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Monday 23 February 2015
Huntington Beach Woman Sentenced to over 5 Years in Federal Prison for Embezzling Millions of Dollars from Her EmployerRead the Press Release
SANTA ANA, California – A Huntington Beach woman was sentenced today to 63 months in federal prison for embezzling nearly $3.5 million from her former employer, a warehouse and trucking-services company.
Patricia A. Francisco, 62, was sentenced today by United States District Judge Cormac J. Carney after the defendant pleaded guilty in August to four counts of wire fraud.
In addition to the prison term, Judge Carney ordered Francisco to pay $3,474,199 in restitution to her former employer, California Multimodal, LLC (CM), which is based in Long Beach.
For more than 15 years, Francisco stole money from CM, where she worked as a bookkeeper. According to court documents, Francisco used three basic means to misappropriate company funds: she stole company checks, which she made out to “cash;” she caused checks to be written to legitimate vendors, which she then stole and deposited into her bank accounts; and she created bogus expense vouchers for other employees, which allowed to obtain checks that she deposited into her own accounts. As part of her scheme, Francisco used a signature stamp belonging to her boss to sign the checks.
Francisco used the money to finance personal expenses, such as a $300,000 down payment on her house, a down payment on a condominium, a $40,000 Cadillac Escalade, approximately $100,000 worth of jewelry, and numerous trips to locations like Hawaii. Francisco told investigators that she stole the money “because she wanted a better life,” prosecutors wrote in a sentencing memorandum filed with the court that cited a simple motive for the crimes: “greed – she wanted to live a more luxurious lifestyle.”
This case was investigated by the Federal Bureau of Investigation.
Release No. 15-017
Horse Trainer Sentenced for Rigging RacesRead the Press Release
A Central Pennsylvania thoroughbred horse trainer who raced horses at Penn National Race Course in Grantville was in Dauphin County Court in Harrisburg was sentenced today to rigging races by administering drugs to horses on race day in violation of rules and regulations banning such treatment.
The United States Attorney’s Office for the Middle District of Pennsylvania and the Dauphin County District Attorney’s Office announced that David J. Wells, 50, Grantville, was sentenced today by Court of Common Pleas Judge Deborah E. Curcillo to 6 months in prison for rigging publicly exhibited contests, in this case, thoroughbred races at Penn National Race Course. Wells was sentenced to 5 years intermediate punishment with the first 6 months in prison. The first 3 months are to be served in the Dauphin County Prison followed by 3 month’s confinement in Dauphin County Prison’s secure work release center.
According to United States Attorney Peter Smith, Wells was charged in October 2014 and plead guilty in December 2014. At the guilty plea proceeding, Wells admitted that he orally or by hypodermic injection illegally administered drugs to horses he trained and raced in order to give him and his horses an advantage in the races. Wells admitted that he was fully aware that this was in violation of the criminal laws of the Commonwealth of Pennsylvania, as well as racing rules and regulations. Wells also admitted that efforts were made to conceal this activity from the public and the Racing Commission. The activity took place between 2009 and 2013.
The prosecution stemmed from an investigation conducted by the FBI, the Pennsylvania Department of Agriculture’s Racing Commission, the Pennsylvania State Police and the Dauphin County District Attorney’s Office into alleged wrongdoing in races at Penn National Race Course. As part of the investigation, Daniel Robertson, the official clocker at Penn National, was indicted in U.S. District Court on federal wire fraud charges in November 2013 and pleaded guilty on July 22, 2014.
The Wells investigation was transferred to the Dauphin County District Attorney’s Office for prosecution of the violation of state law as part of plea negotiations between Wells and the United States. Assistant United States Attorney William A. Behe was specially appointed by Dauphin County District Attorney Edward Marsico as a Special Assistant District Attorney to handle the Wells prosecution and other related prosecutions that may arise from the ongoing federal investigation.
# # #Home Health Worker Sentenced for Defrauding Elderly PatientRead the Press Release
A St. Louis, Missouri, resident was sentenced to federal prison for access device fraud and aggravated identity theft on February 20, 2015, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Melissa Charlton, originally from Valmeyer, Illinois, was sentenced to 36 months in federal prison, $5,271.69 in restitution, a $200 special assessment and three years of supervised release.
Evidence presented in Court established that Charlton exploited an 82 year old woman from O’Fallon, Ill. Charlton obtained unauthorized access to the victim’s credit cards and her checking account to obtain money and goods valued at more than $5,000. The victim attempted to stop the fraud after she discovered fraudulent credit card purchases, but Charlton also stole her replacement credit cards and misused the victim’s social security number and date of birth to activate the replacement cards. She also used the victim’s personal information to apply for an additional credit card account without the victim’s knowledge or consent.
The investigation was conducted by agents from the US Postal Inspection Service. The case was prosecuted by Assistant United States Attorney Steven D. Weinhoeft.
Frederick Financial Officer Sentenced for Stealing over $1.2 Million from an Elderly ClientRead the Press Release
Greenbelt, Maryland – U.S. District Judge Deborah K. Chasanow sentenced Travis Wetzel, age 36, of Frederick, Maryland today to 42 months in prison followed by three years of supervised release for wire fraud and money laundering in connection with a fraudulent scheme to take $1,282,224 from an elderly client’s annuity account. Judge Blake also entered an order that Wetzel forfeit and pay restitution of $1,282,224.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
Wetzel processed financial distribution documents for an investment advisory firm located in Rockville, Maryland. In 2009, Wetzel was promoted to branch operations manager. According to his plea agreement, from July 2010 to September 2012, Wetzel took advantage of his position of trust and embezzled a total of approximately $1,282,224 from an annuity account of an elderly client without the client’s knowledge, and used the money for his personal benefit. Wetzel knew that the client was elderly, whose age and physical condition facilitated repeatedly taking money from the client’s account.
Wetzel also laundered some of the money he took by transferring the money to other bank accounts he controlled.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein praised the FBI for its work in the investigation and thanked Assistant United States Attorneys David Salem and Leah J. Bressack, who prosecuted the case.
Four Charged in Tax Refund Fraud and Identity Theft SchemeRead the Press Release
PANAMA CITY, FLORIDA – A federal grand jury indictment, unsealed today, charges Jermaine Winters, 38 of Coleman, Florida, Senora Cotton, 24 of Chipley, Florida, Rosetta Presley, 22 of Chipley, Florida, and Fontella Keith, 47 of Chipley, Florida, with conspiracy, wire fraud and identity theft in connection with the electronic filing of false federal income tax returns. The indictment was announced today by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
The indictment alleges that, between July 2011 and July 2012, the defendants used the stolen identities of assisted-living facility residents, clinical laboratory patients, and others, in an attempt to steal more than $118,000 from the United States Treasury, through the electronic filing of fraudulent tax returns.
Keith is alleged to have stolen the personal identifying information of patients at the Dogwood Inn, an assisted-living facility in Bonifay, Florida, where Keith worked. The indictment alleges that Keith gave this information to Winters, Cotton, and Presley, who then filed the fraudulent tax returns. The defendants also are alleged to have used the personal identifying information of patients from Sun Laboratory Services, a clinical laboratory in the Tampa, Florida area, to file additional fraudulent tax returns. The defendants allegedly caused the United States Treasury to pay fraudulent income tax refunds by loading refunds onto prepaid debit cards mailed by various financial institutions to addresses in the Northern District of Florida.
The arraignment for Cotton and Keith is scheduled for Monday, February 23, 2015, at 1:30 p.m. before Magistrate Judge Larry A. Bodiford at the United States Courthouse, 30 West Government Street, Panama City, Florida. The arraignment has not been scheduled for Winters or Presley.
The indictment results from an investigation by the Internal Revenue Service – Criminal Investigation, the United States Postal Inspection Service, the Florida Department of Law Enforcement, the Chipley Police Department, and the Leon County Sheriff’s Office. The case is being prosecuted by Assistant United States Attorney Gayle Littleton.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt in a court of law.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Former Security Contractor and Owner Agree to Pay $300,000 to Settle Civil Fraud ClaimsRead the Press Release
ALEXANDRIA, VA – Dawn Hamilton, 48, of Brownsville, Maryland, the chief executive officer and “figurehead” of a now-defunct Virginia-based security contracting firm, Security Assistance Corporation (“SAC”), has agreed to pay $300,000 to settle civil claims arising from a fraudulent scheme to establish SAC as a front company, which obtained more than $31 million in contract payments intended for disadvantaged small businesses through the Small Business Administration’s (SBA) Section 8(a) program.
As a result of her participation in the scheme, Hamilton pleaded guilty to major government fraud in U.S. v. Hamilton, which can be found on PACER by searching for case number 1:13cr75. Hamilton was sentenced to 48 months in prison and three years of supervised release. She was also ordered to forfeit approximately $1.2 million and pay a fine of $1 million.
According to court documents, in or about 2004, SAC received certification as 8(a) contractor. Prior to obtaining that status, a co-conspirator of the scheme, Keith Hedman, 53, of Arlington, Virginia, the owner of a then 8(a)-ineligible company Protection Strategies, Inc. (“PSI”), agreed with Hamilton to use her as a figurehead owner of SAC based on her Portuguese heritage and history of social disadvantage to obtain 8(a) contracting preferences. The Section 8(a) program allows qualified small businesses to receive sole-source and competitive-bid contracts set aside for minority-owned and disadvantaged small businesses.
According to court documents, to deceive the SBA, Hedman, Hamilton, and other co-conspirators from PSI falsely claimed that Hamilton formed and founded SAC and that she was the only member of SAC’s management, even though SAC was managed by Hedman and PSI senior leadership in violation of 8(a) rules and regulations. After SAC fraudulently obtained 8(a) status in 2004, it netted more than $31 million in fraudulently obtained contract payments in the ensuing years.
As part of the civil settlement, Hamilton, on behalf of herself and the now-defunct SAC, has agreed to pay $300,000 to resolve allegations under the False Claims Act, and other related statutory and common law remedies arising from the fraudulent scheme. The civil claims settled by Hamilton and SAC are allegations only; there has been no determination of civil liability.
The resolutions obtained in this matter were the result of parallel investigations by the Civil and Criminal Divisions of the U.S. Attorney’s Office for the Eastern District of Virginia, and the Civil Division of the Department of Justice. The civil matter was investigated by Assistant U.S. Attorney Peter Hyun and DOJ Trial Attorney Allison Cendali. The criminal case was prosecuted by Assistant U.S. Attorneys Chad Golder and Ryan Faulconer, a former Trial Attorney for the Criminal Division’s Fraud Section.
This case was investigated by NASA Office of the Inspector General (OIG), the SBA -OIG, DCIS-OIG, GSA-OIG, and DHS-OIG, with assistance from the Defense Contract Audit Agency.
Former Newark City Hall Employee Sentenced to Three Years' Probation for Producing Fraudulent Birth CertificatesRead the Press Release
NEWARK, N.J. – A former Newark City Hall employee was sentenced today to three years of probation for producing fraudulent New Jersey birth certificates, U.S. Attorney Paul J. Fishman announced.
Cory Cooke, 45, of Newark, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of producing false identification documents. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Cooke was previously employed by the City of Newark at its Office of Vital Statistics and was responsible for issuing official New Jersey birth certificates. From August 2013 to October 2013, Cooke produced four fraudulent New Jersey birth certificates using four different individuals’ personal identifying information, which Cooke had acquired from a conspirator. After producing the fraudulent New Jersey birth certificates, Cooke gave the documents to his conspirator, who subsequently sold them.
As part of the sentence, Judge Wigenton ordered Cooke to spend six months at a residential re-entry center/halfway house and ordered 200 hours of community service.
U.S. Attorney Fishman credited special agents of the U.S. Department of Homeland Security, Immigration and Customs Enforcement, Homeland Security Investigations (ICE HSI), under the direction of Acting Special Agent in Charge John P. Woods in Newark, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney J. Jamari Buxton of the U.S. Attorney’s Office Criminal Division in Newark.
15-066
Defense counsel: Stephen N. Dratch Esq., Livingston, New Jersey
Former New Haven Resident Pleads Guilty to Violating Federal Sex Offender Registration and Notification ActRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that LESTER JOY, 34, pleaded guilty today in Hartford federal court to failing to register as a sex offender.
The Sex Offender Registration and Notification Act (“SORNA”), which was passed by Congress in 2006 as part of the Adam Walsh Act, provides a comprehensive set of minimum standards for sex offender registration and notification in the United States and seeks to strengthen the nationwide network of sex offender registration and notification programs. In part, SORNA requires registered sex offenders to register and keep their registration current in each jurisdiction in which they reside, work, or go to school.
According to court documents and statements made in court, on October 25, 2002, JOY was convicted in the State of New Jersey of sexual assault in the second degree, endangering the welfare of a child in the third degree and theft in the third degree. For these offenses, he was sentenced to three years of imprisonment, lifetime community supervision and was subject to lifetime registration as a sex offender. On January 4, 2006, JOY was convicted in Suffolk County, New York, of three counts of rape in the third degree, two counts of criminal sexual acts in the third degree and two counts of disseminating indecent material to a minor. For these offenses, he was sentenced to a period of 42 to 84 months of incarceration and lifetime probation.
In 2013, prior to his release from prison, JOY was informed of his registration obligations under SORNA and he signed forms stating that he understood his sex offender registration requirements in both New York and New Jersey.
On November 30, 2013, JOY was released from the Morris County, New Jersey jail following service of a sentence for violation of his lifetime term of community supervision in New Jersey. However, he did not register as a sex offender in either New Jersey or New York, and moved to Connecticut. He failed to notify New Jersey, New York and Connecticut officials of his move to Connecticut, as required.
JOY was arrested in New Haven on March 16, 2014.
JOY has been detained since his arrest. He is scheduled to be sentenced by U.S. District Judge Michael P. Shea in Hartford on May 18, 2015, at which time he faces a maximum term of imprisonment of 10 years.
This matter was investigated by the U.S. Marshals Service and is being prosecuted by Assistant U.S. Attorney Deborah R. Slater.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Former Maverick County Commissioner, Former County Employee and Three Contractors Sentenced to Federal Prison in Connection with a Bribery, Kickback and Bid-Rigging SchemeRead the Press Release
In Del Rio today, a former Maverick County commissioner, a former Maverick County employee and three contractors were sentenced for their roles in a bribery, kickback and bid-rigging scheme that caused the 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.
