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12 March 2015
St. Tammany Parish Woman Sentenced for Conspiracy to Commit Wire Fraud in Aftermath of BP Oil SpillRead the Press Release
The U.S. Attorney’s Office announced that RAMONA HUDSON, age 52, of Slidell, was sentenced today for her role in a conspiracy to defraud the Gulf Coast Claims Facility (“GCCF”) in the aftermath of the BP oil spill.
U.S. District Judge Lance M. Africk sentenced HUDSON to 4 years’ probation, 6 months of home confinement, and ordered restitution in the amount of $75,000.
According to court documents, the GCCF made disaster assistance money available to individuals and businesses affected by the oil spill resulting from the Deepwater Horizon explosion in the Gulf of Mexico. The GCCF required individuals to verify loss of income. In or about September 2010, HUDSON, assisted by her co-conspirator, posed as a claimant and completed an electronic claim form with false representations that HUDSON was employed in the commercial fishing industry at the time of the oil spill, when in fact, she was not. The fraudulent claim form and documentation were all wired from a location in the Eastern District of Louisiana to the GCCF’s office in Dublin, Ohio. Based on these false representations, HUDSON and her co-conspirator received approximately $75,000 for lost wages for which they were not entitled.
This case was brought as part of this District’s partnership with the National Center for Disaster Fraud (“NCDF”), a nationwide initiative to protect available funds and assistance for those victims of both natural and man-made disasters such as hurricanes, floods, tornadoes and the recent Gulf oil spill. If you have knowledge of fraud, waste, abuse or allegations of mismanagement involving disaster relief operations, you can contact the NCDF by either calling the hotline at (866) 720-5721, faxing (225) 334-4707, emailing at [email protected], or in writing to National Center for Disaster Fraud, Baton Rouge, LA 70821-4909.
The U.S. Attorney’s Office praised the work of the U.S. Postal Inspection Service and the U.S. Secret Service in investigating this matter. Assistant U.S. Attorneys Julia K. Evans and Theodore R. Carter, III were in charge of the prosecution.
St. Tammany Parish Man Sentenced for Conspiracy to Commit Wire Fraud in Aftermath of BP Oil SpillRead the Press Release
U.S. Attorney’s Office announced that DARRELL MORRIS, age 55, of Slidell, was sentenced today for his role in a conspiracy to defraud the Gulf Coast Claims Facility (“GCCF”) in the aftermath of the BP oil spill.
U.S. District Judge Nannette Jolivette Brown sentenced MORRIS to three years’ probation, and ordered restitution in the amount of $40,000.
According to court documents, the GCCF made disaster assistance money available to individuals and businesses affected by the oil spill resulting from the Deepwater Horizon explosion in the Gulf of Mexico. The GCCF required individuals to verify loss of income. MORRIS, assisted by his co-conspirator, posed as a claimant and completed an electronic claim form with false representations that MORRIS was employed in the commercial fishing industry at the time of the oil spill, when in fact, he was not. The fraudulent claim form and documentation were all wired from a location in the Eastern District of Louisiana to the GCCF’s office in Dublin, Ohio. Based on these false representations, MORRIS and his co-conspirator received approximately $75,000 for lost wages to which they were not entitled.
This case was brought as part of this District’s partnership with the National Center for Disaster Fraud (“NCDF”), a nationwide initiative to protect available funds and assistance for those victims of both natural and man-made disasters such as hurricanes, floods, tornadoes and the recent Gulf oil spill. If you have knowledge of fraud, waste, abuse or allegations of mismanagement involving disaster relief operations, you can contact the NCDF by either calling the hotline at (866) 720-5721, faxing (225) 334-4707, emailing at [email protected], or in writing to National Center for Disaster Fraud, Baton Rouge, LA 70821-4909.
The U.S. Attorney’s Office praised the work of the U.S. Postal Inspection Service and the U.S. Secret Service in investigating this matter. Assistant U.S. Attorneys Julia K. Evans and Theodore R. Carter, III were in charge of the prosecution.
Sentencings for March 10 - March 11, 2015Read the Press Release
Merlin Maurillo-Ramirez, 46, of Mexico, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on March 11, 2015, for illegal re-entry of a previously deported alien into the United States. Maurillo-Ramirez was arrested in Douglas, Wyoming. He received time served, plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Office of Homeland Security, Immigration and Customs Enforcement.
Lucio Martinez-Cruz, 29, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on March 11, 2015, for illegal re-entry of a previously deported alien into the United States. Martinez-Cruz was arrested in Casper, Wyoming. He received time served, plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Office of Homeland Security, Immigration and Customs Enforcement.
Armando Lozano-Garza, 27, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on March 11, 2015, for illegal re-entry of a previously deported alien into the United States. Lozano-Garza was arrested in Gillette, Wyoming. He received time served, plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Office of Homeland Security, Immigration and Customs Enforcement.
Willis A. Center, 32, of Casper, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on March 10, 2015, for conspiracy to possess with intent to distribute, and to distribute 50 grams or more of methamphetamine. Center was arrested in Gillette, Wyoming. He received 183 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $900.00 fine and a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.
Scranton Woman Pleads Guilty to Illegally Acquiring FirearmsRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 49-year-old Scranton woman pleaded guilty yesterday before U.S. District Court Judge Malachy E. Mannion in Scranton, for making false representations in connection with the purchase of firearms.
According to United States Attorney Peter Smith, the defendant, Kimberly Royce, admitted that on two occasions in 2013, she made false statements to a federally licensed firearms dealer in Luzerne County to acquire firearms. Royce obtained a 9mm pistol on January 30, 2013, and a .45 caliber pistol on March 29, 2013, and on both occasions she falsely represented that she was not purchasing them for another person and that she was not an unlawful user of a controlled substance.
Royce was indicted by a federal grand jury in October 2014, as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Wilkes-Barre Police, and Kingston Police.
Royce faces up to 10 years in prison on each count. Judge Mannion ordered a pre-sentence investigation to be completed. Sentencing will be scheduled at a later date.
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.
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.
Retired National Guard Colonel and Former National Guard Sergeant Plead Guilty in Connection with Recruiting Fraud SchemeRead the Press Release
A retired colonel and a former sergeant from the U.S. Army National Guard both pleaded guilty today for their roles in a recruiting fraud scheme that caused approximately $14,000 in losses to the U.S. National Guard Bureau, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.
Retired Colonel Isaac Alvarado, 75, and former Sergeant First Class Travis Nau, 41, both of Albuquerque, New Mexico, pleaded guilty today to one count of conspiracy to commit wire fraud and one count of wire fraud before Chief U.S. Magistrate Judge Karen B. Molzen of the District of New Mexico. Sentencing hearings will be scheduled at a later date, and will take place before U.S. District Judge Judith C. Herrera of the District of New Mexico.
According to court documents, in approximately September 2005, the National Guard Bureau created the Guard Recruiting Assistance Program (G-RAP), which was designed to offer monetary incentives to soldiers who recruited others to join the National Guard. Through this program, a participating soldier, known as a recruiting assistant, could receive bonus payments for referring another individual to join the National Guard.
According to the plea agreements entered today, between February 2008 and February 2012, Alvarado served as a recruiting assistant in the G-RAP. During that time, Nau, who is Alvarado’s son-in-law, worked in a National Guard recruiting office and assisted individuals who were interested in joining the military. The defendants admitted that Nau provided Alvarado with the personal identifying information of potential soldiers, including their names and Social Security numbers. Alvarado then used that information to falsely claim that he was responsible for referring the soldiers to join the military, and to fraudulently claim referral bonuses through the G-RAP. In addition, Alvarado and Nau admitted that Nau advised at least two potential soldiers to falsely report that Alvarado had assisted in their recruitment even though he had not. As a result, Alvarado received approximately $12,000 in fraudulent recruiting bonuses.
The case is being investigated by the Fort Bliss Army Criminal Investigation Command. This case is being prosecuted by Trial Attorneys Sean F. Mulryne and Heidi Boutros Gesch of the Criminal Division’s Public Integrity Section.
Parking Heater Company Pleads Guilty in Price-Fixing SchemeRead the Press Release
Espar Inc., a seller of parking heaters for commercial vehicles, pleaded guilty to participating in a price-fixing scheme, the Department of Justice announced today.
Espar Inc. pleaded guilty to a one-count felony charge in the U.S. District Court for the Eastern District of New York in Brooklyn. According to the charge, Espar conspired with others to fix prices for parking heaters in the United States and elsewhere in North America from at least as early as Oct. 1, 2007, until Dec. 31, 2012. Parking heaters are devices that heat the interior compartment of a motor vehicle independent of the operation of the vehicle’s engine. In addition to paying a criminal fine, Espar has agreed to cooperate in the department’s ongoing investigation. The plea agreement is subject to court approval, and Espar is scheduled to be sentenced on June 5, 2015.
“Today’s plea demonstrates the Antitrust Division’s commitment to holding companies accountable for conspiracies that fix prices on parts used in every day products,” said Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division. “The Antitrust Division will vigorously prosecute companies that engage in schemes that subvert normal competitive processes and defraud American consumers and businesses.”
According to the charge, Espar and its co-conspirators discussed parking heater prices for commercial vehicles, agreed to set a price floor for parking heater kits for commercial vehicles sold to aftermarket customers, and agreed to coordinate the timing and amount of price increases for parking heaters for commercial vehicles sold to aftermarket customers. The companies carried out the agreement and exchanged information for the purpose of monitoring and enforcing adherence to the agreement.
Espar is charged with price fixing in violation of the Sherman Act, which carries maximum penalties of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s plea is the result of an ongoing federal antitrust investigation being handled by the Antitrust Division’s New York Office, with assistance from the FBI’s New York Field Office. Anyone with information concerning price fixing or other anticompetitive conduct in the parking heater industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.
Pallett Recycling Company to Pay $100,000 Fine and Former Owner Sentenced for Environmental CrimeRead the Press Release
American Pallet Recycling, L.L.C. (APR) and its former president and owner, Raymond Viola, have pleaded guilty and been sentenced in U.S. District Court in the Eastern District of New York to criminal violations related to the falsification of certificate stamps in violation of the Plant Protection Act, the Justice Department and the Department of Agriculture announced. As part of the plea agreement, the company will pay a fine of $100,000. Viola will pay $1,000 and serve three years of probation and has relinquished the business to his son.
APR plead guilty to one felony count of falsifying stamps that certified wood pallets were heat treated to prevent pest infestation, and were suitable for use in international transportation. Viola pleaded guilty to a similar misdemeanor count. Viola had the false stamps affixed to wood pallets which were used to carry products from the United States to foreign countries. The criminal conduct took place from March 2007 through January 2011.
The Department of Agriculture requires the heat treatment of wood pallets used in international transactions. The requirement is to prevent parasites and plant diseases from potentially entering the United States in wood packaging materials. The Department of Agriculture began requiring heat treatment of wood packaging material in September 2005. Wood pallets that carry products transported within the United States are not required to be heat treated.
APR sold wood pallets to multiple other companies who used the wood pallets to transport products internationally. The purchasing companies ordered and thought they were purchasing heat treated pallets. Instead, Viola created copies of stamp certifications utilized by legitimate wood pallet treating companies, which he and his employees applied to pallets APR sold. The charges against APR and Viola involved the fraudulent stamp certification of hundreds of untreated wood pallets that were sold to other companies for use in product export.
This is the highest monetary penalty assessed for falsified use of a fraudulent mark related to wood packaging materials under the Plant Protection Act.
The investigation was conducted by the U.S. Department of Agriculture. It was prosecuted by Senior Counsel Rocky Piaggione of the Justice Department’s Environmental Crimes Section.
Owner of Virginia-Based Company Sentenced for Providing Gratuities to Federal Contracting Official Company Earlier Agreed to Pay $300,000 Criminal Penalty for Its ConductRead the Press Release
WASHINGTON – Harry I. Martin, Jr., the owner, president, and chief executive officer of a Virginia-based information technology company, Intelligent Decisions, Inc., was sentenced today to six months home confinement and a $250,000 fine on a federal charge stemming from illegal gratuities that he and his company provided to a former contracting official with the U.S. Department of the Army in return for preferential treatment and government contracts.
The sentencing was announced today by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office; Thomas J. Kelly, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI); Peggy E. Gustafson, Inspector General of the U.S. Small Business Administration (SBA-OIG); Robert E. Craig, Jr., Special Agent in Charge of the Mid-Atlantic Field Office of the Defense Criminal Investigative Service (DCIS), and Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU).
Martin, 56, of Great Falls, Virginia, entered the guilty plea in November 2014. He was sentenced by the Honorable Emmet G. Sullivan. Martin received a sentence of three years’ probation, with the first six months in home confinement, a fine of $250,000, and 500 hours of community service.
In a related action, the company, Intelligent Decisions, Inc., agreed in October 2014 to pay a $300,000 criminal penalty for its conduct. The company was charged in criminal information with one count of paying a gratuity to a public official. Intelligent Decisions, Inc. agreed to the filing of the information, and is to make the payment and strengthen its internal controls as part of a deferred prosecution agreement with the government. In light of that payment, and the company’s willingness to acknowledge responsibility for its actions, the U.S. Attorney’s Office for the District of Columbia will recommend the dismissal of the information in October 2016, provided the company fully cooperates and abides by the agreement.
Martin is among 20 individuals to plead guilty in an investigation into domestic bribery, bid-rigging, and federal contracting. His business colleague, Chae Shim, the former Director of Acquisition Accounts, Asia/Pacific, for Intelligent Decisions, pled guilty to the same federal charge as Martin stemming from gratuities that Shim and others at Intelligent Decisions, including Martin, provided to the former Army contracting official in return for preferential treatment and government contracts. Shim, 48, of Reston, Va., is awaiting sentencing.
In addition to those individuals, one corporation, Nova Datacom, LLC, pled guilty to federal charges. Also, a South Korean-based corporation, Saena Tech Corporation, has entered into a deferred prosecution agreement and agreed to pay a $500,000 criminal penalty as part of the investigation.
In the overall investigation to date, the United States has recovered approximately $28 million through the forfeiture of approximately 40 bank accounts and financial instruments, jewelry, 19 real properties, nine cars; civil settlements; and monetary penalties.
The guilty plea and deferred prosecution agreement involve gratuities provided to In Seon Lim, a former contracting official for the U.S. Department of the Army. Lim pled guilty in July 2014, in the U.S. District Court for the Eastern District of Virginia, to federal charges stemming from a scheme in which he accepted over $490,000 worth of benefits, including cash payments and vacations, from favored contractors, including Intelligent Decisions, Inc. In return, he helped these businesses obtain millions of dollars in federal contracts and subcontracts. Lim, 48, who pled guilty to bribery and two other federal offenses, was sentenced on Oct. 24, 2014 to a four-year prison term.
