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Monday 2 February 2015
Meth Cook Sentenced to 24 Years on Drug and Weapons ChargesRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that Simon Douglas Smith, 35, formerly of Sturgis, Michigan, was sentenced today in federal court to 24 years in prison.
Smith pled guilty in 2013 to manufacturing methamphetamine and possession of firearms by a convicted felon. He was arrested by Anchorage Police Department officers in May 2010, when several firearms and a “one pot” meth lab were found in his car. He was arrested a month later, in June 2010, by Alaska State Troopers, who discovered another one-pot meth lab and another gun. Investigators learned that Smith’s girlfriend, Nichole M. Millsaps, 26, had disappeared just before the first arrest. Smith was indicted on federal meth manufacture and weapons charges in December 2010, and was subsequently charged by the State of Alaska with the murder of Nichole Millsaps.
United States District Court Judge Timothy M. Burgess found that Smith was responsible for manufacturing “substantially more than 50 grams” of actual methamphetamine between July 2009, when he arrived in Alaska, and June 2010. Evidence presented at a December 2014 hearing established that Smith used numerous individuals to purchase cold medicine on his behalf to avoid limits and reporting requirements imposed by state and federal law. Judge Burgess found that Smith was a manager and supervisor of a criminal organization that involved five or more persons and was otherwise extensive, and that he engaged in drug dealing as a livelihood.
Judge Burgess described Smith as the “Johnny Appleseed” of the one-pot meth lab in Alaska, not only cooking meth for his own use but also teaching others how to cook, even after he was in jail. The judge described the impact as “exponential” and pointed to numerous lives destroyed by Smith’s actions. Smith has “the opposite of the Midas touch,” since everyone he touched was harmed. Judge Burgess commented that Smith “blazed a trail filled with misery, tragedy, and ruin.”
Smith was scheduled for sentencing on February 7, 2014, but requested a postponement. The following day, February 8, 2014, Nichole Millsaps’ remains were found in the area of Indian, Alaska, near where she and Smith had been camping in May 2010. Millsaps was shot once in the right rear of the head. A .32 derringer was found buried at the base of a tree approximately 30 feet from where Millsaps’ remains were discovered.
Smith still faces murder charges in the Superior Court of the State of Alaska. Under state law he could be sentenced to up to 99 years for first or second degree murder. Judge Burgess declined to consider the death of Ms. Millsaps when he imposed sentence, noting that there was a separate state process for the murder charge pending in State court. Judge Burgess did describe Smith as extremely dangerous and stated that the community needed protection from him for a very long time.
This case was investigated by the Alaska State Troopers; the Alaska Bureau of Investigation; the Mat-Su Drug Unit; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and the Anchorage Police Department.
Mechanicsville Drug Trafficker Sentenced to 10 Years in PrisonRead the Press Release
Greenbelt, Maryland – U.S. District Judge Deborah K. Chasanow sentenced Tyrone Darnell Butler, a/k/a “Tye,” and “Bone,” age 44, of Mechanicsville, Maryland today to 10 years in prison: eight years in prison followed by four years of supervised release for conspiring to distribute and possession with intent to distribute cocaine base; and an additional two years in prison for violating his supervised release for a previous federal drug conviction.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; and St. Mary’s County Sheriff Tim Cameron.
According to a statement of facts to which Butler agreed in court, on four separate occasions from July to September 2010, Butler sold, or arranged with a co-conspirator to sell, a total of 36.8 grams of crack cocaine to a confidential source.
Previously on February 13, 2002, Butler was sentenced in federal court in Maryland to 70 months imprisonment followed by five years of supervised release for conspiracy to distribute and possess with intent to distribute 500 grams or more of cocaine. Butler’s period of supervised release
was scheduled to expire on March 15, 2011. On January 29, 2010, Butler engaged in conduct which resulted in a guilty plea in the Circuit Court for St. Mary’s County to negligent manslaughter, possession of controlled dangerous substances, attempting to elude police by failing to stop, and attempting to elude police in an official police vehicle. Accordingly, Butler violated his terms of federal supervised release.
United States Attorney Rod J. Rosenstein praised the DEA and St. Mary’s County Sheriff’s Office for their work in the investigation and thanked Assistant U.S. Attorney Leah Jo Bressack, who prosecuted the case.
Mastermind of Equity Skimming Scheme Convicted at TrialRead the Press Release
Tampa, FL – United States Attorney A. Lee Bentley, III announces that a federal jury has found Stephen Mayer (51, Miami) guilty of conspiracy to commit wire fraud affecting a financial institution and nine counts of wire fraud affecting a financial institution. He faces up to 30 years in federal prison on each count. His sentencing hearing is scheduled for May 5, 2015. Mayer was indicted on May 13, 2014.
According to evidence presented at trial, Mayer used a variety of shell companies that he controlled to purchase distressed properties. He then flipped the properties the same day or within days to “credit partners” for an increased price, and kept the proceeds. These “credit partners” were recruited by Mayer because they had good credit and were willing to sign documents. The partners never intended to live in the properties or make any mortgage payments. In exchange for helping him get the mortgages, Mayer would pay the down payment and mortgage, and pay the “credit partners” a commission from his proceeds.
Mayer also facilitated the securing of mortgages, many from FDIC-insured lenders, based on false information about the borrowers’ income, employment, and assets. Mayer instructed the “credit partners” to deed the properties back to him and/or companies under his control so that he could flip them again to other “credit partners” at increased prices, thereby skimming the equity. Mayer failed to make mortgage payments as promised, and each of the properties ultimately went into foreclosure. He used the proceeds from his real estate flipping scheme to fund a lavish personal lifestyle. Agents identified more than 20 homes used by Mayer in this flipping conspiracy and estimate losses to the lenders in excess of $3 million.
This case was investigated by the Florida Department of Law Enforcement and the United States Secret Service. It is being prosecuted by Assistant United States Attorneys Kelley Howard-Allen and Mandy Riedel.
Justice Department Warns Employers Not to Discriminate Against Salvadoran Workers with Temporary Protected Status in Newly-Released VideoRead the Press Release
The Justice Department announced today the launch of an educational video reminding employers that Salvadorans with Temporary Protected Status (TPS) may continue working beyond the March 9, 2015, expiration date of their employment authorization documents. The Justice Department also cautions employers that requesting additional work-authorization documents from these workers may violate anti-discrimination law.
Released by the Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC), the video explains that the Department of Homeland Security automatically extended the validity of employment authorization documents for Salvadorans with TPS for an additional six months. Requesting additional work-authorization documents from these employees may violate the anti-discrimination provision of the Immigration and Nationality Act. This provision prohibits employers from making additional and unauthorized documentary demands because of an employee’s citizenship status, immigration status or national origin when verifying or re-verifying an employee’s employment eligibility.
The newly released video may be viewed at https://www.youtube.com/watch?v=9B3RKCX6dkM.
“We hope this video will prevent discrimination against work-authorized immigrants and help employers across the country understand employment eligibility verification rules,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “Federal law prohibits discrimination in the employment eligibility verification process, and the Justice Department is committed to enforcing the law.”
TPS is a temporary immigration benefit that allows qualified individuals from designated countries who are in the United States to stay and work for a limited period of time. A foreign country is designated for TPS due to conditions in the country that temporarily prevent the country’s nationals from returning safely, such as on-going armed conflict, environmental disasters or other extraordinary and temporary conditions in the designated country. Individuals with TPS can obtain employment authorization documents to work legally in the United States. The Department of Homeland Security has automatically extended employment authorization documents for individuals with TPS from El Salvador until Sept. 9, 2015.
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) within the Justice Department is responsible for enforcing the anti-discrimination provision of the Immigration and Nationality Act. Among other things, the statute prohibits citizenship status and national origin discrimination in hiring, firing, and recruitment or referral for a fee; unfair documentary practices; retaliation; and intimidation.
For more information about protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired), call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired), sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php, email [email protected] or visit OSC’s website at www.justice.gov/crt/about/osc.
Irving, Texas Man Guilty in Identity Theft RingRead the Press Release
Department of Justice
Office of Public AffairsSHERMAN, Texas – A 39-year-old Irving, Texas man has pleaded guilty for his role in an identity theft ring operating in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Jose Otero, also known as Jorge Osorio Morales, pleaded guilty to conspiracy to submit false statements to the U.S. Postal Service on Jan. 30, 2015, before U.S. District Judge Amos L. Mazzant, III.
According to information presented in court, Otero admitted that he used a false North Carolina driver’s license bearing his photograph but bearing the name of someone else to obtain private mail boxes in Irving, Plano, and Carrollton, Texas.
A federal indictment was returned on Mar. 15, 2012 against a number of conspirators in the scheme. At this time, six others have been sentenced to federal prison for their roles. Luigi Montes, 34, of Houston was sentenced to 60 months in federal prison on June 28, 2013 for conspiracy to submit false statements to the U.S. Postal Service and false claims to the Internal Revenue Service (IRS). Montes was also ordered to pay restitution in the amount of $50,381 to the IRS. Lupe Mendoza, 33, of Houston, was sentenced to 15 months in federal prison on Apr. 15, 2013 for conspiracy to make a false statement to the U.S. Postal Service and ordered to pay restitution to the IRS in the amount of $31,270. Tania Estafania Aguilar Gomez, 27, of Dallas, was sentenced to 10 months in federal prison on Feb. 15, 2013 and ordered to pay restitution of $22,268 to the IRS. Rosalba Gomez, 48, of Dallas, was sentenced to five months in federal prison on Feb. 15, 2013. David Gomez, 23, of Omaha, Nebraska, was sentenced to 16 months in federal prison on Nov. 29, 2012. Joana Gomez, 52, of Balch Springs, Texas, was sentenced to five months in federal prison on Aug. 21, 2012.
Otero faces up to five years in federal prison at sentencing. A sentencing date has not been set.
This case was investigated by the U.S. Postal Inspection Service and IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney J. Andrew Williams
Husband and Wife Convicted in Multi-Million Dollar Healthcare Fraud SchemeRead the Press Release
HOUSTON – William Owuama, 55, and Marla Owuama, 47, of Houston, have entered guilty pleas to charges related to a healthcare fraud scheme in which they billed Medicare for more than $9 million, announced U.S. Attorney Kenneth Magidson.
William Owuama was the owner of Wilmar Healthcare Systems and his wife was a registered nurse who helped run the clinic. William Owuama violated the anti-kickback statute by paying Medicare beneficiaries for visiting the clinic. He also billed Medicare and Medicaid for vestibular testing that was never performed and billed under the provider number of a local doctor while that doctor was incarcerated on unrelated charges. From January 2006 through October 2009, Medicare and Medicaid paid Wilmar Owuama more than $4 million based on the fraudulent claims.William Owuama pleaded guilty to conspiracy to commit healthcare fraud and violate the anti-kickback statute. He faces up to five years in prison and a possible $250,000 fine. Marla Owuama was convicted of misprision of a felony for helping to conceal the crime and faces up to three years in prison and the same fine. The couple has agreed to pay restitution to Medicare and Medicaid as a part of their plea agreements.
They are set for sentencing April 21, 2015, before U.S. District Judge Nancy F. Atlas.
The investigation leading to the charges in this case was conducted by the U.S. Department of Health and Human Services – Office of Inspector General, FBI and the Texas Attorney General’s Office Medicaid Fraud Control Unit. Assistant U.S. Attorneys Andrew Leuchtmann, John Pearson and Adrienne Frazior prosecuted the case.
Huntington man sentenced on cocaine chargesRead the Press Release
Huntington, W.Va. – United States Attorney Booth Goodwin announced today George Antonio Newman, 37, of Huntington, West Virginia, was sentenced to 51 months in federal prison.
In May 2014, Newman pleaded guilty to possession of cocaine with intent to distribute. On April 15, 2013, members of the Drug Enforcement Agency found one ounce of cocaine while searching Newman’s residence in the 1300 block of 18th Street in Huntington. Newman admitted he intended to distribute the cocaine. Agents also seized a loaded handgun found with the cocaine.
Chief United States District Judge Robert C. Chambers imposed the sentence.
The case was investigated by the Drug Enforcement Agency and Huntington Police Department. Assistant United States Attorney Greg McVey was in charge of the prosecution.
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Huntington man gets nine years for heroin, cocaine chargesRead the Press Release
HUNTINGTON, W.Va. – United States Attorney Booth Goodwin announced today that Dwight McVernon Green, 24, of Huntington, West Virginia, was sentenced to nine years in federal prison.
In October 2014, Green pleaded guilty to possession of heroin and cocaine for resale. On July 10, 2014, Green was stopped by a Huntington Police Department officer for speeding, and was ultimately arrested for driving under the influence of alcohol.
During a subsequent search of the vehicle, a loaded pistol with a chambered round, nearly $60,000 and a box of clear plastic baggies were found. In the trunk were two plastic bags containing around 104 grams of cocaine and around 50 grams of heroin.
Green was sentenced to 87 months for the drug charge, with an additional 21 months for violation of supervised release, which he was on when he committed the July 2014 offense. The sentences will run consecutively.
Chief United States District Judge Robert C. Chambers imposed the sentence.
The case was investigated by the Huntington Violent Crimes and Drug Task Force. Assistant United States Attorney Greg McVey was in charge of the prosecution.
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Huntington felon sentenced for firearm possessionRead the Press Release
HUNTINGTON, W.Va. – United States Attorney Booth Goodwin announced today that Robert Gene Small, 54, of Huntington, West Virginia, was sentenced to 32 months in federal prison.
In September 2014, Small pleaded guilty to being a felon in possession of a firearm. On Aug. 4, 2013, members of the Huntington Police Department responded to a shots fired call at Marcum Terrace in Huntington. Once there, the officers learned that Small and a female were both armed, and had left the area in a vehicle. When the HPD later stopped the vehicle, an officer saw a rifle lying in the back seat. A further search uncovered another rifle, and a loaded revolver.
Chief United States District Judge Robert C. Chambers imposed the sentence.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Greg McVey was in charge of the prosecution.
