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6 March 2015
District Man Sentenced to 22 Years in Prison for Killing Man Outside Barber Shop Murder Was Among a Series of Violent Crimes Committed by DefendantRead the Press Release
WASHINGTON - Christopher Holmes, 23, of Washington, D.C., was sentenced today to 22 years in prison for killing a man in 2008 after a confrontation at a Southeast Washington barber shop, U.S. Attorney Ronald C. Machen Jr. announced.
Holmes was found guilty by a jury last month of second-degree murder while armed and possession of a firearm during a crime of violence. The verdict followed a trial in the Superior Court of the District of Columbia. He was sentenced by the Honorable Rhonda Reid Winston. Following his prison term, Holmes will be placed on five years of supervised release.
According to the government’s evidence at trial, on the afternoon of Oct. 29, 2008, Holmes walked into the Classic Kutz barbershop, located in the 3200 block of 22nd Street SE. The barber shop was crowded that day, with children getting their hair cut, adults waiting for a trim, the barbers, and people like David Tucker, who were merely hanging around.
Mr. Tucker, 37, made a comment to Holmes to the effect of, “There’s no one in here for you to rob,” which appeared to be a reference to the fact that Holmes had robbed Mr. Tucker’s childhood friend a few weeks earlier. The argument spilled out into the street, where Holmes pulled out a .40-caliber semi-automatic pistol and pointed it at Mr. Tucker. Mr. Tucker said to Holmes, “What are you going to do? Shoot me in broad daylight?” Holmes then shot Mr. Tucker once in the chest. Mr. Tucker staggered back into the barber shop and collapsed. He died a few moments later. Holmes, meanwhile, fled the scene.
The murder was among a series of crimes committed by Holmes during a 30-day period. Five days before he killed Mr. Tucker, he committed an armed carjacking. A few weeks later, he shot and wounded another man. Holmes, whose nickname was “Barbeast,” earlier was convicted in both of those cases and is serving prison time for those offenses.
In announcing the sentence, U.S. Attorney Machen praised the work of the detectives and officers who investigated the case for the Metropolitan Police Department. He also acknowledged the efforts of those who worked on the case for the U.S. Attorney’s Office, including Paralegal Specialist Mia Beamon, Litigation Technology Specialist Leif Hickling, and Victim/Witness Advocates Michael Hailey and Marcia Rinker. Finally, he commended former Assistant U.S. Attorney Jonathan Kravis and Department of Justice Trial Attorney Edward Sullivan, who prosecuted the case, and former Assistant U.S. Attorneys Melinda Williams and Amanda Haines, who investigated the case.
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Detroit One Collaboration Leads to Additional Arrests and Indictments of Violent Gang Members in Southwest DetroitRead the Press Release
Three alleged members of the Latin Counts violent street gang were charged by a federal grand jury today with murder occurring in southwest Detroit, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement were Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Division and Chief James Craig, Detroit Police Department.
The charges were added to a pending indictment charging nine other individuals with crimes including assault, murder, selling illegal narcotics and stolen firearms, breaking and entering into residential homes and businesses and robbery.
The case was investigated by the Detroit One partnership of federal, state and local law enforcement agencies.
The new charges allege that multiple members of Latin Counts shot two men, killing one of the victims in August of 2013.
The gang allegedly operates in southwest Detroit, Lincoln Park and Ecorse. According to the indictment, the gang actively uses violence to stake out its “turf” and intimidate rival gang members and the residents of southwest Detroit.
Several incidents of violence were charged in a five-count indictment against seven Latin Count gang members in August. The most serious of these incidents involved the killing of a man at the Big Apple Market in southwest Detroit on April 18, 2014. According to that indictment, several Latin Count members jumped out of vehicles and assaulted the victim until one member shot and killed him.Under the Detroit One Initiative, and through the lead efforts of the Detroit Police Department and the FBI Violent Crime Task Force, which consists of representatives of Homeland Security Investigations, Detroit Police Department, Lincoln Park Police Department, Michigan Department of Corrections and Michigan State Police, investigators were able to bring together separate probes into various members of this organization and its activities into one encompassing investigation. Through this collaborative effort, law enforcement has been able to identify members of this organization and charge a total of fourteen individuals in multiple indictments in federal court.
"The Detroit One partnership has dealt a strong blow to the Latin Counts," McQuade said. "Removing violent street gangs from our neighborhoods is important to improving public safety."
Among those charged today are:
- Jonathan Estrada, 25, of Lincoln Park, charged with murder in aid of racketeering, use and carry of a firearm in furtherance of a crime of violence causing death, use and carry of a firearm in furtherance of a crime of violence, and assault with a dangerous weapon in aid of racketeering;
- Jesus Rodriguez, 21, of Lincoln Park, charged with murder in aid of racketeering, use and carry of a firearm in furtherance of a crime of violence causing death, use and carry of a firearm in furtherance of a crime of violence, and assault with a dangerous weapon in aid of racketeering;
- Angel Rodriguez, 21, of Lincoln Park, charged with murder in aid of racketeering, use and carry of a firearm in furtherance of a crime of violence causing death, use and carry of a firearm in furtherance of a crime of violence, and assault with a dangerous weapon in aid of racketeering; and
- Kyle Voltz, 25, of Lincoln Park, charged with murder in aid of racketeering, use and carry of a firearm in furtherance of a crime of violence causing death, use and carry of a firearm in furtherance of a crime of violence, and assault with a dangerous weapon in aid of racketeering.
An indictment is only a charge and is not evidence of guilt. Every defendant is entitled to a fair trial in which it will be the government's burden to prove guilty beyond a reasonable doubt.
Detroit One is a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit. By working collaboratively, local, state and federal law enforcement officials are striving to maximize their ability to identify and arrest the individuals and groups initiating the violence in Detroit.
Detroit Man Indicted for Evasion of Payment of Income Tax Due, Filing False Income Tax Returns and Bankruptcy FraudRead the Press Release
A Detroit man was arraigned today on charges of tax evasion and bankruptcy fraud, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Jarod J. Koopman, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division.
Steven Pittman was charged with one count of federal income tax evasion, two counts of filing false tax returns and seven counts of bankruptcy fraud.
According to the indictment, from 2003 through 2006, Pittman worked for Direct Internet Consulting as a contract salesman providing internet cable services to the Detroit Public School district (DPS), the Detroit Medical Center and others. In mid-2007, Pittman filed Forms 1040, U.S. Individual Income Tax returns for the years 2003 and 2006, reporting tax due and owing of approximately $70,000. Pittman did not include payment of this tax liability with the returns.
When the Internal Revenue Service initiated collection efforts in early 2008, Pittman began to take steps to evade the payment of his outstanding federal tax liability. In April 2008, Pittman filed documents with the State of Michigan, forming an entity named Metrotech Solution Services, LLC (Metrotech), with the signature of “Rodman Edmons” as the Organizer and Resident Agent. Around the same time, Pittman also opened a bank account in the name of Metrotech, and over the course of that year deposited more than $150,000 into the account. Most of the deposits were derived from payments made by the DPS for work performed by Metrotech to install security equipment. In September 2009, Pittman, signed a contract under an alias name with DPS to install and maintain security equipment. Pittman provided services for a number of months to DPS under the security equipment contract and was paid more than $700,000.
In September 2011, Pittman filed a voluntary petition in bankruptcy with the U.S. Bankruptcy Court for the Eastern Judicial District of Michigan. Pittman signed the petition and the Statement of Financial Affairs under penalty of perjury declaring that all of his statements were true and correct. However, Pittman knew that the statements were false. Pittman stated that he owed only $532.44 to the IRS; he failed to disclose the use of an alias; he failed to properly report income he earned in 2009 and 2010 and he failed to declare his interest in the bank accounts and businesses he controlled.
In October 2011, Pittman filed Forms 1040, Individual Income Tax returns for the years 2009 and 2010. Each of these returns were false; Pittman listed himself as an employee of Metrotech, failed to disclose that he was the owner of the company, and failed to report any of the income he earned from the DPS security equipment contract.
“Pittman's blatant abuse of the bankruptcy and tax system was motivated by greed. Investigating and seeking convictions for these violations will hopefully reinforce to the public that no one is above the law”, said Special Agent in Charge Jarod J. Koopman.An indictment is merely an accusation and is not evidence of guilt. The defendant is presumed innocent unless and until proven guilty in a court of law.
The investigation of this case was conducted by Special Agents of the Internal Revenue Service Criminal Investigation and prosecuted by Assistant U.S. Attorney Ross I. MacKenzie and Assistant U.S. Attorney Richard A. Robel.Dedham Man Sentenced to Eight Years for Robberies in Brookline and CambridgeRead the Press Release
BOSTON – A Dedham man was sentenced yesterday for robbing three Boston area banks within a two week period in January 2014 and stealing over $8,000.
Joseph Wilcox, 47, of Dedham, was sentenced before U.S. District Court Judge Rya W. Zobel to 96 months in prison and three years of supervised release. Following a four month investigation, Wilcox was arrested in May 2014. In November 2014, Wilcox pleaded guilty to three counts of bank robbery.
On Jan. 15, 2014, Wilcox, wearing a hat, gloves, and sunglasses, walked into a Blue Hills Bank in Brookline. He approached a teller window and gave the teller a note that stated, “This is a hold-up,” and stole $1,318. One week later, on Jan. 22, 2014, Wilcox, wearing a similar disguise, walked into an Eastern Bank in Cambridge and gave a teller a note that read, “no dye packs” and stole $839. Three days later, Wilcox, again wearing a similar disguise, walked into a TD Bank in Brookline and gave a teller a note that read, “Give me the 100’s and large bills” and stole $6,260.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Brookline Police Chief Daniel C. O’Leary; and Cambridge Police Commissioner Robert C. Haas, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Carlos A. López.
Dearborn Woman Pleads Guilty to Tax ChargeRead the Press Release
A Dearborn woman pleaded guilty to tax evasion, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Jarod J. Koopman, Internal Revenue Service Criminal Investigation and Acting Chief Patrol Agent R. Alan Booth, United States Border Patrol Detroit Sector.
Zena Karkaba, 33, entered her guilty plea before U.S. District Judge Judith E. Levy.
The case was investigated by special agents of the IRS Criminal Investigation Division, patrol agents of the United States Border Patrol – Detroit Sector and was prosecuted by Assistant U.S. Attorney Gary M. Felder.
According to court records, during 2009 through 2012, Karkaba received monetary gifts from an individual, who provided her with personal checks in amounts ranging from $1,000 to $10,000. In preparing many of these checks, the individual wrote the numeric value on the checks and signed them, leaving the date, payee and written amount blank.
During 2012, Karkaba received at least 41 checks totaling $160,100, which she altered by changing the numeric amount on the check, increasing the total of the checks to $278,100. On these checks, Karkaba filled in the date, payee and the corresponding altered written amount. Karkaba went to the individual’s issuing bank and endorsed these checks, receiving the value of the altered checks in cash. By altering the checks, Karkaba received $118,000 above the original check amount.
Karkaba filed an individual U.S. Income Tax return, Form 1040, with the Internal Revenue Service for the 2012 tax year claiming the married filing joint filing status and reporting zero taxable income and no tax due and owing. However, Karkaba knew at the time she filed the return that it was false and fraudulent. During her plea hearing, Karkaba admitted that her true filing status for the 2012 tax year was single; that her taxable income for the year was $108,250.00 and that she owed income tax of $23,771.00.
“Income from any source, whether earned legally or stolen, is subject to income tax. By her guilty plea today, Karkaba is acknowledging and accepting the consequences of her criminal actions,” said Special Agent in Charge Jarod J. Koopman.
“We are proud to have played a part in bringing this case to resolution,” said Chief Patrol Agent Booth. “This result is a testament to the partnership between law enforcement agencies along our shared border.”
A sentencing hearing was set for June 24. The maximum penalty for tax evasion is five years imprisonment; three years supervised release and a $100,000 fine.Cumberland County, New Jersey, Man Convicted in Methamphetamine ConspiracyRead the Press Release
CAMDEN, N.J. – A Cumberland County, New Jersey, man was convicted today for his role in a conspiracy to distribute methamphetamine, U.S. Attorney Paul J. Fishman announced.
Alex Rodriguez, 33, of Vineland, New Jersey, was convicted on an indictment charging him with one count of conspiracy to possess with intent to distribute more than 500 grams of methamphetamine following a two-week trial before U.S. District Judge Robert B. Kugler in Camden federal court. The jury deliberated less than four hours before returning the guilty verdict.
According to the indictment and the evidence at trial:
Rodriguez conspired to broker a deal in which four pounds of high quality methamphetamine were sold for $100,000 in Millville, New Jersey. On behalf of a co-conspirator, who bought the drugs, Rodriguez cut one pound of the purchased drugs to create four additional pounds of methamphetamine. Two conspirators then traveled to Florida seeking to sell five pounds of the newly constituted methamphetamine, where the DEA apprehended them.
The conspiracy charge on which Rodriguez was convicted is punishable by a maximum potential penalty of life in prison.
U.S. Attorney Fishman credited the Drug Enforcement Agency, Atlantic City office, under the direction of Special Agent in Charge Carl J. Kotowski; the DEA’s Orlando office; and the Cumberland County Prosecutor’s Office, under the direction of Prosecutor Jennifer Webb-McRae, with the investigation leading to today’s guilty verdict. He also thanked the Florida Highway Patrol and the U.S. Attorney’s Office, Middle District, Florida.
The government is represented by Senior Litigation Counsel Vincent Grady O’Malley and Assistant U.S. Attorney Bernard J. Cooney of the U.S. Attorney’s Office, Criminal Division.
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Defense counsel: Wayne Powell Esq., Cherry Hill, N.J.
Convicted Sex Offender Sentenced to 20 Years for Possession of Child PornographyRead the Press Release
Orlando, FL – Chief United States District Judge Anne C. Conway yesterday sentenced Jesse Ausbin Brown (62, Orlando) to 20 years in federal prison for possession of child pornography, followed by a life term of supervised release. Brown pleaded guilty on October 23, 2014.
According to court documents, on September 20, 2012, the Winter Garden Police Department received a complaint regarding a man, later identified as Brown, who was attempting to lure young children into his car. Officers later pulled Brown over while he was driving and discovered that, in May of 1992, he had been convicted in the Western District of South Dakota for sexually abusing two children, and sentenced to almost 20 years in prison. Upon his release from prison, Brown completed his term of supervised release and moved from South Dakota to Winter Garden, Florida. Although he was required by law to register as a sex offender upon moving to Florida, he failed to do so. Officers then arrested Brown and he was later convicted in federal court of failure to register as a sex offender.
After Brown’s arrest, his car was sold on December 2, 2012. While cleaning out the car, the purchaser found a smartphone that contained images of child pornography. Subsequent examination of the phone revealed that numerous images of child pornography had been saved to the phone, some with a receipt date of September 5, 2012. Brown later admitted to authorities that he had downloaded the child pornography onto his phone and hidden it in the trunk of the car.
This case was investigated by the Winter Garden Police Department, the Federal Bureau of Investigation, the U.S. Marshals Service, and the Orange County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Joseph M. Schuster.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by 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 www.justice.gov/psc.
Convicted Sacramento Businessman Ordered to Pay over $108 Million in Restitution for Decade-Long SchemeRead the Press Release
SACRAMENTO, Calif. — On Thursday, a federal judge ordered Deepal Wannakuwatte, 64, of Sacramento, to pay $108,199,425 in restitution to victims of his long-running fraud scheme, United States Attorney Benjamin B. Wagner announced today. This ruling concludes the federal criminal prosecution; civil proceedings in the United States Bankruptcy Court are ongoing.
On November 13, 2014, United States District Judge Troy L. Nunley sentenced Wannakuwatte to 20 years in prison and ordered him to forfeit multiple properties, vehicles, business interests, and bank accounts totaling at least $3.5 million to be used to provide restitution to victims.
According to court documents, from 2002 to 2014, Wannakuwatte convinced nearly 200 victims, including individuals, corporate entities, and financial institutions, to invest in a number of business opportunities by misrepresenting the financial worth of himself and his companies. Ultimately, Wannakuwatte obtained well over $230 million from his victims, some of which was returned to victims as illusory profit payments. Contrary to his representations, Wannakuwatte used much of the money he obtained to pay himself and his family, make lulling payments to participants in his fraudulent investment schemes, and pay outstanding debts unrelated to his false representations.
“Today’s order brings to an end the criminal proceedings against Mr. Wannakuwatte, who operated the largest Ponzi scheme in Sacramento history,” said U.S. Attorney Wagner. “The agony of his victims, however, continues. While Mr. Wannakuwatte contemplates his situation from behind prison walls in the coming years, my office will continue to try to identify and liquidate ill-gotten gains that rightfully belong to his victims.”
This case was the product of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, and the Federal Deposit Insurance Corporation, Office of Inspector General, Office of Investigations. Assistant United States Attorneys Michael M. Beckwith and Kevin C. Khasigian prosecuted the case.
Collinsville Man Sentenced to Prison for Two Bank RobberiesRead the Press Release
Steve M. Dodson, 45, of Collinsville, was sentenced today in the U.S. District Court to 78 months in prison on two counts of Conspiracy to Commit Bank Robbery and two counts of Bank Robbery in connection with the robbery of Fairmount Village Credit Union in September 2012 and the robbery of Scott Credit Union in May 2013, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois has announced. Following his prison sentence, Dodson will be on federal supervised release for 3 years. Dodson was also ordered to pay restitution in the amount of $112,933. Dodson has been in custody since June 23, 2014.
Documents filed in U.S. District Court establish that on September 19, 2012, Dodson’s co-conspirator, William Hunter, entered the Fairmount Village Credit Union in Fairmount City, Illinois wearing a bandana covering his face, threated the teller, and demanded money. The teller placed $11,401 in a brown bag and Hunter left the credit union. Investigation revealed that prior to the robbery of the Fairmount Village Credit Union, Dodson agreed to make, and did make, a false 911 call for the purposes of diverting police resources away from the bank robbery. Dodson received fifty-percent of the proceeds for his participation in the robbery. The documents filed in Court also show that on May 24, 2013, two employees of Scott Credit Union in O’Fallon, Illinois were filling the outside ATM with money when Dodson approached them wearing a flesh-colored mask and told them he had a gun. Dodson demanded that they step away from the money at which time he took the three containers of U.S. currency and fled on foot. Dodson was picked up a short distance from the Scott Credit Union by his wife, Denise Dodson, who has also been charged with the bank robbery. Dodson and his wife obtained $100,000 from the robbery of Scott Credit Union.
Hunter had previously pleaded guilty in a companion state-court prosecution.
As to Denise Dodson, her case is pending, thus she is presumed innocent of the charges unless or until proven guilty beyond a reasonable doubt.
The case was investigated by the O’Fallon Police Department and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Ali Summers.
Collinsville Housewife Pleads Guilty to Three Bank TheftsRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on March 6, 2015, Easter Jimison, 37, of Collinsville, Illinois, pled guilty to three counts of Bank Burglary.
The investigation determined that on November 7, 2014, Jimison entered First Collinsville Bank in Caseville, Illinois, and handed the teller a note which read "put the money in a bag. Act normal. Don’t look around." The bank teller placed stacks of bills on the counter until Jimison said "that’s enough," then she put the money inside of her coat and walked out the front door of the bank. As a result, the FCB Caseyville Branch suffered a loss of $4,621.
Again on December 5, 2014, Jimison walked into the Bank of Edwardsville in Swansea, Illinois, and displayed a demand note to a bank teller. The demand note read "give me the money, this is not a joke." The bank teller promptly gathered the money from her drawer and placed it on the counter. Jimison then stated that she was unable to go through with the robbery and began to apologize and make excuses stating that she needed the money for rent. As this was happening an employee of the bank approached Jimison and referred her to a religious organization for financial assistance. Jimison then left the Bank of Edwardsville without taking the money.
On December 10, 2014, Jimison arrived at First Collinsville Bank in Maryville, Illinois in Madison County where she unfolded a note to the teller which stated "act normal" and "withdrawal." The bank teller promptly complied with the demand note and handed Jimison $1,144.00. Jimison then left the bank taking the money and the demand note with her.
Sentencing is set for June 11, 2015. Jimison will face up to 20 years in prison, a fine of up to $250,000, and up to 3 years of supervised release. The case was investigated by the Federal Bureau of Investigation, the Caseville Police Department, the Maryville Police Department and the Swansea Police Department. The case is being prosecuted by Assistant United States Attorney Michael Hallock.
Clearwater Woman Pleads Guilty to Aggravated Identity Theft Relating to Fraudulent Tax ReturnsRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Makaeia Demps has pleaded guilty to aggravated identity theft. She faces a mandatory penalty of two years in federal prison. A sentencing date has not yet been scheduled.
According to the plea agreement, in late 2011, Clearwater Police arrested Demps. In her possession, they found two debit cards, each of which contained funds that were the results of fraudulently filed income tax returns. They also found her to be in possession of a piece of paper with the names and personal information of two other individuals. Further investigation by the Internal Revenue Service connected the use of the debit cards to a number of transactions involving Demps, including the purchase of a vehicle in October 2011. It also revealed that the amount of fraudulent income tax refunds connected directly to Demps via those identities and debit cards she controlled was approximately $74,000.
This case was investigated by the Internal Revenue Service-Criminal Investigation, with assistance from the Clearwater Police Department. It is being prosecuted by Assistant United States Attorney Jay L. Hoffer.
Charleston man sentenced for selling pillsRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced that Michael Scarberry, 37, was sentenced today in federal court in Charleston to 63 months imprisonment, to be followed by three years of supervised release. Scarberry, who pleaded guilty late last year, admitted that he sold hydrocodone to an undercover Metropolitan Drug Enforcement Network Team (“MDENT”) police officer on several occasions. Scarberry also admitted that he obtained the hydrocodone pills on trips to Florida and brought them back to Charleston for sale. His uncle Clarence Scarberry, 51, of Charleston, was sentenced earlier this week to 21 months’ imprisonment and three years of supervised release for his role in the same drug conspiracy.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District. Assistant United States Attorney John Frail is responsible for the prosecution.
Car Repair Shop Owner and His Son Sentenced for Drug Trafficking and Commercial BurglariesRead the Press Release
Baltimore, Maryland – U.S District Judge J. Frederick Motz sentenced David Paschall, age 56, of Catonsville, Maryland, today to 90 month in prison followed by three years of supervised release for conspiring to distribute oxycodone and conspiring to commit bank burglary. Judge Motz also entered an order that Paschall forfeit $500,000, his ownership interest in Paschall’s Auto Body Shop and his residence, three firearms and his vehicle.
Judge Motz sentenced David Paschall’s son, Chad Paschall, age 30, of Baltimore, on February 27, 2015 to 37 months in prison for the drug and burglar conspiracies, and entered an order that Chad Paschall forfeit $250,000.
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Howard County Police Chief Gary Gardner; Chief James W. Johnson of the Baltimore County Police Department; Anne Arundel County Police Chief Tim Altomare; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Special Agent in Charge Elton Malone, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; Otis E. Harris, Jr., Special Agent in Charge, Coast Guard Investigative Service, Chesapeake Region; and Commissioner Anthony W. Batts of the Baltimore Police Department.
“The sentence today of David Paschall and his son Chad should send a strong message to other individuals engaged in the illicit distribution of drugs, including prescription drugs,” stated Gary Tuggle, Assistant Special Agent in Charge of the Drug Enforcement Administration, Baltimore District Office. “Prescription drug trafficking in the Baltimore area is a growing problem and has led to heroin addiction in the area. DEA, along with our federal, state and local partners, intends to aggressively combat this problem. We conducted a very complex investigation and due to the diligent work of all involved, the leaders of this drug trafficking organization will now spend time in a federal prison far from home.”
David Paschall operated Paschall’s Auto Body Shop, formerly located at 801 Desoto Road in Baltimore. According to their plea agreements, it was widely known that the car shop served as a marketplace for an assortment of illegal narcotics, including oxycodone, cocaine and heroin. David Paschall used more than five drug “brokers” to buy drugs almost every day at his shop which he would then either consume or sell for profit. As a leader in the drug conspiracy, he supervised others in the distribution of the drugs. In order to protect the drug conspiracy, David Paschall maintained many guns at the shop and sometimes carried a gun. David Paschall admitted that he agreed to distribute oxycodone, cocaine and heroin from no later than 2010 to July 2013.
Chad Paschall was at the shop most every day, knew that the shop operated as a hub for drug sales and helped his father in brokering drug sales.
The defendants also admitted to committing commercial burglaries in Maryland, Virginia, West Virginia, and Pennsylvania. The defendants conspired to steal cash, money orders, stamps, silver bars, jewelry, cigarettes, lottery tickets, prescription drugs, food, beverages, safes, laptop computers, cell phones, electronics, vehicles and other valuable items from gas stations, convenience stores, banks, credit unions and other commercial establishments. The conspirators often stole or attempted to steal cash from ATMs.
The conspirators usually cut power lines, telephone lines, cables and other wires before entering a business. They used vise grips, sledgehammers, chopsaws, grinders and blow torches to enter the business, and then often waited – for several minutes or sometimes up to several hours – before ransacking the business of its valuable items. David Paschall admitted that he committed, or attempted to commit, dozens of commercial burglaries with one or more coconspirators. For example, David and Chad Paschall used a forklift at a salvage or junk yard located on Hawkins Point Road in Baltimore to pile several junk cars next to a rear upstairs balcony. They climbed up the cars and broke into the office off the balcony. They used the forklift to transport a safe from the office to the ground, where it was broken open and approximately $48,000 was stolen.
To date, 16 defendants charged in the drug and burglary conspiracies have pleaded guilty to their participation in the criminal activities. Fourteen of these defendants have been sentenced, with David Paschall receiving the longest sentence thus far.
United States Attorney Rod J. Rosenstein commended the DEA, Howard County Police Department, Baltimore County Police Department; Anne Arundel County Department, ATF, Department of Health and Human Services - Office of Inspector General; Coast Guard Investigative Service and Baltimore Police Department for their work in the investigation. Mr. Rosenstein also praised the many local and state agencies in Virginia, West Virginia and Pennsylvania for their assistance in the investigation.
Mr. Rosenstein thanked Assistant United States Attorneys David I. Sharfstein and Andrea L. Smith, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Cambridge Cocaine Dealer Sentenced to 7 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge Ellen L. Hollander sentenced Shannon Banks, age 42, of Cambridge, Maryland today to seven years in prison followed by three years of supervised release for being a felon in possession of three firearms and ammunition; and for possession with the intent to distribute cocaine. Judge Hollander also ordered Banks to forfeit three guns and $389,189 in cash seized from his home and storage unit, nine televisions, jewelry, a Lincoln passenger car, an International “party bus,” $5,280 from a bank account, and his residence on Moose Lodge Road as constituting or being derived from the proceeds of his drug trafficking.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Dorchester County Sheriff James W. Phillips, Jr.; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; and Dorchester County State’s Attorney William Jones.
According to his plea agreement, on April 11, 2014, law enforcement executed a search warrant at Banks’ home in the 5400 block of Moose Lodge Road in Cambridge. During the search, agents seized: 233.7 grams of cocaine; $216,169 in cash; a loaded .45 caliber semi-automatic handgun with an obliterated serial number; a 12 gauge shotgun; and a hydraulic kilogram press. On April 15, 2014, agents searched a storage unit belonging to Banks and recovered $173,020, a loaded .22 caliber handgun, and another hydraulic kilogram press. Banks admitted that the cash recovered from his home and storage unit was the proceeds of drug trafficking.
United States Attorney Rod J. Rosenstein praised the DEA, FBI, HSI-Baltimore, Dorchester County Narcotics Task Force, Dorchester County State’s Attorney’s Office, the Maryland State Police, Somerset County Narcotics Task Force, the Worcester County Criminal Enforcement Team, and the Wicomico County Narcotics Task Force for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant U.S. Attorneys Seema Mittal and Evan T. Shea, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Bend Drug Dealer Sentenced to 72 Months in Federal PrisonRead the Press Release
EUGENE, Ore. – On March 5, 2015, Gavin Fraser, 27, of Bend, Oregon, was sentenced by U.S. District Judge Michael McShane to 72 months in federal prison for possessing with the intent to distribute methamphetamine. Upon his release from prison, Fraser will be on federal supervised release for four years.
On July 1, 2013, members of the Central Oregon Drug Enforcement Team (CODE) observed Fraser’s vehicle as it engaged in a trip to Portland – a trip which officers believed was for the purpose of picking up drugs and transporting them back to the Bend area for distribution. Officers stopped and searched the vehicle as it returned to Bend and discovered Fraser was transporting approximately 25 grams of methamphetamine, 24 grams of heroin, scales, packaging materials, and a .22 caliber handgun.
Fraser has prior convictions for unlawful delivery of methamphetamine and heroin and has been the subject of several investigations by CODE, which also investigated and handled the July 1, 2013 case. The CODE team is a multi-jurisdictional narcotics task force supported by the following Central Oregon law enforcement agencies: Bend Police Department, Deschutes County Sheriff’s Office, Redmond Police Department, Prineville Police Department, Crook County Sheriff’s Office, Jefferson County Sheriff’s Office, Madras Police Department, Oregon State Police, Sunriver Police Department, Black Butte Police Department, United States Drug Enforcement Administration (DEA), Warm Springs Tribal Police Department, Deschutes, Crook, and Jefferson County District Attorney’s Offices, and the Oregon National Guard.
This case was prosecuted by Assistant U.S. Attorney Nathan J. Lichvarcik.
Baltimore Heroin Dealer Sentenced to 10 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge Ellen L. Hollander today sentenced Enzo Blanks, a/k/a “Zo,” age 29, of Baltimore, to 10 years in prison, followed by five years of supervised release, for conspiracy to distribute and possess with intent to distribute heroin. Judge Hollander also ordered Blanks to forfeit a vehicle and jewelry.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Commissioner Anthony W. Batts of the Baltimore Police Department; and Chief James W. Johnson of the Baltimore County Police Department.
According to his plea agreement, Blanks was intercepted in text messages, telephone calls and other recordings arranging heroin transactions. Through the investigation, law enforcement determined that, on average, individuals traveled from as far away as western Maryland to meet with Blanks every three days to purchase approximately 500 heroin pills at a time. On September 10, 2013, Baltimore Police officers performed a car stop of a vehicle being driven by Blanks. Blanks was found to be in possession of 444 heroin gel caps. During the arrest, Blanks consented to the search of his girlfriend’s apartment on West Madison Street, where the officers discovered more heroin, cutting agents, sifters, scales and a capping machine. As a leader in the conspiracy, Blanks was responsible for the distribution of between one and three kilograms of heroin over the course of the conspiracy.
A total of 12 defendants, including Blanks, have been convicted for the heroin distribution conspiracy.
United States Attorney Rod J. Rosenstein praised the FBI, Baltimore Police Department and Baltimore County Police Department for their work in the investigation and thanked Assistant U.S. Attorneys Christopher J. Romano and Seema Mittal, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Augusta Man Sentenced to Three Months on Mail and Money Order Theft ChargesRead the Press Release
Contact: F. Todd Lowell
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Jason K. Stockmar, 29, of Augusta, Maine, was sentenced yesterday in U.S. District Court by Judge John A. Woodcock Jr. to three months in prison and one year of supervised release for stealing mail and postal money orders while employed by the United States Postal Service (USPS). He was also ordered to pay $3,160 in restitution. Stockmar pleaded guilty on August 18, 2014.
According to court records, Stockmar was hired by USPS in 2011. He was the officer in charge of the East Vassalboro, Maine Post Office between about December 1, 2012, and April 21, 2013, when he stole about 25 to 30 pieces of customer mail containing cash, checks and gift cards. He also took 20 blank postal money orders from a post office safe and attempted to purchase gold with them.
The case was investigated by the USPS Office of the Inspector General and the U.S. Postal Inspection Service.
Arlington Doctor Sentenced to 15 Years in Prison in Oxycodone ConspiracyRead the Press Release
ALEXANDRIA, Va. – Derron McRae Simon, 45, of Arlington, Virginia, was sentenced today to 180 months in prison, followed by six years of supervised release for his role in an oxycodone conspiracy.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge Leonie M. Brinkema.
Simon, a medical doctor, pleaded guilty on December 18, 2014. In a statement of facts filed with the plea agreement, Simon admitted that during the course of the conspiracy, he wrote and sold numerous prescriptions for oxycodone and other controlled substances, and knew that these prescriptions were not for a legitimate medical purpose and were beyond the bounds of medical practice. Simon was responsible for the distribution of at least 11,000 oxycodone 30 mg pills.According to the statement of facts filed with Simon’s plea agreement, beginning in February 2013 and continuing until around August of 2014, Simon and others conspired to distribute oxycodone throughout northern Virginia. Simon wrote and sold prescriptions for oxycodone and other controlled substances, despite knowing that the individuals in whose names the prescriptions were written were abusing and selling the drugs. Simon never met many of the people for whom he wrote oxycodone prescriptions, as these individuals were not Simon’s medical patients. Over the course of the conspiracy, one of Simon’s co-conspirators paid Simon approximately $500 to $1,000 per fraudulent oxycodone prescription. Simon also directed a co-conspirator to create fraudulent patient history forms and medical records to make it appear that these individuals were actually legitimate patients.
Simon’s medical license was previously suspended on November 24, 2008, for 90 days and he was placed on probation by the Virginia Board of Medicine at the conclusion of this temporary suspension. Simon’s license to practice medicine was suspended again by the Virginia Board of Medicine on July 11, 2014. On July 28, 2014, Simon signed a consent order with the Virginia Board of Medicine and voluntarily and permanently surrendered his license to practice medicine and perform surgery in Virginia. The consent order states Simon will not be eligible for reinstatement of his license at any future date.
This case was investigated by the FBI’s Washington Field Office. Special Assistant U.S. Attorneys Adam Ptashkin, Jennifer A. Clarke, and Jason M. Scheff are prosecuting the case.
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. 1:14-cr-300.Alabama and Georgia Residents Sentenced to Prison for their Participation in $3 Million Identity Theft SchemeRead the Press Release
Montgomery, Alabama – A Phenix City, Alabama, resident was sentenced yesterday to serve 111 months in prison for her role in a more than $3 million Stolen Identity Refund Fraud (SIRF) tax scheme.
Carnesha Alexander was also sentenced to three years of supervised release and ordered to pay restitution in the amount of $840,692. On Feb. 5, a co-conspirator in the scheme, Robert Walker, of Columbus, Georgia, was sentenced to serve 94 months in prison, three years of supervised release and ordered to pay restitution in the amount of $840,692. Alexander and Walker each previously pleaded guilty to conspiracy to defraud the government and one count of aggravated identity theft, announced U.S. Attorney George L. Beck Jr. of the Middle District of Alabama, and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department's Tax Division.
According to court documents and statements made in court, between January 2011 and December 2013, Alexander, Walker and their co-conspirators used stolen identities to file more than 900 false tax returns that requested approximately $3.4 million in tax refunds. Alexander obtained stolen identities from various sources, including the identities of employees from a company in Columbus. In order to file the false tax returns, Alexander, Walker and their co-conspirators applied for and obtained several Electronic Filing Numbers (EFINs) from the Internal Revenue Service (IRS) in the names of sham tax businesses. The tax refunds claimed on the false returns were paid via U.S. Treasury checks mailed to addresses under the control of participants in the scheme, prepaid debit cards issued by financial institutions, and deposits to financial institutions connected to the business EFINs that allowed participants in the scheme to print refund checks. Walker and his co-conspirators cashed the fraudulent refund checks at several businesses located in Alabama and Walker deposited fraudulent refund checks into a bank account he controlled.
“One of the Tax Division’s highest priorities is prosecuting individuals such as Carnesha Alexander, Robert Walker and their co-conspirators, who use stolen identities to file fictitious income tax returns and claim fraudulent refunds,” said Acting Assistant Attorney General Ciraolo. “This street crime threatens the very fabric of tax administration and often victimizes the most vulnerable members of our communities. The Tax Division is committed to working with our partners in law enforcement to identify these schemes, dismantle the criminal operations and punish the offenders who view the Federal Treasury as their own personal bank account.”
Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck commended the special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Michael C. Boteler, Charles M. Edgar Jr. and Gregory P. Bailey of the Tax Division, who prosecuted the case with the assistance of Assistant U.S. Attorney Todd A. Brown of the Middle District of Alabama.
Alabama and Georgia Residents Sentenced to Prison for Their Participation in $3 Million Identity Theft SchemeRead the Press Release
Charnesha Alexander, a Phenix City, Alabama, resident was sentenced yesterday to serve 111 months in prison for her role in a more than $3 million Stolen Identity Refund Fraud (SIRF) tax scheme.
Alexander was also sentenced to three years of supervised release and order to pay restitution in the amount of $840,692. On Feb. 5, a co-conspirator in the scheme, Robert Walker, of Columbus, Georgia, was sentenced to serve 94 months in prison, three years of supervised release and ordered to pay restitution in the amount of $840,692. Alexander and Walker each previously pleaded guilty to conspiracy to defraud the government and one count of aggravated identity theft, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama announced today.
According to court documents and statements made in court, between January 2011 and December 2013, Alexander, Walker and their co-conspirators used stolen identities to file more than 900 false tax returns that requested approximately $3.4 million in tax refunds. Alexander obtained stolen identities from various sources, including the identities of employees from a company in Columbus. In order to file the false tax returns, Alexander, Walker and their co-conspirators applied for and obtained several Electronic Filing Numbers (EFINs) from the Internal Revenue Service (IRS) in the names of sham tax businesses. The tax refunds claimed on the false returns were paid via U.S. Treasury checks mailed to addresses under the control of participants in the scheme, prepaid debit cards issued by financial institutions, and deposits to financial institutions connected to the business EFINs that allowed participants in the scheme to print refund checks. Walker and his co-conspirators cashed the fraudulent refund checks at several businesses located in Alabama and Walker deposited fraudulent refund checks into a bank account he controlled.
“One of the Tax Division’s highest priorities is prosecuting individuals such as Charnesha Alexander, Robert Walker and their co-conspirators, who use stolen identities to file fictitious income tax returns and claim fraudulent refunds,” said Acting Assistant Attorney General Ciraolo. “This street crime threatens the very fabric of tax administration and often victimizes the most vulnerable members of our communities. The Tax Division is committed to working with our partners in law enforcement to identify these schemes, dismantle the criminal operations and punish the offenders who view the Federal Treasury as their own personal bank account.”
Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck commended the special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Michael C. Boteler, Charles M. Edgar Jr. and Gregory P. Bailey of the Tax Division, who prosecuted the case with the assistance of Assistant U.S. Attorney Todd A. Brown of the Middle District of Alabama. Additional information about the Tax Division and its enforcement efforts may be found at the division website.
Alabama and Georgia Residents Sentenced to Prison for Their Participation in $3 Million Identity Theft SchemeRead the Press Release
Marck 06, 2015Montgomery, Alabama - A Phenix City, Alabama, resident was sentenced yesterday to serve 111 months in prison for her role in a more than $3 million Stolen Identity Refund Fraud (SIRF) tax scheme.
Carnesha Alexander was also sentenced to three years of supervised release and ordered to pay restitution in the amount of $840,692. On Feb. 5, a co-conspirator in the scheme, Robert Walker, of Columbus, Georgia, was sentenced to serve 94 months in prison, three years of supervised release and ordered to pay restitution in the amount of $840,692. Alexander and Walker each previously pleaded guilty to conspiracy to defraud the government and one count of aggravated identity theft, announced U.S. Attorney George L. Beck Jr. of the Middle District of Alabama, and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department's Tax Division.
According to court documents and statements made in court, between January 2011 and December 2013, Alexander, Walker and their co-conspirators used stolen identities to file more than 900 false tax returns that requested approximately $3.4 million in tax refunds. Alexander obtained stolen identities from various sources, including the identities of employees from a company in Columbus. In order to file the false tax returns, Alexander, Walker and their co-conspirators applied for and obtained several Electronic Filing Numbers (EFINs) from the Internal Revenue Service (IRS) in the names of sham tax businesses. The tax refunds claimed on the false returns were paid via U.S. Treasury checks mailed to addresses under the control of participants in the scheme, prepaid debit cards issued by financial institutions, and deposits to financial institutions connected to the business EFINs that allowed participants in the scheme to print refund checks. Walker and his co-conspirators cashed the fraudulent refund checks at several businesses located in Alabama and Walker deposited fraudulent refund checks into a bank account he controlled.
“One of the Tax Division’s highest priorities is prosecuting individuals such as Carnesha Alexander, Robert Walker and their co-conspirators, who use stolen identities to file fictitious income tax returns and claim fraudulent refunds,” said Acting Assistant Attorney General Ciraolo. “This street crime threatens the very fabric of tax administration and often victimizes the most vulnerable members of our communities. The Tax Division is committed to working with our partners in law enforcement to identify these schemes, dismantle the criminal operations and punish the offenders who view the Federal Treasury as their own personal bank account.”
Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck commended the special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Michael C. Boteler, Charles M. Edgar Jr. and Gregory P. Bailey of the Tax Division, who prosecuted the case with the assistance of Assistant U.S. Attorney Todd A. Brown of the Middle District of Alabama.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617
5 March 2015
Woman Pleads Guilty to Role in 2001 Arson That Killed Her 15-Year-Old SonRead the Press Release
St. Louis, MO - SANDRA KAY BRYANT, Saint Louis County, pled guilty this afternoon and admitted setