continent using the fictitious names, Bluescape Timeshares International, Country Wide Timeshares, Countrywide Timeshares MA, Landmark Timeshares, Propertys Direct, Quicksale Propertys, Sun Property Networks, Sun Property’s, Universal Propertys, VIM Timeshares, Propertys DRK, Quick Sale Advisers, Quick Sale International, City Resorts, Resort Advisers, American Timeshares, Exit Week, and Resort Advisors International. National Solutions targeted owners of timeshares throughout the United States and Canada. In various court filings related to the National Solutions scam, the government has alleged that the overall scam bilked over 2,500 consumers out of at least $6 million, including eight victims within the Southern District of Illinois. Sentencing is set for June 12, 2015. Currey will face up to 25 years in prison, a fine of up to $250,000, and up to 5 years of supervised release.
This prosecution is one of nearly 75 timeshare resale fraud prosecutions brought in the Southern District of Illinois over the past four years. The case is part of an ongoing investigation by the Midwest Region Office of the Federal Trade Commission and the St. Louis Field Office of the Chicago Division of the United States Postal Service. The prosecution of this case is being handled by Assistant United States Attorneys Scott Verseman and Michael Hallock.
Felon Charged with Possessing Heroin, Three Loaded WeaponsRead the Press Release
PITTSBURGH – An Allegheny County man has been indicted by a federal grand jury in Pittsburgh on charges of possession with intent to distribute 100 grams or more of heroin, possession of firearms in furtherance of a drug trafficking crime, and possession of firearms by a convicted felon, United States Attorney David J. Hickton announced today.
The three-count indictment, returned on Feb. 24, named Antonuan Smith, 28, of Munhall, Pa.
According to the Indictment, on Dec. 23, 2014, Smith possessed over 100 grams of heroin, and with that heroin, possessed three firearms, including a loaded Taurus .40 caliber semi- automatic, a loaded Smith and Wesson .380 caliber semi-automatic, and a loaded .22 caliber assault rifle. Smith allegedly possessed those firearms in furtherance of his drug trafficking. Further, it is unlawful for Smith, who has previously been convicted of felony offenses, to possess firearms or ammunition.
The law provides for a maximum total sentence of not less than 10 years and up to life in prison, a fine of $5,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history of the defendant.
Assistant United States Attorney Eric S. Rosen is prosecuting this case on behalf of the government.
The Munhall Police Department, the Federal Bureau of Investigation, and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Federal Indictments Returned Against Jackson-Area Residents in Health Care Fraud Scheme Targeting Medicare Card-HoldersRead the Press Release
Jackson, Tenn. – Calvin Bailey, 64, of Jackson, Tennessee; Sandra Bailey, 64, of Jackson, Tennessee; and Cindy Mallard, 49, of Bradford, Tennessee; have been charged in an indictment alleging a conspiracy to commit health care fraud and to pay illegal kickbacks in connection with health care services, announced United States Attorney for the Western District of Tennessee, Edward L. Stanton III. Sandra Bailey was also indicted for eight counts of health care fraud and nine counts of paying illegal kickbacks to health care providers and patient-referral sources.
Initial appearances for all three defendants were held today at the United States Courthouse in Jackson, Tennessee, and all were released on bond. Sandra Bailey and Mallard each worked for several years in health care businesses in the Jackson, Tennessee area. Calvin Bailey has been employed as the principal at Medina Middle School in Medina, Tennessee, and has also been employed by medical equipment supply companies.
According to the indictment, Sandra Bailey and Calvin Bailey paid illegal kickbacks to referral sources to identify Medicare card-holders. Sandra Bailey and, on at least one occasion, Calvin Bailey, marketed power wheelchairs and back braces to the Medicare card-holders. Sandra Bailey told targeted Medicare card-holders that the equipment would be free and told card-holders that they needed to get the wheelchairs whether they were needed or not because Medicare might stop paying for them. Although Medicare paid only 80% of the costs for wheelchairs, some of the card-holders had secondary insurance carriers, including TennCare and TriCare, who paid the remaining 20%. For patients without secondary insurance, the defendants helped the patients fill out forms that would waive the requirement for any payment by the card-holder.