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Houston Rapper Heads to Prison for Sex Trafficking of A MinorRead the Press Release
HOUSTON – Jeremy Jacobi Scott aka “J Moe,” 30, of Houston, has been ordered to prison for 10 years following his conviction of conspiracy to commit sex trafficking of a minor, announced U.S. Attorney Kenneth Magidson. Scott pleaded guilty June 23, 2014.
Today, U.S. District Judge Kenneth M. Hoyt took into consideration the facts and circumstances surrounding the exploitation of the minor victim and handed Scott a sentence of 120 months in federal prison. Additional information was also presented today, including Scott’s criminal history which includes prior acts of violence against women and other offenses. In handing down the sentence, Judge Hoyt stated that the crime Scott committed was a very serious offense and that it was time for him to take responsibility for his life, move forward and find a way to support his children upon his release from prison. Judge Hoyt told Scott that his life was no longer about his failed dreams but rather about helping his children fulfill their own dreams. Scott was further ordered to serve five years of supervised release following completion of his prison term, during which time he will have to comply to comply with numerous requirements designed to restrict his access to children. He will also be ordered to register as a sex offender.
At the time of his plea, Scott admitted that beginning in February 2011, he attempted to gain the trust of a 14-year-old female. He had reached out to her via MySpace and began picking her up from her residence and her school and driving her around town and to a music studio where Scott recorded rap songs. He also gave her marijuana.
On one occasion, the female had asked Scott to take her home. He refused and took her cellphone. Soon after, he taught her how to prostitute, photographed her and used those photos to place advertisements for her services on a website known for the advertisement of prostitution services. During that time, the victim witnessed Scott beating another girl recruited to work for him. Scott kept all the monies the victim earned.
She was rescued after approximately a month following an undercover operation.
The lyrics of some of Scott’s songs glorify prostitution and “pimping” and were consistent with terms used by persons who exploit women and minors for commercial sex. He has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation was conducted by the Houston FBI Innocence Lost Task Force, which includes such agencies as the Houston Police Department. The case is being prosecuted by Assistant United States Attorney Sherri L. Zack.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Glen Allen Woman Pleads Guilty to Making a False StatementRead the Press Release
RICHMOND, Va. – Heather Elizabeth Coffman, 29, of Glen Allen, Virginia, pleaded guilty today to the charge of making a false statement involving international terrorism.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement after the plea was accepted by United States District Judge John A. Gibney, Jr.
Coffman pleaded guilty to a one-count criminal information and will be sentenced on May 11, 2015.
In a statement of facts filed with the plea agreement, Coffman admitted that beginning prior to June 2014 and continuing up through November 2014, she used several Facebook accounts under different names showing her support for the ISIS cause. These accounts also revealed the defendant’s romantic involvement with an individual referred to as “N.A.,” a foreign national living outside of the United States. In the months leading up to September 2014, Coffman and N.A. conversed almost daily via Facebook and other communications platforms. During their conversations, Coffman and N.A. explored options for N.A. to travel to Syria in order to fight for ISIS and die a “Shaheed,” referring to a martyr who dies for “jihad.”
According to the plea agreement filed today, Coffman admitted that she lied on November 13, 2014, when she told FBI agents that she had no idea when asked whether an individual referred to as N.A. had talked to anybody else who supported ISIS, and that she did not know anybody he talked to when, as Coffman well knew, she had previously put N.A. in contact with ISIS fighters and N.A., in turn, had communicated with them to facilitate N.A.’s travel to Turkey to join ISIS.
This case was investigated by FBI’s Richmond Field Office and the Richmond Joint Terrorism Task Force (JTTF). The JTTF is a collection of state, federal and local law enforcement agencies, dedicated to the mission of proactively keeping communities safe by thwarting national security and terrorism issues before they become a reality. Member agencies of the Richmond JTTF who assisted in this particular investigation include Virginia State Police, Henrico County Police, Chesterfield County Police, Richmond Police, Homeland Security Investigations, United States Secret Service, Bureau of Alcohol Tobacco and Firearms and Explosives, Department of State Diplomatic Security Service, Transportation Security Administration and Defense Criminal Investigative Service.Assistant U.S. Attorneys Michael Gill and Jessica Aber are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15-cr-016.
Former Queens District Leader and City Council Candidate Sentenced in Manhattan Federal Court to 18 Months in Prison for Obstruction of JusticeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that attorney ALBERT BALDEO, a former Queens District Leader, was sentenced today in federal court to 18 months in prison for tampering with witnesses during the Federal Bureau of Investigation’s (“FBI”) investigation of alleged campaign fraud by BALDEO. Sentence was imposed by U.S. District Judge Paul A. Crotty. BALDEO was convicted of six counts of obstruction of justice and one count of conspiracy to obstruct justice in Manhattan federal court on August 11, 2014, after a two-week trial.
U.S. Attorney Bharara stated: “Albert Baldeo tried through intimidation and harassment to obstruct the government’s investigation of his alleged fraudulent campaign practices. The obstruction of justice by a political official has no place in our politics, but it shows how officials who see fit to hold themselves above the rules will inevitably see fit to hold themselves above the law, and finish not fit to hold office. This has been all too common in New York City and New York State. Today’s sentence is a fitting punishment for Baldeo’s crimes, and a reminder that this Office and its law enforcement partners will continue to vigorously investigate and prosecute political corruption.”
According to the Complaint, Indictment, and Superseding Indictment and evidence presented at trial and during the sentencing proceeding:
In the fall of 2010, BALDEO, then a Queens District Leader of a political party and an attorney, participated in a scheme to defraud New York City that involved the funneling of multiple illegal campaign contributions to his ultimately unsuccessful campaign for City Council. On various occasions, BALDEO, and in at least one instance one of BALDEO’s employees, provided money orders or cash to individuals to contribute to the campaign in their own names, even though BALDEO supplied the funds and these individuals did not contribute any of their own money or reimburse him for these donations.
As part of this scheme, BALDEO gave each such donor, commonly referred to as a “straw donor,” a campaign contribution card in which he or she wrote his or her name, address, employment information, and the amount of money purportedly donated to the BALDEO campaign. BALDEO instructed the straw donors to sign the contribution cards falsely affirming that the contribution was being made from their personal funds and was not being reimbursed in any manner. The New York City Campaign Finance Board (“CFB”) relied upon the information contained in these fraudulent contribution forms, among other things, in order to determine whether to release public matching campaign funds to BALDEO’s 2010 campaign. Moreover, as part of this scheme, BALDEO instructed several of these straw donors to sign affidavits, at least one of which was actually provided to the CFB in connection with BALDEO’s efforts to obtain matching funds, and which also falsely asserted that these straw donors’ contributions were made using their own funds.
After learning of the FBI’s investigation of this matter, BALDEO obstructed the investigation by repeatedly instructing certain straw donors to provide false information to, or not cooperate with, the FBI agents who were investigating contributions to his campaign.
Moreover, in response to BALDEO learning that one straw donor was going to refuse to lie as instructed by BALDEO: (1) a threatening letter was faxed from BALDEO’s office to the office of this straw donor’s attorney; (2) a co-conspirator of BALDEO not charged in this matter made false allegations to the New York City Administration for Children’s Services that this straw donor was abusing his grandchild; and (3) BALDEO and the same co-conspirator made at least one complaint each to the New York City Department of Buildings about properties owned by this straw donor or his wife.
BALDEO, 54, of Richmond Hill, New York, was convicted after trial of one count of conspiracy to obstruct justice, and six counts of obstruction of justice, each relating to a separate instance of witness tampering. He was found not guilty of three fraud-related counts. In addition to his prison term, BALDEO was sentenced to two years of supervised release, including three months on home confinement. He was also ordered to pay a $15,000 fine.
Mr. Bharara praised the investigative work of the FBI and expressed his appreciation for the assistance of the New York City Campaign Finance Board, the New York City Administration for Children’s Services, and the New York City Department of Buildings in the investigation and prosecution of this matter.
This case is being prosecuted by the Office’s Public Corruption Unit. Assistant United States Attorneys Daniel C. Richenthal and Martin S. Bell are in charge of the prosecution.
Former North Miami Mayor’s Co-Defendant Sentenced in Multi-Million Dollar Mortgage Fraud SchemeRead the Press Release
Miramar resident and mortgage lender was sentenced today to 100 months imprisonment, to be followed by five years of supervised release, and ordered to pay $8,215,197.28 in restitution for his recruitment of straw buyers and other conduct in an $8,000,000 mortgage fraud scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Drew J. Breakspear, Commissioner, Florida Office of Financial Regulation, made the announcement.
Karl Oreste, 56, pled guilty in July 2014 to one count of conspiracy to commit wire fraud affecting a financial institution. According to documents filed with the court and statements made in court during the plea, Oreste, president of KMC Mortgage Corporation of Florida, a mortgage lending business located in North Miami Beach, along with co-defendants, Okechukwu Josiah Odunna, a/k/a “O.J. Odunna,” Marie Lucie Tondreau, a/k/a “Lucie Tondreau”, and Kelly Augustin, operated a multi-million dollar mortgage fraud scheme in Miami-Dade and Broward Counties, between December 2005 and May 2008. Oreste and Tondreau, who at the time was a community activist, hosted several radio show programs in the South Florida area which catered to the South Florida Haitian community. During these programs they advertised the services offered by KMC Mortgage. Oreste and Tondreau recruited and paid some of the listeners who responded to those advertisements, as well as other individuals, to pose as borrowers to purchase properties identified by Oreste. Augustin, an employee of KMC Mortgage, also recruited straw borrowers.
According to statements made in court, Oreste, Odunna and other co-conspirators prepared or caused to be prepared applications on behalf of straw borrowers. Odunna was an attorney previously licensed to practice law in Florida and president of O.J. Odunna, P.A. and Direct Title and Escrow Services. These loan applications included false information relating to employment, wages, assets and intent to make the property being purchased a primary residence. The loan applications and documents were submitted by co-conspirators to various mortgage lenders throughout the United States. Once the loan applications were approved, the defendant wired loan funds to O.J. Odunna, P.A., Direct Title or other title companies for closing.
In some instances Oreste, Odunna and other co-conspirators created and submitted duplicate HUD-Settlement Statement Forms, which grossly inflated the true purchase price of the properties. Lenders were not told how the loan proceeds were being disbursed.
At closing, a portion of loan proceeds were disbursed to Oreste through his company, JR Investment and Mortgage Corporation, or other bank accounts controlled by him. A portion was in some instances diverted to accounts controlled by O.J. Odunna, P.A. and Direct Title. Oreste disbursed some of the proceeds that he received to pay recruiters, such as Tondreau and Augustin, and straw borrowers. Oreste also transferred a substantial portion of the funds to the bank account of LTO Investment Corporation’s, a company controlled by Tondreau. Tondreau used funds deposited in LTO Investment Corporation’s bank accounts to make payments on the falsely and fraudulently obtained mortgages in order to maintain the loans, and to conceal and further the fraud. She also used a portion of the funds deposited into LTO Investment Corporation’s bank accounts for her own personal use and benefit.
Over the course of the conspiracy, the defendants fraudulently obtained loans on approximately 20 properties, for which the lenders have suffered losses in the amount of approximately $8.2 million.
Mr. Ferrer commended the investigative efforts of the FBI and Florida’s Office of Financial Regulation. The case was prosecuted by Assistant U.S. Attorney Lois Foster-Steers.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Non-Profit Health Clinics CEO Arrested on 112-Count IndictmentRead the Press Release
BIRMINGHAM – Federal agents this morning arrested JONATHAN WADE DUNNING, former chief executive officer of two non-profit health clinics for the poor and homeless, based on a 112-count superseding indictment returned by a federal grand jury last week, announced U.S. Attorney Joyce White Vance, Federal Bureau of Investigation Special Agent in Charge Roger C. Stanton, Internal Revenue Service-Criminal Investigation Division Special Agent in Charge Veronica Hyman-Pillot, and U.S. Department of Health and Human Services, Office of Inspector General, Atlanta Regional Office Special Agent in Charge Derrick L. Jackson
The superseding indictment against Dunning, 51, of Hoover, was unsealed this morning following his arrest at a resort hotel in Hoover. The indictment includes charges of a seven-year conspiracy, wire fraud, bank fraud and money laundering related to Dunning’s involvement with Birmingham Health Care (BHC), Central Alabama Comprehensive Health (CACH), Birmingham Financial Federal Credit Union (BFFCU), and a group of for-profit businesses known as the “Synergy Entities.” Over the years, according to the charges, BHC and CACH received millions of dollars in federal grant funds through the Health Resources & Services Administration (HRSA) to further their missions of providing healthcare services to underserved populations.
According to the superseding indictment, Dunning was the CEO of BHC and CACH for a period of time and left those jobs to run his for-profit businesses. Even after leaving as CEO, however, Dunning continued to exercise control over BHC and CACH, according to the Superseding Indictment. It is further alleged that Dunning served as president, board chairman, and/or loan officer at BFFCU during a period between October 2008 and October 2011.
The superseding indictment charges that, from these various positions, Dunning participated in a conspiracy and executed schemes to defraud that deprived BHC, CACH, and others of substantial resources, including federal funds. The indictment further alleges that Dunning engaged in money laundering. The indictment seeks forfeiture of all proceedings of the alleged crimes.
"Criminals don't get to live lavish lifestyles by stealing federal money meant to provide healthcare to the poor and the homeless," Vance said. "My office will vigorously prosecute health care fraud; working to ensure that these funds go to the people they are intended to help, and to see that criminals go to jail.”
“The allegations against Mr. Dunning are disturbing, and yet another shocking example of abusing the public’s trust," Stanton said. "There is simply no acceptable level of corruption and the FBI and our partners will continue to bring to justice those who choose to line their pockets with stolen tax dollars.”“Jonathan Dunning is charged with defrauding agencies that received government funding," Hyman-Pillot said. "He is accused of misusing his authority and laundering money to businesses he controlled. He orchestrated a scheme fueled by greed and deceit that ultimately affects all taxpayers,” she said. “IRS Criminal Investigation specializes in complex financial investigations and we take pride in exposing money laundering schemes where individuals attempt to conceal the nature of their proceeds. Anyone who facilitates or participates in such schemes will be investigated and brought to justice.”