According to the government’s evidence, Martin, Shim, and the company provided Lim with thousands of dollars in meals, drinks, entertainment, golf outings, and golf equipment, in return for preferential treatment and the direction of Army subcontracts to the firm.
All told, Intelligent Decisions spent over $8,000 on a variety of expenses, including dinners, golf outings, and other events attended by Lim, who was joined by company officials and others, while one of its former employees agreed to pay for a Lexus ES350 automobile worth over $30,000 for Lim.
At the time of this conduct, Lim was an assistant project manager and product director with the Program Executive Office Enterprise Information Systems, a part of the Army that provides infrastructure and informational management systems. Working in South Korea, Lim’s primary duties were to oversee and implement communications systems upgrades for the U.S. forces there, which included approximately 10 communications centers and various other special projects at military sites throughout the country. Among other things, Lim coordinated work on a major contract, which, in turn, had numerous sub-contracts.
According to the government’s evidence, prior to the awarding of the sub-contracts, Martin and Shim traveled to South Korea in January 2009 to meet with Lim. They provided him with a dinner, drinks, and entertainment. They followed up on the meeting with e-mails expressing their desire for Intelligent Decisions, Inc., to work with him.
Later in January 2009, with Lim’s assistance, the company was awarded two subcontracts. One had an initial value of $525,000, and the other had a value of $67,294.
Over the ensuing months, Martin, Shim, and the company provided Lim with additional meals, entertainment, golf outings, and other benefits. Meanwhile, modifications were made to the sub-contracts increasing their value. The lengths of the two sub-contracts were expanded, along with their value. The $525,000 contract eventually climbed to a value of $3.2 million, and the $67,294 contract later became worth $1.3 million.
This investigation is being conducted by the FBI’s Washington Field Office; the Washington Field Office of the Internal Revenue Service-Criminal Investigation; the Inspector General’s Office of the U.S. Small Business Administration; the Department of Defense’s Defense Criminal Investigative Service; the Defense Contract Audit Agency, and the Army Criminal Investigation Command. It is being prosecuted by Assistant U.S. Attorneys Michael K. Atkinson and Anthony Saler of the Fraud and Public Corruption Section of the U.S. Attorney’s Office for the District of Columbia.
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Owasso Man Sentenced to over Two Years in Prison for Bank RobberyRead the Press Release
TULSA, Okla.—Steven Ray Auten, 31, was sentenced to 33 months in prison for robbing a bank by threatening the teller with a hoax bomb, announced United States Attorney Danny C. Williams Sr. for the Northern District of Oklahoma. Auten was indicted on September 3, 2014, and plead guilty on December 9, 2014.
According to court documents, Auten admitted to robbing the International Bank of Commerce in Owasso on August 9, 2014. He further admitted to presenting a note to the bank teller which demanded money and threatened that he had a bomb. Auten did not actually have a bomb at the time of the robbery. He stole approximately $2400.
In addition to the prison sentence, U.S. District Court Chief Judge Gregory K. Frizzell ordered Auten to pay restitution to the bank.
The case was investigated by the Federal Bureau of Investigation; and prosecuted by Assistant U.S. Attorney Clinton J. Johnson.
Oakland Norteño Associate Possessing Firearms and Cocaine Near School Sentenced to More than 7 Years in PrisonRead the Press Release
OAKLAND - Cristian Quintero-Felix was sentenced yesterday to 87 months in prison, for possession with intent to distribute cocaine within 1000 feet of St. Elizabeth’s High School, possession of firearms in furtherance of a drug trafficking crime, and felon in possession of firearms, announced United States Attorney Melinda Haag and Tatum King, Acting Special Agent in Charge for U.S. Immigration and Custom Enforcement, Homeland Security Investigations San Francisco.
On April 10, 2014, a federal grand jury returned a Superseding Indictment charging Quintero-Felix, a 25 year-old resident of Oakland and Alameda, for being a felon in possession of firearms, in violation of 18 U.S.C. 922(g)(1), possession with intent to distribute cocaine within 1000 feet of a school, in violation of 21 U.S.C. §§ 841(a)(1) and 860, and possession of firearms in furtherance of a drug trafficking crime, in violation of 18 U.S.C. § 924(c). On September 14, 2014, Quintero-Felix pleaded guilty to being a felon in possession of firearms, but demanded a trial with respect to the other charges.
After a two week jury trial, Quintero-Felix was convicted on November 14, 2014, of possession with intent to distribute cocaine within 1000 feet of St. Elizabeth’s High School and possession of firearms in furtherance of a drug trafficking crime. During the trial, evidence showed that the defendant was directly across the street from St. Elizabeth’s High School carrying a backpack with two loaded firearms-- one with one round already in the chamber-- as well as numerous pre-packaged baggies of cocaine for sale and packaging paraphernalia.
The sentence was handed down by the Honorable Phyllis J. Hamilton, U.S. District Court Chief Judge. Chief Judge Hamilton also sentenced the defendant to a six year period of supervised release. Due to Quintero-Felix’ association with Norteños, the sentence handed down by Chief Judge Hamilton included a provision the he may not associate with Norteño gang members or any other gang members during the period of his supervised release. The defendant will begin serving his sentence immediately.
Cynthia Frey and Joseph Alioto, Jr., are the Assistant U.S. Attorneys who prosecuted the case with the assistance of Kurt Kosek and Ponly Tu. The prosecution is the result of the efforts and investigation by the Department of Homeland Security and the Oakland Police Department. This case is the result of efforts by the United States Attorney’s Office, the Homeland Security Investigations, and Oakland Police Department as part of efforts to get guns off the streets of Oakland and to keep school zones safe.
North Little Rock Drug Ring DismantledRead the Press Release
LITTLE ROCK – Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas and David Downing, Assistant Special Agent in Charge for the Drug Enforcement Agency, announced the unsealing of a 77-count superseding indictment charging multiple defendants in central Arkansas with numerous drug and weapon charges. Today, 26 defendants were arraigned by Federal Magistrate Judge Jerome T. Kearney. Six additional defendants will be arraigned on March 24, 2015. The four defendants who remain at large are Jesse Berry, Heather Grady, Michelle Zomaya, and Billy Crews.
“The charges set forth in the 77-count indictment are only possible because of the investigative cooperation of many law enforcement agencies,” stated Thyer. “Their commitment to excellent investigative teamwork, not only takes the meth out of our neighborhoods, but also allows my office to bring large multi-count indictments against the drug dealers to remove them and their weapons from our streets.”
“These arrests mark the final blow reflecting the successful dismantlement of this large scale methamphetamine trafficking organization,” said DEA Assistant Special Agent in Charge David Downing. “By removing these criminals from the streets of Arkansas and Arizona, they can no longer distribute this toxic poison to our communities. Through remarkable partnerships with local law enforcement, we are making major progress in preventing meth trafficking from taking hold in our communities. This investigation is a compelling example of that success,” said Downing.
An investigation into large-scale methamphetamine trafficking organization based in North Little Rock resulted Tuesday in the early-morning arrests of 20 defendants. Twelve defendants had been previously arrested on the original indictment, and four defendants remain at large. The superseding indictment charges these 36 defendants with conspiracy to distribute methamphetamine, multiple counts of distribution and possession with intent to distribute methamphetamine, and multiple gun charges.
The DEA investigation, which began in January 2014, used undercover officers to conduct multiple controlled purchases of methamphetamine and numerous other law enforcement actions, including seizures of methamphetamine. In Operation Falcons’ Ridge the DEA made 16 controlled purchases and executed nine search warrants in seizing nearly two pounds of methamphetamine. In addition, during the execution of the search warrant in Arizona which led to the arrest of four defendants, agents found evidence of approximately 11 pounds of methamphetamine which was destroyed as the search team was entering the residence. The street value of one pound of meth is $13,000 to $15,000.
This organization, headed in Arkansas by Michael Glover and in Arizona by Michael Polito, was based in North Little Rock. It is believed that Glover and associates made numerous trips to Arizona to obtain bulk quantities of methamphetamine, which was then brought back to central Arkansas and distributed. Included in the indictment were several counts which called for the forfeiture of multiple firearms and more than $10,000 which is believed to be the proceeds of drug trafficking.
The superseding indictment charges 36 defendants in 77 separate counts. All defendants except for Polito are residents of central Arkansas. Glover, John Boyce, Brent McNair, and Kallie Shae Lewis were arrested in Arizona following a trip to acquire bulk methamphetamine in October 2014, and later charged in a federal criminal complaint. The original indictment, which charged 12 defendants, including the four arrested in Arizona, was handed down by a Federal Grand Jury on November 5, 2014, The superseding indictment was handed down by a Federal Grand Jury on March 3, 2015. The counts include conspiracy to possess with intent to distribute more than 500 grams of methamphetamine, distribution of methamphetamine, possession with intent to distribute methamphetamine, felon in possession of firearms, possession of a firearm in furtherance of a drug trafficking crime, and the use of telephone to facilitate a drug trafficking crime. If convicted of conspiracy to distribute more than 500 grams of methamphetamine each defendant will face a sentence of not less than 10 years to life imprisonment.
The investigation was conducted by the DEA, with assistance from several law enforcement agencies including the North Little Rock Police Department, the Little Rock Police Department, the Sherwood Police Department, the Benton Police Department, the Pulaski County Sherriff’s Office, the Faulkner County Sherriff’s Office, the Lonoke County Sherriff’s Office, the Saline County Sherriff’s Office, and the Arkansas National Guard. The case is being prosecuted by Assistant United States Attorneys Chris Givens and Michael Gordon.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
DEFENDANTS/CHARGES (defendants still at large in BOLD)
Conspiracy to possess with intent to distribute methamphetamine:
- Gregory Barns, 34, Sherwood, AR
- Jesse Berry, 35, North Little Rock, AR
- Joshua Boozy, 31, North Little Rock, AR
- Linnie Boozy, 33, North Little Rock, AR
- John Boyce, 50, Mayflower
- Justin Cobb, 37, Sherwood, AR
- Billy Crews, 56, Benton, AR
- Joshua Dickerson, 34, Sherwood, AR
- Michael Glover, 31, Cabot, AR
- Chris Grady, 42, Ward, AR
- David Grady, 44, Sherwood, AR
- Heather Grady, 31, North Little Rock, AR
- Misty Hoggard, 35, Benton, AR
- Lindsey Hosford, 32, Little Rock, AR
- Kaylen Johnson, 29, Little Rock, AR
- Kallie Shea Lewis, 25, Austin, AR
- Moneque Lewis, 48, Austin, AR
- Marc Massa, 36, North Little Rock, AR
- Marissa McCullough, 26, Little Rock, AR
- Brent McNair, 35, Mayflower, AR
- Curtis McNair, 32, Mayflower, AR
- Dustin Murphy, 37, North Little Rock, AR
- Tonya Nelson, 46, Benton, AR
- Michael Sean Nicholson, 47, North Little Rock, AR
- Michael Ryan Polito, 33, Phoeniz, AZ
- Christy Ramsey, 40, Little Rock, AR
- Jason Riley, 39, Cabot, AR
- Amy Scarborough, 37, Austin, AR
- Scott Shrum, 36, North Little Rock, AR
- Cassondra Spears, 39, North Little Rock, AR
- Ronald Heath Swaim, 33, North Little Rock, AR
- Amanda Thomson, 38, Mayflower, AR
- Aaron Williams, 32, North Little Rock, AR
- Joe Willis, 33, Lonoke, AR
- Michele Zomaya, 33, North Little Rock, AR
Distribution of methamphetamine:
- Michael Glover, 31, Cabot, AR
- Lindsey Hosford, 32, Little Rock, AR
- Kaylen Johnson, 29, Little Rock, AR
- Aaron Williams, 32, North Little Rock, AR
- Michele Zomaya, 33, North Little Rock, AR
Possession with intent to distribute methamphetamine:
- Justin Cobb, 37, Sherwood, AR
- Michael Glover, 31, Cabot, AR
- Lindsey Hosford, 32, Little Rock, AR
- Marc Massa, 36, North Little Rock, AR
- Brent McNair, 35, Mayflower, AR
- Curtis McNair, 32, Mayflower, AR
- Moneque Lewis, 48, Austin, AR
- Amy Scarborough, 37, Austin, AR
Felon in possession of a firearm:
- Lindsey Hosford, 32, Little Rock, AR
- Brent McNair, 35, Mayflower, AR
Possession of a firearm to further a drug trafficking crime:
- Lindsey Hosford, 32, Little Rock, AR
- Brent McNair, 35, Mayflower, AR
- Curtis McNair, 32, Mayflower, AR
Use of a telephone to facilitate a drug trafficking crime:
- Gregory Barns, 34, Sherwood, AR
- Jesse Berry, 35, North Little Rock, AR
- Joshua Boozy, 31, North Little Rock, AR
- Linnie Boozy, 33, North Little Rock, AR
- John Boyce, 50, Mayflower
- Justin Cobb, 37, Sherwood, AR
- Billy Crews, 56, Benton, AR
- Michael Glover, 31, Cabot, AR
- Chris Grady, 42, Ward, AR
- David Grady, 44, Sherwood, AR
- Heather Grady, 31, North Little Rock, AR
- Misty Hoggard, 35, Benton, AR
- Lindsey Hosford, 32, Little Rock, AR
- Kallie Shea Lewis, 25, Austin, AR
- Moneque Lewis, 48, Austin, AR
- Marissa McCullough, 26, Little Rock, AR
- Brent McNair, 35, Mayflower, AR
- Curtis McNair, 32, Mayflower, AR
- Dustin Murphy, 37, North Little Rock, AR
- Tonya Nelson, 46, Benton, AR
- Michael Ryan Polito, 33, Phoeniz, AZ
- Christy Ramsey, 40, Little Rock, AR
- Jason Riley, 39, Cabot, AR
- Amy Scarborough, 37, Austin, AR
- Scott Shrum, 36, North Little Rock, AR
- Cassondra Spears, 39, North Little Rock, AR
- Ronald Heath Swaim, 33, North Little Rock, AR
- Aaron Williams, 32, North Little Rock, AR
- Joe Willis, 33, Lonoke, AR
- Michele Zomaya, 33, North Little Rock, AR
STATUTORY SENTENCES
Conspiracy to possess with intent to distribute and to distribute more than 500 grams of methamphetamine is punishable by not less than 10 years, not more than life, incarceration in the Bureau of Prisons with a possible fine of up to $10,000,000, and not less than 5 years supervised release.
Distribution of more than 50 grams of actual methamphetamine is punishable by not less than 10 years, not more than life, incarceration in the Bureau of Prisons with a possible fine of up to $10,000,000, and not less than 5 years supervised release.
