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Friday 13 February 2015
Johnson County Man Sentenced to 27 Months in Federal Prison on Obscenity ConvictionRead the Press Release
LUBBOCK, Texas — Christopher Wayne Howard, 26, of Joshua, Texas, was sentenced today by U.S. District Judge Sam R. Cummings to 27 months in federal prison, following his guilty plea in October 2014 to one count of transferring obscene material to a minor, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Judge Cummings ordered Howard to surrender to the Federal Bureau of Prisons to commence service of his sentence on March 20, 2015.
According to documents filed in the case, in March 2014, Howard engaged in a series of online and telephone texting communications with “Jane Doe,” a person he knew to be a 13-year-old-female. During the communications, Howard often turned the subject to sexually explicit matters. On March 13, 2014, Howard chatted with “Jane Doe” and used an online application to send her an obscene, sexually explicit photograph of an adult male.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the San Angelo Police Department’s Special Operations Division investigated. Assistant U.S. Attorney Steven M. Sucsy prosecuted.
Jefferson County Man Sentenced to Thirteen Years on Methamphetamine ChargesRead the Press Release
Follow @SDILNewsA Jefferson County man was sentenced today to federal prison on methamphetamine charges, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Monty D. Hamson, 49, of Mt. Vernon, Illinois, was sentenced to 156 months in federal prison, to be followed by three years’ supervised release, and fined $500. Hamson had previously pleaded guilty to two counts in a federal indictment. Count 1 charged that from May 2010, until on or about February 19, 2014, in Jefferson County, Hamson conspired with others known and unknown to the Grand Jury to manufacture methamphetamine. Count 2 charged that on February 19, 2014, in Jefferson County, Hamson possessed equipment, chemicals, products, or materials which may be used to manufacture methamphetamine, knowing, intending, and having reasonable cause to believe, that those items would be used to manufacture methamphetamine.
The investigation in this case was conducted by the Joint Narcotics Unit of the Mt. Vernon Police Department and the Jefferson County Sheriff’s Department.
The case is being handled by Assistant United States Attorney George Norwood.
Indicted Lewisville, Texas, Resident to Remain in Federal CustodyRead the Press Release
DALLAS — A federal grand jury in Dallas returned an indictment last week, that was unsealed today, charging a Lewisville, Texas, man with offenses stemming from his theft of others’ personal identifying information to steal income tax refunds, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Defendant John Bash made his initial appearance in federal court today, before U.S. Magistrate Judge Paul D. Stickney, who ordered him detained. During the hearing, it was revealed that Bash, who was arrested by special agents with the Internal Revenue Service (IRS) Criminal Investigation (CI) at his residence in Lewisville, is 30-years-old.
The indictment charges Bash with two counts of conspiracy to commit theft of federal public money and two counts of aggravated identity theft.
It alleges that beginning in January 2012, Bash conspired to steal federal public money, that is, income tax returns. As part of the conspiracy, according to the indictment, Bash would obtain the personal identifying information of third persons, including their names, Social Security Numbers and dates of birth. Then, Bash would prepare and submit false federal income tax returns to the IRS using that information. Bash prepared the false income tax returns to include false income and withholding information in a way that would result in a claim for a refund. He filed the returns requesting the refunds either be mailed in the form of a check to an address controlled by a conspirator or loaded onto debit cards acquired by a conspirator.
A federal indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. Upon conviction, however, the penalty for each count of conspiracy to commit theft of federal public money is 10 years in federal prison and a $250,000 fine. Each count of aggravated identity theft carries, upon conviction, a mandatory two-year sentence.
IRSCI is investigating. Assistant U.S. Attorney Aaron Wiley is in charge of the prosecution.
Illinois Physician Pleads Guilty to Taking Kickbacks from Pharmaceutical Company and Agrees to Pay $3.79 Million to Settle Civil False Claims Act CaseRead the Press Release
The Department of Justice announced today that an Illinois physician, Dr. Michael J. Reinstein, pleaded guilty to a federal crime for receiving illegal kickbacks and benefits totaling nearly $600,000 from two pharmaceutical companies in exchange for regularly prescribing an anti-psychotic drug — clozapine — to his patients. Reinstein also agreed to pay the United States and the state of Illinois $3.79 million to settle a parallel civil lawsuit alleging that, by prescribing clozapine in exchange for kickbacks, Reinstein caused the submission of false claims to Medicare and Medicaid for the clozapine he prescribed for thousands of elderly and indigent patients in at least 30 Chicago-area nursing homes and other facilities.
“The Department of Justice is committed to ensuring that physicians who accept payments from pharmaceutical manufacturers to influence prescribing decisions are held accountable,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division. “Schemes such as this one undermine the health care system and take advantage of elderly patients who are among the most vulnerable health care recipients.”
“Physicians must prescribe medications for their patients solely on the basis of the patients’ best medical interests and not because those decisions were improperly influenced by kickbacks and other financial favors,” said U.S. Attorney Zachary T. Fardon of the Northern District of Illinois.
Both the criminal and civil cases involve the promotion of generic clozapine, a rarely prescribed anti-psychotic drug that has serious potential side effects and is generally considered a drug of last resort, particularly for elderly patients. While clozapine has been shown to be effective for treatment-resistant forms of schizophrenia, it is also known to cause numerous side effects, including a potentially deadly decrease in white blood cells, seizures, inflammation of the heart muscle and increased mortality in elderly patients.
Reinstein pleaded guilty to one count of violating the federal Medicare and Medicaid Anti-Kickback Statute at his arraignment in U.S. District Court after he was charged on Feb. 3.
The civil settlement resolves a civil action filed against Reinstein by the federal government for accepting payments from pharmaceutical manufacturer Teva Pharmaceuticals USA Inc. and a subsidiary, IVAX LLC, to induce the use of generic clozapine. The United States alleged that in exchange for these payments, Reinstein prescribed clozapine for Medicare and Medicaid beneficiaries. The United States also alleged that Reinstein submitted and/or caused to be submitted to both Medicaid and Medicare claims for “pharmacologic management” of those patients for whom he prescribed clozapine. However, Reinstein allegedly did not engage in meaningful pharmacological management, because his prescribing decisions for his clozapine patients were based on the kickbacks he received rather than his independent medical judgment or the individual needs of his patients. In March 2014, Teva Pharmaceuticals USA Inc. and IVAX LLC, paid the United States and the state of Illinois $27.6 million to settle allegations that they violated the state and federal False Claims Acts by making payments to Reinstein in return for him prescribing clozapine to his patients.
As set forth in the plea agreement, the payment scheme involving Reinstein began in August 2003, when Reinstein agreed to switch his patients to generic clozapine if IVAX agreed to pay Reinstein $50,000 under a one-year “consulting agreement” and to provide other benefits to Reinstein, in violation of the federal Medicare and Medicaid Anti-Kickback statute. In addition to direct payments to Reinstein, IVAX allegedly also provided all-expenses paid trips to Miami for Reinstein, his wife and various employees of Reinstein. Reinstein quickly became the largest prescriber of generic clozapine in the country and prescribed the drug to many elderly patients. Allegedly, the payments and other forms of remuneration from IVAX and later Teva Pharmaceuticals continued for many years and resulted in the submission of thousands of false claims to the Medicare Part D and Illinois Medicaid programs.
The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs. The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient.
The plea agreement and civil settlement illustrate the government’s emphasis on combating health care fraud and mark another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $23.6 billion through False Claims Act cases, with more than $15.1 billion of that amount recovered in cases involving fraud against federal health care programs.
The U.S. Attorney’s Office for the Northern District of Illinois represented the United States in connection with the plea agreement. The civil settlement with Reinstein was the result of a coordinated effort by the U.S. Attorney’s Office for the Northern District of Illinois, the Civil Division’s Commercial Litigation Branch, the Department of Health and Human Services’ Office of Inspector General, the FBI and the Illinois Attorney General’s Office.
Except to the extent admitted by Reinstein in his guilty plea, the claims resolved by the civil settlement are allegations only, and there has been no determination of liability. The civil case is captioned United States v. Reinstein, Civil Action, No. 12-C-9167 (N.D. Ill.).
Hillview, Kentucky Police Chief Convicted of Making A False Statement to Federal AgentsRead the Press Release
LOUISVILLE, Ky. – Hillview, Kentucky Police Chief Glenn A. Caple was convicted today of making a false statement to federal agents when questioned about his knowledge and involvement in moving evidence found on an elected official’s property on January 4, 2012, announced Acting United States Attorney John E. Kuhn, Jr.
“We thank the jurors for their consideration of the evidence in reaching a unanimous guilty verdict,” stated Acting U.S. Attorney John Kuhn. “We must have faith and trust in our police that they will follow the letter of the law – and will be honest with other law enforcement agents investigating crimes. We cannot have our police knowingly and willfully lying to federal agents out of expedience or self-interest. Chief Caple knew better; he broke the law and an important public trust.”
During the four-day trial, the United States proved that Caple lied to federal agents on April 26, 2012, when he was questioned by the Federal Bureau of Investigation (FBI) about his involvement in directing subordinate Hillview Police officers to move evidence, a backpack characterized as a mobile meth lab, from its original location on the residence of the Hillview mayor and/or initially stating to federal agents that the suspected backpack was not found by Hillview police on the mayor’s property.
Hillview, Kentucky is a city of approximately 9,400 residents located in Bullitt County, Kentucky near Jefferson County. Hillview police officers testified under oath that a mobile meth lab in a black backpack was found in a tire next to a garage on the mayor’s property. They further testified that Chief Caple asked a Hillview police officer to move the backpack to a location believed to be off of the mayor’s property and failed to report the incident, in order to protect the mayor from bad publicity.
Jurors deliberated just over one hour before reaching a guilty verdict. Sentencing is scheduled before Senior District Judge Charles R. Simpson III on May 18, 2015, in Louisville. Caple faces no more than five years in prison, a fine of $250,000 and a three year period of supervised release.
This case is being prosecuted by Assistant United States Attorneys Thomas Dyke and Marisa Ford and was investigated by the Louisville field office of the FBI.
Hedge Fund Manager Sentenced to Prison for $7.9 Million Investment Fraud SchemeRead the Press Release
BATON ROUGE, LA – United States Attorney Walt Green announced today that JAMES R. HOLDMAN, age 59, of Zachary, Louisiana, was sentenced yesterday before U.S. District Judge James J. Brady to sixty (60) months imprisonment as a result of a mail fraud scheme in which he defrauded investors out of millions of dollars. HOLDMAN was also sentenced to serve two years of supervised release following his release from imprisonment and ordered to pay the victims of his scheme $7,910,074 in restitution.
HOLDMAN operated a hedge fund called Greenwing Capital Management, LLC (“Greenwing”). As the owner and operator of the fund, HOLDMAN solicited and received millions of dollars in investment funds from the victim investors, many of whom were retirees, including former military veterans and survivors of Hurricane Katrina. The victim investors hailed primarily from South Louisiana and Mississippi. Throughout 2008, HOLDMAN’s investments suffered substantial losses. However, HOLDMAN concealed his failed investments by falsely representing to the victim investors that their accounts were earning positive rates of return when, in fact, HOLDMAN had lost nearly all of their funds.
By making these false representations, HOLDMAN was able to defraud the victim investors into keeping their remaining money with Greenwing and, in some cases, investing more money, thereby allowing HOLDMAN to continue receiving money in the form of fees for his own personal use and benefit. In order to continue to conceal his fraud, HOLDMAN continued to put the victim investors’ money at risk in an attempt to recoup his losses.
Ultimately, in October 2008, HOLDMAN sent out a form letter to victim investors falsely informing them that a sharp downturn in the stock market related to the financial crisis had caused a 98.67% loss in their investment in a one-month period and had forced him to close the fund. In fact, HOLDMAN had steadily been losing the victims’ money throughout 2008.
U.S. Attorney Green stated: “Investment fraud is a devastating crime that goes on far too often. We will continue to pursue such matters aggressively, particularly when the victims include some of our community’s most vulnerable. My appreciation goes to our federal and state law enforcement partners, both here in Louisiana and in Texas and Mississippi, for helping us uncover and address this scheme.”
The case is being prosecuted by Assistant U.S. Attorneys Shubhra Shivpuri and Chris Dippel. The joint investigation was conducted by the Federal Bureau of Investigation, the Louisiana Office of Financial Institutions, the Texas State Securities Board, and the Securities and Charities Division of the Mississippi Office of the Secretary of State.
Healthcare Company Executives Sentenced to Prison for Fraud and KickbacksRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced that IMEH U. EBERE, age 55, of Baton Rouge, Louisiana, and SHEILA R. HIVES, age 51, of Baker, Louisiana, have each been sentenced by Chief U.S. District Judge Brian A. Jackson for health care fraud offenses in connection with their roles at Golden Medical Equipment & Supply, Inc. (“Golden”), a Baton Rouge-based company that provided durable medical equipment in the Baton Rouge area. EBERE was sentenced to serve twenty-two (22) months in prison, followed by a two-year term of supervised release, and was ordered to pay $444,061.72 in restitution. HIVES was sentenced to a term of probation and was ordered to pay $7,687.50 in restitution.
In 2012, a federal grand jury indicted EBERE and HIVES, charging them with a variety of offenses arising out of a fraudulent scheme through which EBERE and Golden submitted false reimbursement claims to Medicare for enteral nutrition that Golden had purportedly provided to Medicare beneficiaries. Enteral nutrition is designed for individuals who suffer from health conditions that prevent food from reaching the digestive tract, therefore preventing the individuals from maintaining their weight and strength. Enteral nutrition is administered via a feeding tube.