"The indictment and arrest of Mr. Dunning display our agency's commitment to ensuring that individuals who are accused of defrauding government programs intended for our nation's most vulnerable citizens answer for their actions," Jackson said. "To divert money from these programs to one's own personal use must come with serious consequences."
FBI, IRS-CID, and HHS-OIG investigated the case, which Assistant U.S. Attorneys Tamarra Matthews-Jonson and Melissa K. Atwood are prosecuting.
The public is reminded that an indictment contains only charges. A defendant is presumed innocent unless and until proven guilty in court.
Former Mamaroneck Teacher Arrested for ReceivingAnd Possessing Child PornographyRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today the arrest of LYLE KAMLET for possession and receipt of child pornography. KAMLET, a former teacher at a school in Mamaroneck, New York, was arrested on Friday, January 30th by USPIS agents, and presented in White Plains federal court before United States Magistrate Judge Lisa Margaret Smith.
According to the allegations in the criminal Complaint unsealed on Friday in White Plains federal court:
From 2008 through 2010, on a number of occasions, KAMLET ordered child pornography videos – some of which he directed to be mailed to the school where he was then employed. During a search of his residence, law enforcement seized those videos and also found home movies that he had created that contained images of naked children.
KAMLET, 62, of Mount Vernon, New York, is charged with one count of receiving child pornography, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison, and one count of possessing child pornography, which carries a maximum sentence of 10 years in prison. Both counts also carry a maximum fine of $250,000 or twice the gross gain or loss from the offense. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the United States Postal Inspection Service. He requests that individuals with relevant information about KAMLET contact the U.S. Postal Inspection Service at 877-876-2455, and reference case # 1972872.
The prosecution is being overseen by the Office’s White Plains Unit. Assistant United States Attorney John P. Collins, Jr., is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Lyle Kamlet Complaint
Former Fairfield Community High School Cross Country Team Coach Sentenced to Twenty Years in Federal PrisonRead the Press Release
Sentence Resulted from Convictions for Attempted Sexual Exploitation of Minors and Possession of Visual Depictions of Minors Engaged in Sexually Explicit Conduct
Follow @SDILNewsStephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on February 2, 2015, Timothy C. Going, 44, formerly of Fairfield, IL, where he worked as the coach for the cross country team, the assistant coach for the track team, and a math teacher at Fairfield Community High School, was sentenced on four-count Indictment, charging him with three counts of Attempted Sexual Exploitation of Minors (Counts 1-3) and one count of Possession of Visual Depictions of Minors Engaged in Sexually Explicit Conduct (Count 4). On Counts 1-3 of the Indictment, Going was sentenced to 240 months in federal prison, to be followed by 15 years of supervised release, all to run concurrently. On Count 4, Going was sentenced to 120 months in federal prison, to be followed by 15 years of supervised release, to run concurrently to Counts 1-3. The Court also ordered Going to pay a fine of $200 on each count, for a total fine of $800, and a $400 special assessment. Going has been held without bond since his arraignment on a Criminal Complaint on July 21, 2014.
“So many of the aspects of this case are simply disgusting, but the most reprehensible is the complete and utter disregard for the trust that the schools and the parents had placed in Going. Hopefully this long sentence will send a powerful message to those who might want to take advantage of a position of trust – do something like this and forget about a future on the streets as a free citizen.” observed United States Attorney Wigginton.
The investigation into Going’s criminal activities began on May 5, 2014, when a hidden video camera was discovered above a bathroom stall in the girls’ locker room at Fairfield Community High School. The video camera was wired to a black box with an antennae attached to it and a SD card slot in it. The next day, an Illinois State Police (ISP) crime scene investigator collected the camera and black box as evidence and transported them to the ISP’s forensics crime lab in Springfield, Illinois.
An ISP Forensic Technician began a forensic examination of the SanDisk micro SD card (SD card) removed from the black box that was wired to the hidden video camera and discovered several video clips from May 5, 2014, which depicted teenage girls using the bathroom stall or standing or walking next to the bathroom stall in the girls’ locker room in various stages of undress. There were other video clips that had been deleted that showed that the camera had been hidden in different locations in the girls’ locker room, including the changing area, before being placed above the bathroom stall.
The SD card also contained a video clip from May 2, 2014, which captured the placement of the hidden camera in the location in which it was found, by a white male wearing shorts and white ankle socks at approximately 10:28 p.m. that night. A review of the school’s surveillance video showed Going entering the school near that time wearing black shorts, a black hoodie, a gray stocking cap, tennis shoes, and white ankle socks. The school’s surveillance system captured Going later going into the dark gym area, and, at approximately 10:28 p.m., leaving the gym area wearing his white ankle socks and carrying his shoes. The surveillance camera then showed Going exit the school, sit on the stairs to put on his shoes, walk to his truck and drive away.
Additional images recovered from the SD card showed images of members of the girls’ cross country team in various stages of undress as they prepared to and/or finished showering in what appeared to be different hotel bathrooms. Illinois State Police Special Agents spoke with the administration at Fairfield Community High School and learned that Going had taken the cross country team on two overnight trips in 2012 and one overnight trip in 2013 to attend track meets and two regional competitions at Southern Illinois University in Edwardsville, Illinois. Going drove the bus that carried both the cross country team to the meet and regional competitions.
Members of the girls’ 2012 and 2013 cross country teams were interviewed regarding these overnight trips. The interviews revealed that Going had the same routine when he arrived at and left the motel with the cross country team. He would either have the team wait on the bus or in the lobby while he checked them in and took the keys from the hotel clerk. He would then tell the kids to wait so he could check the rooms for any “damage” so that the damage would not be attributed to the students occupying the room, and subsequently charged to the school. After he returned, he would assign rooms to the girls and the boys, and give them the keys to their rooms. Likewise, before checking out of the motel the next day, Going would again have the team either wait in the lobby or on the bus while he would take their keys and tell them that he was going to check the rooms for any “damage” and to make sure all personal belongings had been removed. He would then turn the keys into the motel clerk and they would leave. It was at these times that Going installed and removed the hidden video camera from the bathroom of rooms he specifically assigned to members of the girls’ cross country team.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
The case was investigated by the Illinois State Police, the Fairview Heights Police Department and the Federal Bureau of Investigation's Springfield Child Exploitation Task Force. The case was assigned to Assistant United States Attorney Angela Scott.
Former City of Miami Police Officer Charged with Two Counts of Hobbs Act ExtortionRead the Press Release
Jerry Sutherland, 28, of Miami-Dade County, Florida, a former officer with the City of Miami Police Department, was charged today with two counts of extortion.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, FBI, Miami Field Office, Rodolfo Llanes, Chief, City of Miami Police Department, made the announcement.
As alleged in the Information:
On or about January 28, 2014, Sutherland knowingly and unlawfully attempted to obstruct, delay and affect commerce through extortion by agreeing to protect and facilitate an illegal gambling operation in exchange for the receipt of cash payments.
The Information further alleges that on or about July 15, 2014, Officer Sutherland knowingly and unlawfully attempted to obstruct, delay and affect commerce through extortion by agreeing to facilitate the theft of proceeds from an illegal gambling operation in exchange for the receipt of cash payments.
Mr. Ferrer commended the investigative efforts of the FBI Miami Area Corruption Task Force and the City of Miami Police Department Internal Affairs Section. The case is being prosecuted by Assistant U.S. Attorney Harry C. Wallace, Jr.
An indictment or information contains mere allegations. A defendant is presumed innocent unless and until proven guilty in a court of law.
Attachments:
Information - Jerry Sutherland (PDF)A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Five sentenced for selling heroin, other drugsRead the Press Release
MARTINSBURG, WEST VIRGINIA – Five individuals were sentenced in federal court in Martinsburg today on drug trafficking charges, United States Attorney William J. Ihlenfeld, II, announced.
Tavon Darrell Moore, 31, of Baltimore, Maryland, was sentenced today to 96 months in prison for conspiring to sell heroin in Berkeley, Jefferson, Grant, and Hardy Counties between 2008 and 2014. He pled guilty in November 2014 to one count of “Drug Conspiracy – Heroin.”
Armistead William Craig, 35, of Ranson, West Virginia, was sentenced today to 37 months in prison for selling crack cocaine in Jefferson County in June 2014. He pled guilty in November 2014 to one count of “Distribution of Cocaine Base.”
Eddie Young, III, 40, of Martinsburg, West Virginia, was sentenced today to 33 months in prison for utilizing telephone to arrange the sale of crack cocaine. Young pled guilty in October 2014 to one count of “Use of Telephone to Facilitate Distribution of Cocaine Base.”
Kimberly Michelle Bailey, 32, of Petersburg, West Virginia, was sentenced today to 13 months in prison for selling heroin in Grant County in January 2014. She pled guilty in October 2014 to one count of “Aiding and Abetting Distribution of Heroin.”
Pamela Jean Bailey, 30, of Petersburg, West Virginia, was sentenced today to three years of probation for selling methamphetamine in Grant County in January 2014. She pled guilty in November 2014 to one count of “Aiding and Abetting the Distribution of Methamphetamine.”
Assistant U.S. Attorney Jarod Douglas prosecuted the cases on behalf of the government. The Eastern Panhandle Drug and Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
U.S. District Judge Gina M. Groh presided.
Federal Prosecutors Announce Additional Indictments in Stolen Identity Refund Fraud SchemeRead the Press Release
ERIE, Pa. - Sixteen individuals from around the United States have been indicted by a federal grand jury in Erie on charges of conspiracy to commit wire fraud and aggravated identity theft, United States Attorney David J. Hickton announced today.
The thirteen-count superseding indictment named Doherty Kushimo, 53, of Providence, Rhode Island; Saburi Adeyemi, 56, of Memphis, Tennessee; Abiodun Bakre, 50, of Ozone Park, New York; Adetunji Gbadegeshi, 57, of Queens, New York; Xerxes Shevar, 47, of Brooklyn, New York; Gcobisa Kehle, 37, of Brooklyn, New York; Loyiso Kula, 43, of New York City; Abiodun Tijani, 44, of Staten Island, New York; Funmilayo Aliyu, 53, of Laurelton, New York; Bola Peters, 43, of New York City; Samuel Sobaloju, 52, of Far Rockaway, New York; Daniel Freeman, 49, of Danbury, Connecticut; Nana Baffour, 38, of Bronx, New York; and Kwame Asamoah, 35, of Brooklyn, New York, as defendants.
According to the indictment presented to the court, the sixteen defendants conspired to commit wire fraud by submitting fraudulent federal tax returns in the names of individuals whose identities the conspirators stole. The conspirators then opened bank accounts using stolen identities and used those accounts as repositories for their fraudulently obtained federal tax refunds. The conspirators obtained stolen identity information on the Internet and then traded that information among themselves using email accounts and other means of communication. All told, the indictment alleges that, for the tax years 2010 to 2013, approximately $38 million in fraudulent tax refunds was sought from the IRS by the conspirators, causing the IRS to pay at least $10 million in fraudulent refunds. The indictment also alleges that approximately 3,493 bank accounts were opened using stolen identities, affecting approximately 443 financial institutions, and that approximately 4,563 credit cards were obtained using stolen identities. Approximately 11,468 individuals are alleged in the indictment to have been victimized.
The law provides for a maximum total sentence of 20 years in prison for Saburi Adeyemi, Adetunji Gbadegeshi, Adebola Mejule, Michael Idowu Olugbade, Xerxes Shevar, Gcobisa Kehle, Loyiso Kula, Abiodun Tijani, Funmilayo Aliyu, Bola Peters, Samuel Sobaloju, Daniel Freeman, Nana Baffour and Kwame Asamoah. Doherty Kushimo faces 38 years in prison and Abiodun Bakre faces 36 years in prison. All sixteen defendants are subject to a maximum fine of $250,000 or twice the amount of loss to the victims. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation conducted the investigation leading to the indictment in this case.
An indictment or information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Four Sentenced in Theft from Federal Firearms LicenseeRead the Press Release
Gulfport, Miss – LaKeith Dentrell Smith, Damian O’Neil Towne, Theodore Dempsey Towne, and Princeton Scott Knox were sentenced on January 29, 2015 by Chief District Judge Louis Guirola, Jr., in a case involving the theft of 46 firearms, including machine guns from a federal firearms licensee, announced U. S. Attorney Gregory K. Davis and ATF New Orleans Special Agent in Charge Phillip Durham.
LaKeith Dentrell Smith, 21 of Pascagoula, pled guilty to theft of firearms from a federal firearms licensee and was sentenced to 120 months in prison followed by three years of supervised release and restitution in the amount of $112,751.90
Damian O’Neil Towne, 25 of Gautier, pled guilty to theft of firearms from a federal firearms licensee and was sentenced to 120 months in prison followed by three years of supervised release and restitution in the amount of $112,751.90.
Theodore Towne, 20 of Gulfport, pled guilty to theft of firearms from a federal firearms licensee and was sentenced to 108 months in prison followed by three years of supervised release and restitution in the amount of $112,751.90.
Princeton Scott Knox, 34, of Gautier, pled guilty to misprision of a felony by not reporting the theft and acting to conceal the discovery of the crime. He was sentenced to 21 months in prison followed by one year of supervised release and ordered to pay a $2,000 fine.
"This case illustrates the collaborative effort of law enforcement agencies at the federal, state, and local levels working together to get dangerous criminals off the streets and make our communities a safer place to live," said U.S. Attorney Gregory K. Davis.
