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20 March 2015
First of Eight Defendants Pleads Guilty in Tax Fraud and Identity Theft Scheme in El Dorado & Crossett, ArkansasRead the Press Release
Texarkana, AR – Conner Eldridge, United States Attorney for the Western District of Arkansas, announced that Erica R. Browning, age 35, of El Dorado, pleaded guilty today to one count of Conspiracy to Defraud the United States with Respect to Claims, one count of Theft of Public Money, and one count of Aggravated Identity Theft. Ms. Browning was one of eight defendants indicted on June 24, 2014 by a Federal Grand Jury on multiple counts of aggravated identity theft and one count of conspiracy to defraud the government. Additionally, some of the defendants were charged with theft of public money, possession of unauthorized access devices, wire fraud, and making and presenting a false claim. The change of plea was accepted by The Honorable Harry F. Barnes in the U.S. District Court in Texarkana.
U.S. Attorney Eldridge stated, “This case involves a scheme in which the defendants fraudulently used the identity of others in order to steal money from the United States Treasury for their own personal gain. Fraud and identity theft are serious crimes that have lasting effects on the victims and are an insult to hard-working, law abiding citizens and taxpayers. Our office remains committed to prosecuting these crimes on behalf of the state and our country.”
"Today's announcement exemplifies IRS Special Agents' intense focus on the rigorous pursuit of identity theft and refund fraud," said Special Agent in Charge Christopher A. Henry, IRS Criminal Investigation. "These unscrupulous defendants perpetuated an elaborate scheme driven by insatiable greed and a blatant disregard for the tremendous damage inflicted on innocent victims. Be assured that IRS Criminal Investigation, together with our law enforcement partners and the United States Attorney's Office, will hold those who engage in similar behavior fully accountable."
Additional defendants involved in this case who have pending charges are as follows:
• Gregory A. Taylor, age 50 of Clanton, Alabama (formerly from Crossett, Arkansas)
• Venus M. Ford, age 34 of El Dorado
• Shawn D. Carey, age 34 of El Dorado
• Clarrise R. Carey, age 33 of El Dorado
• Whitney M. Charles, age 25 of El Dorado
• Ecko Scott, age 35 of North Little Rock
• Sanjuana N. Aaron, age 34 of El Dorado
The Superseding Indictment revealed that, from 2009 until approximately December 2011, the defendants unlawfully obtained the names and social security numbers belonging to others, including prison inmates and homeless individuals. The defendants unlawfully used the names and social security numbers to prepare and electronically file false 2009 and 2010 tax returns that claimed fraudulent refunds from the IRS. In many cases, the individuals were not aware the defendants had obtained their personal identifying information or that a tax return was filed using their name and social security number. The defendants received tax refunds via refund checks, direct deposits to bank accounts, and prepaid debit cards and often split the refunds amongst themselves and others.
The defendants were originally charged in a thirty-five count indictment on September 18, 2013 and were subsequently arrested. The Superseding Indictment added thirteen additional counts against Gregory A. Taylor, a paid tax return preparer from Crossett, Arkansas, for charges including aggravated identity theft, wire fraud, and a fraudulent claim for refund on his personal 2009 tax return.
Ms. Browning will be sentenced at a later date. Her sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense, and the characteristics of the violations. The sentence will not exceed the statutory maximum for each count in this case, and in most cases will be less than the maximum. In addition to prison time each count carries a mandatory period of supervised release and a maximum fine of $250,000.
The investigation was conducted by IRS Criminal Investigation, U.S. Secret Service, El Dorado Police Department, and Crossett Police Department. Assistant U.S. Attorney Jonathan Ross is prosecuting the cases for the United States.
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Related court documents may be found on Public Access to Electronic Records Website @www.Pacer.gov
Federal Jury Convicts Four Baltimore Area Drug Dealers in Conspiracy to Distribute Kilograms of Cocaine and HeroinRead the Press Release
Baltimore, Maryland – A federal jury today convicted Jermaine Cannady, a/k/a “Main,” age 39; Cornell Dion Brown, a/k/a “Nelly,” age 29; Dominic William Parker, a/k/a “Nick,” age 30, all of Baltimore; and Ronald Timothy Sampson, a/k/a “Little Ronald,” age 35, of Windsor Mills, Maryland for conspiracy to distribute kilograms of cocaine and/or heroin, and for attempting to possess with intent to distribute cocaine and/or heroin.
The guilty verdicts were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; and Commissioner Anthony W. Batts of the Baltimore Police Department.
According to evidence presented at the nine day trial, on August 11, 2014, each of the defendants agreed to purchase kilogram amounts of cocaine and/or heroin from a cooperating individual (CI). Law enforcement had previously seized 25 kilograms of cocaine and six kilograms of heroin from a concealed compartment in a motor home that the CI used to transport the drugs from California to Maryland. The defendants agreed to meet the CI in the parking lot of a Baltimore area mall to complete the drug transaction. The telephone calls with the defendants arranging the transactions were recorded.
Witnesses testified that Brown and co-defendant Tavon Hopkins were arrested after they arrived to pick up the four kilograms of cocaine they had agreed to purchase from the CI. At the time of their arrest, law enforcement recovered $157,000 in cash from a bag in their vehicle. Cannady and Parker were also arrested when they arrived at the meeting location to pick up the cocaine and heroin requested by Cannady. No cash was recovered from Cannady and Parker, although the CI explained that they were usually provided with heroin and cocaine without payment up front. Cannady and Parker had in their possession multiple cell phones and a police scanner.
According to evidence presented at trial, Sampson indicated that he wished to purchase a kilogram each of cocaine and heroin. Sampson told the CI that he was calling up his buyers to get as much money as possible to give to the CI for the purchase of the cocaine and heroin. When Sampson met the CI to complete the drug transaction, he was also arrested. Law enforcement seized $10,500 after a search of Sampson and his vehicle.
The defendants each face a mandatory minimum sentence of 10 years in prison and up to life in prison for conspiring to distribute and possess with intent to distribute cocaine and/or heroin, and for attempted possession with intent to distribute cocaine and/or heroin. U.S. District Judge Richard D. Bennett has scheduled sentencing for Sampson, Parker, Cannady and Brown on June 24, June 26, June 29, and June 30, 2015, respectively.
Four co-defendants previously pleaded guilty to their participation in the scheme to distribute five or more kilograms of cocaine: Antoine DeMarr Washington, age 42, of Washington, D.C.; Guy Bordes Agnant, Jr., age 38, of Laurel, Maryland; Tavon Alexander Louis Hopkins, age 38, of Baltimore; and Vincent Cooper, age 47, of Washington, D.C. Donte Eugene Taylor, age 39, of Baltimore also pleaded guilty to his role in the scheme. All are awaiting sentencing.
United States Attorney Rod J. Rosenstein commended the FBI, DEA and Baltimore Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Christopher J. Romano and Seema Mittal, who are prosecuting the case.
Escapee from Nashville Captured Near AtlantaRead the Press Release
James Inman Taylor III, 29, of Nashville, Tenn., was captured today near an Atlanta motel after being sought since his escape from Metro Nashville detectives on February 5, 2015, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
Taylor was apprehended by FBI agents after a brief chase and struggle, after he was seen leaving a motel near Atlanta. Prior to his escape in February, Taylor had been charged with federal crimes including 2 Hobbs Act Robberies and 2 counts of using a firearm during a crime of violence. He is accused of taking part in the robberies of two Nashville Piggly Wiggly grocery stores on January 9, 2015.
Metro Nashville Police, along with the FBI, TBI and U.S. Marshals had been searching for Taylor since his escape in February. Taylor is currently being held in federal custody in Atlanta.District Man Sentenced to a Year in Prison for Burglary of Office ComplexRead the Press Release
WASHINGTON – David Pitts, 38, of Washington, D.C., was sentenced today to a year and a day in prison on charges stemming from an incident in which he broke into an office building in Northwest Washington after setting a series of fires, U.S. Attorney Ronald C. Machen Jr. announced.
Pitts pled guilty in January 2015, in the Superior Court of the District of Columbia, to charges of second-degree burglary and first-degree identity theft. He was sentenced by the Honorable Zoe Bush. Judge Bush sentenced Pitts to a total of two years in prison on the charges, but suspended all but a year and a day of the time. Following completion of his prison term, he will be placed on three years of supervised release.
According to a proffer of facts Pitts agreed to at the plea hearing, on Sept. 4, 2014, at about 12:50 a.m., Pitts set a chair and bottles on fire near the parking attendant booth of the parking garage at an office complex in the 3300 block of New Mexico Avenue NW. The fire destroyed the chair and caused damage to the attendant booth. He then walked to another part of the complex and twice lit some newspapers on fire on the ground; this caused no damage.
Minutes later, Pitts walked to a wooded area near the adjacent Embassy Park complex and set another small fire. This fire grew, and had to be extinguished by the District of Columbia Fire and Emergency Medical Services Department.
After setting the fires, Pitts entered the office building on New Mexico Avenue, which houses doctors’ offices and a pharmacy, with the intent to steal prescription medications, controlled substances, and prescription pads. He was arrested at the scene. A subsequent search of the defendant’s apartment led to the recovery of over 5,300 pills, blank prescription pads from at least nine different doctors’ offices, and other items. Many of the blank prescription pads were for doctors who had offices in the complex. Additional blank prescription pads were found in a search of the defendant’s office.
Pitts also faces multiple charges of second-degree burglary, theft and destruction of property in Montgomery County, Md.
In announcing the sentence, U.S. Attorney Machen commended the work of those who investigated the case from the Metropolitan Police Department, the Montgomery County, Md. Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the District of Columbia Fire and Emergency Medical Services Department. He also expressed appreciation for the work of former Assistant U.S. Attorney Brittain Shaw, who investigated the case, and Assistant U.S. Attorney Christopher Bruckmann, who prosecuted the matter.
Dallas Woman Sentenced to 27 Months in Federal Prison for Committing Financial Aid FraudRead the Press Release
DALLAS — A Dallas woman who was convicted following a bench trial last year on all six counts of an indictment charging financial aid fraud, was sentenced today, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Sussette Sheree Timmons, 42, was sentenced by U.S. District Judge Barbara M. G. Lynn to 27 months in federal prison and ordered to pay $20,000 in restitution to the U.S. Department of Education.
“It’s bad enough to lie about your identity or income to obtain financial aid”, said Acting U.S. Attorney Parker, “but Ms. Timmons’ fraud is particularly egregious because she never even intended to attend school. Abuses like this of the federal student aid system must not be tolerated for the sake of the many individuals who truly need aid for education, and for the sake of taxpayers. I commend the investigative efforts of the Department of Education’s Office of Inspector General in identifying this fraud.”
The government presented evidence at trial that Timmons applied for admission to, and received financial aid from several universities/colleges, e.g., New Mexico State University, Western New Mexico University, Ashford University, Northern New Mexico College, Coconino Community College, and Pima County Community College, to fund her education at the institutions.
As part of her scheme to defraud these institutions and the U.S. Department of Education, Timmons never intended to use the disbursed funds for education, but instead intended to embezzle, misapply, steal and use the funds for her own personal use. Timmons also failed or refused to refund the financial aid funds when required to do so.
In total, the amount of funds that Timmons embezzled, misapplied, stole or obtained by fraud, false statement or forgery, or failed to refund, was $64,115.
The U.S. Department of Education Office of Inspector General investigated. Assistant U.S. Attorney P.J. Meitl prosecuted.
Chicago Area Man Convicted on Child Pornography ChargesRead the Press Release
CHICAGO ― A Chicago area man was convicted today for producing child pornography involving a minor whom he photographed in sexually explicit photos as a part of a fantasy world that the defendant created. The defendant, JOHN GABRIEL, 79, of Lockport, who has been in custody since he was arrested on federal charges in September 2013, was found guilty of one count of manufacturing child pornography. U.S. District Court Judge John J. Tharp has not yet set a sentencing date. According to court documents and witness testimony during the four day trial, defendant Gabriel enticed a 17 year old girl by creating a religious fantasy world in which he used the pseudonym “Sarah” to email the victim under the guise of being an angel who had selected the victim to participate in a “Program” run by the angels, in order to save young boys from Satan. In addition to instructing the minor victim about the Program, Sarah suggested that the victim should develop a closer relationship with defendant. For example, in one email, Gabriel wrote “listen closely to those things John [defendant] tells you. You can have a happy life and you can leave all the dirty nasty sinful things behind.”
Essentially, according to the emails received by the victim, the Program dictated that if participants had sex with troubled young boys, under the age of 18, then they were assisting in training the boys in better behavior, and to fight the devil. In addition, according to these emails, each time a participant had sex with a troubled boy; a wealthy benefactor would purchase guide dogs for the blind and fund children’s wings for hospitals. The defendant took sexually explicit photos of the victim and posted them on an Internet website, purportedly for the purpose of recruiting the troubled young boys to have sex with the victim.
Gabriel faces a minimum sentence of fifteen years in prison for manufacturing child pornography, and a $250,000 fine. The Court must impose a reasonable sentence under federal statues and the advisory United States Sentencing Guidelines.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.
The case was prosecuted by Assistant United States Attorneys Barry Jonas and Shoba Pillay.
Carlisle Barracks Army Contractor Charged with Theft Involving Misuse of Credit CardsRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania, announced that, on March 18, a federal grand jury in Harrisburg indicted Scott J. Robinson, of Shippensburg, Pennsylvania, charging him with theft of government property.
According to the United States Attorney Peter Smith, the indictment alleges that Robinson was a civilian contractor performing landscaping and lawn care work at the U.S. Army Garrison (War College), Carlisle Barracks, in Cumberland County, Pennsylvania. Robinson was given access to four government credit cards, issued by the General Services Administration (GSA) to the U.S. Army to purchase fuel for government-owned vehicles used by the defendant to perform his responsibilities under the contract. Robinson allegedly used the credit cards to fuel his own personal vehicle. Between February and July, 2014, Robinson allegedly purchased fuel and other unauthorized items in the amount of approximately $3,602.
The case was investigated by the GSA Office of Inspector General. Assistant U.S. Attorney Gordon Zubrod has been assigned to prosecute the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 15 years imprisonment, a term of supervised release following imprisonment, and a $250,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Bridgeport Man Sentenced to 4 Years in Federal Prison for KidnappingRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that PAUL WHITEHURST, also known as “Juice,” 25, of Bridgeport, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to 48 months of imprisonment, followed by five years of supervised release, for kidnapping.
According to court documents and statements made in court, in January 2013 the Danbury Police Department began investigating a narcotics trafficking network that maintained a series of drug distribution locations, known as trap houses, in Danbury, out of which members of the organization sold crack and heroin. The organization also rented hotel rooms where they packaged and distributed narcotics. During the investigation, law enforcement learned that the individuals who headed the drug trafficking ring had organized and committed armed home invasion robberies of marijuana dealers.
WHITEHURST sold narcotics on behalf of the organization. He also oversaw two trap houses and rented hotel rooms for additional drug distribution.
In approximately May 2013, WHITEHURST and a co-defendant approached an individual who was walking in Danbury and directed the victim to get into their vehicle. At the time, the victim owed WHITEHURST a drug debt of approximately $100. In the car, WHITEHURST physically and verbally assaulted the victim as they drove to a nearby reservoir. At the reservoir, WHITEHURST pushed the victim into the water and then threw rocks at him. WHITEHURST and others then drove the victim to a liquor store and purchased a liter of vodka, which WHITEHUST forced the victim to drink in its entirety in approximately 15 minutes until the victim lost consciousness. The victim, still unconscious, was then driven to a trap house where he was locked in a bathroom overnight. The next day, WHITEHURST directed the victim to work off his drug debt by selling heroin to customers. After selling the drugs, the victim was released.
WHITEHURST has been detained since August 2013. On October 22, 2014, he pleaded guilty to one count of kidnapping.
This matter has been investigated by the Drug Enforcement Administration’s New Haven Task Force and the Danbury Police Department. The DEA Task Force includes personnel from the New Haven, Hamden, West Haven, North Haven, Branford, Ansonia and Meriden Police Departments. The case is being prosecuted by Assistant U.S. Attorneys Tracy Dayton and Vanessa Richards.
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(203) 821-3722 [email protected]Bank Robber Sentenced to 15 Years in Federal PrisonRead the Press Release
Orlando, Florida – U.S. District Judge Paul G. Byron has sentenced William Demethris Bass (40, Oviedo) to 15 years in federal prison for bank robbery. He pleaded guilty on November 4, 2014.
According to court documents, Bass robbed three Orlando-area banks. He robbed a SunTrust Bank branch on June 10, 2014, and two different Fairwinds Credit Union branches on June 14, 2014. Bass continued his spree of robberies in Hinesville, Georgia, and he faces additional federal charges in the Southern District of Georgia.
This case was investigated by the Federal Bureau of Investigation and the Orange County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Embry J. Kidd.
Baltimore Man Sentenced to Five Years in Prison for Receipt of Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Richard Ho Lee, age 33, of Baltimore, today to five years in prison, followed by 11 years of supervised release, for receipt of child pornography. Judge Motz also ordered that upon his release from prison, Lee must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA). In addition, Judge Motz entered an order requiring that Lee to forfeit property that was used or intended to be used to commit or to promote the offenses to which Lee has pleaded guilty. The property to be forfeited includes Lee’s home in the 600 block of South Wolf Street in Baltimore, two laptop computers and an external hard drive.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Marilyn J. Mosby.
According to Lee’s plea agreement, on five occasions in September and October of 2011, while Lee and the victim were in Baltimore, Lee purchased sex from T.F. At the time, T.F. was representing to patrons that she was 19 when, in fact, she was 16. On October 31, 2011, Lee paid for a bus ticket for T.F. to travel to Panama City, Florida, where Lee met her. Lee took the victim to a condo he had rented in Panama City. Upon arriving in Panama City, T.F. told Lee that she was only 16 years old. According to the statement of facts, Lee continued to have sex with T.F., and encouraged her to engage in prostitution. From about December 22, 2011 to January 4, 2012, Lee placed at least 15 advertisements for the victim in the “escorts” and “body rubs” sections of an adult website. Lee used his personal credit card to pay for the advertisements. Lee took provocative photographs of T.F. in lingerie and underwear that he had purchased for her and attached some of the photos to the advertisements. Lee rented a second condominium where T.F. had sex with customers and agreed to provide Lee with a percentage of her earnings.
On January 9, 2012, Lee purchased a bus ticket for T.F., which she used to travel from Florida back to Maryland. In January 2012, Lee produced a counterfeit North Dakota state driver’s license for T.F., which indicated that she was 22 years old. In May 2012, Lee took provocative photographs of T.F. inside his residence in Baltimore.
In June 2012, federal agents recovered Lee’s laptop computers and an external hard drive which contained over 600 images of child pornography, including images that depicted minors that are less than twelve years old and portrayed sadistic and masochistic conduct. Further, the laptop contained templates designed to be used for the production of counterfeit state driver’s licenses.
The case was investigated by the FBI-led Maryland Child Exploitation Task Force (MCETF), created in 2010 to combat child prostitution, with members from10 state and federal law enforcement agencies. The Task Force coordinates with the National Center for Missing and Exploited Children and the Maryland State Police Child Recovery Unit to identify missing children being advertised online for prostitution.
MCETF partners with the Maryland Human Trafficking Task Force, formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders. Members include federal, state and local law enforcement, as well as victim service providers and local community members. For more information about the Maryland Human Trafficking Task Force, please visit http://www.justice.gov/usao/md/priorities_human.html.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore County Police Department, Baltimore City Police Department and the Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Rachel M. Yasser, who prosecuted the case.
Arcade Man Indicted on Drug and Gun ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.–U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned a 10 count indictment charging Ryan Tojdowski, 31, of Arcade, NY, with manufacturing marijuana, possession with intent to distribute marijuana, oxycodone, morphine, alprazolam, hydrocodone, clonazepam, dihydrocodeine, maintaining a drug involved premises, and possession of a firearm in furtherance of a drug trafficking crime. The charges carry a mandatory minimum penalty of five years in prison, a maximum of 20 years and a $500,000 fine.
Assistant U.S. Attorney Caleb J. Petzoldt, who is handling the case, stated that according to the indictment, on December 17, 2014, during the course of an investigation, the Wyoming County Sheriff’s Department discovered the defendant to be in engaged in the manufacturing and distribution of marijuana. In addition, deputies found Tojdowski to be in possession of quantities of oxycodone, morphine, alprazolam, hydrocodone, clonazepam, dihydrocodeine as well as a .223 assault rifle.
The indictment is the culmination of an investigation on the part of the Wyoming County Sheriff’s Department, under the direction of Gregory J. Rudolph and the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Office.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Albert Torres Morales Sentenced to 84 Months on Firearms and Drug ChargesRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Albert Torres Morales, 30, of Richford, Vermont was sentenced today to 84 months imprisonment on charges that he carried a firearm in relation to a drug trafficking crime, and conspired to distribute heroin, cocaine base, and cocaine. Chief Judge Christina Reiss also ordered that Torres Morales serve a three-year period of supervised release following his term of imprisonment.
According to court records, the Vermont Drug Task Force conducted more than ten controlled purchases of heroin, cocaine base, and cocaine from Torres Morales in and around Richford between January and April 2014. According to sources cooperating with law enforcement, Torres Morales regularly possessed a firearm in connection with his drug dealing activity. During a controlled purchase of heroin on March 24, 2014, law enforcement captured audio and video footage of Torres Morales in possession of a handgun while he conducted a heroin transaction.
In the overnight hours of April 19, 2014, Larry Garrow, Jr. of Richford burglarized Rite-Way Sports in Hardwick of 32 handguns. Jaime Hoben then drove with Garrow to Richford, where Garrow traded some 20 of the handguns to Torres Morales for heroin and money. The firearms consisted of .380 and 9mm handguns. Those firearms have not been recovered. The remaining handguns were recovered when Larry Garrow, Sr. found a bag of guns in the bedroom of his son, Larry Garrow, Jr., and turned them in to the Vermont State Police.
On April 22, 2014, law enforcement executed a search warrant at Torres-Morales’s residence, the location of numerous controlled purchases of narcotics from Torres-Morales. Among other items, agents recovered a drug ledger and a safe containing $6,000 in cash. Torres-Morales was arrested the same day with heroin and over $1,000 in cash.
Also in connection with this case, Hoben was sentenced to six months imprisonment and three years of supervised release on a charge of possession of stolen firearms. On March 2, 2015, Garrow was sentenced to 30 months imprisonment and three years of supervised release after his conviction for possession of stolen firearms. As part of his plea agreement with the government, Garrow stipulated that he stole the firearms from Rite-Way Sports.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Vermont State Police, with the assistance of the United States Border Patrol, and the Hardwick Police Department. The United States was represented by Assistant U.S. Attorney Kevin J. Doyle. Torres-Morales was represented by Michael L. Desautels, Esq. of the Federal Defender’s Office
19 March 2015
“Gold Club” Owner Among Those Indicted for Using Business to Operate Elaborate Money Laundering SchemeRead the Press Release
SAN FRANCISCO – Seven persons -- Vladimir Handl, Michael Rose, Peter Scalise, David Gaither, Richard Leyland, Edwin Hetherton, and Paul Fink -- were arrested after being charged with racketeering, money-laundering, and drug trafficking related crimes, announced United States Attorney Melinda Haag and Federal Bureau of Investigation Special Agent in Charge David J. Johnson.
According to an indictment that was unsealed yesterday, Handl and Rose were businessmen in Myrtle Beach, South Carolina, whose interests included restaurants, nightclubs, and strip clubs in several states. Handl operated and controlled businesses such as VIP Group, LLC, International VH, LLC, and Heat Lounge, LLC, while Rose operated and controlled defendant PML Clubs, Inc., along with Explosive Clubs, Inc., Nightclub and Restaurant Services, LLC, Legacy Entertainment, East Coast Restaurant & Nightclubs, and Micro Management Group, LLC. Rose, through PML Clubs, Inc., operated several strip clubs in South Carolina, Delaware, and New Hampshire under the name “The Gold Club.” Rose, through PML Clubs, Inc., also licensed the use of the name “The Gold Club” to franchisees throughout the United States.
According to the indictment, Handl and Rose, along with their associates, Peter Scalise, and David Gaither, conspired to conduct the affairs of an enterprise through a pattern of racketeering involving money laundering, bank fraud, and drug trafficking. Between 2011 through the present, the defendants knowingly accepted more than $2.3 million that they believed either had been fraudulently diverted from a bankruptcy court proceeding or constituted proceeds from drug trafficking, and then laundered the money through their businesses, including Rose’s Gold Clubs. The indictment further alleges that as part of their laundering scheme, the defendants created fraudulent invoices, contracts, and other business records to make it appear that the money they received and “cleaned” was for legitimate business transactions. The defendants also sought to acquire cocaine to sell.
Handl, Rose, Scalise, Gaither, and PML Clubs, Inc., are all charged with racketeering conspiracy, in violation of 18 U.S.C. § 1962(d), while Handl, Rose, Scalise, and PML Clubs, Inc., are also charged with substantive racketeering, in violation of 18 U.S.C. § 1962(c). In addition, Handl, Rose, Scalise, and PML Clubs, Inc., are charged with conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h). Furthermore, Handl and Scalise are each charged with 118 counts of substantive money laundering, in violation of 18 U.S.C. § 1956(a)(3), while Rose and PML Clubs, Inc., are each charged with 105 counts of substantive money laundering.
Richard Leyland and Edwin Hetherton, in turn, are charged with a money laundering conspiracy of their own. In addition to the conspiracy change, Leyland is charged with four counts of substantive money laundering and Hetherton is changed with three counts of substantive money laundering. Both Leyland and Hetherton also are charged with theft of United States property.
Handl and Paul Fink are also charged with conspiring to possess cocaine with intent to distribute, in violation of 21 U.S.C. § 846.
All seven defendants were taken into custody today in arrests coordinated throughout the country. Rose and Scalise were arrested in the vicinity of Myrtle Beach, South Carolina. Handl and Gaither were arrested in the vicinity of Florence, South Carolina. Fink was arrested in the vicinity of Chico, California; Hetherton was arrested in the vicinity of Sacramento, California; and Leyland was arrested in the vicinity of Fort Washington, Pennsylvania. They all are expected eventually to make appearances in San Francisco in connection with the indictment filed in the federal district court in the Northern District of California.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the corporate defendant PML Clubs, Inc., could face a maximum fine of $250,000 for each of the two racketeering-related counts, and $500,000 for each count of the 106 money laundering-related counts. Additional special assessments may apply.
The individual defendants face a maximum 20-year term of imprisonment for each racketeering-related count and each money laundering-related count. Further, the individual defendants face a maximum 10-year term of imprisonment for each theft of United States property count, and a maximum 20-year term of imprisonment for the conspiracy to possess cocaine with intent to distribute. Each defendant’s maximum terms of imprisonment are as follows:
- Handl: 2,440 years’ imprisonment
- Rose: 2,160 years’ imprisonment
- Scalise: 2,420 years’ imprisonment
- Gaither: 40 years’ imprisonment
- Leyland: 110 years’ imprisonment
- Hetherton: 90 years’ imprisonment
- Fink: 20 years’ imprisonment
Additional periods of supervised release, fines, and special assessments also could be imposed. Any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant United States Attorneys David Countryman and W.S. Wilson Leung are prosecuting the case with the assistance of Lance Libatique and Carolyn Jusay. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
“Caught on Video”: Final Defendant Sentenced in Federal Drug Conspiracy TrialRead the Press Release
Contact Person: A. Lance Crick (864) 282-2100
COLUMBIA, South Carolina ----- United States Attorney Bill Nettles stated today that Daniel Rodriguez, age 26, of Lilburn, Georgia, was sentenced to 155 months in federal prison earlier this afternoon in federal court in Greenville. Rodriguez, along with co-defendant, Jesus Buruca-Martinez, age 22, of Lawrenceville, Georgia, were found guilty after a federal trial in September 2014 of conspiracy to distribute 500 grams or more of methamphetamine, a violation of Title 21, United States Code, Section 846. Rodriguez was also found guilty of two counts of using a communication device (telephone) to facilitate the commission of a drug felony, a violation of Title 21, United States Code, Section 843(b). United States District Judge J. Michelle Childs presided over the trial and sentenced Rodriguez. Last month, Judge Childs sentenced Buruca-Martinez to a ten-year federal prison sentence.
Evidence presented at trial established that, beginning in early 2012, agents and task force officers with the DEA in Greenville, began investigating an upstate-based methamphetamine distribution network that was being sourced with pounds of methamphetamine from individuals in the Atlanta-area. Ultimately, over a two-year investigation and some seven superseding indictments, twenty-seven defendants were indicted in the conspiracy, with twenty-five entering guilty pleas. The investigation revealed that two members of this conspiracy, Dustin Tiller and Nicanor Perez-Rodriguez, both inmates in the South Carolina Department of Corrections at the time, contacted members of their families on the outside to arrange for methamphetamine to be transported from Georgia into South Carolina for further distribution.
After identifying Daniel Rodriguez as a Georgia-based member of the conspiracy who was making frequent trips to South Carolina to bring methamphetamine as well as collect drug proceeds, members of the Anderson County Sheriff’s Office and Anderson City Police Department were able to establish surveillance on Rodriguez, on Sunday, August 5, 2012, as Rodriguez met with other members of this conspiracy, to include Jesus Buruca-Martinez, in the parking lot of a restaurant, located off of Exit 19, Interstate 85, in Anderson County.
Agents then maintained surveillance on Rodriguez and Buruca-Martinez as they traveled in tandem, both driving separate vehicles, to a residence in Belton, South Carolina. Maintaining surveillance on the Belton residence, agents observed Buruca-Martinez leave the residence, followed by Rodriguez’s departure some twenty minutes later. Traffic stops were conducted on both vehicles and law enforcement seized $20,240 in cash from Buruca-Martinez.
Following the execution of a federal search warrant at the Belton residence and the arrest of Rodriguez, Buruca-Martinez, and others, that evening, agents reviewed a home surveillance system seized in the search. The surveillance system had an operational camera imaging the living room of the residence, attached to a digital video recording (DVR) system. In reviewing the images on the DVR, which dated back some two weeks from the incident date, agents observed Rodriguez arriving at the residence on two previous occasions in July 2012.
Regarding the activity inside the residence on August 5, 2012, a review of the video revealed Rodriguez, Buruca-Martinez, and third co-conspirator, who rode with Rodriguez that day from Georgia, counting, for several minutes, over $20,000 in cash. Witnesses testified that this cash was partial payment applied to the overall drug debt owed to Rodriguez and others for pounds of methamphetamine previously provided on consignment. As the money count concluded, the video showed Buruca-Martinez bundling two cash parcels, placing one in each cargo short pocket, and exiting the residence, ultimately heading south on Interstate 85 before he was stopped by law enforcement.
Nettles stated that the case was investigated and prosecuted by members of the Organized Crime and Drug Enforcement Task Force (OCDETF), a taskforce coordinated by the United States Attorney’s Office. Members of the task force involved in this investigation included the Anderson County Sheriff’s Office, the Anderson City Police Department, the South Carolina Highway Patrol, the Department of Homeland Security, and the Drug Enforcement Administration. Assistant United States Attorneys Andy Moorman and Lance Crick of the Greenville office handled the prosecution.####
Women’s History Month CommemoratedRead the Press Release
Today the United States Attorney’s Office for the Northern District of Iowa recognized Women’s History Month 2015 by hosting a program commemorating the 40th anniversary of the landmark Iowa Civil Rights Commission decision, Cedar Rapids Community School District v. Parr. United States Attorney Kevin Techau welcomed speakers and guests noting that this month, “We celebrate countless pioneering women and the legal victories they have won.”
Featured program speakers included Des Moines attorney Roxanne Conlin and Reverend Bill Cotton. They recounted how their professional careers crossed in the early-1970s when they fought against the injustice of gender discrimination facing two Cedar Rapids school teachers.
Over 50 attendees heard the speakers tell the story of how two pregnant school teachers were forced to leave their teaching positions in the Cedar Rapids School District beginning the fifth month of their pregnancy. One teacher, Joan Parr, was not tenured and the policy as it related to her called for a forced termination. Reverend Cotton, the first Director of the Cedar Rapids Civil Rights Commission, challenged this discriminatory practice. As the litigation commenced, Reverend Cotton connected with then Assistant Attorney General Roxanne Conlin, who successfully prosecuted the case all the way to the Iowa Supreme Court. In 1975, the High Court ruled that this practice discriminated against women and violated the Iowa Civil Rights Act. This case is considered a landmark ruling in Iowa jurisprudence.
One year after this ruling the US Supreme Court rejected a claim that an employer’s policy excluding pregnancy from its disability benefits plan did not violate Title VII of the 1964 Civil Rights Act’s prohibition on sex discrimination. Two years later Congress passed the 1978 Pregnancy Discrimination Act which overruled this decision. http://go.usa.gov/3CefA These facts highlight not only the bravery of two Iowa teachers pioneering women’s rights but the forward thinking of Iowa’s judiciary.
Both speakers closed their presentations by noting that Iowa courts have a long history of furthering the rights of citizens in many cases well before the United States Congress or the US Supreme Court conferred them. Speaker Conlin shared that, “This is something we as Iowans should have great pride in.”
US Attorney Techau echoed the Presidential Proclamation proclaiming March 2015 as Women’s History Month by stating, “We know that when women succeed, America succeeds.”
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West Seneca Man Pleads Guilty to Possession of Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.–U.S. Attorney William J. Hochul, Jr. announced today that Ryan Arcara, 25, of West Seneca, NY, pleaded guilty before Senior U.S. District Court Judge William M. Skretny, to possession of child pornography. The charge carries a maximum sentence of 10 years in prison, a $250,000 fine, or both.
Assistant U.S. Attorney Marie P. Grisanti, who is handling the case, stated that the defendant possessed eight image files and 59 video files containing child pornography stored on a computer and hard drive. Some of the images depicted prepubescent minors or minors under 12 years old.
The plea is the culmination of an investigation on the part of Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero.
Sentencing is scheduled for July 8, 2015, at 10:00 a.m. Judge Skretny.
Utah-Based Washakie Renewable Energy LLC Settles Renewable Fuel Standard ViolationsRead the Press Release
The Department of Justice today filed a stipulation of settlement resolving civil claims against Washakie Renewable Energy LLC (Washakie) for violations of the Renewable Fuel Program under the Clean Air Act. The stipulation of settlement was filed in the U.S. District Court of the District of Columbia. A complaint stating the government’s claims was filed at the same time, announced Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division and Assistant Administrator Cynthia Giles for the Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance.
From January to October of 2010, Washakie generated more than 7.2 million renewable identification numbers (RINs) based upon its production of biodiesel at its Plymouth, Utah, facility. During that time period, however, Washakie did not produce any biodiesel - at the Plymouth facility or anywhere else. The biodiesel associated with the 7.2 million RINs would have accounted for a reduction of emissions equivalent to more than 30,000 metric tons of carbon dioxide.
The stipulation of settlement requires Washakie to pay a civil penalty of $3 million. In addition to the penalty, Washakie has already retired more than 7.2 million RINs by purchasing RINs from other parties. By doing this, Washakie tried to correct the problem it created by putting invalid RINs on the market. In order to protect the program's integrity and maintain a level playing field for regulated companies, EPA is pursuing enforcement actions against renewable fuel producers and importers that generated invalid RINs.
“The defendant made quite a profit by failing to adhere to the requirements of the Renewable Fuel Program regulations,” said Assistant Attorney General Cruden. “The penalty here sends the message that renewable fuel producers will be held accountable for meeting all legal requirements. The Department of Justice remains committed to taking the profit out of illegal activity.”
“This case is another example of the EPA’s commitment to maintain the integrity of the Renewable Fuel Standard program,” said Assistant Administrator Giles. “Making sure producers are supporting their claims with production of actual renewable fuels is critical to reducing greenhouse gas emissions that are fueling climate change.”
The Energy Independence and Security Act of 2007 expanded and strengthened the Renewable Fuel Program to encourage the blending of renewable fuels into the motor vehicle fuel supply of the U.S. and thereby reduce the nation’s dependence on foreign oil, help grow the renewable energy industry in the United States, and achieve significant greenhouse gas reductions. Authorized renewable fuels producers and importers could generate and attach credits – known as “renewable identification numbers” or “RINs” – to renewable fuels, such as biodiesel, that they produced or imported. Fossil fuel refiners and importers are obligated to obtain RINs each year according to the volume of fossil fuels that they put on the market. These “obligated parties” must purchase RINs or produce them themselves and they are responsible for the acquisition of valid RINs to meet their renewable fuel quotas. If transferred RINs are invalid, the transferees are liable for failing to satisfy their obligations. Because certain companies need RINs to comply with regulatory obligations, RINs have market value. A RIN is invalid if it incorrectly identifies, among other things, the production facility, or the type of fuel produced, or the volume of fuel produced and the regulations prohibit the transfer of invalid RINs.
Washakie registered with the EPA as a renewable fuel producer under the Renewable Fuel Regulations and identified its facility in Plymouth as a renewable fuel production facility. EPA initially discovered these violations during an inspection of Washakie’s Plymouth facility in 2010. EPA uncovered additional information concerning the violations in Washakie’s response to information requests and further investigation. There is no evidence that Washakie produced any biodiesel anywhere during the period covered by the complaint.
To read the settlement, or for more information about the case, visit: http://www2.epa.gov/enforcement/washakie-renewable-energy-llc-clean-air-act-settlement
For more information on the Renewable Fuel Standards, visit: http://www2.epa.gov/enforcement/civil-enforcement-renewable-fuel-standard-program
Two FCI Hazelton inmates sentenced for trafficking heroin into prisonRead the Press Release
CLARKSBURG, WEST VIRGINIA – Marcus Brown, 27, and Samuel Bynum, 24, both inmates at the Federal Correctional Institution at Hazelton, were convicted and sentenced in federal court today for their role in facilitating the shipment of quantities of heroin into the prison, United States Attorney William J. Ihlenfeld, II, announced.