Distribution of more than 5 grams but less than 50 grams of actual methamphetamine is punishable by not less than 5 years, not more than 40 years’ incarceration in the Bureau of Prisons with a possible fine of up to $5,000,000, and not less than 4 years supervised release.
Distribution of less than 50 grams of a mixture or substance containing methamphetamine is punishable by not more than 20 years’ incarceration in the Bureau of Prisons with a possible fine of up to $1,000,000, and not less than 3 years supervised release.
Possession with the intent to distribute more than 50 grams of actual methamphetamine is punishable by not less than 10 years, not more than life, incarceration in the Bureau of Prisons with a possible fine of up to $10,000,000, and not less than 5 years supervised release.
Possession with the intent to distribute more than 50 grams but less than 500 grams of a mixture or substance containing methamphetamine is punishable by not less than 5 years, not more than 40 years’ incarceration in the Bureau of Prisons with a possible fine of up to $5,000,000, and not less than 4 years supervised release.
Possession with the intent to distribute less than 50 grams of a mixture or substance containing methamphetamine is punishable by not more than 20 years’ incarceration in the Bureau of Prisons with a possible fine of up to $1,000,000, and not less than 3 years supervised release.
Possession of a firearm by a felon is punishable by not more than 20 years’ incarceration in the Bureau of Prisons with a possible fine of up to $250,000, and not more than 3 years supervised release.
Possession of a firearm in furtherance of a drug trafficking crime is punishable by not less than 5 years, not more than life, consecutive to any other imposed sentence, incarceration in the Bureau of Prisons with a possible fine of up to $250,000, and not more than 3 years supervised release.
Use of a communication facility to facilitate a drug trafficking crime is punishable by not more than 4 years’ incarceration in the Bureau of Prisons with a possible fine of up to $250,000, and not more than 1 year supervised release.
New Orleans Man Sentenced to 5 Years for Receiveing Images Depicting the Sexual Exploitation of ChildrenRead the Press Release
U.S. Kenneth A. Polite announced that TRAVIS ISRAEL OSBORNE, age 23, of New Orleans, was sentenced today for crimes involving the sexual exploitation of children.
U.S. District Judge Eldon E. Fallon sentenced OSBORNE to 60 months incarceration, followed by 5 years of supervised release.
According to court documents, special agents with the Federal Bureau of Investigation executed a search warrant at OSBORNE’S residence on April 2, 2013. Agents recovered one computer and one external digital storage device. A subsequent forensic examination of the computer and storage device revealed that beginning in 2011 OSBORNE used versions of a peer-to-peer network to look for and download images of children as young as 8-years-old engaging in sexually explicit conduct. In total, OSBORNE downloaded and catalogued approximately 140 images and 37 videos of prepubescent children being sexually victimized.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter. Assistant United States Attorney Jordan Ginsberg was in charge of the prosecution.
New Orleans Man Pleads Guilty to Possessing Counterfeit Credit CardsRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced today that a New Orleans man pleaded guilty to possessing counterfeit credit cards in order to make illegal purchases.
Izell Mayes, 24, of New Orleans, entered a conditional guilty plea for one count of possession of 15 or more counterfeit or unauthorized access devices to U.S. Magistrate Judge Kathleen Kay. The plea will become final when accepted by U.S. District Judge Donald E. Walter. According to the guilty plea, Mayes was riding in a car that was stopped for speeding on February 9, 2014 in Vinton, La. Upon further investigation, the car was searched and 50 counterfeit credit cards in Mayes’ name were found. Forty counterfeit cards under another name were also found in the car. Mayes later confessed to picking up the cards in Houston before traveling to Louisiana. He used the cards in department stores in Houston earlier that day. The last card used was in Baytown, Texas.
Mayes faces up to 10 years in prison, three years supervised release and a $250,000 fine. A sentencing date of June 18, 2015 was set.
The U.S. Secret Service and the ATF investigated the case. Assistant U.S. Attorney Howard C. Parker is prosecuting the case.
New Jersey Man Sentenced for Firearms Law ViolationRead the Press Release
Prosecution is part of Project Safe Neighborhoods Initiative
JOHNSTOWN, Pa. – A resident of Tuckertown, NJ, has been sentenced in federal court in Johnstown to 36 months in prison and three years’ supervised release on his conviction of violating federal firearms laws, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Abdur Rahmen Abdullah, 33, of Tuckertown, NJ.
According to information presented to the court, on Jan. 10, 2013, Abdullah possessed a Remington, Model 870 Wingmaster, 12 gauge shotgun. On July 1, 2008, Abdullah was convicted in the United States District Court for the District of NJ of being a felon in possession of a firearm, which is a crime punishable by imprisonment for a term exceeding one year. Federal law prohibits persons who have been convicted of a crime punishable by a term of imprisonment exceeding one year from possessing firearms or ammunition.
Assistant United States Attorney Stephanie L. Haines prosecuted this case on behalf of the government.
Mr. Hickton commended the Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Johnstown Police Department for the investigation leading to the successful prosecution of Abdullah.
According to Mr. Hickton, this case was prosecuted as part of Project Safe Neighborhoods initiative, a collaborative effort by federal, state and local law enforcement agencies, prosecutors and communities to prevent, deter and prosecute gun crime.
New Haven Heroin Dealer Sentenced to 10 Years in Federal PrisonRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ROBERT SANTOS, also known as “Scoot,” 33, of New Haven, was sentenced today by Senior U.S. District Judge Ellen Bree Burns in New Haven to 120 months of imprisonment, followed by eight years of supervised release, for distributing narcotics.
According to court documents and statements made in court, this matter stems from “Operation Bloodline,” a joint law enforcement investigation targeting narcotics trafficking and gang violence in the Dwight-Kensington and Fair Haven sections of New Haven. Led by the DEA New Haven Task Force and the New Haven and Hamden Police Departments, the year-long investigation included the use of court-authorized wiretaps on numerous telephones, extensive physical surveillance, controlled purchases of narcotics, execution of search warrants, and seizures of narcotics and firearms. Approximately 100 individuals were convicted of federal charges as a result of the investigation.
On February 6, 2014, a jury found SANTOS guilty of one count of conspiracy to possess with intent to distribute, and to distribute, 100 grams or more of heroin.
According to the evidence at trial, Kevin Wilson, also known as “Nature,” distributed narcotics, primarily in the Dwight/Chapel area of New Haven. SANTOS partnered with Wilson, pooling money to acquire large quantities of heroin from a New York-based supplier, and then distributing the drug in greater New Haven.
Trial testimony also established that Wilson and other co-defendants shared a stash of firearms to use in furtherance of their drug trafficking activity.
SANTOS was arrested on July 25, 2012, and is detained.
SANTOS’s criminal history includes multiple felony convictions, including three narcotics-related convictions and one firearm-related conviction.
Wilson pleaded guilty and awaits sentencing.
This matter was investigated by the Drug Enforcement Administration’s New Haven Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Haven, Hamden, West Haven, North Haven, Branford, Ansonia and Meriden Police Departments. The United States Marshals Service, the Connecticut State Police, the Connecticut Department of Correction, Parole and Community Services and the Milford, Hartford, New Britain, North Branford and Stratford Police Departments provided valuable assistance to the investigation.
This case is being prosecuted by Assistant U.S. Attorneys S. Dave Vatti and Marc Silverman.
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Contact: Darcie N. McElwee
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Gregory Owens, 58, of Londonderry, New Hampshire, was indicted yesterday by a federal grand jury in Portland and charged with interstate domestic violence and discharging a firearm during and in relation to a crime of violence in connection with a home invasion shooting in Saco, Maine on December 18, 2014.
According to court records, on that date, Owens drove from New Hampshire to Maine intending to kill his wife who was an overnight guest at the home of friends living in Saco. During the home invasion, Owens shot his wife and the male home owner with a 9mm pistol. Both survived their injuries.
Owens faces up to 20 years in prison on the interstate domestic violence charge and no less than ten years and up to life on the firearm charge, which must be served consecutively. He also faces a $250,000 fine on each count.
The investigation is being conducted by the Saco Police Department; the Maine and New Hampshire State Police; the Federal Bureau of Investigation; and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
An indictment is merely an accusation and a defendant is presumed to be innocent unless proven guilty in a court of law.
Naturalized U.S. Citizen Sentenced on Immigration Fraud for Failing to Disclose Terrorism ConvictionRead the Press Release
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan and Special Agent in Charge Marlon Miller of Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Detroit Field Office announced that a naturalized U.S. citizen was sentenced today to serve 18 months in prison for her Nov. 10, 2014, conviction on immigration fraud for failing to disclose that she had been convicted of participating in a terrorist bombing.
Rasmieh Yousef Odeh, 67, a Chicago-area resident, was found guilty by a jury of procuring her U.S. citizenship unlawfully on Nov. 10, 2014, after a five-day trial. According to the indictment, Odeh was convicted in Israel for her role in the 1969 bombings of a supermarket and the British Consulate in Jerusalem, which were carried out on behalf of the Popular Front for the Liberation of Palestine (PFLP), a designated terrorist organization. Odeh and others placed multiple bombs at the British Consulate and in a supermarket. One of the bombs placed at the supermarket detonated, killing two and injuring others. A bomb placed at the consulate caused structural damage to the facility. Odeh was sentenced by Israeli military authorities to life imprisonment, but was released after 10 years as part of a prisoner exchange and she then returned to the West Bank.
The evidence presented at trial established that in 1995, Odeh immigrated to the United States and was naturalized as a citizen in 2004. In her immigration documents filed in the United States, Odeh failed to disclose her arrest, conviction and imprisonment overseas, which were material facts for the U.S. government in determining whether to grant her citizenship.
“The United States government is entitled to accurate information about people who are asking permission to enter and stay in the country,” said U.S. Attorney McQuade. “A prior conviction for committing a terrorist bombing is a very significant fact, and failure to disclose this information is a serious fraud against the United States.”
“Today's sentencing and deportation order against the defendant underscores the severe penalties that await those who attempt to defraud the immigration system by hiding derogatory information from their past,” said Special Agent in Charge Miller. “When individuals are less than truthful on their immigration documents, the system is severely undermined and the security of our nation is put at risk. I applaud the HSI special agents and federal prosecutors who worked tirelessly to resolve this lengthy and complex investigation.”
As part of her sentence, the Honorable U.S. District Judge Gershwin A. Drain revoked Odeh’s U.S. citizenship and ordered her removed and deported to Jordan. Judge Drain stayed the execution of these orders pending her appeal of the conviction. Judge Drain also granted Odeh’s request to remain on bond pending her appeal.
This case was investigated by special agents of ICE-HSI and prosecuted by Assistant U.S. Attorney Jonathan Tukel and Special Assistant U.S. Attorney Mark Jebson of the Eastern District of Michigan, and Trial Attorney Elisabeth Poteat of the Justice Department’s National Security Division.
Moss Bluff Man Warehoused and Sold Large Quantities of MarijuanaRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced that a Moss Bluff man pleaded guilty Wednesday to operating a marijuana sales and transport conspiracy that stretched from Texas to Louisiana.
Daniel Cantu-Lopez, 42, of Moss Bluff, La., pleaded guilty before U.S. District Judge Richard T. Haik to one count of conspiracy to possess with intent to distribute marijuana. According to evidence presented at the guilty plea, Cantu-Lopez was warehousing large quantities of marijuana in Houston and distributing it out of his trailer in Moss Bluff. He directed the transport and sales of marijuana from June 2013 to September of 2013 from locations in Texas and Louisiana. During the course of the investigation, 4.9 kilograms of marijuana were seized from conspirator Juan Antonio Garcia on June 25, 2013 during a traffic stop in Vinton, La.; 453 grams of marijuana were seized on July 1, 2013 from conspirator Bertoldo Tolo Labra while being delivered to Moss Bluff; 380 kilograms of marijuana were seized on July 13, 2013 in George West, Texas, from conspirator Jamie Garza who was driving a truck and horse trailer; 4.5 kilograms of marijuana were purchased by an undercover agent on July 17, 2013 from Cantu-Lopez’s common-law wife Lisa Long in Moss Bluff; and 537 kilograms of marijuana were seized in Houston on September 13, 2013 from a pickup truck driven by conspirator Juan Garcia.
Cantu-Lopez faces up to 40 years in prison, five years supervised release, and a $5 million fine. A sentencing date was not set.
The defendant was arrested as part of Organized Crime Drug Enforcement Task Force (OCDETF) Operation “Cajun Gallo.” The DEA, the George West Texas Police Department, and the Houston Police Department participated in this OCDETF investigation. The OCDETF program is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
Assistant U.S. Attorney Howard C. Parker is prosecuting the case.
Michael Fabini of Fort Wayne Sentenced to 168 MonthsRead the Press Release
FORT WAYNE – The United States Attorney for the Northern District of Indiana, David Capp, announces that today, Michael Fabini, 35, of Fort Wayne was sentenced to 168 months imprisonment along with a term of 5 years of supervised release, and forfeiture was ordered following his plea of guilty to the felony offenses of conspiring to distribute and possession with intent to distribute 1,000 kilograms or more of marijuana and engaging in a monetary transaction in property derived from drug trafficking.
Documents filed in this case indicate that, from on or about September 21, 2007, and continuing to on or about December 6, 2012, Fabini did knowingly and intentionally conspire, combine, confederate and agree to distribute and possess with the intent to distribute 1,000 kilograms or more of marijuana and on or about August 7, 2009, did knowingly engage in a monetary transaction affecting commerce in depositing $70,154.99 derived from drug trafficking. Fabini agreed as part of his plea agreement to the forfeiture of certain assets, and also agreed to a forfeiture money judgment in the amount of $5,000,000.00.
According to Capp, the sentencing of Michael Fabini represents a culmination of a lengthy and extensive law enforcement investigation that removed 2 of the top dealers, (Fabini and Matthew McChesney) in the Fort Wayne area along with many of their underlings from the streets of Fort Wayne. Not only were significant sentences imposed, but the United States will obtain significant forfeiture of Fabini’s real estate (his home in Cherry Hills) and personal property, but also cash and various accounts which represented proceeds of criminal activity. The United States has already forfeited cash, vehicles, and residences with a total value of approximately $1.9 million dollars as a result of McChesney’s conviction.
As the United States Attorney has repeatedly indicated to the citizens of the Northern District of Indiana, “law enforcement is organized, and federal law enforcement will continue to coordinate their efforts with state and local law enforcement officers to bring comprehensive cases against drug dealers operating in our communities.” Not only will the federal prosecution result in significant sentences, but Capp indicates that his office will seek forfeiture of all assets, real and personal and well as any proceeds derived from the commission of the offense.