“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.
United States District Judge Alia Moses sentenced:
- former Maverick County Precinct 2 Commissioner Rodolfo Bainet Heredia, age 56, to ten years in federal prison followed by three years of supervised release and ordered him to perform 1,200 hours of community service after completing his prison term. Heredia was also ordered to pay a maximum $567,003.88 in restitution to Maverick County. On June 4, 2013, Heredia pleaded guilty to one count of receiving a bribe by an agent of an organization receiving federal funds. By pleading guilty, Heredia admitted that in 2010 and 2011, he manipulated the bidding process to guarantee that contractors he chose would be awarded Maverick County construction contracts. Furthermore, Heredia admitted that he instructed the private contractors to submit inflated bids to Maverick County in order to ensure the availability of sufficient funds to perform the construction work, make a profit, and also to pay him bribes;
- Alejandra Garcia, a 28-year old former Maverick County employee whose duty was to issue Maverick County checks to private contractors, to 109 months in federal prison followed by three years of supervised release and ordered her to perform 800 hours of community service after completing her prison term. Garcia was also ordered to pay a maximum $382,254.29 in restitution to Maverick County and to report to federal authorities no later than June 8, 2015, to begin serving her prison term. In January 2013, Garcia pleaded guilty to receiving numerous cash payments of $200 to $500 in bribes from contractors and commissioners in return for her issuing thousands of dollars in Maverick County checks to contractors before the funds were approved for issuance by the Maverick County auditor’s office;
- Marcelo Alvarez, a 56-year-old surveyor and consultant from Eagle Pass, to 112 months in federal prison followed by three years of supervised release and ordered to pay a maximum $1,022,303.94 restitution to Maverick County. In April 2014, Alvarez pleaded guilty to one count of paying a bribe to an agent of an organization receiving federal funds. According to court documents, between 2010 and 2012, Alvarez paid $100 to $200 on multiple occasions to Maverick County elected officials, including two county commissioners, for their support in securing county construction projects. Ultimately, Maverick County paid in excess of $800,000 to Amistad Consulting, a company to which Alvarez was connected, to perform engineering, project management and consulting services for the county. Alvarez, designated by Amistad Consulting as the Resident Project Representative, received payment for his services of approximately $300,000 between 2010 and 2012;
- Salvador Castillon, 53-year-old owner of South Texas Concrete based in Eagle Pass, to 87 months in federal prison followed by three years of supervised release. Castillon was also ordered to pay a maximum $175,804.71 in restitution to Maverick County and perform 800 hours of community service after completing his prison term. Judge Moses also ordered that Castillon report to federal authorities by June 8, 2015, to begin serving his sentence. In December 2013, Castillon pleaded guilty to one count of paying a bribe to an agent of an organization receiving federal funds. According to court records, Castillon was awarded Maverick County construction contracts totaling $416,800 in 2010 and $148,000 in 2011. Castillon admitted that during that time period, he paid then Maverick County Precinct 2 commissioner Rodolfo Bainet Heredia approximately $57,000 in return for being awarded the construction contracts; and,
- Saul Lombrana, 65-year-old owner and operator of Fiesta Contractors based in Eagle Pass, to 33 months in federal prison followed by three years of supervised release. Lombrana was also ordered to pay a maximum $14,500.00 in restitution to Maverick County and perform 300 hours of community service after completing his prison term. Judge Moses also ordered that Lombrana report to federal authorities by June 8, 2015, to begin serving his sentence. In February 2014, Lombrana pleaded guilty to one count of paying a bribe to an agent of an organization receiving federal funds. By pleading guilty, Lombrana admitted that in March 2011, he submitted a $14,500 bid to construct 155 linear feet of concrete drain swell on Rafael Street in Precinct 1. After being awarded the contract, Lombrana never constructed the concrete drain swell, but requested and received full payment for the project. Of the $14,500 he received, Lombrana admittedly only kept $5,000 while giving the rest to a Maverick County employee Jaime Flores as a bribe.
This afternoon, Judge Moses remanded Maverick County Precinct 4 Commissioner Cesar Flores into federal custody while postponing his sentencing. A new sentencing date has yet to be scheduled. 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 contractors were awarded construction contracts in Maverick County Precinct 4 in 2010 and in 2011.
To date, eight individuals have been sentenced in connection with this investigation. Hipolito Amaya, Jose Aguilar and David Gelacio have previously received sentences of 41 months incarceration, 14 months incarceration and 12 months incarceration, respectively. Nine more defendants are scheduled for sentencing tomorrow in Del Rio before Judge Moses.
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, the Drug Enforcement Administration, and the Eagle Pass ISD Police Department. Individuals who have first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741. Assistant United States Attorneys Bryan N. Reeves, Michael Galdo and Katie Griffin prosecuted this case on behalf of the Government.
Former Fresno Police Department Detective and Fresno Marijuana Trafficker Plead Guilty to Bribery ConspiracyRead the Press Release
FRESNO, Calif. —Derik Carson Kumagai, 41, and Saykham Somphoune a/k/a, “Oat,” 41, both residents of Fresno, pleaded guilty today to conspiring to commit bribery, United States Attorney Benjamin B. Wagner announced.
According to the defendants’ plea agreements and other court documents, beginning in April of 2012, federal law enforcement was investigating a group of individuals, including defendant Somphoune and one of his associates, for suspected cultivation and distribution of marijuana. In October and November of 2013, defendant Somphuone had a series of meetings with his associate, some of which were attended by defendant Kumagai. At the time, Kumagai was a Fresno Police Department Detective. During these meetings, the associate was told that he was under federal investigation, but that in return for a bribe payment, defendant Kumagai could close the investigation and arrange to have the associate designated as a confidential informant for the Fresno Police Department. On November 6, 2013, the associate paid Kumagai approximately $20,000 cash. A few hours later, the associate signed documents for the purported purpose of becoming a confidential informant for the Fresno Police Department. The defendants were arrested in March of 2014, and the associate never actually served as a confidential informant for the Fresno Police Department.
“The defendants attempted to take advantage of the trust placed in law enforcement officers for their personal gain,” said U.S. Attorney Wagner. “Law enforcement officers who accept bribes put the public and other law enforcement officers in danger.”
“There is absolutely no room for such egregious misconduct in law enforcement,” said Special Agent in Charge Monica M. Miller of the Sacramento FBI. “Individuals who commit such crimes undermine public trust and betray the other fine officers who serve the public honestly and with the highest degree of integrity, while risking their lives daily to protect their communities.”
DEA Acting Special Agent in Charge Bruce C. Balzano stated, "The DEA will diligently work with our law enforcement counterparts to hold those accountable who tarnish the badge by engaging in criminal behavior."
"Mr. Kumagai took an oath to uphold the law and protect citizens,” said IRS Criminal Investigation Special Agent in Charge José M. Martinez. “Instead, he used his position for personal gain and betrayed the community he swore to protect. IRS-CI will continue to investigate public corruption to ensure everyone plays by the same rules—regardless of job or position.”
This case was the product of an investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, and the Internal Revenue Service, Criminal Investigation. Fresno Police Chief Jerry Dyer and the Fresno Police Department cooperated with federal law enforcement throughout the investigation. Assistant United States Attorneys Grant B. Rabenn and Kevin P. Rooney are prosecuting the case.
Kumagai and Somphoune are scheduled to be sentenced by Judge Anthony W. Ishii on May 4, 2015. Kumagai and Somphoune face a maximum statutory penalty of 5 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case is the product of the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.
Former Doral Employee and Contractor Indicted for Bank FraudRead the Press Release
SAN JUAN, P.R. – On Wednesday, February 18, a Federal grand jury returned a 13-count indictment charging two individuals for financial institution fraud, misapplication of bank funds, wire fraud and money laundering, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. The FBI is in charge of the investigation.
Defendant Annelise I. Figueroa was an employee of Doral Bank, and Vice-President of the Property and Facilities Department. Her duties and responsibilities included supervision of the maintenance of Doral Bank’s branch offices. Figueroa did not have authority to sign or approve contracts on behalf of Doral Bank, and her approval authority to commit bank funds was approximately $5,000.00. Defendant Rolando Rivera Solis was Vice-President of San Juan Tropical, a for profit corporation that provided cleaning services to Doral Bank.
The defendants engaged in a deceptive course of conduct designed to defraud Doral Bank. Defendant Annelise Figueroa would surreptitiously change the terms of a maintenance contract with San Juan Tropical, by issuing a letter of intent which materially changed the terms of a maintenance contract with Doral Bank, by specifying that the monthly fee would, in fact, be paid on a weekly basis, thereby causing the bank to pay San Juan Tropical and its principals fees to which they were not entitled, and securing benefits for herself and other family members, from San Juan Tropical.
For example, on January 21, 2011, the defendant Annelise Figueroa, issued a letter of intent indicating that the contract fee of $27,350.00 would be paid on a monthly basis. The letter was not signed by the defendant’s supervisor or any other bank executive. On January 24, 2011, Figueroa, issued a letter of intent indicating that the contract fee of $27,288.27 would be paid on a weekly basis. The letter was not signed by the defendant’s supervisor or any other bank executive.
Defendant Annelise I. Figueroa, being an employee of Doral Bank, a financial institution whose funds are insured by the Federal Deposit Insurance Corporation, with intent to injure and defraud Doral Bank, willfully misapplied, abstracted, or purloined the sum of approximately $2,350,000.00 of the moneys, funds, or credits of such institution, in that the defendant without authority altered the material conditions of a maintenance contract with San Juan Tropical, for the purpose of causing Doral Bank to make the contractually stipulated monthly payments on a weekly basis.
As part of the manner and means of the scheme to defraud, defendant Figueroa, would pressure the Accounting Department to issue the weekly payments, and would also cause other bank employees to similarly direct the Accounting Department to issue the checks to San Juan Tropical, due to her personal relationship with defendant Rivera-Solis.
“We are committed to ensuring the integrity of the banking system and to prosecuting those who through their financial crimes undermine it for their personal gain,” stated Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. “The fraudulent schemes devised to exploit our banking system for personal gain will be investigated and prosecuted to the full extent of the law. This investigation continues.”
“We will continue to aggressively investigate fraudulent financial schemes that put in jeopardy the integrity of our financial system and are often a gateway to further criminal activity,” said Carlos Cases, Special Agent in Charge of the FBI in Puerto Rico.
If convicted, the defendants face a maximum possible sentence of 30 years on the financial institution charge, 30 years on the wire fraud charge and 10 years for the money laundering charge. Figueroa is also facing a possible sentence of 30 years on the misapplication of bank funds.
The case is being investigated by FBI and prosecuted by Assistant United States Attorney José Capó-Iriarte. Indictments are only charges and are not evidence of guilt. Defendants are presumed to be innocent unless and until proven guilty. The investigation is ongoing.
Former Deputy Indicted for Civil Rights Violations and Obstruction of JusticeRead the Press Release
Fort Myers, Florida – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Michael J. Ronga (43, Cape Coral) with deprivation of civil rights and obstruction of justice. If convicted, he faces a maximum penalty of 10 years in federal prison for the civil rights charge and up to 20 years in federal prison for the obstruction of justice charge.
The indictment alleges that on May 5, 2013, while working as a deputy sheriff with the Lee County Sheriff’s Office, Ronga assaulted “R.L.C.” causing bodily injury, and also took money and a cellphone from “R.L.C.” Ronga also allegedly lied to law enforcement about his interactions with “R.L.C.” on that day.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Lee County Sheriff’s Office and the Federal Bureau of Investigation. It will be prosecuted by Special Assistant United States Attorney Amira D. Fox and Chief Assistant United States Attorney Jesus M. Casas.
Former Art Gallery Employee Sentenced to Two Years for Embezzling More Than $1 MillionRead the Press Release
Orlando, Florida – U.S. District Judge Roy B. Dalton, Jr. today sentenced Jeffery Hall (48, Maitland) to two years in federal prison for mail fraud. He was also sentenced to serve three years of supervised release, and will be ordered to pay restitution in an amount to be determined at a later proceeding. Hall pleaded guilty on November 25, 2014.
According to court documents, Hall worked at a local art gallery that also had locations outside of Florida. Over a two-year period, he used his position at the gallery to embezzle more than $1 million. Hall did this by diverting proceeds from the sale of artwork to his own personal bank accounts, or to a business account that belonged to him. He also used the gallery’s artwork as loan collateral for himself and sold some of the artwork on eBay.
This case was investigated by Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Roger B. Handberg.
Five Indicted for Identity Theft Refund Fraud ConspiracyRead the Press Release
Jackson, Miss - Timothy Benjamin Taylor, 46, of Clinton; Terence Antonio Thompson, 45, of Lithonia, Georgia; Christopher Lashawn Chamberlin, 38, of Bailey; Donald Price, 40, of Jackson; and Tamia Patrice Herndon, 44, of Jackson were indicted by a federal grand jury for conspiracy to submit false claims, conspiracy to commit wire fraud, and conspiracy to commit identity theft for their roles in a scheme to submit fraudulent federal income tax returns to the IRS, announced U.S. Attorney Gregory K. Davis and Jerome R. McDuffie, Acting Special Agent in Charge, IRS - Criminal Investigation.
According to the indictment filed on January 7, 2015, the defendants obtained stolen identification information, used that information to fill out federal tax returns, submitted those returns with false wage and deduction information and attempted to receive the refunds generated by those returns.
The defendants have been arraigned by U.S. Magistrate Judge Linda Anderson and the case is set for trial before U.S. District Judge Carlton W. Reeves during the court term beginning on March 2, 2015. If convicted, the defendants each face up to ten years in prison for conspiracy to submit false claims, twenty years in prison for conspiracy to commit wire fraud, and five years in prison for conspiracy to commit identity theft. Each count of the indictment carries a maximum fine of $250,000.
Jerome R. McDuffie, Acting Special Agent in Charge, IRS - Criminal Investigation, stated, "Putting an end to tax-fraud-related identity theft is still a major investigative priority for IRS – CI. We want to protect taxpayers from being victimized by these crimes, and are working diligently to let individuals know that IRS-CI is watching and will investigate and seek prosecution in instances where identity theft crimes violate the statutes we protect."
