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17 March 2015
New York City Police Department Auxiliary Officer Charged with Hacking into NYPD Computer and FBI DatabaseRead the Press Release
Earlier today, a criminal complaint was unsealed charging Yehuda Katz, a New York City Police Department (NYPD) Auxiliary Deputy Inspector assigned to the 70th Precinct in Brooklyn, with executing a scheme to hack into a restricted NYPD computer and other sensitive law enforcement databases. The defendant was arrested earlier this morning and will have his initial appearance this afternoon at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York, before United States Magistrate Judge James Orenstein.
The charges and arrest were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office, and William J. Bratton, Commissioner of the New York City Police Department.
“The defendant allegedly used his position as an auxiliary officer to hack into restricted computers and networks in order to obtain the personal information of thousands of citizens in a scheme to enrich himself through fraud,” stated United States Attorney Lynch. “The threat posed by those who abuse positions of trust to engage in insider attacks is serious, and we will continue to work closely with our law enforcement partners to vigorously prosecute such attacks.” Ms. Lynch expressed her grateful appreciation to the FBI and the NYPD’s Internal Affairs Bureau, which worked together closely to investigate the case.
“As alleged, Katz illegally accessed sensitive law enforcement computer systems for his own personal gain. This type of behavior betrays the public’s trust and cannot be tolerated. We entrust our public servants to safeguard confidential information and not prey upon victims, and we will continue to work with our partners to prosecute those who engage in this type of criminal activity,” stated FBI Assistant Director-in-Charge Rodriguez.
“This case is a clear example of the collaborative effort between federal prosecutors, the FBI, and the NYPD’s Internal Affairs Bureau to weed out individuals who allegedly violate the Department’s trust,” said Police Commissioner Bratton.
According to the complaint, the defendant surreptitiously installed multiple electronic devices in the Traffic Safety Office of the NYPD’s 70th Precinct that allowed him to remotely access restricted NYPD computers and law enforcement databases, including one maintained by the FBI, that he did not have permission to access. One of the electronic devices installed by the defendant contained a hidden camera that captured a live image of the Traffic Safety Office and was capable of live-streaming that image over the Internet. The second electronic device was connected to one of the computers in the Traffic Safety Office and allowed the computer to be accessed and controlled remotely.
As alleged in the complaint, investigators with the NYPD’s Internal Affairs Bureau and the FBI determined that the devices had been used to allow the defendant to remotely log onto an NYPD computer using usernames and passwords belonging to NYPD uniformed officers. Thereafter, the defendant ran thousands of queries in databases, including a restricted law enforcement database maintained by the FBI, for information, including the personal identifying information of victims, related to traffic accidents in the greater New York City area.
The complaint further alleges that, after the defendant accessed the NYPD computer and law enforcement databases, he contacted individuals who had been involved in traffic accidents and falsely claimed to be, among others, an attorney with the fictitious “Katz and Katz law firm” who could assist them with potential legal claims. Letters sent by the defendant to accident victims included claims such as “I can advise you with 100% confidence that I can resolve this claim in your favor,” and “My fee is 14% only when you collect. And I know that you will collect.” All told, according to the complaint, between May and August 2014, the defendant ran over 6,400 queries in sensitive law enforcement databases that he accessed remotely via the compromised NYPD computer for information related to traffic accidents.
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces a maximum sentence of 10 years.
The government’s case is being prosecuted by Assistant United States Attorneys Samuel P. Nitze and Peter W. Baldwin, with assistance provided by the Computer Crime and Intellectual Property Section of the Department of Justice.
The Defendant:
YEHUDA KATZ
Age: 45
Brooklyn, New York
E.D.N.Y. Docket No. 15-MJ-229
Mexican National Sentenced for Illegal Re-EntryRead the Press Release
U.S. Attorney Kenneth A. Polite, Jr., announced that GALDINO MARTINEZ-CARRILLO, age 38, a citizen of Mexico, was sentenced yesterday for illegal re-entry of previously removed alien.
U.S. District Judge Martin L.C. Feldman sentenced MARTINEZ-CARRILLO to time served. MARTINEZ-CARRILLO will be surrendered to the custody of the U.S. Immigration and Customs Enforcement for removal proceedings
According to the court documents, on August 1, 2014, GALDINO MARTINEZ-CARRILLO was found in the United States after having been deported previously on October 25, 2012.
U.S. Attorney Polite praised the work of the Department of Homeland Security in investigating this matter. Assistant United States Attorney Emily K. Greenfield was in charge of the prosecution.
Mexican Citizen Pleads Guilty to Federal Heroin Trafficking Charge in New MexicoRead the Press Release
ALBUQUERQUE – Tomas Bustamante-Machado, 51, a Mexican citizen illegally residing in Phoenix, Ariz., pleaded guilty this morning in Albuquerque, N.M., to federal trafficking charges.
Bustamante-Machado was arrested on Jan. 16, 2015, in Bernalillo County, N.M., after the New Mexico State Police found approximately 1286 grams (2.8 pounds) of heroin hidden in his vehicle following a routine traffic stop. According to the criminal complaint, the heroin was found in an altered compartment in the back seat of Bustamante-Machado’s vehicle after he consented to a search of the vehicle. Court documents indicate that Bustamante-Machado is a Mexican citizen who was out of prison on an immigration bond pending a deportation hearing at the time of his arrest in this case. Bustamante-Machado subsequently was indicted on Feb. 10, 2015, and charged with possession of heroin with intent to distribute.
During today’s proceedings, Bustamante-Machado pled guilty to the indictment and admitted that on Jan. 16, 2015, while traveling from Phoenix, he was stopped by law enforcement and found to be in possession of more than one kilogram of heroin which was concealed in a secret compartment in the vehicle he was driving. He further admitted that the heroin was intended for another person.
Bustamante-Machado has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled. At sentencing, Bustamante-Machado faces a mandatory minimum of ten years and a maximum of life in federal prison. He will be deported after completing his prison sentence.
This case was investigated by the Border Enforcement Security Task Force (the BEST Team) of the Albuquerque office of HSI and the New Mexico State Police, and is being prosecuted by Assistant U.S. Attorney Joel R. Meyers and the Organized Crime Section of the U.S. Attorney’s Office.
This case was prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Members of Floyd County Family Plead Guilty to Insurance FraudRead the Press Release
PIKEVILLE — Three members of a Floyd County family admitted in federal court that they attempted to defraud insurance companies out of thousands of dollars.
On Monday, Charles Ray Tackett, 42, his son, Michael Ray Tackett, 25, and his wife, Anna Grace McGuire Tackett, 27, pleaded guilty to wire fraud and conspiracy before U.S. District Judge Danny C. Reeves.
According to court documents, Charles Tackett devised a scheme to defraud insurance carriers, by fraudulently obtaining insurance on classic vehicles. Tackett admitted he purchased vehicles, including a 1971 Cadillac Deville and a 1972 Oldsmobile, and falsely reported to the insurance companies that the vehicles had been fully restored through a body shop, when no such work had been done to the vehicles.
Tackett claimed the cars were worth significantly more than their actual value and he obtained insurance based on the inflated value of the vehicles. After the vehicles were destroyed in a fire, Tackett attempted to recover money by filing a claim under the fraudulently obtained insurance policy.
Tackett also acknowledged he recruited his wife and son to join the conspiracy. Michael Tackett and Anna McGuire Tackett executed similar schemes involving a 1978 Chevy Monte Carlo, a 1979 Pontiac Trans Am, and a 1984 Pontiac Firebird.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Howard S. Marshall, Special Agent in Charge, Federal Bureau of Investigation, jointly announced the guilty pleas.
The investigation was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Kate K. Smith represents the federal government in this case.
All three defendants are scheduled to be sentenced on June 22, 2015. They face a maximum prison sentence of 20 years and a maximum fine of $250,000. Any sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.
Member of Lawrence Kidnapping Crew Sentenced to 16 Years in PrisonRead the Press Release
BOSTON – Calling his crime “heinous” and “dastardly,” a U.S. District Court Judge sentenced a Lawrence man to 16 years in federal prison yesterday for his role in a 2012 kidnapping.
Edgar Acevedo, 34, was sentenced to 16 years in prison and two years of supervised release. In December 2014, Acevedo pleaded guilty to conspiracy to commit kidnapping.
Acevedo was part of a kidnapping crew headed by Alfred Vasquez. On Jan. 30, 2012, Vazquez, Acevedo, Alberto Moreno, Julio Gonzalez, and Deborah Torres, all of Lawrence, held a gun to a victim and kidnapped him from a street in the Jamaica Plain neighborhood in Boston. Through Vasquez, the crew demanded a $100,000 ransom for the victim’s release and, joined by William Ayala, held the victim in Lawrence for five days. After federal agents interceded, the victim was rescued, unharmed, in Lawrence. Among other evidence, members of the crew were identified by fingerprint and DNA evidence.
Before imposing sentence, Judge Gorton termed Acevedo’s crime “heinous” and remarked:
“You deserve to be severely punished here because you played an integral role in a sophisticated, well-planned kidnapping that involved the use of violence, firearms and an abduction for at least several days and the demand for and pursuit of a ransom after death threats. This kind of an egregious crime is rightly dealt with harshly in the sentencing guidelines, particularly to deter the commission of such crimes. And because you were part of the conspiracy to carry out this potentially deadly kidnapping, you are deserving of the long sentence you are about to receive. This sentence is intended not only to deter you from ever committing such a crime again but also to deter anyone else, whether engaged in drug trafficking or otherwise, from committing such dastardly crimes.”
This case is part of a two-year investigation by the U.S. Attorney’s Office, the Federal Bureau of Investigation, the Massachusetts State Police, the Lawrence Police Department, and other law enforcement agencies into violent kidnapping and home invasion crews operating in Lawrence. According to affidavits and other documents filed in court, the investigation revealed that the majority of these kidnappings were carried out by organized, armed, violent crews often referred to as Joloperros (loosely translated as “Stick-up Guys”). These Joloperros crews typically kidnapped drug dealers for large ransoms, paid in cash and/or drugs; used safe houses to hold their hostages; and sometimes assaulted and burned their victims while they held them captive. These crews also frequently used sophisticated tracking techniques, such as GPS devices, to follow their victims before the abductions, and at times used associates in the Dominican Republic to receive ransom money.
Seven people have pleaded guilty in connection with this kidnapping, including Miguel Nolasco, a relative of the victim who hired Vazquez to commit the kidnapping, Acevedo, Moreno, Gonzale,; Torres, and Ayala. Sentencing hearings for the remaining defendants are scheduled for March and April 2015.
Since the investigation began, more than 20 people have been charged in federal court with kidnapping-related offenses or because they were identified as being associated with members of Lawrence-based kidnapping crews. Including the guilty pleas referenced here, to date, nine people have pleaded guilty to conspiracy to commit kidnapping, while four others have pleaded guilty to firearm-related offenses.
United States Attorney Carmen M. Ortiz; and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; Chief James Fitzpatrick of the Lawrence Police Department; Commissioner William Evans of the Boston Police Department; Chief Damenic J. DiMella of the Saugus Police Department, made the announcement today. The cases are being prosecuted by Assistant U.S. Attorneys Peter K. Levitt, Christopher Pohl, and Timothy E. Moran of Ortiz’s Organized Crime and Gang Unit.
Member of Drug Trafficking Organization Sentenced to 57 Months in Prison for Conspiring to Sell Heroin in New JerseyRead the Press Release
TRENTON, N.J. – A member of a large-scale drug trafficking organization was sentenced today to 57 months in prison for conspiring to distribute heroin in Ocean and Monmouth counties and elsewhere in New Jersey, U.S. Attorney Paul J. Fishman announced.
Jamar Johnson, a/k/a “Rep,” of Lakewood, New Jersey, pleaded guilty Dec. 1, 2014, before U.S. District Judge Peter G. Sheridan to conspiracy to distribute heroin. Judge Sheridan imposed the sentence today in Trenton federal court.
In March 2014, 18 other alleged members of the drug trafficking organization of which Johnson was a member were charged by criminal complaint with conspiring to distribute heroin. The complaint referred to the drug trafficking organization as the “Britt-Young DTO,” after its leaders, Robert Britt, a/k/a “True,” and Rufus Young, a/k/a “Equan,” a/k/a “E-Money,” a/k/a “Kintock.” Of those individuals, eight have pleaded guilty.
According to documents filed in the case and statements made in court: Between September 2013 and March 2014, Johnson conspired with Rufus Young and others to distribute heroin in Ocean and Monmouth counties as part of the Britt-Young DTO. Johnson admitted that he distributed between 100 and 400 grams of heroin in furtherance of the conspiracy.In addition to the prison term, Judge Sheridan sentenced Johnson to three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, Red Bank Resident Office, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Nicholas Grippo of the U.S. Attorney’s Office Criminal Division in Newark.
15-093
Defense Counsel: Joshua Markowitz Esq., Lawrenceville, N.J.
Medford Armed Career Criminal Sentenced to 15 Years in Federal PrisonRead the Press Release
MEDFORD, Ore. - On Monday, March 16, 2015, Senior U.S. District Judge Owen M. Panner sentenced Joel Daniel Dixon, 49, of Medford, Oregon, to 188 months in federal prison, after he previously pled guilty to being a felon in possession of ammunition. Dixon will be on supervised release for five years after he completes his prison sentence.
