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6 April 2015
Colorado U.S. Attorney's Office Cracks Down on Men Traveling from Out-of-state to Colorado to Have Sex with ChildrenRead the Press Release
DENVER – The U.S. Attorney’s Office, in conjunction with U.S. Immigrations and Customs Enforcement (ICE) Homeland Security Investigations (HSI), have cracked down on individuals who travel to Colorado from other states with the intention of having sex with minor children. Two arrests were made last week, and a third individual pled guilty to the crime. All three are held in custody.
Brian Franklin Howard, age 37, of Las Vegas, Nevada, was arrested on April 2, 2015, at Denver International Airport by HSI and the Denver Police Department after he flew here to have sex with children. Howard initially came into contact with an undercover HSI agent on line. The agent was using the persona of a single mother of children, ages 10 and 14. At one point Howard took photos of his penis and sent them to the single mother persona, indicating that he would like for her to show them to her daughters. He then arranged to meet her and her children in Denver. He flew from Las Vegas to Denver, where he was met with an agent acting in an undercover capacity at DIA. Once he confirmed his intent to have sex with the children he was arrested. Howard faces one count of aggravated sexual abuse with children (with a penalty of not less than 30 years and up to life in federal prison, and up to a $250,000 fine), two counts of travel with intent to engage in illicit sexual conduct (with a penalty of not more than 30 years in prison, and up to a $250,000 fine), and two counts of attempted coercion and enticement (with a penalty of not less than 10 years and up to life in prison, and up to a $250,000 fine). Howard is scheduled to have a detention hearing on April 8, 2015.
Also last week Matthew Hornung, age 33, of Harrisburg, Pennsylvania, was arrested by HSI and the Colorado State Patrol on March 28, 2015, after driving to Colorado to have sex with children. Hornung also met an undercover agent on line. The agent was using the single mother persona, saying she had children ages 10 and 14. The defendant, intent on meeting the single mother and her two children, drove from Pennsylvania to Colorado. Hornung made it to Colorado, although his vehicle started to fail before he reached Greeley. He was arrested by HSI and the Colorado Highway Patrol after he approached the marked CSP car for assistance. The defendant faces one count of travel with intent to engage in illicit sexual conduct (with a penalty of not more than 30 years in federal prison, and up to a $250,000 fine). He has been ordered held without bond pending a resolution of his case.Finally, Darwin Gowen, age 62, of St. Louis, Missouri, pled guilty on March 31, 2015, before U.S. District Court Judge R. Brooke Jackson, to one count of travel with intent to engage in illicit sexual conduct (the penalty of which is not more than 30 years in federal prison and up to a $250,000 fine). Gowen also met an HSI agent online, using the persona of a single mother with young children. He traveled from Missouri to Denver by plane, where he was arrested by HSI at DIA after confirming his intent to have sex with children, ages 11 and 15. Gowen is in federal custody pending sentencing.
“Preventing the sexual abuse of children is a top priority of this office,” said U.S. Attorney John Walsh. “These cases should demonstrate to those who plan to travel from other states to Colorado in hopes of sexually exploiting children that there will be immediate and severe criminal consequences.”
“The sexual exploitation of children by predators has reached epidemic proportions nationally and internationally,” said David A. Thompson, special agent in charge of HSI Denver. “Targeting these predators through the tireless efforts by our HSI special agents has been a high priority for more than a decade. These cases demonstrate how every parent must remain vigilant to Internet predators who may pose in various disguises to meet and ultimately sexually exploit children.”
These cases were investigated by HSI with support from the Colorado State Patrol.
Howard and Gowen are being prosecuted by Assistant U.S. Attorney Alecia Riewerts. Hornung is being prosecuted by Assistant U.S. Attorney Beth Gibson. Howard and Hornung have been charged by Criminal Complaint. Anyone accused of committing a felony violation of federal law has a Constitutional right to be indicted by a grand jury. Both of those defendants are presumed innocent unless and until proven guilty. Gowen has pled guilty.
Cocaine Trafficker Faces up to 20 Years in Federal PrisonRead the Press Release
PROVIDENCE, R.I. – Kendall Ferrara, 33, of Providence, faces up to 20 years in federal prison and a fine of $1,000,000 when he is sentenced in July, having pleaded guilty today in U.S. District Court in Providence to trafficking cocaine, announced United States Attorney Peter F. Neronha and Vincent B. Lisi, Special Agent in Charge of the Boston field office of the FBI.
Appearing before U.S. District Court Judge Mary M. Lisi, Ferrara pleaded guilty to one count of distribution of cocaine. At sentencing on July 16, 2015, Ferrara faces statutory penalties of up to 20 years imprisonment to be followed by 3 years to lifetime supervised release, and a fine of up to $1,000,000.
According to court documents and information presented to the court, an undercover FBI Safe Streets Task Force investigation into drug trafficking activities in and around Providence in the fall of 2014 included five purchases of cocaine of varying amounts from Ferrara during a five-week period of time. The purchases totaled nearly 59 grams of cocaine.
Ferrara was arrested by members of the FBI Safe Streets Task Force on February 23, 2015.
The case is being prosecuted by Assistant U.S. Attorney Ly T. Chin.
The FBI’s Safe Streets Task Force consists of agents and law enforcement officers from the FBI, RI State Police, Providence, Cranston, Woonsocket, Johnston and Central Falls Police Departments and the RI Adult Corrections Institutions.###
To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Calais Man Fined $5,000 and Sentence to Probation for False StatementRead the Press Release
Contact: Jim Moore
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Clyde Eldridge, 65, of Calais, Maine, was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr, to one year of probation and fined $5,000 for making a false statement to federal agents.
According to court records, Eldridge owned C&E Feeds, a feed and pet store in Calais. In 2010, the U.S. Environmental Protection Agency (EPA) and its Canadian counterpart, Environment Canada, were investigating the illegal use of the pesticide cypermethrin. On September 23, 2010, when asked by two EPA special agents to identify anyone to whom he had sold cypermethrin and whether he had kept records of the sales, Eldridge said he sold different amounts of cypermethrin to different people and that he did not keep track of the sales. The investigation revealed, however, that Eldridge sold cypermethrin on 10-11 occasions to one regional production manager employed by Kelly Cove Salmon Ltd., a subsidiary of Cooke Aquaculture, and that on each occasion Eldridge made a note of the quantity picked up by the manager. In April of 2013, Cooke Aquaculture pled guilty in New Brunswick Provincial Court and paid a $490,000 fine for illegally using pesticides that killed hundreds of lobsters in waters that were about a mile from Maine’s border.
In imposing a sentence, Judge Woodcock said that Eldridge violated the trust of his fellow citizens in selling the pesticide, knowing that it would likely be used in violation of Canadian law and that violating laws meant to protect the environment is a serious matter.
The investigation was conducted by EPA’s Criminal Investigation Division and Environment Canada.
Broward County Resident Sentenced to More Than 5 Years in Prison for Identity Theft Schemes Involving Fraudulent Income Tax Refunds and Social Security BenefitsRead the Press Release
A Broward County resident was sentenced to 61 months in prison, followed by 3 years of supervised release, and was ordered to pay restitution of $57,949, for his participation in identity theft schemes involving fraudulent income tax refunds and Social Security benefits.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Paula Reid, Special Agent in Charge, United States Secret Service (USSS), Miami Field Office, Thomas Caul, Special Agent in Charge, Social Security Administration (SSA), Office of Inspector General (OIG), and Scott Israel, Sheriff, Broward Sheriff’s Office (BSO), made the announcement.
Sheldon Mozie, II, 23, previously pled guilty to one count of wire fraud and one count of aggravated identity theft.
According to court documents, law enforcement executed a search warrant at Mozie’s residence and seized papers/notes containing at least 182 victims’ personal identifying information (PII), a thumb drive containing at least 99 additional victims, Mozie’s computer, and debit cards. Computer forensic investigators determined that Mozie’s computer contained the PII of many of the same victims’ that were found in the notes/papers in Mozie’s bedroom, in addition to other victims’ PII. Mozie filed 49 federal income tax returns for tax year 2013 using the PII of many of the victims that were found on the papers/notes in his bedroom. Between February 10, 2014 and May 6, 2014, for the tax year 2013, Mozie claimed $208,559 on the fraudulent tax returns.
Mozie also utilized the stolen PII to divert Social Security benefit payments to himself that belonged to additional identity theft victims. To accomplish this scheme, Mozie logged onto the Social Security Administration website, “my Social Security,” with the victims’ names, dates of birth and Social Security numbers to open online accounts in those victims’ identities. Once the online accounts were opened, Mozie was able to divert the Social Security benefit payments from the victims to himself by having the funds deposited onto prepaid debit cards (mostly Green Dot cards) or by directly depositing the funds into his personal bank account. Between September 2013 and May 2014, Mozie diverted approximately $25,027 in Social Security benefits to himself.
Mr. Ferrer commended the investigative efforts of IRS-CI, the USSS, SSA-OIG, and BSO. The case is being prosecuted by Assistant U.S. Attorney Alicia E. Shick.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Broward County Resident Sentenced in Connection with International Fraud SchemeRead the Press Release
A Broward county resident was sentenced by United States District Judge Beth Bloom in Fort Lauderdale to 71 months imprisonment, followed by three years of supervised release, for his participation in a fraudulent international lottery scheme that targeted senior citizens living in the United States.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Ronald J. Verrochio, Inspector in Charge, United States Postal Inspection Service, and Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), made the announcement.
On January 23, 2015, Mikhail Gorbachev George Williams, 26, of Fort Lauderdale, pled guilty to one count of conspiracy to commit wire fraud.
According to court documents and statements made in court, Williams participated in a fraudulent lottery scheme, emanating from Jamaica, in which elderly victims throughout the United States were falsely told that they had won a lottery/sweepstake contest. Williams and his co-conspirators sent letters and made multiple telephone calls to the victims, wherein they fraudulently claimed to be representatives of the sweepstakes/lottery company that was to award the prize monies. The victims were told that in order to claim their winnings, they had to pay taxes, duties or fees. The co-conspirators directed the victims to pay Williams in order to receive their purported winnings. The elderly victims were induced to send thousands of dollars to cover bogus fees, taxes and insurance for the fraudulent lottery winnings. The victims paid Williams by wire transfers, money orders, U.S. currency, and checks. Payment was made though the U.S. mail and by prepaid debit cards.
Mr. Ferrer commended the investigative efforts of the U.S. Postal Inspection Service and ICE-HSI. The case is being prosecuted by Assistant U.S. Attorney Bertha R. Mitrani.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Beckley man sentenced for federal drug chargeRead the Press Release
HUNTINGTON, W.Va. – United States Attorney Booth Goodwin announced today that a Beckley man was sentenced in federal court in Huntington on a federal drug charge. Michael Greer, 30, of Beckley, was sentenced as a career offender to a 120-month term of imprisonment, followed by a 3-year term of supervised release. Greer previously pled guilty in December of 2014, to distributing heroin to a person cooperating with law enforcement authorities. The drug deal took place on Brooks Street in Beckley. The sentence was imposed by Chief United States District Court Judge Robert C. Chambers.
This case was investigated by the Beckley Raleigh County Drug and Violent Crime Task Force and is being prosecuted under the Beckley Pill Initiative directed by the United States Attorney’s Office.
This case is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of pills and heroin in communities across the Southern District.
Albuquerque Man Pleads Guilty to Federal Heroin Trafficking ChargeRead the Press Release
ALBUQUERQUE – David Godfrey, Jr., 28, of Albuquerque, N.M., pleaded guilty this morning in federal court to a heroin trafficking charge under a plea agreement with the U.S. Attorney’s Office.
Godfrey was arrested on Sept. 8, 2014, on a two-count indictment charging him with distribution of more than 100 grams of heroin and using and carrying a firearm in relation to a drug trafficking crime. According to the indictment, Godfrey committed the crime on Feb. 13, 2013, in Bernalillo County, N.M.
During today’s proceedings, Godfrey pled guilty to Count 1 of the indictment charging him with distribution of heroin. In entering the guilty plea, Godfrey admitted that on Feb. 13, 2013, he handed a bag containing more than 100 grams of heroin to another person in northeast Albuquerque. Godfrey also admitted that at the time he had a .45 caliber pistol in his waistband for protection.
At sentencing, Godfrey faces a statutory minimum penalty of five years and a maximum of 40 years in federal prison. He remains detained pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Albuquerque office of the DEA and the New Mexico State Police. Assistant U.S. Attorney Paul Mysliwiec is prosecuting this case.
This case is being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaboration between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
4 April 2015
Brunswick Men Convicted on Federal Tax ChargesRead the Press Release
Contact: Karen E. Kelly
Assistant Chief, U.S. Department of Justice's Tax Division
James W. Chapman, Jr.
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II and Acting Assistant Attorney General of the U.S. Department of Justice, Tax Division, Caroline D. Ciraolo, announced that F. William Messier, 70, and David E. Robinson, 78, both of Brunswick, Maine, were convicted yesterday by a federal jury in U.S. District Court for conspiracy to defraud the United States by impeding and impairing the Internal Revenue Services (IRS). Messier was also convicted of corruptly endeavoring to impede the IRS. Messier was acquitted of willful failure to file income tax returns for 2008 through 2012.
According to testimony during the trial, Messier, doing business as Oak Hill Communications, earned income generated on leases from telecommunication towers located on his Brunswick property. From 1999 through 2014, Messier engaged in conduct intended to obstruct the enforcement of the Revenue laws, including providing false tax documents to customers, obstructing IRS collection activities and the extensive use of cash. In 2012, the IRS assessed taxes and interest against Messier totaling $172,000 for the tax years 2000 to 2004. According to the testimony of witnesses, after the IRS sent Notices of Levy to Messier’s customers, Robinson and Messier took a number of steps to obstruct and impede the IRS in the enforcement of the levy, including presenting the IRS with a fake and worthless money order for the amount due by Messier. According to witness testimony, Messier and Robinson urged customers not to honor the levies or to pay the IRS, urged customers to pay Messier in cash to conceal their payments from the IRS, sent false documents to the IRS and sent threatening and misleading correspondence to customers of Messier’s business urging them not to cooperate with the IRS. Robinson claims to be the “Interim Attorney General” of the “Maine Republic Free State.”
Messier faces up to 8 years in prison and fines totaling $500,000. Robinson faces up to five years in prison and a fine of up to $250,000. They will be sentenced after the completion of presentence investigation reports by the U.S. Probation Office.
The case was investigated by IRS Criminal Investigation. Assistant United States Attorney James W. Chapman, and Karen E. Kelly, Assistant Chief at the Tax Division prosecuted the case.
3 April 2015
Webster Man Pleads Guilty to DistributingRead the Press Release
CONTACT: Karen Brown
PHONE: (716) 843-5836
FAX: (716) 551-3051ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Erik Smothers, 36, of Webster, NY, pled guilty to distributing cocaine to various individuals in Rochester, NY, between 2009 and his arrest on November 28, 2014. Smothers faces a minimum sentence of 5 years and maximum sentence of 40 years imprisonment and a $5,000,000 fine.
