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1 April 2015
Federal Inmate Sentenced for Assault with Intent to Commit MurderRead the Press Release
Inmate Michael Vaught Assaulted With the Intent to Commit Murder a Federal Officer at the United States Penitentiary Lee
ABINGDON, VIRGINIA – Acting United States Attorney Anthony P. Giorno announced today that a federal inmate currently serving a prison sentence at United States Penitentiary Lee has been sentenced to serve additional federal time after he assaulted a federal correctional officer.
Michael Vaught, age 43, was sentenced in the United States District Court for the Western District of Virginia in Abingdon on March 31, 2015, for assault with the intent to commit murder. Vaught, who is currently serving a 368 month aggregate term of imprisonment for felon in possession of a firearm and assault with intent to commit murder for convictions arising out of the United States District Court for the Southern District of Indiana, was sentenced to serve an additional 240 months of federal incarceration for his assault on the officer.
According to evidence provided by Special United States Attorney Debbie Stevens, on August 17, 2014, Vaught threw scalding hot liquid on the federal correctional officer and stabbed the officer multiple times with a prison made ice pick style weapon that was approximately 9 inches long and sharpened to a point.
The investigation was handled by the Federal Bureau of Investigation and Special Investigative Unit of the Bureau of Prisons. Special Assistant United States Attorney Debbie Stevens prosecuted the case for the United States.
Father of Marysville School Shooter Charged with Illegal Firearms PossessionRead the Press Release
The father of a teen who killed four students and himself last year at Marysville-Pilchuck High School was arrested today on charges that he illegally purchased the firearm used in the mass shooting, announced Acting United States Attorney Annette L. Hayes. RAYMOND LEE FRYBERG, 42, is charged with unlawful possession of a firearm by a prohibited person in connection with the Beretta, model PX4 Storm, he purchased in January 2013. At the time of the purchase FRYBERG was the subject of a permanent protection order that prohibits him from possessing firearms. However, FRYBERG lied on forms at the time of the purchase stating he was not subject to a protection order. In fact, just four months earlier, FRYBERG admitted in tribal court that he had violated the protective order and thus he knew that he was subject to its terms. FRYBERG will appear in U.S. District Court in Seattle today, March 31, 2015, at 2:00 PM.
“Guns in the hands of people who have demonstrated they will use violence is a dangerous mix that is prohibited by law,” said Acting U.S. Attorney Annette L. Hayes. “Our office has a long history of working with our federal, state, local and tribal law enforcement partners across Western Washington to prosecute those who illegally possess firearms. This case is part of that effort and a reminder that we are united in our commitment to get firearms out of the hands of those who pose the greatest risk to our communities.”
According to the criminal complaint filed in the case, in 2002, FRYBERG’s then-girlfriend asked the Tulalip Tribal Court for an order of protection alleging FRYBERG had recently threatened her and had in the past physically assaulted her by hitting, slapping and/or pulling her hair. The protection order was made permanent in September 2002 and had no expiration date. In September 2012, FRYBERG was back in tribal court and pleaded “no contest” to violating the protection order. FRYBERG was fined and placed on probation for one year. Less than four months later, FRYBERG went to Cabela’s Sporting Goods store on the Tulalip reservation and purchased the Beretta, and, over subsequent months, four other firearms. FRYBERG filled out forms for the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) stating that he was not the subject of any court order restraining him from harassing, stalking, or threatening an intimate partner or the child of a partner. The form states that anyone subject to such an order is prohibited from purchasing a firearm. The complaint alleges FRYBERG lied when he filled out the form.
On October 24, 2014, FRYBERG’s son, 15-year-old Jaylen Fryberg, used the illegally purchased Beretta to kill four other students and himself at Marysville-Pilchuck High School in Marysville, Washington. Fryberg’s cousin was critically injured but survived.
The case was investigated by the FBI, the Tulalip Tribal Police Department. The case is being prosecuted by Assistant United States Attorneys Ye-Ting Woo and Bruce Miyake.
Former Corporate Executives of Samarion, INC., Plead Guilty to Conspiracy to Defraud InvestorsRead the Press Release
Jackson, Miss – Mark E. Rodgers, 52, currently of Houston, Texas, and the former Chief Executive Officer and President of Samarion Solutions, Inc., in Ridgeland, MS pled guilty on March 25, 2015 before U.S. District Court Judge Daniel P. Jordan III to one count of conspiracy to defraud investors in the sale of securities (18 U.S.C. §371), announced U.S. Attorney Gregory K. Davis and FBI Special Agent in Charge Donald Alway.
Samer N’Ser, 53, from Ridgeland, MS, the former Chief Technology Officer of Samarion Solutions, Inc., entered a guilty plea before U.S. District Judge Daniel P. Jordan III on January 27, 2015 to the same charge
According to the indictment in this case, from approximately 2006 through 2009, Rodgers and N’Ser conspired to intentionally mislead Samarion, Inc. investors in Mississippi, Alabama and elsewhere. Samarion, Inc., formerly known as Valence Broadband, Inc., was a corporation operating out of Madison County, Mississippi. The business plan of the company was to produce a viable monitoring system, commonly referred to as the "Samarion Solution", for installation in nursing homes and elsewhere that could predict when a patient might fall, prevent abuse and/or neglect by staff, and improve the over-all care of nursing home patients.
Both Rodgers and N’Ser were involved in the offer and sale of stock to investors. They conspired to fraudulently misrepresent to potential investors material facts that would affect their decision to invest, including but not limited to the financial strength of the company and the true functionality and capacity of the product, among other things. The indictment alleges that Rodgers and N’Ser engaged in a course of business which operated as a fraud and deceit upon the purchasers of the stock, using wire communications and the U.S. Mail to further that activity.
The indictment also alleges that Rodgers and N’Ser sold stock to investors representing that the investment funds would be used solely for the business purposes of the company, and instead used some of the money for their own personal benefit, including personal loans to each,
an unauthorized bonus for Rodgers, and the purchase of a 2007 Land Rover SUV titled in Rodgers’ name. The indictment further alleges that N’Ser and Rodgers fraudulently used Samarion investor funds to loan approximately $500,000 to C First Class Corporation, a company that was unrelated to Samarion or its business purpose, but for which Rodgers also served as a board member. The indictment alleges that Rodgers fraudulently concealed his personal interest in that company from the Samarion Board of Directors.
FBI SAC Don Alway stated: "This case is an example of the positive results we achieve by working with our state and local partners. We appreciate the effort of everyone involved in successfully investigating and prosecuting this case."
Joseph Borg, Director of the Alabama Securities Commission said, "I want to thank the Office of Greg Davis, United States Attorney for the Southern District of Mississippi; the Federal Bureau of Investigation; the Office of Robert L. Broussard, Madison County, Alabama District Attorney; the Madison County, Alabama Sheriff’s Department and the Alabama Securities Commission staff for working together to ensure this conviction and to see that justice was served for the victims. The successful prosecution demonstrates the outstanding results that are achieved when federal, state and local law enforcement work together."
The defendants will be sentenced on June 15, 2015 at 9:00 a.m. The maximum penalty for conspiracy is five years in prison and a fine of up to $250,000.
Assistant United States Attorney Carla J. Clark, Chief of the Criminal Division, is prosecuting the case for the government. Agents from the FBI, the Alabama Attorney General’s Office and the Alabama Securities Commission are assisting in the case.
Ex-Pharmacist Sentenced for Illegal Dispensation of DrugsRead the Press Release
The United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that Larry Steven Patton, 64, of Marion, Illinois, was sentenced today, on a charge of Illegal Dispensation of a Controlled Substance. The United States District Court in Benton sentenced Patton to probation for three years, a fine of $3,000, and a special assessment of $100. The court also ordered Patton to perform 25 hours of public service.
Court records indicate that at relevant times, Patton was an owner and a pharmacist of Medicap Pharmacy in Saline County, Harrisburg, Illinois. As a licensed pharmacist, Patton was a registrant authorized to dispense controlled substances. Patton admitted to knowingly and intentionally dispensing unlawfully four pills, each having two milligrams of Xanax, a Schedule IV controlled substance to another person requesting the medication, on July 12, 2012, at the Medicap Pharmacy in Harrisburg. Patton admitted that this dispensation was outside the scope of his professional practice and not for a medical purpose under a valid prescription.
The case was investigated by the Drug Enforcement Administration and the Illinois State Police. The case is being prosecuted by Assistant U.S. Attorney Liam Coonan.
Essex County, New Jersey, Man Sentenced to 135 Months in Prison in Multi-Million Dollar Real Estate Investment Fraud SchemeRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man was sentenced today to 135 months in prison for running a real estate investment scheme that bilked victims out of more than $5 million, U.S. Attorney Paul J. Fishman announced
Abbe Edelman, 51, of Livingston, New Jersey, previously pleaded guilty before U.S. District Judge Susan Wigenton to an information charging him with one count of wire fraud. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
For roughly a decade, Edelman conducted an elaborate real estate investment fraud Ponzi scheme, duping victim-investors to provide him with money purportedly to buy and sell real estate and earn large returns on their investments. Beginning in 2004, Edelman operated through several companies alleged to be in the business of buying and selling real estate. Edelman told investors that he had significant past real estate experience, including a purported history of successfully buying and selling numerous bank foreclosed properties, and an MBA degree from NYU in real estate finance. Edelman claimed that he had longstanding relationships with banks that provided him with unique access to purchase foreclosed properties at below market prices and, in fact, already had negotiated with the banks to purchase certain properties at agreed-upon prices that would guarantee an easy resale and profit for investors.
Edelman promised investors that any investment would be used solely for the purchase, renovation or sale of specific investment properties in, among other places, New York, New Jersey, California, and Florida. Edelman told his investors that he could obtain extraordinary returns – as much as 25 percent – in as little as eight to 12 months. He purportedly told some victims that he had received from other investors, including professional athletes and celebrities, the majority of the capital needed to purchase the investment properties. He also said he had provided cash deposits to the financial institutions to secure the right to purchase the investment properties and invested his own money in the deals.
In reality, neither Edelman nor any of his real estate companies had a history of purchasing any bank foreclosed properties. Edelman also did not possess even an undergraduate degree. He did not have any deals lined up involving any investment properties, did not have his own money invested in any such deals, and did not have any money from celebrity investors. Edelman induced investors to give him more than $5 million; none of it was used to fund any real estate acquisitions or renovations, but was instead diverted for his own use.
Edelman used his victims’ money for his home mortgage and day-to-day living expenses, such as restaurants, telephone, and gas bills. He purchased merchandise from high-end retailers, such as Gucci and Neiman Marcus, repaid existing investors in Ponzi-scheme fashion, and paid his legal expenses in connection with victims seeking repayment of their investment.
When investors later inquired about the status of their investments, Edelman offered additional misrepresentations, including emails sent from a fake email account that he had created, falsely assuring investors that he and his company had closed on the foreclosed properties, sometimes telling them buyers for the properties already had been identified.
In some cases, to allow the scheme to continue undetected, Edelman made “lulling” payments to investors, ranging from $100 to tens of thousands of dollars, to permit the scheme to continue. When payments were made to any investors, Edelman generally represented that the money was from the sale of investment properties, when, in fact, it came from a new investor.
In addition to the prison term, Judge Wigenton sentenced Edelman to serve three years of supervised release and pay $3,121,279 in restitution to his victims. Judge Wigenton also ordered a money judgment against Edelman in the amount of $3,121,279, representing the proceeds of Edelman’s fraudulent scheme, and forfeiture of Edelman’s interest in certain assets previously seized by the government, including approximately $79,000 and a 2014 Audi.
U.S. Attorney Fishman credited criminal investigators with the U.S. Attorney’s Office and postal inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates, with the investigation leading to today’s sentencing.
This case is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The government is represented by Assistant U.S. Attorney Joseph B. Shumofsky of the Economic Crimes Unit.
Defense Counsel: William J. Rush, Wayne, New Jersey
Eleven Individuals Indicted for Wire FraudRead the Press Release
SAN JUAN, P.R. – On March 25, a Federal grand jury returned a twenty-three count indictment charging eleven individuals for conspiracy to commit wire fraud and wire fraud, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. The Secret Service and the Puerto Rico Police Department are in charge of the investigation.
Beginning in or about June 2008 and continuing to in or about October 2011, the defendants devised a scheme and artifice to defraud AMGEN, a multinational biopharmaceutical company located in Juncos, Puerto Rico. The purpose of the conspiracy was for defendants to enrich themselves by using the AMGEN American Express Purchasing Credit cards (PCards) and purchase requisition process to obtain payments for fictitious purchases and split the proceeds paid by AMGEN for these fictitious purchases and/or services that were never actually rendered or received.
The defendants are: Joel Merced-Mercano, Héctor Santiago-Rodríguez, Efraín Rivera-Romàn, Pablo López, Hernàn Torres-Gómez, Joel Díaz-Rosario, Mitza Vàzquez-Meléndez, Juan L. Carreras, Marielexy Cestary-Roldàn, Carlos Calderón-Díaz, and Lourdes Colón-Colón.
“Some of the defendants had the duty and responsibility to ensure that AMGEN’s facility was able to properly operate twenty four hours a day, seven days a week; but instead, they misused their positions of trust within the company to commit fraud to enrich themselves illegally,” stated Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. “AMGEN suffered a loss of over $1.6 million as a result of the scheme; those responsible for this loss will be held accountable for their corrupt actions.”
If convicted, the defendants face a maximum possible sentence of 20 years. The case is being investigated by the Secret Service with the collaboration of the Puerto Rico Police Department, and prosecuted by Assistant United States Attorney Julia Meconiates. An indictment contains only charges and is not evidence of guilt. Defendants are presumed to be innocent unless and until proven guilty. The investigation is ongoing.
Detroit Man Sentenced for Robbing Iraqi DiplomatRead the Press Release
A Detroit resident was sentenced yesterday in federal court to more than eight years in prison for his role in an armed robbery of an Iraqi diplomat and his wife, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Division, Special Agent in Charge David R. Eberhardt, Diplomatic Security Service and Chief Michael Patton, West Bloomfield Police Department.
U.S. District Judge Paul D. Borman imposed sentence on James Frederick Dubose, 24, to a mandatory minimum sentence of 84months in prison for using a firearm during a crime of violence and a consecutive sentence of 20 months in prison for assault of a foreign official using a deadly weapon. Dubose had pleaded guilty to these two offenses in December. At sentencing, Dubose was also ordered to pay $4,150 in restitution to the victims.
According to the documents filed in this case, on November 11, 2012, the defendant and his co-defendant targeted the victims, an Iraqi diplomat and his wife, as they were shopping at the Meijer store in Southfield, Michigan. The defendants then followed the victims to their residence. Dubose and his co-defendant approached the victims inside the garage after the victims had exited their vehicle. Dubose held the victims at gunpoint, threatened to shoot them and stole their jewelry. Dubose and his co-defendant then ran from the garage and fled the scene. Dubose was arrested by Southfield Police on November 23, 2012, in possession of the same firearm used in the armed robbery.
The investigation of this case was conducted by the Federal Bureau of Investigation, the United States Department of State Diplomatic Security Service, and the West Bloomfield Police Department. The case was prosecuted by Assistant U.S. Attorneys Ronald W. Waterstreet and Cathleen M. Corken
Delaware County Nightclub Owners Plead Guilty to Tax and Fraud ChargesRead the Press Release
PHILADELPHIA – Romeo Callueng, 45, and Susan Callueng, 43, of Woodlyn, PA, pleaded guilty on March 26, 2015 to tax evasion and fraud in connection to a health care benefit program. The Calluengs, who owned the “Club 27” nightclub at 27 Bank Street in Philadelphia, were receiving assistance from Medicaid and LIHEAP (Low Income Heating and Energy Assistance Program) despite making substantially more than the maximum income eligibility. Each defendant pleaded guilty to one count of fraud and four counts of tax evasion for evading income taxes in 2006, 2007, 2008, and 2009.
The Calluengs listed Club 27 for sale through a realtor in 2009. Undercover IRS agents met with the realtor in 2009, posing as buyers. They were provided income statements that had been prepared by defendant Susan Callueng, in which the defendant asserted that the club had profits of about $400,000 per year in 2007 and 2008, and almost $300,000 for the first eight months of 2009 (an annualized rate of about $450,000). The undercover agents then met with both the defendant and her husband. Both Romeo Callueng and Susan Callueng explained to the agents, in consensually recorded conversations, that they did not report all their income to “Uncle Sam” and that they preferred cash registers to the POS system because of the lack of records. Romeo Callueng explained to the undercovers that “it’s book number one and book number two.” He told the agents that they kept track of their income, but they did not record it, because “you want to hide as much as you can.”
During a meeting with both of the Calluengs, Romeo Callueng explained to the undercover agents that his wife could teach them how to run the business so that they would not be “throwing red flags” to “Uncle Sam.” Defendant Susan Callueng was asked about the income statements that she had prepared, and asked what portion is “off the books.” She replied, “Everything is off.” She then opined that “everybody in this business is off the books.” She stated that they report a “bare minimum” of income to the Department of Labor in order to avoid putting a “red flag up there.” She also told them that she destroys the records related to receipts because she does not want records to be available. The defendants paid their employees and their expenses out of cash, in order to avoid making excessive deposits and to avoid generating records of their expenses which could trigger government attention.
The defendants had also applied for and received both LIHEAP and Medicaid. On the applications for these benefits, defendants claimed income varying from $100 each per week to $700 per week, significantly below the actual profit they earned from Club 27. The income that they were actually earning from Club 27 greatly exceeded the maximum income for eligibility for either of these federally funded programs. In order to apply for these benefits, the defendants were required to submit proof of their income. They attached letters on Club 27 letterhead, purportedly signed by the manager of the Club. However, the manager never signed those letters.
U.S. District Court Judge Mark A. Kearney scheduled a sentencing hearing for June 26, 2015. Each defendant faces a maximum possible statutory sentence of 25 years in prison with an estimated advisory sentencing guideline range of 18 to 24 months, plus restitution to the IRS, a possible fine of up to $1.25 million, a $500 special assessment, and three years of supervised release.
The case was investigated by the Internal Revenue Service Criminal Investigations and the Office of Inspector General for the Department of Health and Human Services. It is being prosecuted by Assistant United States Attorney Nancy Rue.
Download indictment_-_rossid.pdf
Defendant Sentenced for Email Extortion SchemeRead the Press Release
Executed Extortion Scheme from Prison
RICHMOND, Va. – Christopher J. Burruss, 37, of Toano, Virginia, was sentenced today to 24 months in prison, followed by one year of supervised release for Interstate Threat to Injure the Reputation of Another, in violation of 18 U.S.C. § 875(d).
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Adam S. Lee, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Richmond Division, made the announcement after sentencing by Senior U.S. District Judge James R. Spencer.
Burruss pled guilty on October 21, 2014. According to court documents, the victim of the scheme, T.N., is an attorney who previously represented Burruss in an Eluding Police and Driving Under the Influence (First Offense) criminal case in New Kent County, Virginia. In November 2010, Burruss went to trial and was convicted on both offenses. In November 2012, Burruss filed a Habeas Corpus Petition in state court, alleging ineffective assistance of counsel by T.N. After a hearing on the matter, the Virginia Circuit Court with jurisdiction over the case rejected Burruss’s challenge. He appealed and the case was set for oral argument before the Virginia Supreme Court on February 11, 2014.
As part of his guilty plea, Burruss admitted that on September 12, 2013, he filed a Virginia State Bar complaint against T.N. Among other allegations, Burruss stated that he believed that T.N. had mishandled the New Kent County criminal case and had inappropriate communications and contact with Burruss’s friend, S.B., and another woman leading up to and after the criminal case that affected T.N.’s representation. Included with the complaint, Burruss attached several embarrassing email and text messages between T.N. and three other women. Also included were affidavits from S.B. and another woman detailing some of their interactions with T.N. before and after the New Kent County criminal case. These emails, text messages, and affidavits later served as the basis for Burruss’s extortionate threats against T.N.
From January 23-26, 2014, Burruss, with the assistance of S.B., began a direct email exchange with T.N. in which Burruss communicated extortionate demands. In a series of three emails, his demands evolved, ultimately requiring that to avoid disclosure of the embarrassing communications to the press, T.N. would have to submit an affidavit to the Virginia Supreme Court admitting he mishandled Burrus’s the New Kent County criminal case and repay almost $20,000 in legal fees incurred by Burruss in connection with that case.
Burrus’s guilty plea was premised on the following extortionate communication that he caused to be sent on January 24, 2014, in response to a series of questions from T.N.:
Hi [T.N.]-
In response to your letter this morning Chris is seeking that you write an affidavit to be submitted to the Supreme Court admitting that you mishandled the case. He is also seeking complete restitution, which would include your retainer and the $20,000 in legal fees since then. In the event that the DUI fine remains in effect he asks that you pay that, as well. Neither of the affidavits from [C.E.] or myself were submitted to the court. They are not yet public record, however Chris intends to move forward on Monday afternoon. As far as the Bar is concerned we all know they would prefer to keep all of this very quiet.
Best regards-
[S.B.]
After receiving the final email on the afternoon of January 26, 2014, T.N. had no further communication with Burruss or S.B. T.N. reported this matter to federal and state authorities, which led to the current prosecution.
The case was investigated by the FBI’s Richmond office. Assistant United States Attorneys Michael Gill and Heather Hart are prosecuting the case on behalf of the United States
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:14-cr-135.
Defendant Sentenced to Serve 48 Months in Federal Prison and Pay Millions in Restitution for Violating the CAN-SPAM ActRead the Press Release
DALLAS —Milos Vujanic, 34, who was convicted for his role in what U.S. District Judge Sidney A. Fitzwater previously called “a massive, complicated, multi-year scheme to defraud a large number of victims,” was sentenced this week to 48 months in federal prison and ordered to pay approximately $17.3 million in restitution. Acting U.S. Attorney John Parker, of the Northern District of Texas, made the announcement today.
Vujanic pleaded guilty in December 2014 to a superseding information charging one count of fraud and related activity in connection with electronic mail (CAN-SPAM Act).
A citizen of Serbia, Vujanic was arrested in May 2012, in Paris, France. After a lengthy extradition process, Vujanic first appeared in the U.S. District Court in the Northern District of Texas in April 2014.
Nineteen defendants were originally charged in this massive telecommunications fraud conspiracy. Two of the defendants, Nathan Todd Shafer, 32, of Irving, Texas, and Matthew Norman Simpson, 26, of Red Oak, Texas, were convicted in December 2011 following a 10-week trial before Judge Fitzwater.
Simpson was sentenced to 40 years in federal prison and ordered to pay restitution of approximately $17.6 million and a forfeiture money judgment of the same amount. In addition, the Court also forfeited specific assets such as precious metal certificates worth approximately $3 million and additional cash and computer equipment worth an additional $2 million. Simpson was convicted on one count of conspiracy to commit wire fraud and mail fraud, one count of fraud and related activity in connection with electronic mail, one count of obstruction through destruction of evidence and one count of false registration of a domain name. Additionally, shortly after Simpson’s conviction at trial, the Court entered an order finding that Simpson committed perjury during his testimony.
Shafer, who was convicted on one count of conspiracy to commit wire fraud and mail fraud, was sentenced to nine years in federal prison and ordered to pay approximately $3.3 million in restitution as well as a forfeiture money judgment of the same amount.
Michael Blaine Faulkner, of Southlake, Texas, was sentenced to 30 years in federal prison and ordered to pay approximately $18.2 million in restitution, a forfeiture money judgment of the same amount, and forfeit a host of computer equipment. Faulkner pleaded guilty in October 2011 to one count of conspiracy to commit wire and mail fraud and one count of obstruction through hiding assets. His wife, Chasity Lynn Faulkner, who also pleaded guilty in October 2011 to one count of conspiracy to commit electronic mail, postal mail and wire fraud, and was sentenced to 60 months in federal prison.
According to documents filed in the case Michael and Chasity Faulkner fled to Mexico in 2009 after they learned of the FBI’s investigation into their activities. They lived in Mexico, under assumed aliases, until January 2010 when they were arrested and returned to the U.S. to face charges.
One defendant remains a fugitive and is believed to be living outside of the U.S. Two defendants were acquitted at trial. Of the remaining defendants, all have pleaded guilty and been sentenced.
In March and April 2009, the FBI executed numerous search and seizure warrants at locations including the Faulkner’s residence in Southlake, Faulkner’s business known as Crydon located at 1950 Stemmons Freeway in Dallas, Matthew Simpson’s residence, a business operated by Simpson known as Core IP located at 2323 Bryant Street in Dallas, and at other related businesses.
During trial, the government presented evidence that Shafer, Simpson and their coconspirators conspired to defraud various telecommunications companies including AT&T; Verizon; XO Communications; Excel Communications; Waymark Communications; Bandwidth.com; CommPartners; the lessors of properties at 2020 Live Oak, 2323 Bryan Street and 1950 Stemmons Freeway in Dallas; leasing companies and creditors, including Wells Fargo and AT&T Capital Services; credit reporting agencies; and various other service providers, such as power companies, insurance companies, air-conditioning companies, and web site developers and others for goods and services amounting to more than $20 million.
The conspirators also made false representations to obtain goods, such as computers and telecommunications equipment and infrastructure, to include racks to hold computer equipment, generators to provide power for the equipment, and office space to install the equipment, as well as services related to the operation and use of computers and telecommunications. The conspirators created, purchased and used shell companies to hide the identity of the owners or operators of the companies, or the relationships between the companies. The conspirators paid persons including homeless persons for the use of their identities to “act” as the officers, directors or managers of the shell companies. They also used P.O. Boxes, commercial remailer services, shell offices, apartments or other physical locations to hide owners’ or operators’ identities or the relationships between the companies. They assumed other identities to hide true ownership of the shell companies and made materially false representations to their victims, by mail, fax, telephone, email or other communications, to obtain goods and services from them. In addition, the coconspirators ran a data center that provided a safe haven for those engaged in the sending of SPAM, hiding the senders’ information from law enforcement and other regulators. Vujanic worked for Faulkner and he assisted in the SPAM fraud by 1) ensuring the networking equipment and computers were operational, 2) setting up the telephone systems in the office; 3) providing false information to creditors; 4) providing false information to regulators such as ARIN (American Registry of Internet Numbers); and 5) providing false information to customers and suppliers.
The case was investigated by the FBI, with assistance from the Texas Workforce Commission, the Texas Secretary of State, the Dallas Police Department, the Southlake Police Department, Dallas Sheriff’s Office, Ellis County Sheriff’s Office, the Duncanville Police Department, the Longview Police Department, the New Orleans Police Department, the American Registry for Internet Numbers (ARIN), the Federal Trade Commission, the Federal Communication Commission and various state public utility commissions.
Cushing Woman Pleads Guilty to Making A False StatementRead the Press Release
Contact: Craig M. Wolff
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Crystal Burch, 22, of Cushing, Maine, pled guilty today in U.S. District Court to making a false statement to a government agency.
According to court records, in June 2014, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) was investigating Burch’s then-boyfriend for the illegal possession of firearms. In 2013, Burch purchased several handguns from a local firearms dealer and ATF agents were trying to determine whether Burch’s boyfriend possessed any of them. Burch falsely told an ATF agent that she had transferred the handguns to her boyfriend’s father. Later the same day other ATF agents found her boyfriend in possession of two of the handguns.
Burch faces a sentence of up to five years in prison, a $250,000 fine and three years of supervised release. She will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by the ATF.
Constitutional Rights Lawsuit Dismissed in Favor of CBP OfficersRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that a Final Judgment on the Pleadings was granted in favor of defendants Dennis Jacobs, U.S. Customs and Border Protection (CBP) Officer, and seven "John Doe" and "Jane Doe" CBP officers in Yu Min Zhao v. Dennis Jacobs, et al. , Civil Case No. 13-00028 (D.N. Mar. I.). The plaintiff filed a Bivens lawsuit against the CBP officers, claiming that the officers violated her right to be free from excessive force and her right to equal protection during the immigration inspection process.
The U.S. Attorney's Office, on behalf of Officer Dennis Jacobs, filed a motion arguing that Officer Jacobs was entitled to a judgment in his favor because, even though he was named in the lawsuit, he was not accused of any wrong doing. In fact, he was not present during the timeframe of the allegations in the Complaint. Further, CBP's inquiry into an alien's purpose for entering the NMI and the detention and removal of an inadmissible alien (in this case, for indications of an intention to overstay the visa waiver) are part of CBP's duties under immigration laws. On January 12, 2015, the District Court for the NMI granted the judgment on all grounds. The court held that Officer Jacobs was protected under the law as a federal employee because none of the allegations tied him to any constitutional violations. The court also found that the relief requested by the plaintiff- an injunction and a declaratory judgment- is barred under Bivens law. Ultimately, the court found that the true nature of the lawsuit was a challenge to CBP's determination of the plaintiff's inadmissibility to enter the NMI rather than constitutional violations, which is also not permitted under Bivens law.
The court gave the plaintiff an opportunity to amend her complaint, and she failed to do so. On March 20, 2015, the court entered a final judgment on all grounds in favor of Officer Jacobs and the other unnamed officers.
U.S. Attorney Alicia A.G. Limtiaco stated, "Bivens law permits federal employees to be sued in their personal capacities for actions taken during the course of their official duties. Protection of federal employees for legitimate actions performed in the course of their official duties is critical to the effectiveness of the federal government. As noted by the Supreme Court in Anderson v. Creighton, 483 U.S. 635 (1987), Bivens lawsuits exact substantial social costs, including 'expenses oflitigation, the diversion of official energy from pressing public issues, and the deterrence of able citizens from acceptance of public office.' In cases such as this where the government demonstrates that legitimate actions were taken in the course of one's official duties and that the complaint against the individuals is without merit, dismissal is the appropriate and just remedy."
This case was defended by Assistant U.S. Attorneys Jessica F. Cruz and Mikel W. Schwab.
Community leaders collaborate to present drug awareness education to Harrison County, WV studentsRead the Press Release
WHEELING, WEST VIRGINIA – On Thursday, April 2, 2015, community leaders will present drug abuse awareness programming to high school students across Harrison County, West Virginia in a continued effort to combat the trend of increasing drug overdoses across the Mountain State.
“Drug addiction has infiltrated societies across West Virginia with an unforgiving grip. It is critical for young students to participate in straightforward, honest discussions about the reality of drug abuse,” said United States Attorney William J. Ihlenfeld, II. “Our state leads the nation in drug overdose deaths. The more we can address younger audiences, the better chance we have to reverse the trend of substance abuse and overdoses in our region. We commend the Harrison County Board of Education for collaborating with local community leaders to present drug education to the area high schools. These types of presentations are critical to position our young for future success.”
Presentations are scheduled on Thursday, April 2, 2015, for all students at Bridgeport High School (8:30AM), Lincoln High School (9:45AM), South Harrison High School (12:00PM), Robert C. Byrd High School (12:50PM), and Liberty High School (2:00PM). Students will hear presentations from the United States Attorney’s Office, the United States Drug Enforcement Administration, as well as panel discussions coordinated by the Harrison County Prevention Partnership. The presenters will utilize a variety of techniques, including screening of thought-provoking documentary films. Additionally, a group of current and former West Virginia University athletes and coaches have partnered with the United States Attorney’s Addiction Action Plan to place a spotlight on drug abuse. Several of those athletes will participate in tomorrow’s presentations.
The aforementioned presentations are all part of the United States Attorney’s Addiction Action Plan for North Central West Virginia, a collaborative effort comprised of thought leaders from various disciplines. The goals of the plan include decreasing heroin use, promoting improved access to quality substance abuse treatment, choking off the supply of heroin to the region, and making West Virginia stronger, safer, and healthier. Providing impactful and effective drug education to West Virginia students is a key component of the action plan. Anyone interested in scheduling future events or obtaining additional information is encouraged to contact the United States Attorney’s Office at (304) 234-0100.
Colorado Springs Business Owner Charged with Filing False Returns and Structuring DepositsRead the Press Release
DENVER – Lisabeth Melahn, age 53, of Colorado Springs, Colorado, was indicted by a federal grand jury on March 26, 2015 on charges of filing false income tax returns and structuring cash deposits to evade reporting requirements, announced United States Attorney John Walsh and IRS Criminal Investigation Acting Special Agent in Charge Steven A. Osborne. Melahn is scheduled to appear before a U.S. Magistrate Judge on April 10, 2015 to respond to the charges.
According to the indictment, Melahn, the owner of a Colorado Springs business, Tan Your Hide, subscribed personal income tax returns for the 2008 through 2010 tax years, knowing that the income from her S-corporation, Tan Your Hide II, listed on those tax returns was substantially understated.
In addition, the indictment charges that on 8 separate occasions between March 31, 2010 and July 8, 2010, Melahn caused cash deposits totaling over $10,000 to be made to her personal account at American National Bank which were split in order to circumvent the requirement that currency transactions of over $10,000 be reported. The split deposits were made either at different times on the same day or on two consecutive days. The total of the structured deposits alleged in the indictment totaled over $100,000.
“Filing true and timely income tax returns is not only a civic duty, it is also a legal obligation,” said U.S. Attorney John Walsh. “Those who evade paying income taxes, either by not filing, or in this case, by not providing accurate income information, can end up being prosecuted to the fullest extent of federal law.”
“As April 15 is approaching, this should serve as a reminder to all taxpayers that they should file complete, timely, and accurate tax returns or they could face significant penalties; and those individuals who goes as far to commit tax fraud may find themselves facing jail time,” said Acting Special Agent In Charge Steven A. Osborne of IRS-Criminal Investigation, Denver Field Office.
Melahn was charged with three counts of subscribing to a false income tax return, each of which carries a penalty of not more than 3 years in federal prison, and a fine of up to $250,000. She is also charged with eight counts of structuring deposits to evade the CTR reporting requirements. Because the alleged structuring involved more than $100,000 in a 12-month period, the charges carry a penalty of not more than 10 years in federal prison and a fine of up to $500,000 per count. Included in the indictment is a notice of forfeiture for any property traceable to the structuring charges alleged in the indictment.
This case was investigated by the Internal Revenue Service – Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Linda Kaufman.The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.
Colorado Man Sentenced to Prison and New Hampshire Man Pleads Guilty to Conspiracy to File False Tax Returns, Both in Connection with Defrauding a Dubuque College BookstoreRead the Press Release
On Monday, March 30, 2015, a former director of the Clarke University bookstore in Dubuque, Iowa, who used a fictitious book supply company to falsely bill the University for more than $300,000.00, was sentenced to 57 months in prison in federal court in Cedar Rapids. James Spaulding, age 35, from Longmont, Colorado, was convicted of one count of mail fraud and two counts of filing false tax returns.
On Tuesday, March 31, 2015, Spaulding’s friend and co-conspirator from Concord, New Hampshire, Thomas DeFelice, age 38, pled guilty to conspiracy to falsify corporate and personal tax returns in relation to falsely reporting the income from the fraud.
In plea agreements, Spaulding and DeFelice admitted Spaulding was the director of the Clarke University Bookstore between 2011 and 2012. Spaulding and DeFelice created a fictitious corporation called RVP Wholesale Books (“RVP”), then caused RVP to issue false invoices to Clarke University purporting to show that RVP supplied the Clarke University bookstore with books. In truth, RVP never supplied the Clarke University bookstore with any books. Spaulding and DeFelice split the proceeds of the fraud, totaling more than $302,000.00. Spaulding convinced DeFelice that there were, in fact, books purchased through RVP and delivered to Clarke University. DeFelice agreed with Spaulding, however, to falsely inflate the purported cost of goods sold so as to fraudulently decrease RVP’s and their personal tax liabilities. Spaulding and DeFelice therefore filed false tax returns for 2011 and 2012 in which they failed to disclose the illegal proceeds obtained from the fraud. Spaulding later lied to a federal grand jury in Cedar Rapids, Iowa, by falsely claiming RVP supplied the Clarke University bookstore with books.
Spaulding was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Spaulding was sentenced to 57 months’ imprisonment. A special assessment of $200 was imposed, and he was ordered to make $318,900.55 in restitution to Clarke University. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Spaulding is being held in the United States Marshal’s custody until he can be transported to a federal prison.
DeFelice entered his guilty plea before United States Chief Magistrate Judge Jon Stuart Scoles. Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. DeFelice remains free on bond pending sentencing. DeFelice faces a possible maximum sentence of three years’ imprisonment, a $250,000 fine, $100 in special assessments, and up to three years of supervised release following any imprisonment.
The cases are being prosecuted by Assistant United States Attorney C.J. Williams and was investigated by the Dubuque Police Department and the Internal Revenue Service Criminal Investigation Division.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file numbers are 14-CR-1022-LRR for Spaulding and 15-CR-1005-LRR for DeFelice.
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Chicago Man Sentenced for Southern Illinois Crack Cocaine OffenseRead the Press Release
On March 25, 2015, Maurice L. Christian, a/k/a "Reece," 26, of Chicago, was sentenced on a federal crack cocaine violation, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Christian, who had previously pled guilty to a one-count indictment, charging conspiracy to distribute crack cocaine, was sentenced to 140 months in federal prison, to be followed by 3 years of supervised release, and fined $200.00. The offense occurred between 2013 and March 2014, in Jackson County. Evidence at the plea and sentencing hearings established that Christian was involved with co-defendant Johnathan T. Buck, a/k/a "Buffalo," and others in the distribution of crack cocaine in Carbondale. Buck, Christian, and their associates were transporting crack cocaine from northern Illinois to Carbondale for distribution. On multiple occasions, Buck and Christian sold crack cocaine to a confidential source working for law enforcement. At sentencing, the district court found that Christian was responsible for 493 grams of crack cocaine. Christian’s sentence was enhanced because he possessed a firearm during his participation in the crack cocaine offense. Buck was previously sentenced to 120 months for his role in the crack cocaine conspiracy.