"Burglary and theft of firearms from federally licensed firearms dealers are considered to be a top investigative priority for ATF because these brazen acts are a precursor for future
violent crimes," stated ATF New Orleans Special Agent in Charge Phillip Durham. "Let these harsh sentences be a warning for anyone considering this type of criminal behavior. ATF and our law enforcement partners are committed to keeping the community safe and will not rest until the crime is solved and the stolen firearms are recovered."
The case was investigated by the Moss Point Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant United States Attorney Annette Williams.
Department of Justice Will Not Challenge Standards-Setting Organization's Proposal to Update Patent PolicyRead the Press Release
The Department of Justice announced today that it will not challenge a proposal by the Institute of Electrical and Electronics Engineers, Inc. (IEEE) to update the IEEE Standards Association’s (IEEE-SA) patent policy. That policy governs the incorporation of patented technology in IEEE standards and explains the terms under which holders of patents essential to IEEE standards commit to make licenses available for use in implementing IEEE standards.
The department’s position was stated in a business review letter to counsel for IEEE and IEEE-SA from Renata B. Hesse, Acting Assistant Attorney General for the Antitrust Division for this matter.
IEEE requested a business review letter from the Antitrust Division expressing its enforcement intentions regarding a proposed update to its patent policy. According to representations made by the applicant, the update revises the policy’s provisions regarding commitments from parties holding patent claims that are essential to IEEE-SA standards to license those claims on reasonable and non-discriminatory (RAND) terms. The update addresses the availability of injunctive relief, the meaning of a reasonable licensing rate, permissible requests for reciprocal licensing, and the production levels to which the commitment applies.
Standards can offer significant procompetitive benefits. For example, they may facilitate product interoperability, lower costs, foster innovation and efficiency, and increase competition among technologies for inclusion in standards. The stated purpose of the IEEE’s update is to add clarity to the commitment patent holders voluntarily make regarding the licensing of patent claims essential to IEEE standards on RAND terms.
The department supports standards setting organizations’ efforts to clarify their patent licensing policies,” said Acting Assistant Attorney General Hesse. “IEEE’s decision to update its policy, if adopted by the IEEE Board, has the potential to help patent holders and standards implementers to reach mutually beneficial licensing agreements and to facilitate the adoption of pro-competitive standards. Where, as here, the department does not believe that adoption of a policy change is likely to result in harm to competition, IEEE and other standards setting organizations are free to adopt those modifications to their policies that they believe will benefit their standards setting activities. The U.S. government does not dictate patent policy choices to private standards setting organizations."
The department issued similar guidance to VITA in 2006 and to IEEE in 2007 regarding changes to their patent policies that allowed patent holders to commit publicly to specific restrictions on their future licensing terms and conditions for the use of essential patents.
Under the department’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the division currently intends to challenge the action under the antitrust laws based on the information provided. The department reserves the right to challenge the proposed action under the antitrust laws if it produces anticompetitive effects.
A file containing the business review request and the department’s response may be examined in the Antitrust Documents Group of the Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 1010, Washington, D.C. 20530. After a 30-day waiting period, the documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the business review procedure.
Department of Justice FY 2016 Budget RequestRead the Press Release
President Obama’s FY 2016 budget proposal totals $28.7 billion for the Department of Justice to support federal law enforcement priorities and the criminal justice priorities of our state, local and tribal law enforcement partners. The request represents a comprehensive investment in the Justice Department’s mission and includes increases in funding for countering violent extremism and other national security areas, civil rights and advancing equality under the law, Smart on Crime activities, including increased funds for prisoner reentry initiatives, and other key enforcement initiatives. The request represents a $1.3 billion increase over the comparable FY 2015 enacted level.
“The Department of Justice is dedicated to advancing the safety, the security, and the rights of all Americans – and the vital investments detailed in the department’s FY 2016 budget reflect that commitment,” said Attorney General Eric Holder. “From our global efforts to safeguard the American people against terrorist attacks and prevent violent extremism, to the work we are doing through the Smart on Crime initiative to make our criminal justice system more fair and more effective, to our ongoing focus on building trust between law enforcement officers and the communities they serve, we are working every day to protect the American people and extend this nation’s promise of equal justice under law. And as we move forward – with the resources outlined in this budget proposal – the Department of Justice will build on its groundbreaking work to strengthen our communities, to preserve our cherished values, and to build the safer, more just society that all Americans deserve.”
The Department of Justice’s areas of investment include:
- +$65 million for the department’s law enforcement components, including the Federal Bureau of Investigation, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Marshals Service, and the Organized Crime Drug Enforcement Task Force program.
- +$125 million for our litigating components, including the U.S. Attorneys, National Security Division, Criminal Division, Civil Rights Division, Civil Division, and the Environment and Natural Resources Division.
- +$217 million for the prisons and detention functions of the Federal Bureau of Prisons.
- +$146 million for immigration and administration, technology, and other support functions, including the Executive Office for Immigration Review, Office of the Pardon Attorney, Office of the Inspector General, Community Relations Service, General Administration, and Justice Information Sharing Technology.
- +$154 million for DOJ grant programs overall (Office of Justice Programs, Office of Community Oriented Policing Services, and Office on Violence Against Women), for a total grant program request of $2.4 billion.
National Security
Defending U.S. citizens from both internal and external threats remains the department’s highest priority. National security threats are constantly evolving, requiring additional investments to adapt to those threats in innovative ways. The FY 2016 budget request provides $106.8 million in program increases to develop the department’s capacity in a number of critical national security areas including: countering violent extremism and domestic radicalization; counterterrorism; cybersecurity both domestic and abroad; information sharing and collaboration with the intelligence community; and training and technical assistance for our foreign partners.
The FY 2016 request supports a comprehensive national security strategy that includes countering violent extremism (CVE) and cybersecurity. Through grants provided by the Office of Justice Programs and the Community Oriented Policing Services, the department will foster community-led CVE efforts and emphasize trusted partnerships between public safety agencies and local residents and community organizations. Funding is also requested to build upon recent cyber investments that address computer intrusions and defend the security of the department’s critical information networks from cyber threats.
To maintain its role as a national security leader, the department must continue to improve its coordination with both domestic and foreign partners through training and technical assistance. The FY 2016 request includes resources for both the FBI and Drug Enforcement Administration to enhance collaboration with the intelligence community through improved IT infrastructure and counterintelligence programs. In addition, the FY 2016 request includes resources for improving the process of sharing evidence with our foreign partners, coordinated investigations, and operating overseas security sector assistance programs. The department’s foreign experts are best situated to build the strong overseas partnerships that are essential to joint efforts to fight terrorism and transnational crime.
For more information, view the National Security Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.
Civil Rights
The department’s mission is to uphold the civil and constitutional rights of all Americans, particularly the most vulnerable members of our society—thus extending equality under the law to all Americans. Accomplishing this requires resources both to investigate and to litigate.
Protecting the nation’s most vulnerable populations is a top priority of this Administration and the department. These issues remain a highly relevant to the American people and a significant focus of both the Civil Rights Division and the Community Relations Service. The FY 2016 request includes $102.8 million in new investments addressing ongoing and growing threats of human trafficking, hate crimes, and campus sexual assaults. The request includes funds to expand civil and criminal enforcement efforts to ensure that all communities have effective and democratically accountable policing.
Our request supports the health of our democracy by augmenting our Voting Rights Act enforcement to protect each citizen’s fundamental right to vote. Further, our request creates a sustainable and lasting legacy of civil rights enforcement in U.S. Attorneys Offices and the coordination of our efforts with state and local partners across the nation.
Increases for grant programs will provide technical assistance and training to improve the public’s access to counsel and legal assistance in state, local, and tribal courts and juvenile justice systems. The resources will also help to implement the recommendations of the White House Task Force to Protect Students from Sexual Assault and assist law enforcement agencies on criminal justice issues, including use of force practices and the deployment of crisis intervention teams.
For more information, view Civil Rights Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.
Smart on Crime
In total, our budget invests an additional $247 million to support Smart on Crime initiatives. At the direction of the Attorney General, in early 2013 the Justice Department launched a comprehensive review of the criminal justice system in order to identify reforms that would ensure federal laws are enforced fairly and—in an era of reduced budgets—efficiently. As part of its review, the department studied all phases of the criminal justice system, including charging, sentencing, incarceration, and reentry, to identify the practices that are successful at deterring crime and protecting the public.
We must remain vigilant in our efforts to stop violent crime. However, for far too long, well-intentioned policies created to lower criminal activity perpetuated a cycle of poverty, criminality, and incarceration that broke too many families and weakened too many communities. The Smart on Crime initiative focuses on effectively using federal resources for the most important law enforcement priorities, addressing the disparate impact of the criminal justice system on vulnerable communities, and implementing a series of commonsense reforms to create a fundamental shift in response to certain crimes—particularly low-level, nonviolent offenses. The new guidance also bolstered prevention and reentry programs to deter crime, reduce recidivism, and create pathways of opportunity for eligible candidates.
The Attorney General’s plan focuses federal resources and places the harshest sentences on the most violent offenders rather than prioritizing the sheer number of prosecutions. Considering alternatives to incarceration for low-level, non-violent offenses also strengthens our justice system and places a lower financial burden on the budget. This means increased use of diversion programs, such as drug courts, that reduce taxpayer expense and have the potential to be successful at preventing recidivism. Even when imprisonment is appropriate, sentencing should reflect the individualized circumstances of the case.
We must also pay attention to what happens to inmates after prison. To better prevent recidivism, it is important to reduce barriers to reentry for formerly incarcerated individuals. This includes emphasizing reentry programs, and revisiting rules and regulations that make it harder for these individuals to find a job, an education, or affordable housing.
For more information, view the Smart on Crime Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.
Prisons and Detention
Maintaining safe and secure detention and prison facilities, while investing in ways to reduce recidivism, is critical to the department’s ongoing efforts to reform the criminal justice system and be Smart on Crime. To continue this commitment, the department requests $217 million in program increases for prisons and detention.
The Administration is committed to a comprehensive strategy to contain incarceration costs over the long term by facilitating inmates’ transition into society in order to reduce recidivism rates, increase public safety, and strengthen communities. The budget reflects these commitments and takes steps to address the cycle of incarceration by investing additional resources in the BOP re-entry programs for the approximately 45,000 federal inmates that return to our communities each year.
The request increases staffing at BOP’s 17 high security institutions. The request would provide funding to have two correctional officers on duty in each housing unit for all three shifts, increasing officer and inmate safety at high security institutions. The request also funds additional medical beds at Federal Correctional Institution Fort Worth that will house and treat severely ill inmates currently housed in community hospitals. Finally, the request also increases funding for BOP to undertake essential rehabilitation, modernization, and renovation of BOP institutions, one third of which are 50 years old or older. Adequately maintaining structures preserves capital investments and ensures sufficient security within institutions.
For more information, view the Prisons and Detention Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.
Immigration
The department plays an integral role in the immigration system by ensuring the fair, expeditious, and uniform application of the Nation’s immigration laws. The department’s Executive Office for Immigration Review (EOIR) oversees the immigration court and Board of Immigrant Appeals. In recent years, in response to the Department of Homeland Security’s (DHS) increased enforcement efforts along the borders, EOIR has sought to keep pace with the rising number of immigration cases, in order to maintain the effectiveness and efficiency of immigration enforcement, adjudication and detention programs. But EOIR’s immigration court caseload continues to increase to record levels.
To process this increasing workload and improve the efficiency of the immigration court system, the Department requests an increase of $124 million to support additional Immigration Judge (IJ) Teams and Board of Immigration Appeals attorneys and provide for other improvements to the immigration system. This enhancement will help IJ Teams and attorneys adjudicate rising immigration caseloads resulting from the increase in Southwest Border crossings. Also included in this program increase are funds to expand legal representation for unaccompanied children and to improve efficiencies in immigration court proceedings by expanding the Legal Orientation Program.
For more information, view the Immigration Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.
Enforcement Priorities
The department’s mission and responsibility is to investigate and punish those who break federal laws and harm innocent citizens. Continued investments to uphold its commitments and obligations are needed to strengthen the department’s ability to protect the health and well-being of our nation’s citizens, and have the flexibility to address threats as they emerge; simply maintaining existing law enforcement capacity is not sufficient. For FY 2016, the department requests $43 million in additional investments to address violent crime and illicit drugs, along with health care fraud and environmental crime.
For more information, view the Enforcement Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.
State, Local and Tribal Law Enforcement
The department strongly supports its partnerships with state, local, and tribal entities.
The FY 2016 budget maintains its commitments to state, local, and tribal law enforcement partners without reducing the department’s federal operational role. Simultaneously, efficiencies are identified to ensure that federal resources are being targeted to the most effective grant programs.The FY 2016 discretionary and mandatory request for state, local, and tribal law enforcement assistance is $3.5 billion. The request for state, local, and tribal assistance includes $15 million for implementation of the Administration’s Countering Violent Extremism Initiative, discussed under National Security above. The budget also targets $97 million for the President’s new Community Policing Initiative to build and sustain trust between law enforcement and the people they serve. Both the Office of Community Oriented Policing Services (COPS) and Office of Justice Programs (OJP) budgets include enhancements to support these two initiatives.
The request also includes $249.5 million for the Community Oriented Policing Services (COPS) Hiring Program and a $14 million increase to the Office on Violence Against Women Campus Violence Program.
For more information, view the State, Local and Tribal Law Enforcement Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.
Public Safety in Indian Country
The United States has a unique legal and political relationship with American Indian tribes and Alaska Native communities as provided by the Constitution, treaties, court decisions and federal statutes. The Department of Justice has an important legal and moral responsibility to prosecute violent crime in Indian Country because under current law, in much of Indian Country, the department alone has the authority to seek an appropriate sentence when a major crime has been committed. Federal investigation and prosecution of serious violent crime in Indian Country is often both the first and only avenue of protection for the victims of these crimes.
The FY 2016 President’s budget requests $417 million in total resources for public safety initiatives in Indian Country. Investments include significant and versatile grant funding for addressing a range of criminal justice issues, among which is a $5 million request for a new Tribal Domestic Violence Criminal Jurisdiction program authorized by Congress in the Violence Against Women Reauthorization Act of 2013. This program would provide grants to tribal governments and their designees to support tribal efforts to exercise special domestic violence criminal jurisdiction over non-Indian offenders who commit violence against Indian spouses, intimate partners or dating partners, or who violate protection orders, in Indian Country.