On July 23, 2014, HIVES pled guilty before Chief Judge Jackson to receiving health care kickbacks, in violation of Title 18, United States Code, Section 1320a-7b(b)(1)(A). HIVES admitted that she received illegal kickbacks from EBERE to induce HIVES to refer Medicare beneficiaries to EBERE and Golden. Approximately one week later, on July 29, 2014, EBERE pled guilty before Chief Judge Jackson to conspiracy to commit health care fraud, in violation of Title 18, United States Code, Section 1349. EBERE admitted that, through her company, she submitted numerous fraudulent claims to Medicare for enteral nutrition-related products that she had purportedly provided to Medicare beneficiaries, even though the beneficiaries did not have feeding tubes and therefore did not need enteral nutrition and did not qualify for it. EBERE admitted that, from September 2003 through November 2011, through Golden, she submitted approximately $800,000 in enteral nutrition related claims alone.
The case was investigated by the Office of Inspector General for the U.S. Department of Health and Human Services (DHH-OIG), the Federal Bureau of Investigation (FBI), and the Medicaid Fraud Control Unit of the Louisiana State Attorney General’s Office (MFCU), and was brought as part of the Medicare Fraud Strike Force, under the supervision of the United States Attorney’s Office and the Fraud Section of the Criminal Division of the U.S. Department of Justice. This case is being prosecuted by Assistant U.S. Attorney Shubhra Shivpuri, with assistance from DOJ Trial Attorney Dustin M. Davis.
Grand Jury Returns Superseding Indictment Against Westbank Gang MembersRead the Press Release
U.S. Attorney Kenneth A. Polite announced the return of a second superseding Indictment charging members of a violent Westbank gang associated with the Harvey Hustlers with violating federal drug and firearm laws, including multiple murders and shootings. A federal grand jury returned the second superseding Indictment yesterday against Harry Smoot, 30, Frankie Hookfin, 23, Ray Woodruff, 21, Andre Addison, a/k/a “Dooda,” 23, Lance Singleton, a/k/a “Life Taker,” 24, Terrance Kelley, a/k/a “Streets,” 28, Isaac Smith, a/k/a “Ike,” 21, Joequell Lewis, a/k/a “Blow,” 27, Chris Brown, a/k/a “Ten,” 32, Richard Thomas, a/k/a “Stizzle," 39, Terrell Wade, a/k/a “T-Dog,” 39, and Clifford Sonnier a/k/a “Dut,” 25, all of Jefferson Parish. This Indictment is a product of an ongoing investigation into the violent acts in furtherance of the drug trafficking by this violent Westbank gang.
The second superseding Indictment charges all defendants with conspiracy to distribute more than one kilogram of heroin and over 280 grams of crack cocaine, six defendants with three counts of murder in furtherance of drug trafficking activities, four defendants with two counts of discharging firearms in furtherance of drug trafficking crimes, as well as multiple counts of other firearms violations. All defendants are presently in custody pending trial.
If convicted of any of the murders in furtherance of drug trafficking, the defendants will face a maximum sentence of life in prison, a $250,000 fine, and five years of supervised release. If convicted of any additional shootings in furtherance of drug trafficking, the defendants face a mandatory sentence of 10 years of imprisonment to be served consecutive with any other sentence, a $250,000 fine, and five years of supervised release. All defendants are facing 10 years to life, a $10,000,000 fine, and at least five years of supervised release if convicted of conspiracy to distribute heroin and cocaine.
U. S. Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendants must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation and the Jefferson Parish Sheriff’s Office in investigating this matter. Assistant United States Attorneys Collin Sims, David Haller, and Myles Ranier are in charge of the prosecution.
Four Convicted for Roles in Multi-Million Dollar Mortgage Fraud Scheme in Federal Court TrialRead the Press Release
SACRAMENTO, Calif. — After a 21-day trial, a federal jury found Nadia Kuzmenko, 35, resident of Loomis, Peter Kuzmenko, 36, resident of Sacramento, Edward Shevtsov, 51, resident of Sacramento, and Aaron New, 39, resident of Sacramento, guilty of multiple counts of mail and wire fraud associated with their involvement in a mortgage fraud scheme that cost financial institutions approximately $16 million, United States Attorney Benjamin B. Wagner announced today.
Peter Kuzmenko, Edward Shevtsov, and Aaron New were also found guilty of money laundering associated with the scheme. Nadia Kuzmenko was also found guilty of witness tampering.
According to evidence presented at trial, from late 2006 through 2007, the defendants engaged in a mortgage fraud scheme involving over 30 properties in the Sacramento area. The defendants were responsible for securing more than $26 million in residential mortgage loans on over 30 homes purchased through straw buyers. Records introduced at trial showed each of these defendants personally received hundreds of thousands or millions of dollars.
Nadia Kuzmenko was a licensed real estate sales person who, along with her sister Vera Kuzmenko, created fraudulent loan applications on behalf of the straw buyers. The loan applications contained materially false information as to the straw buyers’ income, employment, assets, and intent to occupy the residences. The loan paperwork also hid from lenders millions in dollars of payments that went to the defendants. With respect to the witness tampering count, the evidence showed that after she learned the FBI was investigating her, Nadia Kuzmenko told various witnesses to lie to the FBI and blame a dead woman for the fraud.
Aaron New was a licensed real estate broker who submitted the fraudulent loan applications to lending institutions and convinced home sellers to sign off on fraudulent invoices to divert money out of escrow and to the defendants. New also served as a straw buyer himself.
Peter Kuzmenko and Edward Shevtsov recruited straw buyers and helped create fraudulent loan paperwork. They also controlled shell accounts in which millions of dollars were diverted out of escrow based on fraudulent invoices and false representations made to lenders. Peter Kuzmenko was also a straw buyer himself.
“The defendants convicted today were important players in a network of fraudsters responsible for millions of dollars in losses associated with dozens of inflated property sales using multiple straw buyers,” said U.S. Attorney Benjamin B. Wagner. “As the guilty verdicts in this case demonstrate, mortgage fraudsters who believe they can escape accountability for their crime by blaming others and offering false alibis are mistaken. Our enforcement efforts in this area are far from done.”
“While today’s verdict is a victory for justice it does not change the fact that these individuals victimized their community and severely damaged the regional economy with their multi-million dollar fraud scheme,” said Assistant Special Agent in Charge John Gliatta for the FBI’s Sacramento field office. “As in this case, the FBI will vigorously investigate large, complex financial fraud to ensure those who are victimizing the community are brought to justice.”
“Mortgage fraud is an incredibly destructive crime that leaves many victims in its wake”, said José M. Martínez, Special Agent in Charge, IRS-Criminal Investigation. “The impact on homeowners and communities is devastating. While this verdict cannot reverse the damage caused by these defendants, it highlights the ongoing commitment of IRS-CI to hold accountable those involved in these types of crimes.”
The case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorneys Lee S. Bickley and Michael D. Anderson and Special U.S. Attorney David J. Ward are prosecuting the case.
The defendants are scheduled to be sentenced by Judge John A. Mendez on May 26, 2015. Each defendant faces a maximum statutory penalty of 20 years on each of their counts of conviction for wire and mail fraud. Nadia Kuzmenko faces an additional 20 years for witness tampering. Peter Kuzmenko, Edward Shevtsov, and Aaron New face up to 20 years on each of the counts of conviction for money laundering. Co-defendants Vera Kuzmenko and Rachel Siders are still awaiting trial.
Fort Myers Man Convicted of Drug ConspiracyRead the Press Release
Fort Myers, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury today found Titus Lamar Bellot (28, Fort Myers) guilty of conspiracy to possess with intent to distribute the controlled substance methylone. He faces a maximum penalty of 20 years in federal prison. His sentencing hearing is scheduled for May 18, 2015.
Bellot was indicted on April 30, 2014.
According to the testimony and evidence presented at trial, on April 21, 2014, U.S. Customs and Border Protection officials at an international mail facility in New York encountered an International Express Mail parcel from the People’s Republic of China. After searching the parcel, they determined that it contained methylone. U.S. Immigration and Customs Enforcement’s Homeland Security Investigations agents made a controlled delivery of the package to an address in Lehigh Acres, Florida. Deena Williams, who was convicted after a jury trial on February 5, 2015, accepted the package. Agents then entered the house and discovered that Williams had opened the package and removed the drugs. Bellot came to the house a short time later to pick up the drugs. Further investigation confirmed that the package belonged to him.
This case was investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Jeffrey F. Michelland.
Former Wells Fargo Investment Banker and Three Conpsirators Sentenced for Insider Trading ConspiracyRead the Press Release
Investment Banker Received Kickbacks in Cash And Gold For Stolen Inside Information
CHARLOTTE, N.C. – A former Wells Fargo investment banker and three of his conspirators were sentenced today on insider trading conspiracy and related charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Today’s sentencings stem from the Charlotte-based FBI investigation, “Operation Insider Out,” which began in early 2012 and identified targets involved in insider trading activities in the Charlotte area.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation, Charlotte Division joins U.S. Attorney Tompkins in making today’s announcement.
John W. Femenia, 33, of Greenwich, Conn., was sentenced to five years in prison and two years of supervised release. Shawn C. Hegedus, 34, of Centereach, N.Y. was sentenced to ten years in prison and two years of supervised release. Matthew J. Musante, 34, of Miami, Fla., was sentenced to 42 months in prison followed by two years of supervised release. They each pleaded guilty to insider trading and money laundering conspiracy charges. Danielle C. Laurenti, 34, of Massapequa Park, N.Y. was sentenced to 19 months (time served) in prison followed by two years of supervised release. Laurenti pleaded guilty to one count of insider trading conspiracy.
Four other codefendants who previously pleaded guilty to insider trading conspiracy have already been sentenced:
• Roger A. Williams, 53, of Georgetown, S.C., was sentenced to 24 months in prison and one year of supervised release.
• Kenneth M. Raby, 52, of Greer, S.C., was sentenced to 18 months in prison and one year of supervised release.
• Aaron M. Wens, 34, of Encinitas, Calif., was sentenced to six months in prison and one year of supervised release.
• Frank M. Burgess, Jr., 44, of Charlotte, was sentenced to six months in prison and one year of supervised release.
• James A. Hayes, 40, also of Charlotte, was sentenced to one year of probation.According to filed court documents and today’s sentencing hearings, from March 2010 through December 2012, the conspirators conducted illegal insider trading activities based on stolen material non-public information, including information on Wells Fargo and its clients’ upcoming corporate mergers and acquisitions. Stealing material non-public inside information allows a trader to cheat and earn substantial profits by trading before such news becomes public, thereby earning substantial profits by trading again once the news becomes public and impacts the price of a stock.
Femenia, an investment banker who lived in Charlotte and later in New York, stole from his employer, Wells Fargo, and its clients, material nonpublic information about upcoming mergers and acquisitions, and passed the inside information to his conspirators who then used it to conduct illegal trades. These conspirators then passed the confidential inside information to other conspirators who also then traded on that information, court records indicate. The criminal conspiracy netted over $11 million in proceeds as a result of the illegal insider trading activities, court records show.
According to court records, Femenia was paid kickbacks for the stolen information in several forms. Court records indicate that Hegedus, who was a stockbroker and Femenia’s high-school friend, used the proceeds of the insider trading to buy 55 gold bars. Femenia then sold four of the gold bars for $70,877. Femenia also received kickbacks in cash, including via ATM cash deposits made to account in the name of Femenia’s girlfriend. Court records indicate that Hegedus and his wife, Laurenti, laundered proceeds of the insider trading through a casino in Las Vegas. Court records also show that Femenia and Hegedus engaged in mortgage fraud through the fraudulent purchase of a luxury home in Waxhaw, N.C.
In announcing today’s sentencings, U.S. District Judge Robert J. Conrad Jr. stated that the sentences imposed were intended to deter other insider traders and to recognize the seriousness of the offense.
Femenia and Musante have been released on bond and will be ordered to self-report to the Federal Bureau of Prisons (BOP) to begin serving their sentences. Hegedus, who previously fled to Cuba, has been detained since his return to the United States over the summer of 2013 and will be transferred to BOP’s custody upon designation of a federal facility.
U.S. Attorney Tompkins commended the FBI for their investigation of the case, and thanked the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, and Wells Fargo for their invaluable assistance.
The prosecution for the government was handled by Assistant United States Attorneys Kurt W. Meyers and Kelli H. Ferry of the Charlotte office.
President Obama established the Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The President’s Financial Fraud Enforcement Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.stopfraud.gov.Former Smucker Employee Sentenced to Nearly Five Years in Prison for Stealing $4.1 Million from the CompanyRead the Press Release
A former employee was was sentenced to nearly five years in prison for a 16-year scheme to defraud J.M. Smucker Company, of Orville, Ohio, of more than $4.1 million, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office.
Mark R. Kershey, age 54, of Akron and formerly of Massillon, was sentenced to 58 months in prison by U.S. District Judge Donald C. Nugent. The judge also ordered Kershey to pay more than $4.1 million in restitution to Smucker and its insurance company and to forfeit two airplanes and four automobiles.
Kershey was employed as Smucker’s chief airplane mechanic at the Akron-Canton airport when, from approximately October 1997 through January 2013, he devised a false billing scheme using a fictitious entity he controlled, under the name of Aircraft Parts Services, Co., according to court documents.
Kershey submitted false invoices to Smucker in the name of Aircraft Parts Services, which in all or nearly all instances were for nonexistent parts and/or for purported outside services that he actually performed as part of his salaried employment duties. Kershey submitted most invoices in amounts less than $10,000, which he was authorized to approve. A supervisor approved a few larger invoices based on his trust in Kershey, according to court documents.
Kershey maintained a P.O. Box under the fake company name in Greentown, Ohio, to receive checks mailed by Smucker in reliance on the fraudulent invoices. Kershey used the proceeds of his scheme for personal uses, including the purchase and maintenance of two airplanes, the purchase of several automobiles, and payments for his personal residence, according to court documents.