In February 2013, a Jackson County Probation officer, accompanied by Jackson County Sheriff’s deputies, conducted a home visit on a probationer. The probation officer had reason to believe that another fugitive was at the residence. A sheriff’s deputy went to the back of the residence and saw Dixon hiding by the back window in a narrow space between the fence and the house. The deputy ordered Dixon to put his hands up. Dixon turned away, reached into his pocket and threw something down, and then walked towards the deputy with his hands up. The deputy frisked Dixon and found a Colt .380 magazine loaded with five .380 rounds in his pocket. In the narrow space where Dixon was hiding, officers found a small baggie of methamphetamine that had been dropped on the ground, a gallon ziplock of marijuana bud, a backpack, and a leather satchel containing 584 grams of methamphetamine packaged for sale.
Under federal law, any person who possesses a firearm or ammunition after being previously convicted of three violent felonies or felony drug trafficking crimes is an Armed Career Criminal and faces a 15 year mandatory minimum prison sentence. Dixon’s criminal history includes over 62 arrests, with 14 felony convictions, including felony attempt to elude police, manufacture of methamphetamine, possession of a controlled substance, supplying contraband, theft in the first degree, and felon in possession of a firearm. Dixon also has 22 misdemeanor convictions, including six assault in the fourth degree convictions, resisting arrest, attempt to elude police, false information to police, and felon in possession of a restricted weapon.
This case was investigated jointly by Jackson County Parole and Probation Services, the Jackson County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, and Firearms, and was prosecuted by Assistant U.S. Attorney Douglas W. Fong.
Luzerne County Man Charged with Drug Trafficking and Illegal Gun PossessionRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a criminal information was filed today charging a Kingston man with distributing Oxycontin and unlawfully possessing a firearm as an illegal drug user.
According to United States Attorney Peter Smith, the information alleges that Shawn Jenks, age 32, unlawfully possessed the firearm during September through November 2014, and illegally distributed Oxycontin pills on November 22, 2014, in Luzerne County.
The charges stem from an investigation by special agents of the Federal Bureau of Investigation and Kingston Police.
Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, if the defendant is convicted of the charges, he faces a maximum penalty under the federal statute of 20 years in prison and a $1 million fine for the drug charge, and 10 years in prison and a $250,000 fine for the gun charge. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Lone Tree Businessman Pleads Guilty to Defrauding the U.S. GovernmentRead the Press Release
DENVER – Hemal Ramesh Jhaveri, age 52, of Lone Tree, Colorado, pled guilty this week before Chief U.S. District Court Chief Marcia S. Krieger to conspiracy to defraud the United States, federal authorities announced. Chief Judge Krieger is scheduled to sentence Jhaveri on June 15, 2015. Jhaveri was indicted by a federal grand jury in Denver on August 6, 2014. An information was subsequently filed on March 16, 2015, the same day he pled guilty. Jhaveri is free on bond.
According to information contained in the charging documents and the plea agreement, Jhaveri was the founder, sole owner, and chief executive officer of SofTec Solutions, Inc. of Englewood, Colorado.
Between 2001 and 2010, SofTec Solutions participated in the Small Business Administration’s 8(a) Business Development Program, which was available to small businesses that were owned and controlled by socially and economically disadvantaged individuals. As a result of its participation in the program, the company received United States government contracts under which it provided clerical and administrative support and other services. During the life of the conspiracy, the government paid SofTec Solutions more than $17,000,000 pursuant to those contracts.
As requirements for SofTec Solutions’ continued participation in the program, Jhaveri’s net worth was to remain under $750,000 and his withdrawals from the company were not to exceed $300,000 in any fiscal year. In order to circumvent those limits, Jhaveri, with the assistance of others, diverted money from SofTec Solutions to bank accounts that he controlled and to other places for his personal use and benefit. The government’s position is that the diversions occurred in the years 2006 through 2009 and the total amount of money diverted was $4,494,305.79.
Much of the diverted money moved to bank accounts in California, India, Singapore, and Hong Kong and from those accounts to accounts that Jhaveri controlled. In addition, Jhaveri diverted over $500,000 from SofTec Solutions and used it as part of the purchase price of his $3,000,000 residence in Lone Tree, Colorado. He also arranged for the company to pay the IRS $177,240 to satisfy his personal tax bill. In 2008 and 2009, Jhaveri caused SofTec Solutions to transfer a total of $984,194 to pay expenses related to a restaurant in which he had an interest. In addition, Jhaveri funneled $45,000 from SofTec Solutions to an account of a dormant company and used that money to make his alimony payments.
Jhaveri never informed the SBA that this money had been diverted from SofTec Solutions to his use and benefit. If Jhaveri had provided that information, the SBA would have seen that his withdrawals from the company exceeded $300,000 in each of the years 2006 through 2009 and that his net worth each year was more than he reported to the agency.
Jhaveri willfully failed to report much of the diverted money on his federal income tax returns. The government has taken the position that Jhaveri failed to report $3,349,111 of the diverted money as income on his 2006-09 returns and, as a result, he caused a tax loss of $1,171,179. The government is requesting that Jhaveri be ordered to pay that amount as restitution to the IRS.
Jhaveri pled guilty to one count of conspiracy to defraud the United States, which carries a penalty of not more than 5 years in federal prison, and a fine of up to $250,000.
This case was investigated by IRS – Criminal Investigation, Department of Defense – Office of Inspector General – Defense Criminal Investigative Service, General Services Administration - Office of the Inspector General, Army Criminal Investigation Command – Colorado Fraud Resident Agency – Major Procurement Fraud Unit, Small Business Administration – Office of the Inspector General. The Special Enforcement Program of the Internal Revenue Service assisted in the case. The defendant was prosecuted by the Economic Crime Section of the U.S. Attorney’s Office’s Criminal Division.
Law Firm Bookkeeper Pleads Guilty to Embezzling Approximately $1 MillionRead the Press Release
ABINGDON, VIRGINIA – Patricia Ethel Chinault, 72, of Apopka, Florida, pled guilty today to embezzling approximately $1 million from a Carroll County law firm. Chinault previously lived in Carroll County and worked as a bookkeeper for the law firm. After she moved to Florida in 2009, Chinault continued to provide bookkeeping services for the firm.
Chinault had electronic access to the law firm’s accounts. Investigation revealed that she used that access to fraudulently divert money to herself from 2010 to 2014. Federal law enforcement agents became aware of suspicious activity on one of Chinault’s credit card accounts and subsequent investigation revealed the extent of Ms. Chinault’s criminal activity.
According to information provided to the Court at the guilty plea hearing, Chinault spent most of the stolen money on internet gambling. The government has asserted that Chinault will be responsible for more than $1.1 million in restitution. Chinault has admitted to stealing at least $960,809.
United States District Judge James P. Jones scheduled sentencing for June 4, 2015, at 2:00 p.m. Chinault faces a maximum possible penalty of up to twenty years in prison and/or a fine of up to $250,000.
The investigation of the case was conducted by the United States Secret Service. Assistant United States Attorney Randy Ramseyer is prosecuting the case for the United States.
Laredoan Pleads Guilty to Possessing Child PornographyRead the Press Release
LAREDO, Texas – Oscar Herrera III, 42, of Laredo, has pleaded guilty to possession of child pornography, announced U.S. Attorney Kenneth Magidson along with Janice Ayala, special agent in charge of Homeland Security Investigations (HSI) in San Antonio and Webb County Sherriff Martin Cuellar.
“This case is another example of the many successes resulting from the strong partnership between HSI and Webb County,” said Ayala, “a partnership which is a credit to the leadership and direction of Sheriff Martin Cuellar.”
As part of the plea today, the court heard that an investigator with the Webb County Sheriff’s Office, while using peer-to-peer software, was able to successfully download various files containing child pornography from an IP address associated with Herrera. As a result of this information, HSI special agents were contacted to assist in the investigation.
In November 2014, agents executed a search warrant at Herrera’s residence, at which time they seized various electronic devices. Forensic analysis on those devices revealed more than 3,000 images and more than 400 videos of child pornography. Herrera admitted watching the videos and that he knew that it was wrong.
“We’re glad individuals such as Herrera are admitting to the crime they committed, said Cuellar. “We will continue to be on the lookout for those who prey on the most vulnerable members of our population and ensure that they are brought to justice.”
The arrest of Herrera was a result of Operation Child Guardian, which was launched by the Webb County Sheriff’s Office in 2009. The success of these investigations have put dozens of suspected child predators behind bars.
U.S. District Court Judge Marina Garcia Marmolejo accepted the guilty plea today and set sentencing for June 30, 2015. At that time, Herrera faces a maximum of 10 years in federal prison and a possible $250,000 maximum fine. Upon completion of any prison term imposed, Herrera also faces up to life on supervised release during which time the court can impose a number of special conditions designed to protect children and prohibit the use of the Internet.
Herrera has been and will remain in custody pending sentencing.
This case, prosecuted by Assistant U.S. Attorney Christopher A. dos Santos, 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."
Justice Department Releases Critical Response Report of San Diego Police Department's Misconduct Policies and PracticesRead the Press Release
COPS Office Releases 40 Recommendations to Implement Best Practices at San Diego Police Department
The U.S. Department of Justice’s Office of Community Oriented Policing Services today announced the completion of an assessment of the San Diego Police Department’s policies and practices for preventing, detecting and investigating misconduct. The San Diego Police Department volunteered to undergo the review by the COPS Office following a series of misconduct incidents over the course of five years.
“Our goal with this report began with identifying deficiencies in policies, practices, or organizational culture that allowed misconduct to occur and to go undetected for years in San Diego,” said COPS Office Director Ronald Davis. “We see this report as a blueprint for reforms, and for building on the reform efforts already undertaken by former Chief William Lansdowne and Chief Shelley Zimmerman.”
The COPS Office first announced the beginning of the Critical Response Technical Assistance review in March 2014. The report focuses on 17 cases of misconduct over five years and includes a review of how the cases were handled, and of the department’s policies and accountability system. During the assessment, the COPS Office’s training and technical assistance provider for the assessment, the Police Executive Research Forum, conducted focus groups and interviews with city and department stakeholders, community outreach and observed operations.
The report identifies a number of deficiencies in recruiting practices, supervision and training of officers, accountability systems, and mechanisms for reviewing citizen complaints and leadership. The assessment recommends a comprehensive approach to all aspects of policing that can help prevent misconduct. This includes the training and supervision of officers, the recruitment and selection of new officers, accountability mechanisms, internal investigations and disciplinary practices.
“We requested and welcomed this assessment from the Department of Justice COPS Office," said San Diego Police Chief Shelley Zimmerman. “The numerous recommendations they have made will only help us improve our department and the proud service we provide to our community.”
The report, Critical Response Technical Assistance Review—Police Accountability: Findings and National Implications of an Assessment of the San Diego Police Department can be found here: https://cops.usdoj.gov/RIC/ric.php?page=detail&id=COPS-W0756.
The assessment was administered as part of the COPS Office’s Critical Response Technical Assistance initiative, designed to provide technical assistance to agencies facing significant law enforcement-related issues. Using subject matter experts, interviews and direct observations, as well as conducting extensive research and analysis, the COPS Office assists law enforcement agencies with enhancing and improving their policies and procedures, operating systems and professional culture.
The COPS Office, headed by Director Ronald Davis, is a federal agency responsible for advancing community policing nationwide. Since 1995, COPS has awarded over $14 billion to advance community policing, including grants awarded to more than 13,000 state, local, and tribal law enforcement agencies to fund the hiring and redeployment of more than 126,000 officers and provide a variety of knowledge resource products including publications, training, and technical assistance. For additional information about COPS, please visit www.cops.usdoj.gov.
Justice Department Asks Federal Court to Shut Down Indiana Tax Return PreparerRead the Press Release
The United States filed a complaint seeking to permanently bar an Indianapolis woman from preparing federal tax returns for others, the Justice Department announced today.
The civil injunction complaint against Jennifer Carolina Gonzalez, doing business as Jenny’s Tax Services, which was filed in the U.S. District Court for the Southern District of Indiana, alleges that Gonzales fraudulently adjusted customers’ income claimed on Schedule C (Profit or Loss From Business) to either increase an Earned Income Tax Credit the customer was not entitled to, or to reduce the customer’s tax liability. Gonzalez, according to the suit, also frequently prepared returns claiming head of household filing status for customers who were ineligible. The complaint alleges that Gonzalez frequently prepared returns claiming child tax credits for customers’ relatives who lived in Mexico and had never lived in the United States, even though Gonzalez knew that children living in Mexico cannot be used to support child tax credits and additional child tax credits.
Tax return preparers must provide their Preparer Tax Identification Number (PTIN) on returns they prepare. As alleged in the complaint, as part of a pattern of non-compliance, Gonzalez failed to provide her own PTIN on returns she prepared until January 2013. Instead, the complaint alleges that Gonzalez used a PTIN assigned to a person living in New Jersey, who has no connection to Gonzalez and has never authorized Gonzalez or anyone else to use the PTIN.