The ongoing investigation is being conducted by the Southern Illinois Enforcement Group, Carbondale Police Department, and Drug Enforcement Administration. The Jackson County State’s Attorney’s Office assisted in the investigation.
The case was assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Buffalo Man Pleads Guilty to Drug ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that Andre Owens, 49, of Buffalo, NY, pleaded guilty to conspiracy to possess with intent to distribute, and to distribute, 28 grams or more of crack cocaine, before U.S. Senior U.S. District Judge William M. Skretny. The charge carries a mandatory minimum penalty of five years in prison, a maximum of 40 years, and a $5,000,000 fine.Assistant U.S. Attorney Timothy C. Lynch, who is handling the case, stated that between June 2013 and February 25, 2014, the defendant conspired with others to buy and sell crack cocaine in the City of Buffalo.
Also charged in this case are co-defendants Anthony McCutcheon, Troy Cooley, Deandre Sparks, Williams Jefferson, Markiel Hall, Morrell Buster, Alicia Maghett and Carmella Rivera. Sparks and Hall have been convicted. Charges are pending against McCutcheon, Cooley Jefferson, Buster, Maghett and Rivera. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The plea is the culmination of an investigation by the Federal Bureau of Investigation and the Lackawanna Police Department, under the direction of Chief James Michel.
Sentencing is scheduled for July 29, 2015 at 9:00 a.m. before Judge Skretny.
Bucks County Real Estate Investor Arrested on Fraud ChargesRead the Press Release
PHILADELPHIA - Dean Rossi, 49, of Warrington, PA, was arrested today in connection with an alleged mortgage fraud scheme, announced United States Attorney Zane David Memeger. Rossi, a real estate investor who owned numerous low-income properties throughout the Philadelphia area, was charged by indictment, unsealed today, with conspiracy, mail fraud affecting a financial institution, and bank fraud.
The indictment alleges that Rossi misappropriated in excess of $643,000 from real estate closings. After obtaining bank loans to purchase or refinance residential properties, Rossi allegedly teamed up with title/closing agents to divert a substantial portion of the loan proceeds. According to the indictment, Rossi received cash from the settlements that otherwise should have been used to pay off prior mortgages and tax liens on certain properties. To prevent the scheme from being detected, Rossi allegedly continued to cause payments to be made on the prior existing mortgages years after those loans were supposed to have been paid in full.
If convicted, the defendant faces a possible advisory sentencing guideline range of 46 to 57 months in prison, up to five years of supervised release, a fine of up to $4 million, and a $400 special assessment.
The case was investigated by the U.S. Postal Inspection Service and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Karen M. Klotz.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Bradenton Man Convicted for Illegal Reentry After DeportationRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury yesterday found Leonel Hernandez-Lopez (36, Bradenton), a/k/a Jose Luis Carbajal, guilty of illegal re-entry after deportation. He faces a maximum penalty of 10 years in federal prison. His sentencing hearing is scheduled for June 18, 2015. Hernandez-Lopez was indicted on September 5, 2013.
According to evidence presented at trial, on December 12, 2002, Hernandez-Lopez was deported from the United States to Mexico. On August 16, 2013, U.S. Immigration and Customs Enforcement agents found him in Bradenton. Hernandez-Lopez had not requested permission to re-enter the United States after his deportation.
This case was investigated by U.S. Immigration and Customs Enforcement’s Customs Investigative Service and the Manatee County Sheriff’s Office. It is being prosecuted by Assistant United States Attorneys Jennifer L. Peresie and Michael V. Leeman.
Aredale Woman Sentenced to Federal PrisonRead the Press Release
A woman who committed perjury while testifying in federal proceedings was sentenced on March 31, 2015 to six months in federal prison.
Ashley Tufte, 29, from Aredale, Iowa, received the prison term after a January 9, 2015, guilty plea to one count of perjury.
In a plea agreement, Tufte admitted she lied while testifying before a federal grand jury.
Tufte was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Tufte was sentenced to 6 months’ imprisonment and fined $1,000. A special assessment of $100 was imposed. She must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
Tufte was released on the bond previously set and is to surrender to the Bureau of Prisons on a date yet to be set.
The case was prosecuted by Assistant United States Attorney Matthew J. Cole and investigated by the Drug Enforcement Agency (DEA).
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-CR-131.
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Adams County Man Pleads Guilty to Making False Claims to IRSRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Mitchell Orewiler, age 34, of Adams County, pleaded guilty today before U.S. District Court Judge Sylvia Rambo in Harrisburg, to making false claims with the Internal Revenue Service (IRS).
According to United States Attorney Peter Smith, on or about April 14, 2009, Orewiler filed a 2007 tax return in which he falsely claimed federal income tax had been withheld on interest he had earned. In his 2007 tax return, Orewiler requested a refund of approximately $288,000 to which he knew he was not entitled. The IRS sent Orewiler the $288,000 refund.
Orewiler was indicted by a federal grand jury in March 2014, as a result of an investigation by the IRS. Edward Wirth, Internal Revenue Service, Criminal Investigation, Assistant Special Agent in Charge, said “As we rapidly approach the April 15th filing deadline, it is important for the public to note the ramifications of filing false and fictitious federal income tax returns. The Internal Revenue Service, Criminal Investigation and the United States Attorney’s office are committed to aggressively pursuing those who attempt to enrich themselves at the expense of the American public.”The government also filed a plea agreement in the case, which is subject to approval by the court. Assistant U.S. Attorney Joseph J. Terz is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 5 years imprisonment, a term of supervised release following imprisonment, and a $250,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
31 March 2015
Wheeling man to serve one year in prison for selling crack cocaineRead the Press Release
WHEELING, WEST VIRGINIA – William “B.J.” Farmer, 39, of Wheeling, was sentenced today to 12 months in prison for distributing crack cocaine in Ohio County, West Virginia in June 2014, United States Attorney William J. Ihlenfeld, II, announced.
Farmer admitted to the cocaine trafficking allegation when he pled guilty in February 2015 to a criminal Information charging him with one count of “Distribution of Cocaine Base” following an investigation by the Ohio Valley Drug and Violent Crime Task Force, a HIDTA-funded initiative.
The twelve month sentence imposed today will run consecutively to an eighteen month sentence imposed in February 2015 after Farmer violated a previously imposed period of supervised release.
Assistant U.S. Attorney John Parr prosecuted the case on behalf of the government.
Senior U.S. District Judge Frederick P. Stamp presid
Vivian man, Texan plead guilty to cocaine and methamphetamine chargesRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced today that a Vivian man and a Texan pleaded guilty to cocaine conspiracy and methamphetamine distribution charges in Caddo and Bossier parishes.
Eugene O’Neal Cross, 39, of Marshall, Texas, pleaded guilty to one count of distribution of methamphetamine, and Anthony D. Jackson, 24, of Vivian, La., pleaded guilty to one count of conspiracy to distribute cocaine. United States District Judge Donald E. Walter presided over the hearing. According to evidence presented at the guilty plea, from February 21, 2014 until July 26, 2014, Jackson conspired to possess and distribute more than 500 grams of cocaine. Cross admitted to distributing more than 50 grams of methamphetamine on January 21, 2014. Using surveillance and controlled buys, agents recorded the defendants at various times possessing, distributing and/or planning to distribute drugs in Caddo and Bossier parishes.
Cross faces 10 years to life in prison, five years of supervised release, and a $10 million fine for the methamphetamine charge. Jackson faces five to 40 years in prison, four years of supervised release and a $5 million fine. A sentencing date of July 9, 2015 was set.
The defendants were arrested as part of the Organized Crime Drug Enforcement Task Force (OCDETF) Operation Cross the Line. The DEA and the Caddo-Shreveport Narcotics Task Force investigated the case. The OCDETF program is a joint federal, state, and local cooperative approach to combat drug trafficking and is the nation’s primary tool for targeting national and regional level drug trafficking organizations, coordinating the necessary law enforcement entities and resources, and disrupting and dismantling of major drug trafficking organizations.
Assistant U.S. Attorney Allison D. Bushnell is prosecuting the case.
Union City, New Jersey, Inspector Admits Conspiring to Rig Contractor Selection Process for Community Development ProjectsRead the Press Release
NEWARK, N.J. – An inspector at the Union City Community Development Agency (UCCDA) today admitted conspiring with contractors to rig the selection process for home improvement, sidewalk replacement and other projects, causing losses of at least $400,000, U.S. Attorney Paul J. Fishman announced.
Johnny Garces, 52, of Union City, New Jersey, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an information charging him with one count of conspiring with others to obtain by fraud funds provided by Union City.
According to documents in this case and statements made in court:
Between April 2007 and July 2011, Garces was an inspector at the UCCDA, a government agency that receives funding from the U.S. Department of Housing and Urban Development (HUD) under a federal block grant that provides money for home improvement projects, sidewalk replacement and other projects.
From 2007 through 2011, Garces conspired with contractors Joseph Lado, 66, of Fort Lee, New Jersey, Leovaldo Fundora, 53 of Guttenberg, New Jersey, and others to rig the selection process for HUD-funded projects through false and misleading bids. In addition to instructing Lado and Fundora to submit phony, higher bids from competitors, Garces also fabricated higher bids from numerous fictitious companies so that Lado, Fundora and others would secure the projects.
The conspiracy charge to which Garces pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Garces is scheduled to be sentenced on July 7, 2015. Lado and Fundora have both pleaded guilty for their roles in the scheme and await sentencing.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Amy Luria of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: Christopher L. Patella Esq., Bayonne, New Jersey
Two Plead Guilty in Scheme to Distribute Synthetic MarijuanaRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that two defendants have pleaded guilty in federal court to crimes related to the distribution of thousands of kilograms of synthetic marijuana, commonly referred to as K2.
Sharon Elizabeth Harrington, 27, of Bunceton, Mo., and Chadwick James Schlicht, 44, of Osage Beach, Mo., pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth on Monday, March 31, 2015.
Harrington pleaded guilty to participating in a mail fraud conspiracy in Boone County, Mo., from March 2011, to December 2013. Harrington, who was the manager and ran the day-to-day operations of Impulse Market, LLC, was responsible for overseeing the manufacturing process for what was falsely labeled as “incense” or “potpourri” and was labeled “not for human consumption.” Harrington admitted that this “incense” or “potpourri” was actually synthetic cannabinoids mixed with acetone then sprayed onto a plant-like material. These substances, which were mailed or delivered by commercial carrier, were intended for human consumption as a drug in order to obtain a physiological effect of a high. Harrington admitted that she conspired to defraud the Food and Drug Administration and the public by mailing products that were misbranded and bore false and misleading labeling.
Based upon the invoices, bank records, and products seized by law enforcement, Harrington (through her employment with Impulse Market), oversaw the manufacture, sale and distribution of synthetic cannabinoid products, which were produced from approximately 167 kilograms of synthetic cannabinoids obtained from China. Harrington admitted that she sold, in aggregate, multiple kilogram quantities of synthetic cannabinoid products.
In one example cited in the plea agreement, Harrington mailed a parcel of synthetic marijuana to a business in Oklahoma on May 6, 2013. In return for the products, Impulse Market was paid $89,458.
Schlicht pleaded guilty to participating in a conspiracy to distribute a controlled substance.
Schlicht admitted that items seized from his residence by Missouri State Highway Patrol troopers were intended for the manufacture of synthetic marijuana. State troopers executed a search warrant at Schlicht’s residence on Oct. 27, 2012. They seized $1,840, three firearms, numerous packages of synthetic marijuana, and numerous materials related to the manufacture of synthetic marijuana (including packaging materials, bulk amounts of plant-like materials, labels, cans of acetone and two bags containing a total of more than 1.4 kilograms of synthetic powder that is a controlled substance analogue.
Under federal statutes, Harrington and Schlicht are each subject to a sentence of up to 20 years in federal prison without parole. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Special Assistant U.S. Attorney Stuart J. Zander. It was investigated by the Drug Enforcement Administration, IRS-Criminal Investigation, Homeland Security Investigations, the Columbia, Mo., Police Department, the MUSTANG Task Force, the LANEG Drug Task Force, the Cole County, Mo., Sheriff’s Department, the Morgan County, Mo., Sheriff’s Department, the Camden County, Mo., Sheriff’s Department, the Camdenton, Mo., Police Department, the Missouri State Highway Patrol, the Kirksville, Mo., Police Department, the North Missouri Drug Task Force, the Schuyler County, Mo., Sheriff’s Department, the Edina, Mo., Police Department, the Linn County, Mo., Sheriff’s Department and the Brookfield, Mo., Police Department.