Court documents describe Kershey’s efforts in late 2012 to deceive Smucker with respect to the final three checks payable to Aircraft Parts Services totaling $44,000, which Kershey had failed to negotiate. Kershey told the employee that Aircraft Parts Services had been sold to another Smucker vendor (referred to in the information as SAI), and submitted a letter to Smucker purportedly from SAI’s owner, that Kershey fabricated and forged, falsely confirming the purported sale to SAI. Smucker then issued replacement checks to SAI, that SAI deposited after discussion between Kershey and SAI’s owner.
Kershey previously pleaded guilty to one count of mail fraud.
The case is being handled by Special Assistant United States Attorney John M. Siegel following investigation by the Federal Bureau of Investigation, Canton, Ohio.
Former Nissan Employee Sentenced in Scheme to Defraud NissanRead the Press Release
Kenneth Carter, 45, of Corona, Calif., was sentenced today by U.S. District Judge William J. Haynes, Jr., to serve 60 months in prison for his role in a scheme to defraud Nissan North America by filing false Lemon Law claims on behalf of individuals who owned Nissan vehicles, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Carter was also ordered to pay restitution in the amount of $565,000 to Nissan North America.
On April 3, 2014, Kenneth Carter, along with co-defendants, Francisco DeLaRosa, 42, of West Covina, Calif., Adrian Franklin, 40, of Chandler, Arizona, Bruce Young, 49, of Compton, Calif., Tracey Young, 46, of Los Angeles, Calif., and Wendell Young, 34, of Inglewood, Calif., were indicted and charged with conspiracy to commit mail fraud, mail fraud, and conspiracy to commit money laundering, for their roles in a scheme to defraud Nissan North America.
The scheme originated from Kenneth Carter, a former employee of Nissan North America who was employed at Nissan’s Franklin, Tennessee headquarters from March 2007 through April 2008 as an “Arbitration Specialist”. Carter’s duties as an Arbitration Specialist included negotiating settlements with attorneys who brought claims on behalf of Nissan owners alleging violations of “Lemon Laws” or the “Federal Warranty Act.”
Between March 2007 and April 2008, Carter, along with Wendell Young, Adrian Franklin, Tracey Young, Francisco DeLaRosa, and others, provided information obtained from Nissan owners, such as the owner’s name, address, and vehicle identification number, which Carter used to file false and fraudulent Lemon Law claims with Nissan and requested settlement checks. Once Carter processed the false claims he caused settlement checks to be issued. Defendants Wendell Young, Adrian Franklin, Tracey Young, and Francisco DeLaRosa then directed the Nissan owners to deposit the checks into their bank accounts or to cash the checks and then “kick-back” a portion of the funds received from Nissan. A portion of the funds were then paid to Carter, and the remaining funds were kept by Wendell Young, Adrian Franklin, and Tracey Young.
Between March 2007 and April 2008 Carter caused more than 80 false claims to be paid by Nissan, totaling approximately $571,500.
Five other co-defendants were previously sentenced in the case:
- Francisco DeLaRosa was sentenced on June 13, 2014, to five months in a half-way house to be followed by five months of house arrest and ordered to pay $191,250.00 in restitution to Nissan North America.
- Adrian Franklin was sentenced on June 6, 2014, to 10 months in a half-way house and ordered to pay $191,250.00 in restitution to Nissan North America.
- Bruce Young was sentenced on August 15, 2014, to 15 months in prison and ordered to pay $78,000.00 in restitution to Nissan North America.
- Tracey Young was sentenced on June 13, 2014, to 12 months and one day in prison, to be followed by six months in a half-way house and ordered to pay $191,250.00 in restitution to Nissan North America.
- Wendell Young was sentenced on May 30, 2014, to 20 months in prison and ordered to pay $191,250.00 in restitution to Nissan.
The case was investigated by the IRS-Criminal Investigation and the Tennessee Bureau of Investigation. Assistant United States Attorneys Kathryn Ward Booth and Sandra G. Moses represented the government.
Former Klansman Sentenced for Cross BurningRead the Press Release
Timothy Flanagan, 33, was sentenced to nine months and ordered to pay a $5000 fine in federal court in Nashville, Tennessee, for his role in the April 30, 2012, cross burning in front of an interracial family’s home in Minor Hill, Tennessee, the Department of Justice announced. Flanagan previously pleaded guilty to one count of conspiring with others to threaten, intimidate and interfere with an African-American man’s enjoyment of his housing rights, and one count of interfering with those housing rights.
Flanagan—a former member of the Church of the National Knights, a Ku Klux Klan affiliate—admitted during the plea hearing that on the night of April 30, 2012, he and two other individuals devised a plan to burn a cross in the yard of an African American man in Minor Hill, Tennessee. Flanagan’s co-conspirator, Timothy Stafford, constructed a wooden cross in a workshop behind his house. Using Flanagan’s credit card, Stafford and co-conspirator Ivan “Rusty” London then purchased diesel-fuel with which to soak the cross. Flanagan and the other co-conspirators then drove the cross to the victim’s residence and, upon arriving at the residence, Flanagan and London exited the truck. The cross was placed in the driveway leading up to the house and was ignited. The co-conspirators burned the cross with the purpose of intimidating the African-American male who resided at that residence.
Timothy Stafford, 41, of Minor Hill, Tennessee, and Ivan “Rusty” London IV, 21, of Lexington, Kentucky, previously pleaded guilty for their roles in the conspiracy, and will be sentenced on March 3, and March 26, respectively.
“Hate-motivated crimes will not be tolerated in our country,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “The Justice Department will vigorously prosecute individuals that violate the rights of others because of race.”
“There can be no tolerance for such acts of intimidation when innocent persons are targeted simply because of their race,” said U.S. Attorney David Rivera of the Middle District of Tennessee. “The U.S. Attorney’s Office and our law enforcement partners will work tirelessly to protect the civil rights of all persons and bring to justice, anyone who would attempt to impede the constitutionally protected right to liberty of any person.”
This case was investigated by the Columbia, Tennessee, Division of the FBI and is being prosecuted by Trial Attorney Jared Fishman of the Civil Rights Division and by Assistant U.S. Attorney Hal McDonough of the Middle District of Tennessee.
Former Ceo of New London Manufacturing Company Sentenced for Clean Water Act ViolationRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, Tyler Amon, Special Agent in Charge of EPA’s Criminal Investigation Division, and Commissioner Robert Klee of the Connecticut Department of Energy and Environmental Protection announced that THOMAS H. FARIA, 38, the former chief executive officer and president of Faria Limited, LLC, doing business as Sheffield Pharmaceuticals, was sentenced today in Hartford federal court for violating the Clean Water Act. U.S. District Judge Alvin W. Thompson ordered FARIA to serve three years of probation, perform 300 hours of community service and pay a $30,000 fine.
According to court documents and statements made in court, the Clean Water Act requires that every company obtain a permit from the Connecticut Department of Energy and Environmental Protection (“CT DEEP”) before it can discharge its industrial wastewater to the public sewage system, commonly known as the publicly owned treatment works (“POTW”). Companies are also required, among other things, to test and monitor their industrial wastewater monthly to ensure that the chemical levels in the wastewater do not exceed federal and state limitations.
Sheffield Pharmaceuticals (“Sheffield”) has a factory at 170 Broad Street in New London that manufactures a wide range of over-the-counter pharmaceutical creams, ointments and toothpastes. From approximately 1986 to July 2011, Sheffield discharged industrial wastewater from its New London manufacturing operations to the New London POTW without a permit and in violation of Connecticut’s approved pretreatment program. The New London POTW discharges to the Thames River in southeastern Connecticut. During this entire time period, Sheffield lacked a pretreatment system at its factory to treat its industrial wastewater prior to discharge to the New London POTW, performed no regular monitoring of its discharges of industrial wastewater, and submitted no monthly monitoring reports to the CT DEEP.
After becoming the company’s president and chief executive officer in April 2003, FARIA soon learned through his own employees that Sheffield was discharging pollutants considered toxic under federal environmental law in its industrial wastewater without the required permit. FARIA also learned that in order to obtain a permit from CT DEEP, the company would have to install, at significant expense, a wastewater pretreatment system that would pretreat its industrial wastewater prior to discharging it to the New London POTW. Although FARIA’s own employees urged him to make the financial investment to bring the company into compliance, FARIA chose not to do so. FARIA continued this illegal course even when four environmental consulting firms, which the company had hired, advised him that the discharge of industrial wastewater to the public sewage treatment system, without a pretreatment system and CT DEEP permit, is illegal.
On April 20, 2011, the CT DEEP conducted an unannounced inspection of Sheffield. After finding that the company had no wastewater discharge permits, the CT DEEP inspector issued a Notice of Violation and cited the company for discharging manufacturing and laboratory wastewater without a permit. On or about May 27, 2011, Faria Limited, LLC submitted a permit application to CT DEEP so that the company could legally discharge industrial wastewater from its New London facility into the New London POTW. By July 2011, the company had installed a wastewater pretreatment system at its factory to pretreat the pollutants contained in its industrial wastewater prior to its discharge to the New London POTW.
“Managers of Connecticut factories who knowingly violate federal and state environmental law risk federal prosecution and a felony conviction,” said U.S. Attorney Daly. “The Clean Water Act applies to every industrial entity doing business in Connecticut. This Office will vigorously prosecute corporate officers whose decisions and actions threaten Connecticut’s natural resources and harm the public’s right to a clean environment. We recognize and thank the EPA and DEEP for their invaluable work in protecting the environmental integrity of Connecticut’s rivers and the Long Island Sound.”
“This defendant engaged in a longstanding scheme of illegally dumping millions of gallons of untreated pollutants to the sewer system over a period of seven years,” said EPA Special Agent in Charge Amon. “As the top executive, Defendant Faria cheated the public utility and undercut his competitors all while his employees and consultants were telling him to follow the law.”
“This case sends a clear signal that intentionally violating the environmental laws and regulations of Connecticut will not be tolerated and will be dealt with accordingly,” said DEEP Commissioner Robert Klee. “The U.S. Attorney’s office aggressively prosecuted this case and has brought it to a successful conclusion. I commend their efforts.”
On July 8, 2014, FARIA waived his right to indictment and pleaded guilty to one count of knowingly violating, or causing to be violated, the Clean Water Act. As a condition of his guilty plea, FARIA resigned from the company on March 7, 2014, and shall have no role in the operations or management of Faria Limited. He now resides in Portland, Oregon.
This matter was investigated by the U.S. Environmental Protection Agency and the Connecticut Department of Energy and Environmental Protection. The case was prosecuted by Assistant U.S. Attorney Hal Chen and Special Assistant U.S. Attorney Peter Kenyon.
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[email protected]Former Bank of the West Employee Pleads Guilty to Federal Embezzlement ChargesRead the Press Release
ALBUQUERQUE – Angela Giddings, 38, of Albuquerque, N.M., pled guilty today to one count of embezzlement by a bank employee and embezzlement from Indian tribal organizations. Under the terms of her plea agreement she will serve 24 months in federal prison as well as a term of supervised release to be determined by the court.
Giddings was indicted on Dec. 16, 2014, and charged with 12 counts of embezzlement by a bank employee; six counts of embezzlement from Indian tribal organizations; and four counts of aggravated identity theft. The indictment alleges that Giddings committed these crimes in Bernalillo County, N.M., between Feb. 2, 2013, and July 18, 2014. At the time, Giddings was employed as a customer service manager for Bank of the West.
According to the indictment, Giddings embezzled funds entrusted to the bank by withdrawing and transferring funds from the accounts of customers without authorization and for her own use. The indictment alleges that Giddings’ allegedly unlawful withdraws and transfers ranged from $15,000.00 to $60,000.00. It also alleges that the victims of Giddings’ criminal conduct included the To’hajilee Community School Board and the Cañoncito Band of Navajos. The aggravated identity theft charges allege that Giddings used the names, addresses, and personal identifiers of individuals to commit felony offenses.
During today’s proceedings, Giddings pled guilty to one count of embezzlement by a bank employee and one count of embezzlement from an Indian tribal organization. In entering the guilty plea, Giddings admitted that between Jan. 9, 2012 and July 18, 2014, she misapplied and embezzled money by making unauthorized withdrawals and transfers for her own benefit. She further admitted that on July 18, 2014, she transferred $55,000.00 from a private individual’s account and $60,000.00 from the To’hajilee Community School Board account without authorization and for her own purposes with the intent to defraud.
This case was investigated by the Albuquerque office of the FBI and the Office of Inspector General of the Federal Deposit Insurance Corporation, and is being prosecuted by Assistant U.S. Attorney Jeremy Peña.
Former Accountant of Adult Entertainment Businesses Pleads Guilty to Tax Fraud ConspiracyRead the Press Release
A former accountant of adult entertainment businesses pled guilty for his participation in a tax fraud conspiracy.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Paul Anthony Ruggieri, of Parkland, pled guilty today to one count of conspiracy to defraud the United States.
According to court documents, Ruggieri provided accounting and return preparation services to Anthony Andreozzi [Case 9:13-cr-80174], F & A Concepts, Inc. (F & A) and Galaxy Communications, Inc. (Galaxy), two adult entertainment businesses owned and operated by Andreozzi in the State of Florida. Defendant Ruggieri also provided accounting services to the general public through his business, Strategic Accounting Alliance. Ruggieri and Andreozzi conspired for the purpose of unlawfully enriching Andreozzi by engaging in a fraudulent scheme to evade the payment of federal income taxes.
Court documents state that Andreozzi diverted corporate receipts of F & A and Galaxy for his own personal use. In order to conceal his diversion of corporate funds, Andreozzi instructed Ruggieri to falsify the corporate books and records by classifying certain personal expenditures of Andreozzi as business expenses. Ruggieri and Andreozzi caused the preparation and filing of false corporate tax returns for F & A and Galaxy, in that the corporate returns included fraudulent business expenses which reduced each corporation’s income. Ruggieri and Andreozzi also caused the filing of false personal income tax returns for Andreozzi for calendar years 2006, 2007, 2008 and 2009, in that the personal returns failed to include the diverted corporate income, thereby understating on Andreozzi’s personal returns his total income and tax due and owing.