For more information, view the Public Safety in Indian Country Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.
Infrastructure
In order to maintain an effective and efficient Department of Justice, the department must invest in its physical and non-physical infrastructure to support its investigative and prosecutorial enterprises. The department’s request addresses gaps in critical infrastructure including information technology systems, facility construction and maintenance, litigation support services, operational oversight and other investments.
The investments requested for FY 2016 build on many DOJ investments already made and will allow the department to make significant strides in several areas. With these investments, the department will be able to make forward progress in consolidating its data centers, reduce the significant backlog for U.S. Marshals Service construction projects in federal courthouses, direct and oversee administration and operation of the department activities, and provide data transparency to the public.
For more information, view the Infrastructure Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.
- +$65 million for the department’s law enforcement components, including the Federal Bureau of Investigation, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Marshals Service, and the Organized Crime Drug Enforcement Task Force program.
Defendants in New Braunfels Texas Mexican Mafia Case Sentenced to Federal PrisonRead the Press Release
In San Antonio today, seven New Braunfels Texas Mexican Mafia (TMM) members, prospects and associates were sentenced to federal prison for their roles in a drug trafficking and extortion scheme announced Acting United States Attorney Richard L. Durbin, Jr., Federal Bureau of Investigation Special Agent in Charge Christopher Combs, Texas Department of Public Safety Director Steve McCraw and New Braunfels Police Chief Tom Wibert.
This morning, Chief U.S. District Judge Fred Biery sentenced the following TMM defendants:
- Ignacio Flores, Jr. (aka “Iggy”) – age 32 – TMM Sergeant -- sentenced to 235 months in federal prison followed by five years of supervised release after pleading guilty to conspiracy to possess with intent to distribute methamphetamine, interference with commerce by threat or violence, felon in possession of a firearm and possession of body armor by a convicted felon.
- Nicholas “Nicky” Flores – age 31 – sentenced to 235 months in federal prison followed by five years of supervised release after pleading guilty to conspiracy to possess with intent to distribute methamphetamine and interference with commerce by threat or violence.
- Rene Zamarripa – age 38 -- sentenced to 188 months in federal prison followed by five years of supervised release after pleading guilty to conspiracy to possess with intent to distribute methamphetamine and one count of interference with commerce by threat or violence.
- Juan Vega (aka “Johnny Boy”) – age 33 – sentenced to 130 months in federal prison followed by three years of supervised release after pleading guilty to interference with commerce by threat or violence .
- Javier Martin Meza – age 30 -- sentenced to 160 months in federal prison followed by five years of supervised release after pleading guilty to conspiracy to possess with intent to distribute methamphetamine and one count of interference with commerce by threat or violence.
- Gary Gonzales (aka “G Monster”) – age 23 – sentenced to 60 months in federal prison followed by five years of supervised release after pleading guilty to conspiracy to possess with intent to distribute methamphetamine and one count of interference with commerce by threat or violence.
Two co-defendants were sentenced last year for their role in the drug trafficking and extortion scheme. On May 23, 2014, 36-year-old Julian Morales (aka “Oso”) was sentenced to 168 months in federal prison followed by three years of supervised release. On October 31, 2014, 30-year-old TMM Lieutenant Abraham Ramirez (aka “Puppet”) was sentenced to 96 months in federal prison followed by three years of supervised release. Morales and Ramirez each pleaded guilty to one count of conspiracy to possess with intent to distribute methamphetamine and one count of interference with commerce by threat or violence.
According to court records, from May 2011 to July 2013, the defendants conspired to extort money from New Braunfels area drug traffickers so that the money could be distributed to members of the TMM. The defendants required persons who sold narcotics to pay the defendants a “tax” on the proceeds of drug distribution. This requirement that drug dealers pay the drug tax was enforced by the defendants through threats of force and physical violence, and actual force and violence. The defendants were also responsible for distributing between 500 grams and 1.5 kilograms of ICE methamphetamine in the New Braunfels area from May 2012 until July 2013.
In a separate, but related, matter, Chief Judge Biery sentenced 37–year-old Rocky Esquivel (aka “Rock”) this morning to ten years in federal prison followed by five years of supervised release after Esquivel pleaded guilty to possession with intent to distribute methamphetamine and possession of a firearm in furtherance of drug trafficking. On May 1, 2013, Esquivel was the subject of a traffic stop in New Braunfels. At the time, authorities discovered that he was in possession of 108 grams of methamphetamine, three firearms, body armor and $4,085.00 in U.S. Currency.
This case was investigated by the FBI, Texas Department of Public Safety and the New Braunfels Police Department.
Defendant in Los Zetas Money Laundering Case Sentenced to Maximum Federal Prison Term for Conspiring to Bribe JudgeRead the Press Release
In Austin this morning, 53-year-old Veracruz, Mexico businessman Francisco Antonio Colorado-Cessa (aka “Pancho”), was sentenced to the maximum five years in federal prison for attempting to bribe a federal judge announced Acting United States Attorney Richard L. Durbin, Jr., Federal Bureau of Investigation Special Agent in Charge Christopher Combs and Internal Revenue Service-Criminal Investigation Special Agent in Charge Steve McCollough.
This five-year prison term will be added to Colorado-Cessa’s maximum 20-year federal prison term for his role in a complex scheme to launder millions of dollars in illicit Los Zetas drug trafficking proceeds to purchase, train, breed, and race American quarter horses in the United States.
On March 12, 2004, Colorado-Cessa, his son, Francisco Agustin Colorado Cebado (aka “Panchito”), and his business partner, Ramon Segura Flores, pleaded guilty to one count of conspiracy to bribe a federal judge. All three admitted to conspiring last year to pay a $1.2 million bribe to a federal judge in order to secure a reduced sentence for Colorado-Cessa in the money laundering case. According to court records, at no time before or during this investigation was the judge involved in the alleged criminal activity.
“A fair and impartial criminal justice system is one of the cornerstones of our democracy, and it is not for sale. The FBI will continue to fiercely protect it against criminals who think they can buy their way to unjust freedom,” stated FBI Special Agent in Charge Christopher Combs.
On July 22, 2014, Colorado Cebado and Segura Flores were each sentenced to a year and a day in federal prison and ordered to pay a $10,000 fine for their roles in the scheme.
This case was investigated by the FBI and IRS-Criminal Investigation.
Conspirator Sentenced in Scheme to Embezzle over $1 Million from A Co-Conspirator’s EmployerRead the Press Release
Greenbelt, Maryland – U.S. District Judge George J. Hazel sentenced Brian Hooper, age 42, of Woodbridge, Virginia, today to 27 months in prison followed by three years of supervised release for conspiring to commit wire fraud in connection with a scheme to steal over $1 million from a consulting company. Judge Hazel entered an order that Hooper forfeit and pay restitution of $1,031,571.96, the loss resulting from his conduct.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to his plea agreement, co-defendant Janice McCumbie worked for a global consulting business that had offices in Maryland and elsewhere. Clients paid large retainers to secure consulting services. The consulting company would issue refund checks to the clients in certain circumstances, including when a client’s retainer exceeded the amount of work that the consulting company actually performed or when the client made duplicate payments to the consulting company. McCumbie’s duties included coordinating client refunds.
In 2008, Hooper introduced McCumbie to a co-conspirator, who was not a client of the consulting company. Between June and December 2008, McCumbie caused the consulting company to issue six fraudulent refund checks totaling $121,081.22 to the co-conspirator in exchange for a share of the check proceeds. The co-conspirator shared the proceeds from five of these fraudulent checks with Hooper and McCumbie.
In 2009, Hooper introduced McCumbie to defendant Leonard Smedley, who was also not a client of the consulting company. From February 2009 to October 2013, McCumbie caused the consulting company to issue 42 false refund checks totaling $910,490.74 to Smedley in exchange for Smedley sharing the check proceeds with Hooper and McCumbie.
Leonard Smedley II, age 35, of Capitol Heights, Maryland; Amber Gayleard, age 29, of Schuylkillhaven, Pennsylvania; and Janice McCumbie, age 45, of Marydel, Maryland; previously pleaded guilty to their participation in the conspiracy. Smedley was sentenced to 18 months in prison and ordered to pay restitution of $910,490. Gayleard was sentenced to 21 months and ordered to pay restitution of $217,695.57. McCumbie is scheduled to be sentenced on March 12, 2015.
United States Attorney Rod J. Rosenstein praised the FBI for its work in the investigation and thanked Assistant United States Attorneys Leah Jo Bressack and David Salem, who prosecuted the case.
Community Health Systems Professional Services Corporation and Three Affiliated New Mexico Hospitals to Pay $75 Million to Settle False Claims Act AllegationsRead the Press Release
Community Health Systems Professional Services Corporation (CHSPSC) and three affiliated New Mexico hospitals (collectively CHS) have agreed to pay the United States $75 million to settle allegations that they violated the False Claims Act by making illegal donations to county governments which were used to fund the state share of Medicaid payments to the hospitals, the Justice Department announced today. CHSPSC is based in Franklin, Tennessee, and manages more than 200 affiliated hospitals in 29 states. The three New Mexico hospitals are Eastern New Mexico Medical Center in Chaves County, Mimbres Memorial Hospital and Nursing Home in Luna County and Alta Vista Regional Medical Center in San Miguel County.
“Congress expressly intended that states and counties use their own money when seeking federal matching funds in order to encourage them to join the federal government in ensuring that Medicaid funds are spent on the needs of beneficiaries,” said Acting Assistant Attorney General for the Justice Department’s Civil Division Joyce R. Branda. “When private hospitals violate the rules against hospital donations funding the state share, that important protection of the Medicaid program is destroyed.”
New Mexico’s Sole Community Provider (SCP) program, which was discontinued in 2014, provided supplemental Medicaid funds to hospitals in mostly rural communities. The federal government reimbursed the state of New Mexico for approximately 75 percent of its health care expenditures under the SCP program. Under federal law, New Mexico’s 25 percent “matching” share of SCP program payments had to consist of state or county funds, and not impermissible “donations” from private hospitals. This restriction on the use of private hospital funds to satisfy state Medicaid obligations was enacted by Congress to curb possible abuses and ensure that states have sufficient incentive to curb rising Medicaid costs.
The United States alleged that from Aug. 1, 2000, through Dec. 31, 2010, CHS knowingly caused the state of New Mexico to present false claims to the United States for payments made to CHS under the SCP program by making improper donations to Chaves, Luna and San Miguel counties, which were then used by the counties, and subsequently the state, to obtain federal matching payments. The government alleged that CHS concealed the true nature of these donations to avoid detection by federal and state authorities, and as a result of its scheme, received SCP payments which were funded by the United States in the amount of three times CHS’ “donations.”
“Hundreds of thousands of New Mexicans depend on Medicaid for medical care and other services,” said U.S. Attorney Damon P. Martinez for the District of New Mexico. “This litigation underscores the importance of maintaining the integrity of the Medicaid Program. Those who violate the law in order to profit from the Medicaid Program undercut the financial integrity of the program and can thus put at risk the availability of medical care and other services to those in need. We are committed to protecting the integrity of the Medicaid Program no matter the effort required or the time it may take, even in the face of the most vigorous litigation.”
“Hospitals that make provider donations with the expectation that they will receive a windfall from the Medicaid program threaten the integrity of the Medicaid program and will be held accountable,” said Special Agent in Charge Mike Fields for the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) Dallas region.
The settlement announced today stems from a whistleblower complaint filed by a former CHSPSC revenue manager, Robert Baker, pursuant to the qui tam provisions of the False Claims Act, which permit persons to bring a lawsuit on behalf of the government and to share in the proceeds of the suit. The act also permits the government to intervene in and take over the lawsuit, as it did in this case as to some of Baker’s allegations. The United States did not intervene in Baker’s allegations as to SCP payments made to two other affiliated New Mexico hospitals, Carlsbad Medical Center and Lea Regional Medical Center. Today’s settlement also resolves these other allegations. Baker will receive $18,671,561 as his share of the government’s recovery.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $23.5 billion through False Claims Act cases, with more than $15 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation and litigation of this case was conducted by the U.S. Attorney’s Office for the District of New Mexico and the Justice Department’s Civil Division, with assistance from HHS-OIG and the HHS Office of General Counsel. The case is captioned United States ex rel. Baker v. Community Health Systems Professional Services Corporation, et al., Civ. Action No. 05-279 (D. N.M.). The claims settled by this agreement are allegations only and there has been no determination of liability.
Community Health Systems Professional Services Corporation and Three Affiliated New Mexico Hospitals to Pay $75 Million to Settle False Claims Act AllegationsRead the Press Release
ALBUQUERQUE – Community Health Systems Professional Services Corporation (CHSPSC) and three affiliated New Mexico hospitals (collectively CHS) have agreed to pay the United States $75 million to settle allegations that they violated the False Claims Act by making illegal donations to county governments which were used to fund the state share of Medicaid payments to the hospitals, the Justice Department announced today. CHSPSC is based in Franklin, Tennessee, and manages more than 200 affiliated hospitals in 29 states. The three New Mexico hospitals are Eastern New Mexico Medical Center in Chaves County, Mimbres Memorial Hospital and Nursing Home in Luna County and Alta Vista Regional Medical Center in San Miguel County.
“Congress expressly intended that states and counties use their own money when seeking federal matching funds in order to encourage them to join the federal government in ensuring that Medicaid funds are spent on the needs of beneficiaries,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “When private hospitals violate the rules against hospital donations funding the state share, that important protection of the Medicaid program is destroyed.”