This case was investigated by IRS - Criminal Investigation and will be prosecuted by Assistant U.S. Attorney Scott Gilbert.
The public is reminded that an indictment is a formal charge that a defendant has committed a violation of the federal criminal laws. All defendants are presumed innocent unless and until proven guilty.
Elmira Man Pleads Guilty to Producing Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that Shannon T. Lewis, 41 of Elmira, NY, pleaded guilty to producing child pornography before U.S. District Court Judge Charles J. Siragusa. The charge carries a mandatory minimum 15 years and a maximum penalty of 30 years in prison, a fine of up to $250,000, or both.Assistant U.S. Attorney Craig R. Gestring, who is handling the case, stated that Lewis was first identified during a sexual assault investigation being conducted by the Elmira Police Department. Police learned that the defendant harbored at risk minors who ran away from a nearby juvenile facility. While in his custody, Lewis gave the minors drugs including bath salts. Investigators learned that the defendant and another adult raped one of the minors, a 16 year old girl and that Lewis videotaped the rape. Police then contacted the Corning Resident Office of the Federal Bureau of Investigation for assistance.
During the investigation, several homemade sexually explicit videos of the child were found on the defendant’s computer. The videos showed Lewis hiding the camera in his room before bringing the child in and raping her. The defendant was also seen giving the child victim bath salts before, during, and after the rape.
Lewis was convicted of Rape in Chemung County and is presently serving a sentence of two and a half years in State Prison for that offense. Following today’s plea, the defendant was remanded to the custody of the United States Marshals Service pending his federal sentencing.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to 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 www.projectsafechildhood.gov.
The plea is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, Corning Resident Office, and members of the Elmira Police Department, under the direction of Chief Michael Robertson.
Sentencing is scheduled for May 27, 2015, at 11:00 a.m. before Judge Siragusa.
Dickson, Tennessee Medical Practice to Pay More Than Half A Million Dollars to Settle False Claims Act AllegationsRead the Press Release
Dickson Medical Associates, P.C. (“DMA”) of Dickson, Tennessee has agreed to pay civil damages of over $500,000 to settle allegations that it violated the False Claims Act, announced David Rivera, United States Attorney for the Middle District of Tennessee. The alleged false claims involved the importation and distribution of foreign, non-FDA approved prescription drugs prohibited under the Food, Drug, and Cosmetic Act.
Specifically, the settlement resolves allegations by the United States that a doctor, through DMA and as one of its physicians and shareholders, obtained Aclasta®, a non-FDA approved version of the drug Reclast®, from foreign distributors at various times from 2008 through 2012. The doctor prescribed these drugs to patients and then, through DMA, billed for the foreign drugs as FDA-approved Reclast®, despite the fact that the foreign drugs were not intended for distribution in the United States and in some instances, the drug labels appeared in foreign languages. The drug is predominantly used to treat osteoporosis and bone damage.
“The Food, Drug and Cosmetic Act and its enacting regulations exist to ensure the safety and efficacy of prescription drugs sold within the United States,” said U.S. Attorney David Rivera. “The resolution set forth in this settlement agreement should send a clear message that this Office will diligently pursue any violations of those laws.”
This matter was investigated by the U.S. Food and Drug Administration- Office of Inspector General, the U.S. Department of Health and Human Services- Office of Inspector General, the Tennessee Bureau of Investigation, and the United States Attorney’s Office for the Middle District of Tennessee. The United States was represented by Assistant U.S. Attorney Christopher C. Sabis.
This settlement agreement is neither an admission of liability by DMA nor a concession by the United States or the State of Tennessee that the claims are not well founded.
Detroit man sentenced on heroin chargeRead the Press Release
HUNTINGTON, W.Va. – United States Attorney Booth Goodwin announced today that Anthony M. Barnes, 38, of Detroit, was sentenced to 21 months in federal prison.
In November 2014, Barnes pleaded guilty to possession of heroin with the intent to distribute. On April 8, 2014, officers with the Huntington Police Department executed a search warrant in the 900 block of 6th St. in Huntington. Barnes was there when they entered, attempting to conceal heroin by smashing it into the carpet. Officers seized around 18 grams of heroin, which Barnes admitted to possessing for distribution.
Chief United States District Judge Robert C. Chambers imposed the sentence.
The case was investigated by the Huntington Violent Crimes and Drug Task Force. Assistant United States Attorney Joseph F. Adams handled the prosecution.
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Detroit man pleads guilty to heroin chargeRead the Press Release
HUNTINGTON, W.Va. – United States Attorney Booth Goodwin announced today that Robert Lamar Payne, 31, of Detroit, pleaded guilty to possession of heroin with the intent to distribute.
Payne admitted that from 2012 to 2014, he conspired with other individuals to distribute heroin from Detroit in the Huntington area. He used an apartment in the 1000 block of 12th Avenue in Huntington to store and distribute the heroin. On Feb. 13, 2014, agents with the Huntington Violent Crimes and Drug Task Force searched the apartment, recovering around 41 grams of heroin, two firearms and $2,411 in cash.
That same day, agents also searched a room at the Super 8 Motel on 16th Street Road in Huntington. There, agents found Payne, and accomplice Derrick Goodwin, with more than 200 grams of heroin and $2,915 in cash. Payne and Derrick Goodwin stated they jointly possessed the heroin for the purpose of distribution.
Payne face up to 40 years in federal prison and a $5 million fine. He is scheduled to be sentenced on May 26, 2015.
Chief United States District Judge Robert C. Chambers presided over the plea hearing.
The case is being investigated by the Huntington Violent Crimes and Drug Task Force. Assistant United States Attorney Joseph Adams is in charge of the prosecution.
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Davenport Man Sentenced in Federal Court for Felon in Possession of a FirearmRead the Press Release
DAVENPORT, IA - On February 20, 2015, Terrell Devon Lillybridge, age 33, of Davenport, Iowa, was sentenced by United States District Court Judge Stephanie M. Rose to 46 months in prison, after pleading guilty to being a felon in possession of a firearm, announced United States Attorney Nicholas A. Klinefeldt. Lillybridge was also ordered to serve three years of supervised release following imprisonment, and to pay $100 towards the Crime Victims Fund.
On June 27, 2014, a Davenport, Iowa, Police Department officer attempted a traffic stop of a vehicle driven Terrell Devon Lillybridge. Prior to this date in 2007, Lillybridge had been convicted of a felony offense. Lillybridge did not stop in response to the officer’s visual indications to stop, and officers thereafter located Lillybridge a short distance away. After Lillybridge got out of the driver’s side of the vehicle, two officers approached him and observed Lillybridge drop a small baggie containing what was later determined to be marijuana. Officers placed Lillybridge into custody. During a pat down of Lillybridge, officers found in his right front pocket a loaded High Point 9mm handgun.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Davenport, Iowa, Police Department. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa as part of the Project Safe Neighborhood initiative.
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Davenport Man Sentenced in Federal Court for Felon in Possession of a FirearmRead the Press Release
DAVENPORT, IA - On February 20, 2015, Bradley Joseph Patton, age 46, of Davenport, Iowa, was sentenced by United States District Court Judge Stephanie M. Rose to 15 months in prison, after pleading guilty to being a felon in possession of a firearm, announced United States Attorney Nicholas A. Klinefeldt. Patton was also ordered to serve three years of supervised release following his imprisonment and to pay $100 towards the Crime Victims Fund.
On April 2, 2014, Davenport, Iowa, Police officers conducted a search warrant at a Davenport house where Patton resided. Officers found and seized four firearms out of a safe. These firearms were identified as a Bushmaster XM15-E2S rifle and loaded magazine, a Remington 1100 12 gauge shotgun, a Glock 21 .45 caliber handgun with loaded magazine, and a Taurus "the Judge" .410 gauge revolver. Patton admitted that he knowingly possessed all four of these firearms. Patton was convicted of a felony in 1991.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Davenport, Iowa, Police Department. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa as part of the Project Safe Neighborhood initiative.
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Court Imposes $1.8 Million Restitution Order Against Three Defendants in Merced County Unlawful Asbestos Abatement CaseRead the Press Release
FRESNO, Calif. —Defendants, Joseph Cuellar, age 74, a resident of Fresno, California; Patrick Bowman, age 48 of Los Banos, California; and Rudolph Buendia, age 52 of Planada, California, were ordered today to pay a total of $1,801,832.50 in restitution to 65 victims exposed to airborne asbestos as a result of defendants' unlawful asbestos abatement at Building 325 at the former Castle Air Force Base in Atwater, California, United States Attorney Benjamin B. Wagner announced. The order, which was a result of the defendants’ prior convictions for knowingly violating the asbestos work practice standards of the National Emissions Standards for Hazardous Air Pollutants, was part of a written ruling issued by United States District Judge Lawrence J. O’Neill. All three defendants previously entered guilty pleas and all had been sentenced to terms of imprisonment of between 24 and 27 months.
The 65 victims referenced in the order made claims for restitution for the costs of medical monitoring necessary for the early detection of asbestos-related illnesses that might arise as a result of their exposure to airborne asbestos caused by defendants' unlawful asbestos abatement crimes.
According to court documents, Firm Build, Inc., performed the demolition and renovation work to convert the former Castle Air Force Base's motor pool at Building 325 into an automotive mechanic training center. Bowman was Firm Build's president, Cuellar was its administrative manager, and Buendia was its construction project site manager. The prosecution stemmed from defendants' unlawful asbestos abatement during the demolition and renovation of Building 325 during September 2005 through January 31, 2006. During the renovation at Building 325, Firm Build, Inc., directed its employees and high school students from the Workplace Learning Academy to remove and dispose of asbestos containing insulation on pipe and on other facility components without utilizing proper protective equipment or taking protective measures. Bowman was also the Vice-Principal in charge of the Workplace Learning Academy.
This case is the result of an investigation by the Merced County District Attorney's Office, the San Joaquin Valley Unified Air Pollution Control District, and the United States Environmental Protection Agency.
“There is no safe level of exposure to asbestos,” said Jay Green, Special Agent-in-Charge of EPA’s criminal enforcement program in California. “By directing student workers to illegally remove demolition debris containing asbestos, knowing the students had neither the training nor the proper safety equipment, the defendants in this case exposed the students and other workers at the job site, and their respective families to dangerous and potentially deadly carcinogens, and jeopardized all of their futures. Today's sentence sends a strong message that EPA and its partner agencies will continue to protect those vulnerable to environmental crimes by vigorously prosecuting criminals who place profit ahead of public health.”
Assistant United States Attorneys Samuel Wong and Melanie Alsworth prosecuted the case.
District Judge O'Neill previously ordered Cuellar to self-surrender for service of his sentence on March 9, 2015.Corpus Christi Man Charged for Kidnapping ChildRead the Press Release
CORPUS CHRISTI, Texas – Austin Carlin, 19, of Corpus Christi, has been charged in a criminal complaint for violating the federal kidnapping act, announced U.S. Attorney Kenneth Magidson.
According to the federal criminal complaint filed this afternoon, Carlin abducted a child from her residence in the early morning hours of Feb. 22, 2015. Carlin allegedly stole a vehicle and drove out of Corpus Christi with the child. An Amber Alert was immediately disseminated in pursuit of Carlin and the child.
Authorities pulled Carlin over as he drove on Interstate 10 approximately 350 miles west of San Antonio. Law enforcement was able to arrest Carlin and successfully recover the child and return her to her family.
Carlin is in custody and expected to make his initial appearance before U.S. Magistrate Judge Jason Libby tomorrow at 2:00 p.m.
If convicted, he faces a minimum of 20 years and up to life in federal prison as well as a possible $250,000 fine.
The charges are the result of the investigative efforts of the FBI, Corpus Christi Police Department and the Texas Department of Public Safety. Assistant U.S. Attorney Hugo R. Martinez is prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Coralville Man Sentenced in Federal Court on Possession of Child Pornography ChargeRead the Press Release
DAVENPORT, IA - On February 20, 2015, Anthony Arn, age 44, formerly of Coralville, was sentenced by United States District Court Stephanie M. Jones to 45 months in prison, announced United States Attorney Nicholas A. Klinefeldt. Arn was also ordered to serve ten years of supervised release following imprisonment, and to pay $100 towards the Crime Victims Fund. Arn will also be required to register as a sex offender.
On July 19, 2011, law enforcement officers conducted a search of Arn’s Coralville residence and seized several computers and related equipment. A forensic examination of the equipment seized found 110 digital images and 4 videos of minor engaged in sexually explicit conduct. Arn pled guilty to possession of child pornography on October 6, 2014.
This case was investigated by the United States Department of Homeland Security, and the case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa as part of the Project Safe Childhood initiative.
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Concord Man Sentenced to more than Three Years in Prison for Defrauding Credit UnionRead the Press Release
A Concord Township man was sentenced to more than three years in prison for defrauding Taupa Lithuanian Credit Union out of $2.3 million, law enforcement officials said.
John Struna, 52, was sentenced to 43 months in federal prison and ordered to pay more than $2.3 million in restitution. He pleaded guilty to seven counts -- one count of conspiracy to commit bank fraud, one count of bank fraud, one count of making false statements and four counts of money laundering.
Struna has forfeited a restaurant he owned – the Sunny Street Café in Concord Township – a condominium in Florida and a 2014 Mazda because they were purchased with proceeds of the fraud, according to court documents.
The guilty plea was announced by Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office, and Kathy Enstrom, Special Agent in Charge of the Internal Revenue Service – Criminal Investigations.
The National Credit Union Administration and the Ohio Department of Commerce took possession of Taupa last year and placed it into receivership due to its insolvency. Taupa, based in Cleveland, had about 1,150 members and assets of approximately $24 million, according to court records.
Credit union CEO Alex Spirikaitis, former teller Michael Ruksenas and Vytas Apanavicius have previously been found guilty for their roles in conspiracies related to defrauding the credit union.
Struna maintained both personal and corporate accounts at Taupa dating back to 1995. He began a conspiracy with Spirikaitis in 2002 and continued through 2013, during which time Spirikaitis caused Taupa to make approximately 46 fraudulent transfers into Struna’s accounts, according to court documents.
