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11 March 2015
Rbs Trader Admits Defrauding Customers in Multimillion Dollar Securities Fraud SchemeRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that MATTHEW KATKE, 34, of New York, New York, waived his right to indictment and pleaded guilty today in Hartford federal court to participating in a multimillion securities fraud scheme. KATKE also entered into an agreement to cooperate in the government’s ongoing investigation.
According to court documents and statements made in court, between April 2008 and August 2013, KATKE was a registered broker-dealer and managing director at RBS Securities Inc. RBS is a global securities firm with headquarters in Stamford, Connecticut. RBS also has a trading floor in Stamford where KATKE and other members of RBS’s Asset Backed Products division traded fixed income investment securities such as residential mortgage-backed securities (RMBS) and collateralized loan obligations (CLOs). In pleading guilty, KATKE admitted that he and others conspired to increase RBS’s profits on CLO bond trades at the expense of customers. As part of the scheme, KATKE and his co-conspirators made misrepresentations to induce buying customers to pay inflated prices and selling customers to accept deflated prices for CLO bonds, all to benefit RBS.
The conspiracy was perpetrated in two ways. In certain transactions, KATKE misrepresented the CLO seller’s asking price to the buyer (or vice versa), keeping the difference between the price paid by the buyer and the price paid to the seller for RBS. In other transactions, KATKE misrepresented to the CLO buyer that bonds held in RBS’s inventory were being offered for sale by a fictitious third-party seller invented by KATKE, which allowed KATKE to charge the buyer an extra commission that RBS was not entitled to.
The investigation revealed numerous fraudulent transactions by KATKE that cost at least 20 victim customers, including firms affiliated with recipients of federal bailout funds through the Troubled Asset Relief Program, millions of dollars.
“Fraud in the fixed income markets is a secret and unfair tax on investors everywhere,” said U.S. Attorney Deirdre M. Daly. “Broker-dealers, and the people who work for them, need to understand that a market practice that is at odds with the securities law is a crime that carries serious repercussions. We urge others to follow Mr. Katke’s example and cooperate with investigators. We want to thank SIGTARP and the FBI for their efforts to date in this continuing investigation. Additionally, we acknowledge our other partners at the Department of Labor Office of the Inspector General, the Federal Housing Finance Administration Office of Inspector General and the Fraud Section of the Department of Justice for their hard work in the numerous ongoing investigations into this market.”
“As a result of an ongoing criminal investigation by SIGTARP, this afternoon, Katke, a former senior securities trader at investment bank RBS, pleaded guilty to conspiring to defraud bank customers—customers that included TARP banks—out of millions of dollars,” said Christy Romero, Special Inspector General for TARP (SIGTARP). “Katke lied to customers about the status of and the true prices paid and offered for securities as a way to boost profits for himself, others, and RBS. Defrauding a TARP recipient bank is the same as defrauding the American taxpayers who funded the TARP bailout. I want to commend U.S. Attorney Deirdre Daly and the team of prosecutors who stand united with SIGTARP to combat TARP bailout-related crime.”
KATKE pleaded guilty to one count of conspiracy to commit securities fraud, which carries a maximum term of imprisonment of five years. He was released on a $250,000 bond and is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on June 3, 2015.
This case is being investigated by the Federal Bureau of Investigation and the Special Inspector General for the Troubled Asset Relief Program, and is being prosecuted by Assistant United States Attorneys Jonathan Francis and Heather Cherry.
Today’s announcement is part of the ongoing efforts of the Financial Fraud Enforcement Task Force’s Residential Mortgage-Backed Securities (RMBS) Working Group, a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis and the federal government’s subsequent bailout. The RMBS Working Group brings together attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice, U.S. Attorneys’ Offices, the FBI, the Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG, the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network, and state Attorneys General offices around the country.
The RMBS Working Group is led by Acting Associate Attorney General Stuart Delery, and co-chaired by Assistant Attorney General for the Criminal Division Leslie R. Caldwell, Acting Assistant Attorney General for the Civil Division Benjamin Mizer, U.S. Securities and Exchange Commission Director of Enforcement Andrew Ceresney, U.S. Attorney for the District of Colorado John Walsh and New York Attorney General Eric T. Schneiderman.
For more information about the RMBS Working Group and the Financial Fraud Enforcement Task Force, visit: www.stopfraud.gov.
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(203) 821-3722 [email protected]RBS Trader Admits Defrauding Customers in Multimillion Dollar Securities Fraud SchemeRead the Press Release
U.S. Attorney Deirdre M. Daly of the District of Connecticut, Special Inspector General Christy Romero for the Troubled Asset Relief Program (SIGTARP) and Special Agent in Charge Patricia M. Ferrick of the FBI’s New Haven Division announced that Matthew Katke, 34, of New York City, waived his right to indictment and pleaded guilty today in Hartford federal court to participating in a multimillion securities fraud scheme. Katke also entered into an agreement to cooperate in the government’s ongoing investigation.
According to court documents and statements made in court, between April 2008 and August 2013, Katke was a registered broker-dealer and managing director at RBS Securities Inc. RBS is a global securities firm with headquarters in Stamford, Connecticut. RBS also has a trading floor in Stamford, where Katke and other members of RBS’s Asset Backed Products division traded fixed income investment securities such as residential mortgage-backed securities (RMBS) and collateralized loan obligations (CLOs). In pleading guilty, Katke admitted that he and others conspired to increase RBS’s profits on CLO bond trades at the expense of customers. As part of the scheme, Katke and his co-conspirators made misrepresentations to induce buying customers to pay inflated prices and selling customers to accept deflated prices for CLO bonds, all to benefit RBS.
The conspiracy was perpetrated in two ways. In certain transactions, Katke misrepresented the CLO seller’s asking price to the buyer (or vice versa), keeping the difference between the price paid by the buyer and the price paid to the seller for RBS. In other transactions, Katke misrepresented to the CLO buyer that bonds held in RBS’s inventory were being offered for sale by a fictitious third-party seller invented by Katke, which allowed Katke to charge the buyer an extra commission that RBS was not entitled to.
The investigation revealed numerous fraudulent transactions by Katke that cost at least 20 victim customers, including firms affiliated with recipients of federal bailout funds through the Troubled Asset Relief Program, millions of dollars.
“Fraud in the fixed income markets is a secret and unfair tax on investors everywhere,” said U.S. Attorney Daly. “Broker-dealers, and the people who work for them, need to understand that a market practice that is at odds with the securities law is a crime that carries serious repercussions. We urge others to follow Mr. Katke’s example and cooperate with investigators. We want to thank SIGTARP and the FBI for their efforts to date in this continuing investigation. Additionally, we acknowledge our other partners at the Department of Labor Office of the Inspector General, the Federal Housing Finance Administration Office of Inspector General and the Fraud Section of the Department of Justice for their hard work in the numerous ongoing investigations into this market.”
“As a result of an ongoing criminal investigation by SIGTARP, this afternoon, Katke, a former senior securities trader at investment bank RBS, pleaded guilty to conspiring to defraud bank customers—customers that included TARP banks—out of millions of dollars,” said Special Inspector General Romero. “Katke lied to customers about the status of and the true prices paid and offered for securities as a way to boost profits for himself, others and RBS. Defrauding a TARP recipient bank is the same as defrauding the American taxpayers who funded the TARP bailout. I want to commend U.S. Attorney Daly and the team of prosecutors who stand united with SIGTARP to combat TARP bailout-related crime.”
Katke pleaded guilty to one count of conspiracy to commit securities fraud, which carries a maximum term of imprisonment of five years. He was released on a $250,000 bond and is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny of the District of Connecticut on June 3, 2015.
This case is being investigated by the FBI and the Special Inspector General for the Troubled Asset Relief Program, and is being prosecuted by Assistant U.S. Attorneys Jonathan Francis and Heather Cherry of the District of Connecticut.
Today’s announcement is part of the ongoing efforts of the Financial Fraud Enforcement Task Force’s Residential Mortgage-Backed Securities (RMBS) Working Group, a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis and the federal government’s subsequent bailout. The RMBS Working Group brings together attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice, U.S. Attorneys’ Offices, the FBI, the Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG, SIGTARP, the Federal Reserve Board’s Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network and state Attorneys General offices around the country.
The RMBS Working Group is led by Acting Associate Attorney General Stuart Delery, and co-chaired by Assistant Attorney General Leslie R. Caldwell of the Criminal Division, Acting Assistant Attorney General Benjamin Mizer of the Civil Division, Director of Enforcement Andrew Ceresney for the SEC, U.S. Attorney John Walsh of the District of Colorado and New York Attorney General Eric T. Schneiderman.
For more information about the RMBS Working Group and the Financial Fraud Enforcement Task Force, visit: www.stopfraud.gov.
Psychologist Sentenced to Six Years in Federal Prison and a $100,000 Fine for Role in Rocky Boy's Corruption ProbeRead the Press Release
GREAT FALLS – The former psychologist for the Rocky Boy Health Clinic in Box Elder has been sentenced to six years in prison for his leadership role in corruption ring that embezzled hundreds of thousands of dollars from federal programs on the reservation. Dr. James Howard Eastlick, 48, now of Coeur D’Alene, Idaho, was sentenced by U.S. District Judge Brian Morris to six years in prison despite the government’s recommendation for a more lenient sentence based upon what prosecutors termed “exceptional assistance” in the investigation and prosecution of others involved in the Rocky Boy’s corruption.
While the sentence represented a departure from the advisory guideline range, the sentence also reflected Eastlick’s central role in a myriad of corrupt deals with tribal officials that occurred over a three year period when the reservation saw a significant increase in federal funding.
In addition to the prison term, Judge Morris ordered Eastlick to pay a $100,000 fine, pay $424,800 in restitution and serve three years of supervised release when his term of imprisonment has ended.
Earlier in the day, Morris had sentenced Eastlick’s sister Tammy Kay Leischner, 43, and his brother-in-law, Mark Craig Leischner, 48, both of Laurel to two years in prison. Morris sentenced Eastlick’s father, James Howard Eastlick, Sr., 70, to a year in prison in September of 2014, and Eastlick’s nephew, Brenden Leischner, 24, to six months in custody and five years of probation for his role in a student financial aid fraud scheme at the University of Great Falls.
Bribery Relating to a Federally Funded Program
Dr. Eastlick plead guilty to providing Tony Belcourt, then the Chief Executive officer of the Chippewa Cree Construction Corporation, with a $100,000 payment as part of their on-going business relationship relating to the Tiber Reservoir water project which was funded in 2009 with $20 million in federal stimulus monies under the American Recovery and Reinvestment Act (ARRA) through the Bureau of Reclamation.
Prosecutors presented evidence that Hunter Burns Construction, LLC, was formed as a Native American / minority-owned preference business in June 2009 to do business on the Rocky Boy’s Indian Reservation, primarily on federally funded projects. The 51% majority owner of the company was Hunter Burns, and the other 49% of the company was owned by Dr. Eastlick, then a clinical psychologist with the Rocky Boy Health Board Clinic. Between June 2009 and October 2009, Tony Belcourt awarded four contracts to Hunter Burns Construction, totaling over $713,000, in connection of the expansion of the On-Reservation water district. These contracts were identified as the Box Elder Pipeline Project 1 ($361,300), the Box Elder Pipeline Project 2 ($143,440) the Middle Dry Fork Pipeline project ($155,108), and the Reseeding project to mitigate ground disturbance for these two pipelines ($54,000).
In December, 2011, Belcourt approached Eastlick for a large loan--$100,000—to keep the Bank from taking his ranching operation. Eastlick agreed to help Belcourt.
Belcourt approved and authorized a Chippewa Cree Construction Corporation payment to Hunter Burns Construction on November 21, 2009, in the amount of $148,972. Without the deposit from the Chippewa Cree Construction Corporation, there were insufficient funds in the Hunter Burns Construction account to get the money Belcourt needed to fix the problem with the auction company and Independence Bank caused by the illicit sale of secured cattle.
Two days later, on November 23, 2009, Hunter Burns Construction issued a $100,000 check to Hailey Belcourt.
Four months later, in March of 2010, Hunter Burns Construction was awarded a $1.7 million contract. Two weeks after the contract was entered into, Belcourt approved a $100,000 payment of federal ARRA funds to Hunter Burns Construction . The contract had called for a $15,000 payment for “mobilization”, but that payment was made weeks after the $100,000 payment; a payment that went unrecorded with the project engineers until many months later.
Bribery of Councilman John Houle
Eastlick also plead guilty to bribing Chippewa Cree Tribal Councilman John Chance Houle.
Prosecutors represented to the Court that between October 2007 and September 2012, the Chippewa Cree Tribe received $420,439,495.00 in federal funding. In addition to the over $420 million in federal funding, the Tribe also received a $25 million dollar insurance payment after the flooding of 2010, and an $8.4 million dollar award under the Cobell v. Salazar Settlement in July of 2012. The total money received by the Tribe during this five-year time period was over $450 million dollars.
Of that amount, between April 2009 and December 2011, the Rocky Boy's Health Clinic received over $40 million from HHS and EPA, mostly to operate the Health Clinic and rebuild sewage lagoons damaged by the floods of 2010. The Chippewa Cree Construction Corporation received over $40 million from the BOR as part of the Rocky Boy's/North Central Montana Regional Water System project (the Tiber project).
John Chance Houle, was a tribal councilman during this time and Vice-Chairman of the Rocky Boy Tribe Business Committee. In that capacity, Houle served on the Chippewa Cree Construction Corporation Board and on the Rocky Boy's Health Care Board. Houle had arranged for the Eastlick-Bums partnership with the understanding that if he lost his position on the Council, he would replace Eastlick and continue to use the construction company as a vehicle to obtain tribal funds. A long-time member of the tribal council who had also served as the Tribal Chairman, Houle exerted significant political control over the two boards as well as over the affairs of the Tribe as a whole.