Assistant U.S. Attorney Melissa Marangola, who is prosecuting the cases, stated that Smothers consistently sold ounce levels of cocaine during the five year period. He will return to court to be sentenced before United States District Court Judge Elizabeth Wolford on October 5, 2015 at 12:00 p.m.
The plea is the culmination of an investigation on the part of the Drug Enforcement Administration under the direction of Special Agent in Charge James J. Hunt, New York Field Office, with the assistance of the New York State Police under the direction of Major Scott M. Crosier.
Waggaman Woman Charged with Wire Fraud After Embezzling over $200,000 from EmployerRead the Press Release
U.S. Attorney Kenneth A. Polite announced that DELORES TROUILLET, age 58, of Waggaman, was charged today in a one-count Bill of Information with wire fraud.
According to the Bill of Information, from 1999 to 2014 TROUILLET was employed by a carpet, flooring, and drapery sales and installation company (“Company A”) headquartered in Gretna, Louisiana, where she served as a bookkeeper. In her capacity as bookkeeper, TROUILLET was responsible for overseeing the company’s finances and accounts. TROUILLET had access to Company A’s bank accounts, including the ability to conduct wire transfers from Company A’s bank accounts.
Using her access to the company’s accounts, TROUILLET stole money from Company A in various ways, including generating checks drawing on Company A’s bank accounts to pay her personal expenses. To make the payments appear legitimate, TROUILLET listed in Company A’s internal records checks she made out to herself and deposited into her personal bank account as being made payable to entities with whom Company A engaged in business or frequently paid funds, such as “State Farm Insurance” and “IRS.” TROUILLET also paid for her personal daily expenses using Company A’s corporate credit and debit cards. Further, TROUILLET added money to her biweekly payroll in excess of her agreed upon salary. In total, TROUILLET embezzled approximately $208,082.03 from Company A.
If convicted, TROUILLET faces a maximum term of imprisonment of 20 years imprisonment, and/or a fine of $250,000 or the greater of twice the gross gain to the defendant or twice the gross loss to any person.
U.S. Attorney Polite reiterated that the Bill of Information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the United States Secret Service and investigators with the Jefferson Parish Sheriff’s Office in investigating this matter. Assistant United States Attorney Jordan Ginsberg is in charge of the prosecution.
Delores Trouillet Bill of Information
US Army National Guard Soldier and His Cousin Indicted for Conspiring to Support Terrorism (ISIL)Read the Press Release
CHICAGO ― U.S. Attorney Zachary T. Fardon of the Northern District of Illinois, Assistant Attorney General for National Security John P. Carlin, and Special Agent in Charge Robert J. Holley of the Chicago Division of the Federal Bureau of Investigation announced today that two Aurora, Illinois, men were indicted Thursday for allegedly conspiring to provide material support to Islamic State of Iraq and the Levant (ISIL), a foreign terrorist organization.
Army National Guard Specialist HASAN EDMONDS, 22, and JONAS EDMONDS, 29, were arrested last month by members of the Chicago FBI’s Joint Terrorism Task Force (JTTF) and remain in federal custody. The defendants were charged in an indictment filed yesterday in U.S. District Court of the Northern District of Illinois with one count of conspiring to provide material support and resources to a foreign terrorist organization. Both defendants will be arraigned April 8, at 10:00 in front of Magistrate Judge Sheila M. Finnegan
Conspiring to provide material support to a foreign terrorist organization carries a maximum penalty of 15 years in prison and a $250,000 fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is being represented by Assistant U.S. Attorneys Barry Jonas and John Kness of the Northern District of Illinois, and Trial Attorney Lolita Lukose of the National Security Division’s Counterterrorism Section.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
U.S. Attorney's Office to Conduct Election Day Monitoring Election Day Hotline: (312) 469-6157Read the Press Release
CHICAGO -- Consistent with a long-standing practice of the office, the U.S. Attorney’s Office will monitor the election in Chicago on Tuesday, April 7, 2015, Zachary T. Fardon, United States Attorney for the Northern District of Illinois, announced today. As part of the monitoring effort, the office will operate a hotline for candidates or the public to call to report any complaints relating to voting. In addition, Assistant U.S. Attorneys will be available to respond to complaints as needed.
The hotline number is (312) 469-6157.
Coordination of the monitoring efforts and subsequent investigations, if any, will be directed by Assistant U.S. Attorney Maureen Merin. The Chicago Office of the Federal Bureau of Investigation and the U.S. Marshals Service will assist in this effort by following up, if necessary, on any election fraud complaints.
U.S. Army National Guard Soldier and His Cousin Indicted for Conspiring to Support TerrorismRead the Press Release
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois and Special Agent in Charge Robert J. Holley of the FBI’s Chicago Field Office announced today that two Aurora, Illinois, men were indicted on Thursday for allegedly conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL), a foreign terrorist organization.
U.S. Army National Guard Specialist Hasan Edmonds, 22, and his cousin, Jonas Edmonds, 29, were arrested last month by members of the Chicago FBI’s Joint Terrorism Task Force (JTTF) and remain in federal custody. The defendants were charged in an indictment filed yesterday in U.S. District Court of the Northern District of Illinois with one count of conspiring to provide material support and resources to a foreign terrorist organization. Both defendants will be arraigned on April 8, at 10:00 before Magistrate Judge Sheila M. Finnegan.
Conspiring to provide material support to a foreign terrorist organization carries a maximum penalty of 15 years in prison and a $250,000 fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is being represented by Assistant U.S. Attorneys Barry Jonas and John Kness of the Northern District of Illinois, and Trial Attorney Lolita Lukose of the National Security Division’s Counterterrorism Section.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Two Philadelphia Men Charged with Defrauding Assistance ProgramRead the Press Release
PHILADELPHIA - Abdoulaye Diallo, 50, and Lassana Nianghane, 51, both of Philadelphia, PA, were charged by indictment, unsealed today, with conspiracy to commit offenses against the United States Department of Agriculture’s (USDA) Supplemental Nutrition Assistance Program (SNAP), announced United States Attorney Zane David Memeger. Both defendants were arrested today.
According to the indictment, Diallo, the owner and operator of Brothers Food Market, located in the Germantown section of Philadelphia, trafficked in SNAP benefits with SNAP program beneficiaries by purchasing benefits for cash, which is illegal. It is further alleged that Nianghane, also known as the “purse man,” aided Diallo by acting as the initial contact person for beneficiaries who wanted to sell their SNAP benefits for cash. According to the indictment, instead of accompanying SNAP beneficiaries to Brothers Food Market, defendant Nianghane telephoned defendant Diallo and relayed to Diallo the particulars of the proposed illegal sales over the phone.
Between June of 2011 and May of 2014, according to the indictment, Diallo submitted to USDA, on behalf of Brothers, total SNAP reimbursements of approximately $1.1 million.
If convicted, Diallo and Nianghane face a substantial period of incarceration, three years of supervised release, a fine of up to $1.8 million, and restitution.
The case was investigated by the United States Department of Agriculture Office of Inspector General and U.S. Immigration and Customs Enforcement Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Floyd J. Miller.
Stevensville Businessman Pleads Guilty to FraudRead the Press Release
MISSOULA – Steven Vincent Sann, a 59-year-old resident of Stevensville plead guilty today to charges of wire fraud and money laundering. If the maximum sentences were imposed and ordered to be served consecutively, Sann faces 30 years in prison, $500,000 in fines and 6 years supervised release. U.S. District Judge Dana Christensen set sentencing for July 17, 2015. Sann was released pending sentencing.
Assistant U.S. Attorney Tim Racicot told the court that Sann managed the “Sann Companies” which were engaged in the business of marketing a stand-alone voice mail and fax service using a practice known as Local Exchange Carrier (“LEC”) billing to collect for the service’s charges. Sann was the president, secretary, treasurer, and director of one of those companies – Emerica Media Corporation. The Sann Companies were incorporated in Nevada and most of them designated one person – either a relative or friend of Sann’s – to serve as president, secretary, treasurer, and director. The United States alleged the offense occurred between March 2009 and December 2011.
Utilizing LEC billing to collect for services has come under intense scrutiny over the past several years based on allegations that charges are placed on customers’ monthly bills without their knowledge or consent. Such unauthorized billing is known as cramming. Cramming is the placing of unauthorized charges on your wireline, wireless, or bundled services telephone bill. The Federal Communications Commission (FCC) has estimated that cramming has harmed tens of millions of American households. Crammers often rely on confusing telephone bills to trick consumers into paying for services they did not authorize or receive, or that cost more than the consumer was led to believe.
In order to place charges on land-line telephone bills for its services, the Sann Companies contracted with billing aggregators such as Transaction Clearing. Transaction Clearing worked with the phone companies (LECs) to facilitate the placing of charges on the monthly phone bills of the Sann Companies’ customers.
The federal charges were based on Sann’s fraudulent misrepresentations to Transaction Clearing related to his and his companies’ business relationships with Transaction Clearing. In March of 2010, Transaction Clearing defined for the Sann Companies what it considered a “cramming complaint” and in its contracts with the Sann Companies required them to report complaints meeting that definition on a monthly basis. The reporting obligation applied whether or not the complaint actually related to a customer being signed up for the service without their consent or knowledge, or was justified or unjustified; it only mattered that a complaint had been made. If the complaints reached a certain threshold, the LECs and billing aggregators would require entities such as the Sann Companies to submit action plans in an effort to reduce the volume of complaints. If complaints persisted, the LECs could suspend the Sann Companies and terminate the billing arrangement.
The contracts also required each Transaction client, including the Sann Companies, to disclose the names of other companies or entities owned or controlled by that client’s officers or principals. In order to continue to receive revenue for the Sann Companies from Transaction Clearing, Sann and his agents failed to accurately report complaints meeting Transaction Clearing’s definition of cramming, and also failed to fully disclose Sann’s interest in the Sann Companies.
An employee of Tri-Data Systems in Montana (Emerica’s accounting firm), at the direction of Emerica in Montana, sent an email to Transaction Clearing in Texas on March 3, 2011, representing the Sann Companies had no complaints meeting Transaction Clearing’s definition of cramming during February 2011. In fact, the Sann Companies received approximately 479 complaints that met Transaction Clearing’s definition of cramming during February 2011.
In addition, Sann transferred $100,000 from a bank account to a Charles Schwab and Company investment account on April 4, 2011. The money involved in that transfer was paid to the Sann Companies in connection with funds received from utilizing LEC billing and therefore was derived from the wire fraud scheme described above.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service.
Springfield Businessman Pleads Guilty to Fraud Schemes, Must Pay $3 Million RestitutionRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., businessman pleaded guilty in federal court today to engaging in fraud schemes, even after he was under indictment and while incarcerated, that totaled more than $3 million in losses.
Richard Thomas Gregg, 59, of Springfield, pleaded guilty before U.S. Magistrate Judge David P. Rush to one count of bank fraud and one count of bankruptcy fraud.
Gregg was the principal shareholder and a director of Southwest Community Bank in Springfield, which failed in May 2010. In the factual basis to his plea agreement, Gregg admitted that the United States could prove he substantially jeopardized the soundness of that financial institution and directly contributed to the failure of the bank. Southwest Community Bank lost $679,399 on Gregg’s personal line of credit and $871,125 on a commercial real estate fraud scheme perpetrated by Gregg, for a total loss of $1,550,524.
Gregg and his wife also were majority shareholders in Glasgow Savings Bank in Glasgow, Mo., which failed in 2012. Prior to Glasgow Savings Bank’s failure, it was one of the oldest operating banks west of the Mississippi River. Gregg was also a real estate developer, an investor and a licensed insurance agent for the Shelter Mutual Insurance Company. Gregg had ownership interest in and controlled a number of business entities.
Under the terms of today’s plea agreement, Gregg will be sentenced to six years and six months in federal prison without parole and must pay $3,098,896 in restitution to the victims of his fraud schemes. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
Bank Fraud
By pleading guilty today, Gregg admitted he defrauded Great Southern Bank by selling the collateral securing a $2 million loan, and keeping the proceeds. In February 2009, Gregg borrowed $2 million from Great Southern Bank in Springfield, using 160,000 shares of stock for First Bancshares, Inc. (FBSI), the holding company for First Homes Savings Bank, as collateral. Gregg physically deposited the stock certificate with Great Southern Bank. Between May 6, 2009 and June 6, 2009, Gregg devised and executed a scheme to defraud Great Southern Bank, and to obtain securities under the custody and control of Great Southern Bank by means of false and fraudulent pretenses, representations and promises.
As a part of this scheme, on May 6, 2009, Gregg checked out the original FBSI stock certificate from Great Southern Bank, using as a pretext the stated purpose of separating the large certificate into multiple smaller certificates. At that time, the loan from Great Southern Bank had a balance of $1,511,194. Gregg signed a trust receipt promising to return the stock certificates to the bank within 30 days. Gregg, however, chose not to return the stock certificates to Great Southern Bank and instead used the funds for other purposes. On May 7, 2009, Gregg deposited the collateralized FBSI shares into his account at Scottrade (a privately-owned retail brokerage firm). On May 28, 2009, Gregg borrowed $440,000 from Scottrade, from the margin account on which he used the FBSI stock as collateral.
As a result of Gregg’s fraud, Great Southern Bank consolidated several of his outstanding loans in order to cover the missing collateral. In the end, Great Southern Bank “charged off” $2,316,264 on this consolidated loan. However, the actual value of the FBSI shares, $1,350,400, is the loss directly attributable to the fraud.
Bankruptcy Fraud
While Gregg was already under indictment for bankruptcy fraud relating to the bankruptcy petition of his corporation, 1717 Market Place, LLC, he filed a personal bankruptcy petition that contained numerous false declarations and concealed fraudulent transfers of property.
On March 19, 2013, Gregg filed a voluntary bankruptcy petition. Between Feb. 20, 2013, and Sept. 1, 2014, Gregg devised a scheme to defraud the Bankruptcy Court, the United States Trustee and his creditors. By pleading guilty today, Gregg admitted that his bankruptcy petition contained materially false statements and knowingly omitted material facts. Gregg also admitted that he transferred his property to place that property beyond the reach of the Bankruptcy Court, the United States Trustee and his creditors.
Gregg transferred his interest in two parcels of real estate, a 97.2-acre tract and a 6.4-acre tract in Nixa, Mo. Gregg also filed $250 million in bogus liens on his real and personal property in order to keep them out of the hands of his creditors. Gregg admits that the United States could prove he reported $45,773,834 in unsecured debts to others, which he fraudulently attempted to have discharged in his personal bankruptcy case.
Other Crimes
In addition to the two counts to which he pleaded guilty, Gregg admitted the United States could prove by a preponderance of the evidence all of the other conduct alleged in the indictment against him, including two other bank fraud schemes, wire fraud schemes targeting two casinos, and money laundering.