The complaint further alleges that, in 2012, Gonzalez sold the use of the third-party PTIN she had appropriated, her own Electronic Filing Identification Number (EFIN) and Jenny’s Tax Services’ Employer Identification Number (EIN) to another tax preparation business, which agreed to pay Gonzalez $20 per return filed containing Gonzalez’s identification numbers. Despite selling the use of the identification numbers, Gonzalez continued to use the identification numbers when preparing returns for the 2011 tax year, as did the purchaser.
According to the complaint, the Internal Revenue Service (IRS) estimates that Gonzalez, through Jenny’s Tax Service, has prepared more than 2,000 tax returns since 2011. The suit alleges that the false information she included on her customers’ tax returns generated larger refunds or reduced tax liabilities for Gonzalez’s customers, and that the losses to the U.S. Treasury could exceed $3.9 million.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2015. The IRS has some tips on their website for choosing a tax preparer, and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Ithaca Man Pleads Guilty to ConspiracyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Chris Beach, 48, of, Ithaca, NY, pleaded guilty before U.S. Magistrate Judge Marian W. Payson to a misdemeanor conspiracy charge. The charge carries a maximum sentence one year in prison, a fine of $100,000, or both.Assistant U.S. Attorney John J. Field, who is handling the matter, stated that Beach, a member of the Plumbers & Steamfitters Local 267, conspired to submit a false claim for reimbursement of $6,358 from the Local 267 health benefit program.
The plea is the culmination of an investigation by Special Agents the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the Direction of Special Agent-in-Charge Cheryl Garcia.
Sentencing is scheduled for June 1, 2015 at 12:00 p.m. before Judge Payson.
Hudson County, New Jersey, Contractor Admits Fraudulently Receiving more than $200,000 in Government-Funded Projects through CollusionRead the Press Release
TRENTON, N.J. - A Hudson County, New Jersey, man, today admitted to colluding with other contractors to secure projects funded by U.S. Department of Housing and Urban Development grants, U.S. Attorney Paul J. Fishman announced.
John Youngclaus, 43, of Bayonne, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with theft of $224,250 in government funds.
According to documents filed in this case and statements made in court:
Youngclaus was the owner of JRY Plumbing and Heating (JRY), a plumbing company in Bayonne. The City of Bayonne Department of Community Development (CBDCD) was a government agency that received funds from the U.S. Department of Housing and Urban Development (HUD) under a federal program that provided grants up to $20,000 to low-income families to rehabilitate their homes and to repair conditions affecting health and safety, accessibility, energy efficiency or code compliance. The CBDCD selected contractors for the HUD-funded rehabilitation grants through a competitive bidding process that required the submission of bids from competing contractors with estimated price quotes. The CBDCD selected the lowest bidder for particular applications.
Between January 2012 and December 2012, Youngclaus solicited, received and submitted bids from competing contractors that were higher than the bids that Youngclaus submitted to the CBDCD on behalf of JRY. On at least one occasion, Youngclaus received blank invoices from a competing contractor and Youngclaus wrote the job details and price quote on the blank invoice and submitted the fraudulent bid along with a lower bid from JRY to the CBDCD for a certain grant-funded job to obtain the grant project. The information also describes at least two instances when Youngclaus submitted fraudulent bids from competing contractors for properties that he owned in Bayonne. Although the jobs were awarded to the competing contractor with the lowest bid, JRY plumbing performed the work on the properties owned by Youngclaus and received the payment for the work.
As a result of Youngclaus colluding with other contractors, JRY wrongfully obtained $224,250 in HUD funds from the CBDCD during 2012.
The theft of government funds charge to which Youngclaus pleaded guilty carries a maximum potential penalty of 10 years in prison and maximum fines of $250,000. Sentencing is currently scheduled forJune 22, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; special agents of the U.S. Department of Housing and Urban Development, Office of the Inspector General, under the direction of Special Agent in Charge Christina Scaringi; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark, with the continuing investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jacques S. Pierre of the Special Prosecutions Division and Assistant U.S. Attorney Steven G. Sanders of the Appeals Division.
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Defense counsel: Lawrence S. Lustberg Esq., Newark
Honduran Sentenced for Illegal Re-Entry After DeportationRead the Press Release
The United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced that Omar Oseguera-Cortez, 30, was sentenced on March 16, 2015 to the time he has served in custody for the federal felony offense of re-entering the U.S. unlawfully after two previous deportations.
Oseguera-Cortez is a Honduran national. At his change of plea hearing, Oseguera-Cortez admitted that he had been previously deported to Honduras in 2007 and 2009.
Oseguera-Cortez had served more than two months in custody prior to his sentence hearing. Oseguera-Cortez was originally arrested by Madison County Sheriff’s deputies on January 6, 2015, for criminal damage to property. Oseguera-Cortez will now be remanded to the custody of U.S. Immigration and Customs Enforcement (I.C.E.) for deportation.
The investigation which resulted in Oseguera-Cortez’s arrest and conviction was conducted by Immigration and Customs Enforcement agents.
The case was prosecuted by Assistant United States Attorney Robert L. Garrison.
Harrisburg Man Sentenced to 12 and A Half Years in Prison for Cocaine TraffickingRead the Press Release
The United States Attorney's Office for the Middle District of Pennsylvania announced that a 36-year-old Harrisburg man was sentenced today to 151 months in prison by Chief District Court Judge Christopher C. Conner for possession with the intent to distribute cocaine and crack cocaine.
According to United States Attorney Peter Smith, the defendant, Darnell Lamont Doss, previously pleaded guilty to possession of cocaine base with the intent to distribute in October 2014.
Doss was previously charged in February 2014 in a superseding indictment, as a result of an investigation by the Harrisburg Police Department and the FBI.
The case was prosecuted by Assistant U.S. Attorney Joseph J. Terz.
Gregg County Sex Offender Sentenced for Child Pornography ViolationsRead the Press Release
TYLER, Texas – A 42-year-old Kilgore, Texas man has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Terry Drennen pleaded guilty on Dec. 2, 2014 to possession of child pornography and was sentenced to 180 months in federal prison today by U.S. District Judge Leonard Davis.
According to information presented in court, Drennen, a registered sex offender having been previously convicted of indecency with a child, was found to be in possession of material depicting the sexual exploitation of a child. Drennen was indicted by a federal grand jury on June 19, 2014 and charged with child pornography violations.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Federal Bureau of Investigation, the U.S. Secret Service, the Rusk County Sheriff’s Office and the Orlando, Florida Police Department and prosecuted by Assistant U.S. Attorney Nathaniel C. Kummerfeld.
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Gregg County Convicted Felon Sentenced for Federal Firearms ViolationRead the Press Release
TYLER, Texas - A 39-year-old Longview, Texas man has been sentenced to federal prison for being a felon in possession of a firearm in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
John Blake London pleaded guilty on Dec. 2, 2014, to being a felon in possession of a firearm and was sentenced to 42 months in federal prison today by U.S. District Judge Leonard Davis.
According to information presented in court, on July 9, 2014, London was driving a car in Longview when he was detained by a police officer because he had parked in a roadway and was impeding traffic. During the course of the detention, the officer discovered that London had an active warrant so the officer placed him under arrest. The officer then learned that the only passenger in the car had no valid driver’s license, so the officer called for a tow truck and performed an inventory of the car. During the course of the inventory, the officer discovered a sawed-off shotgun. The officer checked London’s criminal history and found that he had been previously convicted of forgery in Gregg County in 2012 and possession of cocaine in Tarrant County in 2008. Convicted felons are prohibited by federal law from owning or possessing firearms or ammunition. London was indicted by a federal grand jury on Sep. 17, 2014.
This case was prosecuted as part of Project Safe Neighborhoods, aimed at reducing gun and gang violence, deterring illegal possession of guns, ammunition and body armor, and improving the safety of residents in the Eastern District of Texas. Participants in the initiative include community members and organizations as well as federal, state and local law enforcement agencies.
This case was investigated by the Longview Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney Jim Noble.
Georgia Man Pleads Guilty to Fraudulently Obtaining Title Ii Child Insurance BenefitsRead 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 Donald Hargrave, 62, of Douglasville, GA, pleaded guilty to unlawfully receiving Title II Child Insurance Benefits before Senior U.S. District Judge William M. Skretny. The charge carries a maximum penalty of 10 years in prison, a fine of $250,000, or both.
Assistant U.S. Attorney Scott S. Allen, Jr., who is handling the case, stated that between May 2012 and July 2013, while living in Buffalo, the defendant received Title II Child Insurance Benefits from the Social Security Administration but did not use the benefits to support his son. Hargrave received a total of $39,124 to which he was not entitled.
The plea is the result of an investigation by the Office of the Inspector General of the Social Security Administration, under the direction of Special Agent in Charge Edward J. Ryan.
Sentencing is scheduled for July 1, 2015 at 9:00 a.m. before Judge Skretny.
Fugitive Chinese Official and Former Wife Named in Grand Jury Indictment Charging Immigration Fraud and Money LaunderingRead the Press Release
LOS ANGELES – The ex-wife of a former Chinese official was arrested today in Newcastle, Washington, on charges that she and her former husband fraudulently obtained visas to enter the United States through the immigrant investor program and laundered money to purchase property in Washington state.
Shilan Zhao (趙世蘭), 51, of Newcastle, Washington, and her ex-husband Jianjun Qiao (喬建軍), 51, are charged in a federal grand jury indictment unsealed today with conspiracy to commit immigration fraud and international transport of stolen funds, as well as conspiracy to commit money laundering. Zhao is additionally charged with one count of immigration fraud.
The divorced couple’s scheme involved falsely portraying themselves as still married and lying about the source of Zhao's foreign investment, which was required under the EB-5 immigrant investor program to obtain U.S. immigrant visas, according to the indictment. Zhao allegedly stated under oath on documents submitted to U.S. Citizenship and Immigration Services that she had an ownership interest in the companies providing the $500,000 minimum investment, which investigators later learned she did not.
The indictment also states the divorced couple purchased a residence in the Seattle suburb of Newcastle with laundered money related to fraudulent transactions from a grain storehouse in Zhoukou City, Henan Province, China where Qiao served as director from 1998 to 2011.
As part of the indictment, the federal government is seeking the forfeiture of property obtained through the proceeds of the scheme, including the house in Newcastle, Washington. The indictment also alleges that Qiao engaged in fraudulent grain transactions while serving as the grain storehouse director, and Qiao and Zhao had money transferred out of China, with approximately $500,000 being used to purchase the Newcastle property.
Zhao appeared this afternoon in federal court in Seattle, Washington, where the indictment was unsealed. At the government’s request, Zhao was ordered detained (held without bond) and is scheduled to be back in court in Seattle on Friday.
Qiao remains at large and is being sought by U.S. authorities.
If convicted, Zhao faces statutory maximum sentences of five years in federal prison for the charges of conspiracy to commit international transport of stolen funds and immigration fraud, 10 years for the immigration fraud charge, and 20 years for the money laundering conspiracy charge.
This case is the product of a joint investigation conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and Internal Revenue Service - Criminal Investigation, which received assistance from U.S. Citizenship and Immigration Services. Investigators also acknowledge the assistance provided by the Supreme People's Procuratorate and Ministry of Public Security of the People's Republic of China.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Release No. 15-028
Former Postal Employee Sentenced for Obstruction of the MailsRead 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 Jennifer Paonessa, 33, of Niagara Falls, NY, who was convicted of obstruction of the mails, was fined $250.00 by U.S. Magistrate Judge H. Kenneth Schroeder, Jr.Assistant U.S. Attorney Elizabeth R. Moellering, who handled the case, stated that the defendant, a former employee of the United States Postal Service, delayed or failed to deliver mail matter entrusted to her for delivery. The defendant took at least 15 Victoria Secret coupons and used them for her own benefit.
The sentencing is the culmination of an investigation on the part of Special Agents of the United States Postal Service, Office of the Inspector General, under the direction of Monica Weyler.
Former Fugitive Narcotics Trafficker Handed Hefty SentenceRead the Press Release
McALLEN, Texas – Jose Urbano Cortinas, 29, has been ordered to prison for nearly 23 years following his conviction of conspiring to possess with the intent to distribute cocaine, announced U.S. Attorney Kenneth Magidson. Cortinas, of Memphis, Tenn., entered a guilty plea to the charge Oct. 29, 2014.
Today, U.S. District Judge Randy Crane ordered Cortinas to serve a total of 262 months in federal prison to be immediately followed by a five-year-term of supervised release.
The investigation revealed that from 2008 through 2011, Cortinas and others conspired to transport large amounts of cocaine from the Rio Grande Valley to Georgia via tractor-trailers. During the investigation, law enforcement was able to seize several loads of cocaine, including 267 kilograms on May 15, 2009, and 330 kilograms on Jan. 29, 2010.
Cortinas was indicted in 2011, but fled to Arkansas. He was subsequently apprehended in July 2014.
The investigation leading to the charges was conducted by the Drug Enforcement Administration. Assistant U.S. Attorney James Sturgis prosecuted the case.