In 2011, Struna requested and received $112,105 from Spirikaitis for the purchase of a condominium located in Ft. Myers, Florida. At no time did Struna submit any credit applications or loan documents, according to court documents.
The fraudulent transfers totaled approximately $2.3 million. From 2002 through 2013, Struna repaid only approximately $15,000 of the $2.3 million Spirikaitis transferred into his accounts, according to court documents.
This case is being prosecuted by Assistant United States Attorney Robert J. Patton and Special Assistant United States Attorney Derek Kleinmann. The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service.
Colombian Man Pleads Guilty to Visa Fraud Related to Drug Trafficking and Conspiracy to Possess with Intent to Distribute MarijuanaRead the Press Release
Click here for a copy Hector Diaz plea agreement
DENVER – Hector Diaz, age 50, of Colombia, pled guilty this morning before U.S. District Court Judge Robert E. Blackburn to one count of visa fraud committed in facilitation of a drug trafficking crime and one count of conspiracy to possess with intent to distribute less than 50 kilograms of marijuana, federal authorities announced. Diaz, who is free on bond, is scheduled to be sentenced on May 29, 2015 at 9:00 a.m. by the Honorable Judge Blackburn.
If convicted of visa fraud committed in facilitation of a drug crime, the defendant faces not more than 20 years in federal prison, and up to a $250,000 fine. If convicted of conspiracy to possess with intent to distribute less than 50 kilograms of marijuana, Diaz faces not more than 5 years imprisonment, and up to a $250,000 fine.
This case is being investigated by the Drug Enforcement Administration (DEA), the IRS – Criminal Investigations (IRS CI), and the U.S. Department of State, Diplomatic Security Services (DSS).
Diaz is being prosecuted by Assistant U.S. Attorneys M.J. Menendez and Bradley Giles, with assistance regarding asset forfeiture from Assistant U.S. Attorney Tonya Andrews.
Boone County man sentenced on drug chargeRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced today that Terry L. Daugherty, 50, of Nellis, Boone County, West Virginia, was sentenced to 32 months in federal prison, followed by three years of supervised release.
In November 2013, Daugherty pleaded guilty to arranging the delivery of a package containing methamphetamine to resident of Chris Curry. Curry pleaded guilty to agreeing to the scheme with the reward of receiving a small amount of the drugs, and is scheduled to be sentenced in March 2015.
On March 14, 2014, the package was delivered to Curry’s residence by undercover police officers, who had intercepted it in transit. After Curry accepted the package, officers executed a search warrant for the residence and retrieved the package. Curry provided a statement detailing his involvement with Daugherty, who admitted the package was his when questioned by law enforcement.
United States District Judge Thomas E. Johnston imposed the sentence.
The case was investigated by the West Virginia State Police and Drug Enforcement Administration. Assistant United States Attorney John J. Frail handled the prosecution.
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Bergen County, New Jersey, Doctor Charged with Fraudulently Billing for Office Visits that were Never RenderedRead the Press Release
Altered Patients’ Medical Records to Conceal Scheme
NEWARK, N.J. – A family medicine physician with offices in Cresskill and Little Falls, New Jersey, was arrested this morning and charged with fraudulently billing Medicare, Medicaid and private health care insurance companies hundreds of thousands of dollars for physician office visits that were never rendered, U.S. Attorney Paul J. Fishman announced.
Albert Ades, 60, of Englewood, New Jersey, was indicted by a federal grand jury in Newark on Feb. 20, 2015, on one count of health care fraud and 35 counts of making false statements relating to health care matters. The indictment was unsealed today. Ades is scheduled to appear later today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.
According to the indictment:
Ades, a licensed family medicine doctor who owns and operates Albert Ades M.D., P.A., fraudulently billed insurers for face-to-face physician office visits. Instead, he wrote prescriptions, authorized refills, or performed other tasks, without ever seeing those patients on the billed dates. Ades altered, and instructed individuals working at his medical practice to alter, patients’ medical charts by inserting fabricated blood pressure readings, among other notations, to make it appear as if patients had visited Ades’s office on dates for which Ades had billed their insurance plans.
From 2005 through June 2014, Ades billed Medicare, Medicaid and various private payors for physician office visits with patients on dates when he, in fact, had written prescriptions, authorized refills, or performed other tasks, without ever having seen those patients on the billed dates. To conceal his scheme, Ades altered patients’ medical records to make it appear as if patients had been seen at his office, when in fact they had not been there. When one insurance plan initiated an audit after a patient reported Ades for billing prescription refills as office visits, Ades shredded original medical records and created bogus medical records to obstruct the audit. Between 2008 and 2013, at least four individuals working at Ades’s medical offices told Ades that his billing of prescriptions or refills out as office visits was illegal.
The charge of health care fraud carries a maximum penalty of up to 10 years in prison. Each of the 35 charges of making a false claim as to health care matters carries a maximum penalty of up to five years in prison. Each count in the indictment carries a maximum fine of $250,000 or twice the gross gain or loss resulting from the crime.
U.S. Attorney Fishman credited special agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Richard M. Frankel; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and investigators with the U.S. Attorney’s Office with the investigation leading to the indictment.
The government is represented by Jane H. Yoon of the U.S. Attorney’s Health Care and Government Fraud Unit.U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
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Defense counsel: Miles Feinstein Esq., Clifton, New JerseyBelleville Man Charged with Possession of Child PornographyRead the Press Release
Michael M. Anderson, 25, of Belleville, IL, was arraigned today on a one count Indictment charging him with Possession of Prepubescent Child Pornography. The Indictment alleges that on or about September 4, 2014, Anderson knowingly possessed a digital recording which contained child pornography that involved a prepubescent minor or a minor who had not attained 12 years of age. Trial is scheduled for April 29, 2015 in front of the Honorable Nancy J. Rosenstengel. If convicted, Anderson faces a term of imprisonment of not more than twenty years, a fine of up to $250,000, and a term of supervised release of not less than five years, up to life.
An indictment is merely the method by which federal charges are lodged. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
The case was investigated by the Federal Bureau of Investigation and is assigned to Assistant United States Attorney Laura Reppert.
Bank Robber Sentenced to 188 Months ImprisonmentRead the Press Release
FRESNO, Calif. — Fausto Arthur Cruz Hernandez, 44, resident of Mexico, was sentenced today by United States District Judge Lawrence J. O'Neill to over 15 years in prison for bank robbery and for violating a previously imposed term of federal supervised release, United States Attorney Benjamin B. Wagner announced.
According to court documents, on July 22, 2014, the defendant robbed the Bank of the West at 7062 N. First Street in Fresno. The defendant presented a note to a teller that said, “I want $50,000,” and “This is a robbery.” The defendant demanded, “hundreds only.” The teller gave him the hundred dollar bills in her drawer, and he asked what else she had. She said she had nothing else and attempted to push the alarm button. The defendant saw what she was doing and said, “don’t push the button, put your hands up.” The defendant showed her what the teller recognized as a black handgun, and told all of the tellers to “get on the floor.” They did and the defendant left the bank.
Due to prior felony convictions, the defendant qualified as a career criminal, which results in enhanced penalties under federal law. In sentencing the defendant, Judge O’Neill recognized the need to protect the community from the defendant’s violent behavior.
"We are thankful for the Fresno Police Department's collaborative efforts and for the assistance that was received from the public. Together, we ensured an armed and dangerous criminal faced justice," said Supervisory Special Agent Jacqueline Neumann of the Sacramento FBI's Fresno Resident Agency. "The public is not powerless and can fight crime by providing information to identify individuals who put their communities at significant risk.”
This case was the product of an investigation by the Federal Bureau of Investigation and the Fresno Police Department. Assistant United States Attorney Kimberly A. Sanchez prosecuted the case. The case is part of the Project Safe Neighborhoods (PSN) initiative which is a coordinated effort between federal, state and local law enforcement authorities aiming to make our community safer by targeting firearm offenses.
The defendant is currently in custody and will remain there throughout the remainder of his sentence.Baltimore Man Sentenced for Embezzling over $200,000 of Social Security Benefits in A Period of 18 YearsRead the Press Release
Baltimore, Maryland – U.S. District Judge Ellen L. Hollander sentenced John Wharton, age 74, of Baltimore, late on Friday, February 20, 2015 to one year and a day in prison followed by three years of supervised release for conspiring to defraud the federal government of social security benefits, making a false statement in regard to social security benefits, and two counts of theft of government property. Judge Hollander also entered an order that Wharton forfeit and pay restitution of $172,731.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Michael McGill of the Social Security Administration (SSA) - Office of Inspector General, Philadelphia Field Division; and Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services.
According to evidence presented at trial, John Wharton lived with his wife Joeann Wharton, except for a few brief periods of time. John Wharton knew that Joeann applied for disability benefits with the SSA, falsely stating that she was separated from John Wharton. Based on that false claim, she was approved for disability benefits with the diagnosis of mental retardation. From May 1997 to December 2012, Joeann fraudulently received not less than $106,613 in disability benefits.
Trial evidence showed that in 1993, Joeann applied with SSA and was approved for disability benefits as a representative payee for the couple’s then-minor son. Although she was required by SSA to spend the SSI benefits for their son on his care and support, John and Joeann hid the benefits from him. From January 1996 to December 2004, Joeann unlawfully received over $36,000 in disability benefits as representative payee for their son. Although Joeann provided a written statement to SSA in which she falsely claimed that her son was living with her, the son testified at trial that he had not lived with his parents since the mid-1990’s, and he had to work two jobs to make ends meet during most of the period when his mother was collecting disability benefits on his behalf.
In late 2000, Joeann Wharton signed the couple’s son up for benefits as a disabled adult on John Wharton’s Title II record, which would entitle their son to benefits in addition to his disability benefits, if he was disabled and unable to work—which he was not. Between 2001 and 2004, Joeann received at least $15,121 in Title II benefits for their son, none of which she spent for his care or support. The son testified at trial that he was also unaware of these benefits. Prior to 2004, SSA became aware of his work activity and assessed an overpayment of $10,328 against him, which he paid to SSA despite never receiving the benefits in the first instance. He paid back the overpayment from wage and income tax refund garnishments. When he called his parents to complain, they both disclaimed any knowledge of the benefits paid in his name.
After the death of one of the Whartons’ daughters, Joeann applied and was approved to be representative payee for their two granddaughters in May 2002, who at that time were seven and nine years old. In July 2011, Joeann forged a granddaughter’s signature on a check from SSA that she then deposited into her personal account. From June 2009 to August 2012, Joeann received $50,152 in SSA survivor’s benefits as representative payee for her two granddaughters, despite the fact that both granddaughters had moved into their aunt’s house no later than June of 2009. The granddaughters testified at trial that from 2002 to 2009, their grandparents sometimes did not provide them food, and never provided clothing and school supplies. The granddaughters also testified that while living with their grandparents, they were required to spend most of their time in their room, and were not allowed to enter the office, kitchen or living room. Joeann and John Wharton concealed Joeann’s receipt of the survivor’s insurance benefits from their granddaughters, and failed to spend the benefits for their care and support as required by SSA.
Twice in August 2012, John and Joeann Wharton appeared together at an SSA office in Towson and made false statements that their granddaughters continued to reside with them. At her initial appearance and arraignment on February 22, 2013, Joeann falsely claimed to U.S. Pretrial Services that she occupied the upper floors of her home, while John Wharton lived exclusively in the basement. A subsequent search of the home revealed that the Whartons resided together in the home.
John Wharton previously pleaded guilty to theft of government property in connection with his scheme to collect a second set of Title II retirement benefits under the alias “James L Wharton,” for which he received more than $30,000 in benefits after April 2010. He received these benefits while also collecting retirement benefits under his true name and social security account number. At trial, John Wharton was convicted by the federal jury of conspiring to defraud the federal government of social security benefits, making a false statement in regard to social security benefits and a second count of theft of government property.
Joeann Wharton, age 61, of Baltimore, was convicted by the federal jury of the conspiracy, making a false statement in regard to social security benefits, social security benefit fraud, and two counts of theft of government property. Judge Hollander sentenced Joeann Wharton on February 12, 2015 to five years of probation, and entered an order that she forfeit and pay restitution of $155,783.
United States Attorney Rod J. Rosenstein praised the SSA – OIG and HHS - OIG for their work in the investigation. Mr. Rosenstein thanked Special Assistant U.S. Attorney Paul K. Nitze and Assistant United States Attorney Judson T. Mihok , who prosecuted the case.
Attorney General Holder Statement on the Departure of Anne Tompkins as the United States Attorney of the Western District of North CarolinaRead the Press Release
Attorney General Eric Holder released the following statement on the departure of U.S. Attorney Anne Tompkins:
“As United States Attorney for the Western District of North Carolina, Anne Tompkins has pursued the cause of justice with passion, with integrity, and with results,” said Attorney General Holder. “In her outstanding work on matters involving health care and financial fraud, she helped safeguard the well-being of the American people and bring wrongdoers to justice. Through her service on the Attorney General’s Advisory Committee, she proved herself to be an indispensable advisor on a range of vital issues. And with her efforts to protect civil rights and combat human trafficking, she stood up for innumerable men, women, and children who are too frequently overlooked and too often underserved. Over the course of her extraordinary career, Anne has never lost sight of the most vulnerable in her own community, and has spearheaded trailblazing projects to engage young people in the work of building a more just society, from anti-bullying efforts to leadership development. Through her work at all levels, she has served as an inspiring example to public servants throughout the country – including me. And while I will miss her distinguished leadership and wise counsel, I look forward to all that she will achieve in the next stage of her already remarkable career.”
Anderson Woman Pleads Guilty to Fraud Involving Tax Refund ChecksRead the Press Release
Contact Person: Bill Watkins (864) 282-2100
Columbia, South Carolina ---- United States Attorney Bill Nettles stated today that Helen Jean Anderson, age 57, of Anderson, South Carolina, pled guilty today in federal court in Greenville, to conspiracy to commit mail fraud, a violation of Title 18, United States Code, Section 1349. Senior United States District Henry M. Herlong, Jr. of Greenville accepted the plea and will impose sentence after he has reviewed the presentence report which will be prepared by the U.S. Probation Office.
