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Tuesday 3 February 2015
Washington Man Sentenced for Wire FraudRead the Press Release
United States Attorney Deborah R. Gilg announced that on February 2, 2015, United States District Court Judge Laurie Smith Camp sentenced Donald James Wilson of Bothell, Washington, age 44, to a 41 month term of imprisonment, following his conviction for wire fraud. After his release from prison, Wilson will begin a term of supervised release of 3 years. Wilson was also ordered to make restitution in the amount of $605,592.53.
Wilson was a Division Vice President of Sales and Marketing for ConAgra Foods, Inc. Beginning in 2007 and continuing through 2011, Wilson made materially false and fraudulent representations to ConAgra claiming that he was using GTL Enterprises, Inc., a company located in Othello, Washington, and All Out Athletics, located in Marysville, Washington, as vendors to provide promotional trips, activities, and materials to ConAgra’s customers.
Wilson would submit to ConAgra fake GTL Enterprises, Inc. and All Out Athletics invoices for promotional trips, activities, and materials purportedly provided to ConAgra’s customers. ConAgra made payments related to the fake vendor invoices directly to GTL Enterprises, Inc. and All Out Athletics. An owner of GTL Enterprises, Inc. and an employee of All Out Athletics assisted Wilson with the scheme. From at least November, 2007, and continuing through at least November, 2011, Wilson submitted to ConAgra at least twenty-nine (29) fake vendor invoices for payments totaling $605,592.50. Wilson used the monies received from ConAgra for personal expenses unrelated to ConAgra and its customers.
This case was investigated by the Federal Bureau of Investigation.
Warr Acres Man Pleads Guilty to Tax EvasionRead the Press Release
Oklahoma City, Oklahoma – RICKY A. ERWIN, from Warr Acres, Oklahoma, pled guilty yesterday to committing tax evasion, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
Erwin was charged by information on January 14, 2015. As part of his guilty plea, Erwin admitted that he made several affirmative acts to conceal his income, to include enlisting a third party to incorporate a business in 2007 named Pro Tech Supply Inc. (PTSI), and instructing the third party to serve as PTSI’s registered agent to separate himself from the entity. Erwin further admitted to using PTSI as a shell corporation for his construction business and instructing contractors to make payments to PTSI to avoid them having to report his income to the IRS on Form 1099s.
As part of his guilty plea, Erwin agreed to pay restitution to the IRS for the income tax owed for the 2007, 2008, 2009 and 2010 calendar years, which is approximately $133,015. At sentencing, Erwin faces up to five years in prison and a $250,000 fine.
This case is the result of an investigation by IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Charles W. Brown.
Two Martinsburg women charged with fraudRead the Press Release
WHEELING, WEST VIRGINIA – A federal grand jury returned an indictment today charging two Martinsburg, West Virginia women with fraud, United States Attorney William J. Ihlenfeld, II, announced.
An investigation by the Social Security Administration Office of Inspector General revealed that Aida Aliu Bell, 38, of Martinsburg, West Virginia, unlawfully collected Social Security Benefits in the amount of $10,632.00 on behalf of her minor daughters. Initially, Bell was properly designated to receive the benefits of behalf of her daughters. In September 2011, custody of Bell’s minor daughters was transferred to the West Virginia Department of Health and Human Resources. Bell allegedly failed to report the change in custody and continued to improperly collect Social Security benefits through approximately August 2013. Bell is charged with one count of “Social Security Fraud,” for which she faces up to five years in prison and a fine of up to $250,000.00. She is further charged with one count of “Purloining Government Money,” for which she faces up to 10 years in prison and a fine of up to $250,000.00.
During the course of litigation with her mortgage broker, Amanda Bishop, 35, of Martinsburg, West Virginia, is alleged to have created and submitted to the court fake bank statements purporting to show that she had made mortgage payments in the amount of $1,848.00 on Nov. 17, 2010 and Dec. 15, 2010. Bishop is charged with two counts of “False Declaration Before Court” following an investigation by the Federal Bureau of Investigation. She faces up to five years in prison and a fine of up to $250,000.00 on each count.
Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Assistant U.S. Attorney Michael Stein is prosecuting Bell and Assistant U.S. Attorneys Paul Camilletti and Anna Krasinski are prosecuting Bishop on behalf of the government.
Two Former Police Officers Sentenced for July 2012 Robbery in Puerto RicoRead the Press Release
A former sergeant from the Police of Puerto Rico (POPR) was sentenced today to serve 101 months in prison for his involvement in a July 2012 home invasion robbery in Bayamon, Puerto Rico. A second former POPR officer was also sentenced today to serve 24 months in prison for lying to federal agents about his role in the same robbery and for his participation in a second, unrelated robbery.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico made the announcement.
Jorge Fernandez-Aviles, 49, of Carolina, Puerto Rico, pleaded guilty on Oct. 7, 2014, to robbery and firearms charges, and was sentenced to 101 months in prison today. According to admissions made in connection with his guilty plea, on July 14, 2012, Sergeant Fernandez and other POPR officers, armed with their POPR weapons, robbed a house in Bayamon. They drove to the robbery in a marked patrol car loaned to them by a POPR officer. Upon entering the house, the officers identified themselves as police, falsely claimed they were executing a search warrant, and searched and detained the individuals who were present. They then stole money and cocaine. Fernandez-Aviles later received payment from the proceeds of the sale of the stolen cocaine for his participation in the robbery.
Former POPR Officer Alexander Mir-Hernandez, 40, of Carolina, Puerto Rico pleaded guilty on Oct. 3, 2014, to making false statements to federal agents and to a separate civil rights crime in connection with a December 2013 robbery, and was sentenced to serve 24 months in prison today. According to admissions made in connection with his guilty plea, when he was interviewed by FBI agents in June 2014, Mir made several false statements and falsely denied providing the patrol car that was used to commit the July 2012 robbery. Mir also admitted to stealing thousands of dollars in drug trafficking proceeds from a money courier at Luis Munoz Marin International Airport in December 2013 while he was on duty as a POPR officer.
Both defendants were sentenced by U.S. District Judge José Antonio Fusté of the District of Puerto Rico. The remaining four defendants are scheduled to be sentenced in February and March 2015.
This case was investigated by the FBI’s San Juan Division. The case is being prosecuted by Trial Attorneys Heidi Boutros Gesch and Brian K. Kidd of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Mariana Bauzá of the District of Puerto Rico.
Tobyhanna Woman Charged with Social Security FraudRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal grand jury in Scranton has issued an indictment charging a Tobyhanna woman with devising and carrying out a scheme to defraud the Social Security Administration (SSA) of financial benefits intended for low-income individuals and families.
According to United States Attorney Peter Smith, the indictment alleges that Darlene Loveless, aged 50, of Tobyhanna, Pennsylvania, received a substantial inheritance in 2007 but claimed not to have any significant family resources when she was interviewed by a representative of the SSA in early 2010. As a result, Loveless allegedly continued to collect Supplemental Security Income benefits on behalf of her adopted daughter in 2010, 2011, and 2012, despite the fact that the majority of the inheritance allegedly remained in the possession of Loveless during the time that the benefits were being paid to her as a “representative payee.”
The investigation was conducted by the Social Security Administration. Prosecution is assigned to Assistant United States Attorney Peter Hobart.
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 guilt 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 federal law for Fraudulent Acts in relation to Supplemental Security Income is five (5) years of imprisonment, a term of supervised release following imprisonment, and a $250,000 fine, and the maximum penalty for Theft of Government Property is ten (10) years of 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.
(Indictment)
Three Arrested on Charges of Conspiracy to Distribute HeroinRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Steven Miller, 30, of Brooklyn, NY, Jenna Gonyo, 29, of Colchester, VT and Cleveland London, 22, of Brooklyn, NY, made initial appearances on January 30, 2015, in the United States District Court in Burlington, following their arrests for conspiracy to distribute heroin. U.S. Magistrate Judge John M. Conroy detained the defendants pending a detention hearing currently scheduled for February 3, 2015.
According to court documents, on January 29, 2014, the Vermont State Police Drug Task Force received information that Miller and Gonyo had just returned from the NYC area with heroin and crack cocaine, and were headed to the Chittenden County area to distribute those drugs. A State Police Trooper stopped the vehicle occupied by Miller and Gonyo, and a search of the car uncovered approximately 64 grams of heroin, 14.8 grams of powder cocaine and 27.6 grams of crack cocaine. Further investigation revealed that a residence in Concord, VT, contained additional drugs that had been supplied by Miller and possibly a handgun carried by Miller. A search of that residence resulted in the recovery of a handgun, approximately 250 bags of heroin and approximately 2.5 grams of crack. London was inside the residence when the search commenced and investigation determined that London worked for Miller in distributing the heroin and crack cocaine.
The Acting United States Attorney, Eugenia A.P. Cowles, emphasized that the charge against Miller, Gonyo and London is merely an accusation and that the defendants are presumed innocent unless and until they are proven guilty.
If convicted, the defendants face up to twenty years of imprisonment and a fine of up to $1,000,000. The actual sentence would be determined with reference to federal sentencing guidelines.
Miller is represented by Ernest M. Allen, III. Esq. Gonyo is represented by Michael Straub, Esq. London is represented by Robert Behrens, Esq. The prosecutor is Assistant U.S. Attorney Wendy G. Fuller.
Tampa Man Sentenced to More Than Three Years for Stolen Identity Refund FraudRead the Press Release
Tampa, Florida – U.S. District Judge Mary S. Scriven today sentenced Gerrell Houston to 38 months in federal prison for theft of government property and aggravated identity theft. Houston pleaded guilty in September 2014.
According to court documents and information presented at sentencing, Houston conspired with others to defraud the Internal Revenue Service by filing false and fraudulent income tax returns using the names and Social Security numbers of unwitting individuals. The conspirators filed 50 fraudulent tax returns, claiming $331,849 in refunds, and succeeded in obtaining more than $108,000 from the U.S. government.
This case was investigated by the Internal Revenue Service - Criminal Investigation, and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Sara C. Sweeney.
St. Joseph Man Among 14 Defendants Indicted in $4 Million Drug-trafficking ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that 14 defendants have been indicted by a federal grand jury for their roles in a conspiracy to distribute more than $4 million worth of methamphetamine and heroin in the St. Joseph, Mo., area and elsewhere.
Mario Alberto Yepez, 40, and Barbara Kay Tracy, also known as “Barbie,” 33, both of Elwood, Kan.; Messiah Edmundo Garcia, 30, of St. Joseph; Mario Enrique Morales, also known as “El Jeffe,” 63, Griselda Yepez-Garcia, 45, Jacquelyn Morales, 34, Manuela Maratinez-Morales, 69, and Enrique Morales, also known as “Henry,” 35, all of Laredo, Texas; Jose Luis Yepez, also known as “Joe,” 45, of Grand Island, Neb.; Cynthia Kaye Buboltz, 50, of Lewis, Iowa; Araceli Duran-Edeza, 20, of Bellflower, Calif.; Reyna Edeza, 26, of Los Angeles, Calif.; and Gracie Ann Edler, 47, and Richard S. Luther, 52, who are incarcerated on unrelated state charges, were charged in a four-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on Wednesday, Jan. 28, 2015. That indictment was unsealed and made public today upon the arrests and initial court appearances of several defendants.
The federal indictment alleges that 11 of the defendants (with the exceptions of Martinez-Morales, Edeza and Duran-Edeza) participated in a conspiracy to distribute methamphetamine and heroin between Jan. 1, 2011, and Jan. 27, 2015. The indictment alleges that conspirators distributed 80 kilograms of methamphetamine and three kilograms of heroin during the four-year conspiracy.
All of the defendants are charged with participating in a money laundering conspiracy during the same time frame. They allegedly conducted financial transactions that involved the proceeds of the drug-trafficking conspiracy in order to conceal the nature, source, location, ownership and control of those proceeds and to avoid federal bank reporting requirements. According to the indictment, cash obtained from drug sales was deposited into various bank accounts, or stored, or transported, in such a manner as to conceal its true nature, source, location, ownership and control and to avoid federal bank reporting requirements.
During the conspiracy, the indictment says, law enforcement cooperators paid cash for controlled substances, which was deposited into various banks. Cash deposits made in close proximity to where the drug sales occurred, the indictment says, were quickly withdrawn in Texas and California.
In addition to the drug-trafficking and money-laundering conspiracies, the indictment also charges Mario Yepez with being a felon in possession of firearms. According to the indictment, Yepez, who has a prior felony conviction, was in possession of an FHN .40-caliber semi-automatic handgun, a Spikes Tactical AR rifle, a Ruger 9mm handgun, a Dan Wesson Arms .357-caliber revolver, a stolen Cobra .380-caliber handgun, a stolen Hi-Point .45-caliber rifle, two Norinco SKS 7.62x39 rifles, a Smith & Wesson .38-caliber handgun and a Smith & Wesson .22-caliber pistol.
The indictment also charges Mario Yepez, Tracy, Garcia and Enrique Morales with aiding and abetting the use or possession of the same firearms in furtherance of a drug-trafficking crime.