Former Federal Official Admits Self-Dealing Federal Grants to New Jersey UniversitiesRead the Press Release
TRENTON, N.J. – The former assistant division administrator of the Federal Highway Administration (FHWA), New Jersey Division, today admitted using a straw company to fraudulently obtain grant funds, U.S. Attorney Paul J. Fishman announced.
Lawrence F. Cullari Jr., 43, of Tinton Falls, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of mail fraud.
According to documents filed in this case and statements made in court:
The defendant was the assistant division administrator at the FHWA’s New Jersey Division from 2010 through July 2013 and was able to influence the allocation of U.S. Department of Transportation funding. He also operated a private consulting and engineering company called Dencore Consulting, which was owned by his ex-wife. His former father-in-law owned and operated “Company 1,” an engineering company located in Middletown, New Jersey, that provided mechanical, plumbing and electrical designs for commercial and residential projects.
Cullari admitted that in 2006, he and his father-in-law agreed to use Company 1 as a straw contractor to get FHWA-funded work for Dencore Consulting from Rutgers University’s Center for Advanced Infrastructure and Transportation (Rutgers CAIT) and the N.J. Institute of Technology (NJIT). From May 2006 through June 2013, Cullari prepared bids and work proposals for Company 1 to sign and submit to Rutgers CAIT and NJIT. When Rutgers CAIT or NJIT awarded the projects to Company 1, Cullari arranged for the completion of engineering reports and invoices that fraudulently stated that Company 1 completed the work. After Rutgers CAIT or NJIT paid Company 1, its owner kept a small portion of the payment and wrote a check to Dencore Consulting for the remaining balance.
The mail fraud charge to which Cullari pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for June 22, 2015.
U.S. Attorney Fishman credited special agents of the U.S. Department of Transportation, Office of the Inspector General, under the direction of Regional Special Agent in Charge Douglas Shoemaker, and the N.J. Department of Transportation, Office of the Inspector General, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Scott B. McBride, Deputy Chief of the U.S. Attorney’s Office’s Economic Crimes Unit.
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Defense counsel: Bradley L. Henry Esq., New York
Former Corrections Officer Sentenced to 27 Months in Prison for Taking Cash to Smuggle Contraband into FacilityRead the Press Release
WASHINGTON - Lenard Fleming, 34, a former corrections officer who worked for the Corrections Corporation of America (CCA), was sentenced today to 27 months in prison after earlier pleading guilty to a bribery charge for accepting money to smuggle contraband into the District of Columbia’s Correctional Treatment Facility.
The sentencing was announced by U.S. Attorney Ronald C. Machen Jr.; Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office; and Thomas N. Faust, Director of the District of Columbia Department of Corrections.
Fleming, of District Heights, Md., pled guilty in November 2014 in the U.S. District Court for the District of Columbia to one count of bribery. He was sentenced by the Honorable Ketanji Brown Jackson. Upon completion of his prison term, Fleming will be placed on two years of supervised release.
According to the government’s evidence, Fleming had worked for the Corrections Corporation of America (CCA) as a corrections officer at the Correctional Treatment Facility. CCA, a private company, has a contract to provide services to the D.C. Jail.
During the investigation, the FBI recovered contraband from an inmate at the Correctional Treatment Facility in January 2014. Fleming admitted that he smuggled items for the same inmate through that inmate’s contacts outside of the Correctional Treatment Facility. Fleming received cash payments in exchange for smuggling cigarettes and, on one occasion, an iPhone, into the Correctional Treatment Facility for delivery to the inmate.
Fleming was terminated by CCA in February 2014 following a complaint that he was smuggling contraband into the facility for another inmate. CCA was presented with allegations that Fleming met several times with the wife of another inmate. On each occasion, the inmate’s wife provided Fleming cash in exchange for Fleming smuggling cigarettes and synthetic marijuana into the facility and delivering it to the inmate. Fleming was arrested April 30, 2014.
In a related investigation, another former corrections officer at the Correctional Treatment Facility, Darren Malry, 52, pled guilty in October 2014, to a bribery charge. According to the government’s evidence, on March 11, 2014, Malry smuggled contraband into the facility for an inmate. Malry was arrested that day. Malry is to be sentenced March 25, 2015.
In announcing the sentence, U.S. Attorney Machen, Assistant Director in Charge McCabe, and Director Faust commended the work of those who jointly worked the case, including agents from the FBI’s Washington Field Office, investigators from the District of Columbia Department of Corrections Office of Investigative Services, and investigators from the Corrections Corporation of America. They also commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Donna Galindo, Corinne Kleinman, and Angela Lawrence; Assistant U.S. Attorneys Melinda Williams, Todd Gee, and former Assistant U.S. Attorney Justin Dillon, who assisted in the investigation, and Assistant U.S. Attorneys Catherine K. Connelly, Allessandra Stewart, and Arvind Lal, who assisted with forfeiture issues. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Richard DiZinno, who prosecuted the case.
Former Champaign Business Owner Pleads Guilty to Filing False Income Tax ReturnsRead the Press Release
Urbana, Ill. – Sentencing is scheduled on May 8, 2015, for former business owner Michael S. Fogerson of Champaign, Ill. Yesterday, Fogerson pleaded guilty to two counts of filing a false tax return, as announced by Jim Lewis, U.S. Attorney for the Central District of Illinois. Fogerson remains on bond following his appearance yesterday before U.S. District Judge Harold A. Baker.
According to court documents, Fogerson, 51, was the owner, sole proprietor, and operator of The Smoke Shack in Champaign, Ill., and The Smoker’s Den in Decatur, Ill. During 2009, 2010, and 2011, The Smoke Shack sold tobacco-related products, as well as synthetic marijuana prior to its regulation by state and federal authorities. For tax years 2009 and 2010, Fogerson sold bulk quantities of synthetic marijuana to tobacco product stores similar to The Smoke Shack that operated outside of the Champaign and Decatur area. To lower his individual adjusted gross income, Fogerson failed to report the profits generated from these bulk sales to the Internal Revenue Service. Fogerson admitted he failed to report the profits.
As a result of the unreported receipts from his bulk sales of synthetic marijuana, Fogerson falsely claimed only $28,307 of taxable income on his 2009 Form 1040. In reality, Fogerson had taxable income of approximately $393,799. Thus, Fogerson had an additional income tax due and owing to the United States of America of approximately $128,720 for the 2009 tax year, which he did not pay. Fogerson falsely claimed only $54,522 of taxable income on his 2010 Form 1040. In reality, Fogerson had taxable income of approximately $968,579. Thus, Fogerson had an additional income tax due and owing to the United States of America of approximately $336,491, which he did not pay.
During the investigation, the Internal Revenue Service seized $835,421.89 from Fogerson that was alleged to have been deposited in amounts less than $10,000 to avoid having the bank report the deposits to the Internal Revenue Service. As part of his plea of guilty, Fogerson agreed that $465,211 of the seized currency would be used to pay his back taxes for 2009 and 2010 and that the remaining currency would be forfeited to the United States Treasury.The maximum statutory penalty for each count of filing a false tax return is three years in prison, and a fine of up to $100,000, plus the costs of prosecution.
The case is being prosecuted by Assistant U.S. Attorney Eugene L. Miller. The charges are the result of an investigation by Internal Revenue Service, Criminal Investigation Division.
Former CEO of Baltimore Behavioral Health Pleads Guilty to Failing to Transfer Payroll Taxes to the IRS and to Stealing from the Employee Pension PlanRead the Press Release
Baltimore, Maryland – The former Chief Executive Officer (CEO) of Baltimore Behavioral Health (BBH), William Kristen Hathaway, age 52, of Ellicott City, Maryland pleaded guilty today to failing to pay to the IRS more than $2.4 million in payroll taxes deducted from the paychecks of BBH employees, and to stealing more than $53,000 from the BBH employee benefit plan.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Steven Anderson, of the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
“As chief executive officer of a primary ‘charitable’ organization funded by the government to treat Baltimore drug addicts, William Kristen Hathaway paid lucrative salaries to his family members while cheating the IRS and the employee pension plan,” said U.S. Attorney Rod J. Rosenstein. “This case highlights the need for close oversight of organizations that receive public funds.”
“Hathaway abused his position of trust at Baltimore Behavioral Health,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office. “Through manipulation and theft, Hathaway’s scheme left the American taxpayers and the employees of Baltimore Behavioral Health with the tab for his greed.”
“Mr. Hathaway’s fraudulent actions hurt the livelihood of BBH employees, and he should be held accountable,” stated Special Agent in Charge Steven Anderson, of the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations. “My office remains committed to investigating these types of crimes, and we will continue to work diligently with our law enforcement partners to ferret out corrupt individuals.”
According to Hathaway’s plea agreement, he was the CEO for BBH, a tax-exempt organization that provided treatment to people with drug addictions and mental disorders. Hathaway exercised significant control over many aspects of BBH’s business affairs, including managing the company’s financial accounts and overseeing the employee payroll process, which included calculating the withholding of taxes and contributing to and maintaining employee benefit plans. The Board of Directors for BBH was primarily comprised of Hathaway’s relatives, including his wife, his sister, and his mother. Board members were paid a salary.
Hathaway admitted that from March 2009 through December 2011, he regularly deducted payroll taxes from all employees’ wages without forwarding the money to the IRS. For example in the second quarter of 2009, Hathaway caused $344,112.26 in federal payroll taxes to be withheld from employees’ wages, but he elected not to pay that amount over to the IRS. Hathaway admitted withholding a total of $2,495,779 in payroll taxes from March 2009 through December 2011, but instead of forwarding those funds to the IRS, he spent the money on company expenses. For example, during the same period, Hathaway authorized a total of $2,730,752 in salaries to BBH officers, including himself, and contractual payments to an entity owned and operated by his mother and stepfather.
Hathaway also served as a fiduciary for the employee pension plan and was responsible for transferring employee contributions to the retirement plan, as well as any matching company contributions to the custodian of assets for the BBH employee pension plan. Hathaway admitted that from September 2009 through April 2010, Hathaway diverted $53,530.07 in employee contributions to the BBH employee pension plan to pay company expenses, instead of transferring those funds to the custodian of assets.
Hathaway faces a maximum sentence of five years in prison for each of the two counts. U.S. District Judge Richard D. Bennett has scheduled sentencing for June 18, 2015 at 3:00 p.m.
United States Attorney Rod J. Rosenstein commended the IRS – CI and the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations for their work in the investigation and the Employee Benefits Security Administration for its assistance in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Martin J. Clarke, who is prosecuting the case.
Florida Man Sentenced to 10 Years in Prison for Firearms ViolationsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JAIME JAUREGUI, age 36, of Orlando, Florida, was sentenced today after a federal jury found him guilty of conspiracy to violate the Gun Control and National Firearms Acts and possession of unregistered firearms.
U.S. District Judge Jay C. Zainey sentenced JAUREGUI to 120 months incarceration, followed by 3 years of supervised release.
According to previously filed court documents, in January 2012, agents of Homeland Security Investigations in New Orleans received information indicating that JAUREGUI was interested in acquiring items listed on the United States Munitions List and smuggling the weapons to end users in Mexico. On at least four occasions from January 2012 through March 21, 2013, JAUREGUI met with an undercover agent in St. Tammany Parish to negotiate the purchase of more than 100 fully automatic assault rifles, grenade launchers, grenades, and night vision goggles, all of which were destined for a Mexican drug trafficking cartel. JAUREGUI provided a cash deposit of approximately $46,000 during those meetings. JAIME JAUREGUI hired CARLOS CABRERA, FRANCISCO MALDONADO, and RUBEN JAUREGUI to assist him with transporting the weapons to the final destinations. None of the men have federal firearms or export licenses. Defendants CABRERA, MALDONADO, and RUBEN JAUREGUI previously pled guilty and have been sentenced.
U.S. Attorney Polite praised the work of Homeland Security Investigations (HSI) and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), with assistance from the Defense Criminal Investigative Service (DCIS), the Louisiana State Police, and the St. Tammany Parish Sheriff’s Office for investigating this matter. Assistant U.S. Attorney Gregory M. Kennedy and Special Assistant U.S. Attorney Brian Ebarb are in charge of the prosecution.
Federal Jury Finds Mexican National Guilty of Conspiring to Transport Illegal AliensRead the Press Release
ALBUQUERQUE – A federal jury sitting in Las Cruces, N.M., found Juan De Dios Ramos-Ruiz, 50, a Mexican national residing in Socorro, N.M., guilty on an indictment charging him with conspiracy to transport illegal aliens. The guilty plea was announced by U.S. Attorney Damon P. Martinez and El Paso Sector Chief Border Agent Jeffrey D. Self of the U.S. Border Patrol.
Ramos-Ruiz was arrested on Nov. 18, 2014, on a criminal complaint charging him with conspiracy to transport illegal aliens. He subsequently was indicted on Jan. 14, 2015, and charged with the same crime. Trial against Ramos-Ruiz commenced on March 16, 2015, and concluded late this morning when the jury returned a guilty verdict on the sole count of the indictment.