Two New Jersey Doctors Sentenced to Prison for Taking Bribes in Test-Referrals Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – Two New Jersey doctors were each sentenced today to prison for accepting bribes in exchange for test referrals as part of a long-running scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Wayne Lajewski, 51, of Madison, New Jersey and Glenn Leslie, 60, of Ramsey, New Jersey, were sentenced to 14 months and 24 months in prison, respectively. Lajewski and Leslie previously pleaded guilty before U.S. District Judge Stanley R. Chesler to separate informations charging them each with one count of accepting bribes. Judge Chesler imposed the sentences today in Newark federal court.
Including Lajewski and Leslie, 37 people – 24 of them physicians – have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. The investigation has to date recovered more than $10.5 million through forfeiture.
According to documents filed in this and other cases and statements made in court:
Lajewski admitted he accepted cash bribes of $2,000 per month over two years in return for referring patient blood specimens to BLS, for which BLS received more than $850,000. Leslie admitted accepting $5,000 per month in return for referring patient blood specimens to BLS, for which BLS received $380,000.
In addition to the prison term, Judge Chesler sentenced both Lajewski and Leslie to one year of supervised release and fined them $10,000 each. As part of their guilty pleas, Lajewski must forfeit $48,000 and Leslie must forfeit $350,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; IRS– Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s sentencings.
The government is represented by Assistant U.S. Attorney Joseph N. Minish, Senior Litigation Counsel Andrew Leven, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel:
Lajewski: Thomas Calcagni Esq., Newark
Leslie: Michael J. Beatrice Esq., Mahwah, New Jersey
Two More Defendants from Georgia Plead Guilty in Credit Card Fraud SchemeRead the Press Release
BOISE – Clarence Collins, 34, of Douglasville, Georgia, and Mikki Williams, 24, of Atlanta, Georgia, each pleaded guilty today in United States District Court for their roles in a credit card fraud scheme that targeted local retailers in October of 2014, U.S. Attorney Wendy J. Olson announced. They were indicted by a federal grand jury on November 13, 2014.
Collins pleaded guilty to one count of conspiracy to commit wire fraud and one count of aggravated identity theft. According to the plea agreement, Collins traveled to Idaho, along with his co-defendants, for the purpose of making fraudulent purchases of gift cards and prepaid debit cards from retail stores, using stolen credit card numbers encoded onto stock debit cards. Collins admitted to obtaining the stock debit cards encoded with unauthorized credit card numbers, and making purchases at retail stores on October 5, 2014. In all, Collins admitted to traveling to five separate retail stores, and making eight total purchases, using five different credit card numbers that he was not authorized to use. Upon his arrest, Collins was found in possession of seven debit cards encoded with unauthorized credit card numbers. Sentencing is set for June 17, 2015, before Chief U.S. District Judge B. Lynn Winmill.
Conspiracy to commit wire fraud is punishable by up to 20 years imprisonment, a $250,000 fine, a term of supervised release of not more than three years, and a $100 special assessment. Aggravated identity theft is punishable by a mandatory minimum term of imprisonment of two years, a term of supervised release of not more than one year, a maximum fine of $250,000, and a special assessment of $100. As part of his plea, Collins also agreed to forfeit $49,953.41 in cash proceeds of the charged offenses.
Williams pleaded guilty to misprision of a felony. According to the plea agreement, Williams admitted knowing that her co-defendants were engaged in a conspiracy to commit wire fraud by using stolen credit card numbers encoded onto Vanilla debit cards. Williams admitted receiving Visa debit cards that were the proceeds of the fraud scheme. Upon her arrest, she was found in possession of eight pre-paid debit cards that were the proceeds of fraud. Williams admitted that, despite her knowledge of the fraud scheme, she did not report the offense to the authorities, but rather provided false information about her knowledge of the offense and the source of the fraud proceeds, and concealed the proceeds of the fraud.
Misprision of a felony is punishable by up to three years imprisonment, a fine of up to $250,000, up to one year of supervised release, and a $100 special assessment. Sentencing is scheduled for June 16, 2015, before Chief U.S. District Judge B. Lynn Winmill.
Collins and Williams were indicted, along with Rakeen Anderson, 31, of Atlanta, Georgia; Kyandre Banks, 34, of Lilburn, Georgia; Terrance Barimah, 26, of Floranceville, Georgia; Jean Estinville, 26, of Lawrenceville, Georgia; Rashine Kale, 38, of Lawrenceville, Georgia; Charles Moore, 25, of Stone Mountain, Georgia; Jonathan Penn, 20, of Suwanee, Georgia; and Brian Treadwell, 25, of Buford, Georgia, on charges relating to a wire fraud and identity theft scheme. Banks, Estinville, Kale, Moore, Penn, and Treadwell were each charged with conspiracy to commit wire fraud, wire fraud, and aggravated identity theft. Anderson was charged with conspiracy to commit wire fraud and wire fraud. Barimah was charged with conspiracy to commit wire fraud and illegal possession of device-making equipment.
Co-defendant Brian Treadwell is scheduled for sentencing before Chief U.S. District Judge B. Lynn Winmill on June 16, 2015. Co-defendant Jonathan Penn is scheduled for a change of plea hearing before Chief U.S. Magistrate Candy W. Dale on April 23, 2015. Co-Defendant Rakeen Anderson is pending a change of plea hearing to be scheduled. Co-Defendants Barimah, Estinville, Kale, and Moore are currently scheduled for a jury trial on April 27, 2015. Co-defendant Kyandre Banks remains a fugitive.
The case was investigated by the United States Secret Service and the Boise Police Department.
Two Former Cay Clubs Executives Sentenced to Prison Terms in Connection with Fraud Scheme Involving Sales of Vacation Rental UnitsRead the Press Release
Two South Florida residents were sentenced to 60 months imprisonment, followed by three years of supervised release, by United States District Judge Jose E. Martinez, for their involvement in a fraud scheme involving vacation rental units.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), and Timothy Mowery, Special Agent in Charge, Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG), made the announcement.
According to court documents and statements made in court, Barry J. Graham, 59, and Ricky Lynn Stokes, 54, both of Ft. Myers, Florida, participated in a $300 million Ponzi scheme involving the sale of Cay Clubs Resorts and Marinas (Cay Clubs) vacation rental units to approximately 1,400 investors in the Florida Keys and elsewhere. The Cay Clubs business operated from 2004 through 2008, out of offices in the Florida Keys and Clearwater, Florida. Graham was the Director of Sales for Cay Clubs from 2004 through late 2007. From September 2005 to 2008, Stokes was one of Cay Clubs’ highest-producing sales agents and was Cay Clubs’ Director of Investor Relations.
Cay Clubs marketed vacation rental units, in seventeen locations throughout Florida, Las Vegas and the Caribbean, to investors throughout the United States. Cay Clubs promised to develop dilapidated properties into luxury resorts. They also promised investors an upfront “leaseback” payment of 15 to 20% of the unit’s sales price, at the time of closing. Once an investor agreed to purchase a unit, Cay Clubs arranged for a real estate closing and lender financing. Clay Clubs would not disclose the leaseback payment and other financial inducements to the borrowers, on paperwork submitted to lending institutions.
Graham and Stokes conspired with others to fraudulently inflate the prices of Cay Clubs units through insider sales. Graham, Stokes and other insiders purchased units from Cay Clubs without disclosing their affiliation with Cay Clubs. Thereafter, these insider sale prices were used on marketing materials to make it appear to investors that the Cay Clubs units were rapidly increasing in price. Stokes, Graham, and others created and distributed marketing materials that contained false and misleading statements in order to induce investors to purchase units. Furthermore, as Cay Clubs experienced financial difficulties, Graham, Stokes and others conspired to fraudulently market the Cay Clubs investment to new investors by making false and misleading statements, including by concealing Cay Clubs’ failure to convert dilapidated properties into luxury resorts.
During the course of the fraud scheme, Graham and Stokes received approximately $6.5 and $6.2 million, respectively, in real estate commissions or referral fees from Cay Clubs’ affiliated accounts.
On September 16, 2014, co-conspirators Fred Davis Clark, Jr., a/k/a Dave Clark, 56, and Cristal R. Clark, a/k/a Cristal R. Coleman, 41, both formerly from Monroe County, were charged by Superseding Indictment with conspiracy to commit bank fraud and substantive counts of bank fraud, in connection with their alleged participation in the Cay Clubs Ponzi scheme. Dave Clark and Cristal Clark are scheduled for trial before United States District Judge Jose E. Martinez, in Miami, on June 1, 2015.
Mr. Ferrer commended the investigative efforts of IRS-CI, ICE-HSI and FHFA-OIG, and the assistance of the SEC Miami Regional Office in this matter. The matter is being prosecuted by Assistant U.S. Attorneys Jerrob Duffy and Thomas A. Watts-FitzGerald.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Tribal Member Sentenced for Robbery on Coeur d'Alene ReservationRead the Press Release
COEUR D'ALENE - David Ray Crowe, Sr., 46, of Worley, Idaho, was sentenced today to 84 months in prison followed by three years of supervised release for robbery of a smoke shop on the Coeur d’Alene Reservation, U.S. Attorney Wendy J. Olson announced. During the term of supervised release, Crowe will have to submit to searches of his person, home and automobile, he will have to refrain from bars and alcohol consumption, and submit to drug testing up to five times per month. U.S. District Judge Edward J. Lodge also ordered Crowe to pay restitution in the amount of $20,348.44 to the store and victim. Crowe pleaded guilty to the charge on November 20, 2014.
According to the plea agreement, Crowe admitted that on January 3, 2014, he went into the Stubby Lake Smoke Shop in the early morning hours and threatened an employee with a knife. He demanded money, her car keys and told the employee not to scream or he would kill her. Crowe took cash, cartons of cigarettes, a laptop computer and the employee’s 2012 Subaru Forester. The United States prosecuted the case because the events occurred within the boundaries of the Coeur d’Alene Indian Reservation and Crowe is an enrolled tribal member.
“I commend the collaborative efforts of the tribal and federal law enforcement officers,” said Olson. “My office will continue to vigorously prosecute violent crimes in Indian Country and work with the tribal authorities to make the reservations safer places to live and work.”
The case was investigated by Coeur d’Alene Tribal Police and Federal Bureau of Investigation.
Texas Company Charged with Violations of the Federal Lacey ActRead the Press Release
U.S. Attorney Kenneth A. Polite announced that GARCIA SHRIMP CO., LLC, a Texas Limited Liability Company headquartered in Brownsville, Texas, was charged today in a one-count Bill of Information for falsely labeling shrimp that it sold to a New Orleans seafood distributor in violation the Federal Lacey Act.
According to the Bill of Information, on or about October 9, 2012, GARCIA SHRIMP purchased 35,000 pounds of Mexican shrimp from Mexican businessmen. After taking receipt of the shrimp, company personnel removed Mexico labels from the packages and attached new tags indicating that the shrimp was caught in U.S. waters. Company personnel also created false records and bills of lading to make it appear that the shrimp was caught by a U.S. flagged fishing vessel. On or about October 12, 2012, GARCIA SHRIMP sold the shrimp to a New Orleans based seafood distributor for $120,800.
If convicted, GARCIA SHRIMP CO., LLC faces a maximum fine of $500,000 and an organizational probationary term of five years.
U. S. Attorney Polite reiterated that the Bill of Information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the U.S Department of Commerce NOAA Office of Law Enforcement, in investigating this matter. Assistant U. S. Attorney Spiro G. Latsis and Department of Justice Trial Attorney Christopher L. Hale with the Environmental Crimes Section in Washington D.C. are in charge of the prosecution.
Tahlequah Man Sentenced to 60 Months for Firearm PossessionRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that NATHANQUE LANORT SAVAGE, a/k/a Nathan Lenard Savage, a/k/a Nathan Leonard Savage, age 39, of Tahlequah, Oklahoma, was sentenced to 60 months imprisonment, followed by 5 years of supervised release for Felon in Possession of a Firearm, in violation of Title 18, United States Code, Section 922(g)(1).
The charges arose from an investigation by the Muskogee Police Department and the Federal Bureau of Investigation. SAVAGE was Indicted and pled guilty in October, 2014.
The Indictment alleged that on or about October 29, 2013, within the Eastern District of Oklahoma, the defendant, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, the following firearm and ammunition, to-wit: a Black .380 Bryco, model Bryco 38 Semi-Automatic handgun and two rounds of .380 caliber ammunition marked CBC, one round of .380 caliber ammunition marked Federal, one round of .380 caliber ammunition marked PMC, one round of .380 caliber ammunition marked WIN, which had been previously shipped and transported in interstate commerce.
