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Friday 20 February 2015
Federal Indictment Charges 15 with Drug Trafficking Conspiracy; Six More Face State Drug ChargesRead the Press Release
Law enforcement arrested 13 during early-morning round up; Law enforcement still looking for two defendants
CHARLOTTE, N.C. – A federal criminal indictment was unsealed today in U.S. District Court, charging 15 defendants with drug trafficking conspiracy and related charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. FBI agents and officers with the Charlotte-Mecklenburg Police Department conducted an early morning round-up, arresting 13 of the 15 named in the federal indictment.
U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Chief Rodney D. Monroe, of the Charlotte-Mecklenburg Police Department (CMPD).
The 15 defendants named in a federal indictment unsealed today are:
• Noel Rondell Alexander, a/k/a “Floyd,” 25 of Charlotte. (in custody)
• Akanni Butler, a/k/a “KB,” 29, of Charlotte. (in custody)
• Anthony Carter, a/k/a “Sanchez,” 26, of Charlotte. (in custody)
• Akeem Ford, a/k/a “Nike,” 21, of Charlotte. (in custody)
• Kenate Funderburk, a/k/a “Tay,” 35, of Charlotte. (in custody)
• Shemia Glenn, a/k/a “Pooh,” 22, of Charlotte. (not arrested yet)
• Isaac Hampton, a/k/a “Ike,” 26, of Charlotte. (in custody)
• William Kee, III, 20, of Charlotte. (in custody)
• Anthony C. Lindsay, a/k/a “Chez,” 26, of Charlotte. (in custody)
• Keith Rivera, 23, of Charlotte. (in custody)
• Rodney Smith, a/k/a “Man,” 22, of Charlotte. (in custody)
• Jonathan Stewart, a/k/a “J Rock,” 29, of Charlotte. (in custody)
• Antonio Sullivan, a/k/a “Pooh,” 36, of Charlotte. (not arrested yet) • Vincent Thompson, 32, of Charlotte. (in custody)
• Jamel Watson, a/k/a “Man,”18, of Charlotte. (in custody)(See chart below for a breakdown of federal charges and potential penalties for each defendant).
In addition to the 15 federal defendants charged today, six more defendants face state drug and related charges:
• Demontrez Mobley, 21, of Charlotte. (in custody)
• Kadarian Cortez Ford, 18, of Charlotte (in custody)
• Larry Yeargin, 36, of Charlotte. (in custody)
• Elijah Parker, 20, formerly of Charlotte (previously in state custody)
• Scott Mayfield, 26, of Charlotte. (not arrested yet)
• Ty’Darrien Cortez Ford, 20, of Charlotte. (not arrested yet)The federal defendants will have their initial appearances today in federal court.
Today’s arrests and indictments are the result of an eight month investigation conducted by federal and local law enforcement agencies dedicated to making our streets and communities safer. The agencies involved in the initiative include the U.S. Attorney’s Office for the Western District of North Carolina, the FBI, CMPD’s Gang Unit, Vice & Narcotics Unit, and Metro Division, and the Mecklenburg County District Attorney’s Office, with assistance from the North Carolina Division of Community Corrections. The goal of the investigation is to target and reduce violent crime in Mecklenburg County, with special emphasis placed on a street corner in Beatties Ford Road area, formerly controlled by the conspirators.
“Today’s arrests are the result of a coordinated effort of law enforcement partners, working together to target a hot spot for criminal activity. We will continue to work side-by-side side to identify and prosecute those who are responsible for spreading drugs in our streets and wreaking havoc in our neighborhoods,” said U.S. Attorney Tompkins. Tompkins also commended all the agents and officers who participated in this morning’s round up and thanked them for their commitment to serving and protecting our communities.
“The FBI working alongside our law enforcement partners is committed to keeping North Carolina families safe by targeting those offenders whose criminal activities threaten the safety and stability of our communities,” said FBI’s Special Agent in Charge Strong.
“The Charlotte-Mecklenburg Police Department and our partner agencies will continue to be diligent in letting criminals know that these neighborhoods are not a safe haven for their illegal activity,” said Chief Monroe, CMPD. The charges contained in these indictments are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The investigation is being handled by the FBI’s Safe Streets Task Force, of which CMPD is a partner member. The prosecution is being handled by Assistant U.S. Attorney Dana Washington of the U.S. Attorney’s Office in Charlotte.
Federal Grand Jury Indicts Maverick County Commissioner Jose RosalesRead the Press Release
In Eagle Pass, TX, this afternoon, FBI agents arrested 35-year-old Maverick County Precinct 3 Commissioner and Eagle Pass ISD teacher Jose Luis Rosales after a federal grand jury in Del Rio charged him earlier this week in connection with an alleged bribery, kickback and bid-rigging scheme announced Acting United States Attorney Richard Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
A federal grand jury indictment, returned on Wednesday and unsealed today, charges Rosales with four counts of receiving bribes. The indictment alleges that in 2011 and 2012, Rosales manipulated the bidding process to guarantee that individuals he chose would be awarded Maverick County construction contracts. Those contractors deposited the checks issued to them by Maverick County and then made cash payments to Rosales. According to the indictment, the private contractors submitted inflated bids to Maverick County in order for there to be sufficient funds to perform the construction work, make a profit, and pay the bribe to Rosales.
Upon conviction, Rosales faces up to ten years in federal prison for each bribery charge.
This ongoing investigation is being conducted by the FBI and the Texas Department of Public Safety Criminal Investigative Division together with the Customs and Border Protection Office of Internal Affairs and the Eagle Pass Independent School District 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 Attorney Katherine Griffin and Bryan Reeves are prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
February Grand JuryRead the Press Release
United States Attorney Deborah R. Gilg announced the federal Grand Jury for the District of Nebraska has returned 26 indictments charging 26 defendants. Indictments are charging documents that contain one or more individual counts that are merely accusations, and every defendant is presumed innocent unless and until proven guilty.
* Luis Aguilar-Nada, age 41, of Omaha, is charged with illegal reentry into the United States on or about January 26, 2015, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Life Taban Aquilino, a/k/a Lyfe Israel Haim, of Omaha, is charged in a two-count Indictment. Count I of the Indictment alleges that on or about May 16, 2013 the defendant made a false statement in an application for a passport. The maximum penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count II of the Indictment charges Aquilino with aggravated identity theft on or about May 16, 2013. The maximum possible penalty if convicted is 2 years consecutive to any other term of imprisonment imposed on Count I of the Indictment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Mario Cervantes-Camacho, a/k/a Mario G. Cervantes, age 43, of Omaha, is charged in a two-count Indictment. Count I of the Indictment alleges that on or about February 12, 2015, the defendant used a Social Security card knowing said document was not issued lawfully for his use. The maximum possible penalty if convicted is 10 years imprisonment, a fine of $250,000, a 3 year term of supervised release, and a $100 special assessment. Count II of the Indictment alleges that on or about January 27, 2012, Cervantes-Camacho falsely represented a Social Security account number as belonging to him for the purpose of obtaining a benefit to which he was not entitled. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Francisco Chairez-De La Rosa, age 32, of Lincoln, is charged with illegal reentry into the United States on or about January 21, 2015, following deportation after conviction for a felony offense. The maximum possible penalty if convicted is 20 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Jose Cornejo-Lopez, age 32, of Ralston, is charged in a two-count Indictment. Count I of the Indictment charges the defendant with felon in possession of a firearm on or about October 20, 2014. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count II of the Indictment charges Cornejo-Lopez with possession with intent to distribute 50 grams of more of a mixture of methamphetamine on or about October 20, 2014. The maximum possible penalty if convicted is 40 years imprisonment, a $5,000,000 fine, a 4 year term of supervised release and a $100 special assessment.
* Roman Cortez Cisneros, age 40, of Omaha, is charged with illegal reentry into the United States on or about January 15, 2015, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Rogelio Sanchez Estrella, age 25, is charged with illegal reentry into the United States on or about January 21, 2015, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Emanuel Gallegos-Hernandez, a/k/a Emmanuel Gallegos, age 26, of Omaha, is charged with illegal reentry into the United States on or about January 20, 2015, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Carlos Efrain Gallegos-Ruiz, age 33, is charged with illegal reentry into the United States on or about December 19, 2014, following deportation after conviction for a felony offense. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Carlos Ruben Gama-Garcia, a/k/a Ruben Rodriguez, age 47, of Hastings, Nebraska, is charged in a six-count Indictment. Count I of the Indictment charges the defendant with illegal reentry into the United States on or about February 10, 2015, following deportation. The maximum possible penalty if convicted is 20 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment. Counts II, IV and VI of the Indictment allege that on or about on or about March 15, 2013; on or about June 22, 2014; and on or about August 16, 2011, Gama-Garcia falsely represented a Social Security account number as belonging to him for the purpose of obtaining a benefit to which he was not entitled. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment for each count. Counts III and V of the Indictment allege that on or about March 15, 2013 and on or about June 22, 2014, the defendant used identification documents knowing said documents were not issued lawfully for his use. The maximum possible penalty if convicted is 5 years imprisonment, a fine of $250,000, a 3 year term of supervised release, and a $100 special assessment for each count.
* Santiago Gonzalo-Florentino, a/k/a Santiago G. Flores, age 37, of Omaha, is charged with illegal reentry into the United States on or about January 21, 2015, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Stephanie Hagemeier, age 42, of Hastings, Nebraska, is charged in a three-count Indictment. Count I of the Indictment charges the defendant with making a false statement to a government agency on or about November 4, 2014. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count II of the Indictment charges Hagemeier with aiding and abetting aggravated identity theft on or about November 4, 2014. The maximum possible penalty if convicted is 2 years consecutive to Count III, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count III of the Indictment charges the defendant with aiding and abetting the false representation of a social security number. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Francisco Samuel Nava Hernandez, a/k/a Samuel Nava, 27, of Lincoln, is charged with possession with intent to distribute 50 grams of more of a mixture of methamphetamine on or about February 4, 2015. The maximum possible penalty if convicted is 40 years imprisonment, a $5,000,000 fine, a 4 year term of supervised release and a $100 special assessment.
* Marvin Patricio Hernandez, age 38, of Omaha, is charged with illegal reentry into the United States on or about January 13, 2015, following deportation after conviction for a felony offense. The maximum possible penalty if convicted is 20 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Evaristo Hernandez-Perez, age 52, of Omaha, is charged with illegal reentry into the United States on or about January 22, 2015, following deportation. The maximum possible penalty if convicted is 20 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Michael Huyck, of Lincoln, is charged in a three-count Indictment. Count I of the Indictment charges the defendant with receipt and attempted receipt of child pornography on or about August 20, 2010 thru October 1, 2010. The maximum possible penalty if convicted is 20 years imprisonment, a $250,000 fine, supervised release for life, and a $100 special assessment. Counts II and III of the Indictment charge Huyck with access with intent to view on or about August 20, 2010 thru April 9, 2013 and on or about November 20, 2012 thru April 9, 2013. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, supervised release for Life, and $100 special assessment for each count.
* Alexander Marroquin Avalos, age 30, of Omaha, is charged with illegal reentry into the United States on or about February 4, 2015, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Armando Medina-Vargas, age 29, of Omaha, is charged in a two-count Indictment. Count I of the Indictment charges the defendant with conspiracy to distribute 50 grams or more of methamphetamine between on or about February 2014, and December 23, 2014. The maximum possible penalty if convicted is Life imprisonment, a $10,000,000 fine, a 5 year term of supervised release, and a $100 special assessment. Count II of the Indictment charges Medina-Vargas with possession with intent to deliver 50 grams or more of methamphetamine on or about December 23, 2014. The maximum possible penalty if convicted is Life imprisonment, a $10,000,000 fine, a 5 year term of supervised release, and a $100 special assessment. The Indictment also contains an allegation to forfeit proceeds of the offense or property used to commit the offense, including $10,572.00 in U.S. currency.
* Jose J. Nevarez, age 43, of Schuyler, Nebraska, is charged in a three-count Indictment. Counts I thru III of the Indictment charge the defendant with distribution of 5 grams or more of methamphetamine on or about October, 29, 2014; on or about November 4, 2014; and on or about November 12, 2014. The maximum possible penalty if convicted is 40 years imprisonment, a $5,000,000 fine, a 4 year term of supervised release, and a $100 special assessment for each count.
* Raul Pano-Abarca, a/k/a Arturo Aguilar, a/k/a Agapito Garcia, age 27, of Omaha, is charged with illegal reentry into the United States on or about January 20, 2015, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Victorio Ramos Lopez, a/k/a Wilfrido Diaz Lopez, age 31, of Bellevue, is charged with illegal reentry into the United States on or about January 29, 2015, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Victor Rangel, age 27, of San Jose, California, is charged with possession with intent to distribute 50 grams or more of a mixture of methamphetamine on or about January 29, 2015. The maximum possible penalty if convicted is 40 years imprisonment, a $5,000,000 fine, a 4 year term of supervised release, and a $100 special assessment for each count.
* Carlos Reynoso-Mendez, age 34, is charged with conspiracy to distribute and possess with intent to distribute a mixture of methamphetamine beginning on or about November 17, 2014, and continuing to on or about December 16, 2014. The maximum possible penalty if convicted is 20 years imprisonment, a $1,000,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Oscar Aaron Rojo Castillo, age 32, of Bellevue, is charged with illegal reentry into the United States on or about January 29, 2015, following deportation after conviction for a felony offense. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Jose Salinas-Cruz, age 29, is charged with illegal reentry into the United States on or about January 22, 2015, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Valentin Alejo Xochihua, age 35, of Omaha, is charged in a two-count Indictment. Counts I and II charge the defendant with distribution of a mixture of methamphetamine on or about November 25, 2014 and on or about December 8, 2014. The maximum possible penalty if convicted is 20 years imprisonment, a $1,000,000 fine, a 3 year term of supervised release, and a $100 special assessment for each count.
East St. Louis Resident Resentenced to 135 Months for Role in KidnappingRead the Press Release
Jevon M. Jenkins, from East St. Louis, Illinois, was resentenced today by United States District Court Judge David R. Herndon to 135 months in federal prison for Aiding and Abetting Kidnaping, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Court documents indicate that in July 2012, Jenkins and others physically assaulted a Cahokia man in East St. Louis. Jenkins then aided and abetted a co-defendant in confining the Cahokia man in a vehicle and driving him across the Popular Street Bridge into Missouri.
Prior to imposing sentence, Judge Herndon considered the facts and circumstances surrounding Jenkins’ conviction and his criminal history, commenting that the “brutality of the case was quite shocking” and this was a “horrendous crime against a human being.” Judge Herndon then sentenced Jenkins to 135 months in federal prison. There is no parole in the federal prison system. In addition to the prison sentence, Judge Herndon sentenced Jenkins to serve 5-years of supervised release and to pay restitution to the victim. According to United States Attorney Stephen R. Wigginton, “What the victim in this case endured should never be experienced by any human being. We are proud of the sentence imposed today by Judge Herndon. It sends a strong message to criminals: crimes of brutality and torture will not be tolerated.”