The federal indictment contains a forfeiture allegation, which would require the defendants to forfeit to the government any property derived from the proceeds of the alleged violations, including a money judgment of $4,011,000. That is based on a conservative street price of $1,300 per ounce of methamphetamine and an overall conspiracy distribution of approximately 80 kilograms, and a street price of $3,500 per ounce of heroin and an overall conspiracy distribution of approximately three kilograms.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Bruce Rhoades. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Buchanan County, Mo., Sheriff’s Department, the St. Joseph, Mo., Police Department, the Grand Island, Neb., Police Department and the Grand Island, Neb., FBI Task Force.
South Jersey Couple Admit Conspiring to Set Fire to Historic DinerRead the Press Release
CAMDEN, N.J. – A Cumberland County, New Jersey, married couple today admitted planning to destroy a historic diner they owned in Bridgeton, New Jersey, U.S. Attorney Paul J. Fishman announced.
Andrew Webster, 49, and Brenda Webster, 44, both of Cedarville, New Jersey, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to separate informations charging them each with one count of conspiracy to commit arson.
According to documents filed in this case and statements made in court:
In March 2012, Andrew and Brenda Webster purchased and operated Angie’s Bridgeton Grill, a nearly 75-year old diner that was listed on the New Jersey and National Register of Historic Places in 2012.
Soon after they began to operate the diner, the Websters experienced several months of poor financial performance. During their plea hearings, Andrew and Brenda Webster admitted that they agreed to destroy the diner by fire. They also admitted that on Oct. 23, 2012, they traveled to the diner in Andrew’s truck.
According to the charges, in the early morning hours of Oct. 24, 2012, the Websters entered the diner, collected combustible materials (including newspapers, paper menus, and other light-weight combustible materials), doused them with gasoline, and ignited them with an open flame. Brenda Webster suffered burns to her body when gasoline vapors inside the diner ignited. The two quickly exited and within a short period of time, the fire destroyed the diner.
Sentencing for both Andrew Webster and Brenda Webster is set for May 14, 2015. Both were released on bail subject to a $50,000 unsecured bond and travel restrictions.
U.S. Attorney Fishman credited the Bureau of Alcohol Tobacco Firearms and Explosives, under the direction of Special Agent in Charge George Belsky; the Cumberland County Prosecutors Office, under the direction of Prosecutor Jennifer Webb-McRae; and the Bridgeton Police Department, under the direction of Chief Mark Ott, for the investigation leading to today’s guilty pleas.
The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden.
15-043Defense counsel:
Andrew Webster: Richard Coughlin Esq., Assistant Federal Public Defender, Camden
Brenda Webster: Joseph Hoffman III Esq., Turnersville, New Jersey.Somerset Optometry Practice to Pay U.S. Government $800,000 to Settle False Claims Act ViolationsRead the Press Release
LONDON, KY - An optometry practice in Pulaski County has agreed to pay the U.S. Government $800,000 to settle civil allegations that it billed federal health care programs for medically unnecessary and worthless eye examinations provided to nursing home residents over the course of several years.
The U.S. Government contends that from January 1, 2007 to January 31, 2012, Associates in Eye Care P.S.C. (“AEC”), employed an optometrist, Dr. Philip Robinson, who provided routine, monthly eye examinations to almost all of his nursing home patients, regardless of their condition or medical need. Many of these examinations were medically unnecessary according to the government’s allegations.
“Federally funded healthcare programs provide an essential safety net for many of our most vulnerable citizens,” said Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky. “Those who abuse the system for personal gain jeopardize the programs on which so many rely. We are committed to using every available tool to protect these vital programs from fraud and abuse.”
The government also alleges that because of the high number of patients seen by Robinson on a daily basis, it was not possible for all of the patients to receive a legitimate eye exam. Therefore, the exams had no medical value. AEC billed Medicare and Medicaid for all eye examinations provided by Robinson to nursing home patients and received payment from those programs.
According to the settlement agreement, AEC violated the False Claims Act by knowingly seeking payment from federal health care programs for unnecessary and/or worthless medical services.
In addition to payment of the settlement amount, AEC has agreed to enter into an integrity agreement with the Department of Health and Human Services-Office of Inspector General (HHS-OIG), which obligates it to undertake substantial internal compliance reforms and to commit to a third party review of its claims to federal health care programs for the next three years.
Dr. Robinson is also a defendant in the United States’ False Claims Act complaint filed in May 2013. This settlement resolves the government’s claims against AEC, but does not resolve any claims for False Claims Act violations against Robinson. Robinson’s trial is scheduled to begin in April 2015. If he is found liable, Robinson would be responsible for paying back three times the amount of money Medicare and Medicaid paid for his unnecessary and/or worthless services and would be excluded from further participation in federal health care programs.
The investigation was conducted by the Department of Health and Human Services, Office of the Inspector General; the Office of the Kentucky Attorney General, Medicaid Fraud and Abuse Control Unit (“MFCU”), and the U.S. Attorney’s Office.
Sister, Brother Plead Guilty to Armed Robbery at Excelsior Springs BankRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that two Kansas City, Kan., siblings have pleaded guilty in federal court to the armed robbery of an Excelsior Springs, Mo., bank, which was followed by a high-speed chase until the robbers’ vehicle crashed.
Virginia Lynn Spencer, 29, and her brother, Charles Ralph Spencer, 25, both of Kansas City, Kan., pleaded guilty in separate appearances before U.S. Chief District Judge Greg Kays on Monday, Feb. 2, 2015, to the charges contained in a June 10, 2014, federal indictment.
Virginia and Charles Spencer each pleaded guilty to one count of aiding and abetting an armed bank robbery and one count of aiding and abetting the possession of a firearm in furtherance of a crime of violence. Co-defendant Steven Dale Robinson, 23, also of Kansas City, Kan., pleaded guilty to aiding and abetting an armed bank robbery on Nov. 13, 2014.
By pleading guilty, all three defendants admitted to stealing $11,883 at gunpoint from Bank Midwest, 201 N. Jesse James Rd., Excelsior Springs, on May 23, 2014.
Before robbing the bank, in order to help disguise themselves for the robbery, the defendants went to a K-Mart store in Independence, Mo., where they purchased black Missouri t-shirts, a package of gardening gloves, head coverings, sunglasses, black spray dye for Charles Spencer’s facial hair and electrical tape for Virginia Spencer’s shoes. They cased banks in Polo, Braymer and Richmond, Mo., before deciding to rob the Bank Midwest in Excelsior Springs.
Prior to entering the bank, Virginia Spencer provided Charles Spencer with a loaded Rossi .32-caliber revolver. Robinson, the driver, backed the vehicle up near the bank’s entrance in order to facilitate the getaway.
Virginia and Charles Spencer entered the bank at about 5:30 p.m. Charles Spencer stood in the lobby and pointed a Rossi .32-caliber revolver in the air with his finger on the trigger. Charles Spencer displayed the revolver during the entire course of the robbery. They yelled at bank employees to sit on the floor. Virginia Spencer then jumped over the middle teller counter and began going through the teller drawers, while Charles Spencer stood near the teller station, revolver displayed. Virginia Spencer took money out of the teller drawers, placed it in a clear trash bag, and jumped back over the counter.
Both robbers ran from the bank, with Virginia Spencer saying, “Have a nice day” on her way out. They got into the vehicle being driven by Robinson and sped out of the parking lot.
A bank customer, who had just conducted a transaction at the ATM with her three children in the vehicle, drove around toward the front of the bank to leave the parking lot. As the bank robbers’ vehicle left the Bank Midwest parking lot it narrowly missed the customer’s vehicle. She immediately called 911 on her cell phone and reported the vehicle’s direction of travel.
Clay County Sheriff’s deputies saw the vehicle near 69 Highway and Lightburn Road. Attempting to escape from pursuing law enforcement officers, Robinson drove approximately 85 miles per hour while going southbound (the wrong way) in the northbound lane of traffic. Robinson ran traffic stops, struck a concrete barrier, and continued evading police officers, driving over 50 miles per hour through residential neighborhoods. After turning into oncoming traffic on Missouri Highway 291, Robinson continued to speed at 65 miles per hour, eventually reaching approximately 90 miles per hour. During this chase, Charles Spencer threw the firearm out the car window. Eventually, Robinson was traveling at such a high rate of speed that while attempting to round a corner, he lost control of the vehicle and struck a tree head on near Kings Highway and Dam Road in Liberty, Mo. Virginia and Charles Spencer were both injured in the crash and were transported to a nearby hospital.
Law enforcement officers found a bag containing $11,883 on the front floorboard of the vehicle. Police recovered the firearm near the crash site.
Under federal statutes, Virginia and Charles Spencer are each subject to a mandatory minimum sentence of five years in federal prison without parole, up to a sentence of life in federal prison without parole, plus a fine up to $500,000. Robinson is subject to a sentence of up to 25 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 Justin G. Davids. It was investigated by the FBI, the Clay County, Mo., Sheriff’s Department and the Excelsior Springs, Mo., Police Department.
Search Engine Optimizer Admits Extorting Money from A Local Merger and Acquisitions FirmRead the Press Release
DALLAS, Texas — A man, who, along with his sister, was indicted last year on felony offenses stemming from their attempts to extort money from a business in Dallas, pleaded guilty in federal court today, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
William Stanley, 52, a/k/a “William Laurence,” “Bill Stanley,” “William Davis,” “William Harris,” and “William L. Stanley,” pleaded guilty today to one count of Hobbs Act – Extortion. He faces a maximum statutory penalty of 20 years in federal prison and a $250,000 fine. However, according to the plea agreement, if the Court accepts Stanley’s plea, the parties agree that the appropriate term of imprisonment in the case is a maximum of 36 months. Sentencing was set for June 1, 2015, at 9:00 am.
William Stanley, a U.S. citizen, most recently resided in Romania with his wife, a Romanian national. In 2013, he traveled several times between Europe and the United States. On March 3, 2014, he was arrested on a related federal criminal complaint at George Bush Intercontinental Airport in Houston, where he arrived on a flight from Europe.
Stanley’s sister, Lynn Faust, a/k/a “Lynn Michaels,” 54, was arrested in Sweden in May 2014. Ms. Faust was extradited and appeared in Court in the Northern District of Texas on October 16, 2014. On October 21, 2014, the government withdrew its motion to detain, and the Court released Faust on conditions of release. She is charged with one count of transmitting threats in interstate and foreign commerce and one count of Hobbs Act – Extortion. She has filed a motion to continue her trial date.
Faust assisted Stanley operate his search engine optimization (SEO) company. A legitimate SEO business engages in standard practices such as optimizing the underlying HTML code on a website for certain keywords that a search engine indexer, (e.g., q web crawler for Google, Bing, etc.) would associate with a given search query. An illegitimate SEO business engages in deceptive tactics to affect search engine rankings and the volume of results. Such deceptive tactics include creating fraudulent reviews (good or bad), creating fictitious websites, or hiding text on websites.
While Stanley engaged in some legitimate SEO work, he also engaged in illegitimate and illegal SEO activities. Stanley also extorted individuals and companies by threatening to engage in the illegitimate SEO work, that being posting fraudulent comments and creating negative reviews online, if the victim did not pay him a certain sum of money.
In November 2009, Generational Equity (GE), a Dallas-based merger and acquisitions firm, entered into a contract with Stanley for SEO services and reputation management. Stanley was hired because of his ability to improve a firm’s online reputation through search results. After approximately one year, however, GE sought to terminate its relationship with Stanley after it determined he had acted outside of his contracted duties. Stanley also created websites that had the ability to damage GE’s reputation by associating GE with a scam. Stanley demanded additional payments to end his contractual relationship with GE and to surrender the administrator rights to the websites to GE. From November 2010 through January 2011, GE paid Stanley a total of $80,000 to terminate the relationship.
Posing as “William Davis” and “William Laurence,” Stanley transmitted threatening communications, via email and telephone, from foreign countries to GE in the Northern District of Texas. Those communications threatened to post comments on the Internet wrongfully disparaging GE’s reputation, if GE did not send money to Stanley.
Because of Stanley’s threats to harm GE’s reputation through negative Internet posts that would adversely affect GE’s ability to conduct business if it failed to send money, GE responded to the wrongful inducement by sending four payments totaling $29,556 by MoneyGram to Stanley in Brasov, Romania.
According to the stipulated facts outlined in the factual resume, the government can readily prove that Stanley’s extortive conduct caused GE to make the above payments and to lose revenue. The extortive conduct also affected interstate commerce. In addition, the government contends that as of May 2014, it could readily prove that Stanley engaged in similar extortionate conduct with approximately 40 to 45 victims (including GE), and the loss associated with those victims and attributed to Stanley was approximately $186,690.
The FBI is investigating. Assistant U.S. Attorney C.S. Heath is in charge of the prosecution.
Previously Deported Mexican National Sentenced to Prison for Unlawful Re-Entry into United StatesRead the Press Release
ALBUQUERQUE – A previously deported Mexican national was sentenced today in federal court in Las Cruces, N.M., to a 57-month prison term for illegally re-entering the United States.