On October 15, 2013, Andreozzi pled guilty to one count of conspiring to defraud the United States. Andreozzi is scheduled to be sentenced on March 6, 2015, at the Federal Courthouse in West Palm Beach, Florida, by U.S. District Judge Kenneth Ryskamp.
Ruggieri is scheduled to be sentenced on April 17, 2015, at the Federal Courthouse in West Palm Beach, Florida, by U.S. District Judge Kenneth Ryskamp. Each defendant faces a maximum of five years in prison.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Stephanie D. Evans.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Felon Sentenced to Seventeen Years in Federal Prison for Possessing a FirearmRead the Press Release
GRAND RAPIDS, MICHIGAN – Jamar Alonzo Quarles, 34, was sentenced today to seventeen years in federal prison for possessing a firearm as a convicted felon, U.S. Attorney Patrick A. Miles, Jr. announced. In addition to the prison term, U.S. District Judge Robert Jonker ordered Quarles to pay $2,500 in fines, and Judge Jonker imposed a five -year term of supervised release that will commence once Quarles is released from imprisonment.
Quarles pleaded guilty on September 9, 2014. The facts underlying his conviction were outlined in the government’s sentencing memorandum. On April 24, 2013, Quarles was released on parole in connection with a prior conviction for firing multiple rounds at another person. Thereafter, he acquired a pistol. On August 22, 2013, he menaced an ex-girlfriend with a “gun.” On or about August 24, 2013, Quarles became involved in a domestic dispute with his girlfriend. He prevented her from leaving his vehicle and then brought her to his home. He then prevented her from leaving his home, pointed a handgun at her head, and threatened to kill her. His girlfriend was ultimately able to escape and called the police. She directed police back to the defendant’s home, where they found the handgun, which had six rounds of ammunition in the magazine.
Quarles received a lengthy sentence because he was eligible for increased penalties under the Armed Career Criminal Act (“ACCA”). Under federal law, a person who possesses a firearm after sustaining at least three previous felony convictions of a certain type and severity must be sentenced to at least fifteen years in prison. Quarles’s prior convictions included incidents involving assault, battery, home-invasion, and firearms. In imposing sentence, Judge Jonker noted that Quarles was a model candidate for the increased penalties under the ACCA.
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Grand Rapids Police Department (GRPD) investigated the case. Assistant U.S. Attorney Sean M. Lewis and former Assistant U.S. Attorney Sean Maltbie prosecuted the case.
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Federal Jury Convicts Burnet County Man of Firearms and Drug Trafficking ChargesRead the Press Release
In Austin last night, a jury convicted 44-year-old Bertram, TX, resident Jimmy Don Hardin of federal firearms and drug trafficking charges announced Acting United States Attorney Richard L. Durbin, Jr. and Texas Department of Public Safety Director Steve McCraw.
At the conclusion of a four-day trial, jurors convicted Hardin of conspiracy to possess with intent to distribute 500 grams or more of methamphetamine, possession of a firearm during a drug trafficking crime, possession of a stolen firearm and possession of a firearm by a convicted felon. Evidence presented during trial revealed that from May 2013 to December 2013, Hardin conspired with others to distribute methamphetamine throughout Burnet, Llano, Lampasas, Travis and Williamson counties. Authorities arrested Hardin on December 4, 2013, during the execution of a search warrant at his residence. At the time, Hardin was in possession of a stolen .45 caliber pistol as well as nine other firearms. Hardin’s criminal history revealed multiple convictions for manufacture of methamphetamine in Burnet County, TX.
Hardin remains in federal custody pending sentencing scheduled for April 23, 2015, before U.S. District Judge Lee Yeakel. He faces between ten years and life in federal prison. Two co-defendants--57-year-old Guillermo Naranjo Reyna, an illegal alien residing in Austin, and 60–year-old Nebes Montemayor of Austin--pleaded guilty to the drug conspiracy charge prior to trial. Reyna and Montemayor remain in federal custody pending sentencing scheduled for March 10, 2015, before Judge Yeakel. Reyna and Montemayor also face between ten years and life in federal prison.
This case was investigated by the Texas Department of Public Safety, Burnet County Sheriff’s Office, Burnet County District Attorney’s Office, Llano County Sheriff’s Office, Bastrop County Sheriff’s Office, Williamson County Sheriff’s Office, Austin Police Department, and the Cedar Park Police Department together with the Drug Enforcement Administration (DEA) and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Assistant United States Attorneys Doug Gardner and Matt Harding are prosecuting this case on behalf of the Government.
Federal Judge Sentences Sheboygan Sex and Heroin Trafficker to 25 Years ImprisonmentRead the Press Release
United States Attorney James L. Santelle announced today that United States District Court Judge Rudolph T. Randa sentenced Milwaukee native and former Sheboygan resident Jason Guidry (age: 33) to 25 years imprisonment following Guidry’s conviction on three sex-trafficking counts and one count of possession with the intent to distribute heroin. The sex-trafficking counts involved three separate females.
Evidence introduced at Guidry’s sentencing showed that he controlled his group of victimized females by addicting them to heroin and then further induced their prostitution by manipulating and threatening to manipulate his supply of heroin to them. As part of its presentation to Judge Randa, the United States presented expert testimony from Dr. Selahattin Kurter, who is one of a few number of Wisconsin medical doctors board certified in Addiction Medicine. Dr. Kurter testified about the addictive properties of heroin, its long-term effects on the brain, the onset of heroin withdrawal, and the coercive power of the drug on those addicted to it. In his sentencing comments, Judge Randa expressly recited Dr. Kurter’s statement that “heroin is the scourge of our nation.”
In making the public announcement of the criminal judgment imposed on Guidry, United States Attorney Santelle stated: “The sentence imposed on this defendant by Judge Randa is not only appropriate under all the facts and circumstances of this case but also sends yet another message to our community that human trafficking—and the terrible victimization that is at its core—will be answered decisively and significantly by our system of criminal justice. Mr. Guidry’s conduct was especially pernicious in that he used a highly addictive and often deadly drug to manipulate these victims into selling their bodies in the horrific sex trade business.” Santelle noted that this was the first federal conviction of a defendant in Wisconsin who used an addictive drug to control the trafficking activities of his victims.
Santelle stated further: “The investigation and prosecution of human trafficking cases in Eastern Wisconsin is among the highest priorities of my office, and, along with our equally committed federal, state, local, and Tribal law enforcement partners, we will continue to pursue the perpetrators of this heinous conduct with all of the resources available to us.” He commended specifically the detectives of the Sheboygan Police Department who were principally responsible for the investigative work upon which this prosecution, expertly handled by Assistant United States Attorney Joseph R. Wall, was premised.
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Federal Charges Filed in Sex Trafficking of MinorRead the Press Release
CHICAGO − A man who allegedly sex trafficked an underage girl by force was charged in a criminal complaint in U.S. District Court in Chicago. The defendant, ALLEN C. IROEGBULEM, 24, of Roselle, Illinois, was charged with sex trafficking of a minor. The charges were announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois and Robert J. Holley, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.
Iroegbulem appeared today before U.S. District Court Judge Daniel Martin at the Dirksen Federal Courthouse, was will remain in custody pending a detention hearing. The defendant was charged in a criminal complaint filed on February 4, 2015.
According to the complaint, beginning in December 2013, and continuing through February 2014, the defendant transported “Minor A” from the Chicagoland area to Rockford, Illinois, where he arranged for the minor to perform commercial sex acts with at least four men in exchange for money, all in the same night. The minor continued to perform sex acts at the direction of the defendant in hotel rooms throughout the Chicagoland area, at a house on the west-side of Chicago and in Wisconsin, where the minor was continually ordered to perform sex acts with several men at one time, over the course of three months. In addition, Iroegbulem physically assaulted the minor.
The complaint also states that the defendant provided another minor, “Minor C,” with drugs in a hotel room, causing her to pass out. He then arranged for two men to perform sex acts on Minor C while she was in a drugged state.
The investigation was conducted jointly by the FBI and the Carol Stream Police Department and assisted by the McHenry County State’s Attorney’s Office, the McHenry County Sheriff’s Department, the Woodstock Police Department, the DuPage County Sheriff’s Office, and the Schaumburg Police Department.
If convicted, the defendant faces a maximum penalty of life in prison.
The public is reminded that a complaint is not evidence of guilt and that all defendants in a criminal case are presumed innocent until proven guilty in a court of law.
The government is being represented by Assistant United States Attorney Bethany Biesenthal.
Complaint
Essex County, New Jersey, Man Charged in Armed CarjackingRead the Press Release
NEWARK, N.J. – An Irvington, New Jersey, man was charged today with brandishing a firearm while stealing a car in Newark, U.S. Attorney Paul J. Fishman announced.
Raheem Sylla, 23, of Irvington, is charged by complaint with one count of theft of a motor vehicle by force, violence, and intimidation, and one count of use of a firearm in furtherance of a crime of violence. The defendant is scheduled to appear this afternoon before U.S. Magistrate Judge Michael A. Hammer.
According to the criminal complaint:
During the early morning of Sept. 22, 2014, Sylla and a conspirator allegedly approached a 2000 Chevrolet Tahoe parked on a Newark street. Sylla went to the front driver’s window of the Tahoe, pointed a firearm at the driver’s chest and ordered the driver out of the car. The other conspirator approached the front passenger’s side window of the Tahoe and ordered the other passenger out of the car. Sylla and the other male then entered the car and fled.
A short time later, a Rutgers University police officer attempted to pull the Tahoe over for a traffic stop. Sylla tried to escape by driving away at a high rate of speed, but soon crashed and was subsequently apprehended by the Rutgers University police officer. A firearm was recovered from the Tahoe. Sylla has been in state custody since he was apprehended.
The carjacking count with which Brown is charged is punishable by a maximum potential penalty of 15 years in prison. The charge of use of a firearm in furtherance of a crime of violence is punishable by a maximum potential penalty of life in prison and a mandatory minimum sentence of seven years in prison, which must run consecutively to any other prison term. Each of the two counts also carries a maximum fine of $250,000.
U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives under the direction of Special Agent in Charge George P. Belsky; the Newark Police Department, under the direction of director Eugene Venable and Chief Anthony Campos; the Rutgers University Police Department, under the direction of Executive Director of Police Services Kenneth Cop; and the Essex County Prosecutor’s Office, under the direction of Acting Essex County Prosecutor Carolyn A. Murray; as well as criminal investigators from the U.S. Attorney’s Office in Newark with the investigation leading to the charges.
The government is represented by Special Assistant U.S. Attorney Andrew R. Tyler of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.
15-059
Sylla, Raheem Complaint
Eagle Butte Man Sentenced for Assault with A Dangerous WeaponRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota, man convicted of Assault with a Dangerous Weapon was sentenced on February 10, 2015, by U.S. District Judge Roberto A. Lange.
Lawrence Mexican, age 23, was sentenced to 42 months in custody, 2 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Mexican was indicted by a federal grand jury on September 16, 2014, for Assault with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury. He pled guilty to the Assault with a Dangerous Weapon charge on November 18, 2014.
The conviction arose from a July 2014 incident in Eagle Butte, in which Mexican and two others unlawfully assaulted a victim with shod feet, metal crutches, and wooden clubs, with intent to do bodily harm to the victim.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Division. Assistant U.S. Attorney Mikal Hanson prosecuted the case.
Mexican was immediately turned over to the custody of the U.S. Marshals Service to begin serving his sentence.
Drug Trafficker and Former Member of the Texas Mexican Mafia Sentenced to More Than 15 Years in PrisonRead the Press Release
CHARLOTTE, N.C. – Fred Carrasco, Jr., 37, of Mexico was sentenced today to 185 months in prison on drug trafficking and firearms offenses, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Robert J. Conrad, Jr. also ordered Carrasco to serve five years under court supervision upon completion of his prison term.
U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Rodney D. Monroe, of the Charlotte-Mecklenburg Police Department (CMPD).
According to court documents and court proceedings:
According to court documents and court proceedings, Carrasco is a former member of the Texas Mexican Mafia and an affiliate of the Sureños 13 and MS-13 gangs in Charlotte. Court records indicate that from 2005 to 2009, Carrasco was responsible for supplying more than 1,000 kilograms of marijuana and 500 grams of cocaine to Charlotte and elsewhere, which had been smuggled into the United States from Mexico. According to court records, Carrasco fled to Mexico in 2009 and returned in 2013 to face the federal drug trafficking charges filed in the Western District. He pleaded guilty in January 2014 to one count of conspiracy to distribute and to possess with intent to distribute marijuana and cocaine and one count of possession of a firearm in furtherance of a drug trafficking crime
Carrasco has been in federal custody since July 2013 and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
This FBI and CMPD investigated the case. The prosecution was handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.
District Man Sentenced to over 11 Years in Prison for String of Burglaries in Northwest WashingtonDefendant Committed Crimes While on Release After Earlier ArrestRead the Press Release
WASHINGTON - Anthony Hines, 21, of Washington, D.C., was sentenced today to 11 years and two months in prison for a series of crimes, including five burglaries that he carried out while he was awaiting trial in another case, U.S. Attorney Ronald C. Machen Jr. announced.
Hines pled guilty in December 2014, in the Superior Court of the District of Columbia, to two counts of first-degree burglary, one count of attempted burglary, and three misdemeanor charges. He was sentenced by the Honorable John McCabe. Upon completion of his prison term, Hines will be placed on five years of supervised release.
According to the government’s evidence, Hines was arrested on Sept. 27, 2014 in Southeast Washington for operating a vehicle that was reported stolen earlier that day from College Park, Md. He was released two days later on personal recognizance.