The evidence at trial established that on July 17, 2014, Border Patrol agents executed a traffic stop of a car driven by a woman (the driver) in the vicinity of Hachita, N.M., in Luna County, N.M. As an agent approached the car, he observed two passengers in the back seat who were crouched down in an effort to conceal themselves. The agents arrested the three individuals after determining that the driver was a U.S. citizen and the two passengers were Mexican nationals illegally in the United States. The driver testified at trial that she was recruited by Ramos-Ruiz to transport the two illegal aliens from Socorro to Deming, N.M., on July 17, 2014, with the understanding that someone else would transport them from there to another destination. The driver described how Ramos-Ruiz drove ahead of her as a “look out” for the Border Patrol while she followed in her vehicle with the two illegal aliens. The driver also admitted that Ramos-Ruiz paid her $200.00 at the beginning of the drive and expected to be paid another $200.00 when she successfully delivered the two illegal aliens to Deming.
The two illegal aliens also testified and admitted paying $3,500.00 each to be smuggled into the United States. They testified that after being transported to the United States-Mexico border near El Paso, Texas, on July 15, 2014, they were picked up by Ramos-Ruiz who took them to a mobile home were they remained until July 17, 2014. In the early morning of July 17, 2014, the illegal aliens were picked up by the driver who instructed them to stay low in the vehicle to avoid detection by law enforcement.
The jury deliberated approximately 25 minutes before returning its guilty verdict.
Ramos-Ruiz has been in federal custody since his arrest and remains in federal custody pending his sentencing hearing which has yet to be scheduled. Ramos-Ruiz faces a statutory maximum penalty of ten years in prison and will be deported after completing his prison sentence.
This case was investigated by the Las Cruces Border Patrol Station of the U.S. Border Patrol and is being prosecuted by Assistant U.S. Attorneys Luis A. Martinez and E. Garreth Winstead, III.
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15-132
FCI Berlin Inmate Sentenced OnRead the Press Release
Federal Weapon Possession ChargeCONCORD, NEW HAMPSHIRE – Myron Armstrong, 38, an inmate at the Federal Correctional Institution in Berlin, New Hampshire, was sentenced on Monday in United States District Court for the District of New Hampshire to two years in prison for federal weapon possession charges, announced United States Attorney John P. Kacavas.
In early 2014, Armstrong created a weapon from a sock and a combination lock, which he subsequently used to assault a fellow inmate. During the ensuing altercation, a federal correctional officer also sustained injuries when he attempted to intervene. United States Attorney John P. Kacavas stated, “The federal prosecution of this defendant demonstrates our resolve to bring violent offenders to justice and our intolerance of such conduct in a federal correctional institution.”
This prosecution arose from an investigation by the Federal Correctional Institution in Berlin, New Hampshire, in collaboration with the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Nick Abramson.
Ephren Taylor Sentenced to Federal PrisonRead the Press Release
ATLANTA - Ephren Taylor II, and Wendy Connor have been sentenced in connection with the fraud scheme they perpetrated while officers at City Capital Corporation. The scheme victimized over 400 people who invested over $16 million.
“Taylor’s ‘Building Wealth’ tour accomplished exactly the opposite, victimizing hundreds of investors and leaving many of them financially ruined,” said Acting U.S. Attorney John Horn. “At churches across the country he touted himself as a socially conscious investor, but his investment opportunities were nothing but a Ponzi scheme designed to build his own personal wealth. This sentencing brings a measure of justice to those who remain devastated by his actions.”
“These defendants are habitual fraudsters and world-class manipulators,” stated Special Agent in Charge Veronica Hyman-Pillot, IRS Criminal Investigation. “Taylor and Connor knew that the investments they were touting were based entirely on deception and lies, which were driven by their insatiable greed. Today, Taylor and Connor have to face the choices they have made and live with the consequences.”
“This case demonstrates the wide-reaching effects of fraudulent investment schemes and their impact on innocent victims. The fact that Ephren Taylor took advantage of people during a time of reverence and trust is particularly heinous,” said Reginald G. Moore, Special Agent in Charge of the United States Secret Service, Atlanta Field Office. “Today’s sentence should serve as a reminder that criminals will not get away with taking advantage of unsuspecting victims without bearing the consequences.”According to Acting U.S. Attorney Horn, the charges and other information presented in court: Taylor, the CEO of City Capital Corporation, directed a nationwide Ponzi scheme. All told, he defrauded over 400 victims and convinced them to invest over $16 million. From at least April 2009, when Wendy Connor joined City Capital, through October 2010, 278 victims were defrauded of over $5.8 million.
As part of the scheme, Taylor traveled around the country on a “Building Wealth Tour,” where he gave wealth management seminars to church congregations and where he targeted the African American and Christian communities. During this tour, Taylor claimed to be a socially conscious investor and falsely claimed that 20% of profits were donated to charity. One of the churches on the “Building Wealth Tour” was the New Birth Missionary Baptist Church in Lithonia, Ga. While there, Taylor and Connor met potential investors to discuss possible investments. Over 80 individuals from Georgia lost more than $2 million because of Taylor’s scheme.
The investments pushed by Taylor and Connor included purchasing promissory notes, where the funds invested would be used to support small businesses, such as laundries, juice bars, and gas stations. Taylor and Connor falsely represented the revenues and returns for these businesses knowing that they were not profitable.
Taylor and Connor also pushed an investment in sweepstakes machines. Sweepstakes machines are computers loaded with various games that allow players to win cash prizes. City Capital published offering materials that falsely claimed the average sweepstakes machine would generate 300% investor returns. As part of the fraud scheme, Taylor and Connor also promised that the sweepstakes machine investments were 100% risk free.
Taylor and Connor knew that the investments he was touting were not profitable and that investors were not receiving actual returns from their investments.
As part of the scheme, Taylor and Connor encouraged investors to use self-directed IRAs to make their investments. Many victims transferred their retirement savings to trust companies that act as custodians for self-directed IRAs, expecting these funds to be used to fund the investments pushed by Taylor.
After victims funded their self-directed IRAs, Taylor and Connor directed the use of those funds. The money was not invested as promised, but rather was used to pay ongoing business expenses of City Capital, pay personal expenses for Taylor and Connor, and in some limited instances, to pay supposed returns to earlier investors.
In late 2010, the scheme collapsed and Taylor's victims lost virtually all of their investments.
Taylor, 32, of Overland Park, Kansas, was sentenced by United States District Judge William S. Duffey, Jr., to 19 years, seven months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $15,590,752.81. Wendy Connor, 46, of Raleigh, North Carolina, was also sentenced by Judge Duffey to five years in prison, to be followed by three years of supervised release, the first eighteen months of which are home confinement, and ordered to pay restitution in the amount of $5,818,299.13. Taylor was convicted on these charges on October 8, 2014, after he pleaded guilty to conspiracy to commit wire fraud. Connor was convicted on these charges on October 8, 2014, after she pleaded guilty to the interstate transportation of money taken by fraud.This case was investigated by the United States Secret Service and Internal Revenue Service Criminal Investigation with significant assistance from the United States Securities and Exchange Commission.
Assistant United States Attorney Christopher J. Huber 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/.
District Man Found Guilty of Sexually Assaulting Woman in Northwest Washington AlleyRead the Press Release
WASHINGTON – George Cocroft, 38, of Washington, D.C., was found guilty today of first-degree sexual abuse, with aggravating circumstances, for sexually assaulting a woman in an alley in Northwest Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Cocroft was found guilty in the Superior Court of the District of Columbia after a bench trial by the Honorable Robert E. Morin. Cocroft, a prior sex offender, will be sentenced on May 22, 2015. He faces up to life imprisonment without the possibility of release and will be required to register as a sex offender for the remainder of his life.
According to the government’s evidence, on Nov. 25, 2012, the victim, then 19, traveled alone by Metro into the District of Columbia. She has an intellectual disability and autism. At approximately 7 p.m., she went into a fast-food restaurant in the Chinatown neighborhood. Once inside, she encountered the defendant, a homeless man, who sat down with her and began complimenting her and holding her hand.
Cocroft and the victim left the restaurant together, at which time the defendant led the victim into a dark alley. The victim initially believed the defendant’s house was in the alley and that they were going to talk so that they could get to know each other better.
Once in the alley, Cocroft began groping the victim and telling her he had not had sex in a long time. The victim was scared and told the defendant that she did not want to have sex. She said that they should wait until they were older and married. The defendant did not stop, however. He led her to a more secluded part of the alley and had her lie face down on concrete barriers. Despite her continued protests, he sexually assaulted her. After the assault, the victim reported what had happened to her to a Metro station manager. The defendant was subsequently arrested pursuant to an arrest warrant.
In announcing the verdict, U.S. Attorney Machen praised the work performed by those who investigated the case from the Metropolitan Police Department’s Sexual Assault Unit. He also acknowledged the critical services provided to the victim at the District of Columbia Children’s Advocacy Center. In addition, he expressed appreciation for the work of those who handled the case from the U.S. Attorney’s Office, including Victim/Witness Advocate Veronica Vaughan; Paralegal Supervisor Jason Manuel; Paralegal Specialist Tierra Nanches; Information Technology Specialist Michael Richards; Victim/Witness Security Specialists David Foster and La June Thames; and former Assistant U.S. Attorney Heide Herrmann. Finally, he commended the work of Assistant U.S. Attorneys Amy Zubrensky and Jeff T. Cook, who investigated and prosecuted the matter.
Delano Couple Indicted in Unemployment Insurance SchemeRead the Press Release
FRESNO, Calif. — United States Attorney Benjamin B. Wagner announced today the unsealing of a 10-count indictment following the arrest of Raul Oropeza Lopez, 47, and Ana Maria Oropeza, 41, both of Delano. The Oropezas are charged in the indictment with mail fraud and conspiracy to commit mail fraud in connection with a scheme to submit fraudulent claims for unemployment benefits.
According to court documents, Raul Oropeza Lopez obtained social security numbers, names, and other personal identifying information of U.S. citizens and legal residents and then used the information to provide undocumented workers with false identities so they could work in the United States as farm laborers. Then, when the workers were laid off at the end of the growing season, Oropeza and his wife allegedly filed fraudulent unemployment insurance claims in the names of the assumed identities, relying on the work performed by the undocumented workers to claim unemployment insurance benefits for the Oropezas’ benefit. Over a period of six years, Oropeza and his wife submitted more than 520 fraudulent unemployment insurance claims on behalf of over 70 individuals, collecting more than $1.8 million.
This case is the product of a joint investigation by the U.S. Department of Labor, Office of Inspector General; U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Social Security Administration, Office of Inspector General; the Bureau of Alcohol, Tobacco, Firearms and Explosives; United States Postal Inspection Service; and the California Employment Development Department, Criminal Investigations Division. Assistant United States Attorney Mark J. McKeon is prosecuting the case.
Both defendants were released on bond. Their next court appearance is before Magistrate Judge Sheila K. Oberto on May 4, 2015.
If convicted, each defendant faces a maximum statutory penalty of 20 years in prison and a $250,000 fine on each count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.Crownpoint Man Pleads Guilty to Federal Sexual Abuse ChargesRead the Press Release
ALBUQUERQUE – Tomson Largo, 26, an enrolled member of the Navajo Nation who resides in Crownpoint, N.M., pleaded guilty this morning in federal court in Albuquerque, N.M., to sexual abuse charges. Under the terms of his plea agreement, Largo will be sentenced to 90 months in federal prison followed by a lifetime of supervised release. He also will be required to register as a sex offender.
Largo was arrested on Oct. 29, 2014, on a three-count indictment charging him with attempted aggravated sexual abuse, aggravated sexual abuse, and abusive sexual contact. The indictment alleged that Largo committed the offenses on multiple occasions between July 2011 and March 2014, in McKinley County, N.M., within the Navajo Indian Reservation.
During today’s proceedings, Largo pled guilty to all three counts of the indictment. In entering his guilty plea, Largo admitted that between July 1, 2011 and Aug. 31, 2011, he attempted to sexually abuse the victim, an Indian woman, while she was sleeping with her two children. He further admitted that in Dec. 2011, he used force to sexually assault the victim, and in March 2014, he assaulted the victim by shoving his hands down her pants and touching her between the legs. Largo admitted committing each of the three crimes at a residence in Crownpoint.
This case was investigated by the Crownpoint office of the Navajo Nation Division of Public Safety and the Gallup office of the FBI, and is being prosecuted by Assistant U.S. Attorney Kristopher N. Houghton.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Convicted Fraudster Pleads Guilty in Federal Court to Failing to Surrender for Service of SentenceRead the Press Release
DALLAS — A Irving, Texas, man, who was sentenced to serve 70 months in federal prison in an investor fraud case, pleaded guilty this morning to the federal offense of failing to surrender to serve that sentence, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Michael David Carroll, 39, faces a maximum statutory penalty of 10 years in federal prison, to be served consecutively to the sentence imposed on his prior conviction. He also faces up to a $250,000 fine. Sentencing is set for June 29, 2015, before U.S. District Judge David C. Godbey. By law, any sentence Carroll receives for this new offense must be served consecutively to the 70 month sentence Carroll is already serving.
Carroll pleaded guilty in April 2013 to one count of wire fraud stemming from his role as a registered agent, director and incorporator of The Salad Bowl Franchise Corporation. Carroll ran a scheme to defraud potential investors, and to obtain money and property under false and fraudulent pretenses, by fraudulently inducing investors to purchase a “Salad Bowl” franchise from him.