Alejandro Soto-Robledo, 23, was sentenced for his illegal re-entry conviction and for having violated his previous deportation status following an aggravated felony conviction. Soto-Robledo was deported to Mexico in Sept. 2011, following an aggravated felony conviction for drug trafficking in Colorado. He was arrested in this case on April 25, 2014, by U.S. Border Patrol Agents near Sunland Park, N.M. Soto-Robledo was indicted on July 16, 2014, for illegally reentering into the United States without having first obtained the consent of the Department of Homeland Security to reapply for admission to the U.S.
Soto-Robledo will be deported to Mexico after completing his prison sentence.
This case was investigated by the U.S. Border Patrol and was prosecuted by Assistant U.S. Attorney Randy M. Castellano of the U.S. Attorney’s Las Cruces Branch Office.
Postal Employee Charged with Stealing Cash from Greeting CardsRead the Press Release
JOHNSTOWN, Pa. - A resident of Summerhill, Pa., has been indicted by a federal grand jury in Johnstown on charges of theft of mail by a postal employee, United States Attorney David J. Hickton announced today.
The two-count indictment named Kelly Gruss, 35.
According to the indictment presented to the court, on Sept. 22, 2014, Gruss stole $10, and on Sept. 25, she stole $20 from greeting cards sent via U.S. mail.
The law provides for a maximum total sentence of 10 years in prison, a fine of $500,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney John J. Valkovci, Jr., is prosecuting this case on behalf of the government.
The Office of Inspector General of the United States Postal Service conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Pennsylvania man charged with traveling to have sex with minorRead the Press Release
WHEELING, WEST VIRGINIA – A federal grand jury returned an indictment today alleging that Uniontown, Pennsylvania teacher Daniel S. McGarvey, 44, traveled to West Virginia with the intent to engage in sexual conduct with a minor, United States Attorney William J. Ihlenfeld, II, announced.
McGarvey travelled to Bridgeport, West Virginia in October 2014 for the purpose of engaging in sexual conduct with a minor female who he believed to be 15 years old. McGarvey had utilized the Internet and text messaging to arrange for the sexual encounter.
McGarvey is charged with one count of “Travel with Intent to Engage in Illicit Sexual Conduct” following an investigation by the Bridgeport Police Department and the West Virginia Internet Crimes Against Children Task Force. He faces up to 30 years in prison and fine of up to $250,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Assistant U.S. Attorney Stephen Vogrin is prosecuting the case on behalf of the government.
Pennsylvania Man Sentenced to Five Years of Probation for Trafficking in Counterfeit GoodsRead 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 Michael Kurnik, 26, of York, Pennsylvania, was sentenced today in U.S. District Court by Judge George Z. Singal to five years of probation for conspiring to traffic in counterfeit goods. He was also ordered to pay $25,000 in restitution. Kurnik pled guilty to the offense on October 22, 2014.
According to court records, Kurnik regularly purchased what purported to be OtterBox cell phone cases from suppliers in China and resold them to individuals in the United States. These individuals in turn often sold the cases on eBay and other online sites. One of the resellers, who lived in Maine, told Kurnik in May 2013 that he had been contacted by OtterBox and told that he was going to be sued for selling counterfeit cases on eBay.
Despite being told of the OtterBox lawsuit, Kurnik continued to buy the phone cases from China and resell them in the United States. In December 2013, he sent a shipment of counterfeit cases to the reseller in Maine, who by that point was cooperating with law enforcement. A search warrant was executed at a warehouse in Manchester, Pennsylvania used by Kurnik and agents seized about 6,700 counterfeit OtterBox cases. Kurnik admitted in an interview that by May 2013 he knew the cases he was selling were counterfeit, but he continued buying cases from China to resell in the United States until December 2013.
The investigation was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
Omaha Man Convicted of Arson, Mail and Wire FraudRead the Press Release
United States Attorney Deborah R. Gilg announced that Thomas Schropp, 52, of Omaha, Nebraska, was convicted today after a jury found him guilty of arson, mail and wire fraud. The Honorable Joseph F. Bataillon, Senior United States District Judge, presided over the trial that was held the past two weeks in United States District Court. Sentencing has been set for May 1, 2015. Mr. Schropp faces a mandatory minimum of 15 years in prison for the arson conviction and up to 20 years for the mail and wire fraud convictions.
In the fall of 2008 the defendant hired an individual to burn down his business, PK Manufacturing in Nashville, Nebraska, and then subsequently filed an insurance claim for approximately $4,000,000.00 for the loss. Evidence presented at trial showed that PK Manufacturing, a manufacturer of agricultural sprayers, was insolvent and in dire financial straits at the time of the fire which included owing approximately $5,000,000.00 to various banks.
The case was investigated by the U.S. Postal Inspection Service and the Washington County Sheriff’s Office.Office Manager Sentenced to over 5 Years in Prison for Embezzling $600,000 from Healthcare CompanyRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced that Chief U.S. District Judge Brian A. Jackson has sentenced DONNA M. DODSON, age 53, of Baton Rouge, Louisiana, to sixty-three (63) months in federal prison as a result of her fraudulent scheme to defraud one of her former employers. DODSON was also sentenced to make restitution in the amount of $589,680.66 to her victims, to pay special assessments totaling $500, and to serve a three-year term of supervised release following her release from prison. DODSON will also be ordered to forfeit an additional $589,680.66, which represents the proceeds of her fraudulent scheme.
On September 16, 2014, DODSON pled guilty to five (5) counts of wire fraud, in violation of Title 18, United States Code, Section 1343. DODSON had been hired by a local surgical center in 2009 and worked as the company’s office manager until mid-2013. Over that time period, DODSON engaged in a scheme to defraud her employer, by (a) creating false and fraudulent entries in the company’s accounting records and software that appeared to indicate that the company owed money to various third parties; (b) preparing check requests for the false entries she had created; and then (c) fraudulently altering each check request, before the check was actually printed, so that her own name would appear on the face of each check as the “payee.” As DODSON obtained the checks, she would deposit the funds into one of her personal accounts. In total, throughout the scheme, DODSON created and generated more than one hundred (100) checks and fraudulently obtained approximately $600,000.
United States Attorney Green stated: “This case illustrates how much damage a corrupt insider can do to a business. While fraud detection is often focused on external threats, the usual perpetrators of corporate fraud are insiders who abuse their positions of trust to steal from their employers and avoid detection. Such fraud undermines the financial integrity of honest businesses and risks jobs held by honest employees. My office will continue to pursue these important prosecutions and hold corrupt insiders accountable. I appreciate the great work performed in this case by the U.S. Secret Service and the East Baton Rouge Parish Sheriff’s Office’s Financial Crimes Division.”
This investigation was conducted by the United States Secret Service and the East Baton Rouge Parish Sheriff’s Office, with valuable assistance from the Louisiana State Police. The matter was prosecuted by Assistant United States Attorney Alan A. Stevens, who serves as a Deputy Chief in the Criminal Division.
Newington Man Sentenced to 6 Years in Prison for Role in Coast-to-coast Cocaine Trafficking RingRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JERMAINE JENKINS, 34, formerly of Newington, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 72 months of imprisonment, followed by four years of supervised release, for his role in a cocaine trafficking ring.
This matter stems from a joint law enforcement investigation headed by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Drug Enforcement Administration into a drug trafficking organization that involved individuals in California using the U.S. Mail and commercial carriers to send large quantities of cocaine to co-conspirators in the Hartford area who sold the narcotics for profit.
According to court documents and statements made in court, Joseph Miller of Los Angeles, formerly of East Hartford, sent kilogram parcels of cocaine from California to JENKINS, Luther Nance and their associates in Connecticut. JENKINS, Nance and others then distributed the cocaine, or converted the cocaine into crack for street sale.
The investigation revealed that certain co-conspirators traveled to California with a large amount of cash to finance the purchase of cocaine. Co-conspirators also made numerous cash deposits into local bank accounts, as well as wire transfers. The cash deposits were made at several branches of the same bank in the Hartford area in amounts of less than $10,000 in order to evade the bank’s currency transaction reporting requirements.
On November 14, 2013, a federal grand jury returned two-count indictment charging JENKINS, Miller and six other defendants.
On June 27, 2013, a federal grand jury returned a 51-count superseding indictment charging Nance and 14 other individuals with narcotics conspiracy and related offenses stemming from the sale of crack cocaine and heroin in several communities throughout Connecticut.
JENKINS’ criminal history includes a federal conviction in 2006 for distributing crack cocaine, and he was on federal supervised release at the time of this most recent offense. On July 21, 2013, U.S. District Judge Vanessa L. Bryant revoked JENKINS’ bond and sentenced him to an additional 18 months of imprisonment. He has been detained since October 23, 2013.
On October 14, 2014, he pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 500 grams or more of cocaine, and one count of conspiracy to commit money laundering.
Miller and Nance have pleaded guilty and await sentencing.This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, the Internal Revenue Service – Criminal Investigation Division, the U.S. Marshals Service, the Office of the Chief State’s Attorney, the State’s Attorney for the Judicial District of Hartford, and the Hartford, Willimantic, East Hartford, Enfield and Middletown Police Departments.
The case is being prosecuted by Assistant U.S. Attorney Geoffrey M. Stone.
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[email protected]New York man gets nearly six years for oxycodone distributionRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced today that Ajamu Sawandi Osborne, 40, of New York, was sentenced to 70 months in federal prison.
In September 2012, Osborne pleaded guilty to possession of oxycodone with the intent to distribute. He was arrested June 2012, in Charleston, with 96 oxycodone pills on his person for distribution. Following the arrest, officers searched his residence and recovered 60 additional oxycodone pills, 10 oxymorphone pills and 30.2 grams of MDMA. Officers also found $14,000 in cash, which Osborne admitted was drug proceeds.
In addition to the items recovered from Osborne in June 2012, he also admitted involvement in other oxycodone distributions in the Charleston area prior to his arrest.
United States District Judge Thomas E. Johnston imposed the sentence.
The case was investigated by the Metropolitan Drug Enforcement Unit (MDENT). Assistant United States Attorney Monica D. Coleman was in charge of the prosecution.
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New York Man Charged with Federal Firearms CrimeRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that an indictment was returned by a grand jury charging a New York man with being a felon in possession of a firearm/ammunition and possession of a controlled substance.
According to United States Attorney Peter Smith, the indictment alleges that Tyrone Greene, aged 41, of New York City, was arrested on November 20, 2014, by the Hanover Township Police for possession of a loaded, .40 caliber, Beretta handgun and a plastic bag containing marijuana. At the time of his arrest Greene had a prior felony conviction making it illegal for him to possess a firearm.
Greene faces up to 11 years in prison and fines of up to $500,000.The investigation was conducted by the Federal Bureau of Investigation and the Hanover Township Police. The case is being prosecuted by Assistant United States Attorney Peter Hobart.
The maximum penalty under federal law for being a felon in possession of a firearm is 10 years of imprisonment, a term of supervised release following imprisonment, and a fine. The maximum penalty for possessing marijuana is up to 1 year of imprisonment, a term of supervised release following imprisonment, and a fine.
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.
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.
(Indictment)
Middlesex County, New Jersey, Man Sentenced to 71 Months in Prison for Saddle Brook Bank RobberyRead the Press Release
NEWARK, N.J. – A Middlesex County, New Jersey, man was sentenced today to 71 months in prison for robbing a TD Bank in Saddle Brook, New Jersey, U.S. Attorney Paul J. Fishman announced.
Jorge Rodriguez, 47, of South River, New Jersey, previously pleaded guilty before U.S. District Judge William J. Martini to an information charging him with one count of bank robbery. Judge Martini imposed the sentenced today in Newark federal court.
According to documents filed in this case and statements made in court:
Rodriguez admitted using a BB air pistol to rob a TD Bank in Saddle Brook on April 19, 2013. Rodriguez entered the bank wearing a disguise, which included a hat with a dreadlocks wig attached to it. During the robbery, Rodriguez brandished the BB air pistol, handed a bag to a bank teller and said, “Give me the money or I’ll shoot. You have two seconds.” The teller complied and Rodriguez then fled the bank with the bag of money, which also included a dye pack. Rodriguez was apprehended shortly after the robbery after the dye pack exploded.
In addition to the prison term, Judge Martini sentenced Rodriguez to three years of supervised release and fined $75.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge Eric Welling in Newark, along with the Saddle Brook Police Department and the Bergen County Prosecutor’s Office, for the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Josh Hafetz and David M. Eskew of the Criminal Division of U.S. Attorney’s Office in Newark.
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Defense counsel: Patrick McMahon Esq., Assistant Federal Public Defender, Newark
Mexican National Pleads Guilty to Possessing CocaineRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced that a Mexican national pleaded guilty Monday to possessing cocaine with intent to distribute.