The Honorable James H. Payne, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending transportation to the designated federal prison at which he will serve his nonparolable sentence.
Assistant United States Attorney Edward Snow represented the United States.
Swiss Asset Manager Pleads Guilty in Federal Court to Conspiring with U.S. Taxpayers to Evade Federal Income Taxes and File False Tax ReturnsRead the Press Release
A Swiss citizen and former asset manager at a Swiss asset management firm pleaded guilty to conspiring with U.S. taxpayer-clients and others to help U.S. taxpayers hide millions of dollars in offshore accounts from the Internal Revenue Service (IRS), and to evade U.S. taxes on the income earned in those accounts, the Justice Department announced.
Peter Amrein, 53, a Swiss citizen, pleaded guilty before U.S. District Judge Sidney H. Stein of the Southern District of New York pursuant to a plea agreement to one count of conspiracy to defraud the IRS, to evade federal income taxes and to file false federal income tax returns. Amrein faces a maximum sentence of five years in prison at his July 1 sentencing before Judge Stein.
“Peter Amrein’s guilty plea today is another example of individuals being held culpable, in addition to institutions, for their criminal violations of U.S. tax laws,” said U.S. Attorney Preet Bharara of the Southern District of New York. “Regardless of the elaborate scheme you might employ, we will use all of our investigative powers to ensure that all citizens pay their fair share, and that those who assist them in evading our laws are also held responsible.”
According to the allegations in the superseding Information and the prior indictment, as well as statements made during the plea proceeding and other documents filed in federal court in Manhattan, New York:
Amrein worked as a client advisor at a Swiss bank (Swiss Bank No. 3) and, later, as an asset manager at a Swiss asset management firm (the Swiss Asset Management Firm). In those roles, between 1998 and 2012, Amrein helped U.S. taxpayers evade taxes and hide millions of dollars in undeclared accounts at various Swiss banks, including Wegelin & Co., which was charged and pleaded guilty in the Southern District of New York for its conduct in conspiring with U.S. taxpayers to evade taxes. Amrein, among other things, worked with an attorney based in Zurich, to establish sham foundations, which were organized under the laws of non-U.S. countries such as Liechtenstein, so that the undeclared assets of certain of Amrein’s U.S. taxpayer-clients could be maintained in the names of these foreign foundations rather than in the clients’ own names. Amrein did so in order to help his clients conceal their ownership of these undeclared accounts from the IRS.
In 2008, it became publicly known that UBS AG (UBS) was being investigated by U.S. law enforcement for helping U.S. taxpayers maintain undeclared accounts in Switzerland. Because of the investigation of UBS, one of the Swiss banks where Amrein had opened undeclared accounts for U.S. taxpayers (Swiss Bank No. 4) informed Amrein that it was going to close these undeclared accounts. In order to assist his clients in continuing to maintain undeclared accounts, Amrein searched for other banks in Switzerland that, despite the public investigation of UBS, were still willing to open undeclared accounts for U.S. taxpayers. Amrein found such a bank (Swiss Bank No. 1). Thereafter, Amrein opened undeclared accounts for U.S. taxpayer-clients at Swiss Bank No. 1 in the name of sham foundations, and transferred the clients’ undeclared assets from Swiss Bank No. 4 to these accounts at Swiss Bank No. 1.
For some of these clients, Amrein, with the assistance of others, helped send funds back to the United States and to other foreign jurisdictions in ways that were designed to ensure that U.S. authorities would not discover the existence of the clients’ undeclared accounts. For instance, Amrein instructed a client advisor at Swiss Bank No. 1 (the Swiss Bank No. 1 Client Advisor) to empty one of the accounts by sending checks in amounts smaller than $9,900 to the beneficial owner of the account, i.e., the U.S. taxpayer. On another occasion, Amrein instructed the Swiss Bank No. 1 Client Advisor to transfer the balance of one of the accounts, which was then valued at more than $2.4 million, to another account controlled by the U.S. taxpayer in Belize City, Belize. Moreover, as late as 2011, Amrein continued to look for other Swiss banks that were still willing to open undeclared accounts for U.S. taxpayers. For example, in June 2011, Amrein met with a client advisor at a Swiss bank (Swiss Bank No. 2), to discuss opening undeclared accounts for U.S. taxpayer-clients at Swiss Bank No. 2.
Mr. Bharara praised the outstanding investigative work of the IRS-Criminal Investigations. He also thanked the Department of Justice’s Tax Division for their significant assistance in the investigation.
This case is being handled by the U.S. Attorney’s Office for the Southern District of New York’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Sarah E. Paul, Jason H. Cowley, and Daniel B. Tehrani are in charge of the prosecution.
Swiss Asset Manager Pleads Guilty in Manhattan Federal Court to Conspiring with U.S. Taxpayers to Evade Federal Income Taxes and File False Tax ReturnsRead the Press Release
Preet Bharara, the U.S. Attorney for the Southern District of New York, announced today that PETER AMREIN, a Swiss citizen and former asset manager at a Swiss asset management firm, pleaded guilty to conspiring with U.S. taxpayer-clients and others to help U.S. taxpayers hide millions of dollars in offshore accounts from the Internal Revenue Service (IRS), and to evade U.S. taxes on the income earned in those accounts. AMREIN pleaded guilty before U.S. District Judge Sidney H. Stein.
U.S. Attorney Preet Bharara said: “Peter Amrein’s guilty plea today is another example of individuals being held culpable, in addition to institutions, for their criminal violations of U.S. tax laws. Regardless of the elaborate scheme you might employ, we will use all of our investigative powers to ensure that all citizens pay their fair share, and that those who assist them in evading our laws are also held responsible.”
According to the allegations in the Superseding Information and the prior Indictment, as well as statements made during the plea proceeding and other documents filed in Manhattan federal court:
AMREIN worked as a client advisor at a Swiss bank (Swiss Bank No. 3) and, later, as an asset manager at a Swiss asset management firm (the Swiss Asset Management Firm). In those roles, between 1998 and 2012, AMREIN helped U.S. taxpayers evade taxes and hide millions of dollars in undeclared accounts at various Swiss banks, including Wegelin & Co., which was charged and pleaded guilty in the Southern District of New York for its conduct in conspiring with U.S. taxpayers to evade taxes. AMREIN, among other things, worked with an attorney based in Zurich, Switzerland, to establish sham foundations, which were organized under the laws of non-U.S. countries such as Liechtenstein, so that the undeclared assets of certain of AMREIN’s U.S. taxpayer-clients could be maintained in the names of these foreign foundations rather than in the clients’ own names. AMREIN did so in order to help his clients conceal their ownership of these undeclared accounts from the IRS.
In 2008, it became publicly known that UBS AG (UBS) was being investigated by United States law enforcement for helping U.S. taxpayers maintain undeclared accounts in Switzerland. Because of the investigation of UBS, one of the Swiss banks where AMREIN had opened undeclared accounts for U.S. taxpayers (Swiss Bank No. 4) informed AMREIN that it was going to close these undeclared accounts. In order to assist his clients in continuing to maintain undeclared accounts, AMREIN searched for other banks in Switzerland that, despite the public investigation of UBS, were still willing to open undeclared accounts for U.S. taxpayers. AMREIN found such a bank (Swiss Bank No. 1). Thereafter, AMREIN opened undeclared accounts for U.S. taxpayer-clients at Swiss Bank No. 1 in the name of sham foundations, and transferred the clients’ undeclared assets from Swiss Bank No. 4 to these accounts at Swiss Bank No. 1.
For some of these clients, AMREIN, with the assistance of others, helped send funds back to the United States and to other foreign jurisdictions in ways that were designed to ensure that U.S. authorities would not discover the existence of the clients’ undeclared accounts. For instance, AMREIN instructed a client advisor at Swiss Bank No. 1 (the Swiss Bank No. 1 Client Advisor) to empty one of the accounts by sending checks in amounts smaller than $9,900 to the beneficial owner of the account, i.e., the U.S. taxpayer. On another occasion, AMREIN instructed the Swiss Bank No. 1 Client Advisor to transfer the balance of one of the accounts, which was then valued at more than $2.4 million, to another account controlled by the U.S. taxpayer in Belize City, Belize. Moreover, as late as 2011, AMREIN continued to look for other Swiss banks that were still willing to open undeclared accounts for U.S. taxpayers. For example, in June 2011, AMREIN met with a client advisor at a Swiss bank (Swiss Bank No. 2), to discuss opening undeclared accounts for U.S. taxpayer-clients at Swiss Bank No. 2.
Mr. Bharara praised the outstanding investigative work of the IRS-Criminal Investigations. He also thanked the Department of Justice’s Tax Division for their significant assistance in the investigation.
AMREIN, 53, a Swiss citizen, pleaded guilty pursuant to a plea agreement to one count of conspiracy to defraud the IRS, to evade federal income taxes, and to file false federal income tax returns. AMREIN faces a maximum sentence of five years in prison. The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. AMREIN is scheduled to be sentenced before Judge Stein on July 1, 2015.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Sarah E. Paul, Jason H. Cowley, and Daniel B. Tehrani are in charge of the prosecution.
Sun City Pediatrician Sentenced to 14 Years for Distributing Child PornographyRead the Press Release
PHOENIX– On March 30, 2015, Emilio Luna, 44, of Sun City, Ariz., was sentenced by U.S. District Judge David G. Campbell to 14 years in federal prison, to be followed by a lifetime term of supervised release. Luna previously pleaded guilty on two counts of distribution of child pornography during a time when he was a practicing pediatrician. Luna is also required to register as a sex offender and prohibited from working as a pediatrician.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution was handled by Melissa Karlen and Sharon Sexton, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-10-1305-PHX-DGC
RELEASE NUMBER: 2015-027_Luna
Shreveport man sentenced to more than 8 years in prison for firearms chargesRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced today that a Shreveport man was sentenced to 105 months in prison for possessing firearms and ammunition after being convicted of multiple felonies.
Donzell Joseph Samuels Jr., 36, of Shreveport, was sentenced by U.S. District Judge Donald E. Walter on one count of possessing a firearm and ammunition after being convicted of a felony. He was also ordered to serve three years of supervised release. According to evidence presented at the December 15, 2014 guilty plea, Samuels was on probation when law enforcement received information that he had a firearm at his residence. The Caddo Parish Sheriff’s Office contacted Samuels at home in October of 2013 and found him in possession of a .380 caliber pistol, a .357 caliber revolver, two 9 mm pistols, and a 16 gauge shotgun. They also found ammunition with each firearm, an additional 16 rounds of 9 mm ammunition in an extended magazine, and .22 caliber ammunition.
Samuels has three prior felony convictions in the First Judicial District Court for Caddo Parish. In 2008 he was convicted of possession of a Schedule II controlled substance, cocaine, and was sentenced to three and a half years at hard labor. In 2001 he was convicted of accessory after the fact – manslaughter and criminal conspiracy to commit a simple burglary, and was sentenced to four years at hard labor. In 2000 he was convicted of simple burglary and was sentenced to two years at hard labor, suspended with one year of supervised probation.
The ATF and the Caddo Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Robert W. Gillespie Jr. prosecuted the case as part of the Project Safe Neighborhoods Program, which is a Department of Justice initiative designed to prosecute those who are prohibited from possessing firearms and those who use firearms to commit violent crimes.
Second EZ Mart Shooter Pleads GuiltyRead the Press Release
Second Shooter From Southside Richmond Convenience Store Convicted of Illegally Possessing a Firearm and Drug Trafficking
RICHMOND, Va. – William Bell, 30, of Richmond, Virginia, pleaded guilty today to possession of a firearm by a convicted felon in connection with a June 12, 2014 shootout at the EZ Mart convenience store and to possession with the intent to distribute cocaine base related to a September 22, 2014, vehicular pursuit with the Virginia State Police.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Charles E. Smith, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives Washington Field Division, made the announcement after the plea was accepted by U.S. District Judge M. Hannah Lauck.