In addition to the illegal kickbacks to referral sources, Sandra Bailey also made illegal kickback payments to some health care providers who performed – or who were supposed to have performed – face-to-face evaluations of card-holders to qualify the card-holders for power wheelchairs. Cindy Mallard, who was the office manager at the Medina Family Medical Clinic in Medina, Tennessee, assisted Sandra Bailey by visiting card-holders with Sandra Bailey and filling out forms that were supposed to be filled out during a face-to-face evaluation of a patient by a physician or other qualified health care provider. Mallard then assisted Sandra Bailey in getting those forms signed by providers who were supposed to have conducted face-to-face evaluations of the card-holders. Mallard also received kickback payments on behalf of one of the health care providers who signed the forms.
After the defendants identified card-holders and arranged for evaluation paperwork to be submitted to Medicare for payment for medical equipment, sales commissions were then paid to Calvin Bailey, Sandra Bailey, Mallard, or other members of the Baileys’ and Mallard’s families.
This investigation is being conducted by the Department of Health and Human Services-Office of the Inspector General, the Federal Bureau of Investigation and the Tennessee Bureau of Investigation. Assistant U.S. Attorney John Fabian represents the government.
The charges and allegations contained in indictments are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Spanish Version
Farmer Charged with Crop Insurance FraudRead the Press Release
CORPUS CHRISTI, Texas – Leon Bernsen Jr., 65, of Corpus Christi, has been indicted for federal crop insurance fraud, announced U.S. Attorney Kenneth Magidson.
The indictment alleges Bernsen, who farms under the name Bernsen Farms, purchased a crop insurance policy from a company that contracted with the Federal Crop Insurance Corporation. Bernsen allegedly ginned more than 300 bales of cotton under a fictitious business name at a cotton gin in Robstown. Bernsen then filed a crop insurance claim and withheld the production of the bales of cotton from the insurance company resulting in fraudulent crop insurance payments, according to the allegations.
Bernsen is expected to make an initial appearance before a U.S. magistrate judge in Corpus Christi in the near future.
If convicted, Bernsen faces up to 30 years in federal prison.
Criminal investigation was conducted by the U.S. Department of Agriculture - Office of Inspector General. Assistant U.S. Attorney Hugo R. Martinez is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Former Commissioner of Mississippi Department of Corrections and Local Businessman Plead Guilty in Federal CourtRead the Press Release
Jackson, Miss – Christopher B. Epps, former Commissioner for the Mississippi Department of Corrections, and Cecil McCrory, a former Mississippi legislator, former Justice Court Judge, former Chairman of the Rankin County School Board, and a local businessman, entered guilty pleas today before U.S. District Judge Henry Wingate, announced Acting U.S. Attorney Harold Brittain, FBI Special Agent in Charge Donald Alway, IRS-Criminal Investigation Acting Special Agent in Charge Jerome R. McDuffie, U.S. Postal Inspector in Charge Robert Wemyss, and Mississippi State Auditor Stacey Pickering.
Christopher Epps pled guilty to one count of money laundering conspiracy and one count of filing a false tax return. Cecil McCrory pled guilty to one count of money laundering conspiracy.
Epps will be sentenced on June 9, 2015 at 9:30 a.m. and McCrory will be sentenced on June 10, 2015 at 9:30 a.m. The maximum penalty for money laundering conspiracy is 20 years in prison and a $500,000 fine or twice the value of the property involved in the transaction. The maximum penalty for filing a false tax return is three years in prison and a $250,000 fine.
This case was investigated by the FBI, IRS-Criminal Investigation, U.S. Postal Inspection Service, Mississippi State Auditor’s Office, and the Leake County Sheriff’s Office.
Assistant U.S. Attorneys Mike Hurst, Darren LaMarca, and Scott Gilbert, as well as financial analyst Kim Mitchell, are prosecuting the case.
Duquesne Teen Involved in Heroin Trafficking Scheme Gets 57-Month Prison SentenceRead the Press Release
PITTSBURGH – An Allegheny County resident has been sentenced in federal court to 57 months in jail for a charge of conspiracy to possess with intent to distribute and distribute one kilogram or more of heroin, and a charge of possession with intent to distribute and distribution of less than 100 grams of heroin, United States Attorney David J. Hickton announced today.
Chief United States District Judge Joy Flowers Conti imposed the sentence on Rahde Williamson, 19, formerly of Duquesne, Pa.
According to information presented to the court, from in and around January of 2014, and continuing thereafter to in and around April of 2014, Williamson conspired with others to possess with intent to distribute and distribute one kilogram or more of heroin and Williamson possessed with intent to distribute less than 100 grams of heroin.
Assistant United States Attorneys Amy L. Johnston and Cindy K. Chung prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation, the FBI Greater Pittsburgh Safe Street Task Force, Wilkinsburg Police Department, Allegheny County Sheriff’s Office, Pennsylvania Office of the Attorney General, Munhall Police Department, Duquesne Police Department, Monroeville Police Department, Allegheny County Police Department, West Mifflin Police Department, and the Pittsburgh Bureau of Police for the investigation leading to the successful prosecution of Williamson.
District Man Sentenced to 12-Year Prison Term for Attacking Woman in Alley, Then Assaulting Police Neighbors Heard Woman’s Screams, Called 911Read the Press Release
WASHINGTON - Kirk Cheeks, 45, of Washington, D.C., was sentenced today to 12 years in prison for abducting and assaulting a woman in an alley and then firing a gun during a confrontation with police, U.S. Attorney Ronald C. Machen Jr. announced.
Cheeks pled guilty in December 2014, in the U.S. District Court for the District of Columbia, to charges of kidnapping and assault with a dangerous weapon. The plea, which was contingent upon the Court’s approval, called for a 12-year prison sentence. The Honorable Colleen Kollar-Kotelly accepted the plea and sentenced Cheeks accordingly. Upon completion of his prison term, Cheeks will be placed on five years of supervised release.
A federal grand jury indicted Cheeks in June 2014 on federal and District of Columbia offenses. He pled guilty to two of the District of Columbia offenses. The defendant has prior convictions for drug, weapons, and felony assault offenses.
According to the government’s evidence, Cheeks encountered the victim early Feb. 2, 2014, in the area of the 700 block of Girard Street NW. He invited her to walk to his home and drink alcohol, to which she agreed. While walking through the alley behind the 700 block of Girard Street, he put her in a chokehold and dragged her to the rear of a building and down an incline next to the building. Neighbors heard her cry for help and called 911.
Officers from the Metropolitan Police Department (MPD) responded to the alley within minutes of the 911 calls. When officers arrived, they saw Cheeks on top of the victim, and saw that he was holding his hand over the victim’s mouth, telling her to “shut up.” An officer pulled Cheeks off the victim and directed him to walk up the incline to the alley, where other officers were waiting for him. Cheeks, however, resisted and began struggling with officers. He pointed a gun at one of the officers, and during the struggle it discharged a round. After further struggling with officers, the defendant was eventually placed in handcuffs.
The victim reported to detectives that Cheeks had smothered her, stuck a gun to her head, and raped her. In his guilty plea, Cheeks denied sexually assaulting her.
In announcing the sentence, U.S. Attorney Machen commended the work of the officers and detectives of the Metropolitan Police Department’s Third District and Sexual Assault Unit, who investigated the case. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Criminal Investigator John Marsh; Victim/Witness Advocate Lezlie Richardson; Paralegal Specialist Jason Manuel, and Assistant U.S. Attorney Arvind K. Lal, who assisted with forfeiture issues.
Finally, he expressed appreciation for the work of Assistant U.S. Attorneys Amy H. Zubrensky and Cassidy Kesler Pinegar, who prosecuted the case.
15-031
Detroit Scrap Recycler Agrees to Settlement with United States to Reduce PollutionRead the Press Release
A Detroit scrap metal and iron recycling company has agreed to pay a $25,000 penalty and implement a compliance program to resolve allegations that it violated the Clean Air Act, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement was Susan Hedman, Administrator of Region 5 of the Environmental Protection Agency.
The settlement resolves a lawsuit brought by the U.S. Attorney’s Office and the Environmental Protection Agency against Basic Recycling, alleging that its facility on Fulton Avenue in Detroit was releasing harmful chlorofluorocarbons (CFCs) into the environment. CFCs cause ozone depletion and have harmful effects on human health.
Under the settlement, Basic Recycling agreed to implement a Clean Air Act compliance program at its facility to eliminate the harmful release of CFCs.
The settlement requires Basic Recycling to pay a civil penalty of $25,000 and comply with all environmental regulations in accepting and processing small appliances which present a risk of harmful CFC emissions.
“This settlement will protect the health of Detroit residents and ensure cleaner air for future generations,” McQuade said.
“This settlement will help to preserve the earth’s ozone layer, which protects us from harmful radiation,” EPA Region 5 Administrator Hedman said. “Basic Recycling will also take steps to improve air quality in a community that has been disproportionately impacted by environmental contamination.”
While Basic Recycling did not admit any of the violations alleged by the government, it has agreed to all compliance provisions.
The settlement was lodged with the U.S. District Court for the Eastern District of Michigan and will be subject to a 30-day public comment period and final court approval. It can be viewed at: http://www.usdoj.gov/enrd/Consent_Decrees.html and will appear in the Federal Register. Comments can be directed to Assistant Attorney General, Environment and Natural Resources Division, with reference to United States v. Basic Recycling.Detroit Area Patient Recruiter and Physical Therapist Convicted in $1.6 Million Medicare Fraud SchemeRead the Press Release
A federal jury in Detroit today convicted a patient recruiter and a physical therapist for their roles in a $1.6 million Medicare fraud scheme, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office.
Reginald Smith, 54, of Flint, Michigan, a patient recruiter, was found guilty of one count of conspiracy to commit health care fraud and one count of conspiracy to solicit and receive health care kickbacks. Rajan Patel, 30, of Clinton Township, Michigan, a physical therapist, was found guilty of one count of conspiracy to commit health care fraud, three counts of health care fraud, and three counts of making false statements relating to health care matters. Sentencing hearings are scheduled for April 16, 2015, and April 15, 2015, respectively, before U.S. District Judge Arthur J. Tarnow of the Eastern District of Michigan.
According to evidence presented at trial, Smith worked as a patient recruiter for Angle’s Touch Home Health Care LLC (Angle’s Touch) in 2011 and 2012. In that role, he solicited patients for foot care services at adult foster care homes. Smith then referred the patients to Angle’s Touch for medically unnecessary home health care services in exchange for kickbacks. The kickbacks were disguised as payments to Smith’s nonprofit Medicare provider, People Helping People of Detroit.
Patel worked as a physical therapist at Angle’s Touch. According to the evidence presented at trial, Patel and others recruited patients from an adult daycare center in Flint, Michigan. Patel then fabricated patient medical records to make it appear that the recruited patients qualified for and received the home health care services, when they did not.
Evidence presented at trial showed that Medicare paid Angle’s Touch over $1.6 million in the course of the conspiracy.
Four other individuals charged in this case pleaded guilty to conspiracy to commit health care fraud in connection with their roles in the fraud scheme.
The investigation was led by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and U.S. Attorney’s Office for the Eastern District of Michigan. This case was prosecuted by Trial Attorneys Niall M. O’Donnell, Aisling O’Shea and Allan Medina of the Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Day Trader Pleads Guilty to Investment Fraud SchemeRead the Press Release
POCATELLO - Michael Justin Hoopes, 41, of Rexburg, Idaho, pleaded guilty yesterday to wire fraud and engaging in monetary transactions in property derived from specified unlawful activity, U.S. Attorney Wendy J. Olson announced. Hoopes pleaded guilty pre-indictment to a criminal information filed by the U.S. Attorney.
According to the plea agreement, Hoopes admitted that from 2007 through February of 2011, he engaged in a scheme to defraud investors in various investment opportunities he offered. Specifically, Hoopes solicited investors to provide him with capital he represented he would use in his commodities futures day trading activities and to invest in Connected Lyfe, a publicly traded company.
Hoopes misrepresented to investors that he earned returns day trading in excess of 20 to 25 percent, that he would invest all of the capital they provided in day trading and pay them from the profits generated by their investments, and he would receive personal compensation only from profits he made above the 20 to 25 percent return. Hoopes provided false monthly account statements to investors documenting the purported positive returns. Further, regarding Connected Lyfe, Hoopes misrepresented that an investor would double their investment within one year and would bear little risk of loss.
In reality, Hoopes did not invest all of the capital he received, used much of it for personal expenses, including to pay credit card bills, and paid “positive” returns to existing investors primarily from the capital raised from new investors. Between 2007 and February of 2011, Hoopes received in excess of $9 million from investors. Of this amount, the defendant did not invest and misappropriated approximately $620,000 for his own personal use. Contrary to monthly account statements showing positive returns, he lost most of the remainder day trading and in other failed investments.
The charge of wire fraud is punishable by up to 20 years in prison, a maximum fine of $250,000, and up to three years of supervised release. The charge of engaging in monetary transactions in property derived from specified unlawful activity is punishable by up to 10 years in prison, a maximum fine of $250,000, and up to three years of supervised release.
Sentencing is set for May 12, 2015, before U.S. District Judge Edward J. Lodge at the federal courthouse in Pocatello.
The case was investigated by the Internal Revenue Service, Criminal Investigation Division, and the Federal Bureau of Investigation, with the assistance of the Commodities Futures Trading Commission.
Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.
Corona Woman Who Ran High-End Denim Jean Company Pleads Guilty in $15 Million Scheme That Defrauded Union BankRead the Press Release
LOS ANGELES – A Corona woman who was the chief executive officer of a high-end jean company that outfitted Hollywood celebrities pleaded guilty today in federal court to bank fraud and bankruptcy fraud offenses.
Carolyn Marie Jones, 51, pleaded guilty in federal court to one count of bank fraud and one count of concealing assets in a bankruptcy proceeding.
Jones pleaded guilty before United States District Judge Michael W. Fitzgerald, who is scheduled to sentence the defendant on May 11. At sentencing, Jones will face a statutory maximum sentence of 35 years in federal prison and a fine of $1.25 million.
According to a plea agreement filed late yesterday, Jones defrauded Union Bank of California in a scheme related to her company, DDI (sometimes known as Diamond Decisions, Inc.), which sold jeans under the labels Privacywear and PRVCY Premium. Union Bank issued an $8.5 million line of credit – which was later increased to $15 million – to Jones in late 2008, but Jones had filed a fraudulent loan application that used another person’s social security number, bogus tax returns that had never been filed with the Internal Revenue Service and false financial statements for DDI that grossly overstated the company’s profits.
Jones also admitted in the plea agreement that the accounting firm she claimed had audited her financial statements was a sham company. Jones also admitted she lied to Union Bank employees, including the loan officer. In court today, she apologized to the identity theft victim whose information was used on the fraudulent loan documents.
Jones soon defaulted on the $15 million loan, and Union Bank filed a civil lawsuit against DDI in state court. When the court issued an order authorizing Union Bank to seize the company’s assets, Jones filed a Chapter 11 bankruptcy petition in February 2010 that listed the bank as the sole creditor. In the following months, Jones concealed DDI assets, specifically about $120,000 that she had received from DDI customers.
As part of the plea, Jones agreed to pay $15 million in restitution to Union Bank and $124,000 in restitution to victims who invested in another scheme.
Jones pleaded guilty in relation to two cases that were the result of an investigation conducted by the United States Secret Service and IRS - Criminal Investigation. The United States Trustee’s Office provided valuable assistance during the investigation.
Release No. 15-020
Cleveland Woman Charged with making Straw Purchase of a FirearmRead the Press Release
A federal grand jury returned a one-count indictment charging Felicia D. Russell, 30, of Cleveland, with purchasing a firearm for a convicted felon, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that Russell acted as a straw purchaser of a firearm from Atlantic Gun & Tackle in Bedford Heights, Ohio. Russell accomplished her scheme by lying on the Bureau of Alcohol, Tobacco, Firearms, and Explosives Form, stating that she was the actual buyer and recipient of the firearm.