The evidence at the change of plea hearing established that Anderson and various co-conspirators would obtain the means of identification of other individuals and then file fraudulent tax returns. Once the Treasury checks arrived, the co-conspirators sought ways to negotiate the checks. An eye-witness at a convenience store in the upstate told law enforcement that Helen Anderson had recently been in the store and claimed to have 200 Treasury checks to cash and said that she would pay $500 per check to cash them. The eye-witness contacted the police.
On August 6, 2013, a confidential informant working with United States Postal Inspectors was wired for audio and video and met with Helen Anderson. Anderson gave the informant multiple Treasury checks to cash. Anderson instructed the informant to bring her the money from the cashing of the checks within 2 days. She told the informant that she might have more Treasury checks available to cash once the informant returned the money to her.
In order to hide her ties to the Treasury checks, Anderson paid co-conspirators to allow her to use their addresses so checks and other tax documents would be sent to those addresses and would not obviously be associated with Anderson.
Law enforcement estimates that Anderson and her co-conspirators negotiated $483,294.40 in Treasury checks derived from fraudulent returns.
Mr. Nettles stated the maximum penalty Anderson can receive is a fine of $250,000 and/or imprisonment for 20 years, plus a special assessment of $100.
The case was investigated by agents of the Internal Revenue Service, the United States Postal Inspection Service, and the Anderson County Sheriff’s Office. Assistant United States Attorney Bill Watkins of the Greenville office handled the case.#####
650 Attendees Registered for Statewide Anti-Human Trafficking ConferenceRead the Press Release
On February 23, 2015, James L. Santelle, United States Attorney for the Eastern District of Wisconsin announced that more than 650 people have registered for “Not for Sale”: Wisconsin’s Response to Human Trafficking conference that will take place February 24-25, 2015, at the Crowne Plaza Hotel in Milwaukee, WI. Attendees include representatives from law enforcement, non-governmental organizations (NGOs), social service agencies, and medical professionals. The conference is designed to serve as an educational platform for professionals and skilled volunteers working in the area of human trafficking.
The conference will showcase both local and national experts in sex and labor trafficking. A sampling of the national presenters include: Ms. Rachel Lloyd founder of Girls Educational and Mentoring Services (GEMS) of New York; Prof. Bridgette Carr of the University of Michigan Law School, Human Trafficking Clinic; Attorney Katherine Kaufka Walts of Loyola University Chicago, Center for the Human Rights of Children; and Prof. Celia Williamson, University of Toledo, Human Trafficking and Social Justice Institute. The conference will also include presentations by Wisconsin advocates, law enforcement officers and prosecutors.
International trafficking will be discussed by special invited guests from the Office of the Attorney General for Mexico and the Collective Against Trafficking, an organization of 15 Mexican NGOs. Nelly Montealegre Diaz, Special Prosecutor in Charge of Crimes of Violence Against Women and Trafficking together with Mónica Elizabeth Salazar, Director of the Collective Against Trafficking will address the topic of U.S. and Mexican law enforcement working together to combat cross-border trafficking of children.
The conference is sponsored by the City of Milwaukee Health Department-Office of Violence Prevention, Federal Bureau of Investigation, Homeland Security Investigations, Human Trafficking Task Force of Greater Milwaukee, Milwaukee County District Attorney’s Office, Milwaukee Police Department, National Immigrant Justice Center, Sheboygan Police Department, UMOS, Inc. – Latina Resource Center, United States Attorney’s Office, Eastern and Western Districts of Wisconsin, and the Wisconsin Department of Justice.
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Friday 20 February 2015
Youngstown Man Sentenced to 10 Years in Prison for Crack DistributionRead the Press Release
A Youngtown man was sentenced to 10 years in prison for narcotics offenses, law enforcement officials said.
Terrence D. Howell, 43, previously pleaded guilty to possession with intent to distribute crack cocaine and maintaining a drug house.
Howell possessed more than 28 grams of crack cocaine on April 30, 2014, with the intent to distribute the drugs. He also used a home on Arch Street in Youngstown to distribute and manufacture crack cocaine from February through April 2014, according to court documents.
“We will continue to work with our partners to lock up those who attempt to flood Youngstown with drugs,” U.S. Attorney Steven M. Dettelbach said.
“I would like to express my appreciation for the dedicated work of the Mahoning Valley Law Enforcement Task Force on this case,” ATF Special Agent in Charge Donald Soranno said. “Cooperative efforts with our law enforcement partners enhance our ability to remove violent criminals from the streets and make our communities safer.”
This case was prosecuted by Assistant U.S. Attorney David M. Toepfer following an investigation by the ATF and the Mahoning Valley Law Enforcement Task Force.
Willoughby Hills Man Sentenced to 16 1/2 Years in Prison for Cocaine Trafficking, Money Laundering and Firearms PossessionRead the Press Release
A Willoughby Hills man was sentenced to 16 1/2 years in prison for supplying multi-kilogram shipments of cocaine to other dealers for distribution in Northeast Ohio, as well as related crimes, law enforcement officials said.
Troy Williams, 44, previously pleaded guilty to conspiracy to possess with intent to distribute cocaine, possession with intent to distribute heroin, being a felon in possession of a firearm and three counts of money laundering.
He was one of 12 people indicted for their roles in the conspiracy, which lasted between 2010 and 2013. All 12 have been found guilty of crimes in U.S. District Court.
Williams supplied Jason and Joseph Phillips with multi-kilogram shipments of cocaine. All the men charged then arranged for or assisted in the redistribution of the cocaine in the Northern District of Ohio and elsewhere, according to court documents.
In April 2013, Williams also possessed heroin that he intended to distribute, as well as a firearm and ammunition, despite previous felony convictions that prohibited him from having a firearm, according to court documents.
Williams laundered approximately $72,730 in drug proceeds at the Horseshoe Cleveland Casino in July and November 2012. He did this by using cash from drug proceeds to purchase casino chips, according to court documents.
“This defendant led a group that dealt cocaine and heroin throughout Cleveland,” said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio. “He illegally carried a firearm and tried to launder his dirty drug money in downtown Cleveland. This sentence is well deserved.”
“We have zero tolerance for drug dealers. This sentence sends a clear message to those in the drug business,” said Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office. “If you put drugs on the streets of Cleveland, we will find you, arrest you and you will go to jail.”
“This joint effort demonstrates that Ohio’s casinos will not be used by drug traffickers to clean their money,” said Troy N. Stemen, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “The laundering of drug money is as important to drug traffickers as the sale of their illegal drugs. Without these ill-gotten gains, the drug traffickers could not finance their organizations.”
“The Ohio Casino Control Commission takes our mission to ensure the integrity of casino gaming in Ohio seriously, and appreciates the leadership of the US Attorney’s Office and the IRS in this case,” said Matthew Schuler, Executive Director of the Ohio Casino Control Commission. "We will aggressively continue to hold accountable those who would seek to use Ohio’s casinos as a platform for criminal activity.”
Williams will forfeit10 watches, $1,760 in cash as well as a pistol, ammunition and two loaded magazines.
These cases are being prosecuted by Assistant U.S. Attorney Robert F. Corts following an investigation by the Northern Ohio Law Enforcement Task Force, and assistance from the Ohio Casino Control Commission. The NOLETF is a multi-agency task force comprised of investigators from the FBI, Cuyahoga Metropolitan Housing Authority, Drug Enforcement Administration, Internal Revenue Service, Immigration and Customs Enforcement, U.S. Coast Guard Investigative Service, Cleveland Division of Police, Cleveland Heights Police Department, Cuyahoga County Sheriff’s Office, Euclid Police Department, Regional Transit Authority Police Department, Strongsville Police Department, Westlake Police Department, and Shaker Heights Police Department. The NOLETF is also one of the initial Ohio High Intensity Drug Trafficking Area (HIDTA) initiatives. The HIDTA Program supports and helps coordinate numerous Ohio drug task forces in their efforts to eliminate or reduce drug trafficking in Ohio.
Wichita Attorney Among Five Pleading Guilty to Their Roles in Cigarette Trafficking SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Wichita, Kan., attorney is among five defendants who have pleaded guilty in federal court this week to their roles in a multi-million dollar scheme to transport hundreds of thousands of cartons of contraband cigarettes from the Kansas City, Mo., area to the state of New York, where they were sold primarily on Indian reservations.
Harry Najim, 67, of Wichita, pleaded guilty before U.S. District Judge Brian C. Wimes to failing to file a Form 8300 related to his representation of a client involved in the scheme, who was actually an undercover federal agent.
William F. Parry, 54, of Irving, N.Y., pleaded guilty today to contraband cigarette trafficking. Philip Christ, 55, of Hamburg, N.Y., pleaded guilty today to participating in a conspiracy to commit wire fraud and contraband cigarette trafficking.
Nicole Sheffler, 37, of Independence, Mo., and Gholamreza “Reza” Tadaiyon, 51, of Weston, Fla., pleaded guilty on Wednesday, Feb. 18, to their roles in the conspiracy.
USA v. Najim
Najim was a lawyer employed by the Adams Jones Law Firm in Wichita. By pleading guilty today, Najim admitted that he provided legal services for an undercover ATF agent from March 2011 through January 2012. The undercover agent sold large quantities of untaxed cigarettes to a group of individuals who transported the contraband cigarettes to retail outlets in the state of New York. Those individuals were engaged in a conspiracy to commit wire fraud and contraband cigarette trafficking.
The undercover agent paid Najim $16,500 for his legal services when they met at the McCormick and Schmick’s restaurant on the Country Club Plaza in Kansas City, Mo., on June 23, 2011. Najim knew federal statutes required the law firm to file a report with the Financial Crimes Enforcement Network upon receipt of more than $10,000 in a single transaction. Najim, however, did not report the $16,500 payment to the law firm, which caused it to fail to file a report.
Najim was also the attorney for co-defendant Craig Sheffler, 45, of Independence, and Sheffler’s business, Cheap Tobacco Wholesale. Sheffler pleaded guilty on Dec. 19, 2014, to participating in the conspiracy to commit wire fraud and contraband cigarette trafficking and forfeited $599,206 to the government.
Sheffler admitted that he made regular purchases of contraband cigarettes from undercover ATF agents. The contraband cigarettes were transported to New York without prior approval by the New York Department of Taxation and Finance and without first paying the required $4.35 per pack excise tax. The unstamped, untaxed cigarettes were then sold to smoke shops on the reservations in New York, which sold the contraband cigarettes at a considerable discount and deprived the state of its tax revenue.
According to the indictment, conspirators purchased more than $17 million worth of contraband cigarettes from ATF agents during an undercover operation. Sheffler admitted in his plea agreement that the amount of loss exceeded $7 million. Cigarettes were transported to New York without paying the required $4.35 per pack excise tax. The untaxed cigarettes were sold by New York retailers and smoke shops on the reservations in the state of New York. The total state excise tax lost to the state of New York was more than $8 million.
USA v. Sheffler
Nicole Sheffler, the wife of Craig Sheffler, admitted that she collected and transported the money used to purchase the contraband cigarettes from the ATF undercover operation. Nicole Sheffler collected the money from customers of Cheap Tobacco Wholesale and cashed checks at a check cashing business. She delivered the money to the ATF undercover warehouse in Kansas City, Mo., for the cigarette purchases by Cheap Tobacco Wholesale.
USA v. Parry
Parry owns and operates Wolf’s Run, a business that, among other things, operates a gas station, convenience store, and trucking transport business. Parry purchased contraband Marlboro and Newport cigarettes in September and December 2011. Parry admitted that he purchased unstamped cigarettes with the intent that the New York state excise tax would not be pre-collected, thus allowing the cigarettes to be sold at a considerable discount and depriving New York State of its tax revenue. Parry sold those unstamped, untaxed cigarettes at Wolf’s Run and to other smoke shops on the reservations in New York.
Under the terms of today’s plea agreement, Parry must forfeit $459,876, representing the profits he received for his role in the conspiracy, to the government.
USA v. Christ
Christ was the chief executive officer of P.D.C. Consulting, LLC, located in Irving, N.Y. Christ admitted that he brokered sales of contraband cigarettes to Native American businesses located in the state of New York. The tax due and owing to New York State on these cigarette transactions was approximately $2.4 million.
USA v. Tadaiyon
Tadaiyon owns Brand Name Connoisseurs, Corp., a business located in Florida. Neither Tadaiyon nor Brand Name Connoisseurs was a licensed New York tobacco wholesaler authorized to bring cigarettes into the state of New York.
Tadaiyon admitted that he and Sheffler made regular purchases of contraband cigarettes from undercover ATF agents in Kansas City, Mo. They coordinated the cigarette orders from the vendors in New York and assisted in transporting the contraband cigarettes. Tadaiyon received approximately $1,280,000 in gross profit on these transactions.
Under federal statutes, these co-defendants are each subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorneys Paul S. Becker and Justin G. Davids. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, IRS – Criminal Investigation, the Federal Deposit Insurance Corporation – Office of Inspector General and the Kansas City, Mo., Police Department.
Week in Review – South BendRead the Press Release
South Bend, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITIONS
- Justin Magee, 26, of South Bend, Indiana was sentenced to 37 months imprisonment with 2 years supervised release after pleading guilty to the felony offenses of attempting to damage a motor vehicle by means of fire and being a felon in possession of a firearm. According to documents filed in this case, on June 18, 2014, defendant and an accomplice possessed a container of gasoline and matches. It was their intent to set on fire a truck for another person. They approached that truck with the intent to set it on fire. Both had been paid $600 to do this. As they approached the truck, they were surrounded by law enforcement officers and arrested. Also, On June 5, 2014, Magee was involved with an accomplice in selling a firearm to a confidential informant (CI) working for BATF. They delivered a Star handgun to the CI here in St. Joseph County, Indiana. Magee had been convicted of a felony in St. Joseph County in 2013. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Frank Schaffer.
Week in Review – HammondRead the Press Release
Hammond, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITIONS
- Toni Alexander, 43, of Calumet City, Illinois was sentenced to 1 day time considered served and a $750.00 after pleading guilty to the felony offense of conspiracy to commit mail fraud. According to documents filed in this case on December 18, 2013, the defendant was part of a group who staged automobile accidents in Northwest Indiana and Chicago and subsequently submitted false and fraudulent police reports and insurance claims for property damage. She is the eighth defendant to plead guilty in this case. This case was the result of an investigation by the United States Postal Inspection Service and Federal Bureau of Investigation. This case was prosecuted by Assistant United States Attorney Toi Denise Houston.