A federal grand jury indicted Bell on February 3, 2015. He faces maximum sentences of 10 years in prison on the firearm charge and 20 years on the drug charge when he is sentenced on June 29, 2015. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
In a statement of facts filed with his plea agreement, Bell admitted that on June 12, 2014, a masked gunman later identified as DeAndre Yellardy fired multiple shots into a vehicle occupied by Bell in the parking lot of the South Richmond EZ Mart convenience store. Both Bell and his passenger were wounded. Bell returned fire with a .40 caliber pistol, but failed to hit Yellardy. Bell also admitted in his statement of facts that on September 22, 2014, he refused to stop for a Virginia State Police Trooper in Richmond related to a traffic offense. During the ensuing pursuit, Bell threw the .40 caliber pistol and approximately 13 grams of cocaine base from his vehicle. The firearm and cocaine were later recovered. Shell casings from the EZ Mart shooting scene were later matched to the gun recovered from Bell. At the time of both incidents, Bell was a convicted felon, and, as a result, was prohibited from possessing a firearm.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearm, and Explosives, the Virginia State Police, and the Richmond Police Department. Assistant U.S. Attorney Erik S. Siebert is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15-cr-20.
Sandpoint Man Pleads Guilty to Federal Child Pornography ChargeRead the Press Release
COEUR D'ALENE - Brent Anthony Stevens, 31, of Sandpoint, Idaho, pleaded guilty today in federal court to possession of sexually explicit images of minors, U.S. Attorney Wendy J. Olson announced. Stevens was indicted by a federal grand jury in Coeur d'Alene on August 19, 2014.
According to the plea agreement, between July 22, 2013, and September 12, 2013, investigators with the Idaho Internet Crimes Against Children Task Force (ICAC) observed that a computer in Sandpoint, Idaho, was making sexually explicit images of minors available on the internet. ICAC investigators were able to determine that the images were being shared from a computer at Stevens’ residence and obtained a search warrant.
Stevens was present during the search warrant’s execution. He admitted to downloading child pornography and told investigators they would find it on his computer. A computer forensic examiner later found child pornography on a computer and a thumb-drive seized from Stevens. The National Center for Missing and Exploited Children determined that Stevens’ child pornography collection included images of minors from multiple states, including Washington, Colorado, California, and Utah, as well as several foreign countries.
The charge of possession of sexually explicit images of minors is punishable by up to 10 years in prison, a maximum fine of $250,000.00, and up to lifetime supervised release.
Sentencing is set for July 21, 2015, before United States District Judge Edward J. Lodge at the federal courthouse in Coeur d'Alene.
The case was investigated through the collaborative effort of the Kootenai County Prosecutor’s Office, Bonner County Sheriff’s Office, Coeur d’Alene Police Department, Idaho Attorney General’s Office, United States Secret Service, Federal Bureau of Investigation, U.S. Marshals Service, and the U.S. Department of Homeland Security. These agencies participate in the Idaho Internet Crimes Against Children (ICAC) Task Force, a statewide coalition of local, state and federal law enforcement and prosecution agencies, focused on apprehending and prosecuting individuals who use the Internet to criminally exploit children. For more information about the Idaho ICAC Task Force and a list of all the participating agencies, visit www.icactaskforce.org.
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.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Robert Bosch GmbH Agrees to Plead Guilty to Price Fixing and Bid Rigging on Automobile Parts Installed in U.S. CarsRead the Press Release
Robert Bosch GmbH, the world’s largest independent parts supplier to the automotive industry, based in Gerlingen, Germany, has agreed to plead guilty and to pay a $57.8 million criminal fine for its role in a conspiracy to fix prices and rig bids for spark plugs, oxygen sensors and starter motors sold to automobile and internal combustion engine manufacturers in the United States and elsewhere, the Department of Justice announced today.
According to the one-count felony charge filed today in the U.S. District Court of the Eastern District of Michigan, Bosch conspired to allocate the supply of, rig bids for, and to fix, stabilize and maintain the prices of, spark plugs and oxygen sensors sold to automobile and internal combustion engine manufacturers such as DaimlerChrysler AG, Ford Motor Company, General Motors Company and Andreas Stihl AG & Co., among others, in the United States and elsewhere. Bosch’s involvement in the conspiracy lasted from at least as early as January 2000 until at least July 2011. Bosch is also charged with participating in a conspiracy to allocate the supply of, rig bids for, and to fix, stabilize and maintain the prices of, starter motors sold to Volkswagen AG and certain of its subsidiaries in the United States from at least as early as January 2009 until at least June 2010. Bosch has agreed to cooperate in the department’s ongoing investigation. The plea agreement will be subject to court approval.
“The participants in this conspiracy were not located in just one country or region of the world,” said Deputy Assistant Attorney General Brent Snyder of the Antitrust Division’s Criminal Enforcement Program. “Collusion related to automotive parts was global in nature as are our efforts to hold responsible companies and individuals accountable for the resulting harm to U.S. consumers and businesses.”
According to the charge, Bosch and others participating in the scheme conspired through meetings and conversations in which they discussed and agreed upon bids and price quotations on bids to be submitted to certain automobile and internal combustion engine manufacturers and to allocate the supply of the products to those manufacturers. Bosch, which manufactures and sells numerous automotive and internal combustion engine parts, sold spark plugs, oxygen sensors and starter motors at non-competitive prices to customers in the United States and elsewhere in furtherance of the agreement.
A spark plug is an internal combustion engine component for delivering high electric voltage from the ignition system to the combustion chamber. Oxygen sensors are located in the exhaust system and measure the amount of oxygen in the exhaust. Starter motors are small electric motors used in starting internal combustion engines.
The charge against Bosch is the latest in the department’s on-going investigation into anticompetitive conduct in the automotive parts industry. Bosch is the third European-based company charged in this investigation.
Including Bosch, 34 companies and 29 executives have pleaded guilty or agreed to plead guilty in the division’s ongoing investigation into price fixing and bid rigging in the auto parts industry and have agreed to pay a total of nearly $2.5 billion in criminal fines.
Bosch is charged with price fixing and bid rigging in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charge was brought by the Antitrust Division’s Washington Criminal I Section and the FBI’s Detroit Field Office with the assistance of the FBI Headquarters’ International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit http://www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323.
Bosch Information
Republic Man Pleads Guilty to Stealing Guns from Pawn ShopRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Republic, Mo., man pleaded guilty in federal court today to stealing 21 handguns from an Ozark, Mo., pawn shop.
Michael Cameron Heston, 26, of Republic, Mo., pleaded guilty before U.S. District Judge M. Douglas Harpool to aiding and abetting in the theft of a firearm from a licensed firearm dealer.
Co-defendant Daryl Bradley Maples, 28, of Springfield, Mo., has pleaded guilty to the same charge. Heston and Maples admitted that they broke into Sutton Gun and Pawn, 3994 N. 20th St., Ozark, by breaking out the glass front door on Dec. 21, 2012. They stole 21 handguns and various amounts of ammunition. They then went to Maples’s residence, where they divided the spoils of the burglary and made plans to trade the stolen firearms for cash or drugs.
When Maples was arrested on Dec. 26, 2012, he had in his possession two of the firearms that were stolen in the pawn shop burglary, an F.N. 9mm pistol and a Colt .38-caliber revolver, as well as assorted ammunition.
Under federal statutes, Heston and Maples are each subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Abram McGull II. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Ozark, Mo., Police Department and the Springfield, Mo., Police Department.
Prominent Businessman for Private Consulting Group Sentenced to Federal Prison After Bilking Elderly Victim of $1.1 MillionRead the Press Release
PORTLAND, Ore. – Robert L. Keys, 65, an Oregon resident, was sentenced today by U.S. District Judge Marco Hernandez to serve 70 months in prison, after pleading guilty to wire fraud, money laundering, and bankruptcy fraud. Keys was also ordered to serve three years supervised release, and he must pay restitution in the amount of $1.1 million. Keys was a prominent businessman who ran a company called Private Consulting Group, which at one time had assets of $400 million and managed investments for high net worth individuals around the country.
“People who prey upon our elderly citizens in this manner will be held accountable and are deserving of a lengthy prison sentence,” stated Acting U.S. Attorney Billy Williams. “This office is committed to prosecuting individuals for conduct that destroys the trust necessary for safe investments.”
Keys pled guilty to two counts of wire fraud, two counts of money laundering, and one count of bankruptcy fraud at his change of plea hearing held on September 9, 2014. At that hearing, the government contended that in 2008, as Keys’ business ventures were failing, he turned to one of his long-term clients, a widow in her mid-80s, and persuaded her to loan $1.1 million to co-defendant William Kearney, now deceased. Keys lied to his client about the terms of the loan, such as the existence of treasury bonds as collateral for the loan, and he failed to disclose important facts to her in order to fraudulently obtain money for his benefit and that of Kearney.
Keys also received over $100,000 in kickbacks as part of the scheme to defraud his long-time client. Those kickbacks were wired to him by Kearney the day after Keys persuaded his client to loan Kearney the $1.1 million.
In addition to the wire fraud and money laundering charges, Keys and his wife filed for bankruptcy in 2010, and Keys fraudulently attempted to discharge $148 million in debt by lying to the Bankruptcy Court, concealing assets and income, and filing false documents with the Court.
This case was investigated by the Internal Revenue Service, Criminal Investigation, and the United States Trustees Office. The case was prosecuted by Assistant United States Attorney and Senior Litigation Counsel Allan M. Garten.
Portland Man Pleads Guilty to Immigration Fraud and False Statement ChargesRead the Press Release
Contact: Darcie N. McElwee
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Adam Mack, 39, of Portland, Maine, pleaded guilty yesterday in U.S. District Court to aiding and abetting visa and marriage fraud and making false statements.
According to court records, between October 2009 and January 2012, Mack unlawfully assisted foreign nationals who were seeking to become a lawful permanent residents, or green card holders, by engaging in marriage and visa fraud and he made false statements regarding his employment of them to the U.S. Citizenship and Immigration Service.
Mack faces up to 10 years in prison on the visa fraud charges, and up to five years on the marriage fraud and false statement charges. He also faces fines of up to $250,000 on each charge. He will be sentenced after completion of a presentence investigation report by the United States Probation Office.
The investigation was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the U.S. Department of State, Bureau of Diplomatic Security.
Phoenix Man Sentenced to 96 Months Imprisonment for Conspiring to Commit Sex Trafficking of a MinorRead the Press Release
PHOENIX, Ariz. – Kenneth Wayne Becketts, Jr., 32, of Phoenix, Ariz., was sentenced by U.S. District Judge Susan R. Bolton to 96 months’ imprisonment and five years of supervised release after pleading guilty to conspiracy to commit sex trafficking of a minor. Becketts was also ordered to register as a sex offender.
As part of the plea agreement, Becketts admitted to recruiting the underage victim to work as a prostitute, and posting advertisements on various web sites in December of 2011.
U.S. Attorney John S. Leonardo stated, “We will not tolerate those who sexually exploit young women for financial gain. This substantial prison sentence indicates to all that such acts of victimization will be vigorously prosecuted.”
The investigation in this case was conducted by the Federal Bureau of Investigation and the Phoenix Police Department. The prosecution was handled by Christine Ducat Keller, Rachel R. Stoddard, and Krissa Lanham, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-13-01637-PHX-SRB (DKD)
RELEASE NUMBER: 2015-026_Becketts
Panamanian Woman Heads to Prison for Illegal Re-entry into the United StatesRead the Press Release
LAREDO, Texas – Alicia Larrier, 47, has been ordered to prison for more than eight years following her conviction of illegal re-entry, announced United States Attorney Kenneth Magidson. A Laredo jury convicted the Panamanian citizen on Nov. 17, 2014, after less than a day of trial and approximately one hour of deliberations.
Today, U.S. District Judge Marina Garcia Marmolejo, who presided over the trial, handed Larrier the 97-month sentence. At the hearing, Judge Marmolejo ruled Larrier obstructed justice and lied at trial. Additionally, the United States articulated that Larrier had an extensive criminal history, inclusive of aggravated robbery with a gun and practicing dentistry without a license. She is expected to face deportation proceedings following his release from prison.
U.S. Border Patrol (BP) agents apprehended Larrier on March 18, 2014, as part of a group of nine individuals in the Hernandez Ranch near Laredo. Upon investigation, agents determined she was an illegal alien - previously ordered deported in 1993 after multiple convictions for armed robbery, forgery, grand theft and practicing dentistry without a license. She had been sentenced to more than 15 years imprisonment and ultimately deported early to the country of Panama in October 2002.
At trial, the government presented testimony from BP processing and arresting agents, as well as representative of the Department of Homeland Security. Larrier testified, but gave multiple versions of stories on the witness stand to include the claim that she had been drugged, kidnapped and smuggled into the United States against her will.
The jury ultimately did not believe her story and found her guilty as charged.
She will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation leading to the charges was conducted by BP and U.S. Citizenship and Immigration Services. Assistant U.S. Attorneys Sanjeev Bhasker and Adam Goldman prosecuted this case.