On March 17, 2014, U.S. District David C. Godbey sentenced Carroll to 70 months in federal prison and ordered to pay more than $1.4 million in restitution. Judge Godbey ordered Carroll to report to federal prison before 11:00 a.m. on Monday, May 19, 2014, to begin serving that sentence.
On April 18, 2014, the Court granted a defense request to delay Carroll’s report date and set a new report date of July 15, 2014. Again, on July 14, 2014, the Court granted another defense request to delay Carroll’s report date and set a new report date of no later than 2:00 p.m. on Monday, September 15, 2014. However, Carroll disobeyed Judge Godbey’s court order when he willfully failed to surrender for service of sentence. On September 17, 2014, Judge Godbey ordered that an arrest warrant be issued for Carroll.
That same day, a special agent with the FBI informed Carroll that he was a fugitive with an outstanding arrest warrant. The agent instructed Carroll to immediately surrender to the FBI office in Dallas. Rather than surrender as ordered, Carroll advised the FBI agent that he would drive to the designated prison facility and surrender the next morning. On September 18, 2014, Carroll finally surrendered to the designated federal prison facility.
The FBI investigated the case and Assistant U.S. Attorney David L. Jarvis is prosecuting.
Clinton, Pa., Sex Offender Sentenced to 3 Years in Prison for Violating the Terms of His Supervised ReleaseRead the Press Release
PITTSBURGH - A resident of Clinton, Pa., had his term of supervised release revoked and was sentenced in federal court to three years imprisonment to be followed by a 15-year term of supervised release, United States Attorney David J. Hickton announced today.
Senior United States District Judge Gustave Diamond imposed the sentence on Sherwood Stevenson, 76.
According to information presented to the court, Stevenson pretended to be the grandfather of a 12-year old boy during a field trip at the Carnegie Science Center. Stevenson offered candy to the boy and asked him if he wanted to go to the movies sometime. When it was learned that Stevenson was not the boy’s grandfather, the Pittsburgh Police were called. Stevenson provided a false name, date of birth and Social Security number to the Pittsburgh Police. Once detained, the Pittsburgh Police learned his true identity and discovered that he was a registered sex offender. In addition, Stevenson failed to update his Pennsylvania Megan’s Law registration as required when released from prison on Dec. 5, 2014. He also failed to report for mental health treatment on each occasion when it was scheduled in January and February, 2015.
Prior to imposing sentence, Judge Diamond stated that the protection of society was paramount in his decision to sentence Stevenson to the maximum statutory period of imprisonment of three years.
Assistant United States Attorney Stephen R. Kaufman prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Pittsburgh Bureau of Police for the investigation leading to the successful prosecution of Stevenson.
Businessman Charged in Motion Picture Tax Credit ScamRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that GEORGE M. KOSTUCH, age 43, of Baton Rouge, Louisiana, has been charged in a Bill of Information with engaging in a wire fraud scheme to defraud the State of Louisiana’s Motion Picture Industry Development Tax Credit Program, in violation of Title 18, United States Code, Section 1343. If convicted, KOSTUCH faces a significant term of imprisonment, a term of supervised release following imprisonment, a fine, and forfeiture of the proceeds from his offense.
The Bill of Information alleges that KOSTUCH owned and operated K 2 Pictures, LLC, which provided technical services for the production of motion pictures. KOSTUCH allegedly caused the issuance and delivery of checks totaling approximately $539,500 for production expenditures that were, in fact, not incurred. According to the Bill of Information, these checks were later used as false documentation for motion picture productions and submitted to the Louisiana Economic Development Office (“LED”).
The Bill of Information alleges further that, between June 1, 2010 and March 24, 2011, the cancelled checks were used in the application and receipt of film tax credits from the LED. The tax credits issued by LED based upon the false expenditures allegedly totaled $161,850.
The LED is a state entity whose mission is to lead economic development for the State of Louisiana. LED operates the Tax Credit Program which is designed to entice production companies to shoot films and video productions in Louisiana. The Tax Credit Program provides a 30% tax credit on qualified expenditures for the production of films in Louisiana. Once issued by LED, the tax credits are fully transferable.
U.S. Attorney Green stated: “This most recent case illustrates our continued commitment to prosecute all abuses of the Tax Credit Program. As I have stated in the past, those who misuse this program, through fraud and deceit, undermine the purpose of the Tax Credit Program and will be investigated and prosecuted to the fullest extent of the law. We appreciate the work of the FBI and the Louisiana Inspector General’s Office in this case, as well as the cooperation of the LED.”
This investigation was conducted by the FBI and the Louisiana Inspector General’s Office and is being prosecuted by Assistant United States Attorneys Frederick A. Menner, Jr. and Paul L. Pugliese.
NOTE: A Bill of Information is an accusation by the United States. The defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.
Broward Resident Charged with Passing and Possessing Counterfeit MoneyRead the Press Release
A Pompano Beach, Florida, resident was charged by Information yesterday in Fort Lauderdale with possessing and passing counterfeit currency.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Paula A. Reid, Special Agent in Charge, U.S. Secret Service (USSS), Miami Field Office, and William R. Latchford, Chief, Seminole Police Department, made the announcement.
Bernardo Lecaros, 35, was arrested by the Seminole Police Department and the U.S. Secret Service on December 20, 2014, for passing counterfeit notes at the Seminole Classic Casino in Hollywood, Florida.
According to the documents filed with the court, on both December 10, 2014 and December 14, 2014, Lecaros passed $5,400 in counterfeit currency at the Seminole Classic Casino. Lecaros possessed an additional $37,800 in counterfeit currency. If convicted, Lecaros faces up to twenty years imprisonment, three years of supervised release, a $250,000 fine and restitution as to each count.
Mr. Ferrer commended the investigative efforts of USSS and the Seminole Police Department. The case is being prosecuted by Assistant U.S. Attorney Randy Katz.
An Information is only an accusation, and a defendant is presumed innocent unless and until proven guilty.
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.
Brothers Sentenced to Prison Terms for Shooting and Robbing Man in Northeast WashingtonRead the Press Release
WASHINGTON – Michael Canarte, 23, and his brother, Aubrey Canarte, 30, both of Washington, D.C., have been sentenced to prison terms for robbing and shooting a man in Northeast Washington, U.S. Attorney Ronald C. Machen Jr. announced today.
The brothers pled guilty in January 2015 to charges of assault with intent to kill and unlawful possession of a firearm. They were sentenced on March 13, 2015 by the Honorable Lynn Leibovitz. Michael Canarte was sentenced to 10 years in prison, and his brother was sentenced to seven years. Following their prison terms, Michael Canarte will be placed on five years of supervised release, and Aubrey Canarte on three years of supervised release.
According to the government’s evidence, the victim was a friend of a man who had been involved in an ongoing dispute with the Canarte brothers. However, the victim was not involved in the dispute. Nonetheless, on the night of Nov. 21, 2013, Aubrey Conarte approached the victim near an apartment building and alley off the 500 block of 60th Street NE and asked about the man. The victim stated that he did not know where the man could be located.
The victim decided to leave the area and began walking further into the alley. At that point, Michael Canarte emerged from the apartment building and began following the victim. He brandished a gun and ordered the victim to get to the ground. He then rifled through the victim’s pockets, taking his wallet and cellphone. The victim begged for his life. Michael Canarte fired six to 10 rounds, hitting the victim in the neck, leg, and torso.
Following the initial group of shots, someone remarked that the victim did not appear “dead yet.” Immediately following the statement, Aubrey Conarte snatched the gun from his brother, walked over to the victim, stood directly above him, and fired two more shots. After the victim saw dirt kick up next to his face, he stopped moving and pretended to be dead, hoping that the brothers would stop shooting at him.
When police and emergency medical personnel arrived on the scene, they discovered the victim and rushed him to Washington Hospital Center. Though he survives, he suffers paralysis and lost the ability to walk.
In announcing the sentencings, U.S. Attorney Machen commended the work of those who investigated the case for the Metropolitan Police Department, including detectives from the Sixth Police District. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Stephanie Gilbert and Antoinette Sakamsa, Victim/Witness Advocate Jennifer Clark, and Assistant U.S. Attorney Robert E. Eckert, Jr., who investigated and prosecuted the matter.
Blackfoot Man Pleads Guilty to Assaulting a Federal OfficerRead the Press Release
POCATELLO – Dude Galloway, 34, of Blackfoot, Idaho, pleaded guilty today in United States District Court to assaulting a federal officer, U.S. Attorney Wendy J. Olson announced. He was indicted by a federal grand jury on May 28, 2014.
According to the plea agreement, on March 18, 2014, Galloway was arrested by the Fort Hall Police Department on an active arrest warrant and was transported by Fort Hall police officers to the Fort Hall Correctional Center. While at the jail, corrections officers attempted to get the defendant to change into jail-issued clothing. While doing so, the defendant struck a Fort Hall Corrections officer in the face with his hands. The federal assault on an officer law deems Fort Hall corrections and police officers to be federal officers.
Assault on a federal officer is punishable by up to eight years in prison, supervised release of up to three years, and a fine of up to $250.000.
Galloway is scheduled to be sentenced on June 15, 2015, before U.S. District Judge Edward J. Lodge at the federal courthouse in Pocatello.
The case was investigated by the Fort Hall Police Department.
Arthur Gerald Reid Sentenced for Sex Trafficking of ChildrenRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced today that Arthur Gerald Reid, 28, of Macon, Georgia, was sentenced on March 17, 2015 to serve 30 years (360 months) in federal prison for sex trafficking of children. The sentence was handed down by the Honorable Hugh Lawson, Senior United States District Court Judge, in Macon, Georgia.
Mr. Reid entered a plea of guilty to the charges on December 23, 2013. As a part of his plea agreement, the defendant admitted that beginning in September, 2011, and continuing until February, 2013, he prostituted a juvenile victim from various motel rooms in Macon, Georgia, and in Tybee Island, Georgia, through the utilization of backpage.com, an erotic services website. Mr. Reid was physically violent toward the juvenile victim. At the time Mr. Reid was encountered by law enforcement on February 26, 2013 at a Macon, Georgia, motel, he was in custody and control of the juvenile victim. Two additional juvenile victims were also with Mr. Reid at the time of the encounter with law enforcement. Mr. Reid admitted to prostituting these juveniles through the utilization of backpage.com as well. Hidden within the motel room was a BB gun, which the juveniles believed to be an authentic firearm.
“Mr. Reid was willing to sell the childhood of these young victims for a few dollars, profiting on the perversions of the “johns” who responded to his internet ads and the vulnerabilities of these children. His lengthy prison sentence means that he will not be a threat to other children in Middle Georgia for the majority of his life. I want to commend the hard work of the FBI, the GBI, and the Bibb County Sheriff’s Office for investigating this case and working with us to protect the children of Middle Georgia,” said United States Attorney Michael J. Moore.
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “This defendant, by using intimidation and violence to prey on and exploit juveniles in this manner, truly deserves his time behind bars. The FBI will continue to dedicate significant investigative resources and assets toward the protection of our nation’s children from those individuals who would do them so much harm.”
“Child sex trafficking cases are a priority for the GBI. We will continue to work with local and federal law enforcement partners to bring individuals such as Reid to justice. People who prey on and exploit children deserve to be punished to the fullest extent of the law,” said Vernon Keenan, Director of the Georgia Bureau of Investigation.
The case was investigated by the Federal Bureau of Investigation, the Georgia Bureau of Investigation, and the Bibb County Sheriff’s Office. Assistant United States Attorney Julia C. Bowen represented the Government in the prosecution of the case.
Inquiries regarding this case should be directed to Pamela Lightsey, United States Attorney’s Office, at (478) 621-2603.
American Citizen Pleads Guilty to Bribery of a Public Official and Conspiracy ChargesRead the Press Release
WASHINGTON – Binh Vo, 41, an American citizen living in Vietnam, pled guilty today to charges of conspiracy to commit bribery and visa fraud; bribery of a public official; and conspiracy to commit money laundering, announced U.S. Attorney Ronald C. Machen Jr. and Bill A. Miller, Director of the U.S. Department of State’s Diplomatic Security Service (DSS).
Vo entered the plea in the U.S. District Court for the District of Columbia, where a criminal information was pending against him. The plea agreement, which is contingent upon the Court’s approval, calls for a prison sentence between six and eight years, as well as forfeiture of nearly $5.1 million. The Honorable Emmet G. Sullivan scheduled sentencing for June 12, 2015.
Vo was arrested on Sept. 24, 2013, at Washington Dulles International Airport and has been held without bond ever since.
According to the statement of facts in support of his guilty plea, Vo conspired with co-defendant Michael Sestak and others to obtain visas to the United States for Vietnamese citizens. Sestak, 43, was the Non-Immigrant Visa Chief in the Consular Section of the U.S. Consulate in Ho Chi Minh City, Vietnam from August 2010 to September 2012.
According to the statement of facts, Vo and Sestak conspired with other U.S. citizens and Vietnamese citizens to advertise the scheme and recruit customers. Co-conspirators reached out to people in Vietnam and the United States and advertised the scheme by creating a website and by spreading the word through emails and telephone calls. The conspirators told potential customers that once the customer obtained a visa from the scheme, they could disappear, get married or return to Vietnam and be assured of receiving visas in the future.