During the period of the indictment-from July 28, 2009 through November 30, 2011, Houle engaged in a series of “business transactions” with Hunter Burns Construction including the rental of property to the company, the sale or lease of equipment to the company, and the performance of personal services to the company. The investigation revealed that many of the transactions were not legitimate but were merely labeled as such to provide cover to the participants. For example, equipment purportedly sold to Hunter Bums Construction would continue to appear on Houle's inventory of equipment for bank loans and credit long after it was allegedly sold. One transaction was for the potential and prospective lease of property over ten years paid in full up front-when the land was never used for any purpose by the construction company. Another payment was related to the disposal of hazardous waste which could not have been a legitimate transaction due to the regulatory requirements for the disposal of such material that Houle could not legally perform. Eastlick, Houle, and Hunter Burns all confirmed that the scheme was merely a device to funnel federal and tribal monies back to Councilman Houle in exchange for his continuing patronage in the giving of contracts to Hunter Burns Construction.
From July 28, 2009, through November 30,2011, Hunter Burns Construction made a total of $258,487 in l7 payments to Houle, his ranching business, or his children from the health clinic and water project contracts funded by EPA, BOR, and HHS.
Federal Income Tax Fraud
Eastlick was also sentenced on his guilty plea to income tax fraud.
According to prosecutors, Eastlick, in addition to his employment as a psychologist for the Health Clinic, operated a loan program-called the JE Loan Program-with the Chippewa Cree Tribe wherein he loaned money both to the Tribe in large amounts and to individual tribal employees in smaller amounts. Loans to the Tribe generally carried interest rates of l0 per cent, and were paid back within l0 weeks of Eastlick loaning the money. The annualized percentage rate (APR) for loans from the JE Loan program would constitute an 80% return.
With regard to the loans to the tribal employees, Eastlick had an arrangement with the Tribe that to repay those debts, money would be taken from the employee's paycheck, consolidated with other debtors of the JE Loan program, and then tribal checks would be regularly issued to Eastlick representing both interest and principal. These loans were also short-term loans that carried an interest rate of between l0 and 15 per cent with an annualized rate being significantly higher. Eastlick's accountant, who handled the tax affairs of Eastlick's other business interests, had no knowledge of the JE Loan program and did not include taxable income from that source on any of Eastlick's returns including during the years 2008-2011.
Returned principal on the loans made by Eastlick through the JE Loan Program would not be income subject to the Internal Revenue Service's reporting requirements, but interest on those loans is considered income and must be reported. Eastlick did not claim any interest income from his tribal loan program on his federal tax returns for 2008, 2010, or 2011, and only minimal interest in 2009.
Eastlick’s prison sentence on the tax conviction runs concurrently to the 72 months imposed on the other counts of conviction, but he was ordered to pay, of the total restitution amount, $66,313 to the IRS in taxes due and owing from his failure to disclose the interest income from the loan program.
Because there is no parole in the federal system, the “truth in sentencing” guidelines mandate that Eastlick will likely serve all of the time imposed by the court. In the federal system, defendants do have the opportunity to earn a limited reduction in time served for “good behavior,” a reduction for good conduct while incarcerated will not exceed 15% of the overall sentence.
Pikesville Man Pleads Guilty to Conspiracy to Distribute over $6.6 Million in Contraband CigarettesRead the Press Release
Baltimore, Maryland – Zarakh Yelizarov, age 52, of Pikesville, Maryland, pleaded guilty today to a conspiracy to distribute over $6.6 million in contraband cigarettes. Yelizarov’s role in the scheme was to help launder the proceeds of the conspiracy.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; Special Agent in Charge Antoinette V. Henry of the U.S. Food & Drug Administration, Office of Criminal Investigations; and Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services.
According to his plea agreement, Yelizarov’s cousin, Elmar Rakhamimov, conspired with other family members and associates to receive, possess, sell and distribute contraband cigarettes, that is, cigarettes on which the applicable state taxes have not been paid. Rakhamimov, who was the leader and organizer of the scheme, purchased contraband cigarettes on 18 occasions between December of 2011 and November of 2013 from an undercover FBI agent operating in the Baltimore County, Maryland area.
According to his plea agreement, Yelizarov joined the conspiracy in October 2012. Prior to that time, the first nine contraband cigarette transactions were for cash, and the number of cigarettes and amount of cash increased. Yelizarov and Rakhamimov laundered the proceeds of the contraband cigarette sales through an international money laundering operation that wired funds from banks located in Latvia, Cyprus, Estonia, and New York, to a bank in Maryland, disguising the money as legitimate business payments for medical equipment or supplies. During the course of the scheme, Yelizarov used his mobile phone to call his contacts and to discuss the amount and the timing of the wire transfers into the Maryland account. Many of these calls were captured on a court ordered wiretap.
From December 27, 2012 through September 5, 2013, Yelizarov and Rakhamimov wired a total of $649,500 through 12 transactions. Yelizarov and Rakhamimov received a fee of approximately 8% for the money laundering transactions, totaling $56,000.
Rakhamimov used his residence and his restaurant, Europe, to conduct the illegal transactions of contraband cigarettes and the money laundering.
Yelizarov faces a maximum sentence of five years in prison for conspiracy to traffic in contraband cigarettes. U.S. District Judge William D. Quarles, Jr. has scheduled sentencing for July 14, 2015, at 1:00 p.m.
Elmar Rakhamimov, a/k/a “Eric Rakhamimov,” age 42, of Owings Mills, Maryland; his brother, Salim Yusufov, age 43, of Reisterstown, Maryland; Adam Azerman, age 59, of Pikesville; and Shamil Novakhov, age 58, and Ruslan Ykiew, age 39, both of Brooklyn, New York, previously pleaded guilty to their roles in the scheme and are awaiting sentencing.
United States Attorney Rod J. Rosenstein praised the FBI, Baltimore County Police Department, U.S. Food & Drug Administration, Office of Criminal Investigations and Office of Inspector General of the Department of Health and Human Services – Office of Investigations for their work in the investigation and the Medicaid Fraud Control Unit of the Maryland Attorney General’s Office for its assistance in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Paul E. Budlow and John W. Sippel, Jr., who are prosecuting the case.
Oxford Man Sentenced to 63 Months in Prison for Stealing $1.1 Million Through Ponzi SchemeRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ROBERT E. LEE, JR., 51, of Oxford, was sentenced today by U.S. District Judge Jeffrey Alker Meyer in Bridgeport to 63 months of imprisonment for operating a Ponzi scheme that defrauded investors of more than $1.1 million. Judge Meyer also ordered LEE to pay full restitution and a $10,000 fine.
According to court documents and statements made in court, LEE was employed as a broker and financial advisor for various financial investment firms until July 2013 when he was terminated by his most recent employer, Rockwell Global Capital, LLC. Between January 2011 and March 2014, LEE defrauded individuals of approximately $1,150,815 by claiming that he was investing their money in various investment vehicles when, in fact, he was maintaining custody of their funds in his personal bank account. He then used the money to make distributions to other investors, and for personal expenses. To conceal the scheme, LEE fabricated account statements and other documents, which he delivered to his victims.
As part of the sentence, Judge Meyer ordered LEE to forfeit $358,077.17 that was held in an online trading account at the time of his arrest.
LEE was arrested on May 12, 2014. On December 17, 2014, he pleaded guilty to five counts of wire fraud.
This matter was investigated by the Federal Bureau of Investigation was prosecuted by Assistant U.S. Attorneys David T. Huang and Christopher M. Mattei.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
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(203) 821-3722 [email protected]Okeechobee County Illegal Alien Pleads Guilty to Illegal Possession of FirearmRead the Press Release
An Okeechobee County man pled guilty today before U.S. Magistrate Court Judge Frank J. Lynch, Jr. to illegal possession of a firearm.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Hugo Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, and Paul C. May, Sheriff, Okeechobee County Sheriff’s Office (OCSO), made the announcement.
Martin Alvarez-Moreno, 34, of Fort Pierce, Florida, pled guilty to an indictment charging him possession of a firearm by an alien illegally/unlawfully in the U.S.
According to the stipulated factual basis, on November 7, 2014, Okeechobee County Sherriff’s Office received a 911 call with a complaint of a domestic disturbance involving Alvarez-Moreno and a firearm. Upon arrival, OCSO Deputy Sheriffs encountered Alvarez-Moreno standing outside the location. After describing the dispute he was having with his wife, Alvarez-Moreno admitted to the deputies that there was a weapon in his nearby vehicle and provided the keys to the vehicle. An OCSO deputy recovered the Marlin Model 881 rifle from inside the vehicle. The complainant, who identified herself as Alvarez-Moreno’s wife did not want to prosecute. Because there were no other witnesses to the altercation, neither party wished to pursue charges, Alvarez-Moreno agreed to leave the premises and OCSO did not make any arrests at that time. The rifle was transported and placed into OCSO’s evidence for safekeeping.
In the following weeks, Alvarez-Moreno and his wife returned to OSCO four times, and provided written statements of Alvarez-Moreno’s ownership, in order for the return of the firearm. OCSO evidence custodians did not release the firearm because Alvarez-Moreno failed to provide documentation, proving that he was authorized to possess and own a firearm, which was manufactured outside the State of Florida. It was later discovered, that Alvarez-Moreno had illegally entered the U.S. by crossing the border in Arizona in March 2003.
Alvarez-Moreno is scheduled to be sentenced on May 8, at 9:30 a.m., before U.S. District Judge Kenneth A. Marra. He faces up to 10 years in prison, followed by up to three years of supervised release, and possible deportation.
Mr. Ferrer commended the investigative efforts of the ICE-HSI, ATF, and OCSO. This case is being prosecuted by Assistant U.S. Attorney Carmen Lineberger.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Notice of Court ProceedingsRead the Press Release
Contact Person: Beth Drake (803) 929-3000
When: Today, Wednesday, March 11, 2015 at 10:30 a.m Where: Matthew J. Perry Courthouse
Columbia, South Carolina – An evidentiary hearing is scheduled in United States v. Jonathan Pinson. 3: 12-974. United States District Court Judge David C. Norton will preside over the proceeding.
901 Richland Street, Courtroom # 1
Columbia, SC 29201 # # # #New York Man Sentenced to 10 Years in PrisonRead the Press Release
NORFOLK, Va. – Michael Angelo Perry, 46, of New York, NY, was sentenced today to 10 years in prison, followed by 3 years of supervised release for possession with intent to distribute heroin.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No.2:14-cr-144.
Dana J. Boente, United States Attorney for the Eastern District of Virginia, and Karl C. Colder, Special Agent in Charge for Drug Enforcement Administration’s (DEA) Washington Office made the announcement after sentencing by U.S. District Judge Raymond A. Jackson.
Perry pled guilty on November, 24, 2014. According to court documents, Perry operated throughout Norfolk. Perry was selling heroin from his vehicle using a Super 8 motel room in Ocean View. Perry was selling heroin at the Janaf Shopping Center when he was arrested on July 14, 2014. Investigators recovered 14.72 grams of heroin, $1,718 in U.S. currency, and paraphernalia from the trunk of his vehicle that day. At the time of his arrest, he gave investigators written consent to search his motel room. A search of Perry’s motel room resulted in the recovery of 34.22 grams of heroin and a large quantity of a cutting agent used to manufacture heroin for distribution.
This case was investigated by DEA’s Norfolk Resident Office with the assistance of the Norfolk Police Department. Assistant U.S. Attorney Kevin Comstock prosecuted the case on behalf of the United States.Neenah Dentist Pleads Guilty to Two Counts of Failing to Pay Income TaxRead the Press Release
United States Attorney James L. Santelle for the Eastern District of Wisconsin announced that on March 6, 2015, Eugene Darkow (age 58) of Neenah, Wisconsin appeared in federal court in Green Bay and pleaded guilty to two counts of willfully failing to pay his federal income taxes.
Darkow, who operates a dental practice in Neenah, filed tax returns for the years 2008 - 2011 on which he reported more than $1 million in income and owing more than $275,000 in taxes. Darkow, however, failed to pay more than $200,000 of these taxes. In fact, during the years 1998 - 2012, Darkow has failed to pay approximately $450,000 in federal income taxes.
The charges to which Darkow pleaded guilty each carry a maximum possible penalty of up to one year in prison and a fine of up to $250,000. Darkow is scheduled to be sentenced on June 1, 2015. He was released on bond pending his sentencing.
This case was investigated by the Internal Revenue Service Criminal Investigation. The case was prosecuted by Assistant United States Attorney Matthew L. Jacobs.
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Navajo Man from Colorado Sentenced for Federal Child Abuse Conviction in New MexicoRead the Press Release
ALBUQUERQUE – Staffred Kai Begay, 42, of Durango, Colo., was sentenced today to time served, 216 days in federal prison, followed by a year of supervised release for his federal child abuse conviction. He also was ordered to pay $256.11 in restitution to cover medical expenses for the victim.
Begay was arrested on Aug. 12, 2014, on a criminal complaint charging him with child abuse. According to the criminal complaint, on Aug. 7, 2014, a Navajo Indian juvenile (victim) called the authorities to report that Begay was assaulting his mother at a residence located on the Navajo Nation Indian Reservation in San Juan County, N.M. Officers of the Navajo Nation Division of Public Safety responded to the call, but found no one at the residence. The officers responded to a second call in the early morning hours of Aug. 8, 2014, and learned that Begay struck the victim with an axe and broke the victim’s arm.
On Dec. 15, 2014, Begay pled guilty to an indictment charging him with abuse of a child resulting in serious bodily injury. In entering the guilty plea, Begay admitted that on Aug. 7, 2014, he put a child in a situation that endangered the child’s life and resulted in serious bodily injury to the child.
This case was investigated by the Shiprock office of the Navajo Nation Division of Public Safety and the Farmington office of the FBI and was prosecuted by Assistant U.S. Attorney Kyle T. Nayback.