This joint investigation was conducted by the Allen County Police Department Vice and Narcotics Division, New Haven Police Department, and the FBI Fort Wayne Safe Streets Task Force, which is comprised of FBI agents and officers from the Indiana State Police, Allen County Police Department, and the Fort Wayne Police Department. This case was prosecuted by Assistant United States Attorney Anthony W. Geller.Miami-Based Lender Pays $3.8 Million to Resolve Liability Relating to U.S. Export-Import Bank LoansRead the Press Release
The Justice Department announced today that Hencorp Becstone Capital L.C. (Hencorp) has agreed to pay $3.8 million to resolve allegations under the False Claims Act that it made false statements and claims to the Export-Import Bank of the United States (Ex-Im Bank) in order to obtain loan guarantees. Hencorp is a Miami-based lender and financial services company that provides financing and other financial services to Latin American businesses.
“The Ex-Im Bank provides vital support for U.S. manufacturing by enabling foreign businesses to obtain financing to purchase U.S.-made goods and equipment,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Justice Department will continue to vigorously pursue those who attempt to take advantage of this important program.”
The Ex-Im Bank guarantees loans made by approved lenders to foreign businesses for the purchase of American-made products. The lender is responsible for performing a credit review of the transaction to ensure that it meets applicable criteria. The government alleged that Ricardo Maza, a Peruvian-based former Hencorp business agent, created false documentation to obtain Ex-Im Bank guarantees on fictitious transactions on which no products were sold or exported, and that Hencorp acted recklessly by outsourcing key credit review functions to Maza without adequate supervision or oversight. The government alleged that Maza then diverted the proceeds of the loans to himself and to his friends and business associates in Peru, and that the transactions resulted in losses to the Ex-Im Bank when the loans were not repaid. In 2012, Mario Mimbella, 64, of Miami, Florida, the purported U.S.-based exporter on three of the fraudulent transactions, pled guilty to making false records for his participation in the scheme and was later sentenced to prison.
“Lenders that use Ex-Im programs have an obligation to prevent and detect fraud,” said Acting Inspector General Michael T. McCarthy for the Ex-Im Bank. “The Office of Inspector General will pursue accountability for all participants involved in schemes that defraud the Ex-Im Bank.”
This settlement resolves allegations made in a whistleblower lawsuit filed under the False Claims Act by Genaro Benites Caballero, the former owner of one of the purported purchasers who stated that he had no part in the scheme and that his signature was forged on key documents without his knowledge, and Patricia Doris Lee Dominguez, a former attorney for the purported purchaser. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery. The whistleblowers will receive $608,000 of the settlement.
This case was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of Columbia and the Office of Inspector General for the Ex-Im Bank.
The lawsuit is captioned United States ex rel. Benites Caballero, et al. v. Hencorp Becstone Capital, L.C., et al., cv-13-168 (D.D.C.). The claims resolved by the settlement are allegations only, and there has been no determination of liability with respect to Hencorp.
Mechanicsburg Man Sentenced for Impersonating A Federal AgentRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Brandon H. Schnetzka, age 41, of York, Pennsylvania was sentenced today to 18 months incarceration in a federal prison by Senior United States District Court Judge Sylvia Rambo. Schnetzka pleaded guilty to one count of impersonating an officer or employee of the United States on July 30, 2014.
According to United States Attorney Peter Smith, the charge against Schnetzka is a result of a report that he falsely represented himself as a Special Agent from the Federal Bureau of Investigation in order to fraudulently procure a Lexus loaner vehicle from a Mechanicsburg, Pennsylvania dealership. After multiple requests, Schnetzka eventually returned the vehicle after using it for 8 days.
This case was investigated by the Federal Bureau of Investigation and the Silver Spring Township Police Department. This case is being prosecuted by Assistant United States Attorney Meredith A. Taylor.
Manhattan U.S. Attorney and FBI Assistant Director-In-Charge Announce Filing of Criminal Charges Against, and Deferred Prosecution Agreement with, Commerzbank AG New York Branch in Connection with Olympus Corporation’s Billion Dollar Accounting FraudRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today two major actions filed in federal court in the District of Columbia and Manhattan against COMMERZBANK AG (“COMMERZ”), and COMMERZBANK AG NEW YORK BRANCH (“COMMERZ NEW YORK”).
First, a criminal Information was filed today in federal court in the District of Columbia charging COMMERZ NEW YORK with felony violations of the Bank Secrecy Act, in connection with COMMERZ’s and COMMERZ NEW YORK’s relationship with the Olympus Corporation (“Olympus”) and COMMERZ NEW YORK’s failure to, among other things, maintain an effective anti-money laundering program, detect reportable transactions under U.S. law and prevent them from being processed by COMMERZ NEW YORK. The criminal BSA charges are contained in a four-count felony Information (the “Information”) which also charges COMMERZ with conspiring to violate the International Emergency Economic Powers Act (“IEEPA”) based on COMMERZ’s role in processing, from 2001 through at least 2008, $263 million of transactions that were prohibited under U.S. law. The case is assigned to United States District Judge Beryl Howell.
Second, the United States has entered into an agreement (the “Agreement”) with COMMERZ and COMMERZ NEW YORK (collectively, the “Company”) under which the Company agrees to accept responsibility for its conduct by stipulating to the accuracy of an extensive Statement of Facts; to pay a $300 million forfeiture amount to the victims of the Olympus fraud; to refrain from future criminal conduct and cooperate fully with the Government; and to continue reforms of its Bank Secrecy Act (“BSA”)/Anti-Money Laundering (“AML”) compliance program. Assuming the Company’s continued compliance with the Agreement, the Government has agreed to defer prosecution on the Information for a period of three years, after which time the Government will seek to dismiss the charges. The $300 million forfeiture amount to the victims of the Olympus fraud will be paid through a parallel civil forfeiture complaint filed in Manhattan federal court.
COMMERZ and COMMERZ NEW YORK will pay a total of $1.45 billion in penalties to resolve the Olympus-related AML charges, IEEPA violations, and payments to regulators.
Manhattan U.S. Attorney Preet Bharara said: “Today, Commerz New York stands charged with Bank Secrecy Act criminal offenses for its acute, institutional anti-money laundering deficiencies that made it a conduit for over a billion dollars of the Olympus fraud. These criminal charges follow a multi-year investigation and a guilty plea by a former Commerzbank Singapore employee who helped set up the structure that allowed for the Olympus fraud. Institutions, not just individuals, have an obligation to follow the law, and anti-money laundering laws in particular are critical for financial institutions to follow. With today’s resolution, the bank, as part of a deferred prosecution agreement, has accepted responsibility in a detailed statement of facts, agreed to continue reforming its anti-money laundering practices, and will pay $300 million that will go to victims of the Olympus fraud.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “Today we announce more charges against yet another bank. Commerz New York violated the Bank Secrecy Act designed to prevent the movement of money, often with nefarious intent. Commerzbank enabled Olympus to evade detection for years. And worse yet, failed to create a process to prevent this criminal behavior. Management at banks and financial institutions should heed this warming: This behavior will be investigated, vigorously.”
According to the allegations in the criminal Information and other documents filed today in the United States District Court for the District of Columbia, and felony plea documents related to an Olympus executive filed previously in the District Court for the Southern District of New York:
Since 2008, and continuing until at least 2013, COMMERZ NEW YORK violated the BSA and its implementing regulations. Specifically, COMMERZ NEW YORK failed to maintain adequate policies, procedures, and practices to ensure its compliance with United States law, including its obligation to detect and report suspicious activity. As a result of the wilful failure of COMMERZ NEW YORK to comply with United States law, a multibillion-dollar securities fraud was operated through COMMERZ and COMMERZ NEW YORK.
Olympus was a Japan-based manufacturer of medical devices and cameras. Its common stock is listed on the Tokyo Stock Exchange, and its American Depository Receipts trade in the United States. From at least the late 1990s through 2011, Olympus perpetrated a massive accounting fraud designed to conceal from its auditors and investors hundreds of millions of dollars in losses. In September 2012, Olympus and three of its senior executives pled guilty in Japan to inflating the company’s net worth by approximately $1.7 billion.
Olympus used COMMERZ and COMMERZ NEW YORK to perpetrate its fraud. COMMERZ, through its branch and affiliates in Singapore, both loaned money to off-balance-sheet entities created by or for Olympus to perpetrate its fraud, and transacted more than $1.6 billion through COMMERZ NEW YORK in furtherance of the fraud.
The Suspicions at COMMERZ
COMMERZ and COMMERZ NEW YORK were used in furtherance of the Olympus fraud during two different time periods. From approximately 1999 through 2000, Olympus perpetrated its fraud primarily through COMMERZ and its Singapore branch and affiliates. Among other things, Olympus used special purpose vehicles to facilitate the fraud, some of which were created by COMMERZ – including several executives based in Singapore – at Olympus’s direction, using funding from COMMERZ. One of those Singapore-based executives, Chan Ming Fon, was involved in creating the Olympus structure in 1999 while at Commerzbank (Southeast Asia) Ltd., and later managed an Olympus-related entity in 2005-2010 on behalf of which he submitted false confirmations to Olympus’s auditors. In September 2013, Chan pled guilty in Manhattan federal court to conspiracy to commit wire fraud.
From 1999 through 2000, Olympus executives asked COMMERZ executives to provide certain false documents to Olympus’s auditors, which would have failed to disclose that certain Olympus assets were pledged as collateral for loans from a COMMERZ affiliate. COMMERZ obtained a legal opinion, which, in the words of one COMMERZ executive written to an Olympus executive, “ma[de] clear that our bank could be subject to both civil and criminal penalties if we are seen to be assisting or facilitating you in the non-disclosure.” Although COMMERZ ultimately declined to provide the false documents, its executives suggested a variety of ways Olympus could nonetheless fail to disclose the pledge.
In 2000, Olympus took its business away from COMMERZ and transferred it to another bank. In 2005, however, Olympus – and its fraud – returned to COMMERZ. From that point until at least 2010, COMMERZ executives expressed strong suspicions about the Olympus transactions and structure. One senior executive worried that Olympus would have to “write off [the] full amount” of the relevant transactions, and wondered about the effects on COMMERZ if “any negative news is splash[ed] on the front page.” A senior legal and compliance officer responsible for COMMERZ’s Singapore branch and affiliates wrote at the time that he was “concerned” about fraud, asset stripping, market manipulation, and tax offenses, and that “[i]f the [Olympus] structure and transactions can not [be] explained we must file Suspicious Transaction report as a matter of law and [COMMERZ] policy.”
The New York Wires
In March 2010, two wire transfers in the amount of approximately $455 million and $67 million, respectively, related to the Olympus scheme were processed by COMMERZ NEW YORK through the correspondent account for the Singapore branch of COMMERZ. Those wires caused COMMERZ NEW YORK’s automated AML monitoring software to “alert.”
At the time, COMMERZ NEW YORK had conducted no due diligence on the Singapore branch and affiliates of COMMERZ, consistent with COMMERZ’s policy of not conducting due diligence on its own branches. In response to the alerts, however, COMMERZ NEW YORK sent a request for information to COMMERZ in Frankfurt and COMMERZ’s Singapore branch, inquiring about the transactions. The Singapore branch responded in a brief e-mail, dated April 20, 2010, referring to the Olympus-related entities involved in the wires:
GPA Investments Ltd. ist [sic] a Caymen [sic] Islands SPV, Creative Dragons SPC-Sub Fund E is a CITS administered fund both of which are part of an SPC structure to manage securities investments for an FATF country based MNC.
According to the Relationship Manager the payment reflects the proceeds from such securities investments to be reinvested.
COMMERZ’s Singapore branch did not relay any of the concerns about the Olympus-sponsored structures and transactions.
Based on its response, COMMERZ NEW YORK closed the alert without taking any further action other than to note that in March 2010 alone, GPA Investments had been involved in six transactions through COMMERZ NEW YORK totalling more than $522 million. In fact, between 1999 and 2010, a total of more than $1.6 billion in furtherance of the Olympus fraud was cleared through COMMERZ NEW YORK. COMMERZ NEW YORK failed to file a SAR in the United States concerning Olympus or any of the Olympus-related entities until November 2013 – more than two years after the Olympus accounting fraud was revealed.
COMMERZ NEW YORK’s Compliance Deficiencies
COMMERZ NEW YORK had the same designated BSA Officer continuously from approximately 2003 until early 2014. Over those years, she raised concerns about AML compliance, both to her superiors at COMMERZ NEW YORK, and with COMMERZ Frankfurt.
Under the BSA, a financial institution is required to detect and report suspicious activity. This is accomplished, in part, through conducting due diligence, and enhanced due diligence where appropriate, of the correspondent relationship – which COMMERZ NEW YORK failed to do – and by sending requests for further information to the correspondent bank when potentially suspicious transactions are detected. COMMERZ NEW YORK frequently had difficulties getting responses to requests for information generated in connection with automated transaction monitoring “alerts.” Because requests for information went unanswered for as long as eight months without SARs being filed, alerts were often closed without any response to the pending request. As a result of these deficiencies, COMMERZ NEW YORK cleared numerous AML “alerts” based on its own perfunctory internet searches and searches of public source databases but without ever receiving responses to its requests for information.
On June 24, 2010, a COMMERZ NEW YORK-based compliance officer who had primary responsibility for automated transaction monitoring wrote in an e mail to the BSA Officer and the Head of Compliance in New York (who had previously served as the Head of Compliance in Asia) that “we currently have 90 alerts a day,” with “808 alerts outstanding,” which “could lead to a possible back log.” He continued, “I also wanted to make you aware that we have currently over 130 Frankfurt RFIs [i.e., requests for information] outstanding,” noting “a decrease in response to the RFIs” from Frankfurt. The following day, the Head of Compliance in New York forwarded the e mail to COMMERZ’s Global Head of Compliance, adding that “things are not getting better with regards to th[ose] findings. (see below). I will forward you the DRAFT memo on potential revision of staffing needs.” Although the Global Head of Compliance thereafter instituted new procedures designed to increase the speed of responses to RFIs from New York, problems persisted with the timely flow of information from business units outside the U.S. to compliance officers in New York.
COMMERZ and COMMERZ NEW YORK also failed to conduct adequate due diligence or to obtain “know your customer” information with respect to correspondent bank accounts for COMMERZ’s own foreign branches and affiliates. These systemic deficiencies reflected a failure to maintain adequate policies, procedures, and controls to ensure compliance with the BSA and regulations prescribed thereunder and to guard against money laundering.
IEEPA Violations
According to admissions contained in the deferred prosecution agreement, from 2002 to 2008, COMMERZ knowingly and willfully moved $263 million through the U.S. financial system on behalf of Iranian and Sudanese entities subject to U.S. economic sanctions. COMMERZ engaged in this criminal conduct using numerous schemes designed to conceal the true nature of the illicit transactions from U.S. regulators.