Gerson D. Guevara-Miranda, 34, of Mexico, entered a conditional guilty plea before U.S. Magistrate Judge Karen L. Hayes on one count of possession with intent to distribute cocaine. The plea will become final when accepted by U.S. District Judge Robert G. James. According to evidence presented at the guilty plea, Louisiana State Police conducted a traffic stop on Guevara-Miranda’s vehicle on May 23, 2014. After a search of the vehicle, more than one kilogram of powdered cocaine and 23 kilograms of marijuana were found.Guevara-Miranda faces 20 years in prison, three or more years supervised release, and a $1 million fine. A sentencing date of May 4, 2015 was set.
The DEA, Immigrations and Customs Enforcement-Homeland Security Investigations, and the Louisiana State Police conducted the investigation. Assistant U.S. Attorney Seth D. Reeg is prosecuting the case
McAllen Area Ambulance Company Owner Pleads Guilty in Health Care Fraud SchemeRead the Press Release
McALLEN, Texas ‐ Frank Gonzalez, 32, has pleaded guilty to conspiracy to commit health care fraud and aggravated identity theft, announced U.S. Attorney Kenneth Magidson and Texas Attorney General Ken Paxton. Gonzalez, of Mission, is the owner of a McAllen area ambulance transportation company who was charged in a federal indictment for his role in a scheme to defraud Medicare and Texas Medicaid through fraudulent billings.
Gonzalez, the owner of River Valley Transport (dba Med-Alert EMS), was charged in October 2013. As part of his plea today, he admitted he submitted or caused others to submit claims with Medicare and Texas Medicaid for reimbursement of ambulance transportation services that were not provided. Specifically, he billed for transporting beneficiaries to and from dialysis clinics on dates when the beneficiaries did not receive dialysis treatments or even go to the dialysis clinics.
Altogether, Gonzalez was responsible for the submission of $601,000 in fraudulent claims to Medicare and Texas Medicaid, resulting in the payment of $317,795.34 to Gonzalez.
Gonzalez admitted to creating or causing the creation of falsified documents which were intended to make the fraudulent claims submitted to Medicare and Texas Medicaid appear legitimate. The falsified documents were completed to make it appear that a particular emergency medical technician had been involved in the transportation of a patient when in fact they had not. Gonzalez also admitted to forging or caused others to forge the signatures of the emergency medical technicians on documents without their authorization or permission.
Gonzalez admitted to the use of a private vehicle, specifically a mini-van, to transport patients. Gonzalez then billed or caused others to bill those transports as ambulance transportation services and also billed at the higher-paying level of ambulance transportation services known as advanced life support.
To further execute his scheme, Gonzalez used or caused others to use the Medicare number of a patient to submit false and fraudulent billings to Medicare and Texas Medicaid. As part of the plea, Gonzalez will pay $317,795.34 in restitution to Medicare and Texas Medicaid.
U.S. District Judge Ricardo Hinojosa, who accepted the plea today, has set sentencing for May 8, 2015. For the conspiracy to commit health care fraud, he faces a maximum of 10 years in federal prison and a possible $250,000 fine. In addition, he will receive a mandatory two-year prison term for the identity theft which must be served consecutively to the other sentence imposed. Gonzalez was permitted to remain on bond pending that hearing.
The investigation was conducted by the U.S. Department of Health and Human Services‐Office of Inspector General and the Texas Attorney General’s Medicaid Fraud Control Unit. Assistant U.S. Attorney Michael Day is prosecuting the case.
Manchester Man Sentenced for Social Security FraudRead the Press Release
BOSTON – A Manchester man was sentenced today for stealing more than $160,000 in government benefits to which he was not entitled.
Charles Gerbutavich, 71, was sentenced by U.S. District Court Judge Rya W. Zobel to one year of probation, including three months of home confinement, and was ordered to pay a $3,000 fine and $161,587 in restitution to the Social Security Administration. In October 2014, Gerbutavich pleaded guilty to stealing public money in the form of Social Security payments paid out for the benefit of his father.
Gerbutavich’s father died in 1993, but his monthly Social Security benefits continued to be directly deposited into a joint bank account in his and Gerbutavich’s names. From 1993 to 2014, Gerbutavich continued to receive his deceased father’s benefits totaling $161,587.
This case was brought as part of an ongoing effort by the U.S. Attorney’s Office in partnership with the Social Security Administration to investigate and prosecute the posthumous fraud of Social Security benefits. In many of these cases, family members, knowing they are not entitled to government benefits, continue to withdraw and spend the funds after a relative has died.
One of the ways the Social Security Administration detects this kind of fraud is through the Medicare Non-Utilization Project, in which the agency investigates people receiving benefits who are at least 90 years old and who have not used their Medicare Part B benefits for three or more years. In some instances, the agency learns that such a person is actually deceased, but a surviving child has continued to take the deceased person’s benefits.
Since October 2013, the U.S. Attorney’s Office has prosecuted several similar cases involving a total of more than $1 million in stolen government money.
In January 2015, Graeme Griffith, of Andover, pleaded guilty to taking his deceased father’s Social Security benefits totaling $149,285, which were directly deposited into a joint bank account after the father’s death in 2003. Griffith is scheduled to be sentenced on April 16, 2015.
In October 2014, Mary Murphy, of Dorchester, was sentenced to 18 months of home confinement, 10 hours per week of community service, and was ordered to pay a fine of $40,000 and $331,630 in restitution – which she paid in full in October – for taking her deceased mother’s Social Security and Civil Service retirement benefits, which were directly deposited into a joint bank account after her death in 1977.
Also in October 2014, Richard Oldham, of Old Orchard Beach, Maine, was sentenced to four months in prison, six months of home confinement, and was ordered to pay $195,862 in restitution for endorsing Social Security checks in his deceased mother’s name following her death in 1993.
In September 2014, Frances Kenney Moseley, of Boston, pleaded guilty to stealing over $220,000 in Social Security benefits, which were directly deposited into her father’s bank account after his death in 2003. Moseley is scheduled to be sentenced on March 23, 2015.
In August 2014, George Bergstrom, of Shrewsbury, was sentenced to one year of probation and was ordered to pay $57,948 in restitution – which he paid in full in August – for taking his deceased mother’s Social Security benefits, which were directly deposited into a joint bank account after her death in 2009.
In October 2013, John Flaherty of Newburyport, was sentenced to 10 months in prison and was ordered to pay $168,830 in restitution for taking his deceased mother’s Social Security benefits, which were directly deposited into a joint bank account after her death in 1993.
United States Attorney Carmen M. Ortiz and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today. The Gerbutavich case is being prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.
Man Pleads Guilty to Grant Fraud Involving 390 Victims and over $5 Million in LossesRead the Press Release
LAS VEGAS, Nev. – In another case of fraud involving the solicitation of money in exchange for business grants, a Las Vegas man has pleaded guilty to conspiracy to commit wire fraud, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.
Mickey Gines, 41, pleaded guilty on Monday, Feb. 2, before U.S. District Judge Gloria M. Navarro to one count of conspiracy to commit wire fraud. Gines is scheduled to be sentenced on June 4, 2015, at 10 a.m., and faces up to 20 years in prison and a fine of up to $250,000.Two others were also charged in the case. Christine M. Gagnon, aka Crystal Waters, 35, of Escanaba, Mich., pleaded guilty in November to conspiracy to commit wire fraud and is scheduled to be sentenced on March 19, and Gregory Villegas, aka Ray Matsui, aka Ray Mathis, 35, of Las Vegas, is scheduled for trial on March 16. Villegas is in federal custody pending trial.
According to the plea agreement, beginning on about March 1, 2008, and continuing to about May 2, 2012, the defendants entered into a conspiracy to induce small business owners to pay them money for grants that the defendants never intended to pursue. The defendants made numerous false statements to the victims in order to convince them to pay the advance monies, including that they were pre-qualified for or guaranteed “free” private and government grants; that they would partner them with private foundations or government grant programs; that they had obtained grants for other victims; that they would hold their monies in an escrow account; and that their fees were refundable if they did not receive the grants. The defendants knew that their representations were not true, and that they never intended to obtain grants for the victims. Once the defendants received money from the victims, they converted it to their own use. The defendants operated grant funding companies under multiple and evolving names, including BFS Enterprises, Inc. and Global Business Funding, Inc., and used multiple aliases in order to advance the scheme. The defendants repeatedly solicited victims for additional money for goods and services and lulled the victims with false promises of funding and excuses for delays in order to avoid investigation by law enforcement and consumer protection agencies. Using this scheme, the amount of loss that the defendants caused to at least 390 victims was approximately $5.3 million.
This case was investigated by the U.S. Secret Service and FBI and is being prosecuted by Assistant U.S. Attorney Christina M. Brown.Major Albuquerque-Area Drug Trafficker Sentenced to Twelve and a Half Years in Federal PrisonRead the Press Release
ALBUQUERQUE – Alfredo Ochoa, 41, a Mexican national with legal permanent resident status in the United States, was sentenced today in federal court for his conviction on methamphetamine, crack cocaine and cocaine trafficking charges, announced U.S. Attorney Damon P. Martinez, Special Agent in Charge Will R. Glaspy of the DEA’s El Paso Field Division and Director Mark Payne of New Mexico HITDA.
Ochoa was sentenced to 150 months in federal prison. He also was ordered to pay a money judgment in the amount of $500,000.00, which represents a portion of the proceeds he derived from his drug trafficking activities. Ochoa, a resident of Albuquerque, N.M., will be deported after completing his prison sentence.
Ochoa was one of 15 defendants charged in late 2011 and early 2012 as a result of an investigation by the DEA and the HIDTA Region I Narcotics Task Force into drug trafficking in Bernalillo County, N.M. During the course of the investigation, law enforcement authorities seized $211,404 in currency, four pounds of methamphetamine, 397 grams of crack cocaine, 199 grams of cocaine and 157.8 grams of Oxycodone, seven vehicles and a firearm. The investigation was designated as part of the Organized Crime Drug Enforcement Task Force (“OCDETF”) program, a nationwide Department of Justice program that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.
Ochoa and a codefendant were arrested on a criminal complaint in Sept. 2011, and have been in federal custody since that time. The two men subsequently were indicted on methamphetamine trafficking charges in Oct. 2011. In Feb. 2012, the indictment was superseded to add 13 more codefendants and include additional drug trafficking charges involving the distribution of methamphetamine, crack cocaine, cocaine and heroin. To date, 14 of the 15 defendants charged have been arrested and one remains a fugitive. Twelve of the defendants have entered guilty pleas, and two have entered not guilty pleas and are pending trial.
Ochoa pleaded guilty to three narcotics trafficking conspiracy charges in Aug. 2014, and admitted his role in conspiracies to distribute methamphetamine, crack cocaine and cocaine. In entering his guilty plea, Ochoa admitted his involvement in multiple conspiracies to distribute drugs in Albuquerque between June 2010 and Sept. 2011. Ochoa acknowledged that he frequently sold large quantities of methamphetamine, crack cocaine and cocaine to individuals who resold the drugs to others.
This case was investigated by the Albuquerque office of the DEA and the HITDA Region I Narcotics Task Force, and is being prosecuted by Assistant U.S. Attorneys Joel R. Meyers and Linda Mott. The HITDA Region I Narcotics Task Force is comprised of agents and officers from the DEA, Albuquerque Police Department, Sandoval County Sheriff’s Office, Valencia County Sheriff’s Office, Rio Rancho Police Department and the Pueblo of Pojoaque Tribal Police Department. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Long Island Man Sentenced to Prison on Drug ChargeRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Long Island man was sentenced on January 29, 2015 in federal court in Wilkes-Barre, by Senior United States District Judge A. Richard Caputo, to serve 42 months in prison on a charge of conspiracy to distribute methylone.
According to United States Attorney Peter Smith, Richard King, age 30, a resident of Long Island, New York, pleaded guilty to the charge in September of last year. King was ordered to serve an additional 3 years’ under court supervision upon his release from prison.
King was charged after an investigation conducted by the Department of Homeland Security, Bureau of Immigration and Customs Enforcement. The investigation commenced after law enforcement agents in Tennessee seized approximately three kilograms of methylone, a controlled substance “club drug,” commonly known as “molly,” that had been imported into the United States from China. The investigation revealed that individuals in Luzerne County were importing the drugs from China and distributing them in Pennsylvania to Richard King, and others, who then distributed the drugs in clubs in New York City.The case was prosecuted by Assistant United States Attorney William S. Houser.
Logan County man sentenced for role in Arch Coal kickback schemeRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced today that Stephen B. Herndon, 37, of Holden, Logan County, West Virginia, was sentenced by United States District Judge Thomas E. Johnston to five years of federal probation for his role in a multi-million dollar scheme orchestrated at Arch Coal’s Mountain Laurel Mining Complex in Sharples, West Virginia.
In July 2014, Herndon pleaded guilty to structuring a transaction in order to evade federal reporting requirements. He also admitted that he and business partner Scott Ellis paid hundreds of thousands of dollars in kickbacks to David Runyon, Mountain Laurel general manager. The kickbacks were in exchange for business that Runyon directed to Tri-State Mine Service, Inc., a Mountain Laurel vendor in which Herndon was a part owner.
To generate the necessary cash for the kickbacks, Herndon and Ellis structured cash withdrawals from various personal and business accounts for $10,000 or less. This was to avoid triggering the bank’s obligation to file a currency transaction report with the Internal Revenue Service for sums greater than $10,000.