Mt. Vernon, Il Man Indicted on Drug and Gun Related ChargesRead the Press Release
Torence D. Jones, 24, of Mt. Vernon, IL, was indicted on March 3, 2015, on drug and gun related charges in a two count Indictment returned by a Federal Grand Jury sitting in Benton, Illinois, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Count 1 charges that on December 5, 2014, in Jefferson County, Jones knowingly and intentionally possessed with the intent to distribute crack cocaine. Count 2 charges that on December 4, 2014, in Jefferson County, Jones did knowingly possess a firearm from which he knew that the manufacturer's or importer's serial number had been removed, obliterated, or altered.
With respect to Count 1, Jones faces up to 20 years in prison, up to $1,000,000 fine, and supervised release of at least 3 years.
With respect to Count 2, Jones faces up to 5 years in prison, up to $250,000 fine, and supervised release of up to 3 years.
An Indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The investigation in this case was conducted by the Joint Narcotics Unit of the Mt. Vernon Police Department and the Jefferson County Sheriff’s Department.
The case is being handled by Assistant United States Attorney George Norwood.
Mt. Vernon Man Indicted on Robbery and Gun Related ChargesRead the Press Release
David D. Weatherall, 25, of Mt. Vernon, IL, was indicted on March 3, 2015, on robbery and gun related charges in a four count Indictment returned by a Federal Grand Jury sitting in Benton, Illinois, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Count 1 charges that on December 8, 2014, in Jefferson County, Weatherall while aiding and abetting another person, did unlawfully obstruct, delay and affect, and attempt to obstruct, delay and affect, commerce by robbery, in that Weatherall and another person did unlawfully take and obtain personal property consisting of United States Currency and cigarettes, belonging to Huck’s Convenient Food Store, 540 Fairfield Road, Mt. Vernon, Illinois, by means of actual and threatened force, violence and fear of injury, and by brandishing a firearm.
Count 2 charges that on December 8, 2014, in Jefferson County, Weatherall did knowingly aid and abet another person, who did knowingly brandish a firearm, during and in relation to a crime of violence as charged in Count 1.
Count 3 charges that on December 9, 2014, in Marion County, Weatherall did unlawfully obstruct, delay and affect, and attempt to obstruct, delay and affect, commerce by robbery, in that 2
Weatherall did unlawfully take and obtain personal property consisting of United States Currency and Hennessy Liquor, belonging to Biggies Cafe and General Store, 3858 State Route 161, Centralia, Illinois, by means of actual and threatened force, violence and fear of injury, and by brandishing a firearm.
Count 4 charged that on December 9, 2014, in Marion County, Weatherall did knowingly brandish a firearm during and in relation to a crime of violence as charged in Count 3.
With respect to Counts 1 and 3, Weatherall faces on each count up to 20 years in prison, up to a $250,000 fine, and supervised release of up to 3 years.
With respect to Counts 2 and 4, Weatherall faces on each count a minimum of 7 years in prison, up to life in prison, up to a $250,000 fine, and supervised release of up to 5 years. Any sentence on Count 2 or Count 4 must run consecutive to any other Count of which Weatherall is convicted.
An Indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The investigation in this case was conducted by the Mt. Vernon Police Department, the Jefferson County Sheriff’s Office, the Marion County Sheriff’s Office, and the Centralia Police Department.
The case is being handled by Assistant United States Attorney George Norwood.
Money Launderer for Lottery Scam ConvictedRead the Press Release
Contact Person: Eric Klumb (843) 727-4381
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Columbia, South Carolina ---- United States Attorney Bill Nettles stated today that a federal jury sitting in Florence, South Carolina, found Woody Graham, 36, guilty of conspiracy to commit money laundering. Graham was wiring fraud proceeds to Jamaica on behalf of a group running a bogus lottery scam that targeted elderly victims around the country, notifying them that they had won a lottery or sweepstakes, but that they needed to pay fees or taxes in advance in order to receive their winnings. A total of 18 individuals have been indicted in the case; 15 have entered guilty pleas; three have been sentenced to prison terms. United States District Judge R. Bryan Harwell, of Florence, presided over the trial, which lasted two days.
The case was investigated by Special Agents with Homeland Security Investigations (HSI) and Inspectors with the United States Postal Inspection Service (USPIS). Assistant United States Attorneys A. Bradley Parham and Eric Klumb are prosecuting the case.Minnesota Sex Offender Sentenced to More Than 31 Years for Traveling to Engage in Sexual Activity with A MinorRead the Press Release
Tampa, Florida – U.S. District Judge Mary S. Scriven today sentenced Matthew William McLean (26, Minneapolis) to 31 years and 6 months in federal prison for attempting to transport a minor with the intent to engage in criminal sexual activity, and for committing a felony sex offense as a registered sex offender. He pleaded guilty on November 20, 2014.
According to court documents, McLean, a registered sex offender from Minnesota, traveled to Tampa to meet a 14-year-old minor with whom he had been corresponding with over the Internet. McLean picked the minor up from her house, brought her to the Greyhound bus station, and purchased two bus tickets to Brownsville, Texas. Upon discovering that the minor was missing, her family contacted law enforcement, who determined that McLean and the minor were on a Greyhound bus that had stopped in Tallahassee. Law enforcement officers recovered the minor victim and arrested McLean. McLean and the minor admitted that they had engaged in sex acts on the bus while traveling from Tampa to Tallahassee.
This case was investigated by the Hillsborough County Sheriff’s Office, the Tallahassee Police Department, and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Stacie B. Harris.
This is another case 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 United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc
Miami-Dade County Resident Sentenced in Stolen Identity Unemployment Insurance Fraud SchemeRead the Press Release
A North Miami Beach resident was sentenced today to 96 months imprisonment, to be followed by three years of supervised release, for filing fraudulent unemployment insurance claims using the personal identifying information (PII) of more than 90 individuals.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Rafiq Ahmad, Special Agent in Charge, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, Paula Reid, Special Agent in Charge, United States Secret Service (USSS), Thomas Caul, Special Agent in Charge, Social Security Administration, Office of Inspector General (SSA-OIG), Mario J. Musolino, Acting Commissioner, New York State Department of Labor, Jesse Panuccio, Executive Director, State of Florida Department of Economic Opportunity, and J. Scott Dennis, Chief, North Miami Beach Police Department, made the announcement.
According to court records, from at least as early as December 2013, through the summer of 2014, the unemployment insurance claims of more than 90 victims (utilizing the victims’ respective PII) were submitted online from the residence of Reginald Steele-Nelson, 28. In filing these claims, Steele-Nelson used the victims’ PII, including their names and social security numbers. A federal search warrant was obtained for Steele-Nelson’s residence and was executed on August 21, 2014. On that date, law enforcement officers discovered nearly two thousand pieces of unique PII inside the residence and on Steele-Nelson’s person. Law enforcement officers also located a credit card “skimmer,” a device specifically designed to assist in the creation of fraudulent credit and debit cards. Steele-Nelson filed fraudulent unemployment insurance claims with the states of Florida, New York, and Massachusetts. He also filed fraudulent Social Security claims and redirected legitimate Social Security claims from their intended recipients to accounts he controlled. The amount of the intended loss resulting from Steele-Nelson’s offense was nearly $900,000; when taken with the approximately $236,000 in funds actually paid out during the scheme, Steele-Nelson was held accountable for more than $1,100,000 in loss.
Steele-Nelson previously pled guilty to one count of use of one or more unauthorized access devices to obtain $1,000 in value or more during one calendar year, one count of possession of fifteen or more unauthorized access devices, one count of possession of device making equipment, and three counts of aggravated identity theft. Restitution in the full amount of actual loss, $236,371.45, was ordered by U.S. District Judge Kathleen M. Williams.
Mr. Ferrer commended the investigative efforts of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, USSS, SSA-OIG, the State of New York Department of Labor, the State of Florida’s Department of Economic Opportunity, and the North Miami Beach Police Department. This case is being prosecuted by Assistant United States Attorneys Ben Widlanski and Jamie R. Galvin.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Miami Resident Sentenced in Identity Theft Tax Fraud Scheme Involving Medical Patients’ Personal Identifying InformationRead the Press Release
A Miami resident was sentenced to 16 months in prison, followed by two years of supervised release, and was ordered to pay joint and several restitution of $57,000.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Paula Reid, Special Agent in Charge, United States Secret Service (USSS), Miami Field Office, made the announcement.
Kenol Augustin, 36, was previously convicted by a federal jury of one count of conspiracy to commit access device fraud.
According to court documents and evidence presented at trial, in November 2014, an individual recruited into the scheme searched their employer’s database and accessed the names and Social Security numbers (personal identity information or PII) of individual medical patients. This employee then provided a list of individuals’ PII in exchange for a cash payment made by defendant Augustin. Augustin and his co-conspirators then caused false and fraudulent tax returns seeking refunds to be filed with the Internal Revenue Service using the PII that the conspirators had so obtained.
Mr. Ferrer commended the investigative efforts of IRS-CI and the USSS. These cases are being prosecuted by Assistant U.S. Attorneys James V. Hayes and Gera Peoples.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Meth Conspirator Sentenced in Federal CourtRead the Press Release
MOBILE, Ala. – Crystal LaSha-Renee Grider, 24, of Gonzalez, Florida, was sentenced in federal court today on her conviction for conspiracy to manufacture methamphetamine and to possess a List I chemical with knowledge it would be used to manufacture methamphetamine. Court documents showed that Grider was one of several individuals involved in methamphetamine manufacturing at a trailer on Roy Miller Road in Mobile County during the summer and fall of 2012. Grider was staying at the trailer with co-conspirators and she was also purchasing pseudoephedrine, a List I chemical, for use in the methamphetamine manufacturing. Pharmacy records showed that the conspirators, including Grider, had obtained more than 900 grams of pseudoephedrine to "cook" into methamphetamine.
United States District Court Judge William H. Steele imposed a sentence of 60 months imprisonment, to be followed by a four-year term of supervised release. Grider was ordered to undergo testing and treatment for drug abuse while she serves her supervised release term, which will commence as soon as she is released from her prison sentence. No fine was imposed, but Marks was ordered to pay the special mandatory assessments of $200.
The case was investigated by theMobile County Sheriff’s Office. It was prosecuted in the United States Attorney=s Office by Assistant United States Attorney Gloria Bedwell.
Metairie Resident Sentenced to 43 Months in Prison for His Role in $10 Million Tax Fraud Conspiracy, Aggravated Identity TheftRead the Press Release
OLSEN SARAVIA-HERNANDEZ, 48, a Honduran national who most recently resided in Metairie, Louisiana, was sentenced today for conspiracy to defraud the United States by filing false tax returns and for aggravated identity theft, announced U.S. Attorney Kenneth Allen Polite, Jr. and Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
U.S. District Court Judge Helen G. Berrigan sentenced SARAVIA-HERNANDEZ to 43 months in prison and three years of supervised release, while ordering him to pay restitution to the United States of $1,000,000. In November 2014, JACQUELINE J. ARIAS, a tax return preparer from Spruce Pine, Alabama, was sentenced to serve 97 months in prison for her role in the scheme and ordered to pay more than $10,000,000 in restitution.
On December 19, 2013, SARAVIA-HERNANDEZ pled guilty to one count of conspiracy to defraud the United States and one count of aggravated identity theft. According to court documents, SARAVIA-HERNANDEZ and his coconspirators filed false returns listing Individual Taxpayer Identification Numbers (ITINs). An ITIN is a tax processing number issued by the Internal Revenue Service (IRS) to individuals who do not have, and are not eligible to obtain, a Social Security Number. The indictment charged that ARIAS filed false applications for ITINs, false income tax returns, and collected preparation fees from the fraudulently-obtained tax refunds. As alleged in the superseding indictment, SARAVIA-HERNANDEZ acted as a “runner” in the organization, obtaining identification documents in the Eastern District of Louisiana and ferrying them to ARIAS for use in filing false returns.
To date, seventeen defendants have pled guilty in the case, including one defendant who was arrested in Panama last year and is awaiting sentencing. Four defendants remain fugitives. All of the defendants in this case who pled guilty thus far were sentenced to terms of imprisonment, including: CESAR ALEJANDRO SORIANO (42 months); OSCAR ARMANDO PERDOMO, (42 months); YONI PERDOMO, (38 months); ARNULFO SANTOS-MEDRADO, (38 months); ELSIDES EDGARDO ALVARADO-CANALES, (36 months); ELIECER OBED RODRIGUEZ, (34 months); OCTAVIO JOSUE PERDOMO, (34 months); ELBER MENDOZA-LOPEZ, (34 months); AURELIO MONTIEL-MARTINEZ, (24 months); MILLER PERDOMO-ACEITUNO, ( 24 months); SANTOS MARTIN HERNANDEZ, (24 months); and SUSANA CARILLO MENDOZA, (19 months).
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Polite commended the agencies involved in investigating this matter, including: U.S. Immigration and Customs Enforcement, which oversees U.S. Homeland Security Investigations; IRS-Criminal Investigation; the U.S. Secret Service; the U.S. Postal Inspection Service; the Social Security Administration, Office of the Inspector General; and the St. Tammany Parish and Jefferson Parish Sheriffs’ Departments. Trial Attorney Hayden Brockett and Assistant United States Attorney David Haller are in charge of the prosecution.
Menominee County Man Indicted for Sex Offender Registry ViolationRead the Press Release
United States Attorney James L. Santelle for the Eastern District of Wisconsin, announced that on March 10, 2015, a federal grand jury returned a single count indictment against William A. Julius (age: 53) of Menominee County, Wisconsin, charging him with failure to update his registration as a sex offender pursuant to Title 18, United States Code, §2250(a). If convicted of this offense, the defendant faces a sentence of up to 10 years imprisonment, a two hundred and fifty thousand dollar fine, and between five years and a lifetime of supervised release.