For example, in the deferred prosecution agreement, COMMERZ acknowledged that it used non-transparent payment messages, known as cover payments, to conceal the involvement of sanctioned entities, and also removed information identifying sanctioned entities from payment messages, in transactions processed through COMMERZ NEW YORK and other financial institutions in the United States. Specifically, in 2003, COMMERZ designated a group of employees in the Frankfurt back office to review and amend Iranian payments so that the payments would not be stopped by U.S. sanctions filters. In doing so, COMMERZ ensured that Iranian payment messages did not mention the Iranian entity, as transactions may have otherwise been stopped pursuant to the U.S. sanctions.
COMMERZ admitted that it hid these practices from COMMERZ NEW YORK. For example, in 2003, when two state-owned Iranian banks wanted to begin routing their U.S. dollar clearing business through COMMERZ, a COMMERZ back office employee emailed other COMMERZ employees directing: “If for whatever reason CB New York inquires why our turnover has increase[d] so dramatically, under no circumstances may anyone mention that there is a connection to the clearing of Iranian banks!!!!!!!!!!!!!.”
COMMERZ admitted that this conduct continued even though its senior management was warned that the bank’s practices for Iranian clients “raised concerns.” For example, in October 2003, the head of COMMERZ’s internal audit division stated in an email to a member of COMMERZ’s senior management that Iranian bank names in payment messages going to the United States were being “neutralized” and warned: “it raises concerns if we consciously reference the suppression of the ordering party in our work procedures in order to avoid difficulties in the processing of payments with the U.S.A.”
In another scheme designed to avoid U.S. sanctions, COMMERZ admitted that, in 2004, it agreed with an Iranian bank client that, rather than sending direct wire payments to the United States, the Iranian bank would pay U.S. beneficiaries with COMMERZ-issued checks listing only the Iranian bank’s account number and address in London with no mention of the Iranian bank’s name.
Additionally, COMMERZ admitted that in 2005, it created a “safe payment solution” for an Iranian shipping company client, which allowed the client to conduct transactions using the U.S. financial system. The safe payment solution involved routing payments through special purpose entities controlled by the Iranian company, which were incorporated outside of Iran and bore no obvious connection to the Iranian client. COMMERZ and its client switched use of such special purpose entities when COMMERZ NEW YORK’s sanctions compliance filters were updated to detect the use of a particular special purpose entity. COMMERZ continued to process payments on behalf the Iranian client even after the client had been designated by OFAC as an entity subject to U.S. sanctions for its involvement in weapons of mass destruction proliferation.
In addition, COMMERZ admitted that, from 2002 to 2007, it provided Sudanese sanctioned entities with access to the U.S. financial system by engaging in similar schemes to remove reference to Sudanese companies from the transaction records.
The Deferred Prosecution Agreement
As a result of the foregoing conduct, this Office has entered into a Deferred Prosecution Agreement with the Company which has been submitted today to Judge Howel1. Pursuant to the Agreement, the Company has agreed to the following terms and conditions. First, the Company has agreed to waive indictment and to the filing of the Information, charging the Company with violations of the Bank Secrecy Act. Count Two of the Information charges that the Company failed to maintain an effective anti-money laundering program, from in 2008 through in or about 2013, as required under the BSA. Count Three of the Information alleges that the Company violated the BSA by failing to file Suspicious Activity Reports with respect to correspondent banking transactions. Count Four of the Information charges that the Company failed to obtain adequate due diligence on foreign institutions owned by or affiliated with the Company, information that if collected and maintained would have reasonably allowed for the detection and reporting of instances of money laundering and other suspicious activity.
Second, pursuant to the Agreement, the Company agrees to acknowledge responsibility for its conduct by, among other things, stipulating to the accuracy of a detailed Statement of Facts.
Third, the Company agrees to a $300 million non-tax deductible payment, in the form of a civil forfeiture, which the Government intends to distribute to the victims of the Olympus fraud, consistent with the applicable Department of Justice regulations, through the ongoing remission process. To effectuate that forfeiture, the Office has today filed a parallel civil forfeiture complaint in the Southern District of New York, which has been assigned to United States District Judge Paul Gardephe.
Fourth, the Company agrees to various cooperation obligations, including (1) an obligation to report any criminal conduct by any employee acting within the scope of his employment at the Company; (2) reporting to the Offices any BSA-related investigation or proceeding in which the Company is involved; and (3) committing no subsequent federal crimes.
Fifth, the Company agrees to continue reforming its Bank Secrecy Act/Anti-Money Laundering compliance programs and procedures, as required under the prior formal enforcement actions taken by the Federal Reserve and the additional actions taken concurrently by the Federal Reserve and the New York State Department of Financial Services (“DFS”), and to provide quarterly reports and other information to this Office about its progress.
In consideration of these obligations, the Government has agreed to defer prosecution on the Information for a period of three years, after which time – assuming that the Company does not violate the Agreement – the Government will seek to dismiss the charges.
In separate actions, the Federal Reserve Board and DFS announced that they had also reached agreements with COMMERZ and COMMERZ NEW YORK with respect to its BSA crimes.
Mr. Bharara praised the work of the FBI. He also thanked the Federal Reserve Board, the Internal Revenue Service, Criminal Investigation, and DFS.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Bonnie Jonas is in charge of the prosecution.
US v. $300000000 15 Civ. 1825 (SDNY Civil Forfeiture Complaint)
U.S. v. Commerzbank AG, et al Information
Justice Department Settles Lawsuit Against Missouri National Guard to Enforce Employment Rights of Civilian National Guard TechnicianRead the Press Release
The U.S. Justice Department’s Civil Rights Division announced today that a settlement has been reached with the Missouri National Guard (MNG) to resolve allegations that MNG violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) by requiring its civilian National Guard dual technician employees to be separated from their civilian positions prior to entering active military duty service with the U.S. Active Guard Reserve (AGR) Program.
According to the complaint, filed in the U.S. District Court of the Western District of Missouri, MNG violated the USERRA rights of Kinata Holt, a civilian National Guard dual technician, by requiring her to give up her civilian employment as a condition of being called to active duty with the AGR. The Justice Department alleged that MNG’s refusal to place Holt on furlough or leave of absence from her civilian job, by forcing her separation, resulted in the loss of paid military leave to which she would otherwise have been entitled. Under the terms of the settlement agreement, which is subject to approval by the district court, MNG has agreed to rescind its current policy requiring separation in order to enter the AGR and to compensate Holt by awarding her 30 days of paid military leave.
The settlement agreement also provides that MNG will compensate 137 other civilian National Guard dual technicians who were similarly denied military leave benefits. As a part of the agreed upon terms of settlement for those employees, each will receive a leave credit of 15 days of paid military leave for the 2014-2015 fiscal year. Collectively, these employees will receive more than 2,000 days of paid leave for the past year, and be awarded paid military leave in the future as they continue to serve on active duty with AGR.
“This settlement will provide much deserved relief to Kinata Holt and 137 other service members who lost their military benefits because of the actions of MNG,” said Acting Associate Attorney General Stuart Delery. “The Department of Justice is committed to protecting the rights of the men and women who serve in our Armed Forces and we will continue to devote time and resources to hold bad actors accountable.”
“The Missouri National Guard, like other state employers, has a legal obligation under USERRA to provide the full range of rights and benefits to military service members that are permitted under the statute,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “The Department of Justice will continue to vigorously enforce the rights of uniformed service members in retaining their civilian employment benefits while on an absence due to military service obligations.”
This case stems from a referral by the U.S. Department of Labor (DOL) following an investigation by the DOL’s Veterans’ Employment and Training Service. The case was handled by the Employment Litigation Section of the Civil Rights Division with the assistance of the U.S. Attorney’s Office of the Western District of Missouri, both of whom work collaboratively with DOL to protect the jobs and benefits of National Guard and Reserve Servicemembers.
The Justice Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Justice Department’s websites at www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.
Justice Department Files Motion to Expedite the Preliminary Injunction Appeal in State of Texas, et al v. United States of AmericaRead the Press Release
Attached is the motion to expedite the preliminary injunction appeal in the Fifth Circuit Court of Appeals in the case State of Texas, et al v. United States of America.
Appellants’ Motion for Expedited Appeal and for Leave to Use Appendix on Appeal
Justice Department Files Emergency Motion for Stay in the Case of State of Texas, et al v. United States of AmericaRead the Press Release
Attached is the Justice Department’s emergency motion for a stay in the Fifth Circuit Court of Appeals in the case State of Texas, et al v. United States of America.
Attachments to Appellants’ Emergency Motion for Stay Pending Appeal
Appellants’ Emergency Motion for Stay Pending Appeal
Justice Department Asks Federal Court to Shut Down Florida Tax PreparerRead the Press Release
The United States filed a complaint seeking to bar a Doral, Florida, man and his businesses from preparing federal tax returns for others, the Justice Department announced today.
The civil injunction complaint against Eleuterio Almanzar, Almanzar Tax Accounting & Consulting Corp. and Almanzar Financial Services Corp., filed in U.S. District Court in the Southern District of Florida, alleges that Almanzar prepares federal income tax returns for customers that understate the tax that is due or seek refunds larger than are appropriate.
According to the government’s complaint, the understatements are the result of improper education credits, first time homebuyer tax credits, earned income tax credits, charitable deductions and business expense deductions that Almanzar claims for his customers without performing the required due diligence and despite the absence of any supporting documentation. Because some of these credits are refundable credits, the improper claims often result in larger than appropriate refunds, according to the suit. The Internal Revenue Service (IRS) interviewed several of Almanzar’s customers, who stated that the improper deductions and credits were not based on information they provided to Almanzar, and that they did not know that the improper deductions and credits had been taken on their tax return until after their return was filed.
The complaint also seeks to enjoin Almanzar from using a false or fictitious federally issued identification number — including social security numbers, Electronic Filing Identification Numbers, Employer Identification Numbers, Taxpayer Identification Numbers and Preparer Tax Identification Numbers — to file or remit federal income tax returns. The suit also seeks to prevent Almanzar from using any federally issued identification number that belongs to another person to file or remit federal income tax returns. The government is also asking to have Almanzar provide a list of customers that identifies by name, social security number, address, e-mail address, telephone number and tax periods all persons for whom he has prepared federal tax returns or claims for refund since Jan. 1, 2009.
According to the complaint, the average tax deficiency for the returns the IRS examined since 2009 was $3,249 per return. Given the number of returns Almanzar has prepared since 2009, the harm to the United States caused by his practices could be in the millions of dollars.
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.
Justice Department Announces Settlement with California Bank for Knowingly Facilitating Consumer FraudRead the Press Release
The United States filed a civil complaint in the U.S. District Court for the Central District of California today against Plaza Bank of Irvine, California, for knowingly facilitating consumer fraud by permitting a third-party payment processor to make millions of dollars of unauthorized withdrawals from consumer bank accounts on behalf of fraudulent merchants. To resolve the case, Plaza Bank has agreed to pay $1.225 million and enter into a permanent injunction that reforms the bank’s practices to prevent such fraud in the future. The proposed consent decree has been filed with the court, which will determine whether to enter the order.
“Today’s complaint alleges that, in exchange for fee income, the bank ignored its responsibilities and looked the other way while a third-party payment processor and its merchants defrauded unsuspecting victims of millions of dollars,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “A part of our responsibility at the Justice Department is to stop those who knowingly facilitate consumer fraud, and those in the financial industry are no exception.”
The complaint alleges that from July 2007 to mid-2010, Plaza Bank knowingly permitted fraudulent merchants, acting through an intermediary called a third-party payment processor, to illegally withdraw millions of dollars from consumers’ bank accounts. The complaint further alleges that these unauthorized withdrawals resulted in: abnormally high rate of rejected transactions, which hovered between 50 and 55 percent; hundreds of consumer complaints each month in which consumers stated, by sworn affidavit, that withdrawals from their accounts were unauthorized; and inquiries from other banks and law enforcement, both of which expressed their belief that the payment processor’s transactions were fraudulent.
According to the complaint, when Plaza’s chief compliance official raised concerns about these numerous warning signs of fraud, she was brushed aside by Plaza’s chief operating officer—who, unknown to the compliance officer, was one of two corporate officials who also happened to be a part-owner of the payment processor. Plaza thus continued to give fraudsters unfettered access to the bank accounts of tens of thousands of consumers.
Eventually, in June 2009, Plaza was sold to a third-party equity firm, which brought in new bank management. According to the complaint, while new management soon recognized the problematic nature of the bank’s relationship with the payment processor, it did not immediately terminate the processor’s banking capabilities. Instead, the complaint alleges that months passed while Plaza officials debated whether the revenues generated by the payment processor relationship outweighed the possible risk to the bank. Meanwhile, the payment-processor significantly increased the number of fraudulent withdrawals from consumers’ bank accounts, according to the complaint. The complaint further alleges that only after more than a thousand consumer complaints about unauthorized withdrawals reached Plaza, hundreds of thousands of transactions were returned, and tens of millions of additional dollars had been withdrawn from consumer accounts did Plaza finally terminate the relationship.
“Plaza Bank turned a blind eye while consumers lost tens of millions of dollars as unscrupulous merchants reached into accounts and stole hard-earned money,” said Acting U.S. Attorney Stephanie Yonekura for the Central District of California. “Because of its flagrant failure to protect consumers and the integrity of our banking system, Plaza Bank is now subject to a significant penalty and court oversight to ensure it behaves as a lawful corporate citizen.”
According to the terms of the proposed consent decree, Plaza Bank will be required to pay $1 million to the U.S. Treasury as a civil monetary penalty and to forfeit $225,000 to the U.S. Postal Inspection Service’s (USPIS) Consumer Fraud Fund. Plaza will also be required to implement a strict regime of underwriting and monitoring designed to prevent future consumer fraud by third-party payment processors. The bank must also implement and enforce policies regarding disclosure of conflicts of interest by its senior executives and board members. The bank also will be required to cooperate fully in other civil and criminal investigations.
The Justice Department’s case is being handled by Trial Attorney Sang Lee of the Civil Division’s Consumer Protection Branch in coordination with the U.S. Attorney’s Office for the Central District of California.
Joint Law Enforcement Task Force Announces Arrests and Continuing Efforts to Capture Child PredatorsRead the Press Release
LAS VEGAS, Nev. – Federal, state and local law enforcement joined arms today to announce the results of a six-month arrest surge of child predators in southern Nevada, and to discuss their ongoing efforts to identify and prosecute persons who are committing sex crimes against children in Nevada, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
At a news conference in the Lloyd D. George Federal Courthouse, U.S. Attorney Bogden was joined on stage by FBI Assistant Special Agent in Charge Rick Brodsky, Clark County District Attorney Steve Wolfson, Clark County Sheriff Joe Lombardo, Nevada Attorney General Adam Laxalt, HSI Assistant Special Agent in Charge Mike Harris, U.S. Marshal Christopher Hoye, and Captain Michael Johnston of the Henderson Police Department to announce arrest and prosecution results in Operation Protect the Powerless. The Operation occurred from June 1 to Dec. 31, 2014, and resulted in the prosecution and conviction of 219 persons, the execution of 100 search warrants, and the recovery of over 500,000 images and 2,700 videos of child rape and pornography. The surge also resulted in prosecutions are being handled jointly by the U.S. Attorney’s Office and Clark County District Attorney’s Office, and resulted in distinct charges in federal and state court.