U.S. Attorney Wigginton added that: “This case would not have been successful without the courage and perseverance of law enforcement, the witnesses, and especially the victim. We are grateful for the cooperative efforts of the Federal Bureau of Investigation, the Illinois State Police, the Columbia, Illinois Police Department, and the East St. Louis, Illinois, Police Department, who comprised the Save Our Streets Task Force active in the summer of 2012.”
This case was prosecuted by Assistant United States Attorney Monica A. Stump.
East Saint Louis Man Sentenced for Healthcare FraudRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that Maurice L. Burks, 44, of East St. Louis, IL, was sentenced on a one-count indictment charging that Burks engaged in a scheme to commit health care fraud. On February 20, 2015, the district court sentenced Burks to six months of incarceration and ordered him to pay $1,016.82 in restitution as well as a $100 special assessment.
Burks was the personal assistant for his brother. Information in the record showed that Burks billed for hours of care when he was at work or while his brother was hospitalized. Rather than these crucial funds going to providing personal assistants for needy individuals, Burks simply pocketed the payments for his own financial gain.
Especially vulnerable to fraud are programs, such as the one implemented in Illinois, that allows the Medicaid recipient to control the selection and payment of personal care attendants. In most cases, the personal care assistant is a relative or family friend, who often is a ghost employee. In a typical fraud scenario, the payments made by the State of Illinois are split between the Medicaid recipient and the ghost employee.
The investigation was conducted by the U.S. Department of Health and Human Services Office of Inspector General and the Illinois State Police - Medicaid Fraud Control Bureau. The case was prosecuted by Assistant U.S. Attorney Michael Hallock.
If you suspect or know of an individual or company that is not complying with healthcare laws or public aid programs, you may report this activity to the local office of the U.S. Department of Health and Human Services Office of Inspector General or call 800.447.8477.
Duke Energy Subsidiaries Charged with Clean Water Act ViolationsRead the Press Release
RALEIGH – The United States Attorney’s Offices for the Eastern, Middle, and Western Districts of North Carolina, along with the Department of Justice – Environmental Crimes Section, filed criminal charges today against three subsidiaries of Duke Energy Corporation: Duke Energy Business Services LLC, Duke Energy Carolinas LLC, and Duke Energy Progress, Inc. for multiple violations of the Clean Water Act.
The three U.S. Attorney’s Offices filed separate criminal bills of information in their respective federal courts, alleging violations of the Clean Water Act at the following Duke facilities: Dan River Steam Station (Rockingham County); Cape Fear Steam Electric Plant (Chatham County); Asheville Steam Electric Generating Plant (Buncombe County); H.F. Lee Steam Electric Plant (Wayne County); and Riverbend Steam Station (Gaston County). The alleged violations include unlawfully failing to maintain equipment at the Dan River and Cape Fear facilities and unlawfully discharging coal ash and/or coal ash wastewater from impoundments at the Dan River, Asheville, Lee, and Riverbend facilities.
The U.S. Attorney’s Offices for Middle and Western Districts also filed papers asking their courts to transfer the cases to be heard in the Eastern District of North Carolina.
The defendants face a maximum penalty on each charged count of five years probation; a fine in an amount of the greater of not less than $2,500 nor more than $25,000 per day of violation; $200,000.00; or twice the gross gain or loss; restitution; and a special assessment of $125.00.
Persons directly and proximately harmed as a result of the conduct charged in this matter may have rights under the Crime Victims’ Rights Act. See 18 U.S.C. § 3771. If you believe that you are a crime victim in this matter, please contact the United States Attorney’s Office for the Eastern District of North Carolina at [email protected] no later than March 6, 2015.
A criminal information is not a finding of guilt. A corporation charged by criminal information is presumed innocent unless and until proven guilty in a court of law.
The U.S. Attorney’s Offices will have no further comment on this matter until after court proceedings.
Duke Energy Subsidiaries Charged with Clean Water Act ViolationsRead the Press Release
CHARLOTTE, N.C. – The United States Attorney’s Offices for the Eastern, Middle, and Western Districts of North Carolina, along with the Department of Justice – Environmental Crimes Section, filed criminal charges today against three subsidiaries of Duke Energy Corporation: Duke Energy Business Services LLC, Duke Energy Carolinas LLC, and Duke Energy Progress, Inc. for multiple violations of the Clean Water Act.
The three U.S. Attorney’s Offices filed separate criminal bills of information in their respective federal courts, alleging violations of the Clean Water Act at the following Duke facilities: Dan River Steam Station (Rockingham County); Cape Fear Steam Electric Plant (Chatham County); Asheville Steam Electric Generating Plant (Buncombe County); H.F. Lee Steam Electric Plant (Wayne County); and Riverbend Steam Station (Gaston County). The alleged violations include unlawfully failing to maintain equipment at the Dan River and Cape Fear facilities and unlawfully discharging coal ash and/or coal ash wastewater from impoundments at the Dan River, Asheville, Lee, and Riverbend facilities.
The U.S. Attorney’s Offices for Middle and Western Districts also filed papers asking their courts to transfer the cases to be heard in the Eastern District of North Carolina.
The defendants face a maximum penalty on each charged count of five years probation; a fine in an amount of the greater of not less than $2,500 nor more than $25,000 per day of violation; $200,000.00; or twice the gross gain or loss; restitution; and a special assessment of $125.00.
Persons directly and proximately harmed as a result of the conduct charged in this matter may have rights under the Crime Victims’ Rights Act. See 18 U.S.C. § 3771. If you believe that you are a crime victim in this matter, please contact the United States Attorney’s Office for the Eastern District of North Carolina at [email protected] no later than March 6, 2015.
A criminal information is not a finding of guilt. A corporation charged by criminal information is presumed innocent unless and until proven guilty in a court of law.
The U.S. Attorney’s Offices will have no further comment on this matter until after court proceedings.
U.S. v. Duke EnergyDrug Charge Filed Against Philadelphia ManRead the Press Release
PHILADELPHIA - Johnny Santiago, 20, of Philadelphia, PA, was charged today by Information with one count of attempted possession with intent to distribute 500 grams or more of cocaine, announced United States Attorney Zane David Memeger.
If convicted, the defendant faces a maximum possible sentence of 40 years in prison with a mandatory minimum five year term, a fine of up to $5 million, at least four years of supervised release up to a lifetime of supervised release, and a $100 special assessment.
The case was investigated by United States Postal Inspection Service. It is being prosecuted by Assistant United States Attorney Linwood C. Wright, Jr.
District Man Pleads Guilty to Sexually Abusing 7-Year-Old Girl Child Disclosed What Took Place to MotherRead the Press Release
WASHINGTON – A 55-year-old man from Washington, D.C. pled guilty today to a felony charge for sexually abusing a seven-year old girl in May 2014, U.S. Attorney Ronald C. Machen Jr. announced.
The defendant, who is not identified here to protect the privacy of the victim, pled guilty in the Superior Court of the District of Columbia to one count of second-degree child sexual abuse, in an Alford plea. Under such a plea, the defendant does not admit the allegations but agrees that the government has enough evidence to secure a conviction. He is scheduled to be sentenced on April 24, 2015 by the Honorable Milton C. Lee. The defendant faces up to 10 years in prison. He will also be required to register as a sex offender.
According to the government’s factual proffer at today’s plea hearing, the defendant molested the girl, a relative, on May 24, 2014, in a home in Southeast Washington. The girl told her mother what happened, and DNA evidence later confirmed the girl’s allegations.
In announcing today’s plea, U.S. Attorney Machen praised the work of those who investigated the case from the Metropolitan Police Department’s Youth Division. He also expressed appreciation for the work of the child abuse experts at the Child and Adolescent Protection Center at Children’s National Medical Center, as well as the Children’s Advocacy Center, which conducted the child forensic interview and provided other critical services to the victim. U.S. Attorney Machen acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist D’Yvonne Key and Victim/Witness Advocate Lezlie Richardson. Finally, he commended the work of Assistant U.S. Attorney Peter V. Taylor, who investigated and prosecuted the matter.
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Des Moines Pharmacist Sentenced to Two Years in PrisonRead the Press Release
DES MOINES, IA – On February 20, 2015, Mark Graziano, previous owner of Bauder Pharmacy in Des Moines, Iowa, was sentenced by Chief Judge James E. Gritzner to 24 months in prison and three years of supervised release following the period of imprisonment, announced United States Attorney Nick Klinefeldt. Graziano stipulated that the federal tax loss was $455,204 and the State of Iowa tax loss was $122,301, and Judge Gritzner also ordered restitution in the amount of $577,505.
Graziano pled guilty to the charges of conspiracy to distribute a controlled substance and tax evasion on November 6, 2014. By agreement, Graziano agreed to forfeit the property listed in the Notice of Forfeiture in the Second Superseding Indictment, and the property is in the process of being sold with the proceeds being applied toward the restitution judgment.
“In addition to cheating on his taxes, Graziano has now admitted that he illegally sold hydrocodone pills out of Bauder Pharmacy” stated Nick Klinefeldt. “This occurred over five years, and involved hundreds of thousands of pills. Prescription drug abuse is a serious problem in this state and across the country. It wreaks havoc on the lives of all those involved. It has also been demonstrated to lead to the addiction of even more dangerous drugs, such as heroin. Though Graziano is a pharmacist, this activity had nothing to do with legitimate pharmacy practice. Graziano was a drug dealer: plain and simple.”
This case was investigated by the Drug Enforcement Administration and Internal Revenue Service Criminal Investigation. Prosecution of this matter was handled by the U.S. Attorney’s Office for the Southern District of Iowa.
(Download Press Release)
Defendant Sentenced for Theft of Government Property and Aggravated Identity TheftRead the Press Release
DEFENDANT SENTENCED FOR THEFT OF GOVERNMENT PROPERTY AND AGGRAVATED IDENTITY THEFT
TALLAHASSEE, FLORIDA – Kenitra Michelle Gilmer, 30, of Charlotte, North Carolina, was sentenced today by United States District Judge Mark Walker to 12 months in federal prison for theft of government property and 24 months in federal prison for aggravated identity theft. The sentences, which were ordered to run consecutively, were announced today by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
Gilmer’s charges stem from a traffic stop that occurred on February 8, 2012, in the Northern District of Florida. During the traffic stop, officers recovered approximately $52,194 in cash, 17 TurboTax debit cards in other people’s names, and receipts showing that the cards had been used. The TurboTax debit cards were loaded with fraudulently obtained income tax refunds. During the investigation, officers discovered video footage showing Gilmer using one of the TurboTax debit cards at a Publix grocery store.
The case was investigated by the Internal Revenue Service, Homeland Security Investigations, and the Madison County Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Herbert Lindsey.
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.
Davenport Man Sentenced to Six Years in Federal Prison for Firearm OffenseRead the Press Release
DAVENPORT, IA – On February 20, 2015, David Terell Parrow, age 39, of Davenport, Iowa, was sentenced by United States District Judge Stephanie M. Rose to 72 months in prison for felon in possession of a firearm and ammunition, announced United States Attorney Nicholas A. Klinefeldt. Parrow was also ordered to serve two years of supervised release following the imprisonment and to pay $100 towards the Crime Victims Fund.
On July 5, 2014, police responded to a residence in Davenport, Iowa, reference a report of a disturbance and a suspect with a handgun. Upon arriving, officers proceeded to a backyard in that area and located Parrow. Officers approached Parrow and ordered him to the ground. As Parrow was being escorted to the ground, he pulled out a green and black 9mm handgun from his waistband and threw it in front of himself. This firearm was loaded with 5 rounds plus 1 round in the chamber. Police located 3.83 grams of crack cocaine concealed in Parrow’s sock. Prior to July 5, 2014, Parrow had been convicted of a crime punishable by imprisonment exceeding one year.
This case was investigated by the Davenport, Iowa, Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Convicted Tarrant County Tax Preparers Sentenced to Lengthy Federal Prison SentencesRead the Press Release
FORT WORTH, Texas — A husband and wife who were convicted at trial on multiple felony offenses stemming from their operation of a tax return preparation business in Tarrant County, were sentenced this morning by U.S. District Judge John McBryde, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Jacqueline Morrison and Gladstone Morrison, who operated Jacqueline Morrison & Associates (JMA) on North Collins in Arlington, Texas, and on James Street in Fort Worth, Texas, were each sentenced to serve 187 months in federal prison. In addition, Judge McBryde ordered them to pay nearly $18 million in restitution.
Specifically, in October 2014, a federal jury convicted Jacqueline and Gladstone Morrison each on one count of conspiracy to aid and assist in the preparation and presentation of false and fraudulent tax returns. Jacqueline Gladstone was also convicted on 13 counts and Gladstone Morrison on 12 counts of aiding and assisting in the preparation and presentation of false and fraudulent tax returns. Jacqueline was convicted on three counts and Gladstone on four counts of wire fraud.
Gladstone Morrison has been in custody since the conviction. Judge McBryde ordered Jacqueline Morrison to surrender to the Bureau of Prisons on March 13, 2015.
“This office is committed to working with IRS Criminal Investigation to pursue criminals who rob the U.S. Treasury by perpetrating tax fraud schemes,” said Acting U.S. Attorney Parker. “The aggressive prosecution of these individuals is vital to maintaining public confidence in our tax system.”
R. Damon Rowe, Special Agent in Charge of the Dallas Office of IRS Criminal Investigation said, “Most Certified Public Accountants strive for the highest ethical standards; Jacqueline Morrison, however, is one CPA who did not. She and her husband, Gladstone, abused the trust their clients placed in them and their company, Jacqueline Morrison & Associates. With today’s sentences, the Morrison’s are now being held accountable for their corrupt actions.”
The government presented evidence that the Morrison’s conspired to willfully aid and assist in and advise the preparation and presentation to the IRS of false and fraudulent individual income tax returns. Many of the tax returns were false and fraudulent because to increase client refunds, the returns claimed Schedule C business losses from income for which the Morrisons knew the taxpayers were not entitled. The Morrisons and JMA tax return preparers, who the Morrisons trained, would use the substantial losses reported on the false Schedules C to offset wage income, resulting in clients recovering all or most of their tax withholding. The Morrisons benefitted from this practice by charging higher fees for additional schedules, creating client loyalty and increasing their business through client referrals.
As part of the conspiracy, the Morrisons, according to evidence presented, developed a series of forms for the client to sign at the time the return was prepared. These forms were intended to protect the Morrisons by placing all the responsibility for any false information on the client, no matter how transparently implausible or unsubstantiated the information on the return.
During the time of the conspiracy, the Morrisons collected more than $2 million in fees from clients. They also attempted to profit by using JMA’s fraud to build a large client list, which they then leveraged into a lucrative franchise agreement with Express Tax Services, a subsidiary of H&R Block. However, after they entered the franchise agreement, the IRS terminated the Morrisons’ Electronic Filing Identification Numbers (EFINs) because of their fraudulent activities. To conceal that fact and perpetuate the continuation of the franchise agreement, the Morrisons provided Express Tax Services EFINs that belonged to a business associate.
Regarding the wire fraud offenses that occurred during the time of the conspiracy, the government presented evidence that the franchise agreement provided for the payment of $750,000 from Express Tax to the Morrisons. To secure the agreement, the Morrisons falsely represented to Express Tax that JMA was not under investigation, when in fact, they well knew JMA was the subject of a federal criminal investigation by IRS-Criminal Investigation.
Unbeknownst to Express Tax, the Morrisons entered into a separate agreement to sell JMA to an individual named V.H. Gladstone Morrison misled V.H. about the true nature of JMA’s relationship with Express Tax by telling V.H. that the arrangement was nothing more than a “co-branding” or “co-marketing” agreement.” Gladstone Morrison also tried to prevent Express Tax from learning they had executed an agreement to sell JMA to V.H. by falsely telling Express Tax that V.H. was only the Morrison’ office manager. By entering into parallel agreements with separate entities — Express Tax and V.H., the Morrisons received payments from both entities for the same asset.
When the Morrison’s agreements with both Express Tax and V.H. fell apart, they again tried to profit by selling JMA to RealTex Ventures LLC, owned by “D.A.” for $425,000. Again, the Morrisons represented that JMA was not under investigation, when it was.
The case was investigated by IRS Criminal Investigation. Assistant U.S. Attorneys Douglas Allen and Chris Wolfe prosecuted.
Conspirator Indicted in $3.9 Million Fraud SchemeRead the Press Release
Baltimore, Maryland – A federal grand jury has indicted Alberic Okou Agodio, age 30, of Bethesda, Maryland, on charges arising from a mortgage fraud scheme in which he used the names of immigrants and students, along with false financial information, to obtain approximately $3.8 million in home mortgage loans to buy approximately three dozen row houses in Baltimore, all of which are in default or foreclosure. The indictment was returned on February 18, 2015 and unsealed today upon his arrest.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Deputy Inspector General for Investigations Rene Febles of the Federal Housing Finance Agency Office of Inspector General; Special Agent in Charge Cary A. Rubenstein of the U.S. Department of Housing and Urban Development Office of Inspector General; Special Agent in Charge Fran Mace, of the Federal Deposit Insurance Corporation Office of Inspector General; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
Agodio was the founder and principal employee of A&O Consulting, LLC, which provided accounting and business consulting services; and AORE Investments, Inc., which Agodio described as a real estate firm based in Bethesda, Maryland.
According to the 16 count indictment, from June 2009 to November 2010, Agodio persuaded approximately three dozen immigrants and students who lived in the Maryland suburbs of Washington, D.C. to purchase row houses in Baltimore under their names. None of these “straw purchasers” had any experience in real estate transactions, nor the funds needed to buy the properties. Agodio told each straw purchaser that he would prepare the loan application; manage the property after its purchase by finding renters, collecting the rent and paying the mortgage; and would pay the straw purchaser $7,000 to $8,000 after the transaction closed. He further promised to sell the property in three years and give the individual up to 80% of the sale proceeds. Agodio also paid thousands of dollars in additional commissions to those straw purchasers who referred other individuals to him as potential buyers for similar transactions.
The indictment further alleges that Agodio falsely represented in the loan applications the straw purchasers’ assets and in many cases, their earnings as well. Agodio provided the necessary funds for the down payment and the buyer’s share of the closing costs, causing the settlement statement form to inaccurately reflect that the down payments and closing costs had been paid by the straw purchasers.
Following the closings, Agodio allegedly retained the keys to each property, and assumed the responsibility for finding renters and making the required monthly mortgage payments. The named purchasers never lived in the properties. Agodio eventually allowed all of the mortgages to go into default.
During the course of this scheme, Agodio and his co-conspirators obtained approximately $3.8 million in home mortgage loans to buy the row houses. A co-conspirator who owned the row houses paid Agodio an undisclosed kickback from the proceeds he received from the title company on each transaction, totaling over $1.2 million. Agodio used these funds to reimburse himself for making the down payments and closings costs, to pay the promised amount to the straw purchasers and to keep a substantial commission for himself.
The indictment also alleges that a fire occurred at one of the row house properties purchased through a straw purchaser. He falsely identified himself as the straw purchaser to the insurance company in order to collect $106,500 in insurance paid for the repair the property.
The indictment seeks forfeiture of $3,925,841.
Agodio faces a maximum sentence of 30 years in prison for conspiring to commit wire fraud, on each of nine counts for wire fraud, and for mail fraud; 20 years in prison on each of three counts for money laundering; and a mandatory minimum of two years in prison consecutive to any other prison term on each of two counts for aggravated identity theft. Adogio had his initial appearance in federal court in Baltimore at 2:30 p.m. today.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available http://www.justice.gov/usao/md/priorities_financialfraud.html.
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. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended HUD- OIG, FDIC – OIG, FHFA - OIG and the FBI for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Jefferson M. Gray, who is prosecuting the case.
Columbia Man Charged with Child Pornography OffensesRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on February 20, 2015, Dan Stephen Daniels, 49, Columbia, IL, was arraigned on a two-count Indictment charging him, in Count 1, with Receipt of Child Pornography, and, in Count 2, Possession of Prepubescent Child Pornography. Daniels was ordered detained, that is, held without bond, after a detention hearing held immediately after his arraignment.
Count 1 alleges that, on or about October 12, 2014, Daniels knowingly received two (2) images of child pornography, one of a prepubescent male engaged in sexual intercourse with an adult female and the other of a prepubescent female in the lascivious display of her genitals. Count 2 alleges that, on or about October 17, 2014, Daniels knowingly possessed a desktop computer that contained images of child pornography that involved prepubescent minors or minors who had not attained 12 years of age.
Trial is scheduled for April 6, 2015. The penalty for Receipt of Child Pornography is a term of imprisonment of not less than five (5) years but not more than twenty (20) years, a fine up to $250,000, and a term of supervised release of not less than five (5) years to life. The penalty for Possession of Prepubescent Child Pornography is a term of imprisonment of not more than twenty (20) years, a fine up to $250,000, and a term of supervised release of not less than five (5) years 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.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
The case was investigated by the Columbia Police Department and the Federal Bureau of Investigation's Springfield Child Exploitation Task Force. The case is assigned to Assistant United States Attorney Angela Scott.
Colorado Man Pleads Guilty to Using a Firearm During Robbery of the Wells Fargo Bank in Farmington in September 2012Read the Press Release
ALBUQUERQUE – Robert O’Dell Neihart, 44, of Ignacio, Colo., pleaded guilty this morning in federal court in Las Cruces, N.M., to robbing a Wells Fargo Bank branch located on East Main Street in Farmington, N.M., while possessing a .45 caliber semi-automatic pistol. Under the terms of his plea agreement, Neihart will be sentenced to a term of incarceration within the range of 148 to 161 months followed by a term of supervised release to be determined by the court.
Neihart was arrested in Nov. 2012, on a two-count indictment charging him with the armed robbery of the bank on Sept. 21, 2012, and using a firearm during a crime of violence. Count 1 of the indictment also charged co-defendant Denise Myrick, 44, also of Ignacio, Colo., with aiding and abetting Neihart in robbing the bank. Prosecution of the case against Neihart was delayed by competency proceedings.
During today’s proceedings, Neihart pled guilty to both counts of the indictment, and admitted that on Sept. 21, 2012, he robbed the bank by approaching a teller and handing her a two-page letter demanding money. Neihart further admitted that he had a pistol in his possession at the time of the robbery. He admitted using the pistol to shoot at police vehicles that pursued him after the bank robbery. Neihart was arrested at his Colorado residence later that day by the officers who were in pursuit.
Neihart has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled.
Myrick pled guilty on Dec. 4, 2013, to a misdemeanor information charging her with aiding and abetting a bank robbery. In entering her guilty plea, Myrick admitted driving Neihart to the bank and assisting him in his attempted escape. She was sentenced on Mar. 4, 2014, to three years of probation.
This case was investigated by the Albuquerque and Farmington offices of the FBI, the Farmington Police Department, San Juan County Sheriff’s Office and the La Plata County Sheriff’s Department in Durango, Colo. Assistant U.S. Attorney William J. Pflugrath is prosecuting the case.
Chief Financial Officer Sentenced to 9 Years’ Imprisonment for Defrauding Investors of More Than $10 MillionIn Two Separate Fraud SchemesRead the Press Release
Earlier today, Frank E. Perkins, the Chief Financial Officer (“CFO”) of Harbor Funding Group, Inc. (“HFGI”) and Black Sand Mine, Inc. (“BSMI”), was sentenced in federal court in Brooklyn to 9 years’ imprisonment. In September 2014, Perkins pleaded guilty to two counts charging conspiracy to commit wire fraud and conspiracy to commit securities fraud and wire fraud for his role in defrauding: (i) developers and their clients in areas devastated by Hurricane Katrina of more than $9 million through an advance fee scheme; and (ii) investors of almost $1 million through an Alaskan gold mine investment scheme. As part of the sentence, Perkins was also sentenced to 3 years’ supervised release and ordered to pay a total of $10,707,894.59 in restitution to the victims of the two schemes. The sentencing for lead defendant William C. Lange is scheduled for March 12, 2015.
The sentences were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Philip R. Bartlett, Inspector in Charge, New York Division, U.S. Postal Inspection Service (USPIS), and Frank Montoya, Jr., Special Agent in Charge, Federal Bureau of Investigation, Seattle Field Office (FBI).
“Perkins and his co-defendants preyed upon investors seeking to rebuild areas devastated by Hurricane Katrina and stole their victims’ deposit money through an intricate web of lies and deceit. After they spent the more than $9 million they stole from their victims, Perkins and his co-defendants embarked on a gold mine investment scheme that was built and sold on lies. Today’s sentence sends a strong message that those who exploit tragedies to line their own pockets will be held accountable for their crimes,” stated United States Attorney Lynch. Ms. Lynch thanked the USPIS and the FBI for their hard work and dedication through the course of this six-year investigation and prosecution. Ms. Lynch also extended her appreciation to the United States Attorney’s Office for the Western District of Washington for their assistance in the case.
Perkins and his co-conspirators told land developers and their clients that HFGI had lenders and millions of dollars in funds available to provide financing for their real estate projects. As a condition for financing, HFGI required investors to place ten percent of the loan amount in an attorney escrow account. Contrary to Perkins’ representations, HFGI did not have lenders or funds available to finance the loans. As soon as the money was placed in escrow, Perkins and his co-conspirators stole it, at times through the use of a sham escrow agreement. Through this scheme, Perkins and his co-conspirators stole more than $9 million from approximately 300 individuals. As CFO, Perkins authorized the $9 million to be spent on, among other things, salaries, fishing and hunting trips for co-defendants William and Kristofor Lange, remodeling and landscaping for co-defendant William Lange’s new house, and other business ventures started by Perkins and his co-conspirators.
After the $9 million was spent, Perkins and his co-conspirators moved on to BSMI and the gold mine investment scheme. BSMI claimed that it would mine gold and other precious metals on Sitkinak Island in Alaska. Through the use of in-person presentations, cold calls, and “webinars,” Perkins and his co-conspirators convinced investors to purchase BSMI stock by lying to them about the credentials of BSMI’s officers and directors, BSMI’s assets and liabilities, the intended use of investor funds, and by concealing their prior involvement in HFGI. Perkins also concealed his prior involvement in HFGI. Almost $1 million collected from investors in BSMI was spent on salaries and other personal expenses for Perkins and his co-conspirators.
The government’s case is being prosecuted by Assistant United States Attorneys Winston M. Paes, Alixandra E. Smith, and Melanie Hendry.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement and investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The Defendant:
FRANK E. PERKINS
Age: 55
La Grange, Kentucky
E.D.N.Y. Docket No. 10-CR-968 (DLI)
Chief Engineer of Car-Carrier Vessel Sentenced to Prison for Obstruction of Justice in Marine Oil Pollution CaseRead the Press Release
Baltimore, Maryland – Chief U.S. District Judge Catherine C. Blake sentenced Noly Torato Vidad, age 47, of the Philippines, the Chief Engineer of the cargo vessel M/V Selene Leader, to eight months in prison, followed by one year of supervised release, for obstruction of justice and violating the Act to Prevent Pollution from Ships (APPS).
The sentence was announced by U.S. Attorney Rod J. Rosenstein; Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division John C. Cruden; and Coast Guard Captain Kevin Kiefer, Captain of the Port of Baltimore.
Vidad was the Chief Engineer and Ireneo Tomo Tuale was the first engineer on board the vessel, which was operated by Hachiuma Steamship Co, LTD, a Japanese company, between August 2013, and the end of January 2014. The M/V Selene Leader transported vehicles to and from ports in the United States, including the Port of Baltimore.
According to his plea agreement and other court documents, in January 2014, engine room crew members of the M/V Selene Leader, under the supervision of Vidad and Tuale, transferred oily wastes between oil tanks on board the ship using rubber hoses and then illegally bypassed pollution control equipment and discharged the oily wastes overboard into the ocean. Before such waste can be discharged into the sea, the law requires that it must first pass through an oil water separator, and the operation must be recorded in the vessel’s oil record book for inspection by the United States Coast Guard.
When the Coast Guard boarded the vessel in Baltimore on January 31, 2014, Mr. Vidad tried to obstruct the Coast Guard’s investigation and hide the illegal discharges of oil by falsifying the oil record book, destroying documents, lying to Coast Guard investigators, and instructing subordinate crew members to lie to the Coast Guard.
The Hachiuma Steamship Co., LTD previously pleaded guilty to violating the Act to Prevent Pollution from Ships (APPS), arising from the failure to maintain an accurate oil record book for the M/V Selene Leader. As ordered by Chief U.S. District Judge Catherine C. Blake Hachiuma Steamship paid a $1.8 million penalty, $450,000 of which was made payable to the National Fish and Wildlife Foundation to fund projects benefitting the Chesapeake Bay, and $250,000 was awarded to a whistleblower on board the M/V Selene Leader who alerted the Coast Guard about the illegal activities on board the vessel. The company was also placed on probation for three years during which it is to develop an environmental compliance program.
Ireneo Tomo Tuale, age 63, also of the Philippines, previously pleaded guilty to his participation in the scheme and is scheduled to be sentenced in federal court in Baltimore on March 3, 2015.
United States Attorney Rod J. Rosenstein and Assistant Attorney General John C. Cruden praised the Coast Guard Investigative Service for its work in the investigation and thanked Special Assistant U.S. Attorney David P. Kehoe, of the Environmental Crimes Section of the U.S. Department of Justice, and Assistant United States Attorney P. Michael Cunningham, who prosecuted the case.
Carmen Johnson Convicted on Charges Related to Two Separate Residential Mortgage Fraud SchemesRead the Press Release
Greenbelt, Maryland – A federal jury convicted Carmen Johnson, age 48, of Gambrills, Maryland, today on charges of conspiracy, wire fraud and making a false statement on a loan application, arising from two residential mortgage fraud schemes.
The conviction was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Cary A. Rubenstein of the U.S. Department of Housing and Urban Development Office of Inspector General; Deputy Inspector General for Investigations Rene Febles of the Federal Housing Finance Agency Office of Inspector General; Special Agent in Charge Kathy Michalko of the United States Secret Service – Washington Field Office; John L. Phillips, Assistant Inspector General for Investigations, U.S. Department of the Treasury - Office of Inspector General; and Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
According to the evidence presented at her seven day trial, in the first scheme, which operated from March 2007 to November 2008, Johnson conspired with real estate agent Edgar Tibakweitira and others to fraudulently obtain residential mortgage loans by making false statements during the loan application and approval process. In the second scheme, witnesses testified that between April and July 2008 Johnson conspired with real estate agent Nsane Phanuel Ligate and others in a similar mortgage fraud scheme involving two properties in Baltimore.