An investigation by the Federal Bureau of Prisons and the FCI Hazelton Special Investigative Services Unit revealed that the defendants utilized telephone calls and emails to coordinate with another individual to use letters to ship quantities of heroin into the prison.
The defendants each pled guilty today to one count of “Use of Communication Facility to Commit, Cause & Facilitate Commission of a Drug Felony – Aiding and Abetting.” They were each sentenced to an additional six months in prison.
Assistant U.S. Attorney Shawn Morgan prosecuted the cases on behalf of the government.
U.S. District Judge Irene M. Keeley presided.
Trinidad Woman Arrested on Charges of Aggravated Identity TheftRead the Press Release
St. Croix, USVI – Ameena Ali, 39, of Trinidad, was arrested after a federal grand jury returned a two-count indictment against her on Tuesday, March 17, 2015, charging her with making a false statement in an application for a passport and aggravated identity theft, United States Attorney Ronald W. Sharpe announced today. On Wednesday March 18, 2015, Ali made her initial appearance before U.S. Magistrate Judge Cannon in district court. She was released pending trial.
If convicted of making a false statement as charged, Ali faces a maximum of 10 years in prison and a $250,000 fine. If convicted of aggravated identity theft, she faces a mandatory two years in prison and a $250,000 fine.
The two-count indictment is the result of months of investigative work by the United States Department of State Diplomatic Security Service. The case is being prosecuted by Assistant U.S. Attorney Rami S. Badawy.
An indictment is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
Three More Defendants Sentenced for Their Role in Federal Racketeering ConspiracyRead the Press Release
Defendants among 91 Charged in Operation Wax House
CHARLOTTE, N.C. – Denetria Myles, 43, of Charlotte, Frank DeSimone, 42, of Charlotte, and William Brown, 35, of Matthews, N.C., were sentenced by U.S. District Court Judge Graham C. Mullen on Wednesday, February 18, 2015, on federal racketeering charges, announced the U.S. Attorney’s Office for the Western District of North Carolina. One additional defendant was sentenced earlier this month for his role in the scheme.
The U.S. Attorney’s Office is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).
These convictions are the latest in Operation Wax House, an investigation which began in 2007. Of the 91 individuals charged, eighty-nine defendants have either pleaded guilty or have been convicted following trial. The two remaining defendants are international fugitives.
Myles was sentenced to 51 months in prison followed by three years of supervised release. Myles served the conspiracy as a buyer, seller, promoter, and licensed notary. In total, the fraudulent transactions Myles participated in resulted in more than $2 million in losses to financial and lending institutions, with Myles receiving nearly a quarter million in exchange for her crimes. Myles was convicted at trial in October 2013 of racketeering conspiracy and bank fraud.
DeSimone was sentenced to 51 months in prison, followed by two years of supervised release. According to court records and Wednesday’s sentencing hearing, DeSimone operated as a promoter in the investment fraud operations and was involved with multiple fraudulent companies controlled by the Enterprise. In sentencing DeSimone, Judge Mullen noted that an active sentence was necessary to protect the public from further crimes of this defendant. DeSimone pleaded guilty for his role in the RICO conspiracy in November 2013.
Brown was sentenced to 48 months in prison followed by one year of supervised release. According to court records and Wednesday’s sentencing hearing, Brown served the racketeering Enterprise as a promoter in its mortgage fraud operations. As part of the racketeering Enterprise, Brown was involved in at least ten separate mortgage fraud transactions, resulting in losses of approximately $3 million, and he received more than $780,000 in fraudulent kickbacks. According to court records, over the course of the conspiracy Brown also engaged in identity theft. Brown pleaded guilty for his role in the RICO conspiracy in October 2013.
Earlier this month, on February 3, 2015, Judge Mullen also sentenced Sean Williams, 46, of Huntersville, N.C. to 30 months in prison followed by two years of supervised release. Williams was a licensed loan officer and a certified public accountant, who owned and operated a mortgage company, which he used to process loan applications for mortgage fraud transactions, resulting in a total loss of more than $5 million. Williams pleaded guilty to mortgage fraud charges.
Of the 26 six defendants charged in RICO Indictment, 15 await sentencing, including three of the scheme’s leaders. The fourth leader, Ramin Amini, 46, last known address Tehran, Iran, is one of two international fugitives.
Operation Wax House in the Western District of North Carolina is being handled by the Charlotte Division of the FBI and the Criminal Division of the IRS for the Financial Fraud Enforcement Task Force, along with the Securities Division of the North Carolina Secretary of State with respect to a separate prosecution. The Operation Wax House prosecution is being handled for the government by Assistant United States Attorney Maria K. Vento.
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.
The names and case numbers of the all the defendants charged to date in Operation Wax House are listed below, organized by their alleged role in the scheme.
Three Indicted in Relation to Laboring Trafficking, Witness TamperingRead the Press Release
HARRISONBURG, VIRGINIA – Three individuals, including two operators of a Harrisonburg restaurant, have been indicted by a federal grand jury in the Western District of Virginia in Harrisonburg on charges related to labor trafficking and witness tampering.
Maria Rosalba Alvarado McTague, [Alvarado], 47, Felix Adriano Chujoy, 26, and Gladys Georgette Chujoy, 32, all of Harrisonburg, Va., were charged in a superseding indictment filed under seal on Thursday, March 12, 2015 and unsealed today following the arrest and initial appearances of all three defendants.
According to the superseding indictment, Alvarado and F. Chujoy, who are originally from Peru but have become naturalized United States citizens, managed Inca’s Secret, a restaurant in Harrisonburg, Va. As part of the alleged labor trafficking conspiracy, Alvarado is accused of making regular trips to Peru where she attempted to recruit victims to immigrate illegally to the United States for the purpose of working unlawfully at Inca’s Secret. According to the indictment, Alvarado promised to help smuggle the victims into the United States, told victims they would be paid for working at the restaurant, and agreed to provide the victims a place to live in the basement of her and F. Chujoy’s home. In exchange, the victims had to work for Alvarado and F. Chujoy at Inca’s Secret for six months to work off the “debt” owed for smuggling and housing the victims.
According to the indictment, when a victim in Peru refused to cross the Mexican border and enter into the United States illegally, Alvarado arranged to have a visa application submitted to the U.S. Embassy in Peru on behalf of the victim. The application contained a variety of false and fraudulent information.
Upon arriving in the United States, the indictment alleges, the victims were generally forced to work 12-hours per day, seven days per week, and provide services outside of their work at the restaurant. The victims were paid approximately $450 per month, effectively resulting in an hourly wage of less than $1.50 per hour. Other documents unsealed at a previous court hearing reflect that Alvarado and F. Chujoy controlled the victims through isolation, threats, and harassment.
In addition, to the trafficking allegations, the indictment also alleges that Alvarado and F. Chujoy employed illegal aliens at the restaurant and housed others in their home.
G. Chujoy, along with the other two defendants, are also accused of attempting to influence, delay, or prevent victims in this case from testifying at official proceedings. The indictment alleges that Alvarado, F. Chujoy, and G. Chujoy conspired to tamper with witnesses. Alvarado and F. Chujoy were previously indicted, arrested and appeared in federal court on related charges on December 12, 2014. The court released both defendants on bond at that time. The witness tampering is alleged to have occurred while the defendants were on supervised release pending trial on the previous charges in this case.
The investigation of the case was conducted by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Federal Bureau of Investigation, and the Commonwealth of Virginia Attorney General’s Office. Assistant United States Attorney Heather Carlton is prosecuting the case for the United States.
A Grand Jury Indictment is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.
Tax Return Preparer Sentenced to Three Years in Federal Prison for Preparing False Tax ReturnsRead the Press Release
DALLAS — A defendant who admitted to a federal felony offense stemming from his preparation of false tax returns was sentenced yesterday, announced Acting U.S. Attorney John Parker of the Northern District of Texas.
Kenny Iroegbu was sentenced by U.S. District Judge Jorge A. Solis to 36 months in federal prison and ordered to pay $323,046 in restitution to the IRS. Iroegbu pleaded guilty in December 2014 to one count of aiding and assisting in the preparation of a false income tax return.
According to the factual resume filed, Iroegbu operated his own tax return preparation business, doing business as Homequest Vision Tax Service and Homequest Tax Service. Prior to starting his own tax preparation business in 2005, Iroegbu worked as an intern at Lynks Tax Service in Greenville, Texas.
The factual resume also states that Iroegbu prepared tax year 2005 and tax year 2006 returns out of an office located at 3030 LBJ Freeway, Suite 700, in Dallas; he prepared 2007 returns at an office located at 601 West Parker Road, Suite 103, in Plano, Texas.
The method employed by Iroegbu, according to the factual resume, included filing a client’s tax return using a false IRS Schedule F, Profit or Loss from Farming or a false IRS Schedule C, Profit or Loss from Business. Iroegbu would include the false Schedule on the client’s return and typically claim a loss if the client had Form W-2 wages or claim a net profit if the client did not have any Form W-2 wages. This gave the appearance to the IRS that the taxpayer was generating income.
In addition, according to the factual resume, Iroegbu would then put a false refundable fuel credit from taxes paid on un-dyed diesel fuel used on a farm, or for taxes paid on gasoline used for taxes paid on un-dyed diesel fuel used on a farm, or for taxes paid on gasoline used for other nontaxable use. These fuel credits were refundable regardless of whether the taxpayer had a tax liability or was due a refund before considering the fuel credit. Iroegbu claimed fuel credits on IRS Form 4136, Credit for Federal Tax Paid on Fuels.
The factual resume notes that Iroegbu prepared and electronically filed on behalf of his clients 66 tax year 2006 returns and 59 tax year 2007 returns claiming $1,294,749 in fuel credits of which $361,294 in false refunds was used by the IRS to offset any tax owed on the return. The remaining amount was paid to the taxpayers. Twenty-four fraudulent returns examined claimed refunds for Iroegbu’s clients totaling $237,996. The actual amount paid out by the government on these 24 claims totaled $126,582.49.
IRS Criminal Investigation investigated. Assistant U.S. Attorney Joseph M. Revesz prosecuted.
Tanzanian National Heads to Prison in Tax Fraud Scheme Involving Nearly 700 VictimsRead the Press Release
HOUSTON - Tanzanian national Amon Rweyemamu Mtaza, of Houston, has been ordered to prison following his conviction of conspiracy to commit wire fraud, wire fraud and two counts of aggravated identity theft, announced U.S. Attorney Kenneth Magidson. Mtaza pleaded guilty Sept. 16, 2014.
Today, U.S. District Judge Gray Miller, who accepted the guilty plea, handed Mtaza a 63-month sentence for the conspiracy and wire fraud charges to be served concurrently. He also received an additional two years for the aggravated identity theft conviction which will be served consecutively to the other sentence imposed resulting in a 87-month federal prison sentence.
As part of the sentence, the court also signed a final order of forfeiture for a 2006 Maserati and a 2007 Mercedes Benz s550 as proceeds gained from the illegal scheme and ordered Mtaza to pay $404,409 in restitution. In handing down the sentence, Judge Miller considered the numerous victim impact statements that were submitted and the extent of the scheme.
Mtaza is expected to face deportation proceedings following his release from prison.
At the time of his plea, Mtaza admitted he ran a stolen identity refund fraud (SIRF) scheme that targeted more than 600 people and involved the filing of hundreds of fraudulent tax returns. Mtaza used stolen and unlawfully obtained personal identity information, including the names and Social Security numbers, of true persons to prepare fraudulent U.S. income tax returns. The returns were electronically filed in order to generate and obtain tax refunds to which he was not entitled. Mtaza then either directed the fraudulently obtained tax refunds to be deposited onto reloadable debit cards or disbursed as U.S. Treasury checks and used the monies to obtain cash and goods for his own benefit.
The tax refund filings account for an intended loss of more than $1.8 million with an actual loss of $404,409 to the Internal Revenue Service (IRS). A total of 685 victims were identified as victims in Mtaza’s scheme.
Mtaza will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
This case was investigated and prosecuted by the U.S. Postal Inspection Service and IRS - Criminal Investigation. Assistant United States Attorney Suzanne Elmilady is prosecuting this case.
Two Jackson Men Indicted for Drug Conspiracy Resulting in MurderRead the Press Release
Jackson, Miss - Anthony Watson, 25, and Joshua Martin, 23, both of Jackson, were indicted on March 18, 2014 by a federal grand jury for killing Jackson resident Sharod Vaughn on August 13, 2013, announced U.S. Attorney Gregory K. Davis and ATF Special Agent in Charge Phillip R. Durham.
The indictment alleges that Watson and Martin conspired to possess with the intent to distribute less than 50 grams of marijuana and, in the course of carrying out that conspiracy, they shot and killed Sharod Vaughn. The indictment also alleges that, at the time of the murder, Martin was a convicted felon in possession of a firearm.