According to the statement of facts, Vo and his co-conspirators received biographical information and photographs from customers and assisted them with their visa applications. Upon submitting an application, the applicants would receive an appointment at the Consulate, be interviewed by Sestak, and approved for a visa. Applicants or their families generally paid between $30,000 and $60,000 per visa. Nearly 500 fraudulent visas were issued as a result of the conspiracy.
Applicants paid for their visas in Vietnam, or by routing money to co-conspirators in the United States. Vo admitted to receiving millions of dollars for arranging for Sestak to approve the visas. He ultimately moved some of the money out of Vietnam by using money launderers to move funds through off-shore banks. Co-conspirators also had money laundered through off-shore banks to bank accounts in the United States.
In addition to Sestak, two others have pled guilty to participating in the scheme. They are Hong Vo, 29, an American citizen, and Truc Thanh Huynh, 31, a Vietnamese citizen, all of whom are charged with conspiring with Sestak and Binh Vo. Hong Vo is Binh Vo’s sister, and Truc Thanh Huynh is Bin Vo’s cousin.
According to the statement of facts, fraudulent visas granted by Sestak were connected to an Internet Protocol (“IP”) address controlled by Hong Vo. Huynh allegedly participated in the visa scheme by obtaining documents necessary for the visa applications, collecting money and providing model questions and answers for visa applicants. Sestak also allegedly approved a visa for Huynh to the United States, the application for which was submitted by the IP address controlled by Hong Vo.
The case was investigated and prosecuted by the U.S. Department of State Diplomatic Security Service and Assistant U.S. Attorneys Brenda J. Johnson, Alessio D. Evangelista of the National Security Section, Catherine K. Connelly and Jennifer Ambuehl of the Asset Forfeiture and Money Laundering Section, as well former Assistant United States Attorneys Christopher Kavanaugh, and Mona N. Sahaf.
Alien Sentenced for Misuse of Social Security NumberRead the Press Release
A Mexican citizen who used another person’s social security number was sentenced yesterday to serve 120 days’ incarceration.
Roberto Ambrosio-Salvador, age 43, from Michoacan, Mexico, received the prison term after a January 8, 2015, guilty plea to misuse of a social security account number.
Information presented to the court showed Ambrosio-Salvador used a fraudulent permanent resident alien card, and a social security number issued to a person who is now deceased, for the purpose of obtaining employment in Waterloo, Iowa.
Ambrosio-Salvador was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Ambrosio-Salvador was sentenced to 120 days’ imprisonment, to be followed by a 3-year term of supervised release.
In sentencing Ambrosio-Salvador, Judge Reade noted his two prior criminal convictions for driving while intoxicated.
Ambrosio-Salvador was given credit for time served in custody and ordered released to the Department of Homeland Security detainer for processing and removal from the United States.
The case was prosecuted by Assistant United States Attorney Richard L. Murphy and investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-CR-2048.
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Albuquerque Man Sentenced to Seven Years for Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Jerry Ernest Lopez, 33, of Albuquerque, N.M., was sentenced today in federal court to 84 months in federal prison for his methamphetamine trafficking conviction. He will be on supervised release for four years after he completes his prison sentence.
Lopez is being prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
Lopez was arrested in May 2014, on a criminal complaint alleging that he unlawfully possessed methamphetamine, firearms and ammunition on May 27, 2014, in Bernalillo County, N.M. According to the criminal complaint, officers of the Albuquerque Police Department apprehended Lopez at his residence following the execution of a felony warrant on his residence. The complaint alleges that detective located approximately three ounces of methamphetamine, dozens of prescription pills, more than $10,000.00 in cash, five firearms and significant amounts of ammunition inside safes that were located inside Lopez’s bedroom. At the time, Lopez was prohibited from possessing firearms or ammunition because he previously had been convicted of three counts of possession of a controlled substance and forgery in the 2nd Judicial District Court for the State of New Mexico.
Lopez was indicted on June 24, 2014, in a three-count indictment, charging him with being a felon in possession of firearms and ammunition, possession with intent to distribute methamphetamine, and possession of firearms in furtherance of a drug trafficking crime. On Nov. 5, 2014, Lopez pled guilty to one count of possession with intent to distribute. In entering his guilty plea, Lopez admitted that on May 27, 2014, he possessed more than 50 grams of methamphetamine that was seized by law enforcement from his home in northeast Albuquerque along with $10,335.00 in cash during the execution of a search warrant. Lopez further admitted to being a drug dealer.
This case was investigated by the Albuquerque offices of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the DEA, and the Albuquerque Police Department with assistance from the 2nd Judicial District Attorney’s Office. Assistant U.S. Attorney David M. Walsh prosecuted the case.
Additional Sentences Handed Down in East Texas Mortgage Fraud ConspiracyRead the Press Release
PLANO, Texas – Five additional defendants have been sentenced for their roles in a mortgage fraud conspiracy in the Eastern District of Texas, announced U.S. Attorney John M. Bales today. Sentencing hearings were held before U.S. District Judge Marcia Crone.
Djuana Pitts, 46, of DeSoto, Texas, pleaded guilty on Aug. 7, 2013, and was sentenced to 70 months in federal prison on Mar. 13, 2015, and ordered to pay restitution in the amount of $5,688,047.92.
Patricia Hines, 51, of Cedar Hill, Texas, pleaded guilty on Aug. 8, 2013, and was sentenced to 52 months in federal prison on Mar. 16, 2015, and ordered to pay restitution in the amount of $1,562,070.50.
Elliott Scott, 40, of Houston, Texas, pleaded guilty on Sep. 23, 2014, and was sentenced to 46 months in federal prison on Mar. 13, 2015, and ordered to pay restitution in the amount of $2,141,357.77.
Allen Kent Barnett, II, 39, of Rockwall, Texas, pleaded guilty on Feb. 18, 2014, and was sentenced to 31 months in federal prison on Mar. 13, 2015, and ordered to pay restitution in the amount of $3,156,943.31.
Jennifer Gipson, 49, of DeSoto, Texas, pleaded guilty on Oct. 28, 2013, and was sentenced to 12 months and a day in federal prison on Mar. 13, 2015.
Pitts pleaded guilty to conspiracy to commit money laundering. Scott, Barnett and Hines pleaded guilty to conspiracy to commit wire fraud. Gipson pleaded guilty to misprision of a felony.
According to information presented in court, from July 2006 to March 2008, in the Eastern District of Texas and elsewhere, these individuals along with other co-conspirators previously sentenced, were involved in a widespread mortgage fraud conspiracy.
Scott, as an appraiser, and Barnett, as an appraiser trainee, both played roles in the conspiracy to inflate values of properties and to conceal material information from the lending institution in order to induce the company to fund mortgage loans. In addition, Scott and Barnett caused the appraisals to falsely reflect that a co-conspirator or her companies were the public record owners of the properties so as not to alert the lending institutions that they were funding flip transactions.
Pitts, Hines and Gipson all worked at Esquire Title, LLC, a title company. Pitts was an operations manager and Hines and Gipson were assistant escrow officers. Gipson worked under the supervision of Pitts. Pitts and Hines facilitated loan closings. Pitts and Hines’ roles in the conspiracy were to conceal information from the lending institutions in order to induce the lending institution to fund mortgage loans. Pitts also knowingly allowed false title commitments to conceal the true record owner of the properties and false gift letters to be submitted to lending institutions. Pitts and Hines both caused false HUD-1s to be submitted to the lending institutions that indicated the borrowers were the source of the down payments when they both knew that third parties – sometimes even the sellers in the transaction – were the source of the down payments. Hines caused false occupancy affidavits to be submitted to lending institutions, which concealed that the same borrower had purchased multiple properties and indicated on all transactions that the borrower intended to occupy each property as his primary residence. Hines also caused false title commitments to be submitted to the lending institutions that concealed the fact that the property had recently been sold and was a flip transaction. Pitts authorized Hines’ distribution of the criminal proceeds of the underlying wire fraud scheme to other conspirators which distributions typically exceeded $10,000. Gipson knew of the conspiracy between these individuals to defraud lending institutions and she provided a misleading statement to federal agents from IRS Criminal Investigation and FBI when questioned about the conspiracy.
This law enforcement action is part of President Barack Obama's Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
This case was investigated by Federal Bureau of Investigation and IRS Criminal Investigation and prosecuted by Assistant U.S. Attorneys Andy Williams and Chris Eason.
13 Indicted in Wellsville Meth RoundupRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
Buffalo, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned three separate indictments charging 13 defendants with conspiracy to manufacture, possess with intent to distribute and to distribute, methamphetamine. The charge carries a minimum penalty of 10 years in prison, a maximum of life, and a $10,000,000 fine.Charged in the indictments are:
• Michael E. Hasert, 60, of Scio, NY;
• Lionel C. Carter, 58, of Wellsville, NY;
• Todd E. Varney, 31, of Wellsville, NY;
• Bradley J. Hollenbeck, 34, of Andover, NY;
• Patrick J. Danielewicz, 34, of Friendship, NY;
• Sarah J. Greene, 37, of Wellsville, NY;
• Elizabeth J. Schreiber, 35, of Scio, NY;
• Michael C. Mullen, 34, of Hornell, NY;
• Timothy J. Billings, 30, of Wellsville, NY;
• Justin L. Billings, 32, of Wellsville, NY;
• Jordan R. Doane, 26, of Friendship, NY;
• Zackery D. Billings, 25, of Springwater, NY;
• Derek Fagan, 30, of Wellsville, NY
In addition, defendant Michael Hasert is charged with possession of marijuana with intent to distribute, maintaining a drug involved premises, possession of firearms in furtherance of drug trafficking and being a felon in possession of firearms. The charges carry a penalty of 20 years in prison and a mandatory five years to be served consecutively to any sentence imposed.
Defendants Timothy and Justin Billings are also facing charges of maintaining a drug involved premises and possession of firearms in furtherance of drug trafficking. These charges also carry a penalty of 20 years in prison and a mandatory five years to be served consecutively to any sentence imposed.
“Over the last several years, we have seen an increase in the number of cases involving this highly toxic and dangerous substance,” said U.S. Attorney Hochul. “The public needs to be educated that ingestion of crystal meth causes profound and almost immediate physical, mental and emotional consequences, while the production process can also be deadly.”
Assistant U.S. Attorney Thomas S. Duszkiewicz, who is handling the case, stated that between January 2011 and late 2014, the defendants conspired to manufacture and distribute methamphetamine. The defendants engaged in the practice of “smurfing” (buying small quantities) at local pharmacies to get around restrictions on purchasing products containing pseudo ephedrine. This is the most important chemical necessary in the process of manufacturing methamphetamine.
The indictments are 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, the New York State Police Community Narcotics Enforcement Team (CNET), under the direction of Lieutenant Kevin Reyes and Major David Krause, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Division, the Southern Tier Regional Drug Task Force, under the direction of Cattaraugus County Sheriff Timothy Whitcomb, the Wellsville Police Department, under the direction of Chief Timothy O’Grady, U.S. Border Patrol, under the direction of Patrol Agent in Charge Steven Oldman, and the New York State Department of Environmental Conservation, under the direction of Captain Frank Lauricella.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
16 March 2015
Upper Marlboro CPA Pleads Guilty in Local Corruption SchemeRead the Press Release
Greenbelt, Maryland – George Joseph Grillo, age 64, of Upper Marlboro, Maryland pleaded guilty today to wire fraud and money laundering conspiracy arising from a scheme to make it appear that a minority business enterprise (MBE) performed work on Washington Suburban Sanitary Commission (WSSC) contracts, when in fact, the MBE had not performed the work.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
According to the plea agreement, in 2009 and 2010 a non-minority-owned water tank painting company (Company 1) obtained three contracts with the WSSC to paint and repair water tanks or equipment: the Falls Road standpipe contract, the Carole Highlands tank contract and the Hampshire Green contract. The combined value of the three contracts was $2,390,177. Each contract required Company 1 to subcontract 28% or 29% of the contract’s value to certified MBEs or small local business enterprises. The required percentage of the contract, which in this case totaled $679,965.20, was to be paid directly to the MBE.
According to his plea agreement, Grillo was a certified public accountant and from 2002 through 2014 was the chief financial officer of a minority business enterprise that operates as a construction company, and a recycling company. Since the 1980’s Grillo had performed accounting work for the owner of Company 1, including preparation of tax returns, payroll for the company, and financial statements.
Grillo admits that from 2010 to 2014, he conspired with others to make it appear that Company 1 met its minority subcontracting requirements on the WSSC contracts.
For example, the owner of Company 1 directed Grillo to send invoices from his minority-owned company indicating that the company had provided materials on two contracts. Grillo created invoices indicating that his company had provided $78,000 worth of materials on the Falls Road contract and $30,000 worth of materials on the Carole Highlands contract. As directed by the owner of Company 1, these invoices were submitted to another minority subcontractor working with Company 1. In fact, neither Grillo’s company, nor the other minority-owned subcontractor had purchased any materials related to these invoices. To make the fake invoices appear authentic, on June 30, 2011, a check was issued to Grillo’s company for $108,000. On July 5, 2011, Grillo issued a check from his company to Company 1 for $106,920.