Johnson owned and operated CJ Lending and its predecessor Able Estate & Company, which provided credit repair services. Witnesses testified that in both schemes Carmen Johnson reported to credit bureaus and provided her fellow co-conspirators with false credit histories showing backdated lines of credit that were used to convince lenders to give mortgage loans. As part of both schemes, Johnson’s co-conspirators used stolen or false identity information, false documents – including W-2 forms, earnings and banks statements – and false credit information to induce lenders to provide mortgage loans to straw purchasers. Johnson’s co-conspirators also inflated the sales prices of the properties by creating false documents for repairs and renovations that were never made. After the settlement, the conspirators divided up the cash received for the purported repairs.
As a result of both schemes, losses to financial institutions totaled $2,309,646.
Johnson faces a maximum sentence of 30 years in prison on each of two conspiracy counts; 30 years in prison for each of 12 counts of wire fraud affecting a financial institution; and 30 years in prison on each of 10 counts of false statement on a loan application. U.S. District Judge George Jarrod Hazel has scheduled sentencing for June 3, 2015, at 10:00 a.m.
Co-conspirators Edgar Tibakweitira, a/k/a “Edgar Julian,” “Charles Edgar Tibakweitira,” and “Edgar Gaudious Tibakweitira,” age 46, of Severn, Maryland, Flavia Makundi, age 42, of Severn Park, Maryland, Ayoub Luziga, age 35, of Bowie, Maryland, Raymond Abraham, age 48, of Silver Spring, Maryland, Mokorya Cosmas Wambura, age 42, of Takoma Park, Maryland, Abdallah Suleiman Kitwara, age 44, of Bowie, Maryland, have pleaded guilty to their roles in the first scheme. Luziga was sentenced to 21 months in prison and ordered to pay restitution of $999,726. Kitwara was sentenced to 15 months in prison and ordered to pay $290,954 in restitution. Abraham was sentenced to 33 months in prison and ordered to pay $999,726 in restitution. Annika Boas, age 37, of Mount Rainier, Maryland, was convicted after trial and sentenced to 27 months in prison and ordered to pay restitution of $511,147. Makundi was sentenced to time served. Tibakweitira is scheduled to be sentenced on March 23, 2015.
Nsane Phanuel Ligate, age 42, of Ashburn, Virginia, Cane Mwihava, age 43, of Bowie, Maryland, Larry Johnson, age 58, of Capital Heights, and Gladyness Silaa, age 36, of Bowie, Maryland have also pleaded guilty to their roles in the second mortgage fraud scheme. Larry Johnson was sentenced to eight months in prison consecutive to the current sentence he is serving on an unrelated case and ordered to pay restitution of $352,091. Silaa was sentenced six months home detention and ordered to pay $378,602 in restitution. Ligate and Mwihava are scheduled to be sentenced on March 16, 2015 and March 23, 2015, respectively.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available http://www.justice.gov/usao/md/priorities_financialfraud.html.
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 HUD-OIG, FHFA-OIG, Treasury OIG, U.S. Secret Service and HSI Baltimore for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kristi N. O’Malley and Special Assistant U.S. Attorney Kevin Di Gregory, Investigative Counsel for the Federal Housing Finance Agency Inspector General, who are prosecuting the case.
Carbondale Resident Sentenced on Methamphetamine OffenseRead the Press Release
On February 19, 2015, Brandon K. Craig, 21, of Carbondale, Ill., was sentenced for his involvement in a methamphetamine conspiracy, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Craig, who had previously pled guilty to the one-count indictment charging conspiracy to manufacture methamphetamine, was sentenced to 57 months in federal prison, 3 years’ supervised release, and was fined $300. The offense occurred between 2010 and January 2014, in Jackson, Williamson, Union, and Franklin Counties. Evidence at the plea and sentencing hearings established that Craig was involved with others in the manufacture of methamphetamine. Craig was a methamphetamine cook and purchased pseudoephedrine for himself and others to use in the manufacture of methamphetamine. At sentencing, the district court found that Emery was responsible for the illegal possession of 247 grams of pseudoephedrine. Four co-defendants have previously been sentenced for their involvement in the methamphetamine conspiracy. Two co-defendants have pled guilty and are awaiting sentencing. Six co-defendants have pled not guilty and are awaiting jury trial.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office, Murphysboro Police Department, Carbondale Police Department, Illinois State Police/Southern Illinois Drug Task Force, and Drug Enforcement Administration.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
CEO of Kentwood Pharmacy Pleads GuiltyRead the Press Release
GRAND RAPIDS, MICHIGAN – Kim Duron Mulder, 55, formerly of Grand Rapids, and Charles Wayne Brooks, 63, of Alma, entered guilty pleas today before United States District Judge Robert J. Jonker on charges related to the illegal restocking and re-dispensing of recycled drugs at Kentwood Pharmacy. Mr. Mulder, formerly the CEO of Kentwood Pharmacy, pled guilty to a conspiracy to commit health care fraud based on billing Medicare, Medicaid, and private insurance plans for misbranded and adulterated drugs. Mr. Brooks, a pharmacist at Kentwood Pharmacy’s facility in Alma, pled guilty to misbranding prescription drugs that had been previously dispensed and returned to pharmacy stock. Mr. Mulder faces up to ten years’ imprisonment; Mr. Brooks faces up to three years’ imprisonment.
The convictions of Messrs. Mulder and Brooks conclude the federal prosecution of individuals involved with Kentwood Pharmacy. A total of 18 people were convicted of criminal offenses stemming from the practices at Kentwood Pharmacy, including the felony convictions of six licensed pharmacists. Most recently, in December 2014, Judge Jonker sentenced Richard Clarke, formerly Kentwood Pharmacy’s Vice President of Sales, to 14 years in prison for his involvement in a conspiracy to commit health care fraud and a separate charge of possession of child pornography. In December 2014, Judge Jonker also sentenced pharmacist Lawrence Harden to six years’ imprisonment for his involvement in the conspiracy to commit health care fraud. As part of the sentencing hearings, Judge Jonker found that public and private insurers paid more $80,000,000.00 for adulterated and misbranded drugs. Judge Jonker found that Messrs. Clarke and Harden were responsible for restitution amounts of over $8,000,000.00 and $6,000,000.00, respectively.
The federal investigation revealed that Kentwood Pharmacy violated state pharmacy rules and federal law by recycling drugs that were returned from nursing homes and adult foster care homes. These included cross-contaminated drugs that were previously mixed together, drugs bearing foreign substances and residues, and discolored and expired medications. The process by which Kentwood Pharmacy returned drugs to pharmacy stock resulted in the improper labeling of drugs, the placement of different drug dosages into stock bottles, and the placement of the altogether wrong drugs into stock bottles. Because Kentwood Pharmacy did not trace the returned drugs, at least one defendant was able to take and sell controlled prescriptions on the street in northern Michigan.
U.S. Attorney Patrick Miles said, “The Federal Food Drug and Cosmetic Act provides an essential regulatory framework to safeguard the public’s use of prescription drugs. These federal regulations are buttressed by explicit state laws which strictly limit the reuse of drugs which have left the control of pharmacies. The public must be able rely on pharmacists who have both professional and statutory duties to ensure that pharmacies operate in compliance with these federal and state laws regulating the handling, packaging, and distribution of drugs.”
This case was investigated by the U.S. Food and Drug Administration, the Federal Bureau of Investigation, the U.S. Drug Enforcement Administration, the U.S. Department of Health and Human Services, and the Internal Revenue Service. Assistant U.S. Attorneys Raymond E. Beckering III and Adam B. Townshend prosecuted the cases on behalf of the United States.The investigation of this case was initiated by confidential tips. If Michigan residents or medical professionals suspect possible violations of law or other dangerous practices involving pharmacies or prescription drugs, they can contact the FDA or the DEA.
END
CEO of China Based Energy Company Sentenced to Five Years in Prison for Securities FraudRead the Press Release
February 20, 2015
The Chief Executive Officer of an energy firm headquartered in Tukwila, Washington, was sentenced today in U.S. District Court in Seattle to five years in prison, three years of supervised release and a $10,000 fine for two counts of Securities Fraud, announced Acting United States Attorney Annette L. Hayes. DICKSON LEE, 66, served as the CEO of L & L Energy Inc., until his arrest last year. L&L, a formerly NASDAQ listed company, purported to be engaged in various aspects of the coal business including mining, washing, and wholesale distribution of coal, all within the People’s Republic of China. LEE falsified reports to the U.S. Securities and Exchange Commission (SEC) regarding the existence of a Chief Financial Officer and, in a separate scheme, issued under false pretenses hundreds of thousands of shares of L&L stock to individuals controlled by LEE in a scheme to raise cash for the company. At the sentencing hearing U.S. District Judge Richard A. Jones said the case should send a message to CEOs “if you engage in deceit and false representations. . . there will be severe consequences.”
“Investors rely on the representations made by publicly traded companies, both in accounting records and their filings with regulators such as the Securities and Exchange Commission,” said Acting U.S. Attorney Annette L. Hayes. “Mr. Lee’s fabrications about key facts concerning his company undermined one of the foundations of our capital markets. That is what he has been held to account for today.”
According to records in the case, in 2008 and 2009, while trying to get L&L stock listed on a national exchange, LEE falsely reported the identity of the company’s Chief Financial Officer (CFO) and lied about the existence of adequate internal controls in public SEC filings. In fact, the person LEE claimed was the CFO had refused to accept the position, and L&L had no CFO to ensure accurate financial reporting. In 2009, when the purported CFO discovered the fraud, LEE paid the individual tens of thousands of dollars in cash and stock in exchange for her silence, and never disclosed the arrangement to shareholders. Finally, in 2013, during a subsequent SEC investigation, LEE falsely testified under oath about the CFO’s role in the company.
In the second count of Securities Fraud, LEE admits that in 2011 and 2012, he issued 730,000 shares of company stock to third-parties in China who, at LEE’s direction, sold the shares on the market to generate revenue for cash-strapped L&L. At the time, LEE knew that the SEC had initiated an investigation into L&L’s affairs and that raising cash through established investment banks was no longer a viable option. LEE also knew that L&L’s Board had been specifically advised that it could not authorize the direct issuance and sale of stock without public disclosure of the investigation. LEE, therefore, secretly issued L&L stock to China-based individuals under false pretenses and then directed their sale without ever disclosing the truth about the company. In order to further conceal his actions, LEE directed that the shares be falsely recorded in L&L’s accounting records as having been issued for compensation for services, although none of these individuals provided any benefit to L&L in return for the shares.
“This case should serve as a warning to those out there who think that rules don’t apply to them, who let their greed outweigh their obligation to the public trust,” said Special Agent in Charge Frank Montoya, Jr., of the FBI’s Seattle field office. “Those people should know the FBI is deeply committed to protecting the community against those who would violate that trust.”
In their sentencing memo, prosecutors explain how these crimes impact the investing public, writing to the court: “Dickson Lee’s conduct was particularly egregious because he flagrantly and repeatedly sought to undermine basic gatekeeping systems erected to prevent unaccountable corporate executives from fleecing investors….Lee…betrayed a deep contempt for the regular investor. The consequence of Lee’s actions is continued mistrust by the public in corporate executives, erosion of confidence in the securities markets, and significantly higher investment costs as investors spend more to conduct their own due diligence. This limits participation and the result is a less open and less liquid market to the detriment of the economy.”
The case was investigated by the FBI. A parallel civil case is being pursued by the SEC. The case is being prosecuted by Assistant United States Attorney Kathryn Kim Frierson.
Bloomfield Man Pleads Guilty to Federal Statutory Rape ChargeRead the Press Release
ALBUQUERQUE – Orlando Harvey, 24, an enrolled member of the Navajo Nation who resides in Bloomfield, N.M., pleaded guilty this morning to a sexual abuse of a minor charge under a plea agreement with the U.S. Attorney’s Office.
Harvey was arrested on Dec. 22, 2014, on an indictment charging him with four counts of sexual abuse of a minor. According to the indictment, Harvey engaged in a sexual act with the victim who was under 16 years of age on four occasions between Aug. 2014 and Oct. 2014. The indictment alleged that the crimes occurred on the Navajo Indian Reservation in San Juan County, N.M.
During today’s hearing, Harvey entered a guilty plea to Count 1 of the indictment, and admitted engaging in a sexual act with the 15-year-old victim in Aug. 2014. Harvey admitted knowing that the victim was only 15 years old when he picked her up at school and drove her to his residence where they engaged in a sexual act. Harvey then drove the victim back to school. He acknowledged that he manipulated the victim into engaging in a sexual act with him.
Harvey has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled. At sentencing, Harvey faces a statutory maximum penalty of 15 years in prison.
This case was investigated by the Shiprock office of the Navajo Nation Division of Public Safety. The case is being prosecuted by Assistant U.S. Attorneys Raquel Ruiz Velez and Elaine Ramirez as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Biscayne Park Man Pleads Guilty to Identity Theft and Debit Card FraudRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that Kency Aime (29, Biscayne Park) has pleaded guilty to one count of access device (debit card) fraud and nine counts of identity theft. He faces a maximum penalty of 55 years in federal prison. A sentencing date has not yet been scheduled.
According to court documents, on May 7, 2014, a Florida Highway Patrol trooper observed a vehicle traveling above the posted speed limit on I-75 in Hamilton County, Florida. The trooper conducted a traffic stop and identified Aime as the driver and sole occupant of the vehicle. During the stop, the trooper smelled a very strong odor of marijuana coming from inside the vehicle and Aime admitted that he had been smoking marijuana.
During a search of the vehicle, troopers located 34 Mastercard and Visa debit cards, along with 296 sets of Personal Identifying Information (PII). Also found were two computers and cell phones. After obtaining federal search warrants, law enforcement located an additional 103 sets of PII on the computers and cell phones. Further investigation revealed that the Mastercard and Visa debit cards were applied for using stolen PII or obtained fraudulently and associated with fraudulent tax activity.
This case was investigated by the United States Secret Service North Florida High Tech Crime Task Force, the Internal Revenue Service – Criminal Investigation, and the Florida Highway Patrol. It is being prosecuted by Assistant United States Attorney Kevin C. Frein.
Baltimore Bank Robber Sentenced to 10 Years in PrisonRead the Press Release
Baltimore, Maryland – Chief U.S. District Judge Catherine C. Blake sentenced Arnold Threet, age 50, of Baltimore today to 10 years in prison, followed by three years of supervised release, for bank robbery. Chief Judge Blake also ordered Threet to pay restitution of $8,935.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Chief James W. Johnson of the Baltimore County Police Department.
According to his plea agreement, on July 5, 2013, Threet and another individual robbed the First Mariner Bank in the 9800 block of York Road in Cockeysville, Maryland. Both robbers wore masks. They entered the bank and yelled for the people inside to get down. One of the robbers grabbed a teller, pushed what appeared to be a gun into her shoulder and ordered her to the ground. The other robber ordered another bank employee to walk from her desk toward him and get down on the ground. He then ordered her to crawl back to her desk area. The robbers stole $8,935.
A witness saw Threet in a parking lot near the bank and observed what appeared to be a black handgun in the waistband of Threet’s pants. Police officers stopped Threet’s vehicle and he was arrested. A search of the vehicle recovered the clothing, gloves and a pellet gun which are seen in the video of the bank robbery. Threet admitted that he committed the robbery and knew that the pellet gun would be used during the robbery.
United States Attorney Rod J. Rosenstein praised the FBI and Baltimore County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Bonnie S. Greenberg, who prosecuted the case.
Albuquerque Man Arrested on Federal Methamphetamine Trafficking ChargeRead the Press Release
ALBUQUERQUE – Michael Stewart, 55, of Albuquerque, N.M., appeared in federal court this morning on a criminal complaint charging him with possession of methamphetamine with intent to distribute. During his hearing, Stewart entered a not guilty plea to the charge against him and was ordered detained pending trial.
Stewart was arrested on Feb. 19, 2015, after DEA Task Force officers allegedly seized approximately 611.9 gross grams of methamphetamine and approximately $24,000.00 in cash from him and his vehicle during a traffic stop in northwest Albuquerque.
If convicted of the charge in the criminal complaint, Stewart faces a sentence of a mandatory minimum ten years in prison and a maximum of life imprisonment. Charges in complaints are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Albuquerque office of the DEA, Homeland Security Investigations and the Bernalillo County Sheriff’s Office, and is being prosecuted by Assistant U.S. Attorney Shana B. Long.
Alabama Man Sentenced for $10.2 Million Securities Fraud ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Northport, Ala., man was sentenced in federal court today for his role in a $10.2 million securities fraud and wire fraud conspiracy that victimized thousands of investors across the United States and Canada who bought shares in Petro America Corporation, which was purported to be a profitable company with $284 billion in assets.
More than 12,000 victims invested in excess of $10.2 million in Petro America. Contrary to the fraudulent representations the conspirators made to victim-investors, Petro America had no oil, no realistic prospects for obtaining, transporting or storing large amounts of oil, no significant assets, no revenue and no employees other than the CEO.
Russell Hopkins, 51, of Northport, was sentenced by U.S. District Judge Brian C. Wimes to four years and three months in federal prison without parole. The court also ordered Hopkins to pay $673,465 in restitution.
Hopkins is among nine co-defendants who pleaded guilty to their roles in the scheme. Five additional co-defendants were convicted at trial, including CEO Isreal Owen Hawkins, 59, of Kansas City, Kan. Hawkins was sentenced on Oct. 8, 2013, to 30 years in federal prison without parole.
Hopkins, who pleaded guilty on July 13, 2011, admitted that he participated in a conspiracy to commit securities fraud and wire fraud that began Sept. 1, 2008. Hopkins promoted Petro America and sold shares to investors, although he was never licensed to sell securities and despite cease and desist orders from both Missouri and Kansas.
Hopkins and other conspirators used religious language in their pitches and often recruited through churches. The sale of Petro America stock was accomplished by making innumerable false misrepresentations and omissions to investors. For example, conspirators falsely claimed that Petro America was worth $284 billion and Petro America stock was worth $24 per share in order to induce people to invest. There was no basis for those numbers.
In an attempt to enable Petro to continue selling its stock after the Missouri cease and desist order was issued on Nov. 12, 2008, and to enable the conspirators to continue to profit, Hawkins gifted billions of shares to Hopkins and other co-defendants. These secondary sellers agreed to sell the stock and they often returned some of the proceeds as kick-back payments to Hawkins and others. Hopkins and other secondary sellers often represented that they were merely investors selling their own shares; they did not disclose that cease and desist orders had been issued, nor did they disclose that most or all of the shares had been gifted to them. Almost no investor proceeds were being reinvested by Petro; instead, conspirators were spending investor proceeds on personal expenditures.
From June 2009 through February 2011, Hopkins made at least $673,465 from the sale of Petro stock to at least 61 investors throughout the United States.
While much of the time Hopkins simply repeated information to investors that he had heard from others, he knew that it was incomplete and potentially misleading. In his dealings with investors, Hopkins intentionally and willfully did not provide certain material information to investors, including: 1) the existence of cease and desist orders in Missouri and Kansas; 2) specific negative information contained in the cease and desist orders; 3) the fact that the stock was unregistered; 4) the fact that the stock was either gifted to him, or sold to him at a price grossly discounted from the offer price; and 5) the fact that he was selling the investors his personal shares. When he sold the stock, Hopkins adopted numerous positive claims concerning Petro’s future potential to become a publicly traded company, and of its claimed assets, which he knew were overly optimistic and misleading.
Starting around July 2010, Hopkins agreed to pay for some of Petro’s “expenses.” In sum, Hopkins paid $32,000 out of his proceeds from the sale of his shares for expenses including Petro’s Pink Sheets registration, payments for accounting and IT work, and $500 weekly payments for Petro conference calls. Hopkins was told that Alvin Sykes was a consultant for Petro who needed to go to Washington D.C., so Hopkins paid for Sykes’s airfare and hotel.
This case is being prosecuted by Assistant U.S. Attorneys Daniel M. Nelson and Kathleen D. Mahoney. It was investigated by IRS-Criminal Investigation, the U.S. Postal Inspection Service and the Office of the Missouri Securities Commissioner.
Thursday 19 February 2015
Wichita Man Pleads Guilty to Robbery at Dollar GeneralRead the Press Release
WICHITA, KAN. - A Wichita man pleaded guilty in federal court in Wichita Thursday to a robbery charge, U.S. Attorney Barry Grissom said.
Eric Emmanuel Dear, 23, Wichita, Kan., pleaded guilty to one count of commercial robbery. In his plea, he admitted that on July 27, 2014, he robbed the Dollar General Store at 2747 E. Boulevard Plaza in Wichita.
He entered the store about 10:25 a.m., approached the cash register and demanded money. He carried what appeared to be a handgun in his right hand. During the robbery, he touched the counter with his left hand. Fingerprints taken from the counter were matched to three fingers on his left hand. No firearm was recovered.
Sentencing is set for May 7. Both parties have agreed to recommend a sentence of 57 months in federal prison. Grissom commended the Wichita Police Department, the FBI and Assistant U.S. David Lind for their work on the case.
Westbrook Woman Pleads Guilty to Adulterating a Dietary SupplementRead the Press Release
Contact: James W. Chapman, Jr.
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Kathy Jordan, age 61, of Westbrook, Maine, pleaded guilty today in U.S. District Court to adulterating a food item, namely a bottle of fish oil capsules, with intent to defraud.
According to court documents, on April 3, 2012, Jordan purchased a bottle of fish oil capsules, face cream and shampoo from a retail pharmacy store near her home. She returned all three items the following day for a full refund. One week later, the bottle of fish oil capsules was resold to another customer. That customer discovered that the bottle contained other items in addition to fish oil, and returned the bottle to the pharmacy. The pharmacy determined that some of the fish oil capsules had been removed and replaced with stool softener capsules and Dilantin, a prescription anti-seizure medication. Jordan told investigators that she returned the bottle of fish oil capsules after substituting some of the fish oil with other drugs in her home so that she could get a full refund.
Jordan faces up to three years in jail and a $250,000 fine. She will be sentenced after completion of a pre-sentence investigation report by the U.S. Probation Office.
This case was investigated by the Food and Drug Administration, Office of Inspector General.
Washington, D.C., Man Pleads Guilty to Federal Charges in Massive Identity Theft and Tax Fraud SchemeRead the Press Release
Admits Working with Others to Seek More Than $1.1 Million in Fraudulent Refunds
A Washington, D.C., man pleaded guilty to various crimes committed in a far-reaching identity theft and tax fraud scheme in which he and others filed fraudulent federal income tax returns seeking more than $1.1 million in refunds, the Justice Department announced today.
James Nelson, 31, is among approximately a dozen people who have pleaded guilty in the U.S. District Court for the District of Columbia to charges in one of the largest prosecutions to date involving the use of stolen identifying information. The overall case involves the filing of at least 12,000 fraudulent federal income tax returns that sought refunds of at least $40 million.
The guilty plea, unsealed today, was announced by U.S. Attorney Ronald C. Machen Jr. of the District of Columbia, Principal Deputy Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service-Criminal Investigation (IRS-CI) Washington Field Office, Acting Inspector in Charge David M. McGinnis of the U.S. Postal Inspection Service’s (USPIS) Washington Division, Assistant Inspector General for Investigations John L. Phillips of the U.S. Department of Treasury, and Special Agent in Charge Kathy A. Michalko of the U.S. Secret Service’s Washington Field Office.
Nelson pleaded guilty to conspiracy to defraud the United States with respect to claims, aiding and abetting in the making of false claims for refund, and aiding and abetting in fraud and related activity involving identification information. Under federal sentencing guidelines, Nelson faces an estimated range of 41 to 51 months in prison and a fine of up to $75,000 at his sentencing before the Honorable U.S. District Judge Ellen S. Huvelle of the District of Columbia. In addition, as part of his plea agreement, Nelson must pay $636,026 in restitution to the IRS.
“James Nelson now joins numerous others who have pleaded guilty in this prosecution of a D.C.–based scheme involving at least 12,000 fake income tax returns,” said U.S. Attorney Machen. “Honest taxpayers – like those filing their returns this week – are victimized by these scammers who use stolen identities to generate fraudulent tax refunds and drain money from the U.S. Treasury. This prosecution is not over. We will remain aggressive in our efforts to investigate and prosecute tax refund fraud involving identity theft.”
“One of the Tax Division’s highest priorities is prosecuting individuals such as James Nelson and his co-conspirators, who use stolen identities to file fictitious income tax returns and claim fraudulent refunds,” said Principal Deputy Acting Assistant Attorney General Ciraolo. “This street crime threatens the very fabric of tax administration and often victimizes the most vulnerable members of our communities. The Tax Division is committed to working with our partners in law enforcement to identify these schemes, dismantle the criminal operations, and punish the offenders who view the Federal Treasury as their own personal bank account.”
“Perpetrators of identity theft schemes are motivated by greed, acting as if they are above the law and with total disregard for the consequences to the victims,” said Special Agent in Charge Kelly. “The actions of criminals, such as Mr. Nelson, create distressing hardships for many innocent taxpayers and have a devastating impact on the entire community.”
“Postal Inspectors are proud to join our federal law enforcement partners to bring this case to a successful resolution,” said Acting Inspector in Charge McGinnis. “By joining forces, we are able to bring justice to those who would misuse the U.S. mail in order to defraud innocent citizens and the U.S. government.”
“I am proud of the work done by our Office of Investigations, cooperating with other law enforcement organizations in detecting and deterring this fraud and protecting the integrity of the nation’s tax system,” said Assistant Inspector General Phillips.
“Our success in this case and similar investigations is a result of our close work with law enforcement partners,” said Special Agent in Charge Michalko. “The Secret Service worked closely with the Internal Revenue Service and the Department of Justice to share information and resources that ultimately brought James Nelson to justice. This case demonstrates there is no such thing as anonymity for those engaging in identity theft and fraudulent schemes.”
According to the government’s evidence, Nelson was among participants in a massive and sophisticated identity theft and false tax refund scheme involving an extensive network of more than 130 people, many of whom were receiving public assistance. The refunds were sought since 2006, often in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners. In other cases, the refunds were sent to people who were willing participants in the scheme. The refunds listed more than 400 “taxpayer” addresses in the District of Columbia.
From December 2007 through January 2012, according to the government’s evidence, Nelson used his residential addresses, then in the District of Columbia, for the receipt of some of the fraudulently obtained tax refunds. He also recruited others to receive fraudulent refunds at their addresses. For example, Nelson paid one woman about $150 per check for each refund check delivered to her residential address in the District of Columbia.
Approximately 360 fraudulent federal income tax returns were filed with the IRS listing the addresses that were under Nelson’s control. The returns sought refunds of approximately $908,500. As a result, the IRS sent out 238 checks, totaling about $524,795, and 184 of those checks, totaling $432,804, were ultimately cashed.
Nelson also recruited others to negotiate at least 86 other refund checks, totaling approximately $203,222, causing a total intended loss to the U.S. Treasury of more than $1.1 million.
In announcing the plea, U.S. Attorney Machen, Principal Deputy Acting Assistant Attorney General Ciraolo, Special Agent in Charge Kelly, Acting Inspector in Charge McGinnis, Assistant Inspector General Phillips and Special Agent in Charge Michalko commended those who investigated the case. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including former Assistant U.S. Attorney Sherri L. Schornstein and Paralegal Specialist Donna Galindo. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Ellen Chubin Epstein of the District of Columbia’s Fraud and Public Corruption Section and Trial Attorneys Jessica N. Moran and Jeffrey B. Bender of the Tax Division, who are prosecuting the case.
Waco Businessman Pleads Guilty to Federal Wire Fraud ChargesRead the Press Release
In Waco, Charles D. Jones, 61-year-old owner of Charles D. Jones Capital Management, Inc. (CDJCM), faces up to 20 years in federal prison after pleading guilty to wire fraud in connection with the theft of more than $8 million from his clients announced Acting United States Attorney Richard L. Durbin, Jr., U.S. Secret Service Special Agent in Charge Kathleen Hickman, Dallas Field Office, and Texas Department of Public Safety Director Steve McCraw.
According to court records, CDJCM provided fee-only personalized financial planning and investment management for individuals, trusts, foundations and retirement plans. From 2005 to 2012, the defendant stole money and property from his victim clients and used the stolen proceeds for his own personal benefit. To further perpetuate his Ponzi scheme, the defendant created false account statements and mailed or e-mailed them to his victim clients. Jones also caused fraudulent tax returns to be filed in order to cover up his theft. By the defendant’s own estimate, he stole approximately $8,378.524.94 from his clients.
Jones remains on bond pending sentencing which is scheduled for 1:00pm on April 15, 2015, before United States District Judge Walter S. Smith, Jr., in Waco.
This investigation was conducted by the United States Secret Service and the Texas Department of Public Safety Special Crimes Unit. Assistant United States Attorney Greg Gloff is prosecuting this case on behalf of the Government.
Virginia man gets nearly six years for armed robbery of drug dealerRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced today that William Seltzer, 29, of Wytheville, Virginia, was sentenced to 70 months in federal prison.
In July 2013, Seltzer pleaded guilty to aiding and abetting armed robbery affecting interstate commerce. He admitted that on April 22, 2012, he, Robert Barcliff, Keith Glenn and Robert Jared Smith carried out an armed home-invasion robbery in Marmet, West Virginia. They believed the victim to be a drug dealer in possession of oxycodone pills or proceeds from drug sales. Seltzer worked with Barcliff to set up the robbery, and provided information to him about the location of the victim. After receiving word from Seltzer that it was time to enter the apartment, Barcliff and Smith entered the apartment brandishing firearms to carry out the robbery. They stole drug proceeds from the victim before fleeing. A firearm was discharged during the robbery.