New Mexico’s Sole Community Provider (SCP) program, which was discontinued in 2014, provided supplemental Medicaid funds to hospitals in mostly rural communities. The federal government reimbursed the state of New Mexico for approximately 75 percent of its health care expenditures under the SCP program. Under federal law, New Mexico’s 25 percent “matching” share of SCP program payments had to consist of state or county funds, and not impermissible “donations” from private hospitals. This restriction on the use of private hospital funds to satisfy state Medicaid obligations was enacted by Congress to curb possible abuses and ensure that states have sufficient incentive to curb rising Medicaid costs.
The United States alleged that from Aug. 1, 2000, through Dec. 31, 2010, CHS knowingly caused the state of New Mexico to present false claims to the United States for payments made to CHS under the SCP program by making improper donations to Chaves, Luna, and San Miguel counties, which were then used by the counties, and subsequently the state, to obtain federal matching payments. The government alleged that CHS concealed the true nature of these donations to avoid detection by federal and state authorities, and as a result of its scheme, received SCP payments which were funded by the United States in the amount of three times CHS’ “donations.”
“Hundreds of thousands of New Mexicans depend on Medicaid for medical care and other services,” said U.S. Attorney Damon P. Martinez for the District of New Mexico. “This litigation underscores the importance of maintaining the integrity of the Medicaid Program. Those who violate the law in order to profit from the Medicaid Program undercut the financial integrity of the program and can thus put at risk the availability of medical care and other services to those in need. We are committed to protecting the integrity of the Medicaid Program no matter the effort required or the time it may take, even in the face of the most vigorous litigation.”
“Hospitals that make provider donations with the expectation that they will receive a windfall from the Medicaid program threaten the integrity of the Medicaid program and will be held accountable,” said Special Agent in Charge Mike Fields for the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) Dallas region.
The settlement announced today stems from a whistleblower complaint filed by a former CHSPSC revenue manager, Robert Baker, pursuant to the qui tam provisions of the False Claims Act, which permit persons to bring a lawsuit on behalf of the government and to share in the proceeds of the suit. The act also permits the government to intervene in and take over the lawsuit, as it did in this case as to some of Baker’s allegations. The United States did not intervene in Baker’s allegations as to SCP payments made to two other affiliated New Mexico hospitals, Carlsbad Medical Center and Lea Regional Medical Center. Today’s settlement also resolves these other allegations. Baker will receive $18,671,561 as his share of the government’s recovery.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $23.5 billion through False Claims Act cases, with more than $15 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation and litigation of this case was conducted by Assistant U.S. Attorney Howard R. Thomas of the U.S. Attorney’s Office for the District of New Mexico and Senior Trial Counsel Robert J. McAuliffe and Elizabeth A. Rinaldo and Trial Attorney Adam R. Tarosky of the Justice Department’s Civil Division, with assistance from HHS-OIG and the Office of General Counsel of HHS. The case is captioned United States ex rel. Baker v. Community Health Systems Professional Services Corporation, et al., Civ. Action No. 05-279 (D. N.M.). The claims settled by this agreement are allegations only and there has been no determination of liability.
Columbus Man Pleads Guilty to 6 Armed Robberies in 4 StatesRead the Press Release
Defendant Robbed Two Banks in Ky.
COLUMBUS, OH - William J. McBride, Jr., 49, of Columbus, pleaded guilty in U.S. District Court to armed bank robberies in Ohio, West Virginia, Kentucky and Indiana.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, John Barrios, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, William J. Ihlenfeld, II, United States Attorney for the Northern District of West Virginia, John E. Kuhn, Jr., Acting United States Attorney for the Western District of Kentucky, Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Joshua Minkler, Acting United States Attorney for the Southern District of Indiana, announced the plea entered into today.
According to court documents, between June 21, 2014 and August 23, 2014, McBride robbed six different federally insured banks in five different federal jurisdictions while armed with a dangerous weapon.
McBride, at gunpoint, demanded and received more than $21,000 in cash total from the banks. The defendant did not wear any disguise during the robberies, and witnesses in each location described him similarly.
On August 23, 2014, a witness reported McBride’s license plate number upon seeing the defendant flee in his vehicle after robbing the Wesbanco Bank in St. Clairsville, Ohio. Law enforcement officials discovered the vehicle was registered to McBride and subsequently arrested him later the same day in a hotel in Columbus.
McBride pleaded guilty to six counts of armed robbery. He remains in custody.
Each count of armed robbery is a crime punishable by up to 25 years in prison.
U.S. Attorney Stewart commended the cooperative investigation by the FBI and other law enforcement agencies in each jurisdiction, as well as Assistant United States Attorney Sal Dominguez, who is representing the United States in this case.
Columbus Man Pleads Guilty to 6 Armed Robberies in 4 StatesRead the Press Release
COLUMBUS – William J. McBride, Jr., 49, of Columbus, pleaded guilty in U.S. District Court to armed bank robberies in Ohio, West Virginia, Kentucky and Indiana.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, John Barrios, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, William J. Ihlenfeld, II, United States Attorney for the Northern District of West Virginia, John E. Kuhn, Jr., Acting United States Attorney for the Western District of Kentucky, Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Joshua Minkler, Acting United States Attorney for the Southern District of Indiana, announced the plea entered into today.
According to court documents, between June 21, 2014 and August 23, 2014, McBride robbed six different federally insured banks in five different federal jurisdictions while armed with a dangerous weapon.
McBride, at gunpoint, demanded and received more than $21,000 in cash total from the banks. The defendant did not wear any disguise during the robberies, and witnesses in each location described him similarly.
On August 23, 2014, a witness reported McBride’s license plate number upon seeing the defendant flee in his vehicle after robbing the Wesbanco Bank in St. Clairsville, Ohio. Law enforcement officials discovered the vehicle was registered to McBride and subsequently arrested him later the same day in a hotel in Columbus.
McBride pleaded guilty to six counts of armed robbery. He remains in custody.Each count of armed robbery is a crime punishable by up to 25 years in prison.
U.S. Attorney Stewart commended the cooperative investigation by the FBI and other law enforcement agencies in each jurisdiction, as well as Assistant United States Attorney Salvador A. Dominguez, who is representing the United States in this case.
Cisco Trucking owner admits swapping pain pills for truck tiresRead the Press Release
HUNTINGTON, W.Va. – United States Attorney Booth Goodwin announced today that Kenneth Ray Cisco, 50, of Lesage, West Virginia, pleaded guilty to aiding and abetting the distribution of oxycodone.
Cisco, owner of defunct Cisco Trucking, admitted to exchanging oxycodone pills for tractor-trailer tires. On March 14, 2013, an undercover federal agent traveled to Cisco Trucking in Huntington, West Virginia, to meet with Cisco for the purposes of conducting a pre-arranged oxycodone transaction.
The undercover agent met with Cisco and another individual at Cisco Trucking to exchange six tires for oxycodone. Cisco provided the other individual with 31 oxycodone pills, and directed the undercover agent to unload the tires. The individual distributed the pills to the agent after the tires were unloaded.
The agent requested two additional oxycodone pills from Cisco, who provided them to the third individual, who then distributed them to the agent. In total, the agent received 29 15-mg and 4 30-mg oxycodone pills in exchange for the tires.
Cisco faces up to 20 years in federal prison, and a $1 million fine. He is scheduled to be sentenced on May 11, 2015.
Chief United States District Judge Robert C. Chambers presided over the plea hearing.
The case is being investigated by the Drug Enforcement Agency. Assistant United States Attorney Joe Adams is in charge of the prosecution.
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Canadian Man Sentenced 27 Months for Illegal Re-EntryRead the Press Release
ALBANY, NEW YORK – Steven LEVESQUE, 41, was sentenced on Thursday, January 29, 2015 by the Honorable Lawrence E. Kahn to 27 months in federal prison, announced United States Attorney Richard S. Hartunian and James Spero, Special Agent-in-Charge, U.S Immigration and Customs Enforcement, Homeland Security Investigations. The sentence follows LEVESQUE’s July 10, 2003 guilty plea to illegally re-entering the United States. After failing to appear for his February 12, 2004 sentencing proceeding, the Court found LEVESQUE obstructed the administration of justice. LEVESQUE received the maximum sentence under the United States Sentencing Guidelines.
This case was investigated by the United States Department of Homeland Security and prosecuted by Assistant United States Attorney Wayne A. Myers.
California Doctor Pleads Guilty to Failing to Report Foreign Account at Bank Leumi in LuxembourgRead the Press Release
Laguna Beach Resident is the Latest in a Series of Defendants Charged with Concealing Bank Accounts at Israeli Banks
Dr. Baruch Fogel of Laguna Beach, California, pleaded guilty today in the U.S. District Court for the Central District of California to willfully failing to file a Report of Foreign Bank and Financial Accounts (FBAR) for tax year 2009, announced the Justice Department’s Tax Division, the U.S. Attorney’s Office for the Central District of California and Internal Revenue Service-Criminal Investigation (IRS-CI).
According to court documents, Fogel, a U.S. citizen, maintained an undeclared bank account held in the name of a foreign corporation at the Luxembourg branch of Bank Leumi. The undeclared foreign bank account and foreign corporation were set up with the assistance of David Kalai, a tax return preparer who owned United Revenue Service (URS). In December 2014, David Kalai and his son, Nadav Kalai, were convicted in the Central District of California of conspiracy to defraud the United States for helping certain URS clients set up foreign corporations and undeclared bank accounts to evade U.S. income taxes and for willfully failing to file FBARS for an undeclared foreign account that they controlled.
According to court documents and evidence introduced at the trial of David and Nadav Kalai, Fogel was a doctor who operated several managed health care businesses. David Kalai suggested to Fogel that he could reduce his taxes by transferring money to a foreign bank account held in the name of a foreign corporation. David Kalai advised Fogel to open up the bank account that was set up in the name of a British Virgin Islands corporation. At a meeting facilitated and attended by David Kalai at the Beverly Hills branch of Bank Leumi, Fogel executed documents to open his Luxembourg bank account at Bank Leumi. According to court documents, Fogel diverted at least $8 million to his undeclared bank account at Bank Leumi’s branch in Luxembourg.
U.S. citizens and residents who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III, of their individual income tax returns. Additionally, U.S. citizens and residents must file a FBAR with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.
Fogel has agreed to pay a civil penalty in the amount of approximately $4.2 million to resolve his civil liability with the IRS for failing to file FBARs. Fogel faces a statutory maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss to any person, whichever is greater.
Principal Deputy Assistant Attorney General for the Tax Division Caroline D. Ciraolo and Acting U.S. Attorney Stephanie Yonekura of the Central District of California thanked special agents of IRS-CI, who investigated the case, Tax Division Trial Attorneys Christopher S. Strauss and Ellen M. Quattrucci who prosecuted the case, and Assistant U.S. Attorney Sandra R. Brown of the Central District of California, who assisted with the prosecution.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Buffalo Woman Sentenced for Drug ChargesRead the Press Release
CONTACT: BARBARA BURNS
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Barbara Moran, 54, of Buffalo, NY, who was convicted of conspiracy to possess with intent to distribute and to distribute fentanyl, was sentenced to 41 months in prison by U.S. District Judge Richard J. Arcara.Assistant U.S. Attorney Mary Catherine Baumgarten, who handled the case, stated that between September 2012 and May 2013, the defendant conspired with others to distribute fentanyl, a Schedule II controlled substance. Moran sold fentanyl patches from her residence at 93 Pulaski Street in Buffalo. Some of those sales were made to law enforcement officers acting in an undercover capacity.
Co-defendants Jordan Warunek, Barbara Moran, and Gregory Pendziwiatr have all been convicted of conspiracy to possess with intent to distribute and to distribute fentanyl. Warunek was sentenced to two years probation, Mary Moran was sentenced to one year in prison and Gregory Pendziwiatr was sentenced to 15 months in prison.
The sentencing is the culmination of an investigation on the part of the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, and the Cheektowaga Police Department, under the direction of Chief David Zach.
Bridgeport Man Sentenced to 62 Months in Prison for Possessing Stolen Gun, Violating Supervised ReleaseRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that on Friday, January 30, RAHSHIM CARTER, also known as “Jinks” and “Mace,” 26, of Bridgeport, was sentenced by U.S. District Judge Michael P. Shea in Hartford to 62 months of imprisonment for being a felon in possession of a firearm, and for violating his supervised release from a previous federal conviction.
According to court documents and statements made in court, on January 9, 2013, CARTER was sentenced in Hartford federal court to 18 months of imprisonment and three years of supervised release for distributing heroin in and around the Trumbull Gardens housing complex in Bridgeport. He was released from prison on September 11, 2013, and began serving his term of supervised release.
On February 14, 2014, Bridgeport Police received a report that a man driving a black Dodge Durango was selling narcotics in the area of Trumbull Avenue and Reservoir Avenue. Police caught up to the Durango on Reservoir Avenue, pulled it over and learned that a license plate on the Durango belonged to another vehicle. CARTER was in the driver’s seat of the Durango and a woman was in the passenger seat. A search of CARTER’s female passenger revealed a loaded Smith & Wesson Bodyguard .380 firearm. A search of the vehicle also revealed approximately 250 glassine envelopes, commonly used to package heroin for street sale, and a stamp kit.
The investigation revealed that CARTER possessed the firearm and that he attempted to conceal it in the woman’s pants as he was about to be stopped by police. The investigation further revealed that the firearm was one of 111 firearms stolen from Smith & Wesson’s distribution plant in Springfield, Massachusetts, in November 2012.
CARTER has been detained since his federal arrest on April 9, 2014. On November 3, 2014, he pleaded guilty to one count of possession of a firearm by a previously convicted felon.
Judge Shea sentenced CARTER to 50 months of imprisonment for illegally possessing a firearm, and a consecutive 12-month prison term for violating the terms and conditions of his supervised release.
This matter was investigated by the FBI’s Bridgeport Safe Streets Task Force and the Bridgeport Police Department. The case was prosecuted by Assistant U.S. Attorney Rahul Kale.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Bridgeport Man Sentenced to 3 Years in Prison for Illegally Possessing Loaded Handgun in NorwalkRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that on Friday, January 30, DAHONTA HILLIARD, 24, of Bridgeport, was sentenced by U.S. District Judge Vanessa L. Bryant in Hartford to 36 months of imprisonment, followed by three years of supervised release, for being a previously convicted felon in possession of a firearm.
According to court documents and statements made in court, on August 25, 2013, Norwalk police officers were called to disband a fight between 15 to 20 people in the King Kennedy housing complex. As officers approached the housing complex, individuals, including HILLIARD, began to scatter. From his previous encounters with Norwalk Police, HILLIARD was known as a Crips gang associate who was not a resident of the housing complex. Officers approached HILLIARD and asked him if he had any weapons. After HILLIARD responded that he had a knife, officers searched him and found a loaded Bersa .380 semi-automatic handgun.
Prior to August 2013, HILLIARD was convicted of a felony offense. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
HILLIARD has been detained since his federal arrest on March 3, 2014. On August 14, 2014, he pleaded guilty to one count of possession of a firearm by a previously convicted felon.
This matter was investigated by the Norwalk Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant U.S. Attorney Vanessa Richards.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Beckley man sentenced for using phone to arrange drug crimeRead the Press Release
HUNTINGTON, W.Va. – United States Attorney Booth Goodwin announced today that Marcus Graves, 37, of Beckley, West Virginia, was sentenced to 48 months in federal prison.
In October 2014, Graves pleaded guilty to using a communications device to facilitate a drug crime. He admitted that on Jan. 13, 2014, he made a call to Kenneth Newman, who pleaded guilty to drug charges in federal court in May 2014, stating that he wanted to “bring some bread,” and that he would “take two.” Graves made the call to order around two ounces of marijuana.
Chief United States District Judge Robert C. Chambers imposed the sentence.
The case was investigated by the Drug Enforcement Agency and Huntington Police Department. Assistant United States Attorney Greg McVey was in charge of the prosecution.
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Bay Area Woman Who Ran $24 Million Investment Scam Sentenced to over 12 Years in Federal PrisonRead the Press Release
SANTA ANA, California – A San Jose woman who was convicted running a Ponzi scheme that bilked over 200 victims out of more than $24 million was sentenced today to serve 151 months in federal prison.
Bich Quyen Nguyen, 60, received the sentence from United States District Judge Josephine L. Staton, who said the crime caused physical, emotional and psychological harm to victims who, in some case, lost their entire life savings.
In addition to the prison term of more than 12½ years, Judge Staton ordered Nguyen to pay $24,517,482 in restitution.
Nguyen was found guilty conspiring to commit wire fraud in December 2013 by a jury that heard about Nguyen’s investment scheme, which offered purported certificates of deposit issued by a Swedish financial institution that she supposedly ran. The evidence presented during a six-day trial showed that Nguyen told victims that she was the chief executive officer Sun Investment Savings and Loan, which guaranteed annual returns of more than 30 percent on one-year certificates of deposit involving at least $1 million. Nguyen told victims that she used “trading platforms” and made trades at a high frequency and velocity to achieve the high rates of return. Nguyen told victims that their investments were safe because the victims’ money would be in “blocked” accounts. Nguyen further told victims that she had prepared for the 2008 financial crisis so their returns were still protected and guaranteed.
While claims about the investment were bogus, Nguyen’s “false promises did persuade the victims to give up their life-savings,” according to court documents filed by prosecutors. “Because of [Nguyen’s] fraud, the victims were forced to put off their retirements and stretch their remaining resources to simply make ends meet.”
To get the rates that Nguyen fraudulently promised, victims from southern California and Nevada organized private investment clubs to pool the required $1 million. Several of the victim investment clubs were located in Anaheim and Rialto.
During the second half of 2008, Nguyen and co-conspirators made presentations to victims across the region, with some of the presentations taking place at churches.
In the Spring of 2009, the Securities and Exchange Commission obtained orders from United States District Judge David O. Carter that prevented Nguyen and her co-conspirators from continuing to offer these investments. Following the issuance of the injunctions, a receiver and forensic accountant reviewed records and determined that the victims’ money was never “safe,” in part because it was commingled with other victims’ money; some of the victims’ money was used to make Ponzi payments to other investors; and the promised investments were never made. Despite Judge Carter’s orders, Nguyen in May and July 2009 continued to offer investments in Las Vegas and overseas.
In sentencing papers that described Nguyen as being “relentless in the execution of her fraud,” prosecutors cited numerous false promises to victims, lies she told during her trial (including blaming a dead man for the scheme) and a complete lack of remorse. Nguyen has “failed to take any responsibility for the over [$24] million that victims lost due to her fraud,” according to one sentencing memo. “Defendant’s ‘pass-the-buck’ attitude cannot be ignored when there are over 200 victims due to her fraud.”
Nguyen has been in custody for over year after being remanded into custody by Judge Staton when the trial concluded.
Previously in this case, another member of the conspiracy – Johnny Edward Johnson, 70, pleaded guilty to conspiracy to commit wire fraud. Johnson, who faces a statutory maximum sentence of 20 years in federal prison, is scheduled to be sentenced by Judge Staton on February 27.
The investigation of Nguyen and Johnson was conducted by the Federal Bureau of Investigation. The SEC provided substantial assistance.
elease No. 15-010
Atlanta Man Sentenced for Attempted Armed Bank RobberyRead the Press Release
ATLANTA – Gerry Sanders has been sentenced to fourteen years and six months in prison for the attempted armed robbery of a Citizens Trust Bank in Decatur, Ga. in September 2012.
“This defendant’s use of a toy gun during an armed bank robbery led the security guard of the bank to fire his weapon several times, seriously harming not only the defendant, but also a bank teller,” said Acting United States Attorney John Horn. “His violent acts led to both physical and emotional injuries to innocent people.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “This case represents the dangerous consequences set in motion when a person goes into a bank and announces a robbery. The defendant in this case demonstrated a complete disregard for others when he chose to rob the Citizens Trust Bank and, having a history for such reckless criminal behavior, he will now be held accountable with a lengthy prison sentence.”
“The reprehensible acts of this defendant put the lives of innocent people at risk and left physical and emotional scars that will last a lifetime, “said Interim DeKalb Police Chief James Conroy. “I only hope the sentencing of this defendant helps the healing process for these innocent victims.”
According to Acting United States Attorney Horn, the charges and other information presented in court: On September 19, 2012, at approximately 9:10 a.m., Sanders burst through the front doors of the Citizens Trust Bank, located in Decatur, Ga., and pointed what appeared to be a semi-automatic handgun as he quickly approached a bank teller. He then pushed aside a customer whom the teller was assisting and stated, “Give me all the hundreds you have,” while pointing the weapon at the teller. Sanders also pushed a light colored pillow case through the porthole of the glass at the teller's window.
As the teller was putting cash from her teller drawer into the pillow case, the bank security guard yelled at Sanders to “Freeze, drop the gun!” Sanders turned, pointed his weapon at the bank security guard, and started moving toward him. The guard fired several shots, striking Sanders in the leg. A bullet also grazed the leg of a bank teller, resulting in a serious and long-lasting injury. The bank security guard detained Sanders until DeKalb County Police Officers and FBI agents arrived. After Sanders was arrested, the weapon he used was determined to be a toy gun.
Sanders, 42, of Atlanta, Ga., was sentenced to fourteen years, six months in prison, to be followed by five years of supervised release. Sanders was convicted of these charges on October 1, 2014, after a jury trial.
This case was investigated by the Federal Bureau of Investigation and the DeKalb County Police Department.
Assistant United States Attorney Suzette A. Smikle prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Albuquerque Accountant Pleads Guilty to Misusing Treasury Department Names and SymbolsRead the Press Release
ALBUQUERQUE – James A. Vaughn, 64, of Albuquerque, N.M., pleaded guilty this morning to the misdemeanor offense of misusing Department of Treasury names and symbols. Under the terms of his plea agreement, Vaughn will be sentenced to a year of probation.
Vaughn, a certified public accountant, was indicted in April 2014. The two-count indictment charged Vaughn with misusing Treasury Department names and symbols and mail fraud. Count 1 of the indictment alleged that in connection with his accounting practice, Vaughn used the words “Department of the Treasury” and “Internal Revenue Service” to convey the false impression that his business activity had been approved or endorsed by the Treasury Department or IRS. Count 2 charged Vaughn with sending his client a bill by mail for work that had not actually been done, by falsely representing to a client that the client’s tax lien had been resolved by the Treasury Department and IRS, as described in Count 1.
Today Vaughn pled guilty to misusing Treasury Department names and symbols. In entering his guilty plea, Vaughn admitted that in Jan. 2013, a client requested his services in resolving a federal tax lien. Rather than actually resolving the tax lien, Vaughn admitted that he created a false document that used the Treasury symbol and stated that the tax lien had been resolved. Vaughn committed this offense on Jan. 30, 2013, in Bernalillo County, N.M.
Vaughn’s sentencing date has yet to be scheduled. In addition to his probationary sentence, he faces a fine not to exceed $10,000.00.
The case was investigated by the Treasury Inspector General for Tax Administration and is being prosecuted by Assistant U.S. Attorney Paul Mysliwiec.
Abingdon Man Sentenced to 30 Months in Prison for Possessing Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced Nicholas Paul Pedone, age 41, of Abingdon, Maryland, today to 30 months in prison followed by a lifetime of supervised release for possessing child pornography. Judge Bennett ordered that upon his release from prison, Pedone must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to his plea agreement, in March 2013 an agent in the Violent Crimes Against Children Section of the FBI was reviewing the email account of a user that contained child pornography and saw that this user had been corresponding with Pedone by email. One of the user’s emails to Pedone contained two images depicting naked prepubescent and early pubescent males and females.
On October 18, 2013, the agent executed a search warrant on Pedone’s email account which revealed that Pedone had sent and received thousands of emails containing depictions of children engaged in sexually explicit conduct, and that the emails and image files were saved in Pedone’s email account. These emails were sent and received between Pedone and dozens of other email accounts.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation and thanked Assistant U.S. Attorney Paul E. Budlow, who prosecuted the case.
Sunday 1 February 2015
Insert Title HereRead the Press Release
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[email protected]Huntsville Pharmaceutical Distribution Facility Agrees to Pay $300,000 PenaltyRead the Press Release
HUNTSVILLE -- A Huntsville pharmaceutical distribution facility has agreed to pay the federal government $300,000 to settle allegations that it failed to maintain complete and accurate records and inventories of controlled substances, including opioid painkillers, announced U.S. Attorney Joyce White Vance and Drug Enforcement Administration Special Agent in Charge Clay A. Morris.
Generics Bidco and the U.S. Attorney for the Northern District of Alabama finalized the settlement agreement this week. The settlement was reached without any filings in U.S. District Court. With the payment of the penalty, the government agrees to release Generics from all civil liability for violations of records keeping under the Controlled Substances Act.
"The $300,000 penalty in this matter represents the largest penalty collected in Alabama in a DEA compliance investigation," Vance said. "It is imperative that pharmaceutical companies, and all facilities registered with DEA to handle controlled substances, keep clear and current records on receipt and distribution of those narcotics so that they can be tracked and not at risk of being diverted for illegal use in our communities," she said. "I applaud the DEA for its diligent work to ensure all facilities registered with the agency comply with the strict record-keeping and control mechanisms of the Controlled Substances Act."
DEA conducted an accountability audit of Generics for Dec. 12, 2012, through July 14, 2014, and raised allegations that the business violated record-keeping provisions of the Controlled Substances Act by not keeping separate bi-annual inventories of Schedule II controlled substances and the less restricted Schedule III-V substances. DEA also charged that Generics did not keep records readily available, and that the audit showed substantial error in the accounting of the Schedule II and III drugs hydrocodone, carisoprodol, oxycodone and Meperitab.
Generics, as part of the settlement agreement, denies any intentional violation of regulations, but states it has updated several record-keeping procedures and has taken other voluntary measures to assist with compliance. The company cooperated fully in the DEA audit and follow-up proceedings.
Saturday 31 January 2015
California Man Convicted of Methamphetamine DistributionRead the Press Release
HONOLULU – After a nine-day trial and less than one day of deliberation in United States District Court, a federal jury on Friday, January 30, found California resident Alan L. Mapuatuli, age 44, guilty of distribution of crystal methamphetamine, possession with intent to distribute crystal methamphetamine, and possession of a firearm in furtherance of a drug trafficking crime. Mapuatuli faces a mandatory term of life imprisonment without parole when he is sentenced by United States District Judge Derrick K. Watson.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to information produced in court, Mapuatuli was convicted as the result of an undercover transaction between Mapuatuli and an informant involving a pound of methamphetamine. That transaction was monitored and recorded by federal agents. Based on information developed in the investigation, Mapuatuli was stopped as he drove away from the transaction. When his vehicle was searched, agents found the cellphone he had used to communicate with the informant, a black Adidas backpack containing six ounces of crystal methamphetamine, $15,975.00 in U.S. currency, and a loaded, .45 caliber pistol, and a leather bag which contained an additional pound of crystal methamphetamine.
The prosecution was the result of an investigation by Homeland Security Investigations/Immigration and Customs Enforcement and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The prosecution was handled by Assistant United States Attorneys Jonathan M. F. Loo and Michael K. Kawahara.
Friday 30 January 2015
Yonkers Business Owner Pleads Guilty in White Plains Federal Court to Multimillion-Dollar Payroll Tax FraudRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Shantelle P. Kitchen, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced that PATRICK WHITE pled guilty today in White Plains federal court to tax fraud charges.
WHITE is charged with one count of failing to pay over payroll taxes accumulated by his commercial construction business.
Manhattan U.S. Attorney Bharara stated: “The victims in this scheme are the American taxpayers. But the ultimate loser will be the defendant Mr. White who gambled his liberty and his reputation on his tax fraud scheme not being found out.”
Special Agent in Charge Shantelle P. Kitchen stated: “When business owners deliberately fail to pay their fair share of payroll taxes, American taxpayers and businesses have to make up the difference. Additionally, they hurt their own workforce by potentially depriving their workers of future benefits to which they may be entitled.”