According to the indictment, Julius failed to comply with the requirements of the Sex Offender Registration and Notification Act which requires registered sex offenders to maintain information as to their current place of residency.
The case was investigated by the United States Marshal’s Service. The case is being prosecuted by Assistant United States Attorney Daniel R. Humble.
An indictment is only a charge and not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
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Mechanicsburg Man Sentenced for Illegal Sports Gambling OperationRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 40-year old Mechanicsburg man was sentenced today before Senior U.S. District Court Judge William C. Caldwell to 5 months in federal prison followed by 5 month’s house arrest. Sheely is to report for service of his sentence on April 7, 2015.
Steven Sheely, Jr., pled guilty on December 4, 2014, to being involved with his father, Steven Sheely, Sr., and seven other named individuals, in a conspiracy to run an illegal sports gambling operation.
According United States Attorney Peter Smith, Sheely, Sr. and the others took in millions of dollars in illegal bets on all manners of sporting events. The bookmaking activity took place mainly in the central Pennsylvania area where the participants in the organization lived. The organization was dismantled primarily through the use of a court authorized wiretap and the arrest of the participants on May 22, 2014.
The prosecution stemmed from an investigation conducted by the Federal Bureau of Investigation, the Commonwealth of Pennsylvania’s Department of Agriculture’s Racing Commission, and the Pennsylvania State Police. Assistant United States Attorney William A. Behe was assigned to handle the investigation and prosecution of the case.
Maryland Man Sentenced to 56 Months in Prison for Assaulting Transgender Girl on Metrorail Train Defendant Threatened, Harassed and Stabbed 15-Year-Old VictimRead the Press Release
WASHINGTON – Reginald Klaiber, 25, of Greenbelt, Md., was sentenced today to 56 months in prison for stabbing a transgender girl while she was on board a Metrorail train, U.S. Attorney Ronald C. Machen Jr. announced.
Klaiber, also known as Reginald Kaliber, pled guilty in January 2015, in the Superior Court of the District of Columbia, to a charge of assault with a dangerous weapon, with a hate crime enhancement. He was sentenced by the Honorable Juliet McKenna, who described the assault as “brutal.”
“Hate crimes against transgender people occur with troubling frequency and demand a forceful response,” said U.S. Attorney Machen. “Reginald Klaiber stabbed a 15-year-old girl on the Metro solely because of who she is. This prison sentence should make clear that we will not tolerate hate-fueled violence in the District of Columbia.”
According to the government’s evidence, Klaiber confronted the 15-year-old victim on July 30, 2014, at about 4:30 p.m., while both were on a Green Line train approaching the Fort Totten Metro station in Northeast Washington. The victim, who was dressed in women’s clothing, was with two of her friends on the train. Klaiber attempted to engage her in conversation and she asked him to leave her alone. Klaiber began harassing her, saying, among other things, “Are you a boy, you are a boy, right?” and “Why you be looking like a woman?”
The victim again asked Klaiber to leave her alone and to get away. As the train pulled into the Fort Totten station, she stood up. Klaiber stood up as well, pulled out a knife, grabbed the victim in a bear hug and stabbed her in the back. One of the victim’s friends sprayed Klaiber in the face with Mace or pepper spray. Klaiber released the victim, and she and her friends fled through interior train doors into a different Metro car. Klaiber continued to follow them until the exterior doors opened. The victim and her friends then ran into the Metro station, with Klaiber making threatening and harassing statements as he kept following them.
One of the friends pointed out the defendant to Metro Transit Police officers, who apprehended him just outside the station. Police recovered a black folding knife with a three-inch, partially serrated blade in a search of the defendant.
The victim, who later identified Klaiber as her assailant, required medical treatment for her injuries.
Klaiber has been in custody since his arrest.
When he committed the crime, Klaiber was on probation in two other Superior Court cases before the Honorable Patricia A. Broderick for attempted robbery and possession of a prohibited weapon, a knife. As a result of the defendant’s plea in this case, Judge Broderick revoked Klaiber’s probation and sentenced him to 20 months on the attempted robbery charge and five months on the weapon charge. Those sentences will run consecutive to the sentences in the new case. In total, Klaiber was sentenced to nearly seven years in prison.
In announcing the sentence, U.S. Attorney Machen commended the work of the Metro Transit Police. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Supervisory Victim/Witness Advocate Jennifer Clark and Assistant U.S. Attorney Christopher Bruckmann, who prosecuted the case.
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Media AdvisoryRead the Press Release
CHARLESTON, W.Va. – Effective immediately, Michael Shane Arrington, former Public Affairs Specialist for United States Attorney Booth Goodwin’s office, is no longer employed with the office. Please forward all press inquiries to www.justice.gov/usao/wvs or to Robin Justice at (304)345-2200.
Lone Ranger Bandit Sentenced to 40 Years in Federal Prison for Series of Armed Bank RobberiesRead the Press Release
In Waco today, a federal judge sentenced 38-year-old Richard Wayne Swicegood (aka “Lone Ranger Bandit”) of Waxahachie, TX, to 40 years in federal prison for committing 13 armed bank robberies in Texas and Arkansas announced Acting United States Attorney Richard L. Durbin, Jr. and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division.
In addition to the prison term, U.S. District Judge Walter S. Smith, Jr. ordered that Swicegood pay $119,815.00 restitution to the financial institutions and be placed on supervised release for a period of five years after completing his prison term.
On January 15, 2015, Swicegood pleaded guilty to 13 counts of bank robbery. By pleading guilty, Swicegood admitted that he committed the following robberies:
- Temple Santa Fe Community Credit Union in Temple, TX, on October 4, 2011; March 30, 2012; and July 12, 2013, stealing a total of approximately $72,330.
- Union State Bank in Round Rock, TX, on January 4, 2012, and June 5, 2014, stealing a total of approximately $10,780.
- First State Bank in Salado, TX, on July 9, 2012, stealing approximately $5,075.
- Extraco Bank in Lampasas, TX, on November 8, 2013, stealing approximately $2,450.
- Select Federal Credit Union in San Antonio, TX, on March 6, 2014, stealing approximately $9,500.
- Citibank in Wichita Falls, TX, on July 21, 2011, stealing approximately $8,640.
- Altra Federal Credit Union in Tyler, TX, on August 31, 2011, stealing approximately $5,290.
- BBVA Compass Bank in Tyler, TX, on May 17, 2012, stealing approximately $2,750.
- Summit Bank in Benton, AR, on June 30, 2011, and July 1, 2014, stealing a total of approximately $16,220.
On July 1, 2014, following the Summit Bank robbery, an Arkansas state trooper near Benton initiated a stop on the purported bank robbery suspect’s vehicle. Swicegood was arrested after the trooper located a fake firearm and the stolen money inside Swicegood’s vehicle.
This case was investigated by the Federal Bureau of Investigation (FBI) with assistance from the Texas Rangers; San Antonio, Temple, Round Rock, Wichita Falls, Tyler, Lampasas, and Salado Police Departments in Texas; Benton (AR) Police Department; and, the Arkansas State Police. Assistant United States Attorney Greg Gloff prosecuted this case on behalf of the Government.
Licensed Clinical Social Worker Sentenced to Prison for Health Care FraudRead the Press Release
BATON ROUGE, LA –United States Attorney Walt Green announced that CARLA CLARK, age 50, of Pineville, Louisiana, was sentenced yesterday by Chief U.S. District Judge Brian A. Jackson to 21 months imprisonment, 2 years of supervised release following imprisonment, and ordered to pay $413,109 in restitution for her role in a health care fraud scheme involving two Louisiana companies.
The sentencing stems from a health care fraud scheme involving two companies known as Fusion Services, L.L.C. (“Fusion”), and Grace Social Services, L.L.C. (“Grace”), which operated in Alexandria, Louisiana and the surrounding areas. CLARK was a Licensed Clinical Social Worker who worked with Sonya Williams, the owner of Fusion and Grace. CLARK participated in creating false and misleading medical records for Fusion indicating that Medicare beneficiaries had received individual, face-to-face psychotherapy when, in fact, no such services had been provided. Williams then prepared false claims for the purported psychotherapy services to elderly patients and submitted them to Medicare for reimbursement. Medicare paid Fusion and Grace approximately $349,715 as a result of the billings, much of the profits were deposited into Williams’ personal accounts.
In addition to the term of imprisonment, Judge Jackson ordered CLARK to pay restitution in the amount of $413,109 to the Department of Health and Human Services/Centers for Medicare and Medicaid Services for her role in the fraudulent conduct involving Fusion and Grace, as well as other health care entities.
U.S. Attorney Green stated, “This sentencing is part of the continuing effort by my office and our federal, state, and local partners to combat the scourge of health care fraud. Corrupt medical professionals, like the defendant in this case, do an incredible disservice to the vast majority of medical professionals who are honest and committed to quality patient care. Together with the help and cooperation of those honest professionals, we will continue our pursuit of fraudsters in the medical community.”
“Any time false claims are submitted for payment, the nation's health insurance programs suffer,” said Special Agent-in-Charge Mike Fields of the HHS Office of the Inspector General’s (OIG) Dallas Regional Office. “Our HHS OIG investigators will continue to work closely with our law enforcement partners to identify providers who deliberately manipulate the system to obtain crucial Medicare or Medicaid dollars.”
The investigation was conducted by the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG) and the Federal Bureau of Investigation (FBI), with the assistance of AdvanceMed, the Medicare Program Safeguard Contractor which assists with health care fraud investigations. The case was prosecuted by Assistant United States Attorney Catherine M. Maraist.
Leavenworth Man Pleads Guilty to Theft of Government FundsRead the Press Release
KANSAS CITY, KAN. - A Leavenworth man pleaded guilty Wednesday to fraudulently collecting more than $46,000 in government benefits, U.S. Attorney Barry Grissom said.
Michael James Munsterman, 42, Leavenworth, Kan., pleaded guilty to one count of theft of government funds. In his plea, he admitted he received Supplemental Security Income, food stamps and Medicaid even though he did not qualify for those benefits. In April 2011 he applied for SSI benefits claiming that he had a drug-induced heart condition that prevented him from working. He did not reveal to the government that he owned and operated a heating and cooling company and received substantial income from the business while he was receiving benefits. He also admitted that he concealed from the federal government his financial resources that far exceeded the eligibility criteria of the aforementioned needs-based programs.
He fraudulently received a total of approximately $46,367 in government funds.
Sentencing is set for June 16, 2015. He faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. Pursuant to the plea agreement, Munsterman must also pay restitution to the victim-agencies. Grissom commended the Social Security Administration’s Office of Inspector General and Special Assistant U.S. Attorney Trey Alford for their work on the case.
Leader of Counterfeit Credit Card Ring Sentenced to 9 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles, Jr. sentenced Michael Crew, age 54, of Owings Mills, Maryland, today to nine years in prison followed by three years of supervised release, after Crew pleaded guilty to bank fraud conspiracy and aggravated identity theft, arising from his use of stolen credit and debit cards to manufacture counterfeit credit cards used to buy merchandise and services. Judge Quarles also entered an order that Crew pay restitution of $126,318.99, the amount of the actual loss to victims.
The plea and sentence were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office; Chief Gary Gardner of the Howard County Police Department; Commissioner Anthony W. Batts of the Baltimore Police Department; Chief James W. Johnson of the Baltimore County Police Department; Chief Ross C. Buzzuro of the Ocean City Police Department; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Newport News Police Chief Richard W. Myers; and Colonel William M. Pallozzi, Acting Superintendent of the Maryland State Police.
According to his plea agreement, Crew had an embossing machine, and made credit cards using altered gift cards and the credit card and debit card numbers stolen from others. The stolen credit card account numbers were obtained from a variety of sources. Once a valid number was obtained, co-defendants would use an algorithm to derive other valid numbers, which they would confirm by calling customer service for the issuing financial institution. These numbers were used to manufacture counterfeit access devices bearing the stolen credit and debit card account numbers. The counterfeit access devices were then used to make unauthorized purchases of goods and services.
Generally the gift cards used to manufacture the counterfeit credit cards were shoplifted from stores. For example, on June 13, 2012, Crew was arrested when he attempted to shoplift gift cards at the Shoppers Food Warehouse in Howard County. Crew received a citation and was released.
Crew generally did not use the counterfeit credit cards himself, but either sold them or had others use them. Sometimes he told them what to purchase, such as gift cards, electronics and luxury linens which he resold.
On March 12, 2013, a search warrant was executed at Crew’s residence. Dozens of counterfeit gift cards were recovered bearing stolen credit card numbers and, in some cases, the names of co-defendants; numerous receipts from items purchased with counterfeit cards, 122 blank plastic cards, computers, cell phones, notes with credit card account information, and a notebook containing credit card numbers.
During the conspiracy, which continued through the arrest of the final defendants on June 7, 2014, Crew and his co-conspirators accessed or attempted to access credit card accounts with credit limits of between $400,000 and $1 million, using the financial account numbers of real people. More than 250 individuals and institutions were defrauded by the scheme.
To date, five other defendants have pleaded guilty to their participation in the scheme and await sentencing.
The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the U.S. Secret Service; Howard County, Baltimore City, Baltimore County, Howard County, Ocean City and Newport News Police Departments, HSI Baltimore and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Tamera L. Fine, who prosecuted the case.
Lawrence Woman Sentenced for EmbezzlementRead the Press Release
TOPEKA, KAN. - A Lawrence woman was sentenced Wednesday to 24 months in federal prison for embezzlement and ordered to pay $837,000 in restitution to her former employer, U.S. Attorney Barry Grissom said.
Sharon Ann Holladay, 58, Lawrence, Kan., pleaded guilty to one count of embezzlement. In her plea, she admitted the crime occurred while she worked as an officer manager for Westheffer Company, a Lawrence business that manufactures and sells agricultural chemical spray equipment.