Causing the death of a person by discharging a firearm during a drug transaction is punishable by death or up to life in prison. The penalty for the conspiracy to possess marijuana is not more than five (5) years in prison and up to a $250,000 fine, and the penalty for being a felon in possession of a firearm is not more than 10 years and up to a $250,000 fine.
Martin and Watson are scheduled to appear before United States Magistrate Judge F. Keith Ball on April 22, 2015 for their initial appearance and arraignment. Both are currently in the custody of the Hinds County Jail.
The public is reminded that an indictment is a formal charge that a defendant has committed a violation of the federal criminal laws. All defendants are presumed innocent unless and until proven guilty.
Tucson Man Convicted of Murder, AssaultRead the Press Release
TUCSON, Ariz. – On March 17, 2015, Joseph Edward Camargo, 29, of Tucson, Ariz., was found guilty of second degree murder, aggravated assault, and weapons offenses, by a federal jury. The case was tried before U.S. District Chief Judge Raner C. Collins on March 10-17, 2015. Camargo is being held pending sentencing before Judge Collins on May 27, 2015.
The evidence at trial showed that on Sept. 30, 2011, Camargo drove to a residence on the Pascua Yaqui Indian Reservation, armed with a handgun. Camargo provoked a fight with the male victim in the front yard of the residence. After the victim fled into the home, Camargo pursued him, firing four shots into the house. Three bullets struck the victim, killing him a fourth bullet struck another male at the house who was treated and medically released by University Medical Center. All victims are/were members of the Pascua Yaqui Indian Tribe.
A conviction for second degree murder carries a maximum penalty of lifetime incarceration.
The investigation in this case was conducted by the Federal Bureau of Investigation and Pascua Yaqui Police Department, with assistance provided by the Arizona Department of Public Safety and Office of the Medical Examiner. The prosecution was handled by Jesse J. Figueroa and Matthew C. Cassell, Assistant U.S. Attorneys, District of Arizona, Tucson.
CASE NUMBER: CR-11-4021-TUC-RCC-DTF
RELEASE NUMBER: 2015-024_ Camargo
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
St. Croix Man Charged with Federal and Local Crimes Related to Carjacking at the St. Croix Educational Complex High SchoolRead the Press Release
St. Croix, USVI – U.S. Magistrate Judge George W. Cannon arraigned James Cruz, 20, today on federal charges of Carjacking, Using a Firearm in a Crime of Violence and local charges of Robbery in the First Degree, Assault in the Third Degree, and Unauthorized Possession of a Firearm During a Crime of Violence, United States Attorney Ronald W. Sharpe announced. Judge Cannon ordered Cruz detained pending trial.
According to court records, the charges stem from an incident that occurred on February 21, 2015, at the St. Croix Educational Complex High School when Cruz and an unnamed juvenile stole a vehicle at gun point. Both persons were apprehended after fleeing from the pursuing police officers.
Spencerport Man Pleads Guilty to Fraud ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Matthew Lavilla, of Spencerport, NY, pleaded guilty before U.S. District Judge Frank P. Geraci to engaging in financial transactions with proceeds from a fraud scheme. The charge carries a maximum penalty of 10 years in prison, a fine of $250,000 or both.
Assistant U.S. Attorney Bradley E. Tyler, who handled the case, stated that in June 2007, the became aware that the Xerox Corporation had been defrauded by Clarkson Auto Electric, a company that he was a part owner of, and Anthony Fretto, a co-defendant in the case, and also an owner of Clarkson Auto Electric. Despite that knowledge, Lavilla engaged in financial transactions with proceeds of the fraud.
Lavilla was indicted along with nine other defendants, all have been convicted.
“Today’s conviction concludes the Government’s investigation into a group of men who sought to defraud one of our area’s most venerated companies,” said U.S. Attorney Hochul. “The fact that the scheme was perpetrated by business associates as well as corporate insiders should serve as a warning to all businesses. The saying ‘trust, but by all means verify’ is a good rule to keep in mind when it comes to the business world. “
The plea is the culmination of a joint investigation on the part of the Internal Revenue Service, under the direction of Shantelle P. Kitchen, Special Agent in Charge, New York Field Office, and the United States Postal Inspection Service, under the direction of Shelly Binkowski, Inspector in Charge, Boston Division, United States Postal Inspection Service.
Sentencing for March 18, 2015Read the Press Release
Rodney Goich, 45, of Rock Springs, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on March 18, 2015, for conspiracy to possess with intent to distribute, and to distribute, at least 500 grams of methamphetamine. Goich was arrested in Rock Springs, Wyoming. He received 78 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $500.00 fine and a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.
Second Cardiac Monitoring Company Pays $6.4 Million to Settle Allegations It Overbilled Government Medical ProgramRead the Press Release
A second heart monitoring company, BioTelemetry, Inc., is resolving allegations that it overbilled Medicare for outpatient services that were not medically necessary, announced Acting U.S. Attorney Annette L. Hayes. BioTelemetry has agreed to pay $6.4 million to resolve allegations that its subsidiary, CardioNet, improperly billed the Medicare Program for Mobile Cardiac Outpatient Telemetry (MCOT) services when those services were not reasonable or medically necessary. This is the second cardiac monitoring company to settle overbilling charges for these services following an investigation led in Western Washington. In March 2012, LifeWatch Services, Inc., of Rosemont, Illinois, agreed to pay the United States $18.5 million to resolve allegations that the company submitted false claims to federal health care programs. The investigation of CardioNet’s billing practices grew out of a qui tam or “whistleblower” lawsuit against LifeWatch.
“Billing for a higher-level service that is not necessary to treat a patient’s condition to receive higher reimbursement from federal health care programs will not be tolerated,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “Such conduct wastes critical federal health care program funds and drives up the costs of health care for all of us.”
“Today’s settlement is another example of how we will act to stop abusive billing practices and hold companies accountable for conduct that raises everyone’s healthcare costs,” said Acting U.S. Attorney Annette L. Hayes for the Western District of Washington. “This settlement should send a message to all providers: do not misuse federal billing systems to improperly gouge the healthcare system upon which so many Americans rely.”
An MCOT monitor is a real-time, outpatient cardiac monitoring service. MCOT monitors are worn by patients for a period of time during which the device continuously records the activities of the patient’s heart, including any irregular rhythms. The MCOT monitor differs from traditional, less expensive event monitors in that it incorporates cell phone technology, which allows it to continuously transmit data to CardioNet’s diagnostic center (whereas traditional event monitors only download data periodically through a landline).
The government’s investigation revealed that CardioNet was aware that MCOT services were not eligible for Medicare reimbursement when provided to patients who had experienced only mild or moderate heart palpitations, since less expensive “event” or “Holter monitors” could effectively collect data about those patients’ conditions. Nonetheless, the government’s investigation revealed that CardioNet knowingly submitted claims to Medicare for more expensive MCOT services by using an inaccurate diagnostic code that ensured that the claims would be reimbursed by Medicare at a higher rate.
“Sticking taxpayers with a hefty bill for unneeded medical care will never be tolerated,” said Special Agent in Charge Ivan Negroni of U.S. Health and Human Services, Office of Inspector General, Regional Office including Washington. “Working in close coordination with our law enforcement partners we will tirelessly pursue and prosecute these suspected violators.”
“Federal employees deserve health care providers, including remote monitoring companies, that meet the highest standards of ethical and professional behavior,” said Patrick E. McFarland, Inspector General of the U.S. Office of Personnel Management. “Today's settlement reminds all providers that they must observe those standards, and reflects the commitment of Federal law enforcement organizations to pursue improper and illegal billings that increase the cost of medical care.”
The claims resolved by this agreement are allegations only, and there has been no determination of liability.
The settlement was negotiated by Assistant United States Attorney Kayla Stahman of the U.S. Attorney’s Office, Western District of Washington, who was assisted by investigators from the Office of Inspector General of the Department of Health and Human Services and the Office of Inspector General for the Office of Personnel Management.
San Francisco Man and Company Indicted for Smuggling Sophisticated Electrical Components to Russian FederationRead the Press Release
SAN FRANCISCO – Russian émigré Pavel Semenovich Flider was arrested yesterday on charges that he and corporate co-defendant Trident International Corporation, LLC, illegally smuggled sophisticated electrical components out of the United States, and used laundered funds to promote the scheme announced United States Attorney Melinda Haag, U.S. Department of Commerce Acting Special Agent in Charge Joseph Whitehead, U.S. Homeland Security Investigations Acting Special Agent in Charge Tatum King, Federal Bureau of Investigation Special Agent in Charge David Johnson, and U.S. Customs and Border Protection Director of Field Operations Brian Humphrey. A federal grand jury in San Francisco indicted Flider and Trident on March 5, 2015 with Smuggling Goods, Conspiracy to Commit International Money Laundering, and Money Laundering. The indictment was unsealed today in federal court.
According to the indictment, Flider, 65, of San Rafael, California, a Russian national and naturalized citizen of the United States, served as the co-owner and operator of Trident in San Francisco. He is alleged to have procured electronic components from U.S. companies and smuggled them to Russia using transshipment points in Estonia and Finland, in violation of U.S. export law. In furtherance of the crime, Flider and Trident are alleged to have knowingly submitted false and misleading export information on Shipper’s Export Declarations, an official document submitted to the Department of Homeland Security in connection with export shipments from the U.S. Funds used to purchase these electronic components came, at least in part, from transfers received from foreign banks.
Many of the components alleged to have been wrongly smuggled into Russia were controlled dual-use programmable computer chips capable of operating in austere environments making them useful in both civilian and military applications. Wire transfers that allegedly promoted the conspiracy totaled more than 60 million dollars, and were received in San Francisco from banks located in a variety of countries including the Czech Republic, Estonia, Latvia, Cyprus, and Hong Kong. Flider has been charged with fifteen counts of smuggling of goods in violation of 18 U.S.C. § § 554(a), one count of conspiracy to commit international money laundering in violation of 18 U.S.C. § 1956(h) and ten counts of substantive money laundering in violation of 18 U.S.C. § 1956(a)(2)(A). Trident has been charged with the smuggling and money laundering charges. The indictment also seeks forfeiture of Flider’s and Trident’s real and personal property connected to the alleged crimes, including proceeds traceable to the alleged laundering violations.
Flider was arrested in San Rafael, California on March 18, 2015, and made his initial appearance in federal court in San Francisco this morning before the Honorable Maria-Elena James, U.S. Magistrate Judge. Flider currently is being held in federal custody pending a formal detention hearing on Monday, March 23, 2015 before Magistrate Judge James.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Flider could face a maximum 20-year term of imprisonment for each money laundering-related count, and a maximum 10-year sentence for each count of smuggling. Additional periods of supervised release, fines, and special assessments also could be imposed. Trident faces a maximum fine of $500,000 for each money laundering count (or a fine of twice the value of the property used in the transaction) and a maximum fine of $ 250,000 for each of the smuggling counts. As with Flider, upon conviction Trident could be subject to additional fines and assessments. Any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Philip Kearney and Arvon J. Perteet are prosecuting the case with the assistance of Jacqueline Lovrin and Helen Yee. The prosecution is the result of an investigation by the U.S. Department of Commerce, Homeland Security Investigations, U.S. Customs and Border Protection, and the Federal Bureau of Investigation.
San Diego Real Estate Developer Sentenced for Wire FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that TIMOTHY MONAHAN, age 36, a real estate developer from San Diego, California, was sentenced today after previously pleading guilty to committing wire fraud.
U.S. District Judge Jane Triche Milazzo sentenced MONAHAN to one year and one day incarceration, followed by two years of supervised release. Restitution to the Bolivar Investment Group, LLC in the amount of $140,525.19 was paid prior to sentencing.
According to court documents, in about late 2008, MONAHAN and his business partner, “M.H.,” sought investors to invest approximately $3,000,000 for the acquisition of an approximately five-acre tract of land adjacent to the Lakeview Regional Medical Center in Covington, Louisiana, and the development of two office buildings on that land. MONAHAN and M.H. convinced Bolivar Investors Group, L.L.C., an investment group organized by members of the Crescent River Port Pilots= Association, to invest the money. In February 2009, MONAHAN, his partner, and Bolivar created a new entity, ANewtrac West,@ to facilitate the purchase and development. As part of the agreement, Bolivar agreed to fund a $3,000,000 capital contribution to Newtrac West. Shortly thereafter, MONAHAN and his business partner opened a bank account in the name of Newtrac West; while representatives of Bolivar were supposed to have access to the account, in truth only MONAHAN and M.H. had access. Between January 20, 2009, and July 14, 2009, Bolivar made six deposits, including five by wire, into the Newtrac West bank account, totaling approximately $3,000,000.