This robbery was part of a larger conspiracy committed by Robert Barcliff and his associates. Beginning in the fall of 2011, Barcliff, Keith Glenn, Brandon Davis, Darrell Gillespie, Jamaa Johnson and others conspired and agreed to commit armed home-invasion robberies of drug dealers in West Virginia, Virginia, Pennsylvania and Tennessee. The objective of the conspiracy and robberies was to steal drugs, drug proceeds and firearms. The group targeted drug dealers because they believed them not likely to call the police.
Barcliff was recently sentenced to 16 years in federal prison. Johnson and Gillespie are scheduled to be sentenced in May 2015.
United States District Judge Thomas E. Johnston imposed the sentence.
The case was investigated by the Federal Bureau of Investigation, South Charleston Police Department and Charleston Police Department. Assistant United States Attorney Monica D. Coleman handled the prosecution.
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U.S. v. Sheldon Silver IndictmentRead the Press Release
US v. Sheldon Silver Indictment
U.S. District Court Rules that American Express Violated Antitrust LawsRead the Press Release
Attorney General Eric Holder today praised the decision by a judge in the United States District Court in the Eastern District of New York who found in favor of the Justice Department’s lawsuit claiming that American Express’ rules for merchants violate antitrust laws.
“Today’s decision is a triumph for fair competition and for American consumers,” said Attorney General Holder. “By recognizing that American Express’s rules harm competition, the court vindicates the promise of robust marketplaces that is enshrined in our antitrust laws. I salute the hardworking men and women who led the lengthy investigation and trial with uncommon skill and unwavering dedication. With this achievement, we are sending an unambiguous message that the Department of Justice is prepared to litigate any case, no matter how complex, in its pursuit of justice and protection for the American people.”
The United States Department of Justice and 17 state attorneys general sued American Express, Visa Inc. and MasterCard International Inc., in 2010 to eliminate restrictions that the three credit card networks imposed on merchants. Over the course of a seven week trial during the summer of 2014, the department argued that these restrictions obstruct merchants from using competition to try to keep credit card fees from increasing. The civil case, brought under Section 1 of the Sherman Antitrust Act, sought to end the violation and to restore competition.
The trial focused on credit card “swipe fees” which generate over $50 billion annually for credit card networks. Millions of merchants of all sizes and in scores of industries pay those fees. Despite these large fee revenues, the Justice Department argued that price competition over merchant swipe fees has been almost non-existent and for decades the credit card networks have not competed on price. Today’s decision was rendered by Judge Nicholas G. Garaufis.
“Merchants pay over $50 billion in credit card swipe fees each year. The department and the attorneys general of 17 states brought this case because competition over those fees was being suppressed,” said Deputy Assistant Attorney General for the Antitrust Division Leslie C. Overton. “The Court’s ruling establishes that the American Express anti-steering rules block merchants from using competition to keep credit card swipe fees down, which means higher costs to those merchants’ customers. I am proud of the outstanding work done by the investigative and trial teams. As today’s decision reaffirms, the Antitrust Division remains committed to ensuring that competition is not restricted in this important sector of the economy.”
Settlements with Visa and MasterCard were filed at the same time the case against American Express was begun; the settlements prohibit the two networks from continuing their rules and practices that had obstructed competition. The court approved the settlements on July 20, 2011, and they applied immediately to Visa and MasterCard. American Express was not a party to the settlements, and the litigation against American Express continued.
The department argued that the principal reason for an absence of price competition among credit card companies has been rules imposed by each of the networks that limit merchants’ ability to take advantage of a basic tool to keep prices competitive. That tool – commonly used elsewhere in the economy – is merchants’ freedom to “steer” transactions to a network willing to lower its price. Each network has long prohibited such steering to lower-cost cards. Now that Visa and MasterCard have reformed their anti-steering rules, American Express rules stood as the last barrier to competition.
At trial, an array of merchants came forward to explain both the substantial costs they incur when their customers pay with credit cards and their inability to ignite competition among the networks to reduce those costs. In fact, the rules not only prevent merchants from offering their customers lower prices or other incentives for choosing a less costly card, they even block merchants from providing consumers with truthful price information about the cost of swipe fees of different credit cards.
Examples, used as trial exhibits, of what the Amex rule prohibits can be found at http://www.justice.gov/atr/cases/amex/amex-te.html.
Closing arguments in the trial took place on Oct. 9, 2014. Craig Conrath was the lead trial attorney for the United States. The 17 plaintiff states were Arizona, Connecticut, Idaho, Illinois, Iowa, Maryland, Michigan, Missouri, Montana, Nebraska, New Hampshire, Ohio, Rhode Island, Tennessee, Texas, Utah and Vermont. The court also entered a scheduling order instructing the parties to submit, within 30 days, a joint proposed remedial order.
Two New York Men Sentenced for Trafficking HeroinRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that William Nelson, age 42, and Greg Bush, age 53, both of Brooklyn, New York were sentenced in federal court in Scranton on charges of trafficking in 100 grams or more of heroin.
United States District Court Judge Robert D. Mariani sentenced Nelson to 37 months imprisonment and Bush was sentenced to 60 months imprisonment. This case involved the prosecution of 8 defendants. Five have been previously sentenced. One went to trial, was convicted, and is awaiting sentencing.
According to the United States Attorney Peter Smith, both Nelson and Bush were part of an Indictment that was filed on October 16, 2012 in the Middle District of Pennsylvania. The Indictment charged that between September 2011 through May 2012, Nelson and Bush were involved in a conspiracy to distribute and possessed with intent to distribute 100 grams or more of heroin from New York to Scranton and Wilkes-Barre, Pennsylvania.
The prosecution arose from the efforts of a joint investigation conducted by the Drug Enforcement Agency in Scranton, the Lackawanna County District Attorney’s Office – Detective Division, the Pennsylvania State Police, as well as both the Scranton and Wilkes-Barre Police Departments. Assistant United States Attorney Michelle Olshefski prosecuted the case.
Two Indicted for Laser Strikes on Law Enforcement AircraftRead the Press Release
FRESNO, Calif. — A federal grand jury returned two indictments today against Jose Javier Rosas, 62, resident of Bakersfield, Calif., and Jeremy Scott Danielson, 34, of Clovis, Calif., charging them with crimes relating to laser strikes of law enforcement aircraft, United States Attorney Benjamin B. Wagner announced.
Reports of laser attacks have increased dramatically in recent years as powerful laser devices have become more affordable and widely available to the public. Lasers can completely incapacitate pilots who are trying to fly safely to their destination, endangering their crew members, passengers and people on the ground.
Lasing of Kern County Sheriff Helicopter
Rosas was charged with aiming a laser pointer at Air-1, a Kern County Sheriff’s Office helicopter. According to court records, Air-1 was struck last month during the evening hours by a powerful green laser. As a result, the pilot experienced glare, flash blindness, significant loss of night vision, watering eyes, and eye pain and was forced to disengage from a robbery investigation.
Rosas was charged with the laser offense following an investigation conducted by the Federal Bureau of Investigation (FBI), Homeland Security Investigations of Immigration and Customs Enforcement, and Kern County Sheriff’s Office.
Lasing of CHP Aircraft
Danielson was charged with interfering with the safe operation of a California Highway Patrol (CHP) aircraft, Air 43, and aiming a laser pointer at it. According to court records, Air 43 was struck in August and September of last year by a powerful green laser pointer seized from Danielson. The second incident involved up to 23 laser strikes and occurred while Air 43 was taking off from the Fresno Yosemite International Airport during a critical phase of flight. As a result, the pilot and tactical flight officer suffered flash blindness and watering eyes.
The case was investigated by the FBI, CHP, Clovis and Fresno Police Departments.
Assistant U.S. Attorney Karen A. Escobar is prosecuting both cases.
Danielson is scheduled for arraignment on the indictment on February 23, 2015. Rosas is scheduled for arraignment on the indictment on February 27, 2015. They both face a maximum prison term of five years and a fine of up to $250,000, if convicted of aiming the beam of a laser pointer at an aircraft. Danielson faces an additional prison term of twenty years and a fine of up to $250,000, if convicted of interfering with the safe operation of an aircraft.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
Two Hartford Men Charged with MurderRead the Press Release
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United States Attorney Deirdre M. Daly, Chief State’s Attorney Kevin T. Kane, Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, Michael J. Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration for New England, and Hartford Police Chief James C. Rovella, today announced that JIMEL FRANK, also known as “30” and “Velly,” and KARL ROYE, also known as “Eagle,” have been charged with the April 2011 murder of Anthony Parker of Hartford.
This matter stems from a long-term investigation being conducted by the FBI’s Northern Connecticut Violent Crimes Task Force, DEA and Hartford Police Department into narcotics trafficking by members and associates of the WestHell and Team Grease street gangs and gang-related violent activity. Officers and inspectors from the Cold Case Unit of the Office of the Chief State’s Attorney are actively participating in the investigation.
At approximately 10:47 a.m. on the morning of April 6, 2011, the Hartford Police Department received a report of shots fired in the vicinity of 15 Thomaston Street in the Blue Hills Section of Hartford. Officers responding to the scene located Anthony Parker, also known as “Smooth,” 24, seated in the driver’s seat of a vehicle in the driveway of 15 Thomaston Street. Parker was unconscious and suffering from multiple gunshot wounds. Parker was transported by ambulance to Saint Francis Hospital where he ultimately succumbed to his injuries and was pronounced deceased.
The complaint alleges that FRANK and ROYE conspired to engage in, and engaged in, a Violent Crime in Aid of Racketeering, namely the murder of Anthony Parker.
FRANK, 27, of Hartford, was arrested today. He appeared before U.S. Magistrate Judge Thomas P. Smith in Hartford and is detained.
ROYE, 24, formerly of Hartford, has been detained since September 2013 on an unrelated offense and currently is in the custody of the Federal Bureau of Prisons.
If convicted of the charges, each defendant faces a maximum term of imprisonment of life, or death if the government seeks the death penalty in this matter.
U.S. Attorney Daly stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Chief State’s Attorney Kane noted that the unsolved homicide of Anthony “Smooth” Parker was included in cold case playing cards sold to inmates in Connecticut’s state correctional facilities. Each card in the deck features a photograph and brief details about a homicide or missing person case and lists telephone, mail and e-mail contacts that inmates can use to supply information.
This ongoing investigation is being conducted by the FBI’s Northern Connecticut Violent Crimes Task Force, DEA, Hartford Police Department and Cold Case Unit of the Office of the Chief State’s Attorney. The FBI Task Force includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction.
The case is being prosecuted by Assistant U.S. Attorneys John H. Durham and Peter S. Jongbloed, and Supervisory Assistant State’s Attorney Patrick Griffin, who has been cross-designated as Special Assistant U.S. Attorney in this matter.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Three Arrested on Charges of Conspiracy to Distribute HeroinRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Kron Lewis a.k.a. Keon Lewis, 27, of Trinidad and Tobago, Joseph Lupien, 33, of Barre, VT and Matthew Bennett, 20, of Barre, VT, made initial appearances today in the United States District Court in Burlington, following their arrests for conspiracy to distribute heroin. U.S. Magistrate Judge John M. Conroy detained Lewis pending trial and there is a detention hearing for Lupien scheduled for February 23, 2015. Bennett was released on conditions.
According to court documents, on February 18, 2015, a Vermont State Police trooper conducted a motor vehicle stop on I-89 in Sharon, VT of a vehicle occupied by Bennett, Lupien, Lewis and a female. Lupien gave the trooper permission to search the vehicle and inside a bag in the trunk of the car, troopers found approximately 3050 individual bags of heroin and 16.9 grams of bulk heroin. Bennett and Lupien told law enforcement that they had just picked up Lewis and the female at the bus stop in White River Junction and that the bag containing the heroin belonged to Lewis. Both also said that they knew Lewis was bringing heroin to Vermont on the bus and that they had given Lewis a ride from the bus station on several other occasions. Bennett and Lupien said that they were paid in heroin and/or cash for helping Lewis.
The Acting United States Attorney, Eugenia A.P. Cowles, emphasized that the charge against Lewis, Lupien and Bennett is merely an accusation and that the defendants are presumed innocent unless and until they are proven guilty.
If convicted, the defendants face up to twenty years of imprisonment and a fine of up to $1,000,000. The actual sentence would be determined with reference to federal sentencing guidelines.
Lewis is represented by David Watts, Esq. Lupien is represented by Michael Desautels, Esq. Bennett is represented by Elizabeth Mann, Esq. The prosecutor is Assistant U.S. Attorney Wendy G. Fuller.
Thirty-Nine People Indicted in Massive Drug Trafficking ConspiracyRead the Press Release
Thirty-four Florida residents were arrested in a drug trafficking conspiracy. A total of 39 individuals were charged, five individuals remain at large
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, FBI, Miami Field Office, Hugo Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), and Ric L. Bradshaw, Sheriff, Palm Beach County Sheriff?s Office, Miami Field Office, made the announcement.
Charged in the indictment are Samuel David Alvarado, a/k/a “Wham,” 35, of Lake Worth, Stephen Carl Alveranga, a/k/a “Stevo,” 39, of West Palm Beach, Armand Edward Armstrong, 30, of Lake Worth, Robert Benjamin Brewster, a/k/a “Benji,” 33, of West Palm Beach, Devier Calvo-Borrego, 26, of West Palm Beach, Jamie Neil Capalbo, 33, of Loxahatchee, Nicholas William Capparelli, a/k/a “Cap,” 27, of Lake Worth, Herve Fils Viaud, a/k/a “V,” 23, of West Palm Beach, Fidel Fragoso, a/k/a Fidel F. Ojito, 62, of West Palm Beach, Julio Angel Garcia, a/k/a “Peanut,” 24, of West Palm Beach, Tavaris Sherrod Hayes, 30, of West Palm Beach, Baron Waldo Henderson, 38, of West Palm Beach, Sam Henricy, a/k/a “Tukan,” 32, of West Palm Beach, Lavaress Jayvon Hopkins, 25, of West Palm Beach, Rones Jean Paul, 29, of Boynton Beach, Walson Tony Joseph, 38, of Lake Worth, Justin Patrick Landfried, 23, of Royal Palm Beach, Steven Joseph Leal, a/k/a “Pep,” 35, of Lake Worth, Eric Ramon Machado-Orama a/k/a “E,” 35, of West Palm Beach, Victoria Lynn McGinnis, a/k/a “Picky Vicky,” 56, of Palm Springs, Pedro Nel Mejia, Jr. a/k/a “Dro,” 26, of West Palm Beach, Andrew Carl Melchert, 32, of West Palm Beach, Joseph Michaud, 31, of West Palm Beach, Joseph Michael O'Connor, a/k/a “Jit,” 23, of West Palm Beach, Neil R. Puterbaugh, Jr., 41, of Greenacres, Vincent Ronald Ranallo, a/k/a “Vinnie,” 48, of Lake Worth, Todd John Reynolds, 44, of West Palm Beach, Jean A. Saint Louis, Jr., 27, of Lake Worth, Adolfo Rico Sanchez, a/k/a “Primo,” 30, of Lantana, Jacob Lee Skelly, 37, of Port Saint Lucie, Teddy Roosevelt Sims, 37, of West Palm Beach, Tyrone Isiah Thomas, 22, of West Palm Beach, Fabian Josue Vallejo, a/k/a “Fabo,” 24, of Greenacres, Eliezet Andres Velazquez, a/k/a “Tete,” 22, of Lake Worth, David Dieudonne Vilmont, a/k/a “Dai Dai,” “Zona,” 26, of West Palm Beach, Omar Veloz, Jr. a/k/a “O,” 25, of West Palm Beach, Alexander Handel Webster, Jr. a/k/a “X,” 30, of Lake Worth, Sherman Eugene Weeks, Sr., 41, of West Palm Beach, and James Alvin Wright, 29, of West Palm Beach.