PR Department of Health Employee and Another Individual Indicted for Theft of Government Records and Aggravated Identity TheftRead the Press Release
SAN JUAN, P.R. – Yesterday, a Federal grand jury returned an eight-count indictment charging two individuals for conspiracy, theft of government records, unlawful transfer of means of identification, aggravated identity theft, and wrongful disclosure of individually identifiable health information, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. The Internal Revenue Service (IRS) Criminal Investigation Division and Health and Human Services, Office of Inspector General are in charge of the investigation. The Puerto Rico Department of Health Medicaid Office, Fraud Unit provided significant assistance during the investigation.
Defendants Mercedes C. Bodden-Fontana and Raymond I. Ramos-Reyes stole personal identifying information of Mi Salud recipients from the MEDITI database to sell those records to unjustly enrich themselves.
As an employee of the Puerto Rico Department of Health Medicaid Office, Mercedes C. Bodden-Fontana would access to the MEDITI database on her work computer and take photographs of the screen depicting in list form Mi Salud participants’ names, social security numbers and dates of birth. She would subsequently print the pictures of the screen shots. She would then provide the information to defendant Raymond I. Ramos-Reyes. Ramos-Reyes would sell each individual’s information to a third party for approximately $3 per name, date of birth and corresponding social security number. Reyes-Ramos would then provide Bodden-Fontana the proceeds of the sale; in return, she would provide Reyes-Ramos a commission for the sale.
“This indictment underscores our determination to hold accountable those who take advantage of vulnerable populations, commit fraud, and place the safety of others at risk for illicit financial gain,” stated Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. “These defendants stole names, social security numbers and dates of birth of more than 5,000 Mi Salud recipients, to later sell these records for profit; we have stopped their illegal activities with today’s arrests. The investigation continues.”
Kelly R. Jackson, Special Agent in Charge, IRS Criminal Investigation, Miami Field Office, stated, “It is unfortunate that an employee of the Puerto Rico Department of Health Medicaid Office would steal the identities of innocent Mi Salud participants for a profit. Today’s indictment should serve as a strong warning to those who are considering similar conduct of using their position at an employer to commit identity theft. IRS Criminal Investigation and its law enforcement partners are serious about investigating these crimes and holding accountable those who steal and then sell other peoples’ identities to commit tax fraud and other offenses.”
“The Medicaid program provides health care benefits to low-income individuals and families, and the illegal and unauthorized use of Medicaid participants’ personal identifiers is unacceptable. HHS-OIG and its law enforcement partners will continue to aggressively pursue to the fullest extent of the law those who seek to unlawfully enrich themselves by victimizing participants of the Medicaid program,” said Scott Lampert, Special Agent in Charge of HHS-OIG New York Regional Office.
If convicted, the defendants face a maximum possible sentence of five years on the conspiracy charge, 10 years for theft of government records and two consecutive years in prison for the aggravated identity theft charge.
The case is being investigated by IRS-CID, HHS-OIG with the collaboration of the Puerto Rico Department of Health Medicaid Office, and prosecuted by Assistant United States Attorney Julia Meconiates. An indictment contains only charges and is not evidence of guilt. Defendants are presumed to be innocent unless and until proven guilty. The investigation is ongoing.
PR Department of Health Employee and Another Individual Indicted for Theft of Government Records and Aggravated Identity TheftRead the Press Release
SAN JUAN, P.R. – Yesterday, a Federal grand jury returned an eight-count indictment charging two individuals for conspiracy, theft of government records, unlawful transfer of means of identification, aggravated identity theft, and wrongful disclosure of individually identifiable health information, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. The Internal Revenue Service (IRS) Criminal Investigation Division and Health and Human Services, Office of Inspector General are in charge of the investigation. The Puerto Rico Department of Health Medicaid Office, Fraud Unit provided significant assistance during the investigation.
Defendants Mercedes C. Bodden-Fontana and Raymond I. Ramos-Reyes stole personal identifying information of Mi Salud recipients from the MEDITI database to sell those records to unjustly enrich themselves.
As an employee of the Puerto Rico Department of Health Medicaid Office, Mercedes C. Bodden-Fontana would access to the MEDITI database on her work computer and take photographs of the screen depicting in list form Mi Salud participants’ names, social security numbers and dates of birth. She would subsequently print the pictures of the screen shots. She would then provide the information to defendant Raymond I. Ramos-Reyes. Ramos-Reyes would sell each individual’s information to a third party for approximately $3 per name, date of birth and corresponding social security number. Reyes-Ramos would then provide Bodden-Fontana the proceeds of the sale; in return, she would provide Reyes-Ramos a commission for the sale.
“This indictment underscores our determination to hold accountable those who take advantage of vulnerable populations, commit fraud, and place the safety of others at risk for illicit financial gain,” stated Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. “These defendants stole names, social security numbers and dates of birth of more than 5,000 Mi Salud recipients, to later sell these records for profit; we have stopped their illegal activities with today’s arrests. The investigation continues.”
Kelly R. Jackson, Special Agent in Charge, IRS Criminal Investigation, Miami Field Office, stated, “It is unfortunate that an employee of the Puerto Rico Department of Health Medicaid Office would steal the identities of innocent Mi Salud participants for a profit. Today’s indictment should serve as a strong warning to those who are considering similar conduct of using their position at an employer to commit identity theft. IRS Criminal Investigation and its law enforcement partners are serious about investigating these crimes and holding accountable those who steal and then sell other peoples’ identities to commit tax fraud and other offenses.”
“The Medicaid program provides health care benefits to low-income individuals and families, and the illegal and unauthorized use of Medicaid participants’ personal identifiers is unacceptable. HHS-OIG and its law enforcement partners will continue to aggressively pursue to the fullest extent of the law those who seek to unlawfully enrich themselves by victimizing participants of the Medicaid program,” said Scott Lampert, Special Agent in Charge of HHS-OIG New York Regional Office.
If convicted, the defendants face a maximum possible sentence of five years on the conspiracy charge, 10 years for theft of government records and two consecutive years in prison for the aggravated identity theft charge.
The case is being investigated by IRS-CID, HHS-OIG with the collaboration of the Puerto Rico Department of Health Medicaid Office, and prosecuted by Assistant United States Attorney Julia Meconiates. An indictment contains only charges and is not evidence of guilt. Defendants are presumed to be innocent unless and until proven guilty. The investigation is ongoing.
Ohio-Based Health System Pays United States $10 Million to Settle False Claims Act AllegationsRead the Press Release
Robinson Health System Inc. has agreed to pay $10 million to settle claims that it violated the False Claims Act, the Anti-Kickback Statute and the Stark Statute by engaging in improper financial relationships with referring physicians, the Justice Department announced today. Robinson is a nonprofit corporation based in Ohio that operates a number of health care facilities in Portage County, Ohio, including Robinson Memorial Hospital.
“The Department of Justice has longstanding concerns about improper financial relationships between health care providers and their referral sources, because such relationships can alter a physician’s judgment about the patient’s true health care needs and drive up health care costs for everybody,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable.”
The settlement announced today involved Robinson’s financial relationships with a number of referring physicians that allegedly violated the Anti-Kickback Statute and the Stark Statute, both of which restrict the financial relationships that hospitals may have with doctors who refer patients to them. These relationships included management agreements that Robinson had with two physicians groups. These physicians allegedly failed to provide sufficient bona fide management services to have justified the payments that they received. Robinson disclosed these issues to the government.
“Referrals should be made to the best qualified physicians, and must be based on what’s best for the patient,” said U.S. Attorney Steven M. Dettelbach of the Northern District of Ohio. “Improper financial relationships between hospitals and referring doctors can lead to clouded judgments, which is why the Department of Justice will continue to police such matters vigorously.”
This settlement illustrates the government’s emphasis on combating health care fraud and marks 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, which prohibits false claims for federal funds, including claims submitted in violation of the Anti-Kickback Statute and the Stark Statute. Since January 2009, the Justice Department has recovered a total of more than $23.9 billion through False Claims Act cases, with more than $15.2 billion of that amount recovered in cases involving fraud against federal health care programs.
The case was handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of Ohio, and the Department of Health and Human Services’ Office of Inspector General. The claims settled by this agreement are allegations only, and there has been no determination of liability.
New York City Tax Preparer Charged with Preparing False Tax ReturnsRead the Press Release
A federal grand jury in the Eastern District of New York returned an indictment yesterday against a Staten Island, New York, tax return preparer and business owner, charging him with 31 counts of aiding and assisting in the preparation of false federal income tax returns and three counts of filing false personal federal income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
According to the allegations in the indictment, Alabi Gbangbala was the operator of Broadfield, a tax return preparation business located in Staten Island. For tax years 2008 and 2009, Gbangbala allegedly prepared false individual income tax returns for Broadfield clients by, among other things, failing to report accurate exemptions, falsifying business receipts and losses on Schedules C and inflating or fabricating charitable contributions and unreimbursed employee expenses. Gbangbala also filed false individual income tax returns on behalf of himself for tax years 2008 through 2010, in which he failed to disclose his total income for each calendar year.
If convicted, Gbangbala faces a statutory maximum sentence of three years in prison and a fine of $250,000 on each count.
Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Christopher O’Donnell and Mark McDonald of the Tax Division, who are prosecuting the case. Ciraolo also thanked the U.S. Attorney’s Office for the Eastern District of New York for their assistance.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceeding.
Additional information about the Tax Division and its enforcement efforts may be found on the division website.
Gbangbala Indictment
New Hampshire Man Sentenced to over Three Years on Child Exploitation ChargeRead the Press Release
Contact: Andrew McCormack
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Chad Amodio, 43, of Milton, New Hampshire, was sentenced today in U.S District Court by Judge John A. Woodcock, Jr. to 40 months in prison, to be followed by 5 years of supervised release for interstate travel to have sex with a minor. Amodio pled guilty on November 7, 2014.
Court records and proceedings reveal that in March 2014, Amodio began having inappropriate sexual conversations on a chat website with a 13-year-old girl. Police were alerted and an undercover officer took control of the minor’s account. Amodio communicated with the undercover officer and made plans to travel from his home in New Hampshire to Maine in order to have sex at the girl’s home. Shortly after arriving at the Penobscot County address provided by the undercover officer, Amodio was arrested. Alcohol and a bottle of lubricant were found in his vehicle which he admitted purchasing in anticipation of the planned sexual encounter.
The investigation was conducted by the Bangor Police Department, the Federal Bureau of Investigation, the Penobscot County Sheriff’s Office, and the Maine State Police.
New Hampshire Man Pleads Guilty to Social Security FraudRead the Press Release
Contact: Craig M. Wolff
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Rodrigo Schumacker, 30, of Seabrook, New Hampshire, pled guilty today in U.S. District Court to social security fraud.
According to court records, in March 2010, Schumacker, a Brazilian citizen, completed an application requesting that U.S. Citizenship and Immigration Services grant him permanent resident status. On the application, Schumacker claimed that he had been assigned a certain social security number, when in fact he had never been assigned a social security number. The number Schumacker used had been assigned to a woman in Florida who was deceased at the time he used it. He later admitted to investigators that he knew the number he had used was not assigned to him
Schumacker faces up to 5 years in prison, a $250,000 fine, and supervised release of up to 3 years. He will be sentenced after the completion of a presentence investigation report by the United States Probation Office.
The investigation was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
Nebraska Man Sentenced for Distribution of Materials Involving the Sexual Exploitation of MinorsRead the Press Release
Fargo – Acting U.S. Attorney Christopher C. Myers announced that on March 30, 2015, Robert Vangorden, Age 41, Omaha Nebraska, was sentenced before U.S. District Judge Daniel L. Hovland, to serve 17 years and 6 months in prison for distributing materials involving the sexual exploitation of a minor. Judge Hovland also sentenced Vangorden to 10 years of supervised release following his incarceration and ordered him to pay a $100 special assessment to the Crime Victims’ Fund and $5,000 in restitution.
This case was initiated by the Dickinson Police Department and later transferred to the Department of Homeland Security. During the summer of 2013, the Dickinson Police Department conducted an operation to identify child predators online, using a fictitious persona as a 14-year-old girl on various different social network sites. The undercover officer from the Dickinson Police Department began communicating with Vangorden on a social media site known as "Chat Avenue" and later communicated with him via Yahoo Messenger. Vangorden engaged in sexually explicit conversations with the officer’s persona, as well as sending the persona multiple images and videos containing child pornography.
The Department of Homeland Security continued the investigation for a period of two weeks and, during that time period, Vangorden continued communications with the persona and sent additional child pornography images as well as a sexually-explicit webcam video of himself.
The case was investigated by the Department of Homeland Security; Dickinson Police Department; and the North Dakota Bureau of Investigations.
Assistant U.S. Attorney Gary L. Delorme prosecuted the case.