In one bank fraud scheme, in 2008 Gregg defrauded Southwest Community Bank by selling the bank a piece of commercial real estate at 2814 S. Fremont in Springfield for $1,551,9440, when it was worth less than half that amount. Gregg did not disclose to the other bank directors that he had purchased that property for $775,000 a few months earlier, nor did he disclose that two appraisals had been conducted on the property in recent months. One appraisal valued the property at $762,000. The second appraisal was cancelled when Gregg disagreed with the preliminary work. After Gregg cancelled the appraisal, he had the bank order an appraisal of the Fremont property by another appraiser, who valued the property at $1,580,000. Gregg did not disclose to the bank that this appraisal was not an independent valuation of the property, but rather was something Gregg had, in essence, directed.
In another bank fraud scheme, Gregg used collectible automobiles as collateral to obtain loans, then sold the cars without paying back the loans. Gregg admitted that the United States could prove that in January and February 2010 he executed separate but related schemes to defraud Great Southern Bank, Metropolitan National Bank and People’s Bank of the Ozarks. As a part of these schemes, Gregg sold seven collectible automobiles at the Barrett-Jackson Auto Auction in Scottsdale, Ariz. Five of the automobiles were encumbered at the three banks.
Gregg borrowed $400,000 from Great Southern Bank in October 2007, which he secured with four collectible automobiles, including a 2006 Ford GT. Gregg consigned the 2006 Ford GT with the Barrett-Jackson Auto Auction in Scottsdale, Ariz., where on Jan. 23, 2010, the vehicle was sold at auction for approximately $150,000. Gregg chose to not return the proceeds of the sale of the Ford GT ($138,000 after deducting the auctioneer’s fee) to Great Southern Bank and instead used the funds for other purposes. When Gregg defaulted on the loan, Great Southern Bank realized a $129,644 loss.
Also, Gregg borrowed $400,000 from Metropolitan National Bank in 2005. He secured this loan with a “floor plan” financing, meaning the loan was a revolving line of credit made against specific pieces of collateral, in this case automobiles. When each vehicle on the floor plan was sold, the loan advanced against that piece of collateral was to be repaid. This loan was renewed in December 2009. In January 2010, the collateral included a 1971 Chevy Cheyenne Pickup. The portion of the loan’s balance collateralized by the 1971 Chevy Cheyenne Pickup was $17,221. Gregg also consigned the 1971 Chevy Cheyenne Pickup with the Barrett-Jackson Auto Auction, and it was sold for approximately $29,000. Gregg admits the United States could prove he chose to not return the proceeds of the sale ($26,680 after deducting the auctioneer’s fees) to Metropolitan National Bank and instead used the funds for other purposes. When Gregg defaulted on the loan, Metropolitan National Bank realized a $17,221 loss.
Gregg also admits the United States could prove he committed wire fraud related to bounced checks at two Oklahoma casinos. On Jan. 3, 2012 Gregg presented five checks, payable to Buffalo Run Casino in Miami, Okla., each in the amount of $10,000, knowing his credit union account contained insufficient funds to cover those checks. Between Feb. 16 and March 1, 2012, Gregg presented five checks payable to Downstream Casino and Resort in Quapaw, Okla., in the total amount of $60,000, knowing his bank account contained insufficient funds to cover those checks.
Gregg also admits the United States could prove that on Aug. 14, 2012, he filed a substantially fraudulent corporate bankruptcy petition for his company, 1717 Marketplace, LLC, that misrepresented the company’s financial situation to the material detriment of creditors, and concealed more than $9 million in debt owed to the company by insiders, payments he had directed.
Ongoing Criminal Conduct
Some of Gregg’s criminal conduct occurred while he was on bond and while he was incarcerated.
Following his indictment by a federal grand jury on Feb. 28, 2013, Gregg was released on a personal recognizance bond. While he was on bond, Gregg committed substantial, additional criminal offenses, for which the grand jury issued the first superseding indictment on July 23, 2014. The court found that Gregg had violated his conditions of bond by committing federal crimes while on release. The court found that Gregg posed a danger to the community in the form of potential economic harm, and that Gregg was unlikely to abide by any condition or combination of conditions of release. For those reasons, the court ordered Gregg’s bond revoked and he was incarcerated.
Gregg, through counsel, filed a motion asking the court to reconsider its order. Prior to the hearing, the government obtained and reviewed recordings of Gregg’s telephone conversations and prison visits, preserved on the Greene County Jail’s recording equipment. The recordings revealed that Gregg had conspired with others to commit new crimes from jail. On Nov. 3, 2014, the court issued an order denying the motion to reconsider bond.
On Nov. 4, 2014, the grand jury returned a second superseding indictment, which charged Gregg with additional acts of bankruptcy fraud.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by the FDIC Office of Inspector General and IRS-Criminal Investigation.
Snohomish County Man Sentenced to Ten Years in Prison for Gun TraffickingRead the Press Release
A 36-year-old Monroe, Washington man who burglarized a Fred Meyer store stealing 29 firearms and selling them to criminals was sentenced today in U.S. District Court in Seattle to ten years in prison, announced Acting U.S. Attorney Annette L. Hayes. MATTHEW ELSHAUG pleaded guilty in October 2014 to Conspiracy to Possess and Sell Stolen Firearms, Possession and Sale of Stolen Firearms, Theft of Firearms from a Federal Firearms Licensee, and being a Felon in Possession of Firearms. U.S. District Judge Robert S. Lasnik ordered three years of supervised release to follow the prison term and recommended a residential drug treatment program while ELSHAUG is incarcerated.
According to records filed in the case, in the early morning hours of November 17, 2013, ELSHAUG burglarized the Snohomish Fred Meyer store, using a crowbar to steal 29 firearms from the gun case. ELSHAUG, accompanied by his then-roommate Casey Yount, 27, then sold the guns to two other defendants for money and drugs. Yount was sentenced last December to three years in prison for Conspiracy to Receive, Possess, Barter, and Sell Stolen Firearms. Levi Herz, 31, of Everett, Washington, bought nine of the stolen guns and was sentenced last November to 54 months in prison for Possession and Sale of Stolen Firearms and Distribution of Controlled Substances. Raymond Baron, 53, of Marysville, Washington also bought some of the stolen guns. He was sentenced last January to five years in prison for Possession and Sale of Stolen Firearms and possession of an unregistered firearm. Of the 29 stolen guns, only nine have been recovered by law enforcement.
ELSHAUG has prior convictions in Snohomish County for burglary, theft, and illegal firearms possession. Yount has prior convictions in Snohomish County for theft and drug crimes. Herz has prior convictions in Snohomish County for drug crimes.
The case was investigated by the Snohomish Police Department, the Snohomish County Sheriff’s Department, the Marysville Police Department, the Everett Police Department, the Washington State Department of Corrections, the Snohomish Fugitive Task Force, and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF). The Snohomish County Prosecuting Attorney’s Office worked closely with the U.S. Attorney’s Office and law enforcement on the case.
The case is being prosecuted by Assistant United States Attorney Kate Crisham.
Santa Fe Man Sentenced to Prison for Federal Oxycodone Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Daniel Trujillo, 32, of Santa Fe, N.M., was sentenced today in federal court in Santa Fe, N.M., to 18 months in federal prison followed by three years of supervised release for his Oxycodone trafficking conviction. Romero is one of five Santa Fe residents charged in Sept. 2013, with participating in an Oxycodone trafficking ring in a 16-count indictment.
Trujillo and his co-defendants, Ashraf Nassar, 31, Phillip Anaya, 38, Krystal Holmes, 28, and Sarah Romero, 35, were arrested as part of a multi-agency law enforcement operation that included the execution of search warrants at three residences and a business in Santa Fe. The investigation, “Operation High Desert Bash,” was initiated in Jan. 2013 by the DEA’s Tactical Diversion Squad in Albuquerque, N.M., the Santa Fe Police Department and HIDTA Region III Narcotics Task Force in response to the epidemic increase in prescription drug abuse, addiction and overdose deaths in New Mexico, particularly among teens and young adults.
Operation Desert Bash investigation was designated as part of the Organized Crime Drug Enforcement Task Force (“OCDETF”) program, a nationwide Department of Justice program that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations. The investigation primarily targeted a drug trafficking organization unlawfully distributing quantities of Oxycodone in Santa Fe County. Oxycodone is an opioid narcotic pain reliever similar to morphine that is medically prescribed to treat moderate to severe pain and can be habit-forming. Officers seized approximately 7300 mg of Oxycodone during the investigation.
Count 1 of the 16-count indictment charged the five defendants with conspiracy to distribute Oxycodone in Santa Fe County between Dec. 2012 and Sept. 2013. Counts 2 through 4 of the indictment charged Nassar, Anaya and Holmes with substantive Oxycodone distribution offenses, and all five defendants were charged with using telephones to facilitate drug trafficking crimes in Counts 5 through 16.
Trujillo pled guilty on Jan. 30, 2015, to a conspiracy count and admitted his participation in a conspiracy to distribute Oxycodone in the Santa Fe area between Dec. 2012 and Sept. 2013. Trujillo also admitted that he would frequently receive oxycodone from a co-defendant which he would then redistribute.
Two of Trujillo’s co-defendants also have entered guilty pleas. Anaya pled guilty on Nov. 19, 2014, and Romero pled guilty on Oct. 28, 2014; each admitted participating in the Oxycodone trafficking conspiracy charged in the indictment. Under the terms of his plea agreement, Anaya will be sentenced to 46 months in federal prison. His sentencing hearing has yet to be scheduled. Romero was sentenced on March 26, 2015, to 18 months in federal prison followed by three years of supervised release.
Nassar and Holmes have entered pleas of not guilty and are awaiting trial. Charges in indictments are only accusations. All criminal defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
This case was investigated by the Tactical Diversion Squad of the DEA’s Albuquerque office, the Santa Fe Police Department and the HIDTA Region III Drug Enforcement Task Force, and is being prosecuted by Assistant U.S. Attorneys Shammara H. Henderson and Joel R. Meyers.
DEA’s Tactical Diversion Squads combine DEA resources with those of federal, state and local law enforcement agencies in an innovative effort to investigate, disrupt and dismantle those suspected of violating the Controlled Substances Act or other appropriate federal, state or local statutes pertaining to the diversion of licit pharmaceutical controlled substances or listed chemicals.
The HIDTA Region III Drug Enforcement Task Force is comprised of officers from the New Mexico State Police, Santa Fe Police Department and Santa Fe County Sheriff’s Office. It is part of the High Intensity Drug Trafficking Areas (HIDTA) program which was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
This case is being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Richmond Store Owner Sentenced to 41 Months for Cigarette and Wire Fraud SchemeRead the Press Release
Defendant evaded paying over $1 million in sales tax to Virginia while selling cigarettes to traffickers
RICHMOND, Va. – Mohamed Seid Ahmed Mohamed, 57, of North Chesterfield, Virginia, was sentenced today to 41 months in prison, followed by 3 years of supervised release, for conspiring to commit wire fraud and to traffic in contraband cigarettes. He was also ordered to pay $1,009,046 in restitution to the Commonwealth of Virginia, Department of Taxation.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C., Field Office, made the announcement after sentencing by Senior U.S. District Robert E. Payne.
Mohamed pleaded guilty on September 3, 2014. According to court documents, Mohamed was the owner and operator of The Cigarette Club, LLC, a cigarette retail store in Richmond, Virginia, doing business as City Cigarettes. From June 2011 to January 2014, Mohamed and his co-conspirators purchased over 440,000 cartons—worth approximately $19.8 million—of various brands of cigarettes at wholesale stores in the Richmond area using multiple membership accounts. In making the cigarette purchases, Mohamed and/or co-conspirators certified that the cigarettes would be resold through Mohamed’s retail business. As a result, he and his co-conspirators were not required to pay the Virginia Retail Sales and Use Tax on the cigarettes at the time they purchased them. Instead, they were responsible to collect and pay the taxes once they sold them.
In fact, at the time of each purchase, Mohamed and his co-conspirators intended to sell, and ultimately did sell, the overwhelming majority of the cigarettes to individuals who they knew were transporting the cigarettes to jurisdictions outside of the Commonwealth of Virginia for resale as untaxed cigarettes. Mohamed and his co-conspirators never intended to, and ultimately did not, collect or pay the applicable Virginia Retail Sales and Use Tax for the cigarettes purchased at the wholesale stores. As a result of the conspiracy, the Commonwealth of Virginia lost sales tax revenue in the amount of $1,009,046.
This case was investigated by the IRS-Criminal Investigation in Richmond, Virginia, with assistance from the Multi-Jurisdictional Special Operations Group. Assistant U.S. Attorney Dominick S. Gerace is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:14CR00143.
Port Angeles Drug Trafficker Sentenced to Eleven Years in Prison for Meth Distribution ConspiracyRead the Press Release
The former owner of ‘Sellin Style’ car dealership in Sequim, Washington, was sentenced today in U.S. District Court in Tacoma to 11 years in prison and five years of supervised release for conspiracy to distribute methamphetamine and possession of methamphetamine with intent to distribute, announced Acting United States Attorney Annette L. Hayes. TIMOTHY P. SMITH, 31, pleaded guilty in January 2015. SMITH was arrested in February 2014, following a high speed chase that ended after two sets of spike strips were placed on the highway. At sentencing U.S. District Judge Robert J. Bryan said SMITH was the organizer of an “ongoing, long-term, large conspiracy” involving “weapons and violent undertones.”
“This defendant was a menace in his community who spread methamphetamine and its attendant harm on the Olympic Peninsula,” said Acting United States Attorney Annette L. Hayes. “The fact that this defendant has been held to account is a testament to effective coordination between federal, state and local law enforcement.”
According to records in the case, SMITH was the leader of a longstanding methamphetamine distribution ring that supplied large quantities of the drug over several years. SMITH sold methamphetamine to a person working with law enforcement on multiple occasions in June, July and August 2013 at or near his ‘Sellin Style’ car dealership on Old Blyn Highway near Sequim. SMITH also possessed and sold methamphetamine at other locations in and around Port Angeles. Law enforcement surveillance also revealed SMITH conducting drug deals with his suppliers at multiple locations in Kitsap County including the Four Corners Chevron and Hilltop gas stations in Poulsbo, the parking lot of the Walmart in Poulsbo, and the parking lot of the Target store in Silverdale.
In conjunction with a separate investigation and take-down of another drug ring, which was supplying methamphetamine to SMITH and others, law enforcement arrested SMITH as he traveled back to Sequim from Kitsap County on Sunday evening, February 23, 2014. Shortly after SMITH’s vehicle crossed the Hood Canal Bridge, the Washington State Patrol pulled the car over. After initially stopping, SMITH sped away, traveling at speeds nearing 100 mph and weaving into the lane for oncoming traffic. Troopers noticed white bags being tossed from the car. The car hit one set of spike strips and continued on. After hitting a second set of spike strips the car came to a halt and SMITH and his girlfriend were taken into custody. Inside the bags tossed from the car, law enforcement found 1.6 pounds of methamphetamine. The girlfriend also had $4,000 in cash on her person, which she revealed in a monitored jail call to have been given to her by SMITH during the police chase.