Holladay used her access to the company’s financial system to transfer money from the operations account to a petty cash fund she controlled. She also used her access to the payroll system to give herself unauthorized bonuses and commissions. In addition, she made unauthorized purchases on the company’s credit card.
Grissom commended the Lawrence Police Department, the FBI and Assistant U.S. Attorney Rich Hathaway for their work on the case.
Laurel Man Admits to Robbery, Abduction and Sexual Assault of ProstitutesRead the Press Release
Greenbelt, Maryland – Ajibola Erogbogbo, age 19, of Laurel, Maryland, pleaded guilty today to robbery.
The plea agreement was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Anne Arundel County Police Chief Tim Altomare; Chief Richard McLaughlin of the Laurel Police Department; Anne Arundel County State’s Attorney Wes Adams; Chief Mark A. Magaw of the Prince George’s County Police Department; and Prince George’s County State’s Attorney Angela D. Alsobrooks.
According to his plea agreement, Erogbogbo was a security guard at Six Flags amusement park in Largo, Maryland, and a student at Anne Arundel Community College.
On January 9, 2014, a prostitute posted an ad for sex on the internet and Erogbogbo arranged a “date” at a hotel in Linthicum Heights, Maryland. Erogbogbo arrived wearing a vest that read “POLICE,” and had a metallic badge in one hand and a gun in the other. He told the prostitute that she was under arrest and instructed her to write her name and personal information on a yellow notepad he brought with him. Erogbogbo then handcuffed the woman, took her driver’s license and asked about her involvement in prostitution. Erogbogbo removed the handcuffs and demanded money. The woman responded that she did not have any cash. While Erogbogbo searched her belongings and the hotel room, the woman secretly sent a text message to another prostitute working in the same hotel, who knocked on the hotel door.
Erogbogbo answered the door, took out his gun and pointed it at the second prostitute. He handcuffed both women. When he couldn’t find any money, Erogbogbo ordered the second prostitute to write down her phone number and leave the hotel, leaving the initial prostitute with him.
Erogbogbo took the prostitute out to the side entrance of the hotel, telling her that she was going to jail. As they headed towards his parked vehicle, the prostitute broke free and ran back to the front desk yelling for help. The front desk attendant called 911. Erogbogbo fled in his vehicle. Anne Arundel County Police responded and recovered surveillance video footage from the hotel showing Erogbogbo arriving at the hotel, entering the lobby wearing a vest and attempting to take the prostitute away from the hotel.
On January 11, 2014, Erogbogbo again phoned the prostitute after she posted a new commercial sex ad and attempted to arrange another “date.” Based on the information provided by the prostitute, members of the Maryland Child Exploitation Task Force (MCETF) arrived in the area of the hotel and set up surveillance. Erogbogbo, however, never appeared.
A third prostitute told MCETF members that she had arranged a “date” with Erogbogbo who called her after she had posted an online prostitution ad. A fourth prostitute hid in the closet as a precaution. When Erogbogbo arrived in the hotel room, he identified himself as a police officer and placed the prostitute in handcuffs. Erogbogbo was wearing a vest that read “POLICE”, a law enforcement belt, a holstered gun on the right side and a second gun in a left-side drop holster. Erogbogbo also showed her a metallic badge. When the fourth prostitute emerged from the closet, Erogbogbo demanded that they give him their prostitution money. The prostitutes gave Erogbogbo a total of $1,400. Erogbogbo returned $600 to the fourth prostitute and took $800 from the third prostitute. Erogbogbo wrote a phone number on a piece of yellow paper, told the victims to call him if they needed future assistance from the police, removed the handcuffs and left.
On February 19, 2014, MCETF personnel met another prostitute who said that she too had been recently robbed by Erogbogbo. Erogbogbo had made a “date” with this fifth prostitute from her online post. When he arrived at her hotel room, he said that he was a police officer in the “Human Trafficking Unit.” He showed a badge, and wore a ballistic vest with a “POLICE” patch, and carried a radio that he periodically spoke into. He also carried a handcuff pouch, handcuffs and a gun in a leather holster. After asking the woman several questions regarding her involvement in prostitution, Erogbogbo said that the “only way” to avoid arrest was to have sex with him. The woman at first refused. When she would not take off her clothing, Erogbogbo threatened to put handcuffs on her. He began having sex with her, but stopped when she became unresponsive.
The next day, the prostitute posted a new online prostitution ad under the direction of MCETF. Erogbogbo contacted her to make a “date.” Although she had not told Erogbogbo her exact location, Erogbogbo soon walked into the hotel lobby en route to the “date.” When Erogbogbo encountered the Laurel City Police in the lobby, he attempted to flee. He was stopped by the police as he was attempting to re-enter his vehicle parked outside of the hotel. Erogbogbo was wearing a gold Six Flags Loss Prevention badge and a Smith and Wesson replica BB gun, holstered on his belt.
Police searched Erogbogbo’s residence and vehicle and recovered handcuffs, radios, pepper spray, badge holders and a yellow notepad that contained names, driver’s license numbers, phone numbers and addresses of women, including the prostitutes previously described.
Erogbogbo faces a maximum sentence of 20 years in prison and $250,000 fine. U.S. District Judge Theodore D. Chuang scheduled sentencing for June 19, 2015 at 2:00 p.m.
United States Attorney Rod J. Rosenstein commended the FBI, Anne Arundel County and Prince George’s County Police Departments, Laurel Police Department, Anne Arundel County and Prince George’s County State’s Attorney’s Offices and Maryland Child Exploitation Task Force for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant United States Attorneys Daniel C. Gardner and James A. Crowell IV, who are prosecuting the case.
Laurel Couple Sentenced to Federal Prison for Role in Rocky Boy's Corruption ProbeRead the Press Release
GREAT FALLS – A husband and wife linked to corruption on the Rocky Boy’s Indian Reservation were both given two-year federal prison sentences today in Great Falls. Mark Craig Leischner,48, and Tammy Kay Leischner,43, of Laurel were sentenced by U.S. District Judge Brian Morris following their guilty pleas to multiple felonies. Mark Leischner, who plead guilty to embezzlement of over $200,000 in funds from the Chippewa Cree Tribe Rodeo Association, federal student financial aid fraud, and obstruction of justice, was sentenced to 24 months in prison. Tammy Leischner, who plead guilty to aiding the embezzlement of $311,000 in federal funds, bankruptcy fraud, federal student financial aid fraud, and blackmail, was also sentenced to 24 months in prison. Following their incarceration, both will be on federal supervised release for three years. Mark Leischner was ordered to pay $281,313 in restitution, and Tammy Leischner was ordered to pay $375,092 in restitution.
Theft of Federal Funds
Tammy Leischner plead guilty to assisting and participating in the embezzlement of hundreds of thousands of dollars in American Recovery and Reinvestment Act (ARRA) funds provided by the Bureau of Reclamation for the Rocky Boy’s water project.
Prosecutors presented evidence that Tony Belcourt, then the Chief Executive Officer of the Chippewa Cree Construction Corporation, in anticipation of receiving $20 million in ARRA funds in September 2009, solicited bids for the supply and delivery of the pipe needed for the Tiber Reservoir water project. At some point prior to a telephone meeting on January 27, 2010, RPK Transport of Joliet, Montana, was selected as the shipper for the pipe. RPK did in fact provide all of the shipping for the pipe, invoiced the cost, and was paid $348,950, by Tammy Leischner and James Howard Eastlick, Sr. doing business as T. Leischner Consulting.
Although a contract for the supply and delivery (shipping) of pipe was in place with Northwest Pipe, the pipe manufacturer, and a shipper—RPK Transport—had been selected to haul the pipe from Colorado to Montana, Belcourt awarded a separate shipping contract to T. Leischner Consulting on January 28, 2010, for $495,000.
In February 2010, Belcourt approved an advance payment of $165,000 (one-third of the contract price) in ARRA funds to the newly created business entity, T. Leischner Consulting. On March 1, 2010, James Howard Eastlick wire transferred $101,000 of the $165,000 deposit, to the bank account of MT Waterworks, a retail sales pipe supply company, at Yellowstone Bank in Billings. Like the T. Leischner account, the MT Waterworks account was newly created; created only two weeks earlier, on February 19, 2010, by Tony Belcourt and two business partners. The $101,000 wired from T. Leischner Consulting purchased a controlling financial interest in the enterprise for Belcourt, and the company relied on a “minority owned” status for preferential treatment in federal construction projects based on Belcourt’s tribal enrollment with the Chippewa Cree Tribe.
An invoice for services was created by T. Leischner Consulting and dated March 25, 2010, in the full amount of $495,000—even though it had already received a full one-third of the contract amount in February. Leischner presented this invoice to Northwest Pipe through the project’s procurement agent. Between March 26 and April 23, 2010, in a series of financial transactions, $495,000 in ARRA funds were provided to Leischner.
Shortly after the $495,000 was deposited on April 26 into Leischner’s account, James Eastlick Sr. wired $200,000 to the Chippewa Cree Rodeo Association account in Havre. One month later two checks were issued from the Rodeo account to Mark Leischner which totaled $133,000. That money was deposited into the Leischner’s personal account at Stockman Bank. Ten days after that deposit, on July 2, Tammy Leischner bought a $62,000 cashier’s check from Stockman Bank made payable to Hill County Title. That cashier’s check was used by Hailey Belcourt on July 7 to buy a residence in Box Elder, which the Belcourt’s used as a rental property.
Embezzlement from the Rodeo Account and Obstruction of a Grand Jury investigation
Mark Leischner plead guilty to assisting John Chance Houle, a tribal official and the President of the Chippewa Cree Rodeo Association (CCRA) embezzle funds from the rodeo association accounts by serving as a nominee vendor and then kicking money back to Houle and his brother-in-law, James Eastlick, Jr. and obstructing a Grand Jury investigation.
Beginning in 2009, Houle and Eastlick devised a scheme whereby they could embezzle funds from the rodeo association account using nominee vendors willing to kick-back a portion of the proceeds to Houle and Eastlick. In 2009, Mark Leischner received $135,000 in checks from Houle, and kicked-back to Eastlick approximately $53,000. Of the $135,000, according to the forensic investigation of Leischner’s bank accounts by case agents, only $33,750 was actually spent on saddles to be used for rodeo prizes. In June 2010, Houle wrote two rodeo association checks to Mark Leischner totaling $133,000. Of the $133,000, the investigation determined that approximately $16,000 was spent on rodeo prizes (i.e., saddles and belt buckles) and $62,000 was kicked-back to Belcourt for the purchase of a residence in Box Elder.
On March 19, 2013, a Grand Jury subpoena was issued ordering Mark Leischner to appear before the Grand Jury on April 3, 2013, and to produce certain documents relating to his contracts with the CCRA in 2009 and 2010. Between January and June of 2013, Houle, Eastlick, and the Leischners met between three and five times to discuss the manufacture of, and create, “back-up” documents that would satisfy investigators, and the Grand Jury, that the transactions were legitimate rodeo contract payments. On July 25, 2013, documents were provided by Leischner to the Grand Jury. Most were determined to be fabricated documents manufactured between January and June of 2013.
Bankruptcy Fraud and Federal Student Financial Aid Fraud
Brenden Leischner, son of Mark and Tammy Leischner, applied for admission and was accepted to the University of Great Falls (UGF) in the Fall of 2009 as a Criminal Justice major. As part of that process, the Leischners completed the first of several Free Application for Federal Student Aid (FAFSA) forms to qualify Brenden for federal student aid. Both Brenden and his parents provided information, on-line, in the completion and submission of the FAFSA. The Leischners received in excess of $1.1 million dollars into their accounts during the period of Brenden Leischner’s enrollment at UGF that was not declared on any application for federal student assistance. Mark and Tammy Leischner were sentenced for their guilty pleas to defrauding the U.S. Department of Education. Brenden Leischner was sentenced in December of 2014 to six months in custody and 5 years of probation for his role in the fraud.
On October 2, 2012, the Leischners filed for bankruptcy in U.S. Bankruptcy Court, Case No. 12-61597-RBK. On October 19 they filed their schedules in support of the petition. The Leischners did not reveal then, or at any time subsequent, the $165,000 from CCCC, the $495,000 from Northwest Pipe, or the $133,000 from the Rodeo Association. They also did not disclose the existence of the Stockman Bank account, which had been opened in May of 2010, or the Altana FCU account of T Consulting, through which the pipe-shipping contract payments, totaling $660,000, passed.
Tammy Leischner was sentenced on her plea of guilty to bankruptcy fraud.
Blackmail
On October 17, 2014, a letter from Tammy Leischner was delivered to Jim Eastlick Jr.s home addressed to his wife, which read, in part that “To the issue of the criminal charges, I have a handwriting expert highly accredited in state and federal courts, ........, who is prepared to write a report and testify to the fact the signatures on the contracts, are not James Eastlick Jrs' and are in fact [his wife’s]… As a direct result of your actions I am requesting damages of $ 595,000.00 dollars. If payment is received by November 7, 2014 I will wave my right to pursue a civil action, the criminal charges, and informing the federal judge. …If I am not successful trying to mitigate this by November 7, 2014 I will promptly file criminal charges with Joe Waller, inform Honorable Brian Morris, ….” Subsequent investigation verified that Tammy Leischner had sent the threatening letter.
Tammy Leischner plead guilty to a charge of blackmail and was sentenced today for that offense.
Because there is no parole in the federal system, the “truth in sentencing” guidelines mandate that the Leischners will likely serve all of the time imposed by the court. In the federal system, defendants do have the opportunity to earn a limited reduction in time served for “good behavior,” a reduction for good conduct while incarcerated will not exceed 15% of the overall sentence.