Henry Genaro Macias, 33, of Las Vegas, Nev., is a defendant who was jointly prosecuted by state and federal authorities and was sentenced during Operation Protect the Powerless. Investigators determined that Macias was using the internet to share numerous files of child pornography and at the same time was molesting minor children. Macias pleaded guilty in federal court to receipt of child pornography and was sentenced on Dec. 4, 2014, to 12 years in prison and lifetime supervised release. Macias also pleaded guilty in Clark County District Court to attempt lewdness with a child and was sentenced on July 29, 2014, to six to 15 years in prison.
Operation Protect the Powerless was organized and led by the Project Safe Childhood (PSC) Task Force in southern Nevada, and targeted child traffickers, persons who were coercing and enticing minors for sex, child pornographers, child molesters and child rapists. The Task Force, comprised of federal, state and local investigators and prosecutors, was reorganized in 2013 to provide a format for weekly meetings in Las Vegas to review cases involving sex crimes against children and to determine the best venue for prosecution. Members of the Task Force have also been participating in outreach at Clark County schools in order to educate parents and children about the dangers of the internet and unsuspecting child sex predators. The reorganization promptly resulted in the successful six-month operation.
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."
Independence Man Pleads Guilty to a Federal Gun ViolationRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ERIC O’NEAL SELDERS, age 43, from Independence, pled guilty today to a federal gun charge.
SELDERS pled guilty to being a previously convicted felon in possession of a firearm. Specifically, on July 29, 2012, SELDERS, who had four prior state felony convictions, possessed a .38 caliber revolver within the Eastern District of Louisiana. Because of his four prior convictions, SELDERS may be deemed an Armed Career Criminal under federal law and sentenced to a minimum of 15 years of incarceration. If not deemed to be an Armed Career Criminal, SELDERS is facing a maximum of 10 years of incarceration, a fine of not than $250,000 and up to 3 years of supervised release. There is also a mandatory $100 special assessment for each count associated with a guilty plea. U.S. District Judge Eldon E. Fallon set sentencing on June 25, 2015.
U.S. Attorney Polite praised the work of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Tangipahoa Parish Sheriff’s Office in investigating this matter. Assistant United States Attorney Edward Rivera is in charge of the prosecution.
Houston-Area Owner of Medical Equipment Companies Convicted in a $3.4 Million Medicare Fraud SchemeRead the Press Release
A federal jury in Houston yesterday convicted the owner of two Texas medical equipment companies for his role in a $3.4 million Medicare fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Mike Fields of the U.S. Department of Health & Human Services-Office of the Inspector General (HHS-OIG) Dallas Regional Office, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office and the Texas Attorney General’s Medicaid Fraud Control Unit made the announcement.
Huey P. Williams Jr., 45, who owned and operated Hermann Medical Supply of Katy, Texas, and Hermann Medical Supplies II of Houston, was convicted of one count of health care fraud, as charged in a Jan. 15, 2014, indictment. Sentencing will be scheduled at a later date, and will take place before U.S. District Judge Melinda Harmon of the Southern District of Texas.
According to the evidence submitted at trial, Williams submitted claims to Medicare through his two companies for durable medical equipment, including orthotic devices, which were medically unnecessary or never provided to the patients. Many of the orthotic devices were components of an “arthritis kit,” and were purported to be for the treatment of arthritis-related conditions. The evidence demonstrated that, from December 2006 through July 2010, Williams submitted approximately $3.4 million in fraudulent claims to Medicare, and Medicare paid approximately $1.9 million on those claims.
The case was investigated by the FBI, HHS-OIG and the Medicaid Fraud Control Unit of the Texas Attorney General’s Office, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas. The case is being prosecuted by Trial Attorneys Ashlee Caligone McFarlane and Jason Knutson of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
Holland Couple Indicted in Connection with Fraudulent Receipt of Veterans’ Benefits and Workers CompensationRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned a three-count indictment charging Richard Klaffka, 57, and his wife, Cathleen Klaffka, 61, both of Holland, NY, with fraud in connection with Richard Klaffka’s receipt of over $1,000,000 in benefits from the Veterans’ Administration and Workers’ Compensation under false pretenses. The Klaffkas are charged with conspiracy to commit mail fraud and wire fraud and wire fraud and mail fraud. The charges carry a maximum penalty of 20 years in prison, a fine of $250,000 or both.
Assistant U.S. Attorney John E. Rogowski, who is handling the case, stated that according to the indictment, in 2006, Richard Klaffka told the Veteran Administration that, due to an injury connected with his military service in 1978, he was disabled, confined to a wheelchair and unable to engage everyday activities like walking, driving and dressing himself. The indictment further alleges that to promote the fraud, Cathleen Klaffka pushed Richard Klaffka in a wheelchair when at the VA hospital in order to support Richard Klaffka’s false claim that he was confined to wheelchair when, in fact, they both knew Richard Klaffka was able to walk without assistance and engaged in physical activities such as hiking, riding a bike and pitching iron horseshoes.
The indictment also alleges that in order to get Workers’ Compensation benefits from his employment with the United States Postal Service, the defendant falsely claimed that his mobility was limited due to a work injury and that he was only able to walk with the assistance of a cane. According to the indictment, the Klaffkas received over $1,000,000 in government benefits to which they were not entitled. The investigation was triggered by an anonymous call to a fraud hotline.
The indictment is the result of an investigation on the part of Special Agents of the United States Veterans Administration, Office of Inspector General, Criminal Investigations Division, under the direction of Jeffrey Hughes, the Veterans Administration Police Department, under the direction of Chief Jeremy Novak, the United States Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Cheryl Garcia, and the United States Postal Service, Office of Inspector General, under the direction of Monica Weyler, Special Agent in Charge, Eastern Area Field Office.
The defendants will be arraigned on March 20, 2015 at 2:00 p.m. before U.S. Magistrate Judge H. Kenneth Schroeder, Jr.
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.
Grandson of Naval Historian Pleads Guilty to Stealing Historical Records Relating to His Grandfather and Is SentencedRead the Press Release
Baltimore, Maryland - Samuel Loring Morison, age 70, of Crofton, Maryland, pleaded guilty today to theft of government property, specifically, historical records related to his grandfather, Rear Admiral Samuel Eliot Morison.
U.S. District Judge William D. Quarles, Jr. also sentenced Morison today to two years’ probation with the conditions that: he not access any library or archives without the permission of his probation officer; and he cooperate with investigators and archivists in identifying any other government property in his possession. In imposing the probationary sentence, Judge Quarles cited Morison’s failing health, his prior military service and his cooperation with investigators.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Darrell Gilliard of the Naval Criminal Investigative Service (NCIS), Washington Field Office; and Acting Inspector General James Springs of the National Archives and Records Administration (NARA) - Office of Inspector General.
“It's gratifying that NCIS could work with our law enforcement partners to identify and arrest the person responsible for these thefts , and thereby help preserve the illustrious history of the United States Navy,” said NCIS Special Agent in Charge Darrell Gilliard.
James Springs, NARA's Acting Inspector General, stated, “Thefts from our nation’s historical record are an affront to all citizens, regardless of where those records are housed. I appreciate the hard work of the U.S. Attorney’s Office, NCIS, and NARA OIG to insure that this behavior will not be tolerated.”
According to his plea agreement, on April 12, 2014, Morison allegedly offered to sell records relating to Rear Admiral (RADM) Morison’s work during World War II to the owner of a bookstore, who subsequently agreed to take possession of the records, place them on consignment through his shop, and sell them using eBay. On May 12, 2014, special agents with the National Archives and Records Administration Office of Inspector General reviewed the historical records being offered for sale through eBay. The special agents, assisted by the former curator of the Navy Archives determined that the records belonged to the Naval History and Heritage Command's Navy Archive, and were the property of the U.S. government.
On May 21, 2014, a search warrant was executed at Morison’s residence and approximately 34 boxes of government records and property stolen from the Navy Archives were seized. The investigation revealed that Morison was a part-time researcher at the Naval Historical Foundation from March 19, 2010, and had access to the records, known as the “Office Files of RADM Morison Papers.” Morison was never given authority to remove the records from the Navy Archives.
Morison faces a maximum sentence of 10 years in prison for theft of government property. As part of his plea agreement, the government will ask the court to require that Morison be prohibited from visiting libraries and archives without prior approval from his probation officer.
United States Attorney Rod J. Rosenstein praised NCIS and the NARA Office of Inspector General for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney James G. Warwick, who prosecuted the case.
Fraudsters Sent to Federal PrisonRead the Press Release
CORPUS CHRISTI, Texas - Several individuals have been ordered to federal prison for their roles in a scheme to defraud local banks, announced U.S. Attorney Kenneth Magidson.
Rosemary Guillen, 41, and Richard Villarreal, 29, both of Corpus Christi, pleaded guilty in December 2014 to aiding and assisting one another to commit bank fraud. Today, U.S. District Judge Nelva Gonzalez Ramos sentenced Guillen to 46 months imprisonment to be followed by three years of supervised release and Villarreal to a 46-month-term also to be followed by a three-year-term of supervised release. Both were further ordered to pay restitution.
In a separate, but related, indictment, Brianna Geuea, 36, of Portland, entered a guilty plea to a single count of bank fraud as well as theft of mail. She was also sentenced today to 33 and 27 months in federal prison for the bank fraud and mail theft convictions, respectively. Judge Ramos ordered her sentences to run concurrently. She must also serve three years of supervised release following her release from prison and must pay a total of $4,087.52 in restitution.
As part of the fraudulent scheme, individuals would open banking accounts at a local area credit or gain access to existing accounts. They would then deposit fraudulent or counterfeit checks into those accounts, withdraw money and make purchases before the financial institution discovered the fraudulent nature of the deposits.
The fraudulent activity involved more than 20 accounts and created a potential loss of more than $100,000.
In federal custody since their arrests, all will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be designated in the near future.
The charges stem from an investigation by U.S. Secret Service and the Corpus Christi Police Department. Assistant U.S. Attorney Lance Watt is prosecuting the case.
Fort Worth Selected as One of the First Six Pilot Sites for the National Initiative for Building Community Trust and JusticeRead the Press Release
FORT WORTH, Texas – As part of the Department of Justice’s ongoing commitment to strengthening the relationship between law enforcement and the communities they serve and protect, Attorney General Eric Holder announced Birmingham, Alabama; Fort Worth, Texas; Gary, Indiana; Minneapolis, Minnesota; Pittsburgh, Pennsylvania; and Stockton, California, are the first six cities to host pilot sites for the National Initiative for Building Community Trust and Justice. As part of a larger effort, the National Initiative team will work with each pilot site to assess the police-community relationship as well as develop a detailed site-specific plan that will enhance procedural justice, reduce bias and support reconciliation in communities where trust has been eroded.
“This National Initiative is a multi-faceted approach to enhance community trust and help strengthen the relationship between law enforcement and the communities they serve,” said John Parker, Acting U.S. Attorney for the Northern District of Texas. “I join Fort Worth Police Chief Rhonda Robertson and Mayor Betsy Price in embracing this strategy.”
“The Fort Worth Police Department is honored to be selected as one of the six pilot sites for this groundbreaking study,” said Chief of Police Rhonda Robertson. “Upon learning about the project, we immediately realized the opportunity it would present to strengthen our existing community partnerships and to develop new relationships built upon trust within the community. Fort Worth is already an excellent place to live, work, and visit; and we believe our participation in the National Initiative for Building Community Trust and Justice will make it even better.”
“We’re pleased that Fort Worth was chosen as one of the six pilot sites for this national initiative,” said Mayor Betsy Price. “Fort Worth historically has an excellent track record of encouraging diversity as a city. This study will be a valuable tool to open the discussion on equitable treatment in major cities across the nation, including Fort Worth. This study gives us a tool to strengthen our partnership with the justice system and to continue building relationships in the community.”
Attorney General Holder also announced that the Department of Justice is providing additional training and technical assistance to police departments and communities that are not pilot sites. Through the Office of Justice Program’s Diagnostic Center (www.OJPDiagnosticCenter.org), police departments and community groups can request training, peer mentoring, expert consultation and other types of assistance on implicit bias, procedural justice and racial reconciliation. Additionally, the initiative launched a new online clearinghouse that includes up-to-date information about what works to build trust between citizens and law enforcement. The clearinghouse can be found at www.trustandjustice.org.
The Justice Department established the National Initiative for Building Community Trust and Justice as part President Obama’s groundbreaking launch of the My Brother’s Keeper initiative, which seeks to create opportunities for all young people in this country—regardless of their background—to improve their lives and reach their full potential.
“The Department of Justice is committed to using innovative strategies to enhance procedural justice, reduce bias and support reconciliation in communities where trust has been eroded,” said Attorney General Holder. “By helping to develop programs that serve their own diverse experiences and environments, these selected cities will serve on the leading edge of our effort to confront pressing issues in communities around the country.”
“Restoring trust where it has eroded is one of the defining public safety challenges of our day,” said Assistant Attorney General Karol V. Mason of the Office of Justice Programs. “Trust-building is the responsibility of the police and the community, and the National Initiative’s goal is to build the bridge that will define a new era in public safety.”
The three-year grant has been awarded to a consortium of national law enforcement experts from John Jay College of Criminal Justice, Yale Law School, the Center for Policing Equity at UCLA and the Urban Institute. The initiative is guided by a board of advisors that includes national leaders from law enforcement, academia and faith-based groups, as well as community stakeholders and civil rights advocates. In a holistic approach, the initiative simultaneously addresses the tenets of procedural justice, reducing implicit bias and facilitating racial reconciliation. The initiative complements and is advised by other Justice Department components such as the Office of Justice Programs, the Office of Community Oriented Policing Services, the Office on Violence Against Women, the Civil Rights Division and the Community Relations Service.
Former University of Wisconsin-Oshkosh Student Pleads Guilty in Federal Court to Possession of RicinRead the Press Release
Assistant Attorney General for National Security John P. Carlin and U.S. Attorney James L. Santelle of the Eastern District of Wisconsin announced today that Kyle Allen Smith, 21, of Oshkosh, Wisconsin, has entered a guilty plea to possession of ricin. At sentencing, Smith faces a maximum of 10 years imprisonment and fine of $250,000.