In the early morning hours of Oct. 18, 2014, Hines entered a residence in the 2600 Block of Woodley Place NW while the residents were sleeping. He stole, among other things, a cellphone and the keys to the victims’ vehicle, which he later stole. Halloween candy also was removed from the residence, and a trail of candy wrappers led to the house next door, which Hines also burglarized. Among the items taken from that residence were a digital camera, an iPad, video games, a bottle of wine, and the keys to a vehicle owned by one of the victims. Members of the Metropolitan Police Department (MPD) traced the stolen cellphone to a residential building and located the stolen vehicle three blocks away.
The next burglary took place at about 3 a.m. on Oct. 21, 2014. Hines entered a residence in the 1900 block of Calvert Street NW, while the victim was sleeping, and stole two iPhones, $150, and a watch. The victim awakened, and Hines ran from the residence.
Within the hour, Hines entered two more residences in the 1900 block of Belmont Street NW. He damaged a screen at the first residence and set off an alarm at the second. Police quickly responded and arrested him, finding the proceeds from the Calvert Street burglary. Police later executed a search warrant at Hines’s residence and recovered proceeds from numerous burglaries, including the Maryland residence from which the Maryland vehicle was stolen.
In announcing the sentence, U.S. Attorney Machen commended the work and collaboration of the Metropolitan Police Department’s Second and Third Districts and the Prince George’s County Police Department. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Allison Daniels and Assistant U.S. Attorney Christopher Macchiaroli, of the Felony Major Crimes Trial Section, who prosecuted the matter.
15-020District Man Pleads Guilty to Sexually Abusing Two Children-Defendant Had Prior Conviction for Similar Conduct-Read the Press Release
WASHINGTON – James Izlar, 37, of Washington, D.C., pled guilty today to charges stemming from the sexual abuse of two girls at a residence where they were staying in Southeast Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Izlar pled guilty in the Superior Court of the District of Columbia to two counts of second-degree child sexual abuse. The plea, which is contingent upon the Court’s approval, calls for a prison sentence between 9 ½ and 12 years, to be followed by a term of supervised release. The Honorable Jennifer Anderson scheduled sentencing for April 24, 2015.
According to the government’s evidence, Izlar was on supervised release for a previous child sexual abuse conviction involving a 2005 attack on a 13-year-old girl. In June 2013, he removed his GPS tracking device and began living in a house where the two girls, 6 and 9, were temporarily residing. The people in the house did not know that Izlar was a convicted sex offender. Soon thereafter, Izlar began inappropriately touching the girls, who reported the abuse to a family member. Police were notified, leading to Izlar’s arrest.
In announcing the plea, U.S. Attorney Machen commended the work of the detectives of the Metropolitan Police Department’s Youth Investigations Division. He also commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including former Victim/Witness Advocate Melissa Milam; Child Forensic Interview Specialists Karen Giannakoulias and Tracy Owusu, and Paralegal Specialist Joyce Arthur. Finally, he expressed appreciation for the work of Assistant U.S. Attorney John L. Hill, who is prosecuting the case.
15-019District Court Judge Sentences St. Croix Man to 69 Months in PrisonRead the Press Release
St. Croix, USVI – Senior District Court Jude Raymond L. Finch today sentenced Jahmall Augustine, 20, to 57 months in prison for his felon in possession of a firearm conviction, and 12 months for possession of prison contraband, announced United States Attorney Ronald W. Sharpe and U.S. Drug Enforcement Administration (DEA) Special Agent-in-Charge Vito S. Guarino.
Judge Finch also sentenced Augustine to three years of supervised release on the felon in possession count, and one year of supervised release on the prison contraband count. The contraband possession count is to be served consecutively to the felon in possession count. On September 8, 2014, Augustine pleaded guilty to one count of felon in possession of a firearm and possession of prison contraband.
Court records show that on May 1, 2014, acting on a tip, a police officer approached Augustine’s car. The officer observed three smoked marijuana cigarettes and two phials. After obtaining Augustine’s consent, the officer searched the car and found a firearm and eight phials containing marijuana.
Court records also show that on April 4, 2013, Bureau of Corrections officials conducted a search of a cell occupied by Augustine and another inmate at Golden Grove Adult Correctional and Detention Facility. The officers discovered and seized one baggie containing marijuana, and a homemade knife, commonly referred to as a shank, from under Augustine’s mattress, both of which are prohibited objects.
U.S. Attorney Sharpe commended the efforts of the Virgin Islands Police Department, the DEA and Bureau of Corrections, who investigated the cases, and Assistant U.S. Attorney Rhonda Williams-Henry, who prosecuted the cases.
Des Moines Area Attorney and Real Estate Agent Convicted of Bank FraudRead the Press Release
DES MOINES, IA - A Des Moines area attorney and real estate agent were both convicted of bank fraud after an eight-day jury trial, announced United States Attorney Nicholas A. Klinefeldt. Attorney Jason Springer was convicted of seven counts of bank fraud, and real estate agent Rick Makohoniuk was convicted of one count of bank fraud, in connection with a property flipping scheme. Bank fraud carries a maximum penalty of up to 30 years in prison, a fine not to exceed $1,000,000, or both. The court also will be authorized to impose orders of restitution. United States District Judge John A. Jarvey will schedule a sentencing date at a later time.
Springer, Makohoniuk, and three other men were charged with engaging in a scheme to defraud financial institutions from approximately March 2009 to March 2011, involving approximately eighteen homes in and around Des Moines, Iowa, and a loss of approximately $400,000. Two of the other men, Nathan Smith and Patrick Steven, with the assistance of Springer and others, negotiated short sales with lenders on behalf of homeowners. Smith and Steven also purchased the homes in the short sales while deceiving the lenders into believing that the price Smith and Steven paid in the short sale was the fair market value. In fact, Smith and Steven resold the homes for a higher price the same day they purchased the home in the short sale or soon after, all without the lenders’ knowledge. Springer furthered the scheme by conducting many of the fraudulent real estate closings, including signing and submitting false HUD-1 settlement statements that stated that Smith and Steven paid cash at closing for the short sales. In some cases, Smith and Steven brought no money to closing, whereas in other cases, Smith and Steven provided checks, but there were not sufficient funds in Smith and Steven’s bank account to cover the checks they brought to closings. Springer used the proceeds of the resale to fund the short sale. Makohoniuk, a realtor, is alleged to have submitted false documents to a lender with respect to one of the homes involved in the scheme.
The three following defendants charged in the indictment each entered guilty pleas; and are scheduled to be sentenced on May 14, 2015:
• Nathan Smith and Patrick Steven both pleaded guilty to one count of bank fraud; and
• Jerod Hogan, a Des Moines area mortgage broker, pleaded guilty to one count of conspiracy to make a false statement to a financial institution.
This case was investigated by the Federal Bureau of Investigation and the United States Department of Housing and Urban Development-Office of Inspector General, and was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Department of Justice Files Statement of Interest in Clanton, Alabama, Bond CaseRead the Press Release
The Department of Justice filed a statement of interest today with the U.S. District Court for the Middle District of Alabama in Varden v. City of Clanton. In this class action litigation, the plaintiff alleges that incarcerating individuals solely because of their inability to pay a cash bond violates the U.S. Constitution.
In her complaint, Varden alleges that she was required to pay a cash “bond” in a fixed dollar amount for each misdemeanor charge she faced or else she would remain incarcerated. In its statement of interest, the department aims to assist the court in evaluating the constitutionality of fixed-money bail practices. The statement asserts that, as courts have long recognized, any bail or bond scheme that mandates payment of pre-fixed amounts for different offenses in order to gain pre-trial release, without any regard for indigence, not only violates the Fourteenth Amendment’s Equal Protection Clause, but also constitutes poor public policy. Instead, courts should make an individualized assessment of each defendant to determine whether the defendant is a threat to public safety or a flight risk. Pretrial detention should be based on an objective evaluation of these factors, not on the defendant’s ability to pay.
“Bail practices that are indifferent to an individual’s ability to pay are incompatible with our Constitution and contrary to our values,” said Attorney General Eric Holder. “By taking action in this case, the Justice Department is sending a clear message: that we will not accept criminal justice procedures that have discriminatory effects. We will not hesitate to fight institutionalized injustice wherever it is found. And we will never waver in our effort to ensure that all Americans – regardless of background or circumstance – receive the equal rights and protections to which they are entitled under the law.”
“The criminal justice system should not work differently for the indigent and the wealthy” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “Bail practices that create a two tiered system of justice by treating the indigent and the wealthy differently undermine fundamental fairness in our nation’s criminal justice system.”
The statement of interest provides the court with a framework to assess the plaintiff’s claim of an unlawful bail scheme. As the department explains in the statement of interest, “Fundamental and long-standing principles of equal protection squarely prohibit bail schemes based solely on the ability to pay. Fixed-sum bail schemes do not meet these mandates. By using a predetermined schedule for bail amounts based solely on the charges a defendant faces, these schemes do not properly account for other important factors, such as the defendant’s potential dangerousness or risk of flight. The federal government recognized as much when it reformed its bail system over fifty years ago.”
Varden v. City of Clanton was filed in January 2015. The plaintiff seeks declaratory, injunctive and compensatory relief. A preliminary injunction hearing will be held on Feb. 24.
Delta Woman Sentenced in Connection with Hospice FraudRead the Press Release
OXFORD, Miss. - Felicia C. Adams, United States Attorney for the Northern District of Mississippi; Donald Alway Special Agent in Charge at the Federal Bureau of Investigation; Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General and Mississippi Attorney General Jim Hood announced that:
Betty Powell, 48, of Webb, Mississippi, was sentenced on February 12, 2015 by United States District Judge Sharion Aycock in Aberdeen, Mississippi to fourteen (14) months imprisonment to be followed by three (3) years of supervised release. She was also ordered to pay $244,500 in restitution to the Medicare program. Powell will report to the Federal Bureau of Prisons on April 6, 2015.
Powell previously pled guilty in August 2014 to conspiracy to commit healthcare fraud in violation of 18 U.S.C. §§ 1347 & 1349. Powell admitted to providing patient names and identifying information to Regina Swims-King in return for approximately $244,500 in payments from Swims-King. Swims-King has also pled guilty and been sentenced in this case for submitting fraudulent charges to Medicare and receiving millions of dollars in Medicare funds based on alleged hospice services for patients that were not eligible for hospice services; services that were never provided; or claims based on the forged signatures of physicians. Swims-King was sentenced to seventy (70) months imprisonment and ordered to pay $7,941,335.26 in restitution to the Medicare program.
Felicia C. Adams, United States Attorney for the Northern District of Mississippi said, “The United States Attorney’s Office for the Northern District of Mississippi is working aggressively to pursue unscrupulous health care providers who commit fraudulent acts and bring them to justice. Today’s sentence insures that these illegal practices will not be tolerated and fraudsters will be punished. Our office appreciates the hard work of all of the federal, state, and local agencies that participated in this investigation.”
"Health care fraud threatens the most vulnerable of our citizens by endangering the programs which provide care for them," stated Don Alway, Special Agent in Charge of the FBI in Mississippi. "I want to commend the investigators from the federal and state agencies who worked together on this case. We look forward to continued partnerships such as this among the law enforcement community in Mississippi.”
“Medical identity theft is a growing problem,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “As this case demonstrates, dishonest health care providers can make a lot of money by trafficking in patient information. But as this sentence shows, there is a price for stealing patient identities and the price is prison time.”
“Healthcare fraud is a serious problem in Mississippi and across the nation. These crimes steal money from government programs and have a direct impact on our State’s most vulnerable citizens. We will continue to pursue and prosecute these offenders. Joint State and Federal investigations and prosecutions are essential to protect our healthcare systems and our citizens,” said Attorney General Jim Hood.
This case was investigated by the Special Agents of the Federal Bureau of Investigation, Department of Health and Human Services, Office of Inspector General, and the Mississippi State Attorney General’s Office - Medicaid Fraud Control Unit, and was prosecuted by the United States Attorney’s Office for the Northern District of Mississippi.
Court Approves Consent Order in Alabama Desegregation Case to Improve Faculty Diversity and Ensure Fair and Equitable Student DisciplineRead the Press Release
The U.S. District Court for the Northern District of Alabama approved a consent order yesterday afternoon filed by the Justice Department, together with private plaintiffs and the Calhoun County, Alabama, School District, finding that the district has met its desegregation obligations in certain areas and providing for additional, comprehensive relief in the areas of faculty and staff hiring and recruitment as well as student discipline and school climate.
In approving the consent order, which amends a longstanding federal school desegregation decree, the district court declares that the 9,200-student school district has eliminated the vestiges of prior state-mandated segregation in the areas of student assignment, extracurricular activities, school facilities and transportation, thereby ending the court’s supervision in those areas. The order requires the district to take additional steps to reach full compliance, including adopting measures to promote racial diversity in its faculty and staff, expanding its use of positive behavioral supports and interventions throughout its schools, and revising its student discipline policies and procedures to ensure they are fair, non-discriminatory and limit the use of exclusionary discipline such as suspensions and expulsions.
“We commend the Calhoun County School District for the progress it has made in complying with its desegregation obligations, and for agreeing to take additional steps to reach our mutual goal of ensuring equal educational opportunities for all students,” said Acting Assistant Attorney General Vanita Gupta of the Justice Department’s Civil Rights Division. “We will continue to work closely with the district to implement this agreement and bring this case to a successful conclusion.”
The district may seek full dismissal of the case upon compliance with the terms of the three-year agreement. The Justice Department will monitor and enforce the district’s compliance with the order.
The enforcement of Title IV of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, among other bases, in public schools is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt.
Council Bluffs Resident Sentenced for Conspiracy to Distribute Methamphetamine and Possession of A FirearmRead the Press Release
COUNCIL BLUFFS, IA - On February 12, 2015, Ronald Wayne Shenk, a 48 year-old resident of Council Bluffs, Iowa, was sentenced by United States District Court Judge Stephanie M. Rose to 120 months in prison for conspiracy to distribute methamphetamine followed by a consecutive period of 60 months in prison for possession a firearm in relation to drug trafficking, announced United States Attorney Nicholas Klinefeldt. Shenk’s term of imprisonment is to be followed by five years of supervised release.