Laguna Pueblo Man Pleads Guilty to Assaulting his Intimate Partner by Strangulation and Attempted ManslaughterRead the Press Release
ALBUQUERQUE – Duane Day, 25, a member and resident of Laguna Pueblo, N.M., pleaded guilty in federal court in Albuquerque, N.M., this morning to an assault and attempted manslaughter charges arising out of the strangulation of his intimate partner.
Day was arrested on May 22, 2014, on a criminal complaint charging him with attempt to commit manslaughter, assault of an intimate partner by strangling, and child abuse. According to the complaint, on May 12, 2014, in Laguna Pueblo within Cibola County N.M., Day assaulted the victim, a Laguna Pueblo woman, by strangling her and causing her to lose consciousness. It further alleges that Day fled the scene of the assault with the victim’s two young children, an 11-month-old and a two-year-old, to a nearby mesa. The complaint further alleges that the victim suffered a severe stroke as a result of the strangulation which required her to undergo emergency brain surgery to relieve swelling and bleeding in the brain.
Day subsequently was indicted on June 11, 2014, and charged in with assaulting an intimate partner by strangling and suffocating; attempted manslaughter; and endangering the lives and health of two children.
During today’s proceedings, Day pled guilty to Counts 1 and 2 of the indictment. In entering his plea agreement, Day admitted that on May 12, 2014, he assaulted the victim by placing his knee on her neck and placing his hand over her mouth causing her to suffocate. Day acknowledged that he attempted to kill the victim by impeding the victim’s breathing to the point of her losing consciousness.
At sentencing Day faces a statutory maximum penalty of ten years in federal prison on the assault by strangulation charge and seven years in prison on the attempted manslaughter charge. Day remains detained pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Albuquerque office of the FBI, the Laguna/Acoma Agency of the BIA’s Office of Justice Services, and the Pueblo of Laguna Tribal Police Department. Assistant U.S. Attorney David Adams is prosecuting this case.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Knoxville Woman and Others Indicted for Operating “Pill Mills" in Knox and Adjacent CountiesRead the Press Release
KNOXVILLE, Tenn. - A federal grand jury in Knoxville has returned indictments charging multiple individuals for their roles in the proliferation of several “pill mills” in Knox and adjacent counties over the past few years. The primary defendant in the investigation, Sylvia Hoffstetter, 51, of Knoxville, is charged with conspiring with other pain clinic operators or sponsors of pill shopping organizations to distribute oxycodone, and to launder the proceeds generated by those clinics.
Hoffstetter, who was arraigned on Mar. 10, 2015, before U. S. Magistrate Judge C. Clifford Shirley, Jr., is accused of being responsible for the distribution of a quantity of oxycodone sufficient to generate clinic revenue of at least $17.5M between April 2011 and March 2015. She was ordered to be jailed upon the government’s motion until a detention hearing is conducted on Friday, Mar. 13, 2015. Several others were arrested on Tuesday and made their initial appearances before the court. Other arrests are pending.
If convicted as charged, each defendant faces up to 20 years in prison and a fine of up to $1M on the drug trafficking charge and up to another 20 years and a fine of up to $500,000 on the money laundering charges. There is no parole in the federal system.
U.S. Attorney William C. Killian and FBI Special Agent in Charge (SAC) Edward Reinhold announced that this indictment is the result of an investigation by the FBI High Intensity Drug Trafficking Area (HIDTA). The FBI HIDTA is composed of FBI special agents and investigators assigned to the task force by Blount County Sheriff James Berrong, Clinton Police Chief Rick Scarborough, Harriman Police Chief Randy Heidle, Knox County Sheriff Jimmy “J. J.” Jones, Knoxville Police Chief David Rausch, Loudon County Sheriff Tim Guider, and Roane County Sheriff Jack Stockton. SAC Reinhold also expressed his appreciation to Jefferson County Sheriff Bud McCoig and Kingston Police Chief Jim Washam for providing assistance in the arrests of some of these defendants.
Assistant U.S. Attorneys Tracy L. Stone and Anne-Marie Svolto will represent the United States in the prosecution of these cases.
Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until his or her guilt has been proven beyond a reasonable doubt.
The HIDTA program enhances and coordinates drug control efforts among local, state, and federal law enforcement agencies. The program provides agencies with coordination, equipment, technology, and additional resources to combat drug trafficking and its harmful consequences in critical regions of the United States. In the Eastern District of Tennessee, HIDTA funds DEA and FBI led drug task forces in Johnson City, Knoxville, and Chattanooga, as well other initiatives to reduce drug crime in the HIDTA. For more information please visit www.whitehouse.gov/ondcp/high-intensity-drug-trafficking-areas-program .
The investigation is also part of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (“OCDETF”) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Joint Statement from the Justice Department and the Office of the Director of National Intelligence on the Declassification of Renewal of Collection Under Section 501 of the Foreign Intelligence Surveillance ActRead the Press Release
On Feb. 27, 2015, the Director of National Intelligence declassified and disclosed publicly that the U.S. government had filed an application with the Foreign Intelligence Surveillance Court seeking renewal of the authority to collect telephony metadata in bulk, and that the FISC renewed that authority.
The FISC's Feb. 26, 2015, Primary Order renewing the collection expires on June 1, 2015. The DNI also announced that the Administration was undertaking a declassification review of the Feb. 26, 2015, Primary Order. Following this review by the Executive Branch, the ODNI has released in redacted form the Feb. 26, 2015, Primary Order, signed by Judge James E. Boasberg.
This order is now publicly available at the ODNI website, dni.gov, and the ODNI's public website dedicated to fostering greater public visibility into the intelligence activities of the Government, www.icontherecord.tumblr.com.
Primary Order Renewing Collection
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney’s Office announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Judge Johnston in Great Falls on March 10, 2015, and entering pleas of Not Guilty were:
- WYATT CAMERON MONTCLAIR, a 20-year-old resident of Poplar, appeared on charges of involuntary manslaughter. If convicted of the charge contained in the indictment, MONTCLAIR faces 8 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation and the Fort Peck Tribes Department of Law and Justice. PACER Case Reference: 15-21
- BRANDON LEE ROMERO, a 20-year-old resident of Poplar, appeared on charges of burglary and assault resulting in serious bodily injury. If convicted of the most serious charge contained in the indictment, ROMERO faces 20 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Fort Peck Tribes Department of Law and Justice. PACER Case Reference: 15-19
- JENNIFER RAE SALAZAR, a 28-year-old resident of Washington, appeared on charges of conspiracy to possess with intent to distribute methamphetamine and possession with intent to distribute methamphetamine. If convicted of the most serious charge contained in the indictment, SALAZAR faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference: 14-39
Appearing before U.S. Magistrate Judge Ostby in Billings on March 9, 2015, and entering pleas of Not Guilty were:
- DANNY LEWIS FROST, a 61-year-old resident of Billings, appeared on charges of conspiracy to possess with intent to distribute and to distribute methamphetamine and possession with intent to distribute methamphetamine. If convicted of the most serious charge contained in the indictment, FROST faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by the Drug Enforcement Administration and the Montana Division of Criminal Investigation. PACER Case Reference: 15-18
- PATRICK CLEARY HECK, a 54-year-old resident of Sidney, appeared on charges of failure to register as a sexual offender. If convicted of the charge contained in the indictment, HECK faces 10 years in prison, $250,000 in fines and lifetime supervised release. The case was investigated by the United States Marshals Service. PACER Case Reference: 15-18
Appearing before U.S. Magistrate Judge Lynch in Missoula on March 5, 2015, and entering pleas of Not Guilty were:
- SPENCER ROBERT RICE, a 28-year-old resident of Belgrade, appeared on charges of receipt of child pornography. If convicted of the most serious charge contained in the indictment, RICE faces 20 years in prison, $250,000 in fines and lifetime supervised release. The case was investigated by the Internet Crimes Against Children Task Force and the Bozeman Police Department. PACER Case Reference: 15-15
Appearing before U.S. Magistrate Judge Johnston in Great Falls on March 5, 2015, and entering pleas of Not Guilty were:
- MELISSA ANN BOUTWELL, a 31-year-old resident of Great Falls, appeared on charges of false statement in connection with purchase of a firearm and false declaration before grand jury. If convicted of the most serious charge contained in the indictment, BOUTWELL faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the United States Marshals Service. PACER Case Reference: 15-18
Appearing before U.S. Magistrate Judge Johnston in Great Falls on March 3, 2015, and entering pleas of Not Guilty were:
- DONELLE PARKER, a 43-year-old resident of Wolf Point, appeared on charges of robbery. If convicted of the charge contained in the indictment, PARKER faces 20 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by Fort Peck Tribes Department of Law and Justice. PACER Case Reference: 15-02
- OLYN PAYNE, a 35-year-old resident of Wolf Point, appeared on charges of robbery. If convicted of the charge contained in the indictment, PAYNE faces 20 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by Fort Peck Tribes Department of Law and Justice. PACER Case Reference: 15-02
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Indictment: Three Defendants Kidnapped and Killed Junction WomanRead the Press Release
TOPEKA, KAN. – Three people were indicted Wednesday on federal charges of kidnapping and killing a Junction City woman, U.S. Attorney Barry Grissom said. Grissom said his office is prosecuting the case jointly with the Geary County Attorney in federal court.
The body of Amanda Clemons, 24, of Junction City, was found in February 2014 in Geary County, Kan.
Charged with one count of kidnapping resulting in death are:
Larry L. Anderson, 26, who is being held in the Geary County Jail.
Marryssa M. Middleton, 23, who is being held in the Geary County Jail.
Drexel A. Woody, 24, who is being held in the Geary County Jail.
The indictment alleges that on Feb. 7, 2014, the defendants kidnapped the victim and held her on the Fort Riley military installation. While they were holding her they killed her.
If convicted, they face a maximum penalty of life in federal prison without parole. The Junction City Police Department, the Grandview Plaza Police Department, the Geary County Sheriff’s Office, the Riley County Police Department, the Fort Riley Criminal Investigation Division and the FBI investigated. Assistant U.S. Attorney Jared Maag, Assistant U.S. Attorney Tony Mattivi and Geary County Attorney Steven Opat are prosecuting.
OTHER INDICTMENTS
Frederick L. Sanders, 43, Topeka, Kan., is charged with one count of unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred Jan. 30, 2015, in Shawnee County, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Tony Mattivi is prosecuting.
Luis Guadalupe Leon-Aceves, 44, Cavroca, Mexico, is charged with one count of possession with intent to distribute methamphetamine. The crime is alleged to have occurred March 8, 2015, in Sedgwick County, Kan.
If convicted, he faces a penalty of not less than 10 years in federal prison and a fine up to $10 million. The Drug Enforcement Administration investigated. Special Assistant U.S. Attorney Michelle Jacobs is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Honduran Man Charged with Illegal ReentryRead the Press Release
A federal grand jury returned an indictment charging Selvis Velazquez-Villanueva, a 28 year-old Honduran citizen, for entering the United States illegally after previously being deported.
Velazquez-Villanueva, who entered the United States through Mexico after being deported in 2007, was found in Lorain, Ohio, during a traffic stop, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that Velazquez-Villanueva had unlawfully reentered the United States after being previously deported on May 16, 2007.
Assistant United States Attorney Karrie D. Howard is prosecuting the case, following an investigation by the United States Border Patrol, Department of Homeland Security.
If convicted, the Court will determine the defendant’s sentence after a review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum. In most cases, it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Gretna Man Pleads Guilty to Conspiracy to Commit Bank FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that DAVID DELANEY, age 57, of Gretna, pled guilty today to conspiracy to commit bank fraud.
According to court documents, DELANEY, who worked as a technician for A & H Armature Works, Inc., embezzled from the company’s bank account at First American Bank. DELANEY conspired with another to steal from A & H Armature Works, Inc. by using PayPal and American Express accounts to transfer the funds.
DELANEY faces a maximum term of imprisonment of five years, a fine of $250,000 and three years of supervised release following any term of imprisonment. U.S. District Judge Helen G. Berrigan set sentencing for June 17, 2015.
U.S. Attorney Polite praised the work of the United States Secret Service, New Orleans Field Division in investigating this matter. Assistant United States Attorney Loan "Mimi" Nguyen is in charge of the prosecution.
Glenview Real Estate Broker Sentenced to 40 Months in Federal Prison for $4.2 Million Investor FraudRead the Press Release
CHICAGO — A former managing director of Panorama Global Partners, LLC, a company that falsely purported to trade in certain financial instruments, was sentenced today to 40 months in federal prison for fraudulently obtaining approximately $4.2 million in investor funds and for misappropriating approximately $3.9 million of those funds.
The defendant, RICHARD DEMARIA, 45, of Glenview, was also ordered to pay $3.9 million in restitution by U.S. District Judge Robert W. Gettleman. DeMaria, who pleaded guilty in December 2013, was ordered to surrender to begin serving his sentence on May 19.
Before imposing the sentence, Judge Gettleman stated that the sentence he imposed sent a message that “there will be a price to pay for” investor fraud.
DeMaria admitted that between approximately August 2008 and January 2009, he and a business associate fraudulently obtained approximately $4.2 million from victim investors, by falsely telling victim investors that their money would be used to lease and trade certain financial instruments DeMaria did not plan to, and did not use most of the investor money for the promised purpose, but rather misappropriated the money. In addition, as DeMaria soon learned, neither he nor his business associate had the ability to lease or trade these instruments. DeMaria used at least $3.9 million of investor money for other purposes, including $90,000 on an Aston Martin for a business associate and $600,000 on an Indiana home for another business associate. DeMaria also used approximately $70,000 of investor funds for construction on his ex-wife’s Evanston home and almost $2 million on business expenses related to DeMaria’s struggling real estate development business.
DeMaria entered into so-called “Subscription Agreements” with victim investors, on behalf of Panorama Global Partners, LLC, in which he promised to use their funds to purchase financial instruments. When victim investors asked for a return of their investment, DeMaria lied to them, saying that he had invested the money, when in fact he had misappropriated it.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Federal Bureau of Investigation in Chicago. The government was assisted by the Securities and Exchange Commission.