Between April 1, 2011, and September 30, 2013, Herndon and Eillis structured around $183,853. They estimate they used almost all those funds to pay cash kickbacks to Runyon, and in total paid around $237,000 during that period.
Herndon has agreed to forfeit $132,000 to the United States, representing a portion of the funds involved in, and traceable to, the structuring.
This sentence stems from an investigation being conducted by the Federal Bureau of Investigation, IRS Criminal Investigation, United States Postal Inspection Service and West Virginia State Police. Assistant United States Attorney Meredith George Thomas is in charge of the prosecutions.
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Lapwai Man Sentenced for Escape and Probation ViolationsRead the Press Release
COEUR D'ALENE B Solomon Elias Wheeler, 34, of Lapwai, Idaho, was sentenced today in United States District Court to a total of 13 months in prison, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge ordered Wheeler to serve seven months in prison for escape, consecutive to six months in prison for two supervised release violations.
In July 2012, Wheeler was sentenced to eight months in prison and five years supervised release for violating federal sex offender registration laws and giving a false statement to an FBI agent. In June 2014, Wheeler was alleged to have violated his supervised release and was placed back into federal custody. Later that month, Wheeler petitioned for a medical furlough. The court granted the medical furlough, finding that Wheeler needed a medical procedure. The court ordered Wheeler to report back to jail in early July 2014, following treatment. Wheeler did not return to jail and remained out of custody until his arrest in September 2014.
The case was investigated by the U.S. Marshals Service with the assistance of the Nez Perce Tribal Police Department.
Lackawanna Man Pleads Guilty to Possession of Child PornographyRead 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 James M. Meyers, 28, of Lackawanna, NY, pleaded guilty to possession of child pornography before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of 20 years in prison, a fine of $250,000 or both.Assistant U.S. Attorney Scott S. Allen, Jr., who is handling the case, stated that on June 24, 2014, the Wyoming County Sheriff’s Department responded to a complaint in the Town of Pike. At that time, deputies were given an SD card which contained what appeared to be images of child pornography. Subsequent investigation determined that the SD card belonged to the defendant. A forensic analysis determined the images were in fact child pornography. Some of the images contained graphic images of prepubescent children.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The plea is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, and the Wyoming County Sheriff’s Department, under the direction of Sheriff Gregory Rudolph.
Sentencing is scheduled for May 13, 2015 at 1:00 p.m. before Judge Arcara.
Kimberling City Physician Sentenced to Two Years for Failing to File Tax ReturnsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kimberling City, Mo., man who worked as an emergency room physician was sentenced in federal court today for failing to file tax returns despite earning hundreds of thousands of dollars in income each year.
Phillip Edward Psaltis, 65, of Kimberling City, was sentenced by U.S. Magistrate Judge David P. Rush to two years in federal prison without parole. The court also ordered Psaltis to pay $1,581,594 in restitution to the IRS, the Missouri Department of Revenue and the Oklahoma Department of Revenue.
Psaltis worked as an emergency room physician at Lawton Indian Hospital in Lawton, Okla., in 2011 and at Claremore Indian Hospital in Claremore, Okla., in 2010. Psaltis worked as an emergency room physician at Barton County Memorial Hospital in Lamar, Mo., from 2006 to 2009 and at Pike County Memorial Hospital in Louisiana, Mo. in 2008 and 2009.
On Oct. 9, 2014, Psaltis pleaded guilty to two counts of failing to file an income tax return. Psaltis admitted that he has failed to file federal income tax returns since 2002. The two specific charges to which Psaltis pleaded guilty relate to his failure to file a federal tax return for 2009, when he earned approximately $450,664, and for 2010, when he earned approximately $433,339.
Psaltis admitted that he failed to file federal income tax returns for 2009, 2010 and 2011. Psaltis’s unreported income during those years totaled $1,204,786 and the total tax loss was $377,022. Psaltis also owes $551,434 in outstanding federal taxes for the years 2002 through 2008. Because Psaltis did not file his 2012 tax return, it is estimated that he will owe approximately $128,109 in tax liability for 2012.
In addition to the federal taxes owed, Psaltis owes $62,259 in Missouri and Oklahoma state income tax for the years 2009, 2010 and 2011. Psaltis’s medical license was suspended three times – on Dec. 14, 2009, on July 16, 2012, and on June 11, 2013 – for delinquency of Missouri state taxes or failure to file state income tax returns.
This case was prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by IRS-Criminal Investigation.
Kearny County Man Indicted on Federal Child Porn ChargesRead the Press Release
WICHITA, KAN. – A Kearny County man was indicted Tuesday on federal child pornography charges, U.S. Attorney Barry Grissom said.
Mark A. Wireman, 44, Lakin, Kan., was charged with five counts of distributing child pornography and one count of possessing child pornography.
According to court records, the investigation began in October 2014 when Google made a report to the National Center for Missing & Exploited Children’s (NCMEC) CyberTipline. The report was about a file containing child porn that had been uploaded on a Google email server. Investigators followed an electronic trail to Wireman, who was a previously convicted sex offender.
Wireman allegedly was exchanging emails containing child pornography with a man who he met in prison. The emails included photos of young children including toddlers in sexual situations. In one of Wireman’s emails, he urged the other man to take pornographic photos of a child to whom the man had access.
If convicted, Wireman faces a penalty of not less than 15 years and not more than 40 years on the distribution charge and not less than 10 years and not more than 20 years on the possession charge. Homeland Security investigations, the Wichita Police Department’s Exploited and Missing Child Unit and the Internet Crimes Against Children Task Force investigated. Assistant U.S. Attorney Jason Hart is prosecuting
OTHER INDICTMENTS
Jeffrey L. Becklund, 56, Bellflower, Calif., is charged with one count of possession with intent to distribute methamphetamine and one count of interstate travel in furtherance of drug trafficking. The crimes are alleged to have occurred Jan. 24, 2015, in Thomas County, Kan.
If convicted, he faces a penalty of not less than 10 years in federal prison and a fine up to $10 million on the possession charge, and a maximum penalty of five years and a fine up to $250,000 on the interstate travel charge. The Kansas Highway Patrol and the Drug Enforcement Administration investigated. Assistant U.S. Attorney Lanny Welch is prosecuting.
Israel Guevara-Garcia, 36, and Walter Calderon, 35, Freemont, Neb., are charged with one count of possession with intent to distribute methamphetamine. The crime is alleged to have occurred March 31, 2014, in Sedgwick County, Kan.
If convicted, they face a penalty of not less than five years and not more than 40 years and a fine up to $5 million. The Drug Enforcement Administration investigated. Special Assistant U.S. Attorney Michelle Jacobs is prosecuting.
Luis Arturo Garcia Gomez, 37, Phoenix, Ariz., is charged with one count of possession with intent to distribute methamphetamine. The crime is alleged to have occurred Jan. 28, 2015, in Wichita, Kan.
If convicted he faces a maximum penalty of 40 years and a fine up to $2 million. The Drug Enforcement Administration investigated. Assistant U.S. Attorney Matt Treaster is prosecuting.
Juan F. Morales, 62, Garden City, Kan., Victor Linares, 57, Lamar, Colo., and Filiberto Escobedo-Colon, 54, Garden City, Kan., are charged with one count of conspiracy to distribute methamphetamine, five counts of using a telephone in furtherance of drug trafficking, one count of possession with intent to distribute methamphetamine, one count of possession with intent to distribute cocaine, and one count of interstate travel in furtherance of drug trafficking. The crimes are alleged to have occurred in December 2014 in Kearny County, Kan.
Upon conviction, the crimes carry the following penalties:
Conspiracy: Not less than 10 years in federal prison and a fine up to $10 million.
Using a telephone in furtherance of drug trafficking: A maximum penalty of four years and a fine up to $250,000 on each count.
Possession with intent to distribute methamphetamine: Not less than 10 years and a fine up to $10 million.
Possession with intent to distribute cocaine: A maximum penalty of 20 years and fine up to $1 million.
Interstate travel in furtherance of drug trafficking: A maximum penalty of five years and a fine up to $250,000.
The Finney County Sheriff’s Office, the Garden City Police Department and the Drug Enforcement Administration investigated. Assistant U.S. Attorney Lanny Welch is prosecuting.
Justin John Michael Cook, 32, Hutchinson, Kan., is charged one count of unlawful possession of a firearm after a felony conviction, and one count of unlawful possession of ammunition after a felony conviction. The crimes are alleged to have occurred Dec. 17, 2014, in Sterling, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000 on each count. The Sterling Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Matt Treaster is prosecuting.
Nathaniel S. McGrew, 39, Daytona, Ky., is charged with one count of possession with intent to distribute marijuana and one count of unlawful possession of a firearm in furtherance of drug trafficking. The crimes are alleged to have occurred Oct. 30, 2014, in Logan County, Kan.
If convicted, he faces a maximum penalty of 20 years and a fine up to $1 million on the marijuana charge, and a penalty of not less than five years and a fine up to $250,000 on the firearm charge. The Drug Enforcement Administration investigated. Assistant U.S. Attorney David Lind is prosecuting.
Tremain Vaughn Scott, 33, is charged with one count of unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred Jan. 21, 2015, in Shawnee County, Kan.
If convicted, he faces a maximum penalty of 10 years and a fine up to $250,000. The Topeka Police Department, the U.S. Marshals Service and the FBI investigated. Assistant U.S. Attorney Jared Maag is prosecuting.
Dean L. Johns, 49, Abilene, Kan., is charged with one count of wire fraud in connection with fraudulent unemployment benefit claims totaling $11,856. The crime is alleged to have occurred from March 2, 2013, to Aug. 24, 2013.
If convicted, he faces a maximum penalty of 20 years in federal prison and a fine up to $250,000. The Department of Labor investigated. Assistant U.S. Attorney Alan Metzger is prosecuting.
Alfredo Huerta-Guerrero, 37, a citizen of Mexico, is charged with unlawfully re-entering the United States after being deported. He was found Dec. 12, 2014, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement’s Homeland Security Investigations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Justice Department and State Partners Secure $1.375 Billion Settlement with S&P for Defrauding Investors in the Lead up to the Financial CrisisRead the Press Release
Attorney General Eric Holder announced today that the Department of Justice and 19 states and the District of Columbia have entered into a $1.375 billion settlement agreement with the rating agency Standard & Poor’s Financial Services LLC, along with its parent corporation McGraw Hill Financial Inc., to resolve allegations that S&P had engaged in a scheme to defraud investors in structured financial products known as Residential Mortgage-Backed Securities (RMBS) and Collateralized Debt Obligations (CDOs). The agreement resolves the department’s 2013 lawsuit against S&P, along with the suits of 19 states and the District of Columbia. Each of the lawsuits allege that investors incurred substantial losses on RMBS and CDOs for which S&P issued inflated ratings that misrepresented the securities’ true credit risks. Other allegations assert that S&P falsely represented that its ratings were objective, independent and uninfluenced by S&P’s business relationships with the investment banks that issued the securities.
The settlement announced today is comprised of several elements. In addition to the payment of $1.375 billion, S&P has acknowledged conduct associated with its ratings of RMBS and CDOs during 2004 to 2007 in an agreed statement of facts. It has further agreed to formally retract an allegation that the United States’ lawsuit was filed in retaliation for the defendant’s decisions with regard to the credit of the United States. Finally, S&P has agreed to comply with the consumer protection statutes of each of the settling states and the District of Columbia, and to respond, in good faith, to requests from any of the states and the District of Columbia for information or material concerning any possible violation of those laws.
“On more than one occasion, the company’s leadership ignored senior analysts who warned that the company had given top ratings to financial products that were failing to perform as advertised,” said Attorney General Holder. “As S&P admits under this settlement, company executives complained that the company declined to downgrade underperforming assets because it was worried that doing so would hurt the company’s business. While this strategy may have helped S&P avoid disappointing its clients, it did major harm to the larger economy, contributing to the worst financial crisis since the Great Depression.”
Attorney General Holder was joined in announcing the settlement with Acting Associate Attorney General Stuart F. Delery, Acting Assistant Attorney General for the Civil Division Joyce R. Branda and Acting U.S. Attorney for the Central District of California Stephanie Yonekura. Also joining the Department of Justice in making this announcement are the attorneys general from Arizona, Arkansas, California, Connecticut, Colorado, Delaware, Idaho, Illinois, Indiana, Iowa, Maine, Mississippi, Missouri, New Jersey, North Carolina, Pennsylvania, South Carolina, Tennessee, Washington and the District of Columbia.
“This resolution provides further proof that the Department of Justice will vigorously pursue investigations and litigation, no matter how challenging, to protect the best interests of the American people,” said Acting Associate Attorney General Delery. “As part of the resolution, S&P admitted facts demonstrating that it misrepresented itself to investors and the public, allowing the pursuit of profits to bias its ratings. S&P also agreed to retract its unsubstantiated claim that this lawsuit was initiated in retaliation for the decisions S&P made about the credit rating of the U.S. government. Today's announcement is the latest result of our dedicated effort to address misconduct of every kind that contributed to the financial crisis.”
“Today’s historic settlement demonstrates that we will use all of our resources and every legal tool available to hold accountable those who commit financial fraud,” said Acting Assistant Attorney General Branda. “Thanks to the tireless efforts of our team in Washington and California, S&P has not only paid a record-setting penalty, but has now admitted to the American people facts that make clear its own unlawful role in the financial crisis.”
Half of the $1.375 billion payment – or $687.5 million – constitutes a penalty to be paid to the federal government and is the largest penalty of its type ever paid by a ratings agency. The remaining $687.5 million will be divided among the 19 states and the District of Columbia. The allocation among the states and the District of Columbia reflects an agreement between the states on the distribution of that money.
In its agreed statement of facts, S&P admits that its decisions on its rating models were affected by business concerns, and that, with an eye to business concerns, S&P maintained and continued to issue positive ratings on securities despite a growing awareness of quality problems with those securities. S&P acknowledges that:
- S&P promised investors at all relevant times that its ratings must be independent and objective and must not be affected by any existing or potential business relationship;
- S&P executives have admitted, despite its representations, that decisions about the testing and rollout of updates to S&P’s model for rating CDOs were made, at least in part, based on the effect that any update would have on S&P’s business relationship with issuers;
- Relevant people within S&P knew in 2007 many loans in RMBS transactions S&P were rating were delinquent and that losses were probable;
- S&P representatives continued to issue and confirm positive ratings without adjustments to reflect the negative rating actions that it expected would come.
In addition, S&P acknowledges that the voluminous discovery provided to S&P by the United States in the litigation does not support their allegation that the United States’ complaint was filed in retaliation for S&P’s 2011 decisions on the credit rating of the United States. S&P will formally retract that claim in the litigation.
“S&P played a central role in the crisis that devastated our economy by giving AAA ratings to mortgage-backed securities that turned out to be little better than junk,” said Acting U.S. Attorney Yonekura. “Driven by a desire to increase profits and market share, S&P blessed innumerable securitizations that were used by aggressive lenders to offload the risks of billions of dollars in mortgage loans given to homeowners who had no ability to pay them off. This conduct fueled the meltdown that ultimately led to tens of thousands of foreclosures in my district alone. This historic settlement makes clear the consequences of putting corporate profits over honesty in the financial markets.”
Today’s settlement was announced in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state and local partners, it is the broadest coalition of law enforcement, 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 nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
- S&P promised investors at all relevant times that its ratings must be independent and objective and must not be affected by any existing or potential business relationship;
Justice Department Seeks to Shut Down Maryland Tax Return PreparerRead the Press Release
The Justice Department announced today that it has asked a federal court in Greenbelt, Maryland, to permanently bar a Silver Spring, Maryland, tax preparer, doing business as Eplanet, Eplanet LLP, Eplanet Corp., and Eplanete Corp., from preparing tax returns for others.
The government also filed a motion for a preliminary injunction seeking to prevent Komi Gbotcho from filing any returns for the 2014 tax year.
According to the complaint, the Internal Revenue Service (IRS) estimates that Gbotcho, through Eplanet, has prepared more than 1,300 tax returns for the 2010 through 2013 tax years. The suit alleges that Gbotcho prepared returns claiming false or inflated deductions, such as deductions for personal property rental expenses, unreimbursed employee business expenses and home improvement expenses, without some customers’ knowledge. The suit contends that the false and inflated deductions generated larger refunds for Gbotcho’s customers than they were entitled to receive, and that the losses to the U.S. Treasury could amount to as much as $3.4 million.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2015. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Justice Department Reaches Settlements with Four Cities Across the Country to Remove Disability-Related Questions from Job Applications and Ensure Web AccessibilityRead the Press Release
The Justice Department announced today that it has reached settlement agreements with the cities of DeKalb, Illinois; Vero Beach, Florida; Fallon, Nevada; and Isle of Palms, South Carolina. The agreements resolve investigations of each city under Title I of the Americans with Disabilities Act (ADA). The investigations found that each city’s online employment application asked questions about disabilities in violation of the ADA. The ADA does not permit employers to inquire as to whether an applicant is an individual with a disability or as to the nature of such disability before making a conditional offer of employment. Under Section 503 of the Rehabilitation Act of 1973, however, federal contractors subject to affirmative action requirements may invite an applicant voluntarily to self-identify as an individual with a disability, consistent with certain requirements.
The investigations also found that each city’s online employment opportunities website or job applications were not fully accessible to people with disabilities, such as those who are blind or have low vision, are deaf or hard of hearing, or have physical disabilities affecting manual dexterity (such as limited ability to use a mouse). In recent months, the department reached similar settlement agreements with the city of Hubbard, Oregon, and Florida State University.
“Congress intended for people with disabilities to be able to compete for jobs on a level playing field,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “Including disability-based questions on a job application is illegal and creates barriers for people with disabilities. These agreements ensure that people with disabilities will have an equal chance to compete for public sector jobs. We commend each city for its cooperation and efforts to ensure accessibility and fairness in the job application process.”
Under the settlement agreements, each city agrees to ensure that its hiring policies and procedures do not discriminate against any applicant on the basis of disability, including by:
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not conducting a medical examination or making a disability-related inquiry of a job applicant before a conditional offer of employment is made;
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not requiring a medical examination or making inquiries of an employee as to whether such employee is an individual with a disability or as to the nature or severity of the disability, unless such examination or inquiry is shown to be job-related and consistent with business necessity;
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maintaining the medical or disability-related information of applicants and employees in separate, confidential medical files;
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training employees who make hiring or personnel decisions on the requirements of the ADA, designating an individual to address ADA compliance matters, and reporting on compliance; and
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ensuring that its online employment opportunities website and job applications conform with the Web Content Accessibility Guidelines 2.0, which are industry guidelines for making web content accessible.
Those interested in finding out more about the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov.
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James Nastri Sentenced to 210 Months Imprisonment for Conspiracy to Distribute HeroinRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that on January 30, 2015, James Nastri, 34, of Deep River, Connecticut, was sentenced to 210 months in prison, having been convicted of conspiracy to distribute at least 100 grams of heroin. On June 2, 2014, following a five-day trial before United States District Judge William K. Sessions III, a Burlington jury convicted Nastri of that offense. At sentencing, Judge Sessions also gave Nastri 8 years of supervised release.
Court records show that Nastri headed a conspiracy that sold large volumes of heroin and other drugs in the Burlington area and in Bangor, Maine in 2011 and 2012. A Burlington grand jury indicted Nastri in April 2013. He has been in custody since indictment. Court records further show that Nastri=s group distributed an especially strong form of heroin in Burlington, known as AChi town@ or AChi,@ short for Chicago, which has caused several overdoses in the last several years. The Vermont State Police Drug Task Force began an investigation into Nastri=s heroin ring in December 2011.
On March 14, 2012, a Vermont State Police trooper stopped Nastri=s vehicle and seized about $17,000 in drug proceeds. Following that seizure, Nastri transferred his drug business entirely to Maine, and continued to sell opiates there until August of 2012, when two of his workers were murdered by rival drug dealers, Nicholas Sexton and Randall Daluz. Last year, a Bangor, Maine jury convicted Daluz and Sexton of murder.
For his crime, Nastri faced a maximum penalty of life in prison with a ten-year-mandatory minimum. At sentencing, Judge Sessions remarked Nastri=s drug conspiracy was one of the most serious he had ever seen. He further noted that Nastri financed and managed a sophisticated multi-state drug operation. Judge Sessions also cited Nastri=s significant criminal history. Nastri led the conspiracy while on supervised release for a 2006 federal conviction for importation of marijuana. Nastri is expected to be sentenced in the near future in federal court in Connecticut for the supervised release violation.
The investigation was a collaborative effort of the Vermont State Police Drug Task Force; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, and Firearms; the Essex, South Burlington, and Burlington, Vermont Police Departments; and the Lowell, Massachusetts Police Department.
Assistant United States Attorneys Christina Nolan and Timothy Doherty prosecuted the case. Nastri is represented by Edgar L. Fankbonner, Esq., of New York City.
Jamaican Charged with Illegally Re-entering U.S.Read the Press Release
JOHNSTOWN, Pa. - A citizen of Jamaica has been indicted by a federal grand jury in Johnstown on a charge of re-entry of an illegal alien, United States Attorney David J. Hickton announced today.
The one-count indictment named Hubert E. Minott, 31, of North Miami Beach, Fla.
According to the indictment presented to the court, on Feb. 6, 2014, Minott, an alien who had been deported from the United States on June 12, 2008, was found in Somerset County, Pa. He had unlawfully re-entered this country without receiving permission from the Secretary of the Department of Homeland Security to do so.
The law provides for a maximum total sentence of 20 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history of the defendant.
Assistant United States Attorney John J. Valkovci, Jr., is prosecuting this case on behalf of the government.
The Department of Homeland Security/Immigration and Customs Enforcement conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Investment Advisor SentencedRead the Press Release
COEUR D'ALENE B JoAnn Jackson, 63, of Coeur d'Alene, Idaho, was sentenced today to 30 months in prison for wire fraud, U.S. Attorney Wendy J. Olson announced. U. S. District Judge Edward J. Lodge also ordered Jackson to serve three years of supervised release, to pay $811,084.32 in restitution and to serve 200 hours of community service. Jackson pleaded guilty on November 20, 2014.
According to the plea agreement, Jackson admitted that in 1994, she became a licensed stock broker in Idaho. Early in her career, Jackson came into contact with a victim, who eventually put all of her investment accounts under Jackson’s care. Jackson developed a scheme to misappropriate the victim’s money by transferring the funds from the victim’s account into other accounts, eventually obtaining the benefit of the money stolen. Jackson was remanded into federal custody immediately following the sentencing.
The case was investigated by Federal Bureau of Investigation (FBI).
Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.
Indianapolis man sentenced to four years for stealing donations intended for local veteransRead the Press Release
Over $1 million collected at local retail outlets with only a fraction received by vets.
PRESS RELEASE
INDIANAPOLIS -Josh J. Minkler, Acting United States Attorney, announced today the sentence of an Indianapolis man for his role in stealing hundreds of thousands of dollars intended for use by local veterans. Scott M. Gruber 40, was sentenced to four years in federal prison by U.S. District Judge Sarah Evans Barker after being convicted of two counts of mail fraud and one count of structuring to evade reporting requirements.
“Our veterans have made enormous sacrifices to keep us all safe and to steal money intended for their use is unthinkable,” said Minkler. “Besides being illegal, these actions are unpatriotic and will not be tolerated.”
Gruber established two professional fundraising organizations, Independent Promotions and Reliant Event Management to solicit funds for local veteran’s charities. He hired individuals to falsely represent themselves as volunteers and often as veterans to solicit funds from patrons outside local retail outlets and Monument Circle. The solicitors were schooled to tell patrons that 100% of the proceeds went to charities that support veterans. In fact, very little of the money ever made it to the intended veterans.
Gruber and his associates traveled to universities and colleges, as far away as Florida to solicit. Gruber personally instructed his solicitors to falsely represent that they were college students competing for scholarships by soliciting for veteran’s charities. The solicitors would tell prospective contributors that they were volunteers and any amount collected would be matched as a scholarship to them. In reality, the solicitors were paid by Gruber, 40 % of each solicitor’s take.
From 2010 until 2012 Gruber and his associates collected over $550,000 for the Purple Hearts Veterans Foundation (PHVF) and $575,000 for Service Connected Disabled Veterans of America (SDVA). Only eight percent of the funds from PHVF ever made it to the veteran’s charity and less than one percent ($4500) of the money raised for SDVA made it to any veteran. In total, Gruber raised over $1,045,651, very little of which made it the various charities.
This investigation was conducted by the Internal Revenue Service, Criminal Investigation Division, and the Indiana State Police.
According to Assistant United States Attorney James M. Warden, who prosecuted the case for the government, there were two sets of victims in the case; the contributors and the veterans the money was intended to support. Gruber must pay $365,750 in restitution, payable to the American Red Cross and serve three years of supervised release after his sentence at the U.S. Bureau of Prisons.
Hunt County Man Admits Producing Child PornographyRead the Press Release
DALLAS — A 31-year-old Hunt County man appeared this morning in federal court, before U.S. Magistrate Judge Paul D. Stickney, and pleaded guilty to two counts of production of child pornography, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Stephen Walker, most recently of Quinlan, Texas, faces a statutory penalty of not less than 15 years, and not more than 30 years in federal prison, a $250,000 fine and up to a lifetime of supervised release, on each count. He remains in custody. Sentencing is set for May 21, 2015, before U.S. District Judge Jane J. Boyle.
According to documents filed in the case, in September 2006, Walker enticed Jane Doe #2, a seven-year-old female child, to engage in sexually explicit conduct that he photographed.
Then, in November 2010, Walker enticed Jane Doe #1, a three-year-old female child, to engage in sexually explicit conduct that he video-recorded.