Assistant United States Attorney Matthew J. Cronin is prosecuting the case following an investigation by ATF.
If convicted, the Court will determine the defendant’s sentence after a review of 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. In most cases, it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Cleveland Man Convicted of Rape Found with 18 FirearmsRead the Press Release
A Cleveland man previously convicted of rape and unlawful sexual conduct with a minor was indicted in federal court for possessing 18 firearms and ammunition, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Charles Imbrugia, age 45, possessed the ammunition and firearms on Dec. 22, 2015. The firearms included a River Arms 7.62-caliber rifle, a Molot Oruzhie 7.62-caliber rifle, a Norinco 7.62-caliber rifle, multiple 12-gauge shotguns, a Remington .22-caliber rifle, an Israel Weapon Industries .50-caliber pistol and several other firearms, according to the indictment.
"This defendant had an arsenal," Dettelbach said. "Our office places a high priority on keeping firearms out of the hands of those who are forbidden by law from obtaining them."
Imbrugia was previously convicted in Cuyahoga County Common Pleas Court of three counts of rape and two counts of unlawful sexual conduct with a minor. As a convicted felon, he is forbidden by law from possessing firearms or ammunition.
If convicted, a defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal records, 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 investigation preceding the indictment was conducted by the Ohio Adult Parole Authority. The case is being prosecuted by Assistant United States Attorney Kelly Galvin.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Clearfield Woman Charged with Mail, Wire Fraud and Identity Theft in Embezzlement Schemes Involving Two EmployersRead the Press Release
Indictment Alleges She Embezzled About $885,657.56SALT LAKE CITY - A federal grand jury returned a 10-count indictment late Wednesday afternoon charging Teri Ann Jarvis, aka Teri James, aka Teri Jaris, age 41, of Clearfield with mail and wire fraud in connection with embezzlement schemes involving two employers. She also faces one count of aggravated identify theft.
The indictment alleges Jarvis embezzled approximately $885,657.56 from at least two employers and diverted the money for her own use.
According to the indictment, Jarvis was an employee of Positive Power, LLC, from about October 2006 until around September 2013. Positive Power is based in Ogden and provides electrical contracting services. Jarvis’ duties at the company included assisting with the management of company bank accounts, credit cards, collectables, payables and other financial records. She was not authorized to sign checks or credit cards.
Jarvis was an employee of Bronco Fence Company in Kaysville from about March 2014 through about October 2014. The company specializes in fence, deck, and railing construction. Jarvis’ responsibilities at Bronco Fence included assisting with the management of the office, coordinating with a merchant services company for payment processing, and making accounting entries.
The indictment alleges that beginning around 2008 and continuing to September 2014, Jarvis devised a scheme to obtain money from her employers using a variety of means. The indictment alleges she forged Positive Power company checks made payable to herself, her mortgage company, to pay for a car loan, and to her personal credit card. According to the indictment, Jarvis attributed fictitious expenses to closed or terminated work orders to conceal her embezzlement from the company and to avoid detection.
The indictment alleges that Jarvis used the alias Teri James in her employment application with Bronco fence to conceal her identity and avoid detection of her previous embezzlement from Positive Power.
According to the indictment, Jarvis provided false refund information to the merchant services company used by Bronco Fence so that the merchant servicer processed the false refunds and transferred money to Jarvis’ personal bank account. The indictment alleges Jarvis offset the money she embezzled from Bronco Fence as “material expenses” in the company records.
Jarvis altered company financial accounts to conceal her embezzlement of company funds from both of her employers.
The indictment charges four counts of mail fraud, five counts of wire fraud, and one count of aggravated identity theft. The potential maximum penalty for each count of wire and mail fraud is 20 years in federal prison and a fine of $250,000. The aggravated identity theft count carries a mandatory minimum two-year sentence.