One of SMITH’s co-conspirators, Tammy R. Coburn, was sentenced last month to 18 months in prison. The other defendants, Holli A. Bell, Jacob E. Davis, and Charles D. Aslin, have also pleaded guilty in the case and are pending sentencing.
The case was investigated by the FBI, ATF, and Olympic Peninsula Narcotics Enforcement Team (OPNET), a task force containing officers from Clallam County Sheriff’s Office, Jefferson County Sheriff’s Office, Port Angeles Police Department, Sequim Police Department, Neah Bay Department of Public Safety, Elwha Klallam Police, LaPush Police, the U.S. Coast Guard, U.S. Border Patrol, the Washington Department of Corrections, Washington State Patrol and the West Sound Narcotics Enforcement Team (WestNet).
The case was prosecuted by Assistant United States Attorney Gregory A. Gruber.
Philadelphia Woman Arrested for Attempting to Provide Material Support to ISILRead the Press Release
Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania announced that Keonna Thomas, also known as Fatayat Al Khilafah and YoungLioness, 30, of Philadelphia, was charged today by criminal complaint with knowingly attempting to provide material support and resources, including herself as personnel, to a designated foreign terrorist organization. According to the complaint, Thomas attempted to travel overseas in order to join and fight with the Islamic State of Iraq and the Levant (ISIL).
As alleged in the complaint, Thomas posted on Twitter the following statement: “If we truly knew the realities . . . we all would be rushing to join our brothers in the front lines pray ALLAH accept us as shuhada [martyrs].” The complaint further alleges that Thomas applied for a U.S. passport and advised an associate that she had deactivated her Twitter “till i leave for sham [greater Syria]. . . . don’t want to draw attention of the kuffar [non-believers].” Thomas then allegedly engaged in electronic communications with an ISIL fighter in Syria, who asked Thomas if she wanted to be a part of a martyrdom operation. Thomas responded by stating, “that would be amazing….a girl can only wish.” Thomas also allegedly conducted online research into various indirect travel routes to Turkey, and allegedly purchased an electronic visa to Turkey. The complaint alleges that Turkey is known to be the most common and most direct transit point for individuals traveling from locations in Europe who are seeking to enter Syria and join ISIL. On or about March 26, 2015, Thomas allegedly purchased airline tickets to fly overseas on March 29, 2015.
If convicted, the defendant faces a maximum possible sentence of 15 years’ incarceration.
The case was investigated by the FBI’s Joint Terrorism Task Force and the Philadelphia Police Department. It is being prosecuted by Assistant U.S. Attorney Jennifer Arbittier Williams of the Eastern District of Pennsylvania and Trial Attorney Paul Casey of the Justice Department’s National Security Division.
A criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Woman Arrested on Suspicions of Trying to Join ISILRead the Press Release
PHILADELPHIA – Keonna Thomas, a/k/a “Fatayat Al Khilafah,” a/k/a “YoungLioness,” 30, of Philadelphia, was charged today by Criminal Complaint with knowingly attempting to provide material support and resources to a designated foreign terrorist organization, announced United States Attorney Zane David Memeger. According to the complaint, Thomas knowingly attempted to travel overseas in order to join, fight with, and martyr herself on behalf of ISIL.
The Complaint alleges that Thomas posted on Twitter the following statement: “If we truly knew the realities . . . we all would be rushing to join our brothers in the front lines pray ALLAH accept us as shuhada [martyrs].” The Complaint further alleges that Thomas applied for a U.S. Passport, and advised an associate that she had deactivated her Twitter “till i leave for sham [greater Syria]. . . . don’t want to draw attention of the kuffar [non-believers]. Thomas then allegedly engaged in electronic communications with an ISIL fighter in Syria, who asked Thomas if she wanted to be a part of a martyrdom operation. Thomas responded by stating, “that would be amazing….a girl can only wish.” Thomas also allegedly conducted online research into various indirect travel routes to Turkey, and allegedly purchased an electronic visa to Turkey. The Complaint alleges that Turkey is known to be the most common and most direct transit point for individuals traveling from locations in Europe who are seeking to enter Syria and join ISIL. And on or about March 26, 2015, Thomas allegedly purchased airline tickets to fly to Spain three days later, on March 29, 2015.
If convicted, the defendant faces a maximum possible sentence of 15 years in prison.
The case was investigated by the FBI’s Joint Terrorism Task Force and the Philadelphia Police Department. It is being prosecuted by Assistant United States Attorney Jennifer Arbittier Williams and Trial Attorney Paul Casey of the Counterterrorism Section in the Justice Department’s National Security Division.
A Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
New Jersey Man Sentenced to Four Years in Prison for Conspiracy to Distribute MethmaphetamineRead the Press Release
El Dorado, Arkansas - Conner Eldridge, United States Attorney for the Western District of Arkansas, announced that Anthony F. Winters, age 51, of Longvalley, New Jersey, was sentenced today to 48 months in federal prison followed by three years of supervised release on one count of Conspiracy to Distribute Methamphetamine. The Honorable Susan O. Hickey presided over the sentencing hearing in the United States District Court in El Dorado.
U.S. Attorney Eldridge commented, “With today’s sentence, Arkadelphia and the surrounding community have become a safer place for all residents. Our office is committed to eliminating the trafficking of illegal drugs and the violence and other crime it brings with it. I would like to thank the Clark County Sheriff’s Office, the Arkansas State Police, the Group 6 Task Force, and the DEA for all their hard work throughout this entire investigation.”
Clark County Sheriff Jason Watson praised the efforts of all the special agents, investigators and officers involved in this extended investigation. Watson commented, “The public expects and deserves the kind of collaboration that was involved in this case. This was a cooperative effort between the U.S. Attorney’s Office, Clark County Prosecutor’s Office, Drug Enforcement Administration, Arkansas State Police, Arkansas Highway Police, Group 6 Task Force, Arkadelphia Police Department, and Clark County Sheriff’s Department that would not have been possible by any one of these agencies alone.” Watson stated further "The investigation involved hundreds of hours by officers too numerous to mention, but they all deserve credit for their efforts in this investigation; I am very proud of this positive outcome.” Clark County Prosecutor Blake Batson and Sheriff Watson thanked U.S. Attorney Eldridge for his continued assistance in combating drug trafficking in Clark County.
“By working together, DEA and our federal, state and local law enforcement partners are utilizing our respective resources and expertise to achieve results that we could not accomplish on our own. Our combined efforts are making communities in the Western District of Arkansas safer by disrupting the flow of dangerous drugs to our neighborhoods. The sentencing today should put others who engage in this type of activity on notice: if you distribute illegal drugs you will face federal charges and a lengthy prison sentence,” state DEA Assistant Special Agent in Charge David Downing.
According to court records, beginning in October 2013, agents with the Drug Enforcement Administration, Clark County Sheriff’s Office, Group 6 Drug Task Force and the Arkansas State Police initiated an investigation into a drug trafficking organization involved in the distribution of multi-pound quantities of methamphetamine in Southwest Arkansas. During the investigation, agents learned that Anthony Winters was an out-of-state distributor of multi-ounce quantities of methamphetamine that originated in Clark County. After further investigation, DEA began setting up an undercover sting operation in Clark County targeting Winters. During April, 2014, Winters traveled from New Jersey to Arkansas in order to pick up a supply of methamphetamine and take it back to New Jersey for distribution. Upon his arrival at the agreed upon location in Clark County, Winters was provided with a shrink wrapped block of counterfeit substance represented to be a half pound (or eight ounces) of methamphetamine. In exchange for that counterfeit substance, Winters exchanged two signed business account checks, and mentioned that he priced the methamphetamine out for $3,000 an ounce to another distributor in New Jersey. After the transaction was completed, Winters was stopped in Arkadelphia, Arkansas, by an Arkansas State Trooper and arrested on a federal warrant. The shrink-wrapped counterfeit substance was found wrapped in a red sleeping bag in the rear passenger area of the pickup truck Winters was driving. Winters was indicted by a Federal Grand Jury on May 7, 2014, and pleaded guilty to one count of Conspiracy to Distribute Methamphetamine on December 1, 2014.
This case was investigated by the Drug Enforcement Administration (DEA), Group 6 Drug Task Force, the Clark County Sheriff’s Office, Arkadelphia Police Department, and the Arkansas State Police. Assistant United States Attorney Ben Wulff prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Milwaukee Man Pleads Guilty to Receipt of Child PornographyRead the Press Release
James L. Santelle, United States Attorney for the Eastern District of Wisconsin, announced today that Jeffrey Feldman (age: 48), of Milwaukee, Wisconsin, pled guilty today to an indictment charging him with one count of receipt of child pornography.
According to the plea agreement, in January of 2013, Federal Bureau of Investigation special agents detected Feldman sharing files containing child pornography over the Internet via a peer-2-peer network. Based in part on this information, law enforcement agents obtained a search warrant for Feldman’s residence, where they recovered numerous encrypted computers and electronic storage devices. Subsequent decryption and forensic analysis of those devices revealed that Feldman had knowingly received thousands of child pornography image and video files via the Internet, including the files charged in the indictment.
Sentencing is scheduled for July 10, 2015, before United States District Court Judge Lynn S. Adelman of the Eastern District of Wisconsin. At the conclusion of today’s hearing, the defendant was remanded into federal custody.
In announcing today’s plea, United States Attorney Santelle stated: “The plea entered today by Jeffrey Feldman is a reflection not only of his acknowledgment of guilt for his receipt of substantial amounts of child pornography but also of the focused and effective work of investigators and prosecutors in bringing him to justice. In partnership with the Federal Bureau of Investigation and the Criminal Division of the United States Department of Justice, our office remains committed to this high priority mission - that is, identifying and stopping people who prey on our children, victimizing them, their families, and the communities in which we all live and work.”
The case was investigated by the FBI and prosecuted by Assistant United States Attorney Karine Moreno-Taxman of the Eastern District of Wisconsin and Trial Attorney Jeffrey Zeeman of the Criminal Division’s Child Exploitation and Obscenity Section.
This criminal prosecution is a part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the United States Department of Justice. Led by 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, investigate, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue the victims of their criminal conduct. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Millennium Capital Exchange CEO Arrested for Running Foreign Exchange Market Ponzi SchemeRead the Press Release
ATLANTA - Stafford S. Maxwell, the former owner of Millennium Capital Exchange, Inc., has been arraigned on charges of orchestrating a multi-million dollar foreign exchange market Ponzi scheme. He was indicted March 17, 2015.
“Maxwell allegedly lured investors to his forex firm with false promises of trading success,” said Acting U.S. Attorney John Horn. “Even with an improving economy, investment fraud schemes are as popular as ever, and citizens need to be careful when choosing where to entrust their hard earned money.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “The investigation that led to the indictment and arrest of Maxwell reflects the FBI’s commitment to the many victims that have suffered significant financial losses and hardships as a result of this fraudulent investment scheme as alleged in the indictment. Investors are reminded to be cautious of investment pitches that promise exceptionally high rates of return such as those allegedly promised in this case.”
According to Acting United States Attorney Horn, the charges, and other information presented in court: In March 2007, Maxwell incorporated and owned Millennium Capital Exchange, Inc. (“Millennium”), which purported to be a foreign exchange market trading firm. The foreign exchange market (or forex market) is the global market in which participants buy, sell, exchange, and speculate on currencies. The forex trading market consists of banks, commercial companies, central banks, investment management firms, hedge funds, retail forex brokers, and individual investors. Forex trading involves the trading of currencies from different countries against each other. An example of a forex trade is to buy Japanese yen while simultaneously selling United States dollars. Trading in foreign exchange markets frequently exceeds $5 trillion per day.
From about 2008 to January 2012, Maxwell solicited investments from individuals across the United States with promises of high fixed rates of return to be generated from successful foreign currency trading. In particular, to obtain money from investors, Maxwell falsely stated that: (a) he possessed excellent forex trading skills; (b) he had a long history of forex trading success; (c) he often assured investors that they would earn an annualized rate of return on their investments from approximately 48% to 72%; (d) he used “stops” and “floors” on currency trades to insure that the gains would be large, but that the losses would be small; (e) investors had realized significant gains based on his trading; and (f) he had reserve funds that enabled him to cover any trading losses.
According to the indictment, Maxwell: (a) had little success executing forex trades; (b) lost almost all the money that he traded in forex markets; (c) was unable to pay investors the promised investment dividends; and (d) possessed no reserve fund to cover forex trading losses.
According to Millennium’s business model, Maxwell was supposed to use the invested funds to make forex trades through accounts at a financial firm in Geneva, Switzerland. Based on his false representations, investors wired Maxwell well over $1 million, expecting that the funds would be traded in the Swiss accounts the indictment alleges. After receiving money from investors, however, Maxwell diverted approximately half of the money for other improper purposes. First, in an effort to perpetuate the scheme and make it appear that he was a successful forex trader, Maxwell used the money received from new investors (that was supposed to be traded on the forex market) to pay “dividends” to older investors. Second, Maxwell used the money received from investors (that was supposed to be traded on the forex market) to pay his own personal living expenses. In the end, Maxwell spent or lost almost every dollar invested with him.
Stafford S. Maxwell, 46, of Mableton, Georgia, was indicted on March 17, 2015, on ten counts of wire fraud.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Jeffrey W. Davis is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Men Sentenced for Food Stamp FraudRead the Press Release
SYRACUSE, NEW YORK – Two men who previously pled guilty to federal charges of Conspiracy to Commit Food Stamp Fraud were sentenced to terms of incarceration in U. S. District Court in Syracuse. Ebrima KRUBALLY, 46, of Syracuse, NY, was sentenced to 48 months incarceration and Alieu JAITEH, 32, also of Syracuse, was sentenced to 18 months incarceration according to U.S. Attorney Richard S. Hartunian and Brian Devine, Resident Agent in Charge, Homeland Security Investigations, Syracuse Office. U.S. District Judge Glenn T. Suddaby also ordered both to pay restitution of $1,709,304.81 in connection with the fraud scheme. JIATEH is also facing possible deportation as a result of this conviction as well as for other immigration violations.
KRUBALLY, a naturalized U.S. citizen from The Gambia, had been employed by the New York Department of Transportation as an engineer. KRUBALLY also owned and operated MAMA’s Imports, a food store formerly located at 529 N. State Street, Syracuse, NY. JAITEH, a foreign national, also from The Gambia, is a former employee of MAMA’s Imports. Between 2009 and 2012, the defendants conspired to commit more than $1.7 million fraud scheme by exchanging SNAP (Food Stamp) benefit coupons (including electronic benefits cards) for a discounted amount of cash or non-food items (i.e., clothing, cellular phones, DVD’s).