The investigation began in November 2014 when a memory card, containing images of child pornography, was turned in to the Marion County Sheriff’s Office. That memory card had been found at a deer lease in a hunting club in Marion County; the deer lease had been used by Walker.
A search warrant of the memory card revealed it contained multiple sexually explicit videos of prepubescent child pornography taken at a Walker’s previous residence in Rowlett.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The FBI and the Rowlett Police Department investigated. Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.
Homeowner Sentenced to 4 Years in Prison in Scheme to Burn Down House to Collect InsuranceRead the Press Release
Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced Saleh H. Fakhoury, age 49, formerly of Lutherville, Maryland, today to four years in prison, followed by nine months of home detention as part of three years of supervised release, for his participation in a scheme to destroy his Maryland home by fire to collect $3 million in insurance proceeds. Judge Bennett also ordered Fakhoury to pay restitution of more than $800,000.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Chief James W. Johnson of the Baltimore County Police Department; and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
According to his plea agreement and court documents, Fakhoury owned a home in Lutherville Maryland and in 2007, bought a second home in Florida. By March 2009, Fakhoury owed over $200,000 to credit card companies, utilities and other service providers, as well as over $1.7 million to banks for the mortgages on the properties he owned.
Co-conspirator Hammoud worked for Fakhoury at Alfeo’s, a pizza restaurant owned by Fakhoury. Fakhoury and Hammoud schemed to destroy Fakhoury’s home in Lutherville by arson. Fakhoury intended to collect the insurance and pay off his debts. Fakhoury agreed to pay $70,000 to have his home set on fire: $20,000 to be initially paid to Hammoud; and later when the insurance money was received, $50,000 to be paid to others that Hammoud hired to set the fire.
On March 12 or 13, 2009, a fire was deliberately set at the Lutherville home. The fire self-extinguished and minimal damage was sustained. On March 14, 2009, a second fire was deliberately set using paint thinner. The home was completely destroyed. Fakhoury paid Hammoud the agreed upon $20,000 to have the house set on fire.
In September 2009, Fakhoury executed a sworn proof of loss to collect $3,155,197 in insurance. The loss statement was false, in that it claimed items were destroyed or damaged in the fire when, in fact, the items were not consumed in the fire, and the fire was intentionally set. The insurance company denied the claim, but paid $828,773 to the mortgagor of the Maryland home.
On December 2, 2011, Fakhoury filed a civil action against the insurance company in an effort to recover monies under the insurance policy, and claim over $3 million in compensatory damages. As part of his plea agreement, Fakhoury has agreed to dismiss the lawsuit.
Hassan Hammoud, age 60, of Dundalk, Maryland pleaded guilty to his participation in the conspiracy and was sentenced to 63 months in prison, and ordered to pay restitution of $828,773.
United States Attorney Rod J. Rosenstein praised the ATF, Baltimore County Police Department and IRS - Criminal Investigation for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Sandra Wilkinson and Judson T. Mihok, who prosecuted the case.
Home Health Agency Owner Sentenced to 10 Years in Prison for Role in Miami Health Care Fraud SchemeRead the Press Release
Patient Recruiter Sentenced To Two Years In Prison For Participating In The Same Scheme
A South Florida man was sentenced to 10 years in prison today in connection with a long-running $6.2 million Medicare fraud scheme involving Professional Medical Home Health LLC (Professional Home Health), a Miami home health care agency that purported to provide home health and therapy services, as well as similar schemes at two additional Miami home health care agencies. A second defendant was also sentenced to two years in prison today for his role as a patient recruiter in the fraud scheme at Professional Home Health.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement. Chief U.S. District Judge K. Michael Moore of the Southern District of Florida imposed the sentence.
Ernesto Fernandez, 48, of Miami, pleaded guilty on Nov. 26, 2014, to one count of conspiracy to commit health care fraud. In addition to the 10-year prison sentence, Fernandez was also ordered to pay $2,163,057 in restitution and to forfeit $9,061,867, which represents the proceeds traceable to his criminal conduct at all three home health agencies. Fernandez has been in custody since his bond was revoked on Jan. 30, 2015, for violating the condition of his bond prohibiting contact with victims or witnesses in the case except through counsel.
According to documents filed with his plea agreement, Fernandez was an owner and operator of Professional Home Heath. He was also the owner and operator of two other South Florida home health agencies. At each of these companies, Fernandez and his co-conspirators billed the Medicare program for expensive physical therapy and home health services that were not medically necessary or were not provided. Fernandez admitted that he caused patient documentation to be falsified, and planned, organized and oversaw the submission of fraudulent claims to the Medicare program.
Fernandez also admitted to being a patient recruiter for all three home health agencies. In that capacity, Fernandez recruited patients for the agencies in exchange for kickbacks, knowing that the agencies would bill the Medicare program on behalf of the recruited patients for expensive home health and therapy services that were not medically necessary or not provided.
Juan Valdes, 37, of Palm Springs, pleaded guilty on Nov. 10, 2014, to one count of conspiracy to defraud the United States and receive health care kickbacks. In addition to the two-year prison sentence, Valdes was also ordered to pay 204,526 in restitution.
According to documents filed with his plea agreement, Valdes was a patient recruiter for Professional Home Health. In that role, he solicited kickbacks and bribes from the owners and operators of Professional Home Health in exchange for providing beneficiaries to allow Professional Home Health to bill Medicare for home health services that were not medically necessary or not provided.
Fernandez and Valdes are the seventh and eighth defendants to be sentenced in connection with the fraudulent schemes at Professional Home Health. Dennis Hernandez and Jose Alvarez, both owners and operators of Professional Home Health, were each sentenced to 10 years in prison on Jan. 29, 2015. Joel San Pedro, a manager and supervisor of Professional Home Health, was sentenced to 97 months in prison on Jan. 29, 2015. Annarella Garcia, an owner of Professional Home Health, was sentenced to 70 months in prison on Aug. 27, 2014. Annilet Dominguez, an administrator of Professional Home Health, was sentenced to 68 months in prison on Sept. 29, 2014. Alina Hernandez, a patient recruiter for Professional Home Health, was sentenced to two years in prison on Jan. 29, 2015.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Trial Attorney Anne P. McNamara of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Heroin Trafficker Sentenced to 4 Years in Federal Prison; Forfeits $382,227 and A $39,000 Rolex Watch Gained from the Sale of HeroinRead the Press Release
PROVIDENCE, R.I. – Neftali Reyes, a/k/a Popi, 32, of Providence, was sentenced today to 48 months in federal prison for trafficking heroin, announced by United States Attorney Peter F. Neronha and Michael Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration’s (DEA) New England Field Division.
Additionally, Reyes forfeited $382,227 dollars in cash and a Rolex watch valued at $39,000 seized by the government at the time of Reyes’ arrest in August 2014. An investigation by the Rhode Island DEA Drug Task Force determined that the proceeds were generated as a result of Reyes’ drug trafficking activities.
At sentencing, U.S. District Court Judge John J. McConnell, Jr., also ordered Reyes to serve 3 years supervised release upon completion of his prison term. Reyes pleaded guilty on November 13, 2014, to one count of conspiracy to distribute heroin and two counts of distribution of heroin.According to court documents and information presented to the court, beginning in April 2014, the DEA Drug Task Force conducted an investigation of the activities into a drug trafficking organization which included Neftali Reyes and others. On at least two occasions in July 2014, an East Providence undercover police officer arranged with Reyes to purchase heroin. On each occasion a different “runner” met with the undercover officer at pre-determined locations in Providence and Cranston to complete the transactions.
On August 25, 2014, law enforcement arrested Reyes as he left his residence and was entering a parking garage. As Reyes was being detained, he dropped a shoebox containing $37,000 in cash, a cell phone and an iPad. A court authorized search of Reyes’ residence resulted in the seizure of $339,477 in cash from a safe, additional cash located elsewhere in the residence, and a men’s Rolex Oyster watch valued at $39,000. Reyes admitted to law enforcement and to the court that the cash and the Rolex watch were the result of proceeds from the sale of heroin. Reyes admitted to selling heroin for $130 per gram and that the proceeds represented the sale of approximately 2,940 grams of heroin.
The case was prosecuted by Assistant U.S. Attorney Pamela E. Chin.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Hackett Man Sentenced to 75 Months in Prison for Child Pornography OffenseRead the Press Release
Fort Smith - Conner Eldridge, United States Attorney for the Western District of Arkansas, announced that Raymond Freitas, age 42, of Hackett, was sentenced today to 75 months in prison followed by seven years of supervised release for Receipt of Child Pornography. The sentencing took place before the Honorable P. K. Holmes, III in the United States District Court in Fort Smith.
U. S. Attorney Eldridge commented, “We will not rest in our efforts to identify, investigate, and prosecute those who commit these despicable crimes against our children. Every time a video or image involving sexual abuse of children is downloaded or viewed, those children are re-victimized. We appreciate the hard work of law enforcement to bring these sexual predators to justice.”
“Criminals who prey on our children remain a top priority for HSI and our law enforcement partners. This predator will be locked away from society thanks to the collaborative efforts of HSI and our law enforcement partners at the Sebastian County Sheriff's Office and the Hackett Police Department,” said Raymond R. Parmer, Jr. special agent in charge of HSI New Orleans.
According to court records, in May 2014, agents with Homeland Security Investigations identified a computer that was being used to download suspected child pornography via the internet. A subsequent investigation revealed that the subscriber information for that computer returned to Freitas whose residence is in Hackett. Agents obtained and executed a search warrant on the residence where they seized a computer and several DVD’s. Freitas admitted at that time to downloading images and videos of child pornography on several different occasions. A subsequent forensic examination of the confiscated items revealed numerous images and videos of child pornography. On September 29, 2014, Freitas pleaded guilty in Federal Court to receiving child pornography.
This case was investigated by Homeland Security Investigations. Assistant United States Attorney Kyra Jenner prosecuted the case for the United States.
The 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 U.S. Attorneys’ Offices and their Criminal Division Child Exploitation and Obscenity Sections (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Related court documents may be found on Public Access to Electronic Records Website @www.Pacer.gov
Fort Smith Man Sentenced to Seven Years in Prison for Distribution of MethamphetamineRead the Press Release
Fort Smith, Arkansas - Conner Eldridge, United States Attorney for the Western District of Arkansas, announced that Randal Jernigan, age 31, of Fort Smith, Arkansas, was sentenced today on one count of Distribution of Methamphetamine. Jernigan was sentenced to 84 months in prison followed by three years of supervised release. United States District Court Judge P. K. Holmes, III presided over the sentencing in the United States District Court in Fort Smith.
United States Attorney Eldridge commented, “The trafficking and distribution of illegal drugs represents a tremendous problem in our communities, bringing crime and violence onto our streets, and exposing our children to serious risks. Today’s sentence shows that our office, joined by federal, state, and local law enforcement agencies, remains committed to aggressively pursuing and shutting down illegal drug trafficking in Fort Smith and across the Western District of Arkansas.”
According to court records, on April 30, 2014, a confidential informant working with the Drug Enforcement Administration (DEA) met with Randal Jernigan at a local business in Fort Smith to discuss arrangements for a drug deal later that day. During their meeting, Jernigan agreed to meet with the confidential informant at a local Fort Smith residence to conduct the drug deal. Later that day, the confidential informant met with Jernigan at the agreed upon local residence, where Jernigan provided approximately one ounce of methamphetamine in exchange for $1,000.00. The methamphetamine was then sent to the DEA Crime Laboratory, which determined the substance provided by Jernigan contained 27.5 grams of actual methamphetamine. Jernigan pleaded guilty to one count of Distribution of Methamphetamine on September 30, 2014.
This case was investigated by the Drug Enforcement Administration, the Fort Smith Police Department, and the Sebastian County Sheriff’s Office. Assistant United States Attorney Clay Fowlkes prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Fort Peck Man Sentenced to 14 Years for Stomping DeathRead the Press Release
GREAT FALLS—A 42-year-old Wolf Point man was sentenced today to 14 years in federal prison for stomping and beating a man so violently that the man died two days later. Great Falls United States District Court Judge Brian Morris sentenced Mervin Hale, Jr., to 168 months in prison, followed by a term of 4 years supervised release. Hale previously pleaded guilty to second degree murder.
Assistant U.S. Attorney Laura Weiss told the court that Hale and another man had been on a drinking binge in the days prior to the beating. During the late night hours of March 18, 2014, Hale and the man went to the victim’s home where the victim lived with his girlfriend. The investigation revealed that the victim had been sleeping in the bedroom when Hale called him out to the living room. Hale was agitated and pacing around before he started beating and stomping on the victim. The victim died two days later from significant traumatic internal injuries.
Because there is no parole in the federal system, Hale will have to serve at least 85% of his sentence before he is released from prison. The case was investigated by the Federal Bureau of Investigation and the Fort Peck Tribes Department of Law & Justice. Assistant United States Attorneys Laura Weiss and Lori Suek prosecuted the case.
Former Supervisory Contracting Officer Arrested in Navy Bribery ScandalRead the Press Release
A former senior federal contracting officer was arrested this morning for conspiracy to commit bribery in connection with his alleged role in a scheme to steer contracts and benefits to Glenn Defense Marine Asia (GDMA), a defense contracting firm headquartered in Singapore.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Director Andrew L. Traver of the Naval Criminal Investigative Service (NCIS) and Deputy Inspector General of Investigations James B. Burch of the Department of Defense (DCIS) made the announcement.
“Today’s arrest in this ongoing investigation demonstrates our continued resolve to root out all of the corrupt officials involved in this bribery scheme,” said Assistant Attorney General Caldwell. “As alleged, Paul Simpkins misused his position as a contracting officer at the U.S. Navy to obtain bribes of cash, air travel, hotel rooms, and prostitutes, and his actions tarnish the reputation earned by the vast majority of U.S. Navy officers and enlisted and civilian personnel.”
“With the arrest of Paul Simpkins, who was recently among the Defense Department’s high ranking civilians we have uncovered yet another tentacle of this pervasive bribery scheme,” said U.S. Attorney Duffy. “The more we learn about the extent of the greed and corruption, the more determined we are to eviscerate it.”
“As we've mentioned previously, the GDMA investigation is far from over,” said Director Traver. “NCIS will follow the evidence wherever it leads, to bring to justice those who were involved in perpetrating this massive fraud on the Department of the Navy and the American taxpayer. Active leads remain and NCIS will stay on the case until our work is done.”
“As the filing of today's Criminal Complaint and subsequent arrest of Paul Simpkins shows, the Defense Criminal Investigative Service and its law enforcement partners will continue to identify and investigate those individuals who seek to defraud the U.S. taxpayer," said Deputy Inspector General of Investigations Burch. “Any individual, regardless of position, who allowed Glenn Defense Marine Asia Ltd. to prosper at the expense of the American taxpayer, will be brought to justice.”
Paul Simpkins, 60, of Haymarket, Virginia, is the latest individual to be arrested in connection with a corruption probe involving the U.S. Navy, GDMA, and its owner, Leonard Glenn Francis. At this morning’s hearing, United States Magistrate Judge Jones of the Eastern District of Virginia ordered Simpkins to be detained pending a bond hearing set for Feb. 4, 2015. To date, seven individuals, including Francis, and GDMA have entered guilty pleas as part of the investigation.
According to a criminal complaint unsealed today, Simpkins held several manager-level contracting positions throughout the federal government, including Supervisory Contract Special at the U.S. Navy Regional Contracting Center in Singapore from April 2005 through June 2007, and manager in the Department of Defense’s Office of Small Business Programs from December 2007 to August 2012. The complaint alleges that between May 2006 and September 2012, Simpkins accepted several hundred thousand dollars in cash and wire transfers, travel and entertainment expenses, hotel rooms and the services of prostitutes. In return, Simpkins allegedly helped steer lucrative U.S. Navy contracts to Francis and GDMA, advocated for and advanced the interests of GDMA in contract disputes, and assisted in preventing GDMA’s competitors from receiving U.S. Navy business.
The complaint specifically alleges that, beginning in early 2006, Simpkins and Francis held a series of meetings at a hotel in Singapore in which Francis agreed to provide Simpkins with things of value in return for help in steering lucrative ship husbanding contracts to GDMA. Specifically, the complaint alleges that Francis paid Simpkins by hand-delivering over $150,000 in cash and by making several wire transfers to a bank account held in the name of Simpkins’s wife at the time. To conceal the true nature of the wire transfers, Simpkins allegedly used an email account belonging to his mistress to advise Francis of the routing and account information of the bank account belonging to his wife.
In return for the things of value, Simpkins allegedly used his influence within the U.S. Navy to benefit GDMA, including by helping GDMA to secure lucrative ship husbanding contracts to service U.S. Navy vessels in Thailand and the Philippines. In addition, Simpkins allegedly interceded on GDMA’s behalf in contract disputes with the U.S. Navy. The complaint specifically alleges that in 2006, Simpkins’s subordinate recommended that GDMA’s husbanding contract in Thailand not be extended due to “many exceedingly high cost” items. Simpkins allegedly overruled his subordinate and extended GDMA’s contract.
In another example, Simpkins allegedly instructed U.S. Navy officials in Hong Kong to discontinue the use of meters that monitored the volume of liquid waste that GDMA removed from U.S. Navy ships under its husbanding contracts. The use of these meters would have ensured proper accounting of the actual amount of waste removed to ensure that no overbilling occurred. Simpkins also allegedly instructed a U.S. Navy official not to review invoices that GDMA submitted in connection to a recent port call in Hong Kong after Francis complained that U.S. Navy personnel were asking questions.
The charges contained in a complaint are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
The ongoing investigation is being conducted by NCIS and DCIS.The case is being prosecuted by Director of Procurement Fraud Catherine Votaw and Senior Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Robert S. Huie of the Southern District of California.
Those with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.
Former Supervisory Contracting Officer Arrested in Navy Bribery ScandalRead the Press Release
SAN DIEGO – Paul Simpkins, a former senior federal contracting officer for the U.S. Navy, was arrested this morning and charged with conspiracy to commit bribery in connection with his alleged role in a scheme to steer contracts and benefits to Glenn Defense Marine Asia (GDMA), a defense contracting firm headquartered in Singapore.
Simpkins, 60, was arrested this morning in Haymarket, Virginia. He was arraigned in federal court in the Eastern District of Virginia and is scheduled for a detention hearing tomorrow at 2 p.m. Eastern time before U.S. Magistrate Judge Rawles Jones. The government is seeking Simpkins’ removal to face charges in the Southern District of California.
“With the arrest of Paul Simpkins, who was recently among the Defense Department’s high ranking civilians we have uncovered yet another tentacle of this pervasive bribery scheme,” said U.S. Attorney Duffy. “The more we learn about the extent of the greed and corruption, the more determined we are to eviscerate it.”
“Today’s arrest in this ongoing investigation demonstrates our continued resolve to root out all of the corrupt officials involved in this bribery scheme,” said Assistant Attorney General Leslie R. Caldwell. “As alleged, Paul Simpkins misused his position as a contracting officer at the U.S. Navy to obtain bribes of cash, air travel, hotel rooms, and prostitutes, and his actions tarnish the reputation earned by the vast majority of U.S. Navy officers and enlisted and civilian personnel.”
“As we've mentioned previously, the GDMA investigation is far from over,” said Director Andrew L. Traver of the Naval Criminal Investigative Service (NCIS). “NCIS will follow the evidence wherever it leads, to bring to justice those who were involved in perpetrating this massive fraud on the Department of the Navy and the American taxpayer. Active leads remain and NCIS will stay on the case until our work is done.”
“As the filing of today's Criminal Complaint and subsequent arrest of Paul Simpkins shows, the Defense Criminal Investigative Service and its law enforcement partners will continue to identify and investigate those individuals who seek to defraud the U.S. taxpayer,” said Deputy Inspector General of Investigations James B. Burch of the Department of Defense (DCIS). “Any individual, regardless of position, who allowed Glenn Defense Marine Asia Ltd. to prosper at the expense of the American taxpayer, will be brought to justice.”
Simpkins is the latest individual to be arrested in connection with a corruption probe involving the U.S. Navy, GDMA, and its owner, Leonard Glenn Francis. To date, seven individuals, including Francis, and GDMA have entered guilty pleas as part of the investigation.
According to a criminal complaint unsealed today, Simpkins held several manager-level contracting positions throughout the federal government, including Supervisory Contract Special at the U.S. Navy Regional Contracting Center in Singapore from April 2005 through June 2007, and manager in the Department of Defense’s Office of Small Business Programs from December 2007 to August 2012. The complaint alleges that between May 2006 and September 2012, Simpkins accepted several hundred thousand dollars in cash and wire transfers, travel and entertainment expenses, hotel rooms and the services of prostitutes. In return, Simpkins allegedly helped steer lucrative U.S. Navy contracts to Francis and GDMA, advocated for and advanced the interests of GDMA in contract disputes, and assisted in preventing GDMA’s competitors from receiving U.S. Navy business.
The complaint specifically alleges that, beginning in early 2006, Simpkins and Francis held a series of meetings at a hotel in Singapore in which Francis agreed to provide Simpkins with things of value in return for help in steering lucrative ship husbanding contracts to GDMA. Specifically, the complaint alleges that Francis paid Simpkins by hand-delivering over $150,000 in cash and by making several wire transfers to a bank account held in the name of Simpkins’s wife at the time. To conceal the true nature of the wire transfers, Simpkins allegedly used an email account belonging to his mistress to advise Francis of the routing and account information of the bank account belonging to his wife.
In return for the things of value, Simpkins allegedly used his influence within the U.S. Navy to benefit GDMA, including by helping GDMA to secure lucrative ship husbanding contracts to service U.S. Navy vessels in Thailand and the Philippines. In addition, Simpkins allegedly interceded on GDMA’s behalf in contract disputes with the U.S. Navy. The complaint specifically alleges that in 2006, Simpkins’s subordinate recommended that GDMA’s husbanding contract in Thailand not be extended due to “many exceedingly high cost” items. Simpkins allegedly overruled his subordinate and extended GDMA’s contract.
In another example, Simpkins allegedly instructed U.S. Navy officials in Hong Kong to discontinue the use of meters that monitored the volume of liquid waste that GDMA removed from U.S. Navy ships under its husbanding contracts. The use of these meters would have ensured proper accounting of the actual amount of waste removed to ensure that no overbilling occurred. Simpkins also allegedly instructed a U.S. Navy official not to review invoices that GDMA submitted in connection to a recent port call in Hong Kong after Francis complained that U.S. Navy personnel were asking questions.
The ongoing investigation is being conducted by NCIS and DCIS. The case is being prosecuted by Director of Procurement Fraud Catherine Votaw and Senior Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Robert S. Huie of the Southern District of California.
Those with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.
DEFENDANT Case Number: 15MJ0325 Paul Simpkins Age: 60 CHARGESConspiracy to Commit Bribery, in violation of 18 U.S.C. § 371. Maximum penalty five years in prison, $250,000 fine or twice the gross pecuniary gain or loss from the offense, whichever is greater
INVESTIGATING AGENCIESDefense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency*An indictment or complaint itself is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
Former High-Level Adviser to Bank CEO Charged in Manhattan Federal Court with Insider TradingRead the Press Release
PREET BHARARA, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the indictment of CEDRIC CAÑAS MAILLARD, a former high-level adviser to the CEO of a global bank, who engaged in securities trades based on material, nonpublic information he obtained through his employment. CAÑAS’s trades resulted in profits of approximately $917,239.
U.S. Attorney Preet Bharara said: “As alleged, Cedric Cañas exploited his access to material nonpublic information to purchase securities he reasonably knew would increase in value after a public announcement. In short order, he allegedly sold the securities for a nearly $1 million profit. Working with the FBI, we will continue to prosecute those who seek to reap illegal windfall profits from insider information.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “Cañas allegedly based his purchase of Potash equities on illegally obtained inside information, which provided him with nearly $1 million in profits when all was said and done. His actions detail the existence of disingenuous trading principles that effectively thwart fairness in the marketplace. Today we remind the public that the FBI and our partners will continue to work to restore and uphold the integrity of our financial markets.”
According to the two-count Indictment unsealed today in Manhattan federal court:
In August 2010, CAÑAS engaged in a series of trades based on material, nonpublic information he obtained during the course of his employment. Prior to engaging in these trades, CAÑAS, who was employed at a global bank (the “Bank”) as a high-level adviser to the chief executive officer of the Bank, obtained confidential information related to the planned acquisition of Potash Corporation of Saskatchewan Inc. (“Potash”) by BHP Billiton (“BHP”) for $45 billion.
After receiving this information, and prior to the public announcement of the planned acquisition, CAÑAS, who worked for the Bank in Spain, purchased 30,000 Potash equity Contracts for Difference (“CFDs”), which are a form of highly leveraged securities, for which he paid a total of $1,500 in commission fees. Upon receiving CAÑAS’s CFD purchase orders, CAÑAS’s broker purchased an equivalent number of New York Stock Exchange-listed Potash shares. CAÑAS’s purchase of Potash CFDs violated the Bank’s Code of Conduct, which CAÑAS was aware of and understood. The Code of Conduct prohibited trading based upon inside information such as BHP’s planned acquisition of Potash.
On August 16, 2010, the closing price of Potash’s stock on the New York Stock Exchange was $112.15. On August 17, 2010, it was publicly announced that the board of Potash had received and rejected an unsolicited offer from BHP to purchase the common stock of Potash for $38.6 billion, or the equivalent of $130 per share. The price of Potash stock rose and ultimately closed on August 17, 2010, at $143.17 per share. CAÑAS liquidated his position in Potash equity CFDs on the same day as the public announcement, resulting in profits of approximately $917,239.
CAÑAS, 41, a Spanish citizen, has not been arrested.
CAÑAS is charged with two counts of securities fraud. Each count carries a maximum of 20 years in prison and a maximum fine of $5,000,000. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the work of the FBI, and thanked the SEC for its assistance. He added that the investigation is continuing.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Edward Y. Kim is in charge of the prosecution.
The allegations contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.