During the course of the investigation, law enforcement served a search warrant on Shenk’s residence in Council Bluffs, Iowa, on April 17, 2014. The search produced over one kilogram of methamphetamine, over ten thousand dollars in cash, and ten firearms. Law enforcement also located drug trafficking paraphernalia, including digital scales, multiple cellular telephones, drug notes and surveillance equipment. Shenk entered a guilty plea on October 2, 2014.
The investigation was conducted by the Southwest Iowa Narcotics Task Force, Mills County Sheriff’s Office, the Council Bluffs, Iowa, Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Colombian Brothers Sentenced to Prison for Smuggling FirearmsRead the Press Release
Orlando, Florida – Chief U.S. District Judge Anne C. Conway has sentenced two brothers, Nelson Cartagena (41, Rockledge) and Dairo Cartagena (38, Rockledge), for their roles in a conspiracy to smuggle firearms to Colombia, and for unlawfully dealing in firearms. Nelson Cartagena was sentenced to 15 years in federal prison and Dairo Cartagena was sentenced to 5 years and 3 months’ imprisonment. The Court also ordered the Cartagenas to forfeit all firearms intercepted by law enforcement during the investigation.
Nelson Cartagena and Dairo Cartagena pleaded guilty to the charges and were adjudicated guilty on October 30, 2014, and November 24, 2014, respectively. Two other conspirators, Karen Chan and Julian Roland, previously pleaded guilty for their roles in this case. They are scheduled to be sentenced on March 5, 2015.
According to court documents, beginning as early as November 2013, and continuing through July 2014, Nelson Cartagena and his brother bought firearms and high-capacity magazines from various Federal Firearms Licensees and private sellers at gun shows in central Florida. They smuggled many of them to Colombia, hidden inside the motor housing of exercise machines. Law enforcement agents seized 88 firearms and 49 high-capacity magazines that had been purchased by the Cartagenas and had been shipped, or were packaged and ready for shipment, to Colombia. The intercepted shipments included high-powered military style assault rifles, pistols that shoot .223 caliber armor-piercing rifle rounds, and a variety of 9 mm pistols. Based on evidence collected during the investigation, agents estimated that more than 100 firearms were purchased by the brothers and sent to Colombia during this conspiracy. One box containing three assault rifles and a pistol was intercepted in Colombia and a shipment of 15 firearms was intercepted in Miami. An additional two boxes, containing a total of 30 firearms and 49 magazines, were found in Dairo Cartagena’s apartment ready for shipment to Colombia.
Testimony at the sentencing hearing indicated that the firearms and magazines were destined for delivery to an unknown drug cartel in Colombia.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Bruce S. Ambrose.
Clay County Man Sentenced to Eighteen Years on Methamphetamine ChargesRead the Press Release
Follow @SDILNewsA Jefferson County man was sentenced today to federal prison on methamphetamine charges, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Jason L. Shadle, 40, of Flora, Illinois, was sentenced to 216 months in federal prison, to be followed by four years’ supervised release, and fined $200. Shadle had previously pleaded guilty to four counts in a federal indictment. Count 1 charged that from January 2011, until on or about April 8, 2014, in Clay County, Shadle conspired with others known and unknown to the Grand Jury to manufacture more than 50 grams of methamphetamine. Count 2 charged that on May 3, 2012, in White County, Shadle possessed equipment, chemicals, products, or materials which may be used to manufacture methamphetamine, knowing, intending, and having reasonable cause to believe, that those items would be used to manufacture methamphetamine. Count 3 charged that on April 7, 2014, in Crawford County, Shadle possessed equipment, chemicals, products, or materials which may be used to manufacture methamphetamine, knowing, intending, and having reasonable cause to believe, that those items would be used to manufacture methamphetamine. Count 4 charged that from January 2010, to on or about March 25, 2014, in Clay County, and elsewhere, Shadle possessed Pseudoephedrine pills, knowing and having reasonable cause to believe that the pills would be used to manufacture methamphetamine.
The investigation in this case was conducted by the Flora Police Department, the Clay County Sheriff’s Office, and the Southeastern Illinois Drug Task Force.
The case is being handled by Assistant United States Attorney George Norwood.
Clarksville Woman Sentenced for Filing False Tax ReturnsRead the Press Release
Traci Lynne Howes, 41, of Clarksville, Tennessee, was sentenced on February 9, 2015, by Chief United States District Court Judge Kevin H. Sharpe, to serve 18 months in prison for filing a false tax return, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
Howes pleaded guilty in May 2014 to failing to report income of more than $605,000, which she embezzled from her former employer, Drywall Systems, Inc., in Gallatin, Tenn. Chief Judge Sharpe also ordered Howes to pay restitution in the amount of $538,932.33 for funds embezzled from her former employer, and $139,525 to the IRS for funds withheld from the IRS employee trust fund taxes and employer payroll taxes.
“The U.S. Attorney’s Office will aggressively pursue and prosecute individuals who intentionally evade their tax responsibility,” said U.S. Attorney David Rivera.
“With tax season underway, let this sentencing serve as a reminder, no matter what the source of income, all income is taxable,” said Christopher A. Henry, Special Agent in Charge of the Nashville Office of the IRS-Criminal Investigation. “The prosecution of individuals who intentionally conceal income and evade taxes is a vital element of the IRS' enforcement strategy.”
The investigation was conducted by IRS-Criminal Investigation. Assistant U.S. Attorneys Stephanie N. Toussaint and Kathryn Ward Booth prosecuted the case.
Chicago Psychiatrist Pleads Guilty to Taking Kickbacks to Prescribe Anti-Psychotic Drug; Will Also Pay U.S. and Illinois $3.79 MillionRead the Press Release
CHICAGO — A long-time Chicago psychiatrist pleaded guilty today to a federal crime for receiving illegal kickbacks and benefits totaling nearly $600,000 from pharmaceutical companies in exchange for regularly prescribing the anti-psychotic drug clozapine to his patients. The defendant, Dr. MICHAEL J. REINSTEIN, also agreed to pay the United States and the State of Illinois $3.79 million to settle a parallel civil lawsuit alleging that, by prescribing clozapine in exchange for kickbacks, Reinstein caused the submission of at least 140,000 false claims to Medicare and Medicaid for the clozapine he prescribed for thousands of elderly and indigent mentally ill patients in at least 30 area nursing homes and other facilities, federal and state law enforcement officials announced today.
Reinstein, 71, of Skokie, pleaded guilty to one count of violating the federal Medicare and Medicaid Anti-Kickback Statute at his arraignment in U.S. District Court after he was charged on February 3. His cooperation plea agreement calls for the government to recommend a sentence of 18.5 months in prison when he is sentenced on a date to be determined by U.S. District Judge Sharon Johnson Coleman.
Both the criminal and civil cases involve the promotion of generic clozapine, a rarely prescribed anti-psychotic drug that has serious potential side effects and is generally considered a drug of last resort, particularly for elderly patients. While clozapine has been shown to be effective for treatment-resistant forms of schizophrenia, it is also known to cause numerous side effects, including a potentially deadly decrease in white blood cells, seizures, inflammation of the heart muscle, and increased mortality in elderly patients.
Reinstein, a psychiatrist in the Chicago area since 1973 with an office in Chicago’s Uptown neighborhood since at least 1999, quickly became one of the largest prescribers of generic clozapine in the country after obtaining a consulting agreement worth $50,000 per year, plus other compensation, from the manufacturer of the drug.
Under the civil settlement, Reinstein will pay the United States $1,837,968 and the State of Illinois $1,956,741 within 10 days. The settlement resolves a civil lawsuit that the United States filed in November 2012, and the State of Illinois joined in March 2013, on behalf of the U.S. Department of Health and Human Services and the Illinois Department of Healthcare and Family Services. United States v. Reinstein, 12 C 9167 (NDIL).
“Physicians must prescribe medications for their patients solely on the basis of the patient’s best medical interests and not because those decisions were improperly influenced by kickbacks and other financial favors,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois.
“The Department of Justice is committed to ensuring that physicians who accept payments from pharmaceutical manufacturers to influence prescribing decisions are held accountable,” said Acting Assistant Attorney General for the Justice Department’s Civil Division Joyce R. Branda. “Schemes such as this one undermine the health care system and take advantage of elderly patients who are among the most vulnerable health care recipients.”
“The defendant put his patients at great risk of serious health problems to benefit his personal interests at taxpayer expense,” said Attorney General Lisa Madigan, whose office handled the civil litigation.
In March 2014, Teva Pharmaceuticals USA, Inc., and IVAX Pharmaceuticals LLC, paid the United States and the State of Illinois $27.6 million to settle allegations that they violated state and federal False Claims Acts by making payments to Reinstein in return for his prescriptions of clozapine to his patients.
The civil lawsuit against Reinstein alleged that he solicited and accepted kickbacks from IVAX and Teva in exchange for prescribing clozapine to Medicare and Medicaid patients between August 2003 and July 2011. Reinstein violated the federal and state False Claims Acts by causing the submission of prescription drug claims to the Medicare and Medicaid programs for clozapine prescriptions generated by the kickbacks IVAX and Teva paid Reinstein, the suit alleged.
Reinstein also submitted and/or caused to be submitted to both Medicaid and Medicare claims for his professional services involving “pharmacologic management” of those patients for whom he prescribed clozapine. However, Reinstein allegedly did not engage in meaningful pharmacological management, because his prescribing decisions for his clozapine patients were based on the kickbacks he received rather than his independent medical judgment or the individual needs of his patients.
Apart from the admissions Reinstein made in his guilty plea to criminal conduct, the civil settlement is neither an admission of liability by Reinstein nor a concession by the United States or the State of Illinois that their claims were not well-founded.
In pleading guilty in the criminal case, Reinstein admitted that until 2003, he prescribed Clozaril, the brand name version of the clozapine molecule, even though less expensive, generic versions of the drug were available after 1997, because the manufacturer of Clozaril paid Reinstein thousands of dollars annually for speaking engagements to promote the drug. After the patent for Clozaril expired, Reinstein resisted pharmacy and drug company efforts to switch his patients to generic clozapine and he continued to be the largest prescriber of Clozaril to Medicaid recipients in the United States. In July 2003, the manufacturer of Clozaril stopped paying Reinstein for speaking engagements and he agreed to meet with IVAX representatives about switching his patients to generic clozapine.
Shortly later in 2003, Reinstein agreed to switch his patients to IVAX’s generic clozapine after IVAX agreed to pay him $50,000 per year under a consulting agreement and to fund a clozapine research study by a Reinstein-affiliated entity. IVAX renewed its annual consulting agreement with Reinstein and Teva continued paying Reinstein consulting and speaker fees realted to clozapine after acquiring IVAX in January 2006. Teva and IVAX employees renewed consulting and speaking agreements with Reinstein for $50,000 each year between 2004 and 2007, $40,000 for 2008, and $24,000 for 2009. Between 2004 and 2009, Teva and IVAX paid Reinstein a total of approximately $234,000 for consulting and speaking related to clozapine.
Between 2004 and 2009, the manufacturer of an orally disintegrating form of the clozapine molecule also paid Reinstein for speaking engagements, totaling approximately $135,000. In addition, this same manufacturer paid Reinstein’s research company at least $20,000 for a study related to orally disintegrating clozapine, with Reinstein acting as the principal investigator and using his patients. In part because of these payments, between January 2005 and March 2006, Reinstein switched more than half of his patients from generic clozapine to the orally disintegrating clozapine.
Further, employees of Teva and IVAX caused the pharmaceutical companies to pay entertainment expenses for Reinstein and his associates, including expensive meals, tickets to sporting events, and all-expense-paid trips to Miami, all as part of an effort to induce him to prescribe IVAX/Teva clozapine. These entertainment expenses totaled approximately $30,000.
In March 2006, during an all-expense-paid trip to Miami, Teva and IVAX employees asked Reinstein what they could do to get him to prescribe more clozapine and less of the orally disintegrating clozapine to his patients. Reinstein told them that Teva should hire Individual A, whom he described as an important source of patient referrals for him. In May 2006, Teva hired Individual A to a part-time position entering white blood cell count data for some of Reinstein’s patients into the national clozapine registry at a rate of $20 per hour for a maximum of 30 hours per week. Over the next several months, Reinstein switched hundreds of his patients from the orally disintegrating clozapine to generic clozapine, knowing that Teva’s hiring of and payments to Individual A were illegal because they were at least partly in return for his prescriptions of clozapine. Between July 2006 and July 2011, Teva paid Individual A approximately $112,000.
In July 2006, Teva paid a research company affiliated with Reinstein for another clozapine study. The payments to the research company by IVAX in 2004 and Teva in 2006 totaled approximately $61,000. During this time period, the research company made monthly payments to Reinstein for rent and medical director fees. Overall, Reinstein admitted receiving payments totaling approximately $592,000 through various forms of illegal remuneration. In each scenario, Reinstein knew that the compensation was illegal because the payments were at least partly in exchange for his prescriptions of clozapine.
The civil settlement resulted from of a coordinated effort by the U.S. Attorney’s Office for the Northern District of Illinois, the Civil Fraud Section of the Commercial Litigation Branch of the Justice Department’s Civil Division, the Department of Health and Human Services Office of Inspector General, the Chicago Office of the Federal Bureau of Investigation, and the Illinois Attorney General’s Office.
In the civil case, the United States was represented by Assistant U.S. Attorney Eric S. Pruitt, and the State of Illinois was represented by Assistant Illinois Attorney General Robert Barba. Assistant U.S. Attorney Ryan S. Hedges is representing the government in the criminal case.
Plea Agreement
California Man Sentenced to 12 Years in Meth Trafficking ConspiracyRead the Press Release
KANSAS CITY, KAN. - A California man who was convicted on federal methamphetamine trafficking charges in Kansas was sentenced Friday to 146 months in federal prison, U.S. Attorney Barry Grissom said.
Tino Soriano, 33, Coachella, Calif., pleaded guilty to one count of conspiracy to distribute methamphetamine. In his plea, he admitted that on March 22, 2012, he was one of the occupants of a car that fled from a house in the 800 block of South 72nd Street in Kansas City, Kan., after investigators made a controlled delivery of a package containing almost two pounds of methamphetamine. Investigators had seized the package at a FedEx facility in Kansas City after a drug dog alerted to the contents. Soriano and two co-defendants left the package behind because they realized they were under surveillance.
Officers pursued Soriano’s vehicle, eventually finding it abandoned at a residence in the 16000 block of 182nd Street in Tonganoxie, Kan. A birth certificate and other documents belonging to Soriano were found in the car. In addition, investigators learned that on March 21, 2012, Soriano was present with co-defendant Leslie Kingsley during a drug deal at a strip club off K-7 Highway in Bonner Springs, Kan. Kingsley fronted 14 grams of meth to co-defendant Kristy Sherley so she could provide samples to other buyers.
Co-defendants include:
Leslie Kingsley, who is awaiting sentencing.
Kristy Sherley, who was sentenced to 60 months.
Michael Loveland, who was sentenced to 92 months.
Jose Del Refugio Sanchez, who was sentenced to 38 months.
Grissom commended the Kansas City, Mo., Police Department, the Kansas City, Kan., Police Department, the Drug Enforcement Administration, Deputy Chief Assistant U.S. Attorney Jay Robinson of the U.S. Attorney’s office in Riverside, Calif., and Assistant U.S. Attorney Sheri McCracken for their work on the case.
Brooklyn, New York Man, Residing in Fair Haven, Sentenced to 29 Months Prison for Heroin and Crack Cocaine DistributionRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Ras Foster, 25, of Brooklyn, New York has been sentenced on his conviction for distributing heroin in the Fair Haven, Vermont area. Foster previously pled guilty to this offense which involved selling heroin and crack cocaine in Fair Haven in March and April of 2014. One of the two charged sales took place in the parking lot of the Stewart’s convenience store.
Chief United States District Court Judge Christina Reiss sentenced Foster to 29 months imprisonment to be followed by three years of supervised release. The United States Attorney’s Office requested a sentence of 37 months imprisonment, which was the low end of the advisory U.S. Sentencing Guidelines. The maximum sentence for the drug distribution offense to which Foster was convicted is 20 years.
In sentencing Foster, Judge Reiss noted that heroin is “ravaging the community” and “enslaving” addicts by selling them drugs. Judge Reiss further stated that there need to be significant “consequence[s]” to those who “come up to” Vermont to sell drugs.
The United States is represented in this matter by Assistant U.S. Attorney Joseph Perella. Foster is represented by William Christman, Esq. of St. Albans. Esq. The investigation was conducted by the Vermont State Police Drug Task Force, the Federal Bureau of Investigation, and the Drug Enforcement Administration.
Baltimore Man Sentenced to 3 Years in Prison for Possession of Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell, III sentenced Jason Lewis Schwamberger, age 39, of Baltimore, today to three years in prison, followed by 20 years of supervised release. Judge Russell ordered that upon his release from prison, Schwamberger must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Lt. Colonel Anthony C. Satchell, Acting Superintendent of the Maryland State Police.
According to his plea agreement, on two occasions in May 2013, an investigator with the Maryland State Police downloaded files containing child pornography that Schwamberger made available through a file sharing program. On September 13, 2013, a search warrant was executed at Schwamberger’s residence and law enforcement seized his desktop computer, two external hard drives, a thumb drive and numerous CDs and DVDs. A subsequent forensic examination of the seized items revealed that the file sharing program had been used to download child pornography and there were more than 1,000 images and 180 video files depicting minors engaged in sexually explicit conduct,
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Paul E. Budlow, who prosecuted the case.
Akron Doctor Sentenced to 10 Years in Prison for Illegally Prescribing Painkillers, Even After Patients DiedRead the Press Release
An Akron physician was sentenced to 10 years in prison for illegally prescribing hundreds of thousands of doses of painkillers and other pills to customers for no legitimate medical purpose, even after at least eight customers died from overdose-related deaths, law enforcement officials said.
Adolph Harper, Jr., 64, was also ordered to pay $417,060 in restitution. He pleaded guilty last year to one count of conspiracy to traffic drugs, four counts of health care fraud and 16 counts of drug trafficking.
Previously, Adria Harper, 35, of Akron, was sentenced to more than four years in prison after pleading guilty to one count of conspiracy to traffic drugs and 25 counts of drug trafficking. Patricia Laughman, 52, of Barberton, was sentenced to more than a year in prison after pleading guilty to one count of conspiracy to traffic drugs and 14 counts of drug trafficking. Tequilla Berry, 35, of Akron, pleaded guilty last year to one count of conspiracy to traffic drugs and seven counts of drug trafficking. She was sentenced to five years of probation.
Together, they distributed hundreds of thousands of doses of prescription medications -- including Oxycontin, Percocet, Roxicet, Opana, and others -- from Adolph Harper’s medical officers in Akron between 2009 and 2012, according to court documents.
“Harper may have been a doctor, but he sold drugs like a common street-level dealer. People who saw him became addicted, and some of them died from overdoses,” Dettelbach said. “We will continue to prosecute those who contribute to the heroin and opioid epidemic in our state.”
Steven D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office, said: “Harper is deserving of every day of this sentence. Harper took the trust he received simply for being a physician and used it to take advantage of those who were already suffering. We want to thank our partners at the U.S. Health and Human Services, the DEA and the U.S. Attorney’s Office for working together to bring this case to light and this man to justice.”
“Dr. Harper ignored his primary responsibility of protecting his patient’s health and instead looked to exploit and take advantage of their condition. His actions were criminal and put the public’s safety at risk as well as vital taxpayer dollars,” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General – Chicago Region. “The OIG and its partners will continue our efforts to identify instances where physicians abuse the public’s trust and ensure that they are held accountable.”
All four defendants conspired to distribute addictive controlled substances, including prescription painkillers and anti-anxiety medication, outside the usual course of professional practice and without any legitimate medical purpose, according to court documents.
Adolph Harper’s customers, many of whom were drug addicts exhibiting clear signs of drug addiction during their visits to his office, came to his office and received “prescriptions” for addictive prescription medications without being examined by Harper and often without seeing him at all, according to the court documents.
Harper continued to distribute prescriptions for controlled substances after he learned that some of his customers had died from overdose-related deaths. He also continued to distribute narcotics to customers who had overdosed on controlled substances he had earlier prescribed, according to the court documents.
For example, a customer identified in court documents as K.C. was hospitalized several times after overdosing on drugs prescribed by Harper. The hospital and others notified Harper of this fact, but he continued to prescribe narcotics to K.C. She died from an overdose of oxycodone less than a week after Harper prescribed even more oxycodone and alprazolam to her, according to court documents.Adria Harper, Laughman and Berry distributed prescriptions to these customers when Adolph Harper was out of the office and also used Adolph Harper’s pre-signed prescription pad to distribute prescriptions for addictive painkillers to themselves, according to the court documents.
Additionally, Adolph Harper executed four separate schemes to defraud health insurance providers by (1) submitting insurance claims for services using a higher billing code than the service justified; (2) submitting insurance claims for unperformed services; (3) billing an insurance provider for a service after collecting a cash payment for the same service; and (4) causing the submission of insurance claims for prescriptions for controlled substances that were issued outside the usual course of professional practice and not for a legitimate medical purpose, according to court documents.
This case is being prosecuted by Assistant United States Attorneys Margaret A. Sweeney, Edward F. Feran, and Rebecca C. Lutzko following an investigation by the Federal Bureau of Investigation, the Department of Health and Human Services -- Office of the Inspector General, the Drug Enforcement Administration, the Ohio Board of Pharmacy and the Akron Police Department.
Additional Ms-13 Gang Member Indicted for Murder of 19-Year-Old Man in Long IslandRead the Press Release
Yesterday, a superseding indictment was unsealed charging the defendant, Oscar Wellman Espinoza-Merino, along with a previously-charged co-defendant, Byron Lopez, with conspiracy to commit murder in-aid-of racketeering, murder in-aid-of racketeering, obstruction-of-justice murder, and firearms offenses.1 If convicted, the defendant will face mandatory life imprisonment. Espinoza-Merino, who was arrested yesterday morning, was presented for arraignment yesterday afternoon at the United States Courthouse in Brooklyn, New York.
The charges and arrest were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Anthony Scandiffio, Deputy Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations, New York Field Office (HSI); Delano A. Reid, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Explosives and Firearms, New York Field Division (ATF); and William J. Bratton, Commissioner, New York City Police Department.
“This Office has a long history of prosecuting and convicting members of the MS-13 gang, which for years has pursued its particularly brutal brand of violence and lawlessness in neighborhoods throughout Queens and Long Island,” stated U.S. Attorney Lynch. “This prosecution, which brings another alleged member of the gang to justice for a murder that disrupted one of our communities earlier this year, is part of our ongoing mission to dismantle MS-13 wherever and whenever it rears its head in this District.” Ms. Lynch thanked the Suffolk County Police Department for its assistance with the investigation and the United States Marshals Service Regional Fugitive Task Force for its assistance in locating Espinoza-Merino.
“The indictment of two alleged members of the violent MS-13 street gang related to the brutal murder of a fellow gang member is another step in dismantling this transnational gang that has wreaked havoc on our neighborhoods,” said HSI Deputy Special Agent-in-Charge Scandiffio. “HSI will continue to aggressively work with our local, state, and federal law enforcement partners in New York to target MS-13 and other transnational gangs that threaten the safety of our communities.”
ATF Special Agent-in-Charge Reid stated, “As part of our Frontline strategy, the ATF has placed one of its highest priorities in the fight to combat violent crime. As alleged, this gang investigation involved depraved individuals who had no regard for human life. We are happy that yesterday’s arrest can now bring some consolation to the victim’s family, and we look forward to working with our law enforcement partners to swiftly locate and arrest any others who participated in this criminal enterprise.”
“Violent gangs such as MS-13 show complete disdain for life by carrying out heinous acts, such as the murder charged in this indictment, only to instill fear in our communities,” said Police Commissioner Bratton. “The NYPD along with our federal law enforcement partners will continue to aggressively pursue these gang members and bring them to justice.”
As alleged in court documents, Espinoza-Merino is a member of the Brentwood, Long Island chapter of the violent street gang La Mara Salvatrucha, also known as “MS-13.” On February 25, 2014, Espinoza-Merino, Lopez, and other members of the gang directed the victim, fellow gang member Sidney Valverde, to travel to Long Island under the false pretense that they needed him to assist in gang business there. In fact, the co-conspirators planned to kill Valverde because they believed that he was providing information about the gang’s activities to federal law enforcement. After Valverde traveled to Long Island, the conspirators shot him in the back of the head and left his body on Miller Place Beach in Suffolk County, where it was discovered by a beachcomber approximately two weeks later.
The indictment of Espinoza-Merino is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent international street gang comprised primarily of immigrants from El Salvador and Honduras. With numerous chapters, or “cliques,” through the United States, MS-13 has a significant presence in Queens and is the largest street gang in Long Island. Since 2003, more than 250 MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York. More than 150 of those MS-13 members have been convicted on federal racketeering charges. Since 2010 alone, this Office has obtained indictments charging MS-13 members with carrying out more than 20 murders in the Eastern District of New York and has convicted more than 35 MS-13 members in connection with those murders.
The government’s case is being prosecuted by Assistant United States Attorneys Darren A. LaVerne and Alixandra E. Smith.
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1 The charges contained in the indictments are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The Defendant:
OSCAR WELLMAN ESPINOZA-MERINO, also known as “Speedy” and “Petey”
Age: 32
A Palm Beach County Man Sentenced for Unlawfully Transporting Endangered Sea TurtlesRead the Press Release
A Palm Beach County resident was sentenced today by U.S. District Judge Kenneth Marra for unlawfully transporting endangered sea turtles.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and William H. Calvert, Supervisory Law Enforcement Officer, U.S. Fish and Wildlife Service, West Palm Beach, made the announcement.
On August 15, 2014, James Odell McGriff, 56, of Riviera Beach, Florida, dug into two sea turtle nests and unlawfully took 299 endangered sea turtle eggs. Twelve of the eggs were held as evidence, and the remaining 287 sea turtle eggs were returned to the nests, in an effort to allow the eggs to continue to develop and possibly hatch. All species of sea turtles are protected by the Endangered Species Act, as either threatened or endangered species. McGriff intended to sell the illegally obtained eggs for $20.00 a dozen. The U.S. Fish and Wildlife Service estimates that the black market value is between $3.00 and $5.00 per stolen egg, for a total profit of between $897.00 and $1,495.00.
McGriff was sentenced to 14 months imprisonment, to be followed by three years of supervised release. Additionally, Judge Marra ordered that McGriff not go east of the Intercoastal Waterway while he is on supervised release.
Mr. Ferrer commended the investigative efforts of the U. S. Fish and Wildlife Service, the St. Lucie County Sheriff’s Department and the Florida Fish and Wildlife Conservation Commission. This case was prosecuted by Assistant U.S. Attorney Lauren Jorgensen.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Thursday 12 February 2015
Wooster Man Faces Child Pornopgraphy ChargesRead the Press Release
Bruce A. Grubb, 56, from Wooster, was charged with receiving, distributing and possessing visual depictions of minors engaged in sexually explicit conduct, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment charges that from on or about October 4, 2014, through on or about October 13, 2014, Grubb knowingly received and distributed in interstate and foreign commerce, by computer, numerous computer files, which files contained visual depictions of real minors engaged in sexually explicit conduct.
The indictment also charges that on January 21, 2015, Grubb possessed computer disks that contained child pornography.
If convicted, the sentence in this case will be determined by the court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Michael A. Sullivan. The case was investigated by the Canton Office of the Federal Bureau of Investigation and the Canton Police Department.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Woman Pleads Guilty to Filing over 1100 Fraudulent Tax ReturnsRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that Patrice Taylor, age 33, of Ashburn, Georgia, entered a plea of guilty on February 11, 2015 to one count of conspiracy to commit wire fraud and one count of aggravated identity theft before the Honorable W. Louis Sands, Senior U.S. District Court Judge, in Albany, Ga.As a part of her plea agreement, Mrs. Taylor admitted she conspired with her husband, Antonio Taylor, and Jarrett Jones to file over 1,100 fraudulent tax returns between January 2011 and February 2013. At least 1,089 of the returns were filed electronically from two IP addresses registered to Mrs. Taylor, both located at their home. From January 2012 to October 2012, a cell phone subscribed to Mrs. Taylor was used to call the Internal Revenue Service’s Automated Electronic Filing PIN Request 114 times.
In January 2012, Mrs. Taylor filed her own fraudulent federal income tax return requesting a refund in the amount of $6,776. She claimed a dependent that she was not authorized by law to claim. Mrs. Taylor also fraudulently used the data of 14 real people.
For conspiracy to commit wire fraud, the defendant faces a maximum sentence of 20 years in prison, a maximum fine of $250,000, or both. For aggravated identity theft, she faces a mandatory minimum sentence of 2 years in prison, consecutive to any other sentence, a maximum fine of $250,000, or both.
“We are seeing an alarming amount of identity theft across the country. We will use every resource at our disposal to make sure that those who use stolen identities to file phony tax returns and steal money end up with an identification form unique to them – one issued by the federal prison system,” said U.S. Attorney Michael Moore.The case was investigated by the Internal Revenue Service, assisted by the Ashburn Police Department. Assistant United States Attorney Jim Crane is prosecuting the case for the Government.
Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.
West Hartford Woman Pleads Guilty to Tax EvasionRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that STEPHANIE ELLIOTT, 42, of West Hartford, pleaded guilty today before U.S. District Judge Alvin W. Thompson in Hartford to one count of tax evasion.
This matter stems from an Internal Revenue Service investigation into State of Connecticut employees who had little or no federal withholding taken out of their paychecks and who failed to file income tax returns. The investigation revealed that certain state employees submitted fraudulent W-4 forms claiming numerous exemptions and had no money withheld from their wages.
According to court documents and statements made in court, ELLIOTT has been employed by the Connecticut Department of Mental Health and Addiction Services at the Connecticut Valley Hospital since 1999, first as a mental health assistant and later as a nurse. ELLIOTT submitted a false Form W-4 to the state indicating that she had 99 exemptions and was exempt from tax withholding. As a result, no money was withheld from her wages. During the 2007 through 2012 tax years, ELLIOTT paid no federal income taxes on more than $515,000 in income she received, resulting in a federal tax loss of $73,599.
Judge Thompson scheduled sentencing for May 11, 2015, at which time ELLIOTT faces a maximum term of imprisonment of five years and a fine of up to $250,000. She also is required to pay back taxes, plus interest and penalties.
ELLIOTT was charged by indictment on April 9, 2014, and is currently released on bond.
This ongoing investigating is being conducted by the Internal Revenue Service – Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Susan Wines.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Wakefield Woman Pleads Guilty to Misprision of a FelonyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that LINDSEY DOOLEY, age 24, of Wakefield, pleaded guilty today to a one-count superseding Bill of Information which charged her with misprision of a felony. DOOLEY and STEPHEN FARRELL were previously charged with conspiracy, making false statements in connection with a firearm purchase, transfer of a firearm to a prohibited person, possession of a firearm by a felon and possession with intent to distribute heroin.
According to court documents, on May 8, 2013, while conducting a related heroin investigation, Jefferson Parish Sheriff’s Office detectives searched FARRELL and DOOLEY’s residence located at in Metairie. During the search, detectives found a loaded Taurus International .380 caliber firearm and drug paraphernalia. FARRELL previously pled guilty in this case to possession of a firearm by a convicted felon. Court records reveal that DOOLEY concealed FARRELL’s heroin distribution activities by providing a place for FARRELL to store and package the heroin.
DOOLEY faces a maximum term of imprisonment of three years, a maximum fine of $250,000 and up to one year of supervised release following any term of imprisonment. U.S. District Judge Jane Triche Milazzo scheduled sentencing for May 7, 2015.
U.S. Attorney Polite praised the work of the ATF New Orleans Division Office and the Jefferson Parish Sheriff’s Office in investigating this matter. Assistant United States Attorney Nolan D. Paige is in charge of the prosecution.
Venezuelan Man Who Made Threatening Calls to Newtown Residents Is SentencedRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that WILFRIDO A. CARDENAS HOFFMANN, 31, of El Hatillo, Venezuela, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 12 months and one day of imprisonment, followed by three years of supervised release, for making threatening phone calls to residents of Newtown, Connecticut, shortly after the Sandy Hook Elementary School shooting tragedy in December 2012.
According to court documents and statements made in court, on December 16, 2012, two days after the shooting that claimed 26 lives at Sandy Hook Elementary School in Newtown, CARDENAS HOFFMANN used a voice over IP application on an iPod to make numerous phone calls from his home in Venezuela to Newtown residences. In one of the telephone calls, CARDENAS HOFFMANN stated: “This is Adam Lanza. I’m gonna [expletive] kill you. You’re dead. You’re dead. You hear me? You’re dead.” In another phone call, CARDENAS HOFFMANN stated: “This is Adam Lanza. I’m gonna kill you. You’re dead. With my machine gun. You’re dead [expletive].”
The investigation revealed that CARDENAS HOFFMANN made more than 90 calls to approximately 47 telephone numbers of Newtown residences. Not all of the calls were successfully placed and answered.
CARDENAS HOFFMANN was charged by criminal complaint on May 20, 2013. The complaint remained sealed until CARDENAS HOFFMANN was arrested on June 21, 2014, in Miami as he transitioned through Miami International Airport en route to Mexico from Venezuela. He has been detained since his arrest and pleaded guilty to the offense on December 11, 2014.“Threatening Newtown residents just two days after their tragedy was inexplicably cruel,” stated U.S. Attorney Daly. “This defendant’s senseless crimes re-victimized a brave yet fragile community that was already suffering a profound loss. Together with the FBI, our office is committed to tracking down individuals who commit such hoax crimes wherever they are, and bringing them to justice.”
“With today’s sentence, Mr. Hoffmann has been held accountable for his despicable actions that only served to perpetuate the pain and suffering the families living in Newtown have endured,” stated Special Agent in Charge Patricia M. Ferrick. “I would like to thank the investigators and prosecutors for their commitment to bring Mr. Hoffmann to justice.”
This matter has been investigated by the Federal Bureau of Investigation, with the assistance of the Newtown Police Department. The case was prosecuted by Assistant U.S. Attorneys Krishna Patel and Edward Chang.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Upper Darby Man Charged with Transporting Child PornographyRead the Press Release
PHILADELPHIA - David A. Seiver, 77, of Upper Darby, PA, was charged today by indictment with transportation of child pornography, announced United States Attorney Zane David Memeger. According to the indictment, Seiver transported and shipped a video file of an adult male raping a child.
If convicted the defendant faces a mandatory minimum sentence of 15 years in prison with a maximum possible sentence of 40 years in prison, and a fine of up to $250,000.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Virgil B. Walker.
United States Attorney's Office to Sponsor the 12th Annual Project Sentry Logo ContestRead the Press Release
Contact Person: Lance Crick (864) 282-2100
United States Attorney's Office to Sponsor the 12th Annual Project Sentry Logo Contest
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GREENVILLE, South Carolina ---- The United States Attorney's Office is sponsoring its 12th Annual Project Sentry Logo Contest. The statewide contest allows students an opportunity to design logos on school safety, gun violence awareness and prevention, and submit their illustrations for upcoming Project Sentry publications. The contest is open to any student (elementary, middle, or high school age) in South Carolina. Entries will be divided into four grade categories. A winner will be selected from each of the four grade categories and will each receive a $50.00 cash award. The overall winning logo, which will be chosen from among the four grade division category winners, will receive an additional $50.00 cash award (for a total of $100.00), and will be featured in Project Sentry publications. The awards are sponsored by the South Carolina Law Enforcement Officers Association (SCLEOA).
Entries should be consistent with the theme "Preventing Gun Violence at Your School." The deadline for submissions is Friday, April 3, 2015. Contest information has been distributed to schools throughout South Carolina. Therefore, if your child or student is interested in participating, contact your school and/or local law enforcement agency as contest information has been provided to them as well. Additionally, if your child?s school is not participating in the contest, your child may still submit an entry. Application and contest rules may be found on our website at: http://www.justice.gov/usao-sc/programs/ceasefire/project-sentry/contest-winners
Project Sentry, which is part of the district?s Project Safe Neighborhoods/Project Cease Fire program, is a vital step in strengthening our ability to prevent gun crimes among our young people and to ensure a safe learning atmosphere for our children.U.S. Citizen Extradited from Costa Rica in Connection with International-Based Business Opportunity Fraud VenturesRead the Press Release
A U.S. citizen charged in connection with the operation of a series of fraudulent business opportunities was extradited from Costa Rica to the United States, the Justice Department announced today.
John White was charged in a Nov. 29, 2011, indictment in the Southern District of Florida with conspiracy to commit mail and wire fraud, five counts of mail fraud and 13 counts of wire fraud. White was arrested on Feb. 9, 2012, in Costa Rica pursuant to the indictment, which charges that White and his co-conspirators sold fraudulent beverage and greeting card business opportunities, including assistance in establishing, maintaining and operating such businesses, to victims in the United States. The charges in the indictment form part of the government’s continued nationwide crackdown on business opportunity fraud.
In addition to White, 11 other defendants have been charged in connection with related business opportunity fraud ventures that operated in Costa Rica. Nine of those other defendants have been convicted in the United States with sentences ranging from three to 16 years in prison. Two remaining defendants have yet to be received into the custody of the United States.
“Business opportunity fraud takes a heavy financial toll on victims who believe they are buying a piece of the American dream,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division. “The Department of Justice will continue its push to prosecute those who defraud consumers whether from here in the United States or abroad.”
Beginning in May 2005, White and his coconspirators are alleged to have fraudulently induced purchasers in the United States to buy business opportunities in USA Beverages Inc., Twin Peaks Gourmet Coffee Inc., Cards-R-Us Inc., Premier Cards Inc. and The Coffee Man Inc. According to the indictment, the business opportunities the defendant sold cost thousands of dollars each, and most purchasers paid at least $10,000. Each company operated for several months, and after one company closed, the next opened. The various companies used bank accounts, office space and other services in the Southern District of Florida and elsewhere, according to the indictment.
The indictment alleges that the defendant, using aliases, participated in a conspiracy that used various means to make it appear to potential purchasers that the businesses were located entirely in the United States. In reality, White and his co-conspirators operated out of Costa Rica to fraudulently induce potential purchasers in the United States to buy the purported business opportunities, the indictment alleges.
According to the indictment, the companies made numerous false statements to potential purchasers of the business opportunities. Among the misrepresentations alleged in the indictment are: that purchasers would likely earn substantial profits; that prior purchasers of the business opportunities were earning substantial profits; that purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards and beverages; and that the business opportunity worked with locators familiar with the potential purchaser’s area who would secure or had already secured high-traffic locations for the potential purchaser’s merchandise stands. Potential purchasers were also told that the profits of the companies were based in part on the profits of the business opportunity purchasers, thus creating the false impression that the companies had a stake in the purchasers’ success and in finding good locations.
The indictment alleges that the companies employed various types of sales representatives, including fronters, closers and references. A fronter spoke to potential purchasers when the prospective purchasers initially contacted the company in response to an advertisement. A closer subsequently spoke to potential purchasers to close deals. References spoke to potential purchasers about the financial success they purportedly had experienced since purchasing one of the business opportunities. The companies also employed locators, who were typically characterized by the sales representatives as third parties who worked with the companies to find high-traffic locations for the prospective purchaser’s merchandise display racks. The indictment alleges that White, using assumed names, worked as a fronter and a reference.
Each of the companies was registered as a corporation and rented office space to make it appear to potential purchasers that its operations were fully in the United States. USA Beverages was registered as a Florida and New Mexico corporation and rented office space in Las Cruces, New Mexico; Twin Peaks was registered as a Florida and Colorado corporation and rented office space in Fort Collins, Colorado; Cards-R-Us was registered as a Nevada corporation and rented office space in Reno, Nevada; Premier Cards was registered as a Colorado and Pennsylvania corporation and rented office space in Philadelphia; and The Coffee Man was registered as a Colorado corporation and rented office space in Denver.
White faces a statutory maximum sentence of 25 years in prison, a possible fine and mandatory restitution on the conspiracy count. He also faces a statutory maximum sentence of 25 years in prison on each of the mail and wire fraud counts, possible fines and mandatory restitution.
“Business opportunity fraud hurts those who are simply trying to fulfill their dream of running their own business.” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “We will continue to prosecute those who seek to enrich themselves by committing fraud at the expense of innocent victims.”
“The Postal Inspection Service will continue to aggressively investigate and combat business and investment fraud through the use of the U.S. mail,” said Postal Inspector in Charge Ronald Verrochio of the U.S. Postal Inspection Service Miami Division.
Acting Assistant Attorney General Branda and U.S. Attorney Ferrer commended the investigative efforts of the U.S. Postal Inspection Service. The Justice Department’s Office of International Affairs provided assistance with the extradition. The case is being prosecuted by Trial Attorney Alan Phelps of the Civil Division’s Consumer Protection Branch.
An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.