The Food Stamp Program is now referred to as the Supplemental Nutrition Assistance Program (SNAP). SNAP uses tax dollars to subsidize food purchases by eligible low-income or no-income households. SNAP benefits may only be used to purchase food in approved retail food stores, and may not be exchanged for cash or non-food items.
These sentencings are the culmination of a joint investigation conducted by Special Agents from the U.S. Department of Agriculture’s Office of the Inspector General and Homeland Security Investigations (HSI), the investigative component of U.S. Immigration and Customs Enforcement, and prosecuted by the U.S. Attorney’s Office for the Northern District of New York in Syracuse. Substantial assistance was also provided throughout the investigation by the Onondaga County Department of Social Services’ Welfare Fraud Unit, Oneida County Social Services, and the New York State Police.
The case was prosecuted by Assistant U. S. Attorney Geoff Brown. Further questions may be directed to Executive Assistant U.S. Attorney John Duncan at 315-448-0672.
Massachusetts Dairy Farm Agrees to Permanent Injunction for Improper Medication PracticesRead the Press Release
The Justice Department has filed suit in the U.S. District Court for the District of Massachusetts against Michael P. Ferry Inc. and its owner, Michael P. Ferry (Ferry), to block them from violating the Federal Food, Drug and Cosmetic Act (FDCA) in connection with their alleged unlawful use of new animal drugs in cows slaughtered for food. The Justice Department filed the suit on behalf of the U.S. Food and Drug Administration (FDA).
The defendants have agreed to settle the litigation and be bound by a consent decree of permanent injunction that enjoins them from committing violations of the FDCA. The proposed consent decree has been filed with the court and is awaiting judicial approval.
“Failing to maintain appropriate controls in food-producing animals bound for slaughter jeopardizes the public health,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The resolution of this matter ensures that, should it choose to re-enter business, this farm will have the necessary procedures in place to ensure that it delivers safe food to consumers.”
The defendants are primarily in the dairy business, but also sell cows for slaughter as food. Government inspections as recently as June 2014 revealed that Ferry sold animals for slaughter containing excessive and illegal drug residues in their edible tissues. The inspections also revealed that the defendants failed to maintain complete records concerning the medication of their animals. The FDA issued a warning letter to the farm concerning its violations in 2011 and also held a regulatory meeting with the farm in 2013 to discuss unlawful residues found in its cattle. The complaint states that consumers of edible animal tissues who are susceptible to antibiotics may experience severe allergic reactions as a result of ingesting food containing out-of-tolerance antibiotic levels. Furthermore, food containing above-tolerance antibiotic levels contributes to the development of antibiotic-resistant strains of bacteria in those who eat or handle food containing residues of such drugs.
Under the consent decree, the defendants have agreed to shutter their business selling animals for slaughter. To resume selling cows for slaughter, the consent decree requires the defendants to take certain actions and institute measures that must be confirmed by the FDA as compliant.
This matter was handled by Trial Attorney David Sullivan of the Civil Division’s Consumer Protection Branch and Scott Kaplan of the FDA’s Office of the Chief Counsel.
Man Sentenced for Production of Child PornographyRead the Press Release
ALBANY, NEW YORK – Robert V. McLaughlin, age 58, of Mechanicville, New York, was sentenced today by the Honorable Mae A. D’Agostino to 720 months in federal prison followed by a lifetime term of supervised release, announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation. The sentence follows McLaughlin’s guilty plea on November 13, 2014 to two counts of production of child pornography.
The evidence supporting this conviction included McLaughlin’s admission that between 2012 and 2014, he engaged in sexually explicit conduct with two young girls for the purpose of producing visual depictions of that abuse, and that he produced such depictions. In discussing the seriousness of the offenses, which involved the deliberate grooming of two innocent children, Judge D’Agostino noted that to describe McLaughlin’s actions as "disturbing" would be an understatement. The Judge went on to note that the public must be protected from McLaughlin’s predatory behavior.
This prosecution resulted from an investigation conducted by the Federal Bureau of Investigation and the New York State Police. It was prosecuted by Assistant United States Attorney Lisa M. Fletcher and Special Assistant United States Attorney Amanda W. Cox.
Man Convicted of PerjuryRead the Press Release
SYRACUSE, NEW YORK – JOSEPH JENKINS, age 45 of Geneva, New York, was found guilty of perjury on April 1, 2015 following a jury trial in federal court in Syracuse, announced United States Attorney Richard S. Hartunian.
The perjury charges arose from JENKINS’s request for appointment of counsel to represent him in connection with prior federal charges filed in 2011 relating to possession and transportation of child pornography. In his application for appointment of counsel, JENKINS made sworn statements to the court about his financial condition. Based on those statements, the court found JENKINS eligible for appointment of free counsel. But JENKINS did not disclose in his sworn statements that he in fact owned investment accounts worth more than $200,000. JENKINS also failed to disclose his ownership of various boats and recreational vehicles.
United States District Judge Elizabeth A. Wolford scheduled sentencing for August 3, 2015. JENKINS faces a maximum term of imprisonment of five years and a fine of up to $250,000.
JENKINS was previously convicted on February 6, 2014, following a jury trial, of possession and transportation of child pornography. He was sentenced on November 18, 2014, to a term of imprisonment of 225 months and a fine of $40,000, and he was ordered to pay restitution to the victims of his crimes.
The case was investigated by the Department of Homeland Security, Homeland Security Investigations. The case was prosecuted by Assistant U.S. Attorneys Tamara B. Thomson and Nicolas Commandeur.
Little Rock Woman Sentenced to Eight Years in Prison in Scheme to Defraud Undocumented WorkersRead the Press Release
Fayetteville, Arkansas - Conner Eldridge, United States Attorney for the Western District of Arkansas, announced that Wendy Espinoza, a 32 year old foreign national from Honduras who was living in Little Rock, was sentenced to 96 months in prison and three years of supervised release on each count of Wire Fraud and Mail Fraud. The sentences are to run concurrent with each other. Espinoza was also ordered to pay restitution in the amount of $541,520.00. The Honorable Timothy L. Brooks presided over the sentencing hearing in the United States District Court in Fayetteville.
U.S. Attorney Eldridge stated, “With today’s sentence, justice has now been served on behalf of the vulnerable and unsuspecting victims drawn into the devious trap set by Ms. Espinoza. The means in which she represented herself to them and the methods of intimidation that she used in order to enrich herself is nothing short of heartless. She threatened these victims with things she knew would most deeply affect them; arrest, deportation, and the loss of their children. Our office remains dedicated to pursuing fraud cases in the Western District of Arkansas and holding accountable those who swindle and take advantage of others.”
“Criminals routinely make false promises and seek to exploit individuals hoping to gain legal status in the United States,” said Acting Special Agent in Charge of HSI New Orleans Cindy M. Johnson. “This case illustrates the importance of being cautious when dealing with service providers, and also shows that Homeland Security Investigations will investigate and seek prosecution of those who prey on individuals to commit fraud.”
Beginning in 2007 and continuing through July, 2014, Espinoza devised a scheme to defraud illegal immigrants and to take their money by falsely representing that she could provide legal advice and services for them to obtain legal resident status in the United States. Specifically, Espinoza misrepresented that she worked with or for an immigration attorney and that she and or the attorney would prepare legitimate immigration documents for a fee. Espinoza in fact has no legal training and has never been associated with an immigration attorney. She would then state that she needed the individuals to pay various illegitimate “fees” and “fines” to continue the immigration process, such as a $10,000.00 “state pardon fee” and a $10,000.00 IRS fine. If those payments were not forthcoming, Espinoza threatened arrest, deportation, and, in one case, losing custody of their children. In order to comply with Espinoza’s demands, the defrauded individuals arranged for payment from family members to accounts designated by Espinoza. During a search of Espinoza’s residence in Little Rock, federal investigators found counterfeit documents that resembled the bogus Social Security Administration and immigration documents Espinoza had provided to some of the victims. Espinoza pleaded guilty to the charges in September, 2014.
This case was investigated by Homeland Security Investigations and the Social Security Administration Office of the Inspector General. Assistant U.S. Attorney Kyra Jenner prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records Website at www.Pacer.gov
Lakeland Man Sentenced to 80 Years in Prison for Producing and Transporting Child PornographyRead the Press Release
Tampa, Florida – U.S. District Judge Charlene Edwards Honeywell today sentenced Benjamin Cuadrado (41, Lakeland) to 80 years in federal prison for the production and transportation of child pornography. Cuadrado pleaded guilty on January 9, 2015.
According to court documents, between July 26, 2012, and March 25, 2014, Cuadrado produced, transported, received, and possessed child pornography. He used his cellular phone to produce at least 70 videos of him sexually assaulting an infant and a toddler in his care. He transported the child pornography over the Internet using his email account and an Internet messaging program.
A forensic review of Cuadrado’s cellular phone revealed 250 videos and more than 4,000 images of child pornography, including files depicting pre-pubescent children and sadomasochistic conduct.
“Justice has truly been served in this case. Cuadrado’s heinous crimes were against children that were not able to defend themselves,” said Susan L. McCormick, special agent in charge of HSI Tampa. “Working hand-in-hand with our law enforcement partners, HSI will aggressively protect our communities from those who seek to sexually exploit children.”
“The sentence handed down in the case against Mr. Cuadrado brings to an end one of the most disturbing child exploitation cases in the history of our office,” said Alysa Erichs special agent in charge of HSI Miami. “This also sends a message to those who take advantage of the innocence of our children, that we will find you and prosecute you to the fullest extent of the law.”
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Miami Beach Police Department, the Polk County Sheriff’s Office, and the U.S. Secret Service. It was prosecuted by Assistant United States Attorney Jennifer L. Peresie.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Justice Department seeks information from potential monitors regarding Cleveland Division of PoliceRead the Press Release
REQUEST FOR INFORMATION
INDEPENDENT MONITOR
Negotiated Court Enforceable Settlement Agreement
Regarding the Cleveland Division of Police
March 26, 2015
I. DESCRIPTION
The United States and the City of Cleveland (“City”) currently are in negotiations to work toward a court-enforceable settlement agreement (“Consent Decree” or “Agreement”) to address findings issued by the United States on December 4, 2014. The parties have publicly announced that they will jointly select an independent monitor to assess and report to the parties and the Court whether the requirements of the negotiated Agreement are being fully implemented.
The United States Department of Justice, through the Civil Rights Division’s Special Litigation Section and the U.S. Attorney’s Office for the Northern District of Ohio, and the City of Cleveland (collectively, the “Parties”) are seeking interested individuals, firms, or organizations to serve as the Independent Monitor (“Monitor”), either as the lead Monitor or as a subject-matter expert on the Monitor’s team.
The Monitor and his or her team will assist the United States District Court for the Northern District of Ohio (“Court”), the Parties, and the Cleveland community in assessing the implementation of the Agreement in an independent and transparent manner. Once selected by agreement of the Parties and appointed by the Court, the Monitor and his or her team will assess implementation, provide technical assistance, and issue public reports on the City’s compliance with the Agreement.
THIS IS A REQUEST FOR INFORMATION ONLY. This Request is issued solely for information and planning purposes. It does not constitute a Request for Proposal (“RFP”) or a promise to issue an RFP in the future. This Request is not part of, and shall not be governed by, any formal municipal, state, or federal procurement process. Further, this Request does not commit the Parties to select an individual, firm, or organization to serve as the Monitor or a member of the Monitor’s team. The Parties may seek and solicit information regarding interested parties through means other than this Request. Responders are advised that the Parties will not pay for any information or administrative costs incurred in response to this Request; all costs associated with responding to this Request will be solely at the interested party’s expense. Not responding to this Request does not preclude participation in any future RFP, if any is issued, nor does it eliminate an individual, firm, or organization from being considered to serve as the Monitor or a member of the Monitor’s team.
II. BACKGROUND
On December 4, 2014, the Department of Justice announced its findings resulting from a civil investigation it conducted into use of force by the Cleveland Division of Police (“CDP”). The investigation was conducted pursuant to the Violent Crime Control and Law Enforcement Act of 1994, 42 U.S.C. § 14141. The Department of Justice concluded that it had reasonable cause to believe that CDP engages in a pattern or practice of unreasonable use of force. The City does not agree with the Department’s findings concerning a pattern or practice of unreasonable use of force by the CDP. Nevertheless, the City and CDP cooperated in the investigation, and the Parties have agreed to work collaboratively in an effort to craft an Agreement that will ensure constitutional policing. The Parties affirmed their commitment to reaching an Agreement in a Statement of Principles signed on December 2, 2014 and to selecting an independent monitor to assist in assessing compliance with the terms of the Agreement being negotiated by the parties.
The Agreement will be submitted to the United States District Court in the Northern District of Ohio for approval and entry as an order. It is anticipated that the Court will issue an Order that will include steps to implement, monitor, and enforce such Agreement negotiated by the Parties.
The Findings Letter and Statement of Principles, and other related documents, can be found on the following webpage: http://www.justice.gov/crt/about/spl/findsettle.php.
III. MONITOR’S DUTIES AND RESPONSIBILITIES
The Agreement will provide for a Monitor to assist the Court, the Parties, and the Cleveland community in assessing and assisting the City’s compliance with the terms of the anticipated Agreement. The Agreement will specify the duties and responsibilities of the Monitor, who will be subject to the supervision and orders of the Court. For the purposes of this Request for Information, you should assume that the scope of the Agreement anticipated between the parties will focus on issues related to the subject areas described in the Unites States’ Findings Letter.
The Monitor will provide objective, cost-effective, and thorough assessments of whether the terms of the anticipated Agreement are being met, and whether implementation of the Agreement is resulting in constitutional policing by the CDP and increased community trust of CDP. The Monitor also will assist in compliance by offering technical assistance, issuing recommendations, and preparing public reports on the Agreement’s implementation. The Monitor will not replace or assume the role and duties of the City or CDP, including the Chief of Police, or any other City official. The Chief of the CDP will always retain full authority to run the Division of Police in accordance with the laws of Cleveland.
IV. qualifications
Experience in the following areas may be useful, although lack of experience in any particular area will not disqualify a candidate.
- law enforcement practices including use of force and force investigations, community policing, crisis intervention and de-escalation techniques, training, and search and seizure practices;
- experience evaluating, developing, or implementing processes for supervisors and managers to oversee accountability in a large organization;
- experience managing or overseeing law enforcement personnel;
- monitoring, auditing, investigating, or otherwise reviewing performance of organizations;
- evaluating organizational change and institutional reform, including applying qualitative and quantitative analyses to assess progress and performance;
- experience monitoring and ensuring compliance with settlement agreements, consent decrees, or court orders;
- working with government agencies, municipalities, collective bargaining units, elected officials, civilian oversight bodies, and community members interested in policing issues;
- engaging with diverse community stakeholders to promote civic participation, strategic partnerships, and community policing;
- mediation and dispute resolution;
- use of technology and information systems to support and enhance law enforcement;
- appearing in court as a judge, monitor, counsel, or expert witness, or providing other types of testimony;
- providing formal and informal feedback, technical assistance, training, and guidance to law enforcement agencies;
- experience reviewing policies, procedures, manuals, and other administrative orders
or directives, and training programs related to law enforcement practices; and
- experience with municipal budgetary and fiscal issues.