According to the plea agreement, Smith admitted growing castor bean plants and extracting ricin from the beans. A substance found in Smith’s residence was sent to the Department of Homeland Security’s National Bioforensics Analysis Center at Fort Detrick, Maryland, and tested positive for the toxin ricin. Ricin is a toxin that infects human cells and blocks their ability to synthesize their own protein. Small doses of ricin may be lethal to human beings if ingested, inhaled or injected. Symptoms of ricin poisoning can include difficulty breathing, nausea, vomiting and diarrhea, with possible death occurring within 36 to 72 hours. According to information posted on the website of the Centers for Disease Control and Prevention (CDC), there are no known antidotes for ricin poisoning.
Smith admitted having homicidal thoughts and that his homicidal thoughts might have sparked his curiosity about the production of ricin. He stated he would not use or test the ricin on any human because too many people knew what he was doing and would turn him in.
Smith was arrested on Oct. 31, 2014, after two professors at the University of Wisconsin at Oshkosh reported to campus authorities that Smith was making unusual inquiries about chemical processes, including extracting ribosomal inhibiting proteins. Assistant Attorney General Carlin joins U.S. Attorney Santelle in praising the actions of the professors and the university administration in bringing Smith to the prompt attention of law enforcement authorities. Assistant Attorney General Carlin is also very grateful to the Wisconsin National Guard, 54th Civil Support Team, for the critical assistance they provided in the safe recovery of the ricin.
The case was investigated by the Oshkosh Police Department and the FBI. The case was prosecuted by Assistant U.S. Attorney Paul L. Kanter of the Eastern District of Wisconsin and the Justice Department’s National Security Division.
Former University of Kentucky Faculty Member SentencedRead the Press Release
A former employee of the University of Kentucky’s Veterinary Diagnostic Laboratory has been sentenced to 66 months in prison for downloading child pornography images onto his work-issued computer.
On Wednesday, U.S. District Judge Karen Caldwell sentenced 60 year-old Neil Mason Williams for receipt of child pornography. Under federal law, Williams will have to serve at least 85 percent of his sentence. Following his release from prison, Williams will be under the supervision of U.S. Probation Office for 20 years and he will have restricted access to a computer during this time period.
Williams pleaded guilty to the charge in December of last year, admitting that he used a file sharing program to download thousands of images of child pornography onto his work computer. The investigation started in February 2014, when staff members from the Information Technology Department noticed files downloaded on Williams’ computer that appeared to contain child pornography.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Howard S. Marshall, Special Agent in Charge, FBI; Jack Conway, Kentucky Attorney General; and Ray Larson, Office of the Commonwealth’s Attorney, jointly announced the sentence today.
The investigation was conducted by the FBI, the University of Kentucky Police Department, and the Office of the Kentucky Attorney General. Assistant U.S. Attorney David Marye, prosecuted the case on behalf of the federal government.
Former UW-Oshkosh Student Pleads Guilty in Federal Court to Possession of RicinRead the Press Release
United States Attorney James L. Santelle of the Eastern District of Wisconsin announced today that Kyle Allen Smith (Age: 21) of Oshkosh has entered a guilty plea to possession of ricin in violation of Title 18, United States Code, Section 175(b). At sentencing Smith faces a maximum of 10 years’ imprisonment and fine of $250,000.
According to the plea agreement Smith admitted growing castor bean plants and extracting ricin from the beans. A substance found in Smith’s residence was sent to the Department of Homeland Security, National Bioforensics Analysis Center at Fort Detrick, Maryland, and tested positive for the toxin ricin. Ricin is a toxin that infects human cells and blocks their ability to synthesize their own protein. Small doses of ricin may be lethal to human beings if ingested, inhaled, or injected. Symptoms of ricin poisoning can include difficulty breathing, nausea, vomiting, and diarrhea, with possible death occurring within 36 to 72 hours. According to information posted on the website of the Centers for Disease Control and Prevention (“CDC”), there are no known antidotes for ricin poisoning.
Smith admitted having homicidal thoughts and that his homicidal thoughts might have sparked his curiosity about the production of ricin. He stated he would not use or test the ricin on any human because too many people knew what he was doing and would turn him in.
Smith was arrested on October 31, 2014, after two professors at the University of Wisconsin at Oshkosh reported to campus authorities that Smith was making unusual inquiries about chemical processes, including extracting ribosomal inhibiting proteins. United States Attorney Santelle praises the actions of the professors and the university administration in bringing Smith to the prompt attention of law enforcement authorities. It is a perfect example of “See something, say something,” which guides the required vigilance of our times. Mr. Santelle also thanks the Wisconsin National Guard, 54th Civil Support Team, for the critical assistance they provided in the safe recovery of the ricin.
The case was investigated by the Oshkosh Police Department and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Paul L. Kanter.
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Former U.S. Army Specialist Indicted for Taking Bribes While Deployed in AfghanistanRead the Press Release
A former specialist with the U.S. Army has been indicted for accepting bribes from Afghan truck drivers at Forward Operating Base (FOB) in Gardez, Afghanistan, in exchange for allowing the drivers to take thousands of gallons of fuel from the base for resale on the black market.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia made the announcement after the indictment was unsealed today.
Anthony Don Tran, 28, of Stockton, California, was indicted on March 10, 2015, in the Middle District of Georgia for one count of conspiracy to commit bribery of a public official and one count of bribery of a public official. Tran was arrested in Santa Clara, California, on March 11, 2015.
According to allegations in the indictment, from December 2012 to May 2013, Tran conspired with James Norris and Seneca Hampton, both sergeants in Tran’s unit, to solicit and accept cash bribes from local Afghan truck drivers in exchange for permitting the truck drivers to take thousands of gallons of fuel from the base. The indictment specifically alleges that on Jan. 26, 2013, Tran accepted $20,000 in exchange for permitting an Afghan driver to leave FOB Gardez with nearly 13,000 gallons of fuel purchased by the U.S. government.
The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
Norris and Hampton each pleaded guilty to one count of conspiracy to commit bribery of a public official and one count of money laundering on Feb. 11, 2015, and are scheduled to be sentenced on May 21, 2015.
The case is being investigated by the U.S. Army Criminal Investigation Command, the Office of the Special Inspector General for Afghanistan Reconstruction, the Defense Criminal Investigative Service and the Defense Contract Audit Agency, Investigative Support Division. The case is being prosecuted by Trial Attorney John Keller of the Criminal Division’s Public Integrity Section.
Former St. Louis City Police Officer Indicted on Weapons ChargesRead the Press Release
St. Louis, MO – An indictment was unsealed earlier today charging former St. Louis City Police Officer DON McGHEE with providing a firearm to known drug dealers to facilitate their distribution of crack cocaine and marijuana in the City of St. Louis.
According to the indictment, McGhee was a St. Louis Metropolitan Police Officer, assigned as a Patrolman in the Sixth District. The indictment alleges that Officer McGhee knew and associated with individuals who stored and distributed quantities of crack cocaine and marijuana in and from a house located in the City of St. Louis. On March 2, 2014, Officer McGhee took a Mossberg 12 gauge pistol grip shotgun to the Cottage Avenue drug house and gave it to one of the drug dealers knowing, believing or having reason to believe that the drug dealer would use the shotgun in relation to and in furtherance of the drug trafficking. During the execution of a search warrant at the Cottage Avenue house several days later, law enforcement officers recovered the Mossberg pistol grip shotgun, fully loaded, along with several other firearms, ammunition, quantities of crack cocaine and marijuana and a large amount of cash.
McGhee, St. Louis City, was indicted yesterday by a federal grand jury on one felony count of conspiracy to possess a firearm in relation to a drug trafficking crime. Officer McGhee surrendered to authorities this morning. He appeared for arraignment at 2:30 today before United States Magistrate Judge Nanette Baker.
If convicted, this charge carries a maximum penalty of 20 years in prison and/or fines up to $250,000. In determining the actual sentence, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
United States Attorney Richard Callahan noted that this investigation originated with the St. Louis City Police Department, which then partnered with additional law enforcement agencies as its investigation expanded. In addition to the St. Louis City Police Department, the case is also being investigated by the Federal Bureau of Investigation, the United States Drug Enforcement Administration and the St. Louis Circuit Attorney’s Office. Assistant United States Attorney Hal Goldsmith is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.Former South Carolina Congaree Chief of Police Pleads Guilty to Lying to Federal Grand JuryRead the Press Release
Contact Person: Jay Richardson (803) 929-3000
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Columbia, South Carolina ---- United States Attorney Bill Nettles stated today that Jason Amodio (46) of Lexington, South Carolina has entered a guilty plea in federal court in Columbia, to Lying to a Federal Grand Jury, a violation of 18 U.S.C. § 1623. Senior United States District Judge Joseph F. Anderson, Jr. of Columbia accepted the guilty plea.
Evidence presented at the change of plea hearing established that during a joint federal and state investigation into illegal gambling, extortion under color of law, mail and wire fraud, and related public corruption in Lexington County, Amodio appeared before a federal grand jury. Asked about the purpose of a particular check payable to Amodio, Amodio claimed that the check was a loan. In fact, Amodio knew this was false and that the check was an improper payment from an attorney in Lexington. Amodio had assisted in convincing a family to hire that attorney to file a civil lawsuit after a car wreck had left one member of the family dead and one injured. When the attorney received a fee in return for his representation, that attorney then paid Amodio through an intermediary.
“Mr. Amodio went before the federal grand jury, swore on the Bible to tell the truth, and lied; that is a crime,” said United States Attorney Bill Nettles. “This is another joint investigation by the S.C. Attorney General’s Office and the U.S. Attorney’s Office, along with the FBI and SLED, in our ongoing coordinated partnership to prosecute public corruption on all levels.”
As part of his agreement to plead guilty and cooperate with law enforcement, Amodio agreed to be sentenced to four years of probation with eight months of home confinement with electronic monitoring. Additionally, Amodio has agreed to plead guilty in state court to misconduct in office. This case is part of a joint investigation of the FBI, SLED, the South Carolina Attorney General’s Office, and the United States Attorney’s Office into public corruption and is being prosecuted by Assistant United States Attorneys Jay N. Richardson and Jim H. May and Assistant Deputy Attorney General Creighton Waters.Former Non-Profit Executive Pleads Guilty to Stealing Funds Intended to Help the HomelessRead the Press Release
PHILADELPHIA - Nathaniel E. Robinson, 62, of Philadelphia, plead guilty today to using funds intended to help the homeless to pay for his own personal and living expenses. Robinson was the Chief Program Officer at SELF, Inc. He was charged with theft from a program receiving federal funds.
Between 2006 and 2010, Robinson used his corporate American Express credit card at SELF to charge personal expenses. The government alleges he stole approximately $154,050 and reimbursed a total of $2,594.30 before his employment was terminated. Robinson used the corporate American Express card to pay for trips to Alabama, including airfare, lodging, and restaurants; lodging in Orlando, Florida, and Philadelphia; car rentals; car repairs; admission tickets to Six Flags Great Adventure and Clementon Amusement Park; Amtrak tickets; purchases at Walmart and Filene’s Basement; and restaurant charges in Washington, D.C. and Baltimore, MD. Today, Robinson admitted that he stole at least $5,000 of SELF’s funds for personal use.
U.S. District Court Judge Berle M. Schiller scheduled a sentencing hearing for June 8, 2015. Robinson faces a maximum possible sentence of 10 years in prison, restitution, up to three years of supervised release, and a fine of up to $250,000.
The case was investigated jointly by the FBI and the Philadelphia Office of the Inspector General, and was initiated by a tip to the Inspector General’s Office. It is being prosecuted by Assistant United States Attorney Karen L. Grigsby.
Former New York City Police Officer Sentenced to 18 Years’ ImprisonmentRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, former New York City Police Officer Jose Tejada was sentenced to 18 years in prison by United States District Judge John Gleeson. Tejada was convicted after a six-week jury trial in November 2013 of two counts of obstruction of justice and after a two-week jury trial in June 2014 of conspiring to commit Hobbs Act robberies and conspiring to distribute cocaine and heroin.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division, and William J. Bratton, Commissioner of the New York City Police Department (NYPD).
Tejada was a 17-year veteran of the NYPD who, at the time of the criminal conduct, was assigned to the 28th Precinct in Harlem. This prosecution arose out of Tejada’s commission of multiple robberies and attempted robberies in Queens, Manhattan, and the Bronx in 2006 and 2007, some of which he committed while on duty, in uniform, and using an NYPD undercover vehicle.
“The defendant violated his sworn oath as a New York City police officer to protect and serve the citizens of New York by conspiring to commit armed robberies and to distribute narcotics stolen during those robberies.” stated United States Attorney Lynch. “Today’s sentence will send a message that no one – especially one sworn to uphold the law – is immune from prosecution if he engages in criminal acts.” Ms. Lynch expressed her thanks to the New York Drug Enforcement Task Force – comprising DEA special agents, NYPD officers, and New York State Police investigators – and the NYPD’s Internal Affairs Division, Police Impersonation Investigation Unit, which jointly led the investigation.
The evidence presented at the two trials showed that Tejada participated in multiple armed robberies and attempted robberies, which netted thousands of dollars in cash and multiple kilograms of cocaine.
In one such attempted robbery on Schley Avenue in the Bronx, Tejada -- while on duty and in uniform -- used his status as a police officer to demand and gain access to a private residence occupied by a husband and wife and their teenaged daughter. Tejada and two other robbers impersonating police officers mistakenly believed that the residence was a stash house for narcotics. In fact, the residents had no involvement in drug dealing. While Tejada and the other robbers unsuccessfully searched the premises for drugs, Tejada attempted to handcuff the male victim and brandished his NYPD-issued firearm in an effort to intimidate the innocent family.
In a robbery near 125th Street and Broadway in Manhattan, Tejada, fellow NYPD officer Jorge Arbaje-Diaz, and NYPD auxiliary officer Yvan Tineo pulled over an SUV, handcuffed the driver, and stole five kilograms of cocaine hidden inside the car.1 In another robbery on Seaman Avenue in Upper Manhattan, Tejada and Tineo robbed a drug supplier of three kilograms of cocaine at gunpoint.
In an incident outside an arrivals terminal at John F. Kennedy International Airport in Queens, Tejada, Arbaje-Diaz, and Tineo staged the arrest of a corrupt airline employee who was part of a scheme to smuggle narcotics into the United States on board incoming commercial flights. The staged arrest permitted the corrupt airline employee and the members of the robbery crew to steal at least five kilograms of cocaine from the drug organization to whom the corrupt airline employee was to deliver the drugs.
Tejada also supplied members of the robbery crew with NYPD gear and equipment, including an NYPD jacket, utility belt, and police radio, to enable members of the robbery crew to impersonate police officers during the drug robberies.