Week in Review – Fort WayneRead the Press Release
Fort Wayne, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS
- Michael Tressler, 40, of Corunna, Indiana pled guilty to the felony offense of sexual exploitation of children. The magistrate judge is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by Federal Bureau of Investigation and the DeKalb County Sheriff’s Department. Sentencing has not been set. This case is being prosecuted by Assistant United States Attorney Lesley Miller Lowery.
- Victor Boyer, 23, of Fort Wayne, Indiana pled guilty to the felony offenses of armed bank robbery and use, carry, brandish and discharge of a firearm during and relation to a crime of violence. The magistrate judge is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by Federal Bureau of Investigation, Northeast Indiana Federal Bank Robbery Task Force, Allen County Sheriff’s Department and the Fort Wayne Police Department. Sentencing has not been set. This case is being prosecuted by Assistant United States Attorney Lesley Miller Lowery.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS
- Maritza Castaneda, 33, of Colton, California was sentenced to 70 months imprisonment with 1 year supervised release after pleading guilty to the felony offenses of conspiracy to distribute and possession with intent to distribute cocaine. According to documents filed in this case, from on or about November 8, 2010, and continuing to on or about April 13, 2011, in Allen County, Indiana, in the Northern District of Indiana, and elsewhere, Castaneda did knowingly and intentionally conspire, combine, confederate, and agree to distribute and possess with the intent to distribute 5 kilograms or more of cocaine. This case was the result of an investigation by the Federal Bureau of Investigation, Fort Wayne Safe Streets Task Force, Indiana State Police, Fort Wayne Police Department, Allen County Police Department, Allen County Drug Task Force, and the New Haven Police Department. This case was prosecuted by Assistant United States Attorney Anthony W. Geller.
- Jarvis Buchanan, 25, of Fort Wayne, Indiana was sentenced to 121months imprisonment with 2 years supervised release after pleading guilty to the felony offenses of conspiracy to distribute and possession with intent to distribute cocaine and cocaine base, commonly known as crack. According to documents filed in this case, from on or about February 10, 2010, and continuing to on or about January 29, 2011, in Allen County, Indiana, in the Northern District of Indiana, and elsewhere, Buchanan did knowingly and intentionally conspire, combine, confederate, and agree to distribute and possess with the intent to distribute 500 grams or more of cocaine and 28 grams or more of cocaine base, commonly known as “crack”. This case was the result of an investigation by the Federal Bureau of Investigation, Fort Wayne Safe Streets Task Force, Indiana State Police, Fort Wayne Police Department, Allen County Police Department, Allen County Drug Task Force, and the New Haven Police Department. This case was prosecuted by Assistant United States Attorney Anthony W. Geller.
- Florencio Deluna, 33, of Fort Wayne, Indiana was sentenced to 87 months imprisonment with no term of supervised release after pleading guilty to the felony offenses of conspiracy to distribute and possess with intent to distribute a controlled substance. According to documents filed in this case, from on or about November 8, 2010, and continuing to on or about April 13, 2011, in Allen County, Indiana, in the Northern District of Indiana, and elsewhere, Deluna did knowingly and intentionally conspire, combine, confederate, and agree with others to distribute and possess with the intent to distribute 5 kilograms or more of cocaine. This case was the result of an investigation by the Federal Bureau of Investigation, Fort Wayne Safe Streets Task Force, Indiana State Police, Fort Wayne Police Department, Allen County Police Department, Allen County Drug Task Force, and the New Haven Police Department. This case was prosecuted by Assistant United States Attorney Anthony W. Geller.
Two North Jersey Grocery Employees Charged in $1.4 Million Food Stamp FraudRead the Press Release
NEWARK, N.J. – Two Passaic County, New Jersey, men were arrested by federal agents this morning for allegedly conspiring to steal more than $1.4 million dollars from the U.S. Government through a fraudulent food stamps scheme, U.S. Attorney Paul J. Fishman announced.
Jacques Gary Doghram Apelian, 61, of Haledon, New Jersey, and Wael Rabee, 32, of Paterson, New Jersey, were charged by complaint with one count of conspiring to steal monies from the United States. Apelian and Rabee were arrested by agents of the Department of Agriculture, Office of Inspector General and are scheduled to appear this afternoon before U.S. Magistrate Judge James B. Clark III in Newark federal court.
According to the complaint:
Apelian and Rabee, employees of Broadway Deli & Grocery in Paterson, are charged in connection with a scheme in which they unlawfully redeemed Supplemental Nutrition Assistance Program (SNAP) benefits (formerly known as food stamps) in exchange for cash or for the purchase of non-food items. The program is administered by the U.S. Department of Agriculture. Retail food stores approved for participation in SNAP may sell food in exchange for food stamp benefits. They may not exchange food stamp benefits for cash.
SNAP benefits are loaded onto Electronic Benefits Transfer (EBT) cards. The EBT cards are automatically credited with the appropriate level of food stamp benefits for each SNAP recipient. Benefits are electronically transferred from the U.S. Treasury into a bank account designated by the authorized retailer. Authorized retailers receive training material relating to the rules and regulations of SNAP prior to receiving authorization and are responsible for training employees on the proper acceptance and handling of SNAP benefits. To complete a purchase, a SNAP recipient swipes an EBT card through a point of sale terminal at the authorized retailer and enters a personal identification number. If approved, the recipient’s account is debited for the amount of the purchase and the funds are credited to the authorized retailer’s account.
From October 2011 through December 2014, Broadway was authorized to accept SNAP benefits. Rabee and Apelian allegedly entered fictitious dollar amounts for SNAP EBT transactions, gave recipients a percentage of the transaction’s value in cash and kept the remainder. For example, a recipient might purchase eligible food items worth $5.00. The defendants would swipe the recipient’s EBT card for $95.00, which would be debited from the recipient’s EBT account and credited to Broadway’s bank account. The defendants would then give the recipient a portion of the cash and keep a portion of the proceeds, typically 33 percent of the total amount of SNAP benefits debited from the EBT card (not including the costs of store items that were purchased).
SNAP EBT benefit purchases over $50 are rare in small groceries like Broadway and usually indicate fraud. From January 2013 through December 2013, the total dollar amount of Broadway EBT transactions exceeding $50 was $533,452. From January 2014 through December 2014, the total dollar amount of EBT transactions exceeding $50 was $556,310.
Law enforcement agents uncovered the scheme using a cooperating witness (CW). From October 2012 to December 2014, the CW engaged in approximately fifteen “purchases” at Broadway. During each of these transactions, the CW exchanged SNAP EBT benefits for cash with the defendants, in violation of SNAP rules and regulations.
Based on an analysis EBT transactions, purchases over $50 made at Broadway from October 2011 through December 2014 totaled $1,493,294.
The charge of conspiracy is punishable by a maximum potential penalty of five years in prison and a fine of $250,000.
U.S. Attorney Fishman credited special agents of the U.S. Department of Agriculture, Office of Inspector General, under the direction of Special Agent in Charge William G. Squires Jr., in New York; the Paterson Police Department; and Detectives Craig Metz and Iris Reyes of the N.J. Human Services Police for their assistance.
The government is represented by Assistant U.S. Attorney Meredith Williams of the U.S. Attorney’s Office in Newark.
15-065
Apelian, Jacques Gary Doghram and Rabee, Wael Complaint
Two Long Beach, California, Men Sentenced for Participation in a Sex Trafficking ConspiracyRead the Press Release
Defendants Used Deception, Threats, Violence and Coercion to Compel Young Women into Prostitution in Orange County, California
Roshaun Nakia Porter, 39, was sentenced today by U.S. District Judge Josephine L. Staton to a sentence of 240 months in prison and 10 years of supervised release for his role in a sex trafficking conspiracy, announced the Civil Rights Division and the U.S. Attorney’s Office for the Central District of California. Porter’s co-conspirator, Marquis Monte Horn, 40, was sentenced on Oct. 24, 2014, to serve 78 months in prison and five years of supervised release for his role in the conspiracy. Two other defendants have entered guilty pleas in connection with the case.
The judge ordered Porter to pay $866,244.68 in restitution to 10 victims of the conspiracy.
On July 11, 2014, Porter and Horn each pleaded guilty to one count of conspiring to engage in sex trafficking by force, fraud and coercion. According to documents filed in court and admissions in court in connection with Porter’s guilty plea, between 2010 and April 2012, Porter masterminded a scheme in which he exploited young women, including foreign nationals and U.S. citizens, in his prostitution operation in Orange County, California. Using various deceptive means, including false online personal advertisements and fraudulent promises of legitimate employment, Porter reaped substantial illicit profit by luring his victims into personal relationships with him and, thereafter, compelling them to prostitute and provide him the proceeds from their commercial sex acts. To compel the victims into compliance, Porter used physical violence, psychological abuse, threats to harm the victims’ family members and other coercive means. In connection with his guilty plea, Horn admitted that between December 2010 and April 2012, he conspired to recruit and entice victims into Porter’s prostitution ring.
“The Department of Justice is steadfast in its commitment to prosecuting those who seek to profit from enslaving and exploiting others.” said Acting Assistant Attorney General Vanita Gupta of the Justice Department’s Civil Rights Division. “We will continue our unrelenting work to end the scourge of human trafficking and obtain justice on behalf of victims of these heinous crimes.”
“Porter masterminded a reprehensible sex trafficking enterprise that caused extreme trauma and lasting injury to victims,” said Acting U.S. Attorney Stephanie Yonekura of the Central District of California. “Over the course of nearly two years, Porter victimized young women with flagrant lies, bogus romantic overtures and acts of violence as he forced them to give up their bodies for his profit. This conduct is intolerable and warrants the lengthy sentenced issued today by the court.”
“The defendant recruited unsuspecting victims as sex slaves through fraudulent promises of wealth and a better life,” said Assistant Director in Charge David Bowdich of the FBI Los Angeles Office. “He then held them hostage by imposing physical beatings and issuing death threats while he cashed in on their suffering. The FBI is committed to protecting the civil rights of trafficking victims by identifying violent sexual offenders and pimps operating in our communities, and building federal cases to ensure they go to prison."
This matter was investigated by the FBI. It is being prosecuted by Trial Attorney Daniel Weiss of the Civil Rights Division’s Human Trafficking Prosecution Unit and Assistant U.S. Attorney Sandy Leal of the U.S. Attorney’s Office in the Central District of California.
Twin Brothers from Newport News Sentenced for RobberiesRead the Press Release
NEWPORT NEWS, Va. – Shakeen D. Northcutt, and his twin brother, Rakeen D. Northcutt, both 22, from Newport News, Va., were sentenced today for their individual roles in a conspiracy to commit robberies. Shakeen Northcutt was sentenced to 78 months in prison and Rakeen Northcutt was sentenced to 97 months in prison.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Charles E. Smith, ATF Special Agent in Charge of the Washington Field Office, made the announcement after sentencing by U.S. District Judge Arenda L. Wright Allen.
The Northcutt brothers were convicted on October 3, 2014, following a four day jury trial. According to court documents, the brothers each committed a separate robbery along with other individuals. During the first robbery, on October 20, 2013, Shakeen Northcutt entered the Osming Buffett in Hampton, through an open back door, fired a shot, and left with $250.00. In the second robbery, on October 28, 2013, Rakeen Northcutt entered the Buckroe Beach Market, also in Hampton, and confronted the owner who was working behind the counter. He fired two shots before running out the door with no proceeds. The victim was not injured.This case was investigated by the Bureau of Alcohol, Tobacco and Firearms. Assistant U.S. Attorney Robert E. Bradenham, II prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:14cr38.Trio Sentenced to Federal Prison for Credit Card FraudRead the Press Release
Orlando, Florida – U.S. Chief District Judge Anne C. Conway yesterday sentenced Ruben Mangual-Aquino (33, Orlando) to 48 months in federal prison for conspiracy to traffic in counterfeit access devices (credit cards), possession of device-making equipment, producing and using counterfeit access devices, possession of 15 or more counterfeit access devices, and aggravated identity theft. Co-defendant Yahima Carballosa (33, Orlando) was sentenced to 51 months in federal prison for the same offenses. A third co-defendant, Bernard Cordero-Perez (27, Kissimmee), was sentenced to 18 months in federal prison for participating in the conspiracy and for possession of device-making equipment. The Court also ordered the defendants to forfeit computer equipment and cell phones that had been used to commit the offenses. In addition, they were ordered to pay $44,629.23 in restitution to the victims of the crimes.
Mangual-Aquino and Carballosa pleaded guilty on October 29, 2014, and Cordero-Perez pleaded guilty on October 15, 2014.
According to court documents, Cordero-Perez worked as a housekeeper at a hotel in Orlando, Florida. Mangual-Aquino gave Cordero a hand-held skimming device to steal hotel guests’ credit card account information. On several separate occasions while at work, Cordero-Perez took guests’ credit cards from purses, wallets and backpacks that he found in their rooms, and then ran those cards through the skimmer. After skimming the guests’ credit card account information, he gave the skimmer to Mangual-Aquino, who downloaded the credit card account information into a computer at his home. Mangual-Aquino and Carbalossa then encoded credit cards with the stolen credit card account information to create counterfeit cards. Mangual-Aquino and Carbalossa used the counterfeit cards to buy gift cards at local area retail stores, and then used the gift cards to purchase merchandise. Mangual-Aquino gave Cordero-Perez fraudulently purchased gift cards as his payment for his participation in the conspiracy.
This case was investigated by the United States Secret Service and the Orange County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Bruce S. Ambrose.
Three Pasco and Lake County Residents Arrested with Twenty Pounds of MethamphetamineRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces the arrest and charge by a federal complaint of Shawn Paul Hendricks (41, Dade City); Vladimir Castaneda (26) and Jose Edgar Gonzalez-Castaneda (45), both of Eustis, Florida, with conspiracy to distribute and possess with intent to distribute 500 grams or more of methamphetamine. If convicted, each faces a mandatory minimum penalty of 10 years, up to life, in federal prison.