According to the Information previously filed in White Plains federal court:
WHITE operates R & L Construction Inc., a Yonkers-based contracting company. From 2005 through 2011, R&L Construction operated a scheme whereby certain employees’ wages were not properly reported, with the funds diverted from their proper purpose, payment of taxes due, so that White could use them for personal expenses including homes and gambling. In so doing, R & L Construction accumulated approximately $3,758,000 in unpaid payroll tax liabilities.
WHITE faces a maximum sentence of three years in prison on the sole charge in the Information. The statutory maximum sentence is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge. WHITE is scheduled to be sentenced on May 21, at 10 a.m. before U.S. District Judge Cathy Seibel.
Mr. Bharara praised the outstanding efforts of IRS-CID and United States Department of State Diplomatic Security Service. He also thanked U.S. Department of Justice’s Tax Division for its significant assistance in the investigation.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys John P. Collins, Jr. is in charge of the prosecution.
Week in Review – South BendRead the Press Release
South Bend, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS
- Donteze Williams, 33, of South Bend, Indiana pled guilty to the felony offense of attempting to damage a motor vehicle by means of fire. The magistrate judge is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by Bureau of Alcohol, Tobacco, Firearms and Explosives. Sentencing has been set for May 7, 2015. This case is being prosecuted by Assistant United States Attorney Frank Schaffer.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS
- Jesus A. Campos, 35, of Mexico was sentenced to 84 months imprisonment with 4 years supervised release after pleading guilty to the felony offense of conspiracy to distribute marijuana. According to documents filed in this case, from approximately the summer of 2005 until the spring of 2007, Campos conspired with several persons in the Northern District of Indiana to move shipments of marijuana from the Laredo and Dallas, Texas areas to the Northern District of Indiana. During this time period, as charged in the Indictment, Campos helped to arrange shipments of more than 100 kilograms of marijuana. These shipments were made using private drivers who went to Texas to drive the marijuana back up to Indiana or through loads shipped through common carriers. Campos worked with persons to arrange shipments and knowingly possessed marijuana that was later distributed to others in Indiana. Campos also arranged its distribution to the drivers sent by persons he knew in Indiana. This case was the result of an investigation by the Drug Enforcement Agency. This case was prosecuted by Assistant United States Attorney William Grimmer.
- Otis Tate, 26, of Mishawaka, Indiana, was sentenced to 120 months imprisonment with 3 years supervised release after being found guilty by a trial jury of the felony offenses of being a felon in possession of a firearm and receiving a stolen firearm. According to documents filed in this case, on the night of September 18, 2013, Tate was at a gas station at 3417 Western Ave., South Bend, Indiana. T ate believed that another person (“victim”) at the station owed him (Tate) $600 from a previous drug illegal transaction. While they were both in Tate’s car, Tate showed his handgun that he was carrying (a Star 9mm pistol) to the Victim and offered to sell the victim a relatively small amount of marijuana. While the victim was examining the 1/2 ounce of marijuana, Tate pulled his gun on the victim and told him to hand over his gun, cell phone, wallet (with $45 cash), and car keys. Tate’s Star 9mm gun was recovered by police during an inventory of Tate’s car on September 19, 2013. The Sccy 9mm firearm stolen by Tate from the victim was recovered by police on December 11, 2013 in the glove box of a car of an associate of Tate. According to another individual, Tate sold the Sccy 9mm in early December 2013. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Donald Schmid.
Week in Review – HammondRead the Press Release
Hammond, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS
- Edmund Carman, 39, of Gary, Indiana pled guilty to the felony offense of being a felon in possession of a firearm. This charge was filed as a result of an investigation by The Bureau of Alcohol, Tobacco, Firearms, and Explosives. Sentencing has been set for April 30, 2015. This case is being prosecuted by Assistant United States Attorney Jennifer Chang.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS
- Ebony Leonard, 27, of East Chicago, Indiana was sentenced to 2 years of probation after pleading guilty to the felony offense of straw purchasing a firearm. According to documents filed in this case, on March 22, 2014, Leonard fraudulently represented to an employee of a licensed firearms dealership in Hammond, Indiana that she was the actual purchaser of a firearm when in fact she purchased the firearm on behalf of another person. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives. This case was prosecuted by Assistant United States Attorney Thomas M. McGrath.
- Jordon Schwind, 26, of South Bend, Indiana was sentenced to 35 months imprisonment with 4 years supervised release after pleading guilty to the felony offense of conspiracy to possess with intent to distribute 100 grams or more of heroin. According to documents filed in this case, between May 2011 and May 2012, the defendant conspired to distribute heroin to various individuals in the South Bend, Indiana area. This case was the result of an investigation by the Drug Enforcement Administration. This case was prosecuted by Assistant United States Attorneys Joshua Kolar and Jennifer Chang.
Week in Review – Fort WayneRead the Press Release
Fort Wayne, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS
- Luis Ramirez-Perez, 50, of Fort Wayne, Indiana pled guilty to the felony offense of possessing with the intent to distribute marijuana. The magistrate judge is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Drug Enforcement Administration, Homeland Security Investigations, Indiana State Police, Allen County Drug Task Force, Allen County Police Department, New Haven Police Department and the Fort Wayne Police Department. Sentencing has not been set. This case is being prosecuted by Assistant United States Attorney Anthony W. Geller.
- Matthew Hottinger, 39, of Fort Wayne, Indiana pled guilty to the felony offense of maintaining a drug-involved premises for the purpose of storing and distributing marijuana. The magistrate judge is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Drug Enforcement Administration, Homeland Security Investigations, Indiana State Police, Allen County Drug Task Force, Allen County Police Department, New Haven Police Department and the Fort Wayne Police Department. Sentencing has not been set. This case is being prosecuted by Assistant United States Attorney Anthony W. Geller.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
Twelve Sentenced in Federal Court in Interstate Conspiracy Involving Bank Fraud, Money Laundering and Drug Manufacturing ChargesRead the Press Release
The United States Attorney=s Office for the Middle District of Pennsylvania announced that twelve individuals previously charged either by indictment or information have all been sentenced in federal court in Scranton. The federal charges involved conspiracy to commit bank fraud, money laundering, and the manufacture of marijuana in Northeastern Pennsylvania and New Jersey. The last of the defendants, Antonio Figueredo was sentenced on January 26, 2015.
According to United States Attorney Peter Smith, Carlos Guerra-Lescay, age 52, Eileen Mesa, age 37, Ernesto Huerta Martin, age 52, Jose Frias, age 44, all from Newark, New Jersey, Martha Leon, age 51, Carlos Leon, age 50, both from Naples, Florida, Jose Arias Perdomo, age 38, Florida, Milagros Vargas, age 35, from Hialeah, Florida, Vivian Cruz, age 50, and Figueredo, age 44, both from Easton, Pennsylvania, Evelyn Ugalde, age 38, from Hopatcong, New Jersey, and Osleivy Gomez, age 37, North Bergen, New Jersey were all charged in connection with the case.
The defendants engaged in a scheme to acquire properties with false financial information submitted to various financial institutions located across the country. The properties, located in the Brodheadsville and Gilbert area of Monroe County, PA, Newark, NJ and Miami, FL were then used to facilitate indoor marijuana growing operations. Search warrants were executed by the Pennsylvania State Police at three of the properties in August 2011.
The defendants were federally charged at various times in December 2013, and all defendants plead guilty. The defendants were all sentenced on various dates by United States District Court Judge Robert D. Mariani as follows:
Carlos Guerra-Lescay – sentenced to 60 months imprisonment of conspiracy to commit money laundering and manufacture, distribute, and possession with intent to distribute in excess of 100 marijuana plants. Guerra-Lescay is to pay $3,166,629.48 restitution.
Ernesto Heurta Martin – sentenced to 23 months imprisonment of conspiracy to manufacture, distribute, and possession with intent to distribute in excess of 100 marijuana plants.
Jose Arias Perdomo – sentenced to 18 months imprisonment of conspiracy to manufacture, distribute, and possession with intent to distribute in excess of 100 marijuana plants.
Eileen Mesa – sentenced to 3 years’ probation with 6 months house arrest/electronic monitoring for conspiracy to commit bank fraud.
Vivian Cruz – sentenced to 3 years’ probation with 6 months house arrest/electronic monitoring for conspiracy to commit bank fraud. Cruz is to pay $518,984.39 restitution.
Jose Frias - sentenced to 3 years’ probation with 6 months house arrest/electronic monitoring for conspiracy to commit bank fraud.
Osleivy Gomez - sentenced to 3 years’ probation with 6 months house arrest/electronic monitoring conspiracy to commit bank fraud. Gomez is to pay $430,305.84 restitution.
Carlos Leon - sentenced to 3 years’ probation with 6 months house arrest/electronic monitoring for conspiracy to commit bank fraud. Leon is to pay $299,368.36 restitution.
Martha Leon - sentenced to 3 years’ probation with 6 months house arrest/electronic monitoring for conspiracy to commit bank fraud. Leon is to pay $299,368.36 restitution.
Milagros Vargas - sentenced to 3 years’ probation with 6 months house arrest/electronic monitoring for conspiracy to commit bank fraud. Vargas is to pay $411,736.00 restitution.
Evelyn Ugalde - sentenced to 2 years’ probation with 6 months house arrest/electronic monitoring for conspiracy to commit bank fraud. Ugalde is to pay $126,360.42 restitution.
Antonio Figueredo - sentenced to 3 years’ probation for conspiracy to commit bank fraud. Figueredo is to pay $518,984.39 restitution.
This case was investigated by the Drug Enforcement Administration, the Department of the Treasury - Internal Revenue Service, and the Pennsylvania State Police. The case was prosecuted by Assistant United States Attorney Michelle Olshefski.
Three Broward Residents Plead Guilty to Preparing False Tax Returns for Their ClientsRead the Press Release
Three Broward Residents pled guilty for preparing false tax returns for their clients.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Steven Tidas, of Tamarac, Sylvanie Junior Pierre, of Lauderdale Lakes, and Stenor Prosper, of Parkland, each pled guilty to one count of conspiracy.
According to court documents, the defendants served as officers of Value Tax Services, Inc. and/or Value Financial Group, Inc., both of Sunrise. The defendants prepared tax returns for individuals that falsely claimed tax credits for being a first time home buyer, when the defendants knew the taxpayers had not purchased a home and did not qualify for the credit. The defendants also prepared tax returns for individuals that falsely claimed that the taxpayers had household help income, or inflated household help income, and they falsely inflated other income or deductions in order to increase the amount of the taxpayers’ refunds.
Intended loss to the government committed by Tidas, Pierre, and Prosper is $531,146, $284,550, and $163,053, respectively.
Judge Robin Rosenberg will issue an order setting a sentencing date for all defendants. The defendants each face a maximum of five years in prison.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Cynthia R. Wood.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Third Defendant Charged with Violating the Neutrality Act by Planning and Participating in a Plot to Overthrow the Gambian GovernmentRead the Press Release
Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Andrew M. Luger for the District of Minnesota announced today a criminal complaint charging Alagie Barrow, 41, for his role in a recent attempted coup in The Gambia. Barrow is charged with conspiracy to violate the Neutrality Act by making an expedition against a friendly nation from the United States and conspiracy to possess a firearm in furtherance of a crime of violence.
On Dec. 30, 2014, there was an unsuccessful attempted coup against the government of The Gambia. The Gambia is a country in West Africa bordered by Senegal and the Atlantic Ocean.
According to the criminal complaint, in December 2014, Barrow traveled from the United States to The Gambia for the purpose of overthrowing the Gambian government. Barrow is a dual U.S./Gambian citizen and a resident of Tennessee. A separately charged co-conspirator, Cherno Njie, a U.S. citizen of Gambian descent and a resident of Texas, is a businessman who served as a financier and a leader of the conspiracy. Had the coup attempt succeeded, Njie and his co-conspirators expected that Njie would have served as the interim leader of the Gambia had the coup attempt succeeded.
According to the criminal complaint, before departing the United States for The Gambia, Barrow participated in conference calls to discuss the operational plan of the coup. Barrow and two others were the primary authors of the operational plan. Prior to departing for The Gambia, the members of the conspiracy purchased multiple firearms, including M4 semi-automatic rifles, and shipped them to The Gambia for use in the coup attempt. Members of the conspiracy also acquired night-vision goggles, body armor, ammunition, black military style uniform pants, boots, and other personal equipment.
According to the criminal complaint, Barrow traveled to The Gambia as part of the “advance party.” Barrow assisted other members of the group when they arrived in The Gambia and was responsible for delivering them to safe houses. Barrow also conducted reconnaissance of the group’s target, the State House.
According to the criminal complaint, on Dec. 30, 2014, a number of the co-conspirators met in the woods near the State House in Banjul, which is the home of the Gambian President, and split into two assault teams. Barrow was not present at that meeting, and waited with Njie in a safe place until the assault teams took control of the facility. Barrow was supposed to escort Njie to the State House and elsewhere after the coup.
According to the criminal complaint, when one of the assault teams approached the State House and fired a shot into the air, the team began taking heavy fire from the guard towers. Numerous conspirators on the assault teams were killed or injured during the failed attempt to take control of the government building. Both Barrow and Njie have since returned to the U.S. and been arrested.
This investigation is being led by the Federal Bureau of Investigation and its partners on Joint Terrorism Task Forces in multiple field offices. Assistant Attorney General Carlin and U.S. Attorney Luger thank the many agents, analysts, and prosecutors in multiple offices who are responsible for this ongoing investigation.
Assistant U.S. Attorneys Charles Kovats and John Marti of the District of Minnesota are prosecuting this case, with assistance from Richard Scott, a Deputy Chief in the Counterespionage Section of the Justice Department's National Security Division. A number of other U.S. Attorney’s Offices, including those in the Middle District of Tennessee, District of Maryland and the Western District of Texas provided critical support during the investigation.