Capalbo, Henderson, Henricy, Joseph, Landfried, Wright and Veloz were also charged with firearms-related offenses.
Earlier this morning, each of the individuals arrested appeared before U.S. Magistrate Judge William Matthewman for their initial appearances. Alvarado, Garcia, Ranallo, Thomas and Vallejo remain at large.
This case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.
Mr. Ferrer commended the investigative efforts of the FBI, ATF and the Palm Beach County Sheriff?s Office. This case is being prosecuted by Assistant U.S. Attorneys Rinku Tribuiani and Robert Waters.
An indictment is only an accusation and the defendants are presumed innocent until proven guilty.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
South Jersey Man Faces Criminal Charges for Shooting at Pilot Whales with World War II-Era RifleRead the Press Release
NEWARK, N.J. - A Cape May, New Jersey, man surrendered to U.S. Marshals today for shooting at pilot whales off the New Jersey coast, U.S. Attorney Paul J. Fishman announced.
Daniel Archibald, 27, is charged by complaint with one count of violating the Marine Mammal Protection Act. He appeared this afternoon in Newark federal court before U.S. Magistrate Judge James B. Clark III in Newark federal court. He was released on $10,000 unsecured bond, with travel restricted to the United States, except for fishing in international waters. He is required to surrender all firearms and firearms purchaser identification cards and is prohibited from using or possessing a firearm on land or sea.
According to the complaint unsealed today:
Archibald, a tuna fisherman, allegedly shot at pilot whales while aboard the fishing vessel “Capt Bob.” Pilot whales are protected under the Marine Mammal Protection Act of 1972, a statute that prohibits the hunting, killing, capture or harassment of any marine mammal. Harassment under the statute includes any act of pursuit, torment or annoyance that has the potential to injure a marine mammal in the wild.
On Sept. 24, 2011, an 11-foot, 740-pound pilot whale beached itself in Allenhurst, New Jersey, and died shortly thereafter. A necropsy uncovered a .30 caliber bullet lodged in the whale’s jaw. The bullet wound triggered an extensive infection that caused the whale to starve to death a month later.
Review of the Capt Bob’s vessel monitoring system confirmed that it was in New Jersey fishing waters for much of August 2011, the approximate time that the whale was shot. Also, nearly a month before the pilot whale washed ashore, defendant Archibald posted a Facebook photograph of a tuna head on a hook with the caption “thanks a lot pilot whales.”
Special agents eventually searched the Capt Bob and found a Mosin-Nagant, a World War II rifle that has not been manufactured in several decades. Forensic analysis revealed that the bullet found in the whale was similar in all general rifling characteristics to test bullets fired from Archibald’s rifle. When interviewed by special agents, Archibald admitted that he had “spray[ed]” bullets at pilot whales in an effort to chase them away.
The violation charged carries a maximum penalty of one year in prison and a statutory maximum fine of $100,000 or twice the gross gain or loss resulting from the offense.
U.S. Attorney Fishman credited special agents of the National Oceanic and Atmospheric Administration, Office of Law Enforcement, under the direction of Assistant Special Agent in Charge Jeffrey Ray, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Justin Herring of the U.S. Attorney’s Office General Crimes Unit, and Assistant U.S. Attorney Kathleen P. O’Leary of the Health Care and Government Fraud Unit, in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
15-064
Defense counsel: William H. Hughes Esq., Atlantic City, N.J.
Settlement Reached in Medicare Fraud Lawsuit Against Catoosa Doctor and Owner of Vision and Eye Care Medical Diagnostic and Laser Center Inc.Read the Press Release
TULSA, Okla.— Robert Charles Duke and his Catoosa business, Vision and Eye Care Medical Diagnostic and Laser Center, Inc., have agreed to pay a total of $150,000 to settle allegations of submitting false Medicare and Medicaid claims to the United States and the State of Oklahoma.
The announcement was made by United States Attorney Danny C. Williams Sr. for the Northern District of Oklahoma, Attorney General Scott E. Pruitt for the State of Oklahoma, and Special Agent in Charge Mike Fields for the United States Department of Health and Human Services Office of Inspector General, Dallas Region.
“This settlement demonstrates the U.S. Attorney’s Office’s steadfast commitment to combatting health care fraud and abuse. Along with our partners we will take swift action to investigate and prosecute violators and those who abuse the system,” said U.S. Attorney Williams. “We are dedicated to protecting taxpayer money and to ensuring Medicare and Medicaid programs are available to those who need them.”
“Stopping Medicaid fraud is a priority for the Attorney General’s Office and we appreciate our federal law enforcement partners for working with us to take action against a provider who tried to abuse the system. Preventing Medicaid fraud stops misuse of taxpayer dollars but also ensures the program resources are available to help those who need it,” said Attorney General Pruitt.
“When health care providers try to boost their profits by misrepresenting the services they bill to taxpayer-funded health care programs, our agency will make sure they are held accountable for their deceptive schemes,” said SAC Fields.
A civil complaint filed on July 28, 2014, alleged that Duke, 63, of Claremore, Oklahoma, and the Catoosa business had violated the Oklahoma Medicaid False Claims Act and the common law for unjust enrichment and breach of contract.
The lawsuit alleged that, from January 2005 to July 2014, Duke received $1,343,732.36 in Medicaid and Medicare payments after submitting false and inflated patient billings. It further alleged that Duke knowingly and wrongfully coded medical service charges to Medicare. The bills submitted to Medicare did not comply with regulations such that the documentation was incomplete and insufficient according to the allegations.
During 2006 through early 2010, Duke allegedly billed Medicare in excess of 12 hours per day on 387 occasions; 124 of those occasions were in excess of 24 hours per day. In one instance, it was alleged Duke billed for 68 hours for one day.
From 2005 to 2007, Duke allegedly submitted 422 bills claiming services were provided at the doctor’s office, at a higher reimbursement rate, when in fact, the services were performed at nursing homes. In addition, from 2008 to 2010, Duke allegedly wrongfully billed Medicaid in excess of 12 hours per day on 96 occasions.
According to the settlement agreement, Duke denied liability of wrongdoing.
The U.S. Department of Health and Human Services administers the Medicare program and the Oklahoma Health Care Authority administers the Medicaid Program for eligible lower income citizens. The Medicare Program is funded by the U.S. Federal government and the Medicaid Program is funded by both the U.S. Federal government and the State of Oklahoma.
Under the False Claims Act, Duke could have been liable to the United States for civil penalties for each claim plus three times the amount of actual damages that the United States sustained as a result of the false claims.
The case was a joint investigation by the Department of Health & Human Services – Office of Investigations and the Oklahoma Attorney General’s Medicaid Fraud Control Unit; Assistant U.S. Attorney Marianne Hardcastle for the Northern District of Oklahoma and Assistant Attorney General Niki S. Batt for the State of Oklahoma handled the case.
For more information on Medicare fraud, visit the website at www.stopmedicarefraud.gov. To report Medicare Fraud, call 1(800) 447-8477.
(U.S. vs. Robert Charles Duke )
Sentencings for February 12-19, 2015Read the Press Release
Clyde Preston Schmidt, 39, of Cheyenne, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on February 19, 2015, for possession of child pornography. Schmidt was arrested in Cheyenne, Wyoming. He received 66 months imprisonment, to be followed by 10 years of supervised release, and was ordered to pay an $800.00 fine and a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation Internet Crimes Against Children Task Force.
Christopher Lawrence Haynes, 36, of Sheridan, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on February 17, 2015, for conspiracy to possess with intent to distribute, and to distribute methamphetamine, heroin and marijuana. Haynes was arrested in Sheridan, Wyoming. He received 60 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $400.00 fine and a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.
Tanisha Valero, 43, of Cheyenne, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on February 17, 2015, for possession with intent to distribute 50 grams or more of methamphetamine. Valero was arrested in Cheyenne, Wyoming. She received 108 months imprisonment, to be followed by four years of supervised release, and was ordered to pay a $400.00 fine and a $100.00 special assessment. This case was investigated by the Cheyenne Police Department.
John Pryor Nunn, 34, of Torrington, Wyoming, was sentenced by Federal District Court Judge
Alan B. Johnson on February 13, 2015, for conspiracy to possess with intent to distribute, and to
distribute 500 grams or more of methamphetamine and marijuana. Nunn was arrested in Torrington,
Wyoming. He received 240 months imprisonment, to be followed by ten years of supervised release,
and was ordered to pay a $500.00 fine and a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.Brian David Carpenter, 34, of Sheridan, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on February 12, 2015, for conspiracy to possess with intent to distribute, and to distribute methamphetamine, heroin and marijuana. Carpenter was arrested in
Sheridan, Wyoming. He received 119 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $900.00 fine and a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.San Antonio Businessman Sentenced for V.A. Fraud SchemeRead the Press Release
In San Antonio today, 71-year-old Jonathan Patrick Saunders, President of Saunders MEP, Inc., was sentenced to one year and one day in federal prison followed by three years of supervised release and ordered to pay $1,494,000 restitution for defrauding the Department of Veterans Administration (VA) in connection with architectural and engineering contracts announced Acting United States Attorney Richard L. Durbin, Jr.
On January 6, 2015, Saunders pleaded guilty to one count of wire fraud. By pleading guilty, Saunders admitted that over a period of five years beginning in March 2008, he knowingly provided fraudulent information to the VA in order to obtain up to $2 million in task orders from the VA for projects to be performed in and around San Antonio.
Today, United States District Judge Orlando Garcia found that Saunders made false representations to the VA. In his SF-330 “Architect-Engineer Qualifications” package, Saunders falsely represented that his business qualified as a Service Disabled Veteran Owned Small Business, that certain persons with particular qualifications worked for his firm, and that certain projects were completed by his firm. Saunders used interstate wires to execute his fraud scheme.
This case was investigated by agents with the Office of Inspector Generals from the VA and the Small Business Administration. Assistant United States Attorney Thomas P. Moore prosecuted this case on behalf of the Government.
Rutland Man and Boarding House Resident Faces Federal Charge for Crack Cocaine DistributionRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Michael Petruccelli, 49, of Rutland, Vermont has been charged with distributing crack cocaine in Rutland, Vermont in a two-count indictment returned on February 4, 2015. Petruccelli pled not guilty before U.S. Magistrate Judge John Conroy to the charges against him. Judge Conroy ordered that Petruccelli be detained pending trial in light of Petruccelli’s prior criminal record and drug addiction issues.
According to the government allegations, Petruccelli resides at the boarding house at 24 Cottage Street in Rutland, which is owned by his parents. According to the government’s detention motion, the government alleges that in November 2014, an FBI Special Agent warned Petruccelli to stop selling drugs or he would be arrested. Petruccelli is now charged with committing crack cocaine distribution crimes both before and after this warning from the FBI.
The United States Attorney emphasizes that the charges contained in the Indictment are merely accusations and that the defendants are presumed innocent unless and until they are proven guilty. If Petruccelli is convicted, he faces a maximum possible term of imprisonment of twenty years.
The United States is represented in this matter by Assistant U.S. Attorney Joseph Perella. Petruccelli is represented by Thomas Sherrer, Esq. The investigation was conducted by the Vermont State Police Drug Task Force, the Federal Bureau of Investigation, and the Drug Enforcement Administration.
Richford Vermont Man Sentenced in Cross-border Marijuana Trafficking ConspiracyRead the Press Release
The Office of the United States Attorney for the District of Vermont has stated that Jeffrey Donna, 39, of Richford, Vermont has been sentenced to prison for his role in a cross-border marijuana trafficking conspiracy. In August 2014, Donna was convicted of conspiracy to distribute marijuana. As part of his sentence, Donna has forfeited a second home in Florida, a second Florida property, a Richford, Vermont rental property, a Harley Davidson motorcycle, a Polaris ATV, a Cadillac Escalade, twenty-two guns, and $135,000 in drug money. Donna will begin serving his 32 month sentence in March.
Donna, and his co-conspirator, Roy “Opie” McAllister II, have been described as kingpins in a marijuana trafficking business that began in the mid-2000s and continued until the two were arrested on May 29, 2013. The two defendants were responsible for bringing bulk quantities of marijuana across the Canadian border into northern Vermont for several years. According to the evidence of record, Donna and McAllister moved between 1,000 and 3,000 kilograms of marijuana as part of the conspiracy. The marijuana trafficking has been characterized as a for-profit enterprise, in which Donna and McAllister made lavish expenditures using drug proceeds.
McAllister, 39, of Montgomery, Vermont is facing sentencing on March 19, 2015. McAllister has been convicted of conspiracy to distribute marijuana and filing false tax returns in 2010 and 2011. To date, he has been ordered to forfeit a home heating oil delivery truck used by McAllister Fuels, 115 Troy Street, Montgomery, Vermont, which the government alleged was bought with McAllister’s drug proceeds. He has also been ordered to forfeit 34 guns, two Harley Davidson motorcycles, a Polaris ATV, a Chevy Tahoe, and a Ford F-150 Harley Davidson edition pick-up truck. Forfeiture against his residence, 2404 Regan Road, Montgomery, Vermont, jewelry, and a GMC Yukon are pending.
As part of the marijuana trafficking conspiracy, the two defendants were assisted by Jesse Soule, 48, also of Montgomery, Vermont. Soule was convicted in January 2014 of his role in the marijuana trafficking conspiracy. According to court records, Soule participated in the conspiracy by storing bulk marijuana on his farm. Soule is currently in jail serving a 13 month sentence. He has forfeited $250,000 in drug proceeds to the government and a Polaris ATV.
Kirt Westcom, 48, of Fairfield, Vermont, also has been convicted of conspiracy to distribute marijuana. He received bulk marijuana from Donna and McAllister at his farm on 262 Egypt Road, Fairfield, Vermont for several years. Westcom is currently in jail serving a 24 month sentence. Westcom has forfeited $135,000 to the government, as well as a Harley Davidson motorcycle, and a Ford F-350 pick-up truck.Seven other individuals have pleaded guilty to federal crimes arising out of this drug enforcement action in Franklin County, Vermont. They are Jeffrey Baisley, 32, of Richford, Vermont, Jeffrey Tatro, Jr., 28, of Richford, Vermont, Robert Patterson, 55, of Richford, Vermont, Jonathan Palermo, 29, of Essex, Vermont, and Benjamin Pratt, 32, of Colchester, Vermont, who all have been convicted of conspiracy to distribute marijuana. Eric Jette, 32, of Enosburg, Vermont and Johnthan Aldrich, 34, of Richford, Vermont also have been convicted of federal drug charges.
As part of this federal law enforcement action, over $600,000 in cash, three pieces of real property, more than 70 guns, and seventeen vehicles have been forfeited.