V. REQUESTED INFORMATION
The Parties request that interested individuals, firms, or organizations submit information to assist the Parties in identifying potential candidates to serve as Monitor or as subject-matter experts on the Monitor’s team. Interested individuals or firms may provide a resume and a letter of interest describing their current or recent experience relevant to the qualifications described above. Please describe any areas of expertise in which you may want to retain additional staff. If you know any specific individuals or entities, including subcontractors and consultants, who will assist the interested party in fulfilling the duties and responsibilities of the Monitor, please include a brief summary of each team member’s relevant background or experience and attach a resume. If the identities of the individuals or entities that would assist in performing the monitoring function are unknown at the present time, please state the areas of expertise that will be sought and the process that will be used to obtain the necessary services and assistance. If you have performed similar services as part of a team before, you can describe the nature and qualifications of the team members employed.
As the Parties negotiate toward an Agreement, the Parties will likely request supplemental information, including references, proposed methodologies, and budget estimates. The Parties will provide additional information on the scope of the anticipated Agreement at that time. Candidates considered for Monitor or as a subject-matter expert on the Monitor’s team will be required to disclose all actual and potential conflicts of interest.
VI. INFORMATION RESPONSE AS A PUBLIC RECORD
Under the laws of the State of Ohio, all parts of the information response, other than trade secret or proprietary information, may be considered a public record which, if properly requested, the City must make available to the requester for inspection and copying. Additionally, the Parties may choose to share all or some of the submissions with the public. Therefore, to protect trade secret or proprietary information, the Responder should clearly mark each portion of each page—but only that portion of each page—of its information response that contains that information. The City will notify the Responder if such information in its information response is requested, and will make every attempt to protect trade secret or proprietary information by citing to the applicable exemption in Ohio’s Public Records Laws. Blanket marking of the entire information response as “proprietary” or “trade secret” is not acceptable and will not protect the entire response unless each part of the entire response is in fact trade secret or proprietary information. The City is not obligated to protect information that is obviously not a trade secret, obviously not proprietary, and obviously public, even if labeled as such. Upon submission of an information response that contains clearly marked trade secret or proprietary information, the Responder is agreeing to defend and indemnify the City against any lawsuit or claim that the City improperly withheld a public record based upon the Responder marking it as a trade secret or proprietary information.
Letters of interest should be submitted as soon as possible in electronic format (preferably pdf) to the Parties as follows:
For the United States Department of Justice:
Carole S. Rendon Rashida J. Ogletree
First Assistant U.S. Attorney Trial Attorney
U.S. Attorney’s Office U.S. Department of Justice
Northern District of Ohio Civil Rights Division
801 West Superior Avenue Special Litigation Section
Suite 400 950 Pennsylvania Avenue, NW
Cleveland, Ohio 44113 Washington, D.C. 20530
[email protected] [email protected]
For the City of Cleveland:
Barbara A. Langhenry
Director of Law
City of Cleveland
Department of Law
601 Lakeside Avenue. Suite 106
Cleveland, Ohio 44114
Justice Department Files Brief to Address Health Care for Prisoners Suffering from Gender DysphoriaRead the Press Release
The Department of Justice filed a statement of interest today in the Middle District of Georgia in Diamond v. Owens, et al. The plaintiff in that case, a transgender prisoner, alleges that the Georgia Department of Corrections failed to provide adequate care for her gender dysphoria. The statement of interest discusses the unconstitutionality of “freeze-frame” policies, such as the policy allegedly used in the Georgia Department of Corrections. These policies unconstitutionally prohibit treatment beyond the type of care the prisoner received in the community prior to incarceration. Through this filing, without taking a position on the merits of the allegations, the United States stated that the Eighth Amendment mandates individualized assessment and care for gender dysphoria.
“By taking action in this case, the Justice Department is reminding departments of corrections that prison officials have the obligation to assess and treat gender dysphoria just as they would any other medical or mental health condition,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “Prisoners with gender dysphoria should not be forced to suffer needlessly during their incarceration simply because they were not receiving care, or could not prove they were receiving care, in the community. Freeze-frame policies can have serious consequences to the health and well-being of transgender prisoners, who are among the most vulnerable populations incarcerated in our nation’s prisons and jails.”
Based on the facts as alleged, Ashley Diamond was first diagnosed with gender dysphoria as a teenager, nearly twenty years ago. She began taking feminizing hormones, which helped her develop secondary sex characteristics and helped ease the significant physical and emotional discomfort she felt with her biological sex. Yet, when she entered the Georgia Department of Corrections, she was not identified or referred for continuation of this treatment. Instead, her hormone therapy was terminated and she was placed in a secure prison for men.
When Ms. Diamond requested treatment during her incarceration, she was evaluated by Department medical personnel who confirmed Diamond’s gender dysphoria and recommended reinstatement of hormone therapy and other clinically-indicated treatments. However, department officials continued to deny this treatment, telling Diamond that she was ineligible for treatment pursuant to the department’s policy. Because the department did not properly identify Diamond’s gender dysphoria at intake and refer her for treatment at that time, she was, and continues to be, denied necessary medical care.
The facts alleged in this case indicate that the Department of Corrections relied on its freeze-frame policy to deny Diamond the care recommended by the department’s own physicians, in violation of the Eighth Amendment. As stated by the Justice Department in its filing, “[t]wo things are clear from the record in this case: one, the generally accepted standards for treatment of gender dysphoria require treatment decisions be individualized; and two, Ms. Diamond did not receive individualized care.”
Diamond v. Owens, et al. was filed in February 2015.
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney’s Office announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Judge Ostby in Billings on April 1, 2015, and entering pleas of Not Guilty were:
- FRANKLYN DON HAMMONTREE, a 42-year-old resident of Billings, appeared on charges of conspiracy to distribute methamphetamine and distribution of methamphetamine. If convicted of the most serious charge contained in the indictment, HAMMONTREE faces life in prison, $5,000,000 in fines and 4 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference: 15-27
Appearing before U.S. Magistrate Judge Johnston in Great Falls on March 31, 2015, and entering pleas of Not Guilty were:
- COBRA JADE SPOTTED WOLF, a 35-year-old resident of Poplar, appeared on charges of burglary and assault resulting in serious bodily injury. If convicted the most serious charge contained in the indictment, SPOTTED WOLF faces 20 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation and Fort Peck Tribes Department of Law and Justice. PACER Case Reference: 15-19
Appearing before U.S. Magistrate Judge Ostby in Billings on March 27, 2015, and entering pleas of Not Guilty were:
- JUEL REBECA GRAHAM, a 29-year-old resident of Hardin, appeared on charges of conspiracy to distribute methamphetamine and distribution of methamphetamine. If convicted of the most serious charges contained in the indictment, GRAHAM faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by the Bureau of Indian Affairs. PACER Case Reference: 15-26
Appearing before U.S. Magistrate Judge Lynch in Missoula on March 25, 2015, and entering pleas of Not Guilty were:
- ARMANDO GOMEZ-HERNANDEZ, a 51-year-old resident of Mexico, appeared on charges of illegal reentry. If convicted of the charge contained in the indictment, GOMEZ-HERNANDEZ faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the United States Border Patrol. PACER Case Reference: 15-05
- RAFAEL RAMOS-ROMERO, a 28-year-old resident of Mexico, appeared on charges of illegal reentry. If convicted of the charge contained in the indictment, RAMOS-ROMERO faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by Immigration and Customs Enforcement. PACER Case Reference: 15-19
Appearing before U.S. Magistrate Judge Ostby in Billings on March 20, 2015, and entering pleas of Not Guilty were:
- MELVIN LEE WOODENTHIGH, JR., a 33-year-old resident of Lame Deer, appeared on charges of sexual abuse, sexual abuse of a minor, abusive sexual contact and abusive sexual contact of a minor. If convicted of the most serious charges contained in the indictment, WOODENTHIGH faces life in prison, $250,000 in fines and lifetime supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference: 15-20
Appearing before U.S. Magistrate Judge Ostby in Billings on March 19, 2015, and entering pleas of Not Guilty were:
- RENEE ANN ZINNECKER, a 50-year-old resident of Billings, appeared on charges of wire fraud. If convicted of the most serious charge contained in the indictment, ZINNECKER faces 20 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference: 15-09
Appearing before U.S. Magistrate Judge Ostby in Billings on March 17, 2015, and entering pleas of Not Guilty were:
- MICHAEL SERREL JOHNSON, a 45-year-old resident of Minot, North Dakota, appeared on charges of possession with intent to distribute methamphetamine. If convicted of the charge contained in the indictment, JOHNSON faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by the Drug Enforcement Administration and Montana Division of Criminal Investigations. PACER Case Reference: 15-13
Appearing before U.S. Magistrate Judge Lynch in Missoula on March 17, 2015, and entering pleas of Not Guilty were:
- BLAINE GARRETT REPOSA, a 30-year-old resident of Corvallis, Oregon, appeared on charges of distribution of child pornography. If convicted of the most serious charges contained in the indictment, REPOSA faces 20 years in prison, $250,000 in fines and lifetime supervised release. The case was investigated by the Internet Crimes Against Children Task Force, Bozeman Police Department and Gallatin County Sheriff’s Office. PACER Case Reference: 14-29
- ANTHONY DANE ROBERTY, a 54-year-old resident of Bozeman, appeared on charges of receipt of child pornography. If convicted of the charge contained in the indictment, ROBERTY faces 20 years in prison, $250,000 in fines and lifetime supervised release. The case was investigated by the Internet Crimes Against Children Task Force, the Federal Bureau of Investigation, Homeland Security Investigations, Bozeman Police Department and Montana Division of Criminal Investigations. PACER Case Reference: 15-16
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Indianapolis residents convicted of trafficking firearms to HondurasRead the Press Release
Three convicted of illegally purchasing and exporting handguns
PRESS RELEASE
Indianapolis – Josh J. Minkler, the United States Attorney, announced today the recent convictions of three Indianapolis residents in two separate schemes to unlawfully purchase handguns in Indiana and export those weapons to Honduras, Central America.
On Wednesday, U.S. District Judge William T. Lawrence sentenced Wilmer A. Mejia-Fuentes (“Mejia”) to 36 months imprisonment and a $1,500 fine for his role in purchasing and exporting 21 handguns to Honduras. Judge Lawrence had previously sentenced Mejia’s ex-wife, Starlene Mejia, to two years of probation for illegally straw-purchasing three of the 21 handguns her ex-husband exported to Honduras.
In a separate but nearly identical case, on July 31, 2014, U.S. District Judge Tanya Walton Pratt sentenced Alex Martinez to 39 months imprisonment and a $5,000 fine for unlawfully purchasing and then exporting 28 handguns from Indiana to Honduras.
This case was jointly investigated by the U.S. Department of Homeland Security, Homeland Security Investigations, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Policia National Civil de Honduras, after law enforcement officials in Puerto Cortez, Honduras, located three identical, stainless steel, Beretta 9 millimeter handguns, wrapped in foam and duct tape, concealed inside a box containing clothing and household items that had been shipped from the United States. All three weapons were traced back to a purchase made by Alex Martinez at an Indianapolis area gun store. During the course of a lengthy subsequent investigation, ATF and HSI agents determined that between August of 2006 and November of 2010, Martinez and the Mejias purchased a total of forty nine (49) handguns from approximately nine (9) different federally licensed gun dealers in the Indianapolis metropolitan area. Of those forty nine 49 firearms, eighteen (18) were subsequently located in Honduras, where they were registered to various individuals in the Honduran national firearms registry. Thirty-one of the weapons remain unaccounted for.
When contacted by federal agents in Indianapolis, both Alex Martinez and Wilmer Mejia admitted they had exported the weapons they purchased to San Pedro Sula, Honduras, for the purpose of reselling them. Starlene Mejia admitted she had purchased firearms for her ex-husband which he subsequently exported to Honduras. Wilmer Mejia admitted that he was able to sell the handguns in Honduras for nearly $800 per weapon more than he paid for them.
These crimes were particularly egregious given the destination of the illegally exported firearms. Honduras is one of the poorest countries in Latin America and the city of San Pedro Sula, where many of the guns ended up, has been particularly hard hit by violence.
According to Assistant United States Attorney Matthew Rinka, who prosecuted the case for the government, both Alex Martinez and Wilmer Mejia were ordered to serve two years of supervised release following their release from incarceration. Wilmer Mejia, who is a lawful permanent resident of the United States, also faces deportation proceedings.
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Indianapolis man sentenced for witness tamperingRead the Press Release
PRESS RELEASE
INDIANAPOLIS – Josh J. Minkler, United States Attorney, announced today that Logan Mediate, 21, a resident of Indianapolis, Indiana, was sentenced to prison by U.S. District Judge Tanya Walton Pratt to 156 months (13 years) imprisonment following his guilty plea to tampering with a federal witness and possession of a sawed-off shotgun in furtherance of a crime of violence. Mediate was also sentenced to five years of supervised release upon his release from incarceration.
“Anyone who threatens or intimidates a witness will feel the full wrath of federal prosecution,” said Minkler. “Violent crime cannot be tolerated in our neighborhoods and reducing it, will remain a top priority of this office.”
On February 26, 2014, the FBI arrested Mediate’s mother, Jennifer Gaddy, for the distribution of methamphetamine. On March 17, 2014, Mediate confronted the confidential informant who had purchased the methamphetamine from Gaddy in the Mars Hill area of Indianapolis. Mediate told the informant that he knew the informant’s cooperation had led to Gaddy’s arrest and threatened to kill the informant. Mediate produced a sawed-off shotgun from his vehicle and pointed it at the informant. Mediate then pointed the sawed-off shotgun into the air and discharged a round from the shotgun. Mediate then repeated his threat to kill the informant. On March 24, 2014, the FBI located the sawed-off shotgun at a residence in Mars Hill. The FBI also located photographs of Mediate posing with the sawed-off shotgun that Mediate had posted on his Facebook page.
On June 6, 2012, a Marion County jury found Mediate not guilty on charges stemming from a double homicide in Indianapolis.
The case was investigated by the Federal Bureau of Investigation’s Safe Streets Task Force and prosecuted by Bradley A. Blackington, Senior Litigation Counsel for the U.S. Attorney’s Office.
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Gardiner Man Sentenced to over Four Years for Pharmacy RobberyRead the Press Release
Contact: F. Todd Lowell
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Jesse Mansir, 31, of Gardiner, Maine, was sentenced today in U.S. District Court to 51 months in prison and three years of supervised release for pharmacy robbery. He pleaded guilty to the charge on October 28, 2014.