A summons will be issued to Jarvis to appear in federal court in Salt Lake City on the charges in the indictment. An indictment is not a finding of guilt. Individuals charged in an indictment are presumed innocent unless or until convicted of the charges in court.
The case is being investigated by IRS Criminal Investigation special agents, the Weber County Sheriff’s Office, and the Kaysville Police Department and prosecuted by Assistant U.S. Attorneys in the U.S. Attorney’s Office in Salt Lake City.
Brooklyn Man Sentenced to 35 Months for Conspiracy to Distribute Cocaine Base in VermontRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Von Simmonds, 32, of Brooklyn, New York was sentenced today to 35 months for his participation in a conspiracy to distribute cocaine base in Vermont during the winter of 2012-2013. Chief Judge Christina Reiss also ordered that Simmonds serve a three-year period of supervised release after his incarceration.
Simmonds was convicted of this offense after a jury trial in Rutland in June 2014. According to the evidence presented at trial, law enforcement officers, acting on a tip, encountered Simmonds in a Rutland apartment on March 7, 2013. Officers located Simmonds in a bedroom of the apartment. Also found in the bedroom was a pillow case containing $4,503 in cash and a rock of cocaine base. Simmonds acknowledged making several trips from Brooklyn to Vermont with crack cocaine. Simmonds was arrested that night and charged with conspiracy to distribute cocaine base. He has remained in custody since his arrest.
This matter was investigated by the Federal Bureau of Investigation and the Rutland Police Department with the assistance of the Vermont Department of Corrections. The government was represented by Assistant U.S. Attorneys Kevin Doyle and Craig Nolan. Simmonds was represented by Steven L. Barth, Esq. of the Federal Public Defender’s Office.
Blackrock, N.M., Man Pleads Guilty to Federal Child Sexual Abuse ChargeRead the Press Release
ALBUQUERQUE – Vernon Niiha, 51, a member of Zuni Pueblo who resides in Blackrock, N.M., pleaded guilty this morning to an abusive sexual contact charge. Under the terms of his plea agreement, Niiha will be sentenced to prison term within the range of 36 to 48 months followed by a term of supervised release to be determined by the court. Niiha will be required to register as a sex offender.
Niiha was arrested in Aug. 2013, on an indictment alleging that he sexually abused a child under the age of 12 years from Mar. 2002 through Mar. 2003, in Indian country in McKinley County, N.M.
During today’s hearing, Niiha entered a guilty plea to a felony information charging him with abusive sexual contact, and admitted sexually abusing the victim by touching the victim’s genitalia. Niiha has been in the custody of the U.S. Marshals Service since his arrest and will remain detained pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Albuquerque office of the FBI and Zuni Pueblo Tribal Police Department. The case is being prosecuted by Assistant U.S. Attorney Kyle T. Nayback as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Belleville Resident Pleads Guilty to Participating in Fraudulent Tax Refund SchemeRead the Press Release
Alicia Jackson, 40, from Belleville, pled guilty to conspiracy to defraud the United States by making false claims for tax refunds to the Internal Revenue Service by submitting false federal income tax returns, and also pled guilty to two additional counts for making false claims for federal tax refund, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Alicia Jackson faces a prison sentence of up to 20 years, a fine of up to $250,000, up to 3 years’ supervised release after serving her sentence, and mandatory restitution. Her sentencing has been scheduled for June 12, 2015.
The prosecution is the result of an investigation conducted by the Internal Revenue Service/Criminal Investigations. The case is being prosecuted by Assistant United States Attorney Norman R. Smith.
Beckley man sentenced on federal drug chargeRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced today that Demetrice Johnson, 42, of Beckley, was sentenced to 27 months in federal prison, followed by five years of supervised release.
In November 2014, Johnson pleaded guilty to distributing heroin to a confidential informant. The drug deal took place on Robert C. Byrd Drive in Beckley.
United States District Judge Irene C. Berger imposed the sentence.
The case was investigated by the Beckley Raleigh County Drug and Violent Crime Task Force, and was prosecuted under the Beckley Pill Initiative.
The case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and opiates. The U.S. Attorney’s Office, joined by federal, state and local law enforcement, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
###