According to the complaint, Hendricks, who was known by law enforcement to be a large-scale methamphetamine trafficker, was arrested in Dade City on Thursday night for fleeing and alluding law enforcement after an attempted traffic stop. Agents subsequently seized marijuana, a gun, and over $50,000 in cash from a Dade City residence where Hendricks lived with his girlfriend. Hendricks admitted to having received 10 to 15 pounds of methamphetamine a week over the past year from a source in Atlanta, Georgia and stated that he was to receive such a shipment the following night. With Hendricks’s cooperation, last night agents arrested Castaneda and Gonzalez-Castaneda at their residences in Eustis, Florida, after they delivered nearly 9 pounds of methamphetamine to Hendricks. In one of the transport vehicles, agents found an additional 11 pounds of methamphetamine. Gonzales-Castaneda admitted that he and Castaneda had picked up the methamphetamine in Atlanta earlier that morning.
A complaint is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the U.S. Drug Enforcement Administration and the Pasco County Sheriff’s Office. It will be prosecuted by Assistant United States Attorney Kathy J.M. Peluso.
The National President, Vice President, Warlord and Three Other Members of the Devils Diciples Motorcycle Gang Convicted of Racketeering and Drug-Trafficking ChargesRead the Press Release
After a four-month trial, a federal jury in the Eastern District of Michigan convicted six members of the Devils Diciples Motorcycle Gang today, including the national president, national vice president and national warlord, for their participation in various criminal acts, including violent crimes in aid of racketeering, methamphetamine production and trafficking, illegal firearms offenses, obstruction of justice, illegal gambling and other federal offenses.
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 and Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office made the announcement.
“For too many years the Devils Diciples spread fear and violence throughout Michigan and the country,” said Assistant Attorney General Caldwell. “This outlaw motorcycle gang thrived on intimidation and its ability to avoid prosecution – but no longer. Through these convictions, we have decimated the gang and its leadership and helped secure justice for the communities they harmed.”
"These defendants were responsible for violence and trafficking in methamphetamine in Macomb County and across the country,” said U.S. Attorney McQuade. “We are grateful for the work of the investigating agencies and the jury to bring them to justice."
“The defendants in this case perpetrated a broad range of violent criminal activities in support of their illegal enterprise,” said Special Agent in Charge Abbate. “Today’s convictions, which targeted the leadership of this criminal organization, reflect the hard work and dedication of federal, state and local law enforcement, the Department of Justice Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office for the Eastern District of Michigan.”
Devils Diciples national President Jeff Garvin Smith, aka “Fat Dog,” 60, of Mt. Clemens, Michigan; National Vice President Paul Anthony Darrah, aka “Pauli,” 50, of Macomb Township, Michigan; and National Warlord Cary Dale Vandiver, aka “Gun Control,” 56, of Sand Mountain, Alabama, were all found guilty by a jury of engaging in a RICO conspiracy, methamphetamine trafficking conspiracy, conspiracy to obstruct justice, violent crimes in aid of racketeering and various substantive charges. Another prominent leader, Vincent John Witort, aka “Holiday,” 64, of Fontana, California, and a methamphetamine cook, Patrick Michael McKeoun, aka “Magoo,” 60, of Birmingham, Alabama, were found guilty of engaging in a RICO conspiracy and methamphetamine trafficking conspiracy. David Randy Drozdowski, aka “D,” 38 of Fair Haven, Michigan, was found guilty by a jury of committing violent crimes in aid of racketeering and being a felon in possession of a firearm. Scott William Sutherland, aka “Scotty Z,” 49, of Redford, Michigan, was acquitted by the jury of various charges, but previously pleaded guilty to being a felon in possession of a firearm. Sentencing hearings will be scheduled at a later date before U.S. District Judge Robert H. Cleland of the Eastern District of Michigan.
According to evidence presented at trial, the Devils Diciples (which is intentionally misspelled) is a motorcycle gang with its national headquarters in Clinton Township, Michigan. The Devils Diciples operated regional chapters in cities throughout Michigan, Alabama, Arizona, California, Illinois, Indiana, Ohio and elsewhere, and engaged in criminal activities for financial gain.
Evidence presented at trial demonstrated that membership in the Devils Diciples is based in part on successful completion of a probationary period, followed by formal approval by one or more members or leaders. Members, commonly referred to as “full patched members,” are required to own Harley Davidson motorcycles and are required to follow orders from the gang’s leadership, including orders to assault, threaten and intimidate others, to transport and distribute drugs, to lie to law enforcement and to hide or destroy evidence. Members are also required to follow the Devils Diciples by-laws and attend regular meetings referred to as “church.”
According to evidence presented at trial, Smith was the National President and Darrah was the National Vice President of the gang. In those roles, they were responsible for overall management of the activities of the other Devils Diciples members and chapters, including giving final approval to any activity generally affecting the gang as a whole. Vandiver was the National Warlord – or enforcer – of the gang. With other gang members, the leaders also participated directly in criminal activities both for financial gain on behalf of the Devils Diciples, and to protect the gang and its members.
Specifically, the evidence showed that in late 2007, Smith and Darrah were involved in the shooting of a Devils Diciples member who failed to abide by the gang’s rules. And, in August 2008, Smith violently assaulted the girlfriend of another Devils Diciples member because he believed she disrespected him and the gang.
Additionally, the evidence showed that Smith possessed state and federal law enforcement manuals regarding outlaw motorcycle gangs marked “For Official Use Only” and “Law Enforcement Sensitive,” and numerous documents related to criminal matters involving members of the Devils Diciples, including police reports, search warrants, affidavits, indictments and witness interview transcripts. The evidence showed that the documents were used for the purposes of counter-surveillance and to identify suspected informants.
The other defendants were also full patched members of the gang, who committed several other acts of violence.
For example, in August 2003, Witort and other gang members robbed, kidnapped and attempted to murder members of the gang’s Arizona Chapter for violating the gang’s rules. Inside the Arizona clubhouse, the victims were bound with duct tape and zip ties, and severely beaten with firearms, tasers, knives, and other weapons. The victims were then loaded into the bed of a pick-up truck, driven out into the desert, dumped into ravines, and left to die. The evidence showed that Witort and Smith helped to plan the beatings and that Smith later congratulated one of the participants, telling him in a letter that the Devils Diciples were “all proud of you.”
Additionally, the evidence demonstrated that in 2012, at a bar in Chesterfield Township, Michigan, Drozdowski and another Devils Diciples member assaulted a perceived rival motorcycle gang member for being present in Devils Diciples territory. The victim was knocked unconscious and suffered multiple fractures to his face and jaw. Drozdowski and the other Devils Diciples member then ripped the leather vest off of the unconscious victim.
In addition to the defendants convicted today, 21 members and associates of the Devil’s Diciples have been pleaded guilty to various crimes as result of this investigation. The investigation further resulted in the seizure of more than 60 firearms and more than 6,000 rounds of ammunition and the dismantling of eight methamphetamine manufacturing laboratories across the country.
The case was investigated by the FBI, the Michigan State Police, the Macomb County Sheriff’s Office and the County of Macomb Enforcement Team (COMET), with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the St. Clair County Sheriff’s Office. The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
The National President, Vice President, Warlord and Three Other Members of the Devils Diciples Motorcycle Gang Convicted of Racketeering and Drug-Trafficking ChargesRead the Press Release
WASHINGTON – After a four-month trial, a federal jury in the Eastern District of Michigan convicted six members of the Devils Diciples Motorcycle Gang today, including the national president, national vice president and national warlord, for their participation in various criminal acts, including violent crimes in aid of racketeering, methamphetamine production and trafficking, illegal firearms offenses, obstruction of justice, illegal gambling and other federal offenses.
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 and Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office made the announcement.
“For too many years the Devils Diciples spread fear and violence throughout Michigan and the country,” said Assistant Attorney General Caldwell. “This outlaw motorcycle gang thrived on intimidation and its ability to avoid prosecution – but no longer. Through these convictions, we have decimated the gang and its leadership and helped secure justice for the communities they harmed.”
"These defendants were responsible for violence and trafficking in methamphetamine in Macomb County and across the country,” said U.S. Attorney McQuade. “We are grateful for the work of the investigating agencies and the jury to bring them to justice."
“The defendants in this case perpetrated a broad range of violent criminal activities in support of their illegal enterprise,” said Special Agent in Charge Abbate. “Today’s convictions, which targeted the leadership of this criminal organization, reflect the hard work and dedication of federal, state and local law enforcement, the Department of Justice Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office for the Eastern District of Michigan.”
Devils Diciples national President Jeff Garvin Smith, aka “Fat Dog,” 60, of Mt. Clemens, Michigan; National Vice President Paul Anthony Darrah, aka “Pauli,” 50, of Macomb Township, Michigan; and National Warlord Cary Dale Vandiver, aka “Gun Control,” 56, of Sand Mountain, Alabama, were all found guilty by a jury of engaging in a RICO conspiracy, methamphetamine trafficking conspiracy, conspiracy to obstruct justice, violent crimes in aid of racketeering and various substantive charges. Another prominent leader, Vincent John Witort, aka “Holiday,” 64, of Fontana, California, and a methamphetamine cook, Patrick Michael McKeoun, aka “Magoo,” 60, of Birmingham, Alabama, were found guilty of engaging in a RICO conspiracy and methamphetamine trafficking conspiracy. David Randy Drozdowski, aka “D,” 38 of Fair Haven, Michigan, was found guilty by a jury of committing violent crimes in aid of racketeering and being a felon in possession of a firearm. Scott William Sutherland, aka “Scotty Z,” 49, of Redford, Michigan, was acquitted by the jury of various charges, but previously pleaded guilty to being a felon in possession of a firearm. Sentencing hearings will be scheduled at a later date before U.S. District Judge Robert H. Cleland of the Eastern District of Michigan.
According to evidence presented at trial, the Devils Diciples (which is intentionally misspelled) is a motorcycle gang with its national headquarters in Clinton Township, Michigan. The Devils Diciples operated regional chapters in cities throughout Michigan, Alabama, Arizona, California, Illinois, Indiana, Ohio and elsewhere, and engaged in criminal activities for financial gain.
Evidence presented at trial demonstrated that membership in the Devils Diciples is based in part on successful completion of a probationary period, followed by formal approval by one or more members or leaders. Members, commonly referred to as “full patched members,” are required to own Harley Davidson motorcycles and are required to follow orders from the gang’s leadership, including orders to assault, threaten and intimidate others, to transport and distribute drugs, to lie to law enforcement and to hide or destroy evidence. Members are also required to follow the Devils Diciples by-laws and attend regular meetings referred to as “church.”
According to evidence presented at trial, Smith was the National President and Darrah was the National Vice President of the gang. In those roles, they were responsible for overall management of the activities of the other Devils Diciples members and chapters, including giving final approval to any activity generally affecting the gang as a whole. Vandiver was the National Warlord – or enforcer – of the gang. With other gang members, the leaders also participated directly in criminal activities both for financial gain on behalf of the Devils Diciples, and to protect the gang and its members.
Specifically, the evidence showed that in late 2007, Smith and Darrah were involved in the shooting of a Devils Diciples member who failed to abide by the gang’s rules. And, in August 2008, Smith violently assaulted the girlfriend of another Devils Diciples member because he believed she disrespected him and the gang.
Additionally, the evidence showed that Smith possessed state and federal law enforcement manuals regarding outlaw motorcycle gangs marked “For Official Use Only” and “Law Enforcement Sensitive,” and numerous documents related to criminal matters involving members of the Devils Diciples, including police reports, search warrants, affidavits, indictments and witness interview transcripts. The evidence showed that the documents were used for the purposes of counter-surveillance and to identify suspected informants.
The other defendants were also full patched members of the gang, who committed several other acts of violence.
For example, in August 2003, Witort and other gang members robbed, kidnapped and attempted to murder members of the gang’s Arizona Chapter for violating the gang’s rules. Inside the Arizona clubhouse, the victims were bound with duct tape and zip ties, and severely beaten with firearms, tasers, knives, and other weapons. The victims were then loaded into the bed of a pick-up truck, driven out into the desert, dumped into ravines, and left to die. The evidence showed that Witort and Smith helped to plan the beatings and that Smith later congratulated one of the participants, telling him in a letter that the Devils Diciples were “all proud of you.”
Additionally, the evidence demonstrated that in 2012, at a bar in Chesterfield Township, Michigan, Drozdowski and another Devils Diciples member assaulted a perceived rival motorcycle gang member for being present in Devils Diciples territory. The victim was knocked unconscious and suffered multiple fractures to his face and jaw. Drozdowski and the other Devils Diciples member then ripped the leather vest off of the unconscious victim.
In addition to the defendants convicted today, 21 members and associates of the Devil’s Diciples have been pleaded guilty to various crimes as result of this investigation. The investigation further resulted in the seizure of more than 60 firearms and more than 6,000 rounds of ammunition and the dismantling of eight methamphetamine manufacturing laboratories across the country.
The case was investigated by the FBI, the Michigan State Police, the Macomb County Sheriff’s Office and the County of Macomb Enforcement Team (COMET), with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the St. Clair County Sheriff’s Office. The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Texas Man Charged with $1 Million Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Texas man has been charged in federal court for his role in a fraud scheme in which a Dallas area hospital paid more than $1 million to purchase an MRI from conspirators who impersonated representatives of Kansas City-based Cerner Corporation.
Albert Davis, 54, of Richardson, Texas, was charged with conspiracy to commit wire fraud in a criminal complaint filed under seal in the U.S. District Court in Kansas City, Mo., on Feb. 12, 2015. The complaint and affidavit were unsealed and made public today upon Davis’s arrest and initial court appearance in the U.S. District Court in Tyler, Texas, where he remains in federal custody.
The federal criminal complaint alleges that Davis participated in a wire fraud conspiracy with at least six unnamed co-conspirators that began May 1, 2009. Davis allegedly convinced employees of Dallas Medical Center and Prime Health Care (which acquired the hospital during the course of the fraud scheme) that he and his co-conspirators were working with Cerner. As a result, Dallas Medical Center transmitted two wire payments to the conspirators’ bank account totaling $1,061,550.