The government was represented by Assistant United States Attorney Shoshana Gillers.
Ghent, NY Man Pleads Guilty to Money Laundering ConspiracyRead the Press Release
ALBANY, NEW YORK – Michael Elcox, 43, of Ghent, New York, entered a plea of guilty today to conspiracy to launder money before United States District Judge Thomas J. McAvoy, announced United States Attorney Richard S. Hartunian and James J. Hunt, Special Agent in Charge of the Drug Enforcement Administration (DEA), New York Division.
Elcox admitted that he was involved in the illegal distribution of marijuana and conspired to launder the proceeds of that illegal marijuana distribution by routing money through bank accounts held by a co-conspirator and moving cash from New York to Florida. Federal agents seized more than $300,000 in cash, representing proceeds of Elcox’s illegal marijuana distribution, from locations in New York and Florida.
Sentencing is scheduled for July 13, 2015 in Albany. Elcox faces a maximum sentence of up to twenty years in prison, a fine of up to $500,000, and three years of supervised release following his release from prison.
The case was investigated by Special Agents of the DEA Albany District Office, New York Division, DEA Gainesville Resident Office, Miami Field Division and Internal Revenue Service–Criminal Investigations, New York Field Office, as well as the Columbia County Sherriff’s Department, as part of the DEA’s High Intensity Drug Trafficking Area Program. The case is being prosecuted by Assistant United States Attorney Wayne A. Myers.
Gaithersburg Man Sentenced to over 4 Years in Prison in Bank Fraud SchemeRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles, Jr. sentenced Phong Dinh Tran, a/k/a Randy Tran, age 40, of Gaithersburg, Maryland, today to 51 months in prison followed by three years of supervised release for conspiring to commit bank fraud arising from a scheme to use a straw purchaser to buy a liquor store. Judge Quarles also ordered Tran to pay restitution of $950,000.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Small Business Administration Inspector General Peggy E. Gustafson; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Acting Postal Inspector in Charge David M. McGinnis of the U.S. Postal Inspection Service - Washington Division.
According to his plea agreement, Tran created R&K Real Estate Investment, Inc. to buy Potomac Wine & Spirits, a liquor store in Hagerstown, Maryland. Tran was the majority and controlling owner of R& K, and another individual owned a minority interest. In May 2006, Tran and the minority shareholder signed agreements to buy the liquor store for $899,000 and the real estate that the store occupied for $400,000.
Tran sought Joon Park, a principal of Jade Capital & Investments, to broker a loan for the store’s purchase. Tran and Park discussed obtaining a loan at PNC Bank that was guaranteed by the U.S. Small Business Administration (SBA). Because Tran had significant debt from the purchase of residential properties, Park advised that Tran would not likely be approved for an SBA guaranteed loan.
Tran disclosed to Park that he could use a straw buyer for the loan. Tran and Park agreed that they would falsely represent to PNC that the straw buyer would own and operate the liquor store. Tran asked the straw buyer to apply for the loan and promised that he, Tran, would pay all the bills for the store and make the loan payments. At the settlement for the sale of the liquor store on September 29, 2006, the straw purchaser falsely represented to PNC that he was the president of R&K. The funds needed to close the transaction were provided by Tran, not the straw purchaser. PNC funded a loan of $950,000.
After the closing, Tran ran the liquor store. On January 22, 2007 Tran sold a 50% stake in the store to another individual for $380,000. During the sale, Tran represented to the individual that he owned 100% of the store. In 2007, Tran stopped making loan payments to PNC and the loan went into default.
In a separate case, Joon Park, a/k/a “Joon Pak,” and “Joon Paik,” age 44, of Falls Church, Virginia, previously pleaded guilty to his role in a bank fraud conspiracy arising from a scheme to fraudulently obtain numerous business loans guaranteed by the SBA, with resulting losses of over $100 million. Park submitted false SBA loan applications on behalf of his clients from 2003 to 2011. Judge Quarles sentenced Park on June 20, 2013 to 15 years in prison and ordered Park to pay a money judgment of $91,449,700.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the SBA-OIG, FBI and U.S. Postal Inspection Service for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Leo J. Wise and Sean Delaney, who prosecuted the case.
Franklin Man Sentenced to More Than 6 Years in Prison for Possessing Child PornographyRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that a Franklin man was sentenced to 78 months in prison on charges that he downloaded and stored images of child pornography onto a hard drive.
Tommie Joseph Beason, 37, of Franklin, La., was sentenced by U.S. District Judge Richard T. Haik on one count of possession of child pornography. He was also sentenced to five years of supervised release. According to evidence presented at the October 27, 2014 guilty plea, law enforcement agents detected Beason downloading child pornography. Law enforcement agents then searched Beason’s residence on June 3, 2014, and found 230 images and 88 videos of hardcore child pornography on an external hard drive. The illegal files included prepubescent child pornography with very young children and sadistic material.
Homeland Security Investigations and the Louisiana State Police conducted the investigation. Assistant U.S. Attorney John Luke Walker prosecuted the case.
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ 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 exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Attorney’s Office and the U.S. Department of Homeland Security/Homeland Security Investigations/Immigration & Customs Enforcement (ICE) encourage the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) DHS-2ICE. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online at www.ice.gov/exec/forms/hsi-tips/tips.asp. Tips may be submitted anonymously.
Four Serra Nissan Employees Plead Guilty to Auto Loan Fraud ConspiracyRead the Press Release
BIRMINGHAM -- Four former Serra Nissan employees charged in connection with a conspiracy at the Birmingham car dealership to fraudulently boost loan approvals and car sales pleaded guilty today in federal court, announced U.S. Attorney Joyce White Vance, IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot and FBI Special Agent in Charge Roger C. Stanton.
D. SCOTT BURTON, 36, of Odenville, MICHAEL J. WILKINSON, 56, of Moody, TERRY W. HENDERSON, 39, of Pleasant Grove, and ROLAND W. RILEY, 28, of Birmingham, entered their pleas before U.S. District Judge Virginia Emerson Hopkins. All eight defendants charged in the conspiracy to defraud financial institutions, Nissan North America and Serra Nissan customers between August 2010 and October 2013 by fraudulently increasing vehicle sales in order to boost personal profits have now pleaded guilty.
DWIGHT A. PERRY, 44, of Birmingham, and ABDUL ISLAM MUGHAL, 48, of Trussville, pleaded guilty last year, and GERALD R. SHEPARD, 56, of Pinson, and JEFFREY R. GREEN, 33, of Porterdale, Ga., pleaded guilty earlier this year. The eight defendants are scheduled for sentencing between May and July.
"Predatory practices in providing auto loans to people with credit problems or insufficient income is akin to the fraud in mortgage lending," Vance said. "We are engaged in rooting out this fraudulent activity that threatens consumer safety."
Mughal, Shepard, and Burton were sales managers at Serra Nissan, Green and Wilkinson were finance managers, and Perry, Henderson and Riley were salesmen. All eight have pleaded guilty to the conspiracy. In addition, Mughal also pleaded guilty to bank fraud, Shepard to bank fraud and filing a false federal income tax return, and Green to failure to file an individual tax return.
According to court records, the Serra Nissan employees involved in the conspiracy used various means to carry out their fraud and obtain auto loans that, otherwise, would not have been approved. Those means included the following:
• Creating or altering documents to submit to financial institutions to show inflated income for prospective buyers.
• Directing finance managers and salesmen to submit fraudulent documents to financial institutions to misrepresent proof of a customer's residency.
• Listing accessories not actually included on a vehicle so a financial institution would increase its loan amount. The defendants and others had a financial incentive to increase a loan amount in order to increase commissions paid to certain employees.
• Presenting straw buyers, who could qualify for a loan, to financial institutions when the actual buyer could not qualify.The maximum penalty for the conspiracy count is five years in prison and a $250,000 fine. The maximum penalty for bank fraud is 30 years in prison and a $1 million fine. The minimum penalty for aggravated identity theft is two years in prison.
The IRS and the FBI investigated the case, which Assistant U.S. Attorneys Amanda S. Wick and Robin Beardsley Mark are prosecuting.
Four Charged with Trafficking Heroin and Heroin Laced with FentanylRead 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 John Haak, 33, of Evans, NY, and Francis Tessina, 43, of Buffalo, NY, were arrested and charged by criminal complaint with distribution of heroin and conspiracy to distribute heroin. The charges carry a maximum penalty of 20 years in prison.
Assistant U.S. Attorney Frank T. Pimentel, who is handling the case, stated that according to the complaint, on February 28, 2015, law enforcement officers investigated the apparent heroin overdose of a man in Hamburg, NY. During the investigation, officers discovered a cellular telephone that belonged to the deceased individual. Text messages exchanged between the man and defendant Haak revealed that the man had received heroin from Haak shortly before his body was discovered.
Further investigation revealed that Haak delivered bags of heroin, purchased from defendant Tessina, to the deceased man late in the afternoon of February 28, 2015. The defendant also sent text messages to the man warning him to be careful with the heroin because Haak believed it contained fentanyl. The complaint also charges tessina alone of selling heroin on March 9, 2015.
The defendants made an initial appearance this morning before U.S. Magistrate Judge Jeremiah J. McCarthy. Defendant Haak was released on conditions and is due back in court on March 20, 2015 at 11:30 a.m. Defendant Tessina is being held pending a detention hearing on March 16, 2015 at 11:30 a.m.
The criminal complaint is the culmination of an investigation on the part of the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, the Hamburg Police Department, under the direction of Chief Michael Williams, and the Evan Police Department, under the direction of Chief Ernest Masullo.
In a separate case, a federal grand jury has indicted Trent Adair Hamilton, 33, of Lockport, NY, and Michael Paul Mitchell, 33, of Niagara Falls, NY, on a charge of conspiracy to possess with intent to distribute and to distribute heroin. Hamilton is also charged with possession with intent to distribute and to distribute heroin. Mitchell is facing an additional charge of possession with intent to distribute and to distribute crack cocaine. The charges carry a mandatory minimum sentence of five years in prison, a maximum of 40 years, and a $5,000,000 fine.
Hamilton and Mitchell were arraigned on March 10, 2015 before U.S. Magistrate Judge Jeremiah J. McCarthy. The defendants are being held pending a detention hearing on March 13, 2015 at 11:00 a.m.
The indictment is the result of an investigation on the part of the Niagara County Sheriff’s Department, under the direction of Sheriff James Voutour, the Lockport Police Department, under the direction of Chief Larry Eggert, the Niagara Falls Police Department, under the direction of Chief Bryan DalPorto, the North Tonawanda Police Department, under the direction Chief Randy Szukala, the New York State Police, under the direction of Major Michael Cerretto, and the New York State Attorney General’s Office, under the direction of Eric Schneiderman.
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.
Former U.S. Air Force Captain Pleads Guilty to Violating Conflict of Interest Laws and Making a False StatementRead the Press Release
A former Captain in the U.S. Air Force (USAF) who served in 2010 as a U.S. military contracting officer in Afghanistan, pleaded guilty yesterday to violating restrictions on post-government employment and making a false statement to law enforcement agents, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kevin W. Techau of the Northern District of Iowa.
Adam J.J. Pudenz, 35, of Carroll, Iowa, pleaded guilty to willfully violating federal conflict-of-interest laws stemming from his post-government employment with an Afghan company that contracted with the U.S. military and to making a false statement to federal law enforcement agents. The guilty plea was entered before U.S. Magistrate Judge Leonard T. Strand of the Northern District of Iowa. In addition to his guilty plea, Pudenz agreed in a separate civil action to surrender his Iowa residence, which he purchased with money received from his unlawful employment, to the United States.
According to his plea agreement, Pudenz served as a contracting official at Camp Eggers, near Kabul, Afghanistan, in 2010. In that capacity, Pudenz admitted that he administered at least three major U.S. government contracts, all held by the same Afghan company, for the purchase of clothing and footwear for Afghan National Security Forces (ANSF).
Pudenz admitted that prior to departing Afghanistan in December 2010, he began negotiating his future employment with the same Afghan company that held the contracts he administered, a fact that he later lied about during a subsequent law enforcement investigation. In his new position with the Afghan company, Pudenz admitted that he violated the conflict of interest laws by returning to Afghanistan and lobbying U.S. government officials on matters directly related to the same contracts he had previously administered.
This case is being and investigated by the FBI, the Defense Criminal Investigative Service, the Special Inspector General for Afghanistan Reconstruction and U.S. Army Criminal Investigation Command (CID). The case is being prosecuted by Trial Attorney Wade Weems of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Richard L. Murphy of the Northern District of Iowa.
Former U.S. Air Force Captain Pleads Guilty to Violating Conflict of Interest Laws and Making a False StatementRead the Press Release
SIOUX CITY – A former Captain in the U.S. Air Force (USAF) who served in 2010 as a U.S. military contracting officer in Afghanistan, pleaded guilty yesterday to violating restrictions on post-government employment and making a false statement to law enforcement agents, announced U.S. Attorney Kevin W. Techau of the Northern District of Iowa and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.
Adam J.J. Pudenz, 35, of Carroll, Iowa, pleaded guilty to willfully violating federal conflict-of-interest laws stemming from his post-government employment with an Afghan company that contracted with the U.S. military and to making a false statement to federal law enforcement agents. The guilty plea was entered before U.S. Magistrate Judge Leonard T. Strand of the Northern District of Iowa. In addition to his guilty plea, Pudenz agreed in a separate civil action to surrender his Iowa residence, which he purchased with money received from his unlawful employment, to the United States.
According to his plea agreement, Pudenz served as a contracting official at Camp Eggers, near Kabul, Afghanistan, in 2010. In that capacity, Pudenz admitted that he administered at least three major U.S. government contracts, all held by the same Afghan company, for the purchase of clothing and footwear for Afghan National Security Forces (ANSF).