Between January 20, 2009, and July 27 2009, MONAHAN used approximately $140,525.19 from the account without authorization to pay expenses and debts apart from and unrelated to the purchase or development of the land in Covington.
Subsequently, MONAHAN and M.H. devised a scheme to hide the misuse of funds. Specifically, false financial and bank statements of Newtrac West, based on the real bank statements for the Newtrac West account, were created to hide the unauthorized withdrawal of funds and to deceive representatives of Bolivar into believing that Newtrac West was in excellent financial condition. For example, while the Newtrac West account had a true balance of negative $29,292.45 on September 30, 2009, the doctored statement represented that the account had a balance of $826,512.92.
MONAHAN’S partner, M.H., was charged in the Eastern District of Louisiana in August 2013 for his role in the above-described scheme. He pleaded guilty in the Southern District of California and was sentenced to twenty-four months in jail earlier this year.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter. Assistant United States Attorney Jordan Ginsberg was in charge of the prosecution.
Sacramento Men Indicted for Methamphetamine TraffickingRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a five-count indictment today against Lagranger Jones, 36, and Lamonte DeShannon Rush, 45, both of Sacramento, charging them with conspiracy to distribute methamphetamine and methamphetamine distribution, United States Attorney Benjamin B. Wagner announced.
According to court documents, between October 2014 and February 2015, Jones and Rush sold methamphetamine during controlled purchases conducted by DEA Special Agents in the Sacramento area. Court documents allege that Jones has a lengthy criminal history.
This case was the product of an investigation by the Drug Enforcement Administration and the Sacramento Police Department. Assistant United States Attorney Jason Hitt is prosecuting the case.
Jones was arrested by federal agents on March 9, 2015. He was ordered detained pending trial on the same day. Rush remains at large.
If convicted of the most serious charge in the indictment, both defendants face a maximum statutory penalty of life in prison, a mandatory minimum of 10 years in prison and a $10 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Rochester Man Indicted for Stealing More Than $1.2 Million from His Brother and In-LawsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced that a federal grand jury has returned a 20 count indictment charging Mark Saile, 57, of Rochester, NY, with mail and wire fraud, aggravated identity theft, and money laundering. The mail and fraud charges carry a maximum sentence of 20 years in prison, and a fine of $250,000, the identity theft charge carries a mandatory minimum sentence of two years in prison, and the money laundering charges carry a maximum sentence of 10 years in prison and a fine of $250,000.Assistant U.S. Attorney, Richard A. Resnick, who is handling the case, stated that according to the indictment, the defendant’s brother, Robert Saile, who resides in Redmond, Washington, worked for Microsoft, Inc. for a number of years. Robert Saile set up a 401(K) retirement account with Fidelity Brokerage Services, LLC, comprised of Microsoft stock and Fidelity money market funds.
Between July 26, 2012 and June 20, 2014, Mark Saile contacted Fidelity numerous times pretending to be his brother. During those contacts, the defendant was able to trick Fidelity into transferring approximately $980,000 from Robert Saile’s 401(k) retirement account to a bank account his name. Robert Saile was unaware that his brother was stealing money from his retirement account. The defendant also changed the email and mailing addresses on file at Fidelity so that all correspondence from Fidelity would be sent to him.
The indictment further states that, prior to the fraud against his brother, the defendant pretended to be his in-laws and had more than $258,000 withdrawn from their financial accounts without their knowledge.
The indictment is the culmination of an joint investigation on the part of the United States Postal Inspection Service, under the direction of Shelly Binkowski, Inspector in Charge, Boston Division, United States Postal Inspection Service, the Internal Revenue Service, under the direction of Shantelle Kitchen, Acting Special Agent in Charge, New York Field Office, the Federal Bureau of Investigation, and the New York State Police, under the direction of Major Craig Hanesworth.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Previously Convicted Bossier Tax Preparer Pleads Guilty to Tax FraudRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced today that a Bossier City woman pleaded guilty to making and filing a false tax return.
Karen Cartagena, 54, of Bossier City, La., pleaded guilty before U.S. District Judge Elizabeth E. Foote to one count of making and subscribing a false tax return. According to evidence presented at the guilty plea, Cartagena prepared and filed a fraudulent tax return on or about January 24, 2012. In the return, she added education credits (Education and American Opportunity credits) to which she was not entitled.
“My office is committed to the vigorous prosecution of corrupt individuals who prepare fraudulent tax returns,” Finley said. “The selective targeting for profit of educational and other tax credits, which are designated to help individuals in need, is reprehensible.”
“Return preparer fraud is a priority for IRS Criminal Investigation, and we have committed many resources to these cases,” said Jerome R. McDuffie, Acting Special Agent in Charge, IRS-Criminal Investigation, New Orleans Field Office. “Ms. Cartagena was previously convicted of preparing false income tax returns and willfully chose to continue her illegal activities. Taxpayers should be very selective in choosing a return preparer, and have confidence that their returns are prepared accurately and reflect only the information that they provide. We will continue to vigorously investigate and prosecute return preparers who abuse the nation’s tax system.”
Cartagena faces up to three years in prison, one year supervised release, a $250,000 fine, and restitution. A sentencing date of July 16, 2015 was set.
The IRS Criminal Investigation conducted the investigation. Assistant U.S. Attorney Earl M. Campbell is prosecuting the case.
Preston County, WV man arrested in Weirton for production of child pornographyRead the Press Release
WHEELING, WEST VIRGINIA – Robert J. Gongloff, 25, of Weirton, West Virginia, was arrested on March 13, 2015 pursuant to a criminal complaint charging him with “Production of Child Pornography,” United States Attorney William J. Ihlenfeld, II, and Homeland Security Investigations Philadelphia Special Agent in Charge John Kelleghan announced today.
Gongloff, originally from Terra Alta in Preston County, West Virginia, is alleged to have produced numerous images and videos depicting nude minors and minors engaged in sexually explicit conduct. Gongloff is further alleged to have misrepresented his name and age on a website known as MeetMe.com, claiming to be 17 years old and using the name “Johnny Williamson,” in order to transmit sexually explicit photographs to minor females.
HSI requests that anyone with knowledge of this man’s unsupervised contact with minors should contact the agency by calling the 24-hour HSI Tip line at 1-866-DHS-2ICE.
The public can also submit an online tip at www.ice.gov/tips/ or by downloading the Operation Predator smartphone app and submitting a tip via the app.
“What this man is charged with is one of the most heinous crimes in our society,” said Kelleghan. “HSI is committed to aggressively pursuing those who create or trade child pornography. It’s our job to protect the most vulnerable members of our society.”
Assistant U.S. Attorney Stephen Vogrin is prosecuting the case on behalf of the government. U.S. Immigration and Customs Enforcement's Homeland Security Investigations is leading the investigation with assistance from the West Virginia State Police.
A criminal complaint is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Man Charged in Prescription Fraud SchemeRead the Press Release
PHILADELPHIA - Raymond Rysheem E. Starr, 21, of Philadelphia, PA was charged today by indictment with possession of a firearm by a convicted felon and possession of oxycodone, announced United States Attorney Zane David Memeger.
According to the indictment, Starr obtained identifying information and Keystone First account information of a Medicaid beneficiary and used that information to visit a physician and obtain prescriptions for oxycodone, cyclobenzaprine and ibuprofen. Because there was no co-pay, the pharmacies sent claims for payment to Keystone First which paid the pharmacies.
If convicted, Starr faces a maximum possible sentence of 11 years in prison, three years of supervised release and a fine of up to $500,000.
The case was investigated by the United States Postal Inspection Service, United States Secret Service and Federal Bureau of Investigation, with the assistance of the Philadelphia Police Department, Springfield Township, Montgomery County Police Department, Abington Police Department and the Bensalem Police Department. It is being prosecuted by Assistant United States Attorneys K.T. Newton and Yvonne Osirim.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Owner and Executives Convicted in Medicare Referral Kickback Conspiracy at Closed Sacred Heart HospitalRead the Press Release
CHICAGO - The former owner and chief executive officer, the chief operating officer, and the chief financial officer of the now-closed Sacred Heart Hospital were convicted by a jury after a nearly two-month trial of collectively paying hundreds of thousands of dollars in illegal kickbacks in exchange for the referral of hospital patients who were insured by Medicare and Medicaid. The jury found that EDWARD J. NOVAK, 60, of Park Ridge, Sacred Heart’s owner and chief executive officer, ROY M. PAYAWAL, 66, of Burr Ridge, executive vice president and chief financial officer, and CLARENCE NAGELVOORT, 59, of Chicago, paid physicians concealed bribes and kickbacks to induce patient referrals and to increase the patient census, which, in turn, increased hospital revenue.
Sacred Heart Hospital was a 119-bed acute care facility located at 3240 West Franklin Blvd., in Chicago. The hospital closed and filed for bankruptcy in 2013, after Medicare payments were suspended in the aftermath of criminal charges that were first filed in April 2013.
All three defendants were convicted of one count of conspiring to violate the federal healthcare anti-kickback statute by offering and paying kickbacks and bribes, directly and indirectly, to physicians to induce them to refer patients to the hospital for services that would be reimbursed by Medicare and Medicaid. The charged conspiracy spanned from no later than 2001 through April 2013. The jury also convicted defendant Novak of 26 substantive counts of paying kickbacks for patient referrals, defendant Payawal of 17 substantive counts of paying kickbacks for patient referrals, and defendant Nagelvoort of 11 substantive counts of paying kickbacks for patient referrals. The jury acquitted defendant Payawal of ten substantive kickback counts and Nagelvoort of one substantive kickback count. The jury did not reach a verdict on one substantive kickback count for defendant Novak.
Defendants remain free on bond pending their sentencings, which have been scheduled for July 2015. Each count in the indictment carries a maximum penalty of five years in prison and a $250,000 fine and restitution is mandatory. The Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
Four defendants previously entered guilty pleas in the case. These defendants are: Dr. SUBIR MAITRA, 73, of Chicago; Dr. JAGDISH SHAH, 70, of Oakbrook; ANTHONY J. PUORRO, 57, formerly of Chicago, who was Sacred Heart’s chief operating officer; and NOEMI VELGARA, 64, of Chicago, who was Sacred Heart’s vice president of geriatric services and was responsible for overseeing the Golden L.I.G.H.T. medical clinics, including managing employees responsible for marketing, and recruiting and transporting patients.
Four additional physicians associated with Sacred Heart Hospital are scheduled to proceed to trial later this year.
The verdict was announced by U.S. Attorney Zachary T. Fardon for the Northern District of Illinois; Lamont Pugh III, Special Agent-in-Charge of the Chicago Region of the U.S. Department of Health and Human Service Office of Inspector General; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is being represented by Assistant U.S. Attorneys Joel Hammerman, Ryan Hedges, Kelly Greening, Diane MacArthur, Debra Bonamici, and Brian Wallach.
The case falls under the umbrella of the Medicare Fraud Strike Force, which expanded operations to Chicago in February 2011, and is part of the Health Care Fraud Prevention & Enforcement Action Team, a joint initiative announced in May 2009 between the Justice Department and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Dozens of defendants have been charged in health care fraud cases since the strike force began operating in Chicago.
To report health care fraud and to learn more about the Health Care Fraud Prevention & Enforcement Action Team, go to: stopmedicarefraud.gov.
Operator of Illegal Gambling Enterprise Pleads GuiltyRead the Press Release
CHARLOTTE, N.C. – A South Carolina man appeared before U.S. Magistrate Judge David C. Keesler today and admitted to operating an illegal gambling enterprise in Gaston County, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Lenny Steen, Jr. 65, of Spartanburg, S.C. pleaded guilty to one count of running an illegal gambling business and one count of money laundering.
In January 2015, Steen’s conspirator, Clarence Larry Calhoun, 71, of Gastonia, N.C. pleaded guilty to the same charges for his role in the illegal gambling scheme.
Ryan L. Spradlin, Acting Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas joins Acting U.S. Attorney Rose in making todays’ announcement.
According to filed court documents and court proceedings, from about 2012 to October 2014, Calhoun and Steen owned and operated an illegal video poker gambling business in Gaston County. According to court records, Calhoun provided management advice and capital, while Steen was responsible for the day-to-day operations of the business. According to court records, the gambling business, known as “Mr. Lenny’s Place,” operated out of a large warehouse in Gaston County and was open 24 hours a day, 7 days a week. Court records show that, at its height, the gambling establishment housed approximately 63 video poker machines, employed more than eight employees and generated, on an average, more than $10,000 per day.
According to court records and court proceedings, the two men split the profits in half. Court records show that Steen collected the cash and concealed it in retail bags, and personally delivered half of the profits to Calhoun. Calhoun hid the gambling profits in PVC piping, while Steen transported his share to South Carolina and directed others to store the cash, court records show. Court records also indicate that law enforcement seized more than $4 million in cash over the course of the investigation.