The evidence at the two trials also showed that Tejada searched confidential law enforcement databases to determine whether there were outstanding warrants for his own arrest, as well as for the arrest of other members of the robbery crew. Tejada then shared that information with his confederates in an effort to assist them in evading arrest.
Tejada’s conviction is one of the most recent of dozens of convictions in a set of interlocking cases brought in the Eastern District of New York against the members of violent drug robbery crews who impersonated police officers and frequently committed robberies with real police officers. Tejada is the third NYPD officer to be convicted in these cases. In addition, two NYPD auxiliary officers have been convicted as well. In total, 52 defendants who participated in this robbery crew have been convicted.
The government’s case is being prosecuted by Assistant United States Attorneys Alexander A. Solomon, Douglas M. Pravda, and Kenji M. Price.
The Defendant:
JOSE FELIX TEJADA
Age: 47
Mahopac, New York
E.D.N.Y. Docket No. 08-CR-242 (JG)
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1 Arbaje-Diaz was previously convicted of robbery conspiracy and narcotics distribution conspiracy, and was sentenced to 20 years’ imprisonment. Tineo was previously convicted of robbery conspiracy, narcotics distribution conspiracy, and unlawful use of a firearm, and is awaiting sentencing.
Former Mexican Governor’s Political Appointee IndictedRead the Press Release
CORPUS CHRISTI, Texas - A former Mexican political appointee from the State of Tamaulipas, Mexico, has been indicted for conspiring to launder monetary instruments, conspiracy to commit bank fraud and two counts of bank fraud, announced U.S. Attorney Kenneth Magidson.
Pablo Zarate Juarez is the former Instituto Tamaulipeco De Vivienda Y Urbanismo (ITAVU) director in the State of Tamaulipas, Mexico. The criminal indictment, returned yesterday, is a result of the efforts of a multi-agency Organized Crime Drug Enforcement Task Force (OCDETF) investigation.
ITAVU is the Tamaulipas Institute for Housing and Urban Development. Zarate Juarez was appointed to the position of director of ITAVU by former Tamaulipas Governor Tomas Yarrington Ruvalcaba. ITAVU is the department in Tamaulipas responsible for supporting lower income residents with housing programs and financing programs.
There was a previously filed Verified Civil Complaint for Forfeiture in Rem regarding a 2005 Pilatus Aircraft, bearing tail number N679PE, also listed in the forfeiture provision of the indictment against Zarate. The Pilatus aircraft is the same aircraft that is also listed in the notice of forfeiture in the pending criminal indictment charging former Tamaulipas Governor Tomas Yarrington Ruvalcaba. In the civil case, it is alleged that Yarrington is the true owner and that he purchased the aircraft through several straw purchasers in a complex money laundering scheme. The laundered proceeds is alleged to have included drug cartel money.
“HSI special agents often investigate complex financial schemes in order to disrupt and dismantle the ongoing operations of suspected transnational criminal organizations,” said Special Agent in Charge Janice Ayala of Homeland Security Investigations (HSI) San Antonio. “These investigations can deprive the organizations from enjoying the fruits of these illicit proceeds and prevent them from furthering the ongoing criminal enterprise. HSI will continue to aggressively investigate fraudulent financial schemes that jeopardize the integrity of our financial system.”
If convicted of the money laundering conspiracy, Zarate faces up to 20 years in federal prison and a possible $500,000 fine (or twice the value of the monetary instrument or funds involved in the transactions or both). Upon conviction of the bank frdu charge, Zarate also faces up to 30 years in Federal prison and a potential $1 million fine.
Zarate is not in the custody of the United States and a warrant remains outstanding for his arrest. Anyone with information about his whereabouts is asked to contact Homeland Security Investigations at 956-542-5811. Persons calling from Mexico should call 001-800-010-5237.
The OCDETF investigation leading to the indictment was conducted in McAllen, San Antonio, Brownsville, Houston, Laredo and Corpus Christi by HSI, FBI, Internal Revenue Service - Criminal Investigation and Drug Enforcement Administration.
This case is being prosecuted in the Southern District of Texas by Assistant U.S. Attorney Julie K. Hampton.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Former Logan County Assessor sentenced for federal banking law violationRead the Press Release
Rick Grimmett admits to more than $366,000 in structured cash transactions
Charleston, W.va. – United States Attorney Booth Goodwin announced that Russell R. Grimmett, also known as Rick Grimmett, 51, of Man, West Virginia, was sentenced today to five years’ federal probation, including six months of home confinement, for violating federal banking laws. Grimmett is the former Logan County assessor. The sentence was handed down by United States District Judge Thomas E. Johnston.
Banks are required by federal law to report all cash transactions in excess of $10,000. Grimmett admitted that he and an associate withdrew cash from the Logan Bank and Trust in Man, West Virginia, in amounts less than $10,000 to prevent triggering the reporting requirement. This practice, known as “structuring,” is a federal crime. Grimmett further admitted that between early 2009 and December 2012, he and his associate structured more than $366,000 in cash from various banks.
As part of his plea agreement, Mr. Grimmett agreed to resign his position as assessor. He also agreed to forfeit $150,000.
Today’s charge stems from an investigation conducted by the FBI, IRS Criminal Investigation, United States Postal Inspection Service, and the West Virginia State Police. Assistant United States Attorney Meredith George Thomas is handling the prosecution.
Former Immigration Officer Charged with Conspiracy to Commit Visa FraudRead the Press Release
Jacksonville, Florida. – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Orange Park residents Paul Reynolds Friel, Jr. (47) and Marisol Del Carmen Rodriguez Chavarria (39) with conspiracy to commit visa fraud. Additionally, Friel has been charged with four separate counts of making a materially false statement. If convicted on all counts, Friel faces a maximum penalty of 25 years in federal prison. Rodriguez faces a maximum penalty of 5 years in prison.
According to the indictment, Friel was an officer with U.S. Citizenship and Immigration Services, which is part of the Department of Homeland Security. The indictment alleges that beginning in September 2007, he conspired with Rodriguez, a citizen of Nicaragua, for her to enter into a sham marriage with another man. That individual, Luis Aguilar, has been charged separately in another case. Friel allegedly conspired with Rodriguez and Aguilar to make false representations in applying for a visa that would enable Rodriguez to travel to the United States as Aguilar’s spouse. Friel paid for air travel for Aguilar and himself for the wedding of Aguilar to Rodriguez, which occurred in Nicaragua in January 2008. He also paid for Aguilar’s air travel to attend a visa interview in Nicaragua in November 2010, and for Rodriguez’s air travel to Florida in December 2010, after she was issued a visa. The indictment alleges that Friel assisted Rodriguez and Aguilar in filling out immigration forms, and that he loaned $3,500 to Aguilar in order to falsely portray Aguilar’s financial condition in an affidavit submitted to the State Department. Additionally, Friel coached Aguilar on what questions might be asked of him at the visa interview in order to detect relationship fraud. In December 2010, Rodriguez was issued a visa that enabled her to travel to the United States as Aguilar’s spouse. However, the indictment alleges that in or around March 2011, she moved in with Friel and that they had a romantic relationship. Subsequently, Rodriguez and Friel were married.
Friel is also charged with making materially false statements, including during a background investigation for a national security clearance. It is alleged that in December 2011, he failed to disclose his relationship with Rodriguez as his cohabitant, and failed to disclose his contact with her during the preceding seven years, as a foreign national, in connection with a background investigation done by the U.S. Department of Homeland Security and Office of Personnel Management. Rodriguez is a resident alien, not a U.S. citizen.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
On March 12, 2015, Friel and Rodriguez made their initial appearance before United States Magistrate Judge Patricia D. Barksdale. They were released on bond. An arraignment for Friel and Rodriguez has been scheduled for March 16 and 17, 2015, respectively.
This case was investigated by the U.S. Department of Homeland Security, Office of Inspector General, and the Jacksonville office of the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Dale Campion.
Former Denton High School Teacher Sentenced to Serve A Total of 60 Years in Federal Prison for Producing Child PornographyRead the Press Release
FORT WORTH, Texas — A former teacher at Denton High School, Gregory Bogomol, 39, was sentenced today on child pornography production convictions, announced Acting U.S. Attorney John Parker of the Northern District of Texas.
Bogomol, who pleaded guilty in October 2014 to an indictment charging two counts of production of child pornography, was sentenced by U.S. District Judge Terry R. Means to 360 months in federal prison for each count, to run consecutively, for a total of 720 months in federal prison.
According to documents filed in the case, the investigation began when U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) was contacted by the parents of a 15-year-old male victim regarding an individual who solicited a nude photograph of the minor through a smartphone application.
Specifically, according to the factual resume, Bogomol used social media applications such as KIK, Grindr, and Pinger to initiate conversations with underage males. Bogomol posed as a minor female and sent nude images of females to entice the boys to produce sexually explicit pictures.
After Bogomol received an image from the minor male, Bogomol would make additional explicit demands. If the minor male did not comply with his demands, Bogomol would threaten to send sexually explicit pictures of the boy to the boy’s friends via social media applications.
On approximately April 20, 2014, Bogomol coerced one minor victim to send a sexually explicit image of himself. A few days later, Bogomol coerced another minor victim to send a sexually explicit image of himself.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
ICE HSI investigated. Assistant U.S. Attorney A. Saleem prosecuted.
Felon Sentenced to Eight Years in Prison for Illegally Possessing HandgunRead the Press Release
Spack previously convicted of eight felonies in MinnesotaUnited States Attorney Andrew M. Luger today announced the sentencing of TOMMY MICHAEL SPACK, 32, to eight years in prison for illegally possessing a firearm after having been previously convicted of multiple felonies in both Ramsey and Washington Counties. SPACK was indicted on February 3, 2014. The defendant pleaded guilty on May 8, 2014, and was sentenced today before Judge Ann D. Montgomery in U.S. District Court in Minneapolis, Minn.
“Reducing violent crime in Minnesota means keeping guns out of the hands of felons,” said U.S. Attorney Luger. “This defendant had eight felony convictions and knew he was forbidden from possessing firearms. He is now paying the price for repeatedly flaunting the law.”
According to the defendant’s guilty plea and documents filed in court, on December 14, 2013, SPACK was driving a car when St. Paul Police Officers pulled him over at the intersection of Van Dyke Street and Stillwater Avenue East, in St. Paul, Minn. Officers searched the vehicle and recovered a Charter Arms Police Undercover .38 special revolver and a small bag containing methamphetamine.
According to his guilty plea and documents filed in court, SPACK later admitted that both the gun and drugs were his. Based on his criminal history, including convictions for eight felonies prior to December 14, 2013, it was illegal for SPACK to possess a firearm. SPACK’S criminal history includes convictions in Ramsey County for terroristic threats, receiving stolen property, attempted burglary, theft, and possession of illegal drugs. SPACK was previously convicted in Washington County for burglary and receiving stolen property.
This case is the result of an investigation conducted by the St. Paul Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
Assistant U.S. Attorney Surya Saxena prosecuted the case.
Defendant Information: TOMMY MICHAEL SPACK, 32
St. Paul, Minn.
Convicted: • Felon in Possession of a Firearm, 1 count
Sentenced: • Eight years in prison
• Three years supervised releaseFelon Facing Federal Gun ChargesRead the Press Release
PITTSBURGH - A resident of Allegheny County, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on charges of possession of a firearm and ammunition by a convicted felon, and possession of a stolen firearm, United States Attorney David J. Hickton announced today.
The two-count Superseding Indictment, returned on March 11, named Jason T. Korey, 32, as the sole defendant.
According to the Superseding Indictment, on or about April 17, 2014, Korey possessed a firearm and ammunition as a convicted felon, and possessed a stolen firearm. Federal law prohibits an individual who has been convicted of a felony from possessing a firearm.
The law provides for a maximum total sentence of 20 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history of the defendant.
Assistant United States Attorneys Barbara Doolittle and Cindy K. Chung are prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation leading to the Superseding Indictment in this case.
A Superseding Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Federal Jury Convicts Michael O. Brown on Drug Conspiracy and Distribution ChargesRead the Press Release
CHATTANOOGA, Tenn. - Following a four day trial in U.S. District Court, Chattanooga, Tenn., a jury convicted Michael O. Brown, of Fayetteville, Tenn., of conspiracy to distribute and distribution of cocaine and cocaine base (crack).
Sentencing is set for 9:00 a.m., Jun. 15, 2015, in U.S. District Court in Chattanooga. Brown faces a sentence of life in prison for the conspiracy charge and up to 30 years in prison for the distribution charge.
Evidence presented at trial showed that a group of 15 men and women conspired to distribute and possess with intent to distribute five kilograms or more of cocaine and 280 grams or more of cocaine base (crack). The jury saw a video of Brown selling crack cocaine to a confidential source and heard recorded telephone calls in which Brown is heard ordering cocaine from a codefendant. All of the 14 other individuals charged in the case pleaded guilty and have been sentenced. Brown was the only one to go to trial.
Law enforcement agencies participating in the joint investigation which led to indictment and subsequent conviction of Brown and his codefendants included the Drug Enforcement Administration, Tennessee Bureau of Investigation, Franklin County Sheriff’s Office, Lincoln County Sheriff’s Office and Winchester Police Department. Assistant U.S. Attorney Terra L. Bay represented the United States at trial.
Federal Jury Convicts Guatemalan for Cocaine and Methamphetamine ConspiracyRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced that, after a two-day trial, a federal jury found a Guatemalan guilty of conspiracy and possession with intent to distribute more than $1.5 million worth of cocaine and $75,000 worth of methamphetamine.
Jose Gabriel Mendez, 35, a Guatemalan living in Texas, was found guilty of one count of conspiracy to possess with intent to distribute cocaine and methamphetamine, one count of possession with intent to distribute cocaine, and one count of possession with intent to distribute methamphetamine. United States District Judge Donald E. Walter presided over the trial. The defendant’s trial started Tuesday and ended Wednesday afternoon with the jury returning the guilty verdict after deliberating for approximately two hours. Evidence admitted at trial showed that law enforcement agents conducted a traffic stop on October 15, 2014, of a 1996 Dodge Dakota pickup truck driven by Mendez. Further investigation by Corporal Kevin Hoover of the Calcasieu Parish Combined Anti-Drug Task Force (CAT) revealed 516 grams of methamphetamine and 15 kilograms of cocaine hidden in the four door panels and tire jack compartment of the truck.
Mendez faces 10 years to life in prison, five years of supervised release and a $10 million fine. Sentencing is set for June 29, 2015. Mendez’s co-conspirator in the indictment, Jack Edward Lane, 67, of Brownsville, Texas, previously pleaded guilty to the drug conspiracy on January 20, 2015. Sentencing is set for April 15, 2015.
The DEA and Calcasieu Parish Combined Anti-Drug Task Force conducted the investigation. Assistant U.S. Attorneys David C. Joseph and Howard C. Parker prosecuted the case.