Court records reveal that on August 21, 2014, Mansir entered the Rite Aid Pharmacy in Gardiner, approached the pharmacy counter and handed a threatening note to a pharmacy technician. He told the technician that he had a gun and he concealed one of his hands. The pharmacist gave Mansir two bottles of Oxycodone and he fled.
Law enforcement officers located Mansir with the aid of a police dog and recovered one of the stolen Oxycodone bottles. A Gardiner police officer identified Mansir as the robber after reviewing surveillance video from the pharmacy. Two of the pharmacy employees also identified him as the robber from a photo array.
The investigation was conducted by the Gardiner Police Department, the Maine State Police, the Kennebec County Sheriff’s Office, and the Federal Bureau of Investigation.
Former Senior Living Center Employee Charged with ID Theft and $335,000 FraudRead the Press Release
BIRMINGHAM -- The U.S. Attorney's Office today charged a former Hoover senior living center employee with using the identity of a resident with dementia, without authorization, to steal more than $300,000 from the resident's bank and credit accounts, announced U.S. Attorney Joyce White Vance and U.S. Secret Service Special Agent in Charge Craig Caldwell.
Federal prosecutors charged SHOSTOCKA KEYA WARD, 43, of Vestavia Hills, with bank fraud and aggravated identity theft in an information filed in U.S. District Court. Prosecutors also filed a plea agreement with Ward, in which she acknowledges the charges and agrees that she will plead guilty to one count of bank fraud and one count of aggravated identity theft. She also agrees to pay restitution of $335,214 and to forfeit that same amount to the government as proceeds of illegal activity.
According to Ward's plea agreement, her fraud included writing more than $70,000 in unauthorized checks to herself and using one of the victim's credit cards for expenses including financing her own wedding, applying money to someone's prison account, making car and private school tuition payments, and taking trips to Las Vegas, Chicago, Tunica, Miss., and Gatlinburg, Tenn.
According to the government's charging document and Ward's plea agreement, she worked at Galleria Woods as a resident assistant or a transportation coordinator from about August 2010 to January 2014. In 2011, Ward became acquainted with the victim, a Galleria Woods resident who was 75 years old, had no immediate family, few visitors and an out-of-town family friend who served as her power of attorney, but was not actively involved in her daily care or the management of her daily finances.
Ward began assisting the victim with transportation, errands, bill payments and other financial issues, and gained access to the victim’s purse, mail, financial statements, checkbook, and debit and credit cards, according to the information. Ward maintained her relationship with the victim during her employment at Galleria Woods as the victim’s mental and physical condition declined and she became incapable of managing her financial affairs, according to the charges against Ward.
Between Oct. 11, 2011, and Feb. 13, 2014, Ward carried out a scheme to defraud eCO Credit Union of money in the victim’s account through various means and without the victim’s authorization, according to the information and plea agreement. Ward used the victim’s checks for her own benefit, often forging her signature, and obtained a check/ATM card on the eCO account, according to the charges. Ward used the checks and the debit card to obtain cash and to pay for goods and services worth more than $120,000, according to the information. She also used the victim’s Chase Bank, State Farm Bank and Macy's Department Store credit cards for hundreds of thousands of dollars in personal expenses and purchases, and paid portions of those bills with money from the victim's credit union account to continue the scheme.
The maximum prison penalty for bank fraud is 30 years. The penalty for aggravated identity theft is a mandatory two years in prison, which must be served after completion of any other prison sentence imposed for the crime.
U.S. Secret Service investigated the case, which Assistant U.S. Attorney Erica Williamson Barnes is prosecuting
Former Florence Resident Sentenced for Theft of Government Funds and Identity TheftRead the Press Release
Contact Person: Bill Day (803) 929-3000
Florence, South Carolina ---- United States Attorney Bill Nettles stated today that Don Carlos Gibson, Jr., age 48, of Church Hill, Tennessee and formally of Florence, South Carolina, was sentenced in federal court in Florence for Theft of Government Funds, a violation of 18 U.S.C. § 641, and Identity Theft, a violation of 18 U.S.C § 1028A(a)(1). United States District Judge R. Bryan Harwell of Florence sentenced Gibson to seven years imprisonment to be followed by three years of Supervised Release and also ordered Gibson to pay $811,592.07 in restitution.Evidence presented at the change of plea hearing and sentencing established that Gibson collected disability payments from the Department of Veterans Affairs (VA) and the Social Security Administration (SSA) from 1997 to 2013 by falsely claiming he was unable to work. During the time Gibson claimed to be disabled, he attended golfing school in Myrtle Beach and was the general manager of a country club in North Carolina, a car salesman in North and South Carolina, and the pastor of a church in South Carolina and Oklahoma. Gibson's fraud caused losses of $352,576 to the VA and of $407,184 to the SSA. Gibson also caused losses of $51,832 to an individual he defrauded while working as a pastor in Oklahoma. Gibson also used another person’s identity to purchase automobiles and boats and to obtain loans in South Carolina, Tennessee, Oklahoma and Florida.
The case was investigated by agents of the Office of Inspector General (OIG) Department of Veterans Affairs and OIG Social Security Administration. Assistant United States Attorney William E. Day, II of the Columbia office is prosecuting the case.
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Federal Jury in Del Rio Convicts Texas Syndicate MemberRead the Press Release
In Del Rio yesterday, a federal jury returned guilty verdicts against a Texas Syndicate member for various violations of federal racketeering offenses committed in Uvalde, San Antonio and the surrounding areas announced Acting United States Attorney Richard L. Durbin, Jr., and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division. The Defendant faces life in prison for each racketeering offense he has been found guilty of committing.
Jurors convicted 39-year-old George “Curious” Sanchez of Uvalde, Texas, of conspiracy to violate the Racketeering Influenced Corrupt Organization (RICO) statute. Evidence presented during the trial revealed that Sanchez is a member of the Texas Syndicate and along with fourteen other members and associates, conspired since 2002 to commit 3 murders, and conspired to distribute controlled substances. He also was found guilty of conspiracy to commit murder in aid of racketeering and murder in aid of racketeering for the murder of Rogelio Mata on October 13, 2002 in Uvalde, Texas. Mr. Mata was murdered for failing to follow the rules of the Texas Syndicate.
According to testimony at trial, the Texas Syndicate is a violent prison gang that has spread its influence into Texas cities and towns. Members of the Texas Syndicate are bound by a set of rules that ensure loyalty and participation in the enterprise’s criminal activities and are subject to strict and harsh discipline, including death, for violating the rules. The rules require that a member continue his participation in the organization even after his release from prison. Membership is for life and the gang comes first above all else, to include family.
On July 1, 2013, in a jury trial in Del Rio, Texas, Sanchez’s co-defendants Raul “Fatboy” Rodriquez of Uvalde, Texas, Mike “Big Mike” Cassiano of Uvalde, Texas and Cristobal “Little Cris” Velasquez of Uvalde, Texas, were convicted of conspiracy to violate the RICO statute. Rodriquez also was convicted of the substantive charge of violent crime in aid of racketeering for the murder of Rogelio Mata in Uvalde, Texas on October 13, 2002. Velasquez was found guilty of conspiracy to commit violent crime in aid of racketeering and the substantive charge of violent crime in aid of racketeering for the murder of Jose Guadalupe de la Garza on December 25, 2005 in Uvalde, Texas. Cassiano also was found guilty of two counts of conspiracy to commit violent crime in aid of racketeering for the murder of Jose Guadalupe de la Garza on December 25, 2005 in Uvalde, Texas, and the November 9, 2009 murder of Jesse James Polanco in Uvalde, Texas. All three are currently awaiting sentencing.
In addition, the following 10 co-defendants are awaiting sentencing after pleading guilty prior to trial for violating the RICO statute: Sotero Rodriguez Martinez (a.k.a. “June”), of Uvalde, Texas; Chuco Mario Martinez (a.k.a. “Mariachi”), of Uvalde, Texas; Jose Andres Torres (a.k.a. “Yogi”), of Uvalde, Texas; Larry Munoz, Jr. (a.k.a. “Little Larry”), of Uvalde, Texas; Brian Esparza (a.k.a. “Tata”), of Uvalde, Texas; Charles Esparza (a.k.a. “Horse”), of Uvalde, Texas; Ervey Sanchez (a.k.a. “Mad Max”), of Uvalde, Texas, Mark Anthony Vela, of Hondo, Texas; Mario Alberto Gonzales (a.k.a. “The Enforcer”), of Hondo, Texas and, Charles Olan Quintanilla, of Hondo, Texas.
The case resulted from a joint investigation by the Federal Bureau of Investigation with the Texas Department of Public Safety--Criminal Investigations Division, San Antonio Police Department, Medina County Sheriff’s Office and the Bandera County Sheriff’s Office. Also assisting in the investigation was the 38th Judicial District Adult Probation Gang Unit, Texas Department of Criminal Justice and the U.S. Bureau of Prisons. The U.S. Marshals Service, U.S. Immigration and Customs Enforcement-Customs and Border Protection and the Uvalde County Sheriff’s Department assisted in making the arrests. The case against Defendant Sanchez was prosecuted by Assistant United States Attorneys Patrick Burke, Ralph Paradiso and Matthew Watters.
Federal Court Sentences Davenport Man for Felon in Possession of a FirearmRead the Press Release
DAVENPORT, IA - On April 3, 2015, Ricardo Torres, age 31, of Davenport, Iowa, was sentenced by United States District Court Chief Judge John A. Jarvey to 30 months in prison, announced United States Attorney Nicholas A. Klinefeldt. Torres was also ordered to serve three years of supervised release following the imprisonment, and to pay $100 towards the Crime Victims Fund.
On March 5, 2014, after having been convicted of a felony, Torres possessed four firearms: a Jiminez Arms, J. A. NINE 9mm handgun; a HWM Windicator .38/.357 caliber revolver; a American Tactical GSG-522, .22 caliber rifle; and a Mossberg, Model 500A 12 gauge shotgun. Torres pleaded guilty on October 29, 2014, to the charge of being a felon in possession of a firearm.
This case was investigated by the Davenport, Iowa, Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Father and Son Plead Guilty in Massive Marijuana Grow Field CaseRead the Press Release
BROWNSVILLE, Texas – Miguel Echevarria-Zuniga, 52, and Miguel Echevarria-Guizar, 22, have entered guilty pleas to manufacturing marijuana, announced U.S. Attorney Kenneth Magidson along with Deputy Special Agent in Charge Mark Dawson of Homeland Security Investigations (HSI).
The charges stem from an August 2014 investigation by HSI which revealed that part of a 40-acre tract of land in a rural area of Willacy County was being used to grow marijuana. Agents discovered more than 9,000 marijuana plants growing in the field.
Agents arrested the Echevarrias, both Mexican citizens, as they attempted to abscond from the area. Fingerprint analysis linked both defendants to items found in the marijuana field. Agents also searched a storage shed which was rented by Echevarria-Zuniga and found sales receipts for items found in the marijuana field.
“Regardless of their role in a drug trafficking organization, this type of criminal activity will not be tolerated,” said Dawson. “HSI will continue to utilize its broad authorities to dismantle criminal organizations who blatantly ignore the laws of this nation.
U.S. District Andrew S. Hanen accepted the pleas today and has set sentencing for July 6, 2015. At that time, they each face a mandatory minimum of 10 years and up to life in federal prison as well as a $10 million fine. Echevarria-Zuniga also pleaded guilty to being an alien found in the United States after having been deported. He faces a maximum of 20 years imprisonment as well as a $250,000 fine for that conviction.
This case was investigated by HSI and prosecuted by Assistant U.S. Attorneys Israel Cano III and David A. Coronado.
El Paso Businessman Sentenced to Federal Prison for Money LaunderingRead the Press Release
In El Paso this week, 54-year-old Eduardo A. Herrera, owner of Best for Less Collision Center in El Paso, was sentenced to ten years in federal prison for his part in a money laundering scheme announced Acting United States Attorney Richard L. Durbin, Jr., and Homeland Security Investigations (HSI) Special Agent in Charge Waldemar Rodriguez in El Paso.
In addition to the prison term, United States District Judge David Briones ordered that Herrera forfeit his business property valued at $411,000.00, and cash seized from four business bank accounts totaling $15,451.05.
Herrera’s sentence also included a $1,000,000 money judgment.
On January 14, 2015, Herrera pleaded guilty to one count of money laundering. According to court documents, an HSI El Paso investigation determined that Herrera used Best for Less Collision Center for transnational drug smuggling and money laundering. Proceeds of cocaine and marijuana smuggled from Mexico and transported to end users in the Jacksonville, Florida area, were sent to El Paso through numerous funnel accounts held in third parties’ names. Best for Less Collision Center withdrew the proceeds and covered deposits into the business' bank accounts with false invoices. More than $2,000,000 has been identified as being funneled through third party accounts.
This case was investigated by special agents with Homeland Security Investigations and the Drug Enforcement Administration along with the El Paso Police Department as part of the El Paso Southwest Border FOCUS Financial Task Force. Assistant United States Attorney Joseph Blackwell prosecuted this case on behalf of the Government
Distributors of Synthetic Cannabinoids Plead Guilty to Federal ChargesRead the Press Release
CONCORD, NEW HAMPSHIRE – Two men who were responsible for distributing large quantities of unlawful synthetic cannabinoid products have entered guilty pleas in federal court, announced United States Attorney John P. Kacavas.
On March 31, 2015, Kyle Hurley (32) pleaded guilty to participation in a conspiracy to distribute, and possess with intent to distribute, controlled substances. He is scheduled to be sentenced on July 14, 2015. He faces a maximum of 20 years in prison.
On February 12, 2015, Robert Costello (71) pleaded guilty to conspiracy to travel in interstate commerce with the intent to commit a drug trafficking crime and to traveling in interstate commerce with the intent to commit a drug trafficking crime. He is scheduled to be sentenced on May 27, 2015. He faces up to five years in prison on each charge.
Hurley and Costello were arrested on March 28, 2014, after they arranged to deliver more than one ton of synthetic cannabinoid products to undercover law enforcement officers. The synthetic cannabinoid products contained AB-FUBINACA, an illegal controlled substance. Hurley and Costello manufactured and distributed synthetic cannabinoids that were sold in packages bearing a variety of brand names, including “Scooby Snax,” “Bizarro,” “Toxic Blue Magic,” and “Caution Platinum.” These products, which were then sold in convenience stores and at other locations, contained chemicals that are unlawful controlled substances.
Undercover law enforcement officers first began purchasing the unlawful products at convenience stores in Hooksett and Londonderry. Thereafter, they were introduced to Costello, who had been providing the products to the convenience stores. The undercover officers then arranged to acquire quantities of synthetic cannabinoids directly from Costello. When the undercover officers expressed an interest in purchasing larger quantities, Costello introduced them to his source of supply, Hurley, who agreed to supply the undercover officers with large quantities of synthetic cannabinoids. After arranging a purchase of approximately 15 kilograms of synthetic cannabinoids from Hurley and Costello on March 18, 2014, the undercover officers then arranged the one-ton transaction, which led to the arrest of Hurley and Costello on March 28, 2014.