Pudenz admitted that prior to departing Afghanistan in December 2010, he began negotiating his future employment with the same Afghan company that held the contracts he administered, a fact that he later lied about during a subsequent law enforcement investigation. In his new position with the Afghan company, Pudenz admitted that he violated the conflict of interest laws by returning to Afghanistan and lobbying U.S. government officials on matters directly related to the same contracts he had previously administered.
This case is being and investigated by the FBI, the Defense Criminal Investigative Service, the Special Inspector General for Afghanistan Reconstruction, and U.S. Army Criminal Investigation Command (CID). The case is being prosecuted by Trial Attorney Wade Weems of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Richard L. Murphy of the Northern District of Iowa.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-3008.
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Former Programmer Pleads Guilty to Stealing Software Code from Federal Reserve BankRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former software programmer for the Federal Reserve Bank of Kansas City pleaded guilty in federal court today to stealing software code.
Hamid Reza Tahmasebi, 54, of Leawood, Kan., waived his right to a grand jury and pleaded guilty before U.S. District Judge Beth Phillips to a federal information that charges him with theft of government property.
Tahmasebi worked as a lead programmer for the Federal Reserve from Oct. 16, 2012, to Feb. 7, 2014. Tahmasebi admitted that, during his last week of employment, he e-mailed sensitive information to his personal e-mail accounts. Tahmasebi also admitted that he uploaded large amounts of sensitive information to his private Google Drive on-line storage account.
Tahmasebi admitted that he uploaded software code he was working on for the Federal Reserve to his Google Drive account. This software code was developed by the Federal Reserve as part of its role as the fiscal agent for the U.S. Treasury Department. The code taken by Tahmasebi was proprietary and owned by the Treasury Department.
The Federal Reserve, following Tahmasebi’s theft, launched an incident response and investigation along with an extensive code review to ensure its security. Tahmasebi acknowledged in today’s plea agreement that he owes restitution to the Federal Reserve to compensate for the cost of those actions, which the government believes totaled $246,433.
Under the terms of today’s plea agreement, Tahmasebi must pay restitution to the Federal Reserve Bank and a sentence of five years of probation is jointly recommended. A sentencing hearing is scheduled for July 2015.
This case is being prosecuted by Assistant U.S. Attorney Matthew P. Wolesky. It was investigated by the FBI.
Former Private School Coach Facing Indictment Returned to U.S. for ArraignmentRead the Press Release
The former cross country ski coach at a Seattle private school was returned to the U.S. today to appear for arraignment on his indictment on five child pornography related offenses, announced Acting U.S. Attorney Annette L. Hayes. JASON CHRISTOPHER PAUR, 44, of Seattle was arrested by the Royal Canadian Mounted Police in December 2013 at Silver Star ski area in British Columbia, Canada. The arrest came after female students on a school sponsored field trip discovered a video camera had been hidden in their bedroom. The camera had been positioned to video-tape the students while they got dressed after showering. PAUR was immediately removed from the field trip by the chaperones who notified police. PAUR was fired by the school, which has fully cooperated with law enforcement. PAUR is charged with two counts of Production and Transportation of Child Pornography, Production of Child Pornography with Intent to Transport, Possession of Child Pornography and Transportation of Minors with Intent to Engage in Criminal Sexual Activity. PAUR was turned over to U.S. authorities today and will make his initial appearance in U.S. District Court in Seattle tomorrow at 2:00.
According to records in the case and the indictment, the investigation revealed that PAUR had also secretly recorded students while on the annual field trip in 2011 and 2012. The camera seized in Canada contained images, taken in 2013, of students between the ages of 14 and 17 being secretly filmed while changing clothes or after exiting the shower. The indictment alleges PAUR used the pictures for his own sexual gratification, and transported the pictures from Canada to the U.S. The indictment further alleges that PAUR traveled with the juveniles to Canada with the intent to film them for his own sexual gratification.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI). The case is being prosecuted by Assistant United States Attorney Kate Vaughan.
Former Owner and Employees of Brentwood Based Melanocorp, Inc. Plead Guilty to Federal ChargesRead the Press Release
Company Marketed and Sold Injectable Tanning Product Without FDA Approval
Edward Manookian, 63, of Hendersonville, Tenn., and former owner and President of Melanacorp, Inc., pleaded guilty today to one count of conspiring to defraud the U.S. Food and Drug Administration (“FDA”) and to one count of conspiring to smuggle goods from the United States in violation of the Food, Drug, and Cosmetic Act (“FDCA”), announced David Rivera, United States Attorney for the Middle District of Tennessee.
“The consuming public relies heavily on the FDA’s authority to require products to be properly manufactured, labeled and rendered safe for use,” said U.S. Attorney David Rivera. “The defendants in this case blatantly disregarded the FDA’s orders and direction and placed their desire for ill-gotten profits above the safety of the public. The U.S. Attorney’s Office will continue to work with our regulatory partners to ensure the safety of our citizens and to bring those to justice who circumvent the safety of the public for profit.”
In a plea hearing before U.S. District Judge Todd J. Campbell, Manookian admitted that Melanocorp sold Melanotan II (“MII”), a drug that had not been approved by the FDA. Melanocorp marketed and advertised MII as an injectable tanning product and claimed that MII could reduce skin cancer rates. In August 2007 the FDA warned Melanocorp that MII could not be distributed without FDA approval, however, despite the FDA warning and at Manookian’s direction, Melanocorp continued to sell MII both domestically and abroad until April 2009. Following receipt of the FDA warning letter, Melanocorp sold more than $929,000 worth of MII.Manookian also admitted that Melanocorp advertised its MII as being manufactured in the United States, despite the fact that Melanocorp sold MII that had been imported from China. Manookian also admitted that Melanocorp employees routinely mislabeled the contents of packages containing MII in an effort to avoid detection by U.S.Customs officials.
"When individuals, like the defendants in this case, defraud consumers by disguising the true nature of their products, they not only circumvent FDA’s regulatory authority, they also place consumers’ health in jeopardy," said George M. Karavetsos, Director, FDA Office of Criminal Investigations.“By willfully mislabeling products and knowingly selling unapproved drugs the defendants placed illegal profit over the health and safety of law-abiding citizens,” said Acting Special Agent in Charge of HSI New Orleans Cindy M. Johnson. “Counterfeit drugs and cosmetics are a particular danger to the public because of the potential to ingest harmful substances, and HSI will continue to work with its federal, state and local law enforcement partners to keep these potentially dangerous items off the street.” Johnson oversees a five-state area of responsibility including Tennessee, Arkansas, Alabama, Louisiana and Mississippi.
Manookian is scheduled to be sentenced by Judge Campbell on June 26, 2015. He faces up to five years in prison and a fine of up to $250,000 on each count.
In addition, two other former employees of Melanocorp pleaded guilty today in a hearing before Judge Campbell. Brian Manookian, 34, of Nashville, and Karen Manookian, 31, of New York City, each pleaded guilty to one count of violating the FDCA by distributing MII in interstate commerce. Brian and Karen Manookian are scheduled to be sentenced by Judge Campbell on June 19, 2015. Each faces up to one year in prison.
This case was investigated by the FDA- Office of Criminal Investigations and the Department of Homeland Security, Homeland Security Investigations. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
Former Oklahoma Jail Superintendent and Assistant Superintendent Sentenced for Excessive Force Against InmatesRead the Press Release
Raymond A. Barnes, 44, and Christopher A. Brown, 33, the former jail superintendent and assistant jail superintendent, respectively, of the Muskogee County Jail (MCJ) were sentenced in federal court today on multiple counts of civil rights offenses related to allegations of excessive force on inmates at MCJ on or between August 2009 and May 2011. Brown was also convicted of making material false statements to the FBI. Barnes was sentenced to one year and one day imprisonment followed by two years supervised release, and Brown was sentenced to six months imprisonment followed by three years supervised release.
On Feb. 25, 2014, a federal jury convicted both Barnes and Brown of conspiring to violate the rights of inmates housed at MCJ by assaulting inmates themselves or by directing other jailers employed by MCJ to do so. Specifically, the defendants did or caused the following to be done: unjustifiably strike, assault, harm and physically punish inmates at MCJ who were restrained, compliant and not posing a physical threat; organize “meet and greets,” whereby jailers would scare, punish and harm incoming inmates from neighboring counties by throwing and slamming the handcuffed inmates to the ground upon their arrival at MCJ; threaten to fire MCJ employees if they reported abusive behavior directly to the sheriff or to outside law enforcement authorities; require and encourage MCJ jailers to write incident reports that falsely justified uses of force and contained misleading or inaccurate accounts of what had occurred when force was used; and perpetuate an environment within MCJ that allowed unlawful beatings and assaults against inmates to continue indefinitely and without consequence.
Both defendants were also found guilty of violating the rights of an inmate identified as J.R. when both defendants slammed and threw J.R. head-first to the ground while he was handcuffed. Barnes was additionally convicted of violating the rights of a second inmate, G.T., for similar conduct. Brown was acquitted of violating the rights of G.T.
In addition, Brown was convicted of one count of making material false statements to the FBI. Brown falsely claimed that, during meet and greets, the incoming inmate was ordered out of the transport vehicle and then “gently placed” on the ground. But in fact, Brown knew at the time of his statement to the FBI that during these meet and greets the MCJ jailers routinely threw and slammed inmates to the ground even though the inmates were restrained and posed no physical threat.
“The Department of Justice will not hesitate to prosecute corrections officers who violate their oath and abuse those who are entrusted to their custody,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “The convictions and sentences in this case make clear that the department will vigorously enforce the civil rights laws.”
This case was investigated by the Muskogee Resident Agency of the Oklahoma City Division of the FBI and prosecuted by Trial Attorneys Fara Gold and Dana Mulhauser of the Civil Rights Division.
Former Minneapolis School Cook Sentenced to 30 Months in Prison for Acting as Straw Purchaser for Convicted FelonRead the Press Release
Angela Carter Purchased Two Handguns and Knowingly Lied on ATF FormsUnited States Attorney Andrew M. Luger today announced the sentencing of ANGELA CARTER, 33, to 30 months in federal prison for acting as a straw purchaser of two handguns. CARTER was indicted on May 12, 2014, and pleaded guilty on July 28, 2014, to one count of Causing a False Statement to be Maintained in the Records of a Federal Firearms Licensee. The defendant was sentenced on March 10, 2015, before Judge John R. Tunheim in U.S. District Court in Minneapolis, Minn.
According to the defendant’s guilty plea, documents filed in court and statements made on the record in court, on January 21, 2014, Carter bought a Ruger 9mm semi-automatic pistol for $355 from Bill’s Gun Shop in Robbinsdale, Minn. On February 7, 2014, Carter again went to Bill’s Gun Shop and bought a Glock .40 caliber semi-automatic pistol, a 15 round magazine, and 2 boxes of ammunition for $740. When purchasing both handguns, Carter listed an incorrect address on the Bureau of Alcohol, Tobacco, Firearms, and Explosives Form 4473. Carter had moved from that address several months earlier.
According to the defendant’s guilty plea, documents filed in court and statements made on the record in court, both guns, which were fully loaded, were seized on February 10, 2014, during a traffic stop of Carter’s car. At the time, police also seized a Glock 9mm semi-automatic pistol with a fully loaded 33 road magazine. Carter purchased both guns to give to a co-defendant, Keniko Bland, who was prohibited by law from possessing firearms because he had pending charges in Hennepin County for Terroristic Threats. Bland was previously sentenced on December 18, 2014, to 57 months in custody.
This case is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Minneapolis Police Department.
This case was prosecuted by Assistant U.S. Attorney Carol Kayser.
Defendant Information: ANGELA CARTER, 33
Minneapolis, Minn.
Convicted: • Causing a False Statement to be Maintained in the Records of a Federal Firearms Licensee, 1 count
Sentenced: • 30 months in prison
• 3 years supervised releaseFederal Judge Sentences Last of Four Crystal Methamphetamine Traffickers to PrisonRead the Press Release
ASHEVILLE, N.C. – On Tuesday, March 10, 2015, U.S. District Judge Martin Reidinger sentenced Joshua Warner Kamp to 33 months in prison for his role in a crystal methamphetamine trafficking ring, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Kamp, 35, of Alexander, N.C. was also sentenced to four years of supervised release following his prison term. Kamp pleaded guilty in January 2015 to conspiracy to distribute and to possess with intent to distribute methamphetamine.
Kamp’s three codefendants were previously sentenced as follows: Mario Oliver Perez-Sanchez, 30, of Atlanta, Ga. was sentenced to 151 months in prison; Gerardo Moteil Diaz, 29, of Leicester, N.C. was sentenced to 87 months; and Debbie Ollis Webb, 58, of Leicester, N.C. was sentenced to 57 months in prison. They each pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute methamphetamine and were also ordered to five years of supervised release following their release from prison.
Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; Sheriff Van Duncan of the Buncombe County Sheriff’s Office (BCSO); and Lt. John Elkins of the Buncombe County Anti-Crime Task Force (BCAT) join Acting U.S. Attorney Rose in making today’s announcement.
According to court documents and court proceedings, from in or about April 2013 through October 2013, Perez acted as an Atlanta, Ga. based methamphetamine source of supply, moving large quantities of methamphetamine between Georgia, South Carolina and North Carolina. Court records show that Diaz assisted Perez in his North Carolina narcotics trafficking. According to court records, Kamp and Webb bought the methamphetamine from Perez and Diaz, and then sold it in Buncombe County and elsewhere. Over the course of the investigation, law enforcement seized approximately 21 ounces of methamphetamine, $10,876 in U.S. currency and one firearm.
Kamp will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
ATF, BCSO and BCAT investigated the case. The prosecutions were handled by Assistant U.S. Attorney Thomas Kent of the U.S. Attorney’s Office in Asheville.