The United States Attorney’s Office would like to thank the United States Border Patrol, the Franklin County Sheriff’s Office, and the Drug Enforcement Administration for their work in conducting this investigation. This investigation was also assisted by the United States Internal Revenue Service and the Bureau of Alcohol, Tobacco and Firearms.
The United States was represented by Assistant U.S. Attorney Heather Ross. Jeffrey Donna was represented by John Pacht, Hoff Curtis. Roy McAllister II is represented by Peter Langrock, Langrock Sperry & Wool. Jesse Soule was represented by Paul Volk, Blodgett, Watts, Volk & Sussman. Kirt Westcom was represented by Katina Francis Ready, Esq.
Rabbi Pleads Guilty to Voyeurism Charges, Admits Secretly Taking Video Recordings of Dozens of WomenRead the Press Release
U.S. Attorney Ronald C. Machen Jr. of the District of Colombia and Chief Cathy L. Lanier of the Metropolitan Police Department announced that Bernard Freundel, a rabbi who had worked for a Jewish congregation in Washington, D.C., pleaded guilty today to 52 counts of voyeurism stemming from a series of incidents between 2009 and 2014 in which he secretly took video recordings of women preparing for a Jewish ritual bath.
Freundel, 63, of Washington, D.C., pleaded guilty to the misdemeanor charges before the honorable Senior Judge Geoffrey M. Alprin in the superior court of the District of Columbia. Each count carries a maximum sentence of a year of incarceration, a fine of up to $1,000 or $2,500, for the offenses which occurred on or after June 11, 2013, or both. Freundel faces a maximum of 52 years in prison and the potential fines when he is sentenced on May 15, 2015.
“Bernard Freundel exploited his position of power to victimize dozens of women who entered a sacred, intimate space of religious ritual,” said U.S. Attorney Machen. “He betrayed the trust of every woman whose private moments he caught on camera along with an entire community that counted on him for moral leadership. We hope that this guilty plea will allow each of his victims to move forward and heal. We will be seeking a prison sentence that reflects the gravity of this disturbing assault on the privacy and dignity of so many victims.”
“This predator committed an outrageous breach of trust,” said Chief Lanier. “He must be punished for abusing his position to deliberately and repeatedly violate women’s privacy. My heart goes out to the victims and all members of the community who have been deeply wounded by this criminal’s actions.”
According to a factual proffer submitted at today’s plea hearing, between early 2009 and October 2014, Freundel was the sole Rabbi of Kesher Israel congregation in Northwest Washington. Kesher Israel is adjacent to the National Capital Mikvah, a Jewish ritual bath. A mikvah is used primarily by Orthodox Jewish women for monthly spiritual purification and by other individuals as the final step in the Orthodox Jewish conversion process.
The National Capital Mikvah has two changing/showering rooms connected to the room with the ritual bath. On numerous occasions between early 2009 and October 2014, the defendant installed and maintained electronic recording devices in the larger of the two changing/showering rooms. Freundel did so for the sole purpose of secretly and surreptitiously recording women who were using the bathroom and shower; these women were totally and partially undressed before and/or after showering. The women recorded did not know they were being recorded and did not consent to being recorded.
On Oct. 12, 2014, Freundel entered the larger changing/showering room with a clock radio that contained a hidden recording device. He placed the clock radio on the countertop of the sink and positioned the recording element so that it faced the shower area. He then left the changing area. Shortly thereafter, the clock radio was taken by an individual associated with the Mikvah, who immediately turned it over to the Metropolitan Police Department, leading to an investigation.
Freundel was arrested on Oct. 14, 2014. Law enforcement executed search warrants to examine the contents of the clock radio and to seek evidence at Freundel’s home and office at Towson University. Computer forensic examinations of all of the electronic devices and digital media storage devices seized from the defendant’s home and office revealed recordings made by the defendant of at least 52 women who were totally or partially undressed in the large showering/changing room of the Mikvah on a total of 25 different dates between March 4, 2012 and Sept. 19, 2014. These are the women who are the subjects of the charges to which Freundel pled guilty today. The charge of voyeurism has a three-year statute of limitations.
In addition to the 52 recordings that were the subject of the plea, computer forensic examinations revealed that Freundel secretly and surreptitiously recorded approximately 100 additional women totally or partially undressed before and/or after showering in the large bathroom at the National Capital Mikvah between 2009 and September 2014. These women did not know that they were being recorded and did not consent to being recorded.
In announcing the plea, U.S. Attorney Machen and Chief Lanier commended the work of those who investigated the case for the Metropolitan Police Department, including officers and detectives of the second police district. They also recognized the assistance provided by the Towson University Police Department. In addition, they acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office including Chief Jelahn Stewart of the Victim/Witness Assistance Unit, Deputy Chief Sharon Marcus-Kurn of the Sex Offense and Domestic Violence Section, Lead Paralegal Specialist Wanda Trice, Victim/Witness Advocate Lezlie Richardson, Victim/Witness Advocate Supervisor Dr. Lorraine Chase and Criminal Investigator John Marsh.
Finally they expressed appreciation for the work of Assistant U.S. Attorneys Amy H. Zubrensky and Rebekah Holman, who investigated and prosecuted the case.
Prison Sentence Imposed on $15.5 Million Dollar Psychic SwindlerRead the Press Release
PORTLAND, Ore. – U.S. District Court Judge Robert E. Jones today sentenced Rachel Lee, 44 of Canby, Oregon, to 100 months in prison for her lead role in a conspiracy to commit wire fraud, money laundering, and her failure to file personal income taxes. Judge Jones also ordered Lee to pay $15,490,978.65 in restitution to the victim. In addition to the prison sentence, she must serve three years of post-prison supervised release.
“Fueled by greed and a complicated web of deceit, Rachel Lee gained control of her victim, liquidated his fortune, and left him nearly penniless,” said United States Attorney Amanda Marshall. “Due to the combined efforts of federal, state, and local law enforcement, the victim is now safe and financially stable. We will continue to work tirelessly with our law enforcement partners to hold self-serving crooks accountable, protect victims, and seek full restitution.”
According to documents filed with the court, the victim met Lee in 2004 when he visited her Psychic Shop in Bend, Oregon. Between 2004 and 2006, Lee fostered a friendship with the victim for the purpose of extracting money from him and falsely claimed that she provided care for her dying husband. She also falsely claimed that she assisted with bookkeeping for her husband’s business. As a result of these lies and the trust she established with the victim, Lee assumed the role as a paid caregiver to the victim’s elderly father by 2007. Trusting her to act in his best interests, the victim turned over all personal and business account control to Lee. While controlling the victim’s finances, Lee and her family lived in a million-dollar home in the Portland West Hills purchased with the victim’s money.
As part of the fraud scheme, Rachel Lee recruited members of her family to play key roles in carrying out the deception. She and her daughter, Porsha Lee, created a fake persona named Mary Marks and introduced this character to the victim. This character wore a blond wig, glasses, a hat, and sported a British accent. Porsha Lee, as Mary Marks, met the victim and used information her mother provided her to connect with him. She claimed to be a bookkeeper, and soon after began assisting Rachel Lee with the management of the victim’s accounts.
By 2011 the victim believed he and Mary Marks had married and had a child. The child presented to the victim as his son is actually one of Rachel Lee’s grandchildren. Digital images reveal years of holidays, birthdays and events with the victim, Rachel Lee, Porsha Lee as Marks, and their purported child.
Between 2007 and 2011, Rachel Lee directed the victim to incrementally liquidate investment accounts totaling approximately $3.8 million dollars. After depleting the victim’s investment accounts, Rachel Lee convinced the victim he owed substantial taxes and needed to sell his family’s tree farm. At Lee’s direction, the tree farm properties were sold for approximately $12.3 million dollars.
Rachel Lee and her family spent the victim’s fortune on a luxury lifestyle. Lee directed funds for high-roller trips to Las Vegas, trips to California, and a first class trip to Europe. She also spent her ill-gotten gains on luxury clothing and jewelry, including a $64,000 Rolex watch. While selling off the victim’s property, Rachel Lee and her co-defendant, Blancey Lee, purchased a Ferrari and a Bentley on a single day. Finally, between 2010 and 2013, Lee and her co-defendants used the victim’s money to purchase at least 10 properties at a cost of approximately $3.3 million dollars. She and her family used three of the properties – in Bend, Canby, and Scappoose – as Psychic Shops.
By the time of Rachel Lee’s arrest in May 2014, the victim held less than $250,000 in assets under his control. As a result of the investigation, the 10 properties purchased with the victim’s money will be sold for the victim’s benefit. Internal Revenue Service criminal agents seized approximately $1.9 million in cash from bank accounts in the name of Rachel Lee, as well as the Ferrari, the Bentley, and other items. All federally seized assets will be returned to the victim after all defendants are sentenced. Co-defendants Porsha Lee and Blancey Lee are scheduled for sentencing in April.
“This is a heartbreaking crime,” said Special Agent in Charge Teri Alexander of IRS Criminal Investigation. “The level of deceit that Rachel Lee and her family resorted to is almost unconscionable. I am proud our agents could work alongside our law enforcement partners to dismantle this scam.”
“This investigation is an example of outstanding achievement in respect to the investigative efforts by the Canby Police Department, the U.S. Attorney’s Office, and the Internal Revenue Service,” said Canby Police Chief Bret Smith. “This was a complicated investigation requiring expertise and patience from everyone involved in order to bring it to a successful resolution.”
The case was investigated by the Internal Revenue Service, Criminal Investigations and the Canby Police Department, with assistance from the Social Security Administration, Office of Inspector General; the Multnomah County Sheriff’s Office; Portland Police Bureau; and the Oregon Department of Justice. The case is being prosecuted by Assistant U.S. Attorneys Donna Maddux and AnneMarie Sgarlata.
Portland City Council Votes to Join the JTTFRead the Press Release
PORTLAND, Ore. – On Thursday, February 19, 2015, the Portland City Council voted 3-2 to assign two Portland Police Bureau (PPB) officers to the Joint Terrorism Task Force. Mayor Charlie Hales joined Commissioners Dan Saltzman and Nick Fish in voting to allow PPB officers to participate in the JTTF. PPB officers will join other regional law enforcement partners involved in the JTTF.
U.S. Attorney Amanda Marshall joins in applauding the vote of the Portland City Council to rejoin the JTTF. “Our thanks to the leadership of Mayor Hales, Commissioner Dan Saltzman, and Commissioner Nick Fish in taking this historic step to work with other regional law enforcement partners to ensure the public safety of the citizens of Portland and the surrounding communities. Law enforcement in this era is dependent upon effective and committed partnerships. The involvement of PPB with their federal and regional law enforcement partners is a crucial component for effective investigative activities, critical oversight of the investigations, and will improve the transparency of the JTTF partners. PPB’s involvement provides community-based assistance with detection, prevention, as well as timeliness in responding and apprehending suspects in the event of an act of terrorism. Combined with the community outreach efforts of the Department of Justice and the FBI to counter violent extremism at the local, national, and international levels, we are committed to work together with the City of Portland to ensure public safety and protect civil liberties.”
Greg Bretzing, Special Agent in Charge of the FBI Oregon stated that, “We work day in and day out with Portland Police on many different levels – from the street to the chief’s office. Together, we address crime problems that affect the people who live and work in Portland: gang crimes, drug trafficking, child sex trafficking, child predators and more. “Today’s vote to allow Portland Police Bureau to rejoin the JTTF will serve to strengthen that relationship in a critical area – preventing acts of terrorism. It is our mission to keep our shared community safe while at the same time protecting the freedoms we all enjoy in this country.”
"The 104 FBI led Joint Terrorism Task Forces (JTTF) around the nation are staffed with federal, state and local law enforcement professionals who share the common goal of protecting our national security and public safety," said John Carlin, Assistant Attorney General for National Security. "I commend the Portland City Council's decision to allow their police department to rejoin the local JTTF and look forward to having them back on board."
Owner of San Gabriel Valley Surrogacy Agency Pleads Guilty to Ripping Off Would-Be Parents who Paid for Egg DonationsRead the Press Release
LOS ANGELES – The owner of a Glendora egg donation and surrogacy company pleaded guilty late this afternoon to a federal wire fraud charge and admitted defrauding would-be parents, egg donors and surrogates over the course of more than three years.
Allison Layton, a 38-year-old resident of Star, Idaho, pleaded guilty before United States District Court Judge George H. Wu.
Layton, who owned and operated Miracles Egg Donation and sometimes used the name Allison Jarvie, lived in Glendora during the course of the scheme.
Between August 2008 and January 2012, would-be parents – who in the surrogacy and egg donation world are known as intended parents – paid thousands of dollars for egg donation and surrogacy services that Miracles promised to coordinate. Layton took money – often tens of thousands of dollars – from the intended parents, but, instead of putting the funds into escrow accounts to be withdrawn only for certain costs related to the surrogacy or egg donation, Layton used the money for her own personal expenses or to cover unpaid costs related to other clients.
As a result of Layton’s misappropriation of client funds, egg donors, surrogates, attorneys and others often were not paid for all the services they provided and intended parents often did not receive all the services for which they had paid. At least one investor in Miracles also lost money.
When the donors, surrogates and intended parents sought to recover their money and costs, Layton would lull them into believing they would be repaid through false assurances that payments had already been made or would be made soon.
As a result of the fraud scheme, more than 40 victims lost more than $270,000.
As a result of her pleading guilty to wire fraud, Layton faces a maximum statutory sentence of 20 years in federal prison. Layton is scheduled to be sentenced by Judge Wu on May 28.
The investigation into Layton was conducted by the Federal Bureau of Investigation.
Owner of San Gabriel Valley Surrogacy Agency Pleads Guilty to Ripping Off Would-Be Parents Who Paid for Egg DonationsRead the Press Release
LOS ANGELES – The owner of a Glendora egg donation and surrogacy company pleaded guilty late this afternoon to a federal wire fraud charge and admitted defrauding would-be parents, egg donors and surrogates over the course of more than three years.
Allison Layton, a 38-year-old resident of Star, Idaho, pleaded guilty before United States District Court Judge George H. Wu.
Layton, who owned and operated Miracles Egg Donation and sometimes used the name Allison Jarvie, lived in Glendora during the course of the scheme.
Between August 2008 and January 2012, would-be parents – who in the surrogacy and egg donation world are known as intended parents – paid thousands of dollars for egg donation and surrogacy services that Miracles promised to coordinate. Layton took money – often tens of thousands of dollars – from the intended parents, but, instead of putting the funds into escrow accounts to be withdrawn only for certain costs related to the surrogacy or egg donation, Layton used the money for her own personal expenses or to cover unpaid costs related to other clients.
As a result of Layton’s misappropriation of client funds, egg donors, surrogates, attorneys and others often were not paid for all the services they provided and intended parents often did not receive all the services for which they had paid. At least one investor in Miracles also lost money.
When the donors, surrogates and intended parents sought to recover their money and costs, Layton would lull them into believing they would be repaid through false assurances that payments had already been made or would be made soon.
As a result of the fraud scheme, more than 40 victims lost more than $270,000.
As a result of her pleading guilty to wire fraud, Layton faces a maximum statutory sentence of 20 years in federal prison. Layton is scheduled to be sentenced by Judge Wu on May 28.
The investigation into Layton was conducted by the Federal Bureau of Investigation.
Release No. 15-014