In 2010, Grillo agreed that his company would serve as the MBE for Company 1 on the Hampshire Green contract. In 2011, although Grillo’s company had not performed any work on the contract, Grillo caused his company to submit an invoice to WSSC for 28% of the Hampshire Green contract, or $57,504.88, to conceal the fact that Company 1 had not met its contractual obligation to subcontract 28% to an MBE. Again, to make it appear that Grillo’s company had performed the work, Company 1 issued a check for $57,504.88 to Grillo’s company, and a short time later, Grillo’s company issued a check back to Company 1 for $58,291.81.
The conspiracy involved between $1 million and $2.5 million of laundered funds.
Grillo faces a maximum sentence of 20 years in prison. U.S. District Judge George J. Hazel has scheduled sentencing for June 29, 2015 at 10:00 a.m.
United States Attorney Rod J. Rosenstein commended the FBI and IRS-CI for their work in the investigation. Mr. Rosenstein thanked Special Assistant U.S. Attorney James I. Pearce and Assistant U.S. Attorney Mara Zusman Greenberg, who are prosecuting the case.
United States' Investigation of Oregon's Mental Health SystemRead the Press Release
On goingFor more information please see the attached documents linked below.
State and Feds Reach Accord on Mental Health Plan - March 3rd 2012
U.S. Attorney's Office and Civil Rights Division Sign Agreement Move Forward on State-Wide Community Mental Health Reform - November 9th 2012
Letter to John Dunbar - April 9th 2013
Oregon Mental Health Cover Letter for the Interim Report - January 2nd 2014
Oregon Mental Health Attachment to State Interim Report - January 2nd 2014
Oregonian Article - January 23rd 2014
Oregon’s Status Resolving the U.S. Department of Justice’s Investigation into Oregon’s Mental Healthcare System - March 11th 2015
United States Attorney Ronald C. Machen Jr. to Step Down Vincent H. Cohen Jr. to Become Acting U.S. AttorneyRead the Press Release
WASHINGTON –Ronald C. Machen Jr. announced today that he is resigning as United States Attorney for the District of Columbia, effective April 1, 2015, ending more than five years of leading the nation’s largest U.S. Attorney’s Office.
U.S. Attorney Machen, 45, said he intends to return to private practice. Principal Assistant U.S. Attorney Vincent H. Cohen, Jr., 44, a native Washingtonian, will become Acting U.S. Attorney when Mr. Machen leaves office.
“During more than five years as United States Attorney for the District of Columbia, Ron Machen has distinguished himself as a skilled leader, a devoted public servant, and a forceful champion of justice on behalf of the American people,” said Attorney General Eric Holder. “Throughout his remarkable tenure, Ron has applied his boundless talent and consummate judgment to protect the safety and security of all Americans in cases involving violent crime, national security threats, and public corruption. As one of Ron’s predecessors as U.S. Attorney in Washington, I know firsthand the unique demands of leading the nation’s largest U.S. Attorney’s Office. But Ron has never been deterred by a difficult challenge, nor slowed in his pursuit of a safer, stronger Washington. I was fortunate to be able to hire Ron as an Assistant U.S. Attorney in the Office in 1997, and I see in him now the exceptional qualities that I saw in him then: unassailable integrity, relentless determination, and a passion for law and justice. I congratulate him on the outstanding results he has achieved as U.S. Attorney for the District of Columbia. I thank him for his inspiring service. And I look forward to all that he will accomplish in the next stage of his already extraordinary career.”
“After more than five years as United States Attorney, it is time for me to step down,” said U.S. Attorney Machen. “Serving as the U.S. Attorney for the District of Columbia has been the highest honor of my professional career. I am tremendously grateful to the President, Attorney General Holder, and Congresswoman Eleanor Holmes Norton for placing their trust in me. The men and women of this office are among the most dedicated and talented public servants in the country. I am proud of the work we have done together to achieve justice in the courthouse and to build bonds of trust with the community that we serve. I leave this position confident that my extraordinary colleagues will continue to pursue justice and protect the residents of the District and this great nation.”
After nomination by President Obama and unanimous Senate confirmation, Mr. Machen was sworn in as U.S. Attorney for the District of Columbia on Feb. 18, 2010. With more than 300 attorneys, the U.S. Attorney’s Office for the District of Columbia is the largest U.S. Attorney’s office in the country, and is unique in that it prosecutes local offenses as well as federal crimes.Mr. Machen first joined the U.S. Attorney’s Office for the District of Columbia in January 1997. He was hired by Mr. Holder, who was then the U.S. Attorney. Mr. Machen worked as an Assistant U.S. Attorney for the office for almost five years. In 2001, he entered private practice, where he handled white-collar criminal defense, corporate internal investigations, and civil litigation until 2010, when he became the 56th U.S. Attorney in the history of the District of Columbia. Upon resignation, he will be the longest-serving U.S. Attorney for the District of Columbia in over 35 years.
During Mr. Machen’s time as U.S. Attorney, the office secured convictions of terrorists and spies who threatened national security; prosecuted corrupt public officials; successfully convicted scores of violent offenders; and secured over $2 billion in financial recoveries for American taxpayers. Mr. Machen also championed a host of initiatives, including community outreach and youth engagement; a Cold Case Unit, to investigate and prosecute older homicide cases; a Conviction Integrity Unit, to investigate claims of actual innocence; and a Cyber Unit to prosecute high-tech crimes that threaten national security, intellectual property, and personal privacy.
National Security. Over the last five years, the office has secured convictions against dozens of defendants who harmed Americans and American interests, including 13 convictions in terrorism-related cases. The office has repeatedly been called on to handle some of the Justice Department’s most sensitive and significant cases, including the current prosecution of Ahmed Abu Khatallah for his alleged participation in the 2012 attack on U.S. facilities in Benghazi, Libya, which resulted in the deaths of four Americans.
During Mr. Machen’s tenure, the office successfully prosecuted a State Department official who carried out a 30-year conspiracy to provide secrets to Cuba, as well as a government scientist who tried to sell classified information to a purported Israeli intelligence officer. The office also secured guilty pleas from four members of a Mexican drug cartel that murdered a U.S. agent in 2011. In December 2012, the office successfully prosecuted a Chinese-owned nuclear construction company, marking the first time that a People’s Republic of China corporate entity had pled guilty in a U.S. criminal export matter. In October 2014, the office obtained guilty verdicts against four former Blackwater security guards involved in the mass killing of Iraqi civilians in Baghdad’s Nisur Square.
Following a special assignment from the Attorney General, Mr. Machen also led the investigation of the illegal disclosure of classified information relating to a terrorist plot by Al-Qaeda in the Arabian Peninsula to conduct a suicide attack on a U.S.-bound airliner. That investigation led to the successful prosecution of a former FBI analyst who received the longest prison sentence ever in a leak case in a federal court.
Public Corruption. U.S. Attorney Machen placed a high priority on investigating cases involving public corruption in both the federal and District of Columbia governments. Since 2010, the office has obtained trial convictions or guilty pleas from more than 160 defendants, making it a national leader.
During Mr. Machen’s tenure, the office secured felony guilty pleas from three sitting members of the District of Columbia Council – Harry L. Thomas Jr., Kwame Brown, and Michael A. Brown – in addition to Ted G. Loza, the Chief of Staff to a fourth member of the Council. Loza and Michael Brown were each convicted for taking cash payments from individuals seeking favorable treatment from the D.C. government. Thomas was convicted for stealing $350,000 in taxpayers’ money. Kwame Brown was convicted of bank fraud and became the first public official in D.C. history to plead guilty to a criminal campaign finance violation. Mr. Machen also led the ongoing investigation into a criminal conspiracy in the 2010 D.C. mayoral election. To date, that investigation has resulted in the felony convictions of six people associated with a 2010 mayoral campaign.
Mr. Machen also focused on corruption in the federal government. During his tenure, the office obtained convictions of 20 individuals and one company as part of an investigation into the largest domestic bribery and bid-rigging scheme in the history of federal contracting. That investigation led to the convictions of numerous corrupt public officials, executives of government contractors, and others who conspired to cheat taxpayers. The office also obtained the conviction of former Congressman Jesse L. Jackson, Jr. for conspiring to defraud his campaigns of almost $750,000 in funds that were used to pay for personal items and expenses. In addition, the office secured the conviction of former Congressman Trey Radel for cocaine possession.
Violent Crime. Over the past five years, working with the Metropolitan Police Department and other law enforcement agencies, the office has obtained convictions of over 375 murderers. The total includes five men who were found guilty by a jury of murder, conspiracy, and other charges stemming from a series of violent crimes that culminated on the night of March 30, 2010 with a deadly mass shooting on South Capitol Street. Targeting the area’s most violent offenders and networks of drug distributors, the office has obtained convictions of more than 75 members of over a dozen gangs and crews, including MS-13.
Under U.S. Attorney Machen’s leadership, the office launched a Cold Case Unit, comprised of a team of veteran prosecutors that works to investigate and prosecute older murder cases. Over the past several years, more than 20 people have been convicted in these older homicide cases, dating to the 1980s and 1990s. To assist with these and other cases, Mr. Machen appointed the office’s first Special Counsel for DNA and Forensic Litigation. In that role, an experienced prosecutor works full-time on forensic issues to ensure that the office makes use of all available technologies to solve murders and other crimes.
The office also has earned national recognition for its work with the FBI, MPD and other agencies in targeting cases involving child sex offenses and exploitation. Over 80 defendants have been convicted of such crimes over the past five years, including Eric Justin Toth, a former private school teacher and camp counselor, who was apprehended in Nicaragua in 2013 and is now serving 25 years in prison on child pornography and other charges.
Financial Recoveries. Under Mr. Machen’s leadership, the office has sharpened its focus on financial recoveries, generating nearly $2.5 billion for the federal government over the last five years through civil and criminal collections and asset forfeiture. For example, the office has obtained more than $1.5 billion in recoveries from European banks – including ABN Amro Bank, ING Bank N.V., Standard Chartered Bank, and Commerzbank AG – that have admitted moving money illegally through the U.S. financial system on behalf of sanctioned countries and entities. Reflecting the importance he places on this mission, Mr. Machen established an Asset Forfeiture and Money Laundering Section in 2010 within the office’s Criminal Division. Similarly, as the District of Columbia has seen a growing number of qui tam lawsuits filed under the False Claims Act, Mr. Machen doubled the number of civil attorneys dedicated to filing affirmative cases on behalf of the United States to recover from those who defraud the American taxpayer. Among other successes, those civil litigators obtained a $93 million settlement with a telecommunications company that overcharged the government. Many of the cases pursued during Mr. Machen’s tenure focused on fraud on federal health care programs, including the arrests of more than 20 individuals in the largest health care fraud takedown in the history of the District of Columbia and a $34 million civil and criminal settlement with an international pharmaceutical company for off-label marketing of one of its drugs.
Community Outreach. Within the community, U.S. Attorney Machen led an expansion of the office’s outreach efforts, sponsoring youth summits, neighborhood town halls, a clergy ambassador program, domestic and senior abuse seminars, and other events designed to build bonds of trust between citizens and law enforcement. The office has been hailed as a national leader for its robust and sustained efforts to engage at-risk youth, address the root causes of crime, and enlist faith and community leaders as allies in responding to public safety challenges. Mr. Machen also focused extensive resources on re-entry programs for returning offenders, seeking to connect them with housing, employment, and other services in order to reduce recidivism and allow them to begin contributing to the community.
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United States Attorney Joined by 17 Federal, State and Local Law EnforcementRead the Press Release
ALBANY, NEW YORK – United States Attorney Richard S. Hartunian was joined today by seventeen other federal, state and local law enforcement agencies to announce the initiation of the LEADership – Legal Education And Decision-making – Project in the enlarged City School District of Troy.
"The LEADership Project is a crime prevention program designed to reach the youngest members of our communities – all 5
th grade students in the Enlarged City of Troy School District – and to teach them Legal Education And Decision-making skills, skills which will help them to avoid gangs, drugs and violence and lead productive, law abiding lives.," said U.S. Attorney Hartunian. "With the LEADership Project we hope to accomplish two goals: first, to increase the awareness of our youth, specifically Troy’s 5th graders, about the dangers that gangs present to them and their communities, by discussing the myths of gang life, and letting them hear from a former gang member that gang life really amounts to ‘no life’. The second thing we hope to accomplish, in furtherance of Attorney General Eric Holder’s Smart on Crime initiative, is to build greater trust between Troy’s community members and the law enforcement officials who put their lives on the line every day to preserve public safety."
Joining the U.S. Attorney in today’s announcement were the heads of the following agencies, all participating in the project:
• United States Attorney’s Office
• Bureau of Alcohol, Tobacco, Firearms and Explosives
• Federal Bureau of Investigation
• Internal Revenue Service-Criminal Investigations
• Transportation Security Administration
• United States Coastal Guard- Sector New York
• United States Immigration and Customs Enforcement- Homeland Security Investigations
• United States Marshals Service
• United States Postal Inspection Service
• United Sates Postal Service Office of the Inspector General
• United States Probation and Pretrial Services
• New York State Department of Corrections and Community Supervision