At sentencing, the defendants face a maximum prison term of five years and a $250,000 fine for the charge stemming from running the gambling operation, and a maximum of 20 years in prison and a $500,000 fine or twice the amount of criminally derived proceeds for the money laundering charge.Both men have been released on bond and currently await sentencing.
HSI investigated the case.Assistant U.S. Attorney Kevin Zolot, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.
Olean Man Indicted on Drug and Gun ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.–U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned a four count indictment charging Giovanni Salmonson, 23, of Olean, NY, with possession with intent to distribute heroin, possession with intent to distribute buprenorphine (suboxone), possession of a firearm in furtherance of a drug trafficking crime, and being a felon in possession of a firearm. The charges carry a mandatory minimum of five years in prison, a maximum of life, $250,000 or both.Assistant U.S. Attorney Caleb J. Petzoldt, who is handling the case, stated that according to the indictment, on January 1, 2015, during the course of an investigation, the Olean Police Department discovered the defendant to be in possession of quantities of heroin buprenorphine. In addition, Salmonson also had a .22 caliber revolver. The defendant was previously convicted on state charges which prevent him from legally possessing a firearm.
The defendant will be arraigned on March 20, 2015 at 10:15 a.m. before U.S. Magistrate Judge H. Kenneth Schroeder.
The indictment is the culmination of an investigation on the part of the Olean Police Department, under the direction of Chief and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Nigerian Woman Sentenced for Misuse of A PassportRead 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 Pamela Amaka Mmakogu, 30, a citizen of Nigeria, pleaded guilty to misuse of a passport in an attempt to gain entry into the United States before U.S. District Judge Richard J. Arcara. The defendant was also sentenced to time served (six months) in prison.Assistant U.S. Attorney Marie P. Grisanti, who handled the case, stated that on September 6, 2014, Mmakogu, a passenger on a bus at the Peace Bridge Port of Entry, presented a Canadian passport that belonged to another person.
The plea and sentencing are the result of an investigation by United States Customs and Border Protection, under the direction of Rose Hilmey, Acting Director of Field Operations.
New York Pharmacist Charged with Defrauding Medicare and Medicaid of More Than $5 Million Through Fraudulent Billing of Prescription MedicationsRead the Press Release
A twenty-four-count indictment was unsealed this morning in federal court in Brooklyn, New York, charging Andrew Barrett, a licensed pharmacist, with health care fraud, filing false claims, unlawful monetary transactions, filing false personal tax returns, and the filing of and assisting in the preparation of false corporate tax returns.1 Barrett will be arraigned at 2:00 pm today before U.S. Magistrate Judge Steven M. Gold at the U. S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Scott Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), and Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York (IRS-CI).
“As alleged in the indictment, instead of using his pharmacist license to provide valid relief to those in need, Andrew Barrett used it as a license to steal from publicly-funded health care programs and then lied about it on his tax returns,” stated United States Attorney Lynch. "Today’s indictment makes clear that this Office will hold accountable corrupt pharmacists who seek to enrich themselves at the expense of tax-payer funded programs."
“Defrauding Medicare and Medicaid is a serious crime that has consequences for the entire U.S. economy. As alleged, Barrett stole more than $5 million from Medicare and Medicaid for his own personal gain. As evidenced by today’s indictment, the FBI and its partners will vigorously pursue those who seek to steal from taxpayer-funded programs,” stated FBI Assistant Director-in-Charge Rodriguez.
“The alleged actions by Andrew Barrett diverted scarce taxpayer funds from the Medicare and Medicaid prescription drug programs just for personal enrichment,” said HHS-OIG Special Agent in Charge Lampert. “The HHS Office of Inspector General, together with our law enforcement partners, will continue to vigorously pursue those who steal from government health programs in such greed-fueled schemes.”
IRS-CI Special Agent-in-Charge Kitchen stated, “Individuals who steal from government programs often take the added risk of committing tax crimes in the process, exposing themselves to further criminal sanctions. As the federal agency responsible for investigating criminal tax violations, IRS-Criminal Investigation works with our law enforcement partners on complex financial fraud investigations, with the goals of protecting the American taxpayer and seeing that everyone pays their fair share.”
As alleged in the indictment, from January 2011 to December 2012, Barrett operated pharmacies in Bronx, Rockland, and Queens counties in New York State. From his Queens pharmacy, Barrett fraudulently billed Medicare and Medicaid more than $5 million for prescription medications that he never dispensed to patients. Barrett used more than $4 million of his ill-gotten gains to buy drugs for his pharmacies in the Bronx and Rockland counties. Barrett also siphoned off for personal expenses more than $2.5 million from the Bronx and Rockland pharmacy accounts while falsely claiming those funds as business expenses on his personal and corporate tax returns.
The government’s case is being prosecuted by Assistant United States Attorneys William P. Campos and Karin Orenstein.
This prosecution was the result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit http://www.StopFraud.gov.
The Defendant:
ANDREW BARRETT
Age: 55
New City, New York
E.D.N.Y. Docket No. 15-CR-103 (KAM)
____________________________________________________________________________
1 The charges announced today are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Modesto Man Pleads Guilty to Producing Child PornographyRead the Press Release
SACRAMENTO, Calif. — Danny M. Shatswell Jr., 44, of Modesto, pleaded guilty today to producing visual depictions of a minor engaged in sexually explicit conduct, United States Attorney Benjamin B. Wagner announced.
According to court documents, Shatswell used a webcam to produce sexually explicit images of a minor. The minor victim reported to law enforcement that Shatswell was abusing her. When they searched his electronic storage devices and equipment they recovered sexually explicit images that Shatswell produced of his victim in 2010 and 2011.
This case is the product of an investigation by the Modesto Police Department, the Federal Bureau of Investigation, and the Sacramento County Sheriff's Office’s High Tech Crimes Task Force. Assistant U.S. Attorney Michelle Rodriguez is prosecuting the case.
Shatswell is scheduled to be sentenced on June 4, 2015, by U.S. District Judge Troy L. Nunley. Shatswell faces a sentence of 15 years to life in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Midland Man Sentenced to Federal Prison for Coercion and Enticement of a MinorRead the Press Release
Midland resident Kenneth Simon Brzoznowski, age 37, will serve 29 years and 7 months in federal prison for coercion and enticement of a minor announced Acting United States Attorney Richard L. Durbin, Jr., and Homeland Security Investigations (HSI) Special Agent in Charge Waldemar Rodriguez in El Paso.
In addition to the prison term handed down today, U.S. District Judge Robert Junell ordered that Brzoznowski be placed under supervised release for a period of 10 years after completing his prison term.
On October 17, 2014, Brzoznowski pled guilty to using a cell phone to entice a minor female to engage in sexual activity. According to court records, the defendant used a phone app called “Tango” to have a sexually explicit conversation with a female minor. This app was discovered by Brzoznowski’s parole officer. Brzoznowski was previously incarcerated in 2005 for attempting to meet with a 13-year-old girl to have sex.
"Part of HSI's mandate is to protect children in our community from criminals that want to harm them," said Waldemar Rodriguez, Special Agent in Charge of HSI El Paso. "It's a part of our mission that we pursue aggressively."
This investigation was conducted by Homeland Security Investigations. Assistant United States Attorney Austin Berry prosecuted this case on behalf of the Government.
Miami Resident Sentenced for Filing False Tax Returns and Failure to File a Tax ReturnRead the Press Release
A Miami resident was sentenced to 27 months in prison, followed by one year of supervised release, and was ordered to pay restitution of $196,645 to the Internal Revenue Service.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Robert C. Erickson, Deputy Inspector General, General Services Administration Office of the Inspector General (GSA-OIG), made the announcement.
Danilo Santos, 52, previously pled guilty to three counts of filing a false federal income tax return and one count of failure to file a federal income tax return.
According to court documents, in 2009 and 2010, Santos was president and 100% shareholder of Santos Auction USA, Inc. Santos falsely represented to the public that he was associated with the General Services Administration and that he could arrange to sell government seized properties, including boats and automobiles, at bargain prices, prior to the items being offered for auction. An investigation by the General Services Administration Office of the Inspector General revealed that in 2009 and 2010, Santos defrauded a number of his clients by representing to them that he was buying government seized properties for them and then failing to deliver the properties or return the funds that Santos received from the clients. Subsequent prosecution of Santos by the State of Florida resulted in his paying court-ordered restitution to some of these clients.
Court documents state that IRS reviewed Santos’ personal and business bank accounts, interviewed individuals who paid Santos to purchase properties for them, and examined the tax returns filed by Santos. Santos filed false individual and corporate income tax returns for calendar year 2009, and filed a false individual income tax return for calendar year 2010. Santos failed to file a corporate income tax return for calendar year 2010.
Mr. Ferrer commended the outstanding investigative efforts of IRS-CI and GSA-OIG. The case was prosecuted by Assistant U.S. Attorney Robert J. Lehner.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Miami Dade College Student Convicted for Her Involvement in a Stolen Identity Tax Refund Fraud Scheme Involving Her Student Financial Services AccountRead the Press Release
After a three-day trial, a federal jury convicted Laquisha Q. Johnson, 24, of Opa Locka, Florida, for her involvement in a stolen identity tax refund fraud scheme that utilized her student Higher One financial services account. Johnson was convicted of three counts of receiving stolen government property.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and George L. Piro, Special Agent in Charge, FBI, Miami Field Office, made the announcement.
As shown at trial, Johnson was a student at Miami Dade College. During her time as a student, Johnson opened a bank account serviced by Higher One, Inc., which provides financial services to colleges and universities throughout the United States, including Miami Dade College in Florida. After opening this account, tax refunds issued to three different victim-taxpayers were direct deposited into Johnson’s account. This included a tax refund of $61,000.00, that had been issued to a victim-taxpayer with the initials E.R.L. An aggregate amount of tax refunds in the amount of $63,000.00 was deposited into Johnson’s account.
At sentencing, which is currently set for May 27, 2015 at 1:30 p.m., before U.S. District Judge Jose E. Martinez, Johnson faces a maximum term of 10 years in prison.
Mr. Ferrer commended the investigative efforts of IRS-CI and the FBI. The case is being prosecuted by Assistant U.S. Attorneys John Byrne and John Gonsoulin.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Message to Potential Tax Cheats from Federal Prosecutors: Tax Crimes Result in Criminal Prosecution, Prison Sentences and FinesRead the Press Release
CHARLOTTE, N.C. - With the deadline for filing income tax returns approaching next month, Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina, and Thomas J. Holloman, III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI), jointly announce recent tax fraud prosecutions and deliver a powerful warning to potential tax cheats.
“As tax filing season reaches its peak, would-be tax fraudsters are warned that our office will prosecute those who try to cheat the tax system,” said Acting U.S. Attorney Rose. Rose noted the importance of deterring others from committing tax crimes and stated, “Our tax system is built on voluntary compliance and tax criminals who do not pay their fair share increase the tax burden on honest taxpayers.”
“Filing a truthful, accurate tax return is a responsibility that tax preparers should take very seriously, said Thomas J. Holloman, III, Special Agent in Charge, IRS Criminal Investigation. “Let the message to unscrupulous tax return preparers be clear, that criminal activity and greed carry severe consequences. I encourage citizens to avoid being taken advantage of, by seeking out credentialed, reputable tax preparers during the current filing season, also to take the appropriate measures to safeguard their personal information, so as not to fall victim to identity theft.”
On Wednesday, March 18, 2015, Fitzroy Lawrence, a Charlotte tax return preparer, was indicted on federal charges for preparing false tax returns by making false claims for refund from the IRS. According to the indictment, for tax years 2008 through 2011, Lawrence aided and assisted in the preparation of hundreds of tax returns that were filed with the IRS, seeking fraudulent tax refunds totaling millions of dollars. Many of the fraudulent tax returns included false wages and false dependent information. Lawrence was charged with 15 counts of making false claims for refund and faces a maximum sentence of five years in prison and a $250,000 fine per count. The charges against Lawrence are allegations and he is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Prosecutions of Tax Evasion and Filing False Tax Returns
Over the last year, the U.S. Attorney’s Office has prosecuted and convicted a number of individuals for omitting income from their individual tax returns. For example, Mark Tuan Le (3:14-cr-00110), an internal medicine physician, pleaded guilty to tax evasion for hiding millions of dollars in personal income from the IRS by claiming fraudulent business expenses for funds that were used to purchase and construct a $2.4 million, 8000-square foot residence on Lake Norman in Cornelius. Plea documents indicate that Le omitted to report approximately $1.2 million of income per year for 2009 and 2010. Le, who also pleaded guilty to healthcare fraud charges, is awaiting sentencing.