Following the arrests, law enforcement officers executed a search warrant at Costello’s residence in Lawrence, Massachusetts. A shed at the residence was being used to package synthetic cannabinoids. Among the items seized were approximately 46 kilograms of packaged synthetic cannabinoids, as well as approximately 24 kilograms of bulk synthetic cannabinoids, empty packages, shipping documents, scales, heat sealers, and flavorings.
A search warrant was executed at a garage on a property in Seabrook, New Hampshire that belonged to a relative of Hurley. Among the items seized were 16 trash bags each containing 15-kilograms of synthetic cannabinoid products, two trash bags containing approximately 100 packages of synthetic cannabinoids, 28 boxes containing empty packages, scales, empty acetone containers, and shipping materials. In total approximately 225 kilograms of bulk synthetic cannabinoids were seized.
A search warrant was also executed at a location in Epping, New Hampshire, where the synthetic cannabinoids were being manufactured. Among the items located were a cement mixer that was used to manufacture the products, approximately 48 empty 5-gallon drums of acetone, empty chemical containers with AB-FUBINACA residue, three garbage bags containing approximately six kilograms of bulk synthetic cannabinoids, thousands of empty synthetic cannabinoid packages, and approximately 27 kilograms of packaged synthetic cannabinoids.
The investigation is ongoing.
The Drug Enforcement Administration’s Tactical Diversion Squad led the investigation in collaboration with the U.S. Postal Inspection Service and Homeland Security Investigations. The investigators also received the invaluable assistance of DEA-NH/HIDTA and DEA’s Air Wing, the New Hampshire and Massachusetts State Police, the U.S. Marshal Service, Portsmouth Police Department, Somersworth Police Department, Kingston, Police Department, the Dover Police Department, and the York and Kittery, Maine Police Departments. It is being prosecuted by Assistant United States Attorney John J. Farley.
Des Moines Woman Convicted on Numerous Counts of Defrauding Federal and State Welfare ProgramsRead the Press Release
DES MOINES, IA – On April 2, 2015, Des Moines resident Julia Nguyen, age 48, also known as Loan Nguyen, was convicted on 22 federal felony counts by a jury in the Southern District of Iowa, announced United States Attorney Nicholas A. Klinefeldt.
Nguyen was convicted of attempted immigration fraud, theft of federal government funds, social security fraud, false use of a social security number belonging to another person, aggravated identity theft, making material false statements to the U.S. Department of Housing and Urban Development (HUD), committing health care fraud in relation to the Iowa Consumer Directed Attendant Care (CDAC) program, and mail fraud in connection with the Iowa food assistance program.
"The defendant defrauded the Supplemental Security Income (SSI) program, the federal subsidized housing program, the state rental rebate, food assistance, and consumer directed attendant care programs, and tried to deceive federal immigration officials," explained U.S. Attorney Nick Klinefeldt. "The integrity of these programs is bolstered by the success of federal and state investigators to put an end to Ms. Nguyen’s pervasive effort to illegally reap welfare benefits from them."
The two immigration fraud charges relate to events in 2007. Nguyen tricked a local doctor into completing false immigration documentation for two Vietnamese nationals who were seeking to become U.S. citizens, but had had difficulty passing the language and civics portion of the naturalization process. Although federal officials rejected the paperwork after it was submitted, Nguyen nevertheless tried to convince federal authorities that the applicants were medically unable to pass the exams, and should be granted exemptions.
The theft of government funds and social security fraud convictions stem from Nguyen’s abuse of the SSI program, which provides financial assistance to handicapped and elderly people. Over several years, Nguyen fraudulently obtained over $59,000 of SSI of numerous persons who had left the country and were no longer eligible to receive program benefits. This undisclosed income made her ineligible for the $33,600 of SSI she received from 2010 through 2013.
Nguyen was also convicted of using the name and social security number of a man who years earlier had returned to Vietnam to fraudulently obtain funds from the State of Iowa. Nguyen submitted claims to the state rental reimbursement program asserting he was renting an apartment in Des Moines, and received over $3,600.
The jury also convicted Nguyen of making false statements to HUD in connection with receiving subsidized housing by concealing from the government her true income and assets.
The health care fraud conviction related to a Medicaid-based program designed to keep elderly or physically disadvantaged people out of nursing homes, called consumer directed attendant care. After Nguyen’s doctor certified Nguyen was ineligible for the program, Nguyen altered the doctor’s form to make it appear she needed such care, and submitted it to the State. Nguyen’s application was approved, and one of Nguyen’s daughters was paid by the State to provide such unnecessary care.
The mail fraud conviction covered Nguyen’s abuse of the food assistance program, which is jointly funded by the U.S. Department of Agriculture and the State of Iowa. After an elderly food assistance recipient left Iowa to return to his home country of Vietnam, Nguyen had his food assistance electronic benefits (EBT) card sent to Nguyen’s post office box, and used it for Nguyen’s own benefit for several years. Nguyen had replacement EBT cards and various notices sent by the State in the original recipient’s name to Nguyen’s post office box. Trial evidence showed Nguyen using the original recipient’s EBT card to conduct a $199 transaction at a local Wal-Mart. The program was defrauded of over $10,000.
The sentencing hearing has been scheduled for July 7, 2015.
The case was investigated by the Social Security Administration-Office of Inspector General; Homeland Security Investigations; U.S. Citizenship and Immigration Services; Iowa Department of Inspections and Appeals; the U.S. Department of Housing and Urban Development-Office of Inspector General, and U.S. Postal Inspection Service. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Any persons aware of any similar fraud can report it to the Homeland Security Investigations hotline, 1-866-347-2423.
Conroe Family Guilty of Disability FraudRead the Press Release
HOUSTON - Ali Irsan, 58, has been convicted of conspiracy to defraud the United States, announced U.S. Attorney Kenneth Magidson. Irsan’s wife - Shmou Ali Alrawabdeh, 38 - and daughter - Nadia Irsan, 31 - have also been convicted by previously entering guilty pleas to making false statements in association with the fraud scheme.
Ali Irsan is a naturalized U.S. Citizen from Jordan and a resident of Conroe. He and members of his family received Supplemental Security Income (SSI), which is needs-based benefit provided by the Social Security Administration (SSA). SSI pays monthly benefits to the disabled, who DO NOT have resources. An individual with resources, excluding a home and a car, is ineligible for SSI.
On or about Sept. 4, 2002, Ali Irsan applied for SSI benefits claiming he had been disabled and unable to work since 1990. However, Irsan failed to report that he maintained a bank account in Jordan with a balance that fluctuated from approximately $4,000 to $16,000. Also, in January 2010, Ali Irsan received a settlement check for $75,000, which he failed to report to the SSA. Shmou and Nadia Irsan falsified documents in order to aid the fraud scheme involving the disability benefits.
The three family members will remain in custody pending their sentencing hearing, which is set for June 2015. At that time each face up to five years in federal prison and a possible $250,000 maximum fine.
The investigation leading to the charges was led by SSA - Office of Inspector General with the assistance of FBI, Houston Police Department and sheriff’s offices in Harris and Montgomery Counties among others. Assistant U.S. Attorney Jim McAlister is prosecuting the case.
Cleveland man sentenced to nearly 13 years in prison for identity theft and tax fraudRead the Press Release
A Cleveland man was sentenced to nearly 13 years in prison for his role in a conspiracy to use false identities, including those of people incarcerated, to file nearly $2 million worth of false tax claims, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Kathy Enstrom, Special Agent in Charge of IRS Criminal Investigation, Cincinnati Field Office.
“This defendant stole identities and ripped off taxpayers,” Dettelbach said.
“This 12-plus year sentence demonstrates our unwavering commitment to protecting the interests of law-abiding taxpayers,” Enstrom said. “We will continue to partner with the U.S. Attorney’s Office and investigate the criminals who engage in such brazen and fraudulent conduct, ensuring that the only citizens who receive tax refunds are those who are entitled to them.”
Kenneth A. White, 48, was sentenced to 155 months in federal prison and ordered to pay $342,365 in restitution after previously pleading guilty to multiple criminal counts.
White recruited people to use as claimants on some false tax returns, often with the promise of substantial refunds. White also obtained names, Social Security numbers and other personal identifiers of other people to use as claimants, including people in prison or jail. In some cases, this was done without the knowledge or consent of these other people, according to court documents.
Gwendolyn N. White, at the direction of Kenneth White and for a fee, prepared and electronically filed 10 false income tax returns for the year 2008 in the name of the claimants. The total amount claimed in the returns was approximately $1,995,687, according court documents.
Gwendolyn N. White, 32, of Cleveland, was previously sentenced to nearly four years in prison for her role in the conspiracy.
This case is being prosecuted by Assistant U.S. Attorney Vasile Katsaros following an investigation by the Internal Revenue Service – Criminal Investigations.
Chicago Prepaid Cellphone Business Owner Pleads Guilty to Filing False Federal Income Tax ReturnsRead the Press Release
CHICAGO — A business owner of Chicago based prepaid phone stores pleaded guilty yesterday to federal income tax fraud, admitting that he filed four false tax returns, resulting in a tax loss to the United States of more than $174,093, beginning in 2009. The defendant, Ken Leon, 47, of Westmont, pleaded guilty to one count of filing a false individual federal income tax return in 2012 at his arraignment in U.S. District Court after he was charged in a single-count information filed late last month. U.S. District Court Judge Sara L. Ellis set sentencing for June 25, 2015.
Leon was the owner of Ezbuyphones, a prepaid phone business with three Chicago stores, which sold cellphones and accessories and prepaid cell phone minutes and provided electronic bill-paying services. Beginning no later than 2009 and continuing through 2012, the defendant received from his business significant income that he failed to report to the Internal Revenue Service. He received income from his business in two ways; he periodically made cash and check deposits from his business into his personal bank accounts and he paid personal expenses from his corporate bank account, such as mortgage payments for his residence and credit card expenditures on travel, clothing, groceries, and restaurants.
In pleading guilty, Leon admitted that he caused a federal tax loss of $174,093 by filing false tax returns for 2009 - 2012. Leon did not provide accurate information to an accountant who prepared his returns. Specifically, he reported that he had earned only slightly more than $110,000 for the year 2012, when, in fact, his wages and compensation totaled approximately $347,546.
Leon faces a maximum sentence of three years in prison and a $250,000 fine, and his plea agreement contemplates an advisory United States Sentencing Guidelines range of 12 to 18 months in prison.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, Robert J. Holley, Special Agent in Charge of the Chicago Division of the Federal Bureau of Investigation, and Stephen Boyd, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.
Federal tax law requires that U.S. taxpayers pay taxes on all income earned worldwide and to report certain foreign financial accounts.
The government is being represented by Assistant U.S. Attorney William Ridgway.
Plea Agreement
California Technology Company Enters into Non-Prosecution Agreement with U.S.Read the Press Release
HOUSTON – The U.S. Attorney’s Office for the Southern District of Texas (USAO-SDTX) has entered into a Non-Prosecution Agreement (NPA) with Curvature LLC, a California-based technology company, announced U.S. Attorney Kenneth Magidson. As part of the NPA, Curvature has agreed to pay a fine of $2.2 million, enter into a statement of facts, appoint a compliance officer to oversee its procurement activities and continue to enhance its compliance and ethics program.
According to the statement of facts, from approximately 2007 through 2010, Curvature resold new and used computer equipment under the name Network Hardware Resale Inc. (NHR). NHR advertised itself as the largest stocking provider of new and used surplus equipment made by Cisco Systems Inc. (Cisco), another technology company that produced and sold computer equipment including switches and routers.
Cisco sold its products directly to its customers and to its authorized resellers, also known as “Channel Partners,” and in certain limited circumstances, sold products at large discounts pursuant to an agreement known as a Direct Service Agreement (DSA). Under a DSA, the customer or partner was required to provide Cisco with information about the intended use of the products.
As early as 2007, NHR and certain NHR employees knew that Cisco did not condone, and in fact investigated, the sales of Cisco products at DSA prices to users who planned to resell the product and not use it internally. NHR did not, at any time, make any misrepresentations directly to Cisco. However, NHR employees were aware that at least one NHR vendor was submitting purchase orders to Cisco that did not accurately identify the ultimate purchaser of the products and whether the products would be used internally.
In April through December 2010, NHR purchased Cisco products from another company (identified as Company B), which was misrepresenting to Cisco how the products would be used. As a result of these misrepresentations, NHR and Company B obtained substantial discounts on the Cisco products. Company B obtained the products in excess of 86% off list price and then resold many of the products to NHR at approximately 71% off the list price.
Curvature also agreed that in August 2010, after Cisco began investigating the sale of certain products to Company B, Company B offered to provide a sampling of the products back to Cisco to show that they were not being resold. At Company B’s request, NHR shipped some of the products in NHR’s inventory back to Company B so that Company B could provide the products to Cisco in an attempt to demonstrate to Cisco that the products had not been resold.
Under the terms of the NPA, Curvature admitted responsibility for its conduct and agreed to institute remedial measures to prevent any future instances of such conduct, continue to cooperate in the investigation and enhance its compliance and internal controls. In exchange, the USAO-SDTX has agreed that, except for federal criminal tax violations, it will not criminally prosecute Curvature for any of the conduct described in the statement of facts.
The case was investigated by the U.S. Secret Service and the FBI. Assistant U.S. Attorneys Jason Varnado and John Pearson handled the case.
California Man Sentenced in Drug Trafficking and Money Laundering SchemeRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that a California resident was sentenced in federal court in Anchorage for one count of money laundering.
Ines Gutierrez Gaspar, 52, from Little Rock, California, was sentenced by Senior United States District Court Judge H. Russel Holland, to 21 months in prison for his role in conducting financial transactions in California involving funds which he knew to be the proceeds of drug trafficking in Alaska.
According to Assistant U.S. Attorneys Joseph Bottini and Stephan Collins, Gaspar was part of a drug trafficking and money laundering organization which operated between California and Alaska from 2009 until 2011. Gaspar was originally charged in 2011, along with 14 other co-defendants, in a multi-count indictment charging the defendants with conspiracy, drug trafficking, and money laundering. Eleven of Gaspar’s original codefendants were previously convicted of drug trafficking and money laundering charges, with some of those defendants receiving sentences of 10 to 11 years. Many of the earlier sentenced defendants were Mexican nationals, and several have been deported to Mexico following completion of their prison sentences. Gaspar himself is a Mexican citizen and a lawful permanent resident alien in the United States. He likewise faces deportation to Mexico following service of his prison sentence.
Gaspar remained a fugitive until last October when he was arrested in Fresno, California. He was transported to Alaska last November, and in January of this year Gaspar plead guilty to one count of money laundering for actions in withdrawing funds from a bank account in California which he knew to be the proceeds of drug trafficking in Alaska.
Ms. Loeffler commends the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigations Division, Homeland Security Investigations, and the Anchorage Police Department for the investigation of this case.