Dickinson praised Cerner’s swift action in reporting the fraud. “As soon as Cerner employees became aware of this incident, they immediately notified representatives at the hospital and contacted law enforcement to provide information central to the investigation and prosecution of this case,” Dickinson said.
The charge is part of a multi-district investigation based in the Western District of Missouri, which also includes the Northern and Eastern Districts of Texas and the Western District of Arkansas.
According to an affidavit filed in support of the criminal complaint, Davis and his co-conspirators impersonated Cerner employees, physicians, investors and others – both in e-mails and in-person visits. The affidavit alleges that Davis and his co-conspirators created a fake Cerner business entity, opened a fake Cerner bank account, registered a fake Cerner Internet domain, created fake Cerner employee e-mail accounts, leased virtual office space for a fake Cerner address in Kansas City and paid for cellphones with local 816 area code phone numbers. They allegedly created fake Cerner product quotes and fake Cerner invoices.
Davis and his co-conspirators allegedly worked together as a part of several businesses and entities created by Davis and a co-conspirator. Co-conspirators are linked to at least 70 individual business entities registered in Texas, Colorado, Nevada, Wyoming, Washington, Delaware and Florida in which some combination of them are involved. These entities often utilize similar names and addresses, but usually maintain separate business registration and bank accounts.
Raji Kumar, CEO of Dallas Medical Center, told federal agents that she was approached by Davis and a co-conspirator in February 2012. According to the affidavit, they claimed they were partnering with Cerner to sell MRIs. She was told their company, iHeart, had cardiac MRI technology that was a breakthrough in medical science and would change the way patients were diagnosed with cardiac issues. After the initial meeting, the affidavit says, Kumar also met with other co-conspirators.
According to the affidavit, Cerner generated a real quote to sell an MRI, in partnership with Davis, to Dallas Medical Center. However, Cerner made the decision to not pursue the MRI deal with Davis, which was communicated to Davis in October 2012. According to Kumar, Dallas Medical Center was never told by Davis that Cerner was out of the deal.
Instead, the affidavit says, Dallas Medical Center began receiving e-mails purportedly from Cerner employees. The e-mails had the “@cernerinc” domain (which is not used by Cerner) and provided information and confirmation about the MRI sale.
On Oct. 17, 2012, Davis hosted representatives of Dallas Medical Center and Prime Health Care Services at Plano, Texas, for a site visit to look at their MRI. Davis allegedly introduced Kumar and others to an individual identified as “Senior Physicist Suresh Mitta of Cerner” (actually one of the unnamed co-conspirators) who helped demonstrate the equipment. This individual presented a “Cerner” business card to Kumar.
After the visit, Prime Health Care Services made the decision to purchase a new MRI system, as opposed to upgrading the current system.
On Nov. 5, 2012, Prime Health Care Services agreed to buy the MRI for $1,330,130. Conspirators allegedly provided instructions to wire the funds to a fake Cerner bank account. Conspirators allegedly sent a fraudulent invoice that divided the payment into three separate wire transfers of $508,250, $553,300 and $268,550. The first two payments were made in November and December 2012; the third payment was never made because the fraud was detected.
Kumar asked Davis for references, the affidavit says, and he provided three names. Kumar said she attempted to call the three references provided by Davis; two physicians from Oklahoma told her they were happy with the MRI from Cerner and had no issues. (When interviewed later by federal agents, both doctors said they had not talked with Kumar or anyone from Dallas Medical Center about an MRI.)
Kumar said the installation was never completed, and despite numerous calls, nothing was done. The hospital made the decision to try and involve Cerner directly to help finish the installation and get the MRI working.
A hospital employee called the real Cerner Corporation and left a message for the employee with whom they thought they had been dealing. That employee called him back, however, and stated that the hospital was confused, and that Cerner had not sold them an MRI. According to Kumar, on June 26, 2013, she exchanged calls and e-mails with employees from the real Cerner Corporation who had reviewed the e-mails Dallas Medical Center had received, along with the purported Cerner invoices. Cerner employees quickly identified that these were not authentic Cerner invoices and informed her that the e-mails were not sent from the real Cerner domain.
The affidavit also refers to another instance involving Dallas Medical Center in which Davis allegedly impersonated another company to sell a Cath Lab to the hospital, using the same techniques of registering a fake domain, fake e-mails, and a fake business entity. Prior to the MRI negotiations, the hospital made four payments totaling $491,000 to CIS Cardiovascular. These payments actually were made to a bank account over which Davis was the sole person with signature authority.
Criminal Complaint: Eastern District of Texas
In a separate case, Davis was charged with perjury in a federal criminal complaint filed in the Eastern District of Texas, related to his testimony in a civil trial in that district.
Davis, through his company LBDS Holding Company, LLC, sued a company called ISOL Technology, Inc., and two other firms for breach of contract, trade secrets misappropriation, civil conspiracy, unfair competition, and theft of trade secrets. According to court records, this case went to trial in the spring of 2014 and the jury awarded LBDS a verdict of approximately $25 million.
ISOL subsequently filed an emergency motion for sanctions against Davis’s company. In its motion, ISOL argued that LBDS manufactured and falsified evidence in the trial and committed a fraud upon the court. They asked the court to set aside the verdict.
During the trial, Davis and one of the unnamed co-conspirators both testified at trial about e-mails from the domain cernerinc.com. According to the affidavit, e-mails using the cernerinc.com domain were introduced as exhibits, along with a fake “Cerner Distribution Agreement” that purportedly committed Cerner to purchase 345 MRI systems from Davis.
Dickinson cautioned that the charge contained in this complaint 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 Matthew P. Wolesky. It was investigated by the FBI.
Texas Cocaine Trafficker Sentenced to More Than 18 Years in Prison and Forfeits More Than $1.2 Million DollarsRead the Press Release
Ocala, Florida – Senior U.S. District Judge Wm. Terrell Hodges today sentenced Rolando Pinon (46, San Benito, Texas) to 18 years and 6 months in federal prison for conspiracy to distribute five kilograms or more of cocaine. The Court also ordered him to forfeit more than $1.2 million dollars in property and cash, which were determined to be traceable proceeds of the offense. Pinon pleaded guilty on November 25, 2014.
According to court documents and evidence presented at the sentencing hearing, Pinon had a long-time source for large quantities of cocaine in Matamoros, Mexico. Since 2007, he had used various modes of transportation to move the drugs from Texas to Ocala, and had employed a series of drivers, including Jose Manuel Tovar. The investigation revealed that Pinon had sold in excess of 150 kilograms of cocaine to an Ocala-based customer, who then had sold the drugs to multi-kilogram cocaine dealers in the Marion County area.
On August 29, 2014, the Ocala Police Department conducted a traffic stop of a truck Tovar was driving on his way from Texas. During the stop and ensuing search of the vehicle, officers located a marine-style cooler. Once disassembled, the cooler was found to contain six kilograms of cocaine. DEA agents subsequently arrested Pinon in Texas. Tovar was previously sentenced to six years in federal prison on January 22, 2015.
During the course of the conspiracy, Pinon laundered drug money by amassing rental properties in Texas, placing the properties in various nominee names, and renting them for profit. He also purchased a parcel of property and opened a vehicle sales business known as Elik Motors. Elik Motors bought cars at auction and resold them. As part of the plea agreement, Pinon forfeited the rental properties, Elik Motors, and cash. The total amount of the forfeiture exceeded $1.2 million dollars.
This case is another prosecution in the Organized Crime Drug Enforcement Task Force (OCDETF) Operation Wind Sock. The principal mission of the OCDETF Program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation's drug supply.
The case was investigated by the Drug Enforcement Administration and the Internal Revenue Service – Criminal Investigation, with assistance from the Unified Drug Enforcement Strike Team, which is comprised of Narcotics Agents from the Ocala Police Department and Marion County Sheriff’s Office. It was prosecuted by Assistant United States Attorney A. Tysen Duva.
Tax Fraud Promoters Convicted in Conspiracy to Defraud the Internal Revenue ServiceRead the Press Release
SALT LAKE CITY - A Midvale, Utah, man and a Henderson, Nevada, woman were convicted by a jury late Thursday afternoon in the U.S. District Court in Salt Lake City of tax crimes, announced U.S. Attorney Carlie Christensen of the District of Utah and Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Gerrit Timmerman, of Midvale, and Carol Jean Sing, of Henderson, were convicted of conspiracy to defraud the United States related to their promotion of a tax fraud scheme.
According to the evidence introduced at trial, between April 23, 2004, and March 5, 2007, Timmerman and Sing conspired to defraud the United States by marketing “corporations sole” as part of their scheme to evade the assessment and payment of federal income taxes. Timmerman and Sing falsely told their clients that corporations sole were exempt from United States income tax laws, had no obligation to file tax returns and had no obligation to apply for tax exempt status. They further claimed that individuals could render their own income non-taxable by assigning it to the corporation sole, could draw a tax-free stipend from their corporation sole, and could render property immune from Internal Revenue Service (IRS) collection activity by transferring property to the corporation sole.
According to evidence presented at trial, Sing used Trioid International Group Inc. as a resident agent for corporations sole and other business entities for their clients. Sing and Timmerman also utilized a website to list the tax benefits of corporations sole and to post articles about the supposed tax benefits of corporations sole. At the same time, Timmerman was actively assisting others in evading their state and federal income tax liabilities, and recommended the corporation sole to his clients as another way to impair the IRS. Both defendants referred customers to one another and paid each other referral fees.
A corporation sole is a form of incorporation allowed by some states, primarily for use by religious leaders to hold title to property. Several states, including Utah in 2004 and Nevada in 2009, have disallowed the creation of new corporations sole. The IRS has publicized the fact that corporations sole have been abused by promoters in Revenue Ruling 2004-27, and even included corporations sole on their “dirty dozen” tax scams in 2004.
“Individuals who enrich themselves by promoting tax avoidance schemes and assist others in evading state and federal taxes are defrauding American taxpayers,” said U.S. Attorney Christensen. “They should expect to be prosecuted and convicted for this conduct, as this verdict demonstrates.”
“Yesterday’s convictions send a clear message that individuals who willfully violate our nation’s tax laws through the promotion of abusive tax schemes and the creation of sham entities will be investigated and prosecuted to the fullest extent of the law,” said Principal Deputy Acting Assistant Attorney General Ciraolo. “The Tax Division is committed to working with its law enforcement partners to disrupt and dismantle these criminal enterprises.”
“Designing tax shelter transactions intended to conceal the true facts from the IRS isn't tax planning; it's criminal activity,” said Special Agent in Charge John G. Collins of IRS-Criminal Investigation in Utah. “This verdict reinforces our commitment to every American taxpayer to identify and prosecute those who devise illegal tax shelters under the guise of religion or charities to assist their clients in evading their tax obligations.”
Sentencing is scheduled for May 20. Sing and Timmerman each face a statutory maximum sentence of five years in prison and a fine of $250,000.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Christensen commended the special agents of IRS–Criminal Investigation who investigated this case, as well as Trial Attorneys Dennis R. Kihm and Andrea A. Kafka of the Tax Division, who are prosecuting the case.
Tax Fraud Promoters Convicted in Conspiracy to Defraud the Internal Revenue ServiceRead the Press Release
A Midvale, Utah, man and a Henderson, Nevada, woman were convicted by a jury yesterday in the U.S. District Court in Salt Lake City of tax crimes, announced U.S. Attorney Carlie Christensen of the District of Utah and Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Gerrit Timmerman, of Midvale, and Carol Jean Sing, of Henderson, were convicted of conspiracy to defraud the United States related to their promotion of a tax fraud scheme.
According to the evidence introduced at trial, between April 23, 2004, and March 5, 2007, Timmerman and Sing conspired to defraud the United States by marketing “corporations sole” as part of their scheme to evade the assessment and payment of federal income taxes. Timmerman and Sing falsely told their clients that corporations sole were exempt from United States income tax laws, had no obligation to file tax returns and had no obligation to apply for tax exempt status. They further claimed that individuals could render their own income non-taxable by assigning it to the corporation sole, could draw a tax-free stipend from their corporation sole, and could render property immune from Internal Revenue Service (IRS) collection activity by transferring property to the corporation sole.
According to evidence presented at trial, Sing used Trioid International Group Inc. as a resident agent for corporations sole and other business entities for their clients. Sing and Timmerman also utilized a website to list the tax benefits of corporations sole and to post articles about the supposed tax benefits of corporations sole. At the same time, Timmerman was actively assisting others in evading their state and federal income tax liabilities, and recommended the corporation sole to his clients as another way to impair the IRS. Both defendants referred customers to one another and paid each other referral fees.
A corporation sole is a form of incorporation allowed by some states, primarily for use by religious leaders to hold title to property. Several states, including Utah in 2004 and Nevada in 2009, have disallowed the creation of new corporations sole. The IRS has publicized the fact that corporations sole have been abused by promoters in Revenue Ruling 2004-27, and even included corporations sole on their “dirty dozen” tax scams in 2004.
“Individuals who enrich themselves by promoting tax avoidance schemes and assist others in evading state and federal taxes are defrauding American taxpayers,” said U.S. Attorney Christensen. “They should expect to be prosecuted and convicted for this conduct, as yesterday’s verdict demonstrates.”
“Yesterday’s convictions send a clear message that individuals who willfully violate our nation’s tax laws through the promotion of abusive tax schemes and the creation of sham entities will be investigated and prosecuted to the fullest extent of the law,” said Principal Deputy Acting Assistant Attorney General Ciraolo. “The Tax Division is committed to working with its law enforcement partners to disrupt and dismantle these criminal enterprises.”
“Designing tax shelter transactions intended to conceal the true facts from the IRS isn't tax planning; it's criminal activity,” said Special Agent in Charge John G. Collins of IRS-Criminal Investigation in Utah. “Yesterday's verdict reinforces our commitment to every American taxpayer to identify and prosecute those who devise illegal tax shelters under the guise of religion or charities to assist their clients in evading their tax obligations.”
Sentencing is scheduled for May 20. Sing and Timmerman each face a statutory maximum sentence of five years in prison and a fine of $250,000.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Christensen commended the special agents of IRS–Criminal Investigation who investigated this case, as well as Trial Attorneys Dennis R. Kihm and Andrea A. Kafka of the Tax Division, who are prosecuting the case.