During the past year, defendants have received substantial sentences for tax charges, ranging from home confinement to several years in prison. The following individuals were among the defendants sentenced for lying to the IRS about their taxable income:
- Denise Swanson (5:13-cr-00061), of Lenoir, N.C., owned and operated a tax preparation and bookkeeping business and failed to report more than $800,000 of income she received from embezzling client funds during years 2006 through 2011.
- Nghia Ly (3:13-cr-00235), of Waxhaw, N.C., and the fifty-percent owner of Kim Sen Jewelry, Inc., d.b.a. KS Nail Supply (KSJ) in Charlotte, concealed gross receipts and taxable income of over $800,000 from the IRS for 2007 through 2011.
- Kenneth Sumner (3:13-cr-00257), of Charlotte, and owner of Ken B. Sumner and Associates, a Charlotte-based sales company, failed to file timely tax returns for 2006 through 2008 with the IRS. Sumner subsequently filed a delinquent 2006 federal income tax return that omitted gross receipts from Sumner’s business totaling approx. $106,808. For tax years 2007 and 2008, Sumner failed to file timely income tax returns despite having income of approx. $318,433 and $337,090, respectively.
- Jonathan Davey (3:12-cr-00068), of Newark, Ohio, failed to report income that he received from a $21 million Ponzi scheme on his federal tax returns. Davey was also convicted of securities fraud conspiracy, wire fraud conspiracy, and money laundering conspiracy.
Prosecutions of Fraudulent Tax Return Preparers
In 2014, the U.S. Attorney’s Office also prosecuted unscrupulous tax return preparers. The following defendants are among those prosecuted federally for tax return preparer fraud:
- Nkhenge Shropshire (3:13-cr-00248), of Charlotte, and owner of Tax Connections, was sentenced to 33 months in prison following her guilty plea to conspiracy to defraud the IRS and making a false statement on a loan application. For tax years 2009 through 2011, N. Shropshire aided and assisted in the preparation of more than 600 fraudulent tax returns filed with the IRS, resulting in tax losses of more than $580,000.
- Jessica Ordonez (3:14-cr-00071), a resident of Gaston County, N.C. and owner of Tax Pros, (a/k/a Ordonez Tax Services), located in Gastonia and Morganton, pleaded guilty to preparing fraudulent tax returns falsely claiming more than $200,000 in Additional Child Tax Credits. Ordonez also pleaded guilty to filing false tax returns in her own name. Ordonez is scheduled to be sentenced on March 25, 2015.
- Malik Shropshire (3:15-cr-00025), of Charlotte, was indicted in February 2015 on multiple charges, including conspiring with others to prepare hundreds of false tax returns with the IRS that included, among other things, false Schedule C businesses, false dependents, and false refundable education credits.
Prosecutions of Stolen Identity Refund Fraud
In addition to prosecuting tax evaders and fraudulent tax return preparers, the U.S. Attorney’s Office prosecuted individuals for stealing the identities of taxpayers and filing fraudulent tax returns. Jacquline Juarez (3:13-cr-00157), was sentenced to 18 months in prison and ordered to pay restitution of more than $1 million for her role in a fraudulent tax refund scheme involving the use of fraudulent IRS Individual Taxpayer Identification Numbers (ITIN) to obtain false tax refunds.
Federal penalties for each count of conviction of tax crimes range from a maximum of one year in prison and a $100,000 fine for failure to file a tax return, false withholding exemptions, and delivering or disclosing false tax documents, to a maximum of 10 years in prison and a $250,000 fine for conspiracy to defraud with respect to false refund claims. Other penalties include a mandatory term of two years in prison and a $250,000 fine for aggravated identity theft charges, three years in prison and a $250,000 fine for obstructing or impeding an investigation and filing or preparing a false tax return, and a maximum of five years in prison and a $250,000 fine for tax evasion, failure to pay taxes, conspiracy to commit a tax offense or conspiracy to defraud.
The U.S. Attorney’s Office and the IRS remind tax payers to exercise caution during tax season to protect themselves against a wide range of tax schemes ranging from identity theft to return preparer fraud. The IRS has issued its annual “Dirty Dozen” which lists common tax scams that taxpayers may encounter, particularly during filing season. Taxpayers are urged look out for, and to avoid, the following common schemes:
- Phone Scams
- Phishing
- Identity Theft
- Return Preparer Fraud
- Offshore Tax Avoidance
- Inflated Refund Claims
- Fake Charities
- Hiding Income with Fake Documents
- Abusive Tax Shelters
- Falsifying Income to Claim Credits
- Excessive Claims for Fuel Tax Credits
- Frivolous Tax Arguments
Education is the best way to avoid these common schemes.To learn more about the Dirty Dozen scams and for help with recognizing and avoiding abusive tax schemes, the IRS offers educational material at www.irs.gov. Suspected tax fraud can be reported to the IRS using Form 3949-A found on the IRS.gov website.
Memphis Woman Pleads Guilty to Preparing Falsified Income Tax ReturnsRead the Press Release
Memphis, TN – A Memphis woman pleaded guilty this afternoon in federal court to preparing falsified federal income tax returns.
Telska Pollard, 41, of Memphis, TN pled guilty to a three-count information charging her with aiding and assisting with the preparation of false federal income tax returns.
According to the court documents, during April 2009, Pollard aided and assisted taxpayers in preparing and filing fraudulent 2008 U.S. Individual Income Tax Returns. The false returns prepared by Pollard contained certain deductions and expenses on Forms Schedule C, Profit or Loss from Business, that she knew the tax payers were not entitled to claim in order to generate a larger income tax refund.
Pollard pleaded guilty before United States District Judge S. Thomas Anderson, who is scheduled to sentence Pollard on June 25.
This case was investigated by the Internal Revenue Service – Criminal Division. The government’s case is being prosecuted by Assistant U.S. Attorney David Pritchard.
Memphis Tax Preparer Sentenced to 18 Months in Federal Prison for Filing Falsified Income Tax ReturnsRead the Press Release
Memphis, TN – The operator of Tara’s Tax Preparation Service has been sentenced to 18 months in federal prison for conspiring to defraud the Internal Revenue Service by filing false and fictitious income tax returns. There is no parole in the federal prison system.
Tara L. Mitchell, 42, of Cordova, TN was sentenced this afternoon by United States District Court Judge S. Thomas Anderson. Mitchell pled guilty on October 8, 2014 to conspiring to defraud the United States by receiving money for filing false income tax returns.
According to court documents, Mitchell owned and operated a tax return preparation business in Memphis in 2009. Mitchell prepared federal income tax returns that contained a combination of false, misleading and inaccurate statements in order to generate a larger income tax refund.
A number of the false returns prepared by Mitchell would contain two tax credits to increase the amount of income tax refund: the Earned Income Credit and the First-Time Home Buyers Tax Credit. In order to be eligible for the First-Time Home Buyers Tax Credit a tax payer had to meet certain requirements, one of them being that the home must be purchased after April 8, 2008 and before December 1, 2009. In several instances, the income tax returns prepared by Mitchell included the First-Time Home Buyers Tax Credit when the tax payer had not purchased a home during the required period.
Other false items contained in Mitchell’s prepared tax returns included Schedule C Income and Loss statements containing false information; the listing of dependents that the tax payer was not entitled to claim; false claims of Head of Household status; and false wage information.
Mitchell, who did not have an Electronic Filing Identification Number (“EFIN”) to file the income tax returns electronically, paid a fee to use the EFIN of another tax preparer.
Co-defendant Derrick M. Evans, 43, of Marion, Arkansas, who was sentenced in January 2015, would recruit tax payers for Mitchell, and on two separate occasions provided identity information that was used by Mitchell to prepare false income tax returns.
Once the tax return was completed and filed by Mitchell, a check for a Refund Anticipation Loan would be printed. Evans would then transport the tax payer to Memphis to sign the Refund Anticipation Loan check and Mitchell would pay that individual a portion of the proceeds in cash and deposit the remainder of the tax refund in a bank account she controlled.
Mitchell prepared approximately 13 false tax returns for the 2009 tax year. The IRS has determined that the tax loss attributable to the 2009 tax returns totals nearly $113,227, which Mitchell was ordered to repay as restitution to the IRS.
In addition to the prison sentence, U.S. District Judge S. Thomas Anderson order Mitchell to serve three years of supervised release and barred her from participating in the business of preparing tax returns while she is serving her sentence.
This case was investigated by the Internal Revenue Service – Criminal Division. The government’s case was prosecuted by Assistant U.S. Attorney Joseph Murphy, Jr.
Member of Las Cruces-Based Prescription Drug Trafficking Ring Sentenced to Federal PrisonRead the Press Release
ALBUQUERQUE – Kyle Mendenhall, 21, of Las Cruces, N.M., was sentenced today in Las Cruces federal court to 18 months in prison followed by three years of supervised release for his prescription drug trafficking conviction.
Michael Garret Schavier, 31, Juan Rubalcava, 41, Michael Frye, 26, Shane Smolik, 27, Carlos Teran, 31, and Kristopher Hollingshead, 25, all of Las Cruces, N.M., were charged in a 14-count indictment that was filed by a federal grand jury in Las Cruces on Dec. 13, 2012. The indictment alleged that between Dec. 2011 and May 2012, the defendants conspired illegally to distribute Oxycodone and Adderall Doña Ana County, N.M. The indictment also charged members of the conspiracy with possession of Oxycodone and Adderall with intent to distribute.
According to the indictment, the defendants used fraudulent prescriptions to obtain Oxycodone, a painkiller, and Adderall, a stimulant, from pharmacies in Las Cruces and Alamogordo, N.M. The indictment alleged that, during a six-month period, the defendants fraudulently obtained an aggregate of 2,691 pills of Oxycodone (30 mg), 120 pills of Oxycodone (15 mg), and 390 pills of Adderall (30 mg), with the intention of unlawfully distributing the pills.
Mendenhall pled guilty on Dec. 27, 2013, to one count of conspiracy, one count of distributing Oxycodone and three counts of distributing Oxycodone and Adderall. He admitted that between May 3 and May 17, 2012, he obtained a total of 1,131 tablets of Oxycodone and 210 tablets of Adderall by passing fraudulent prescriptions at various pharmacies, often with the assistance of his codefendants Schavier and Rubalcava.
All eight defendants have entered guilty pleas:
- Rubalcava pled guilty on April 18, 2013, and was sentenced on Feb. 11, 2014, to 120 months in prison.
- Frye pled guilty on Jan. 22, 2014, and was sentenced on Aug. 25, 2014, to 12 months in prison.
- Smolik pled guilty on April 11, 2013, and was sentenced on Oct. 9, 2013, to 15 months in prison.
- Hollingshead pled guilty on April 18, 2013, and was sentenced on Sept. 23, 2013, to eight months in prison.
- Schavier pled guilty on Feb. 11, 2014, and Teran pled guilty on Feb. 3, 2014. Both are awaiting sentencing hearings, which have yet to be scheduled.
This case was investigated by the Tactical Diversion Squad of the El Paso Division of the DEA, the U.S. Marshals Service, U.S. Border Patrol, the Doña Ana County Sheriff’s Office and the Alamogordo Department of Public Safety. Assistant U.S. Attorney Amanda Gould of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case.
DEA’s Tactical Diversion Squads combine DEA resources with those of federal, state and local law enforcement agencies in an innovative effort to investigate, disrupt and dismantle those suspected of violating the Controlled Substances Act or other appropriate federal, state or local statutes pertaining to the diversion of licit pharmaceutical controlled substances or listed chemicals.
This case is being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaboration between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Marrero Woman Pleads Guilty to Theft of Hurricane Gustav Recovery FundsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that CAROLYN TREAUDO, age 54, of Marrero, pled guilty yesterday to theft of government funds. TREAUDO admitted to stealing approximately $94,840 from the Federal Emergency Management Agency during 2009 and 2010. The funds were administered by the Louisiana Governor’s Office of Homeland Security and Emergency Preparedness under a program to return disaster-affected locations, including schools, to pre-disaster conditions by reimbursing expenses and paying replacement costs.
According to court documents, TREAUDO obtained the funds by making false representations in connection with a property associated with her non-profit organization, Conquering Word Christian Academy. TREAUDO represented that the location was a school prior to Hurricane Gustav, when, as she well knew, the location had not been registered as a school with the state prior to this disaster. TREAUDO also intentionally and repeatedly submitted claims for reimbursement of fictitious expenditures and for replacement of fictitious supplies. TREAUDO bolstered these claims with false invoices to make it appear as if she had spent funds on repairs and supplies when, as she well knew, these expenditures had not occurred.
TREAUDO faces up to ten years’ incarceration and a fine of up to $250,000. U.S. District Judge Kurt D. Engelhardt set sentencing for June 24, 2015.
U.S. Attorney Polite praised the work of the Department of Homeland Security - Office of Inspector General in investigating this matter and thanked the Louisiana Legislative Auditor for its assistance. Assistant U.S. Attorney Chandra Menon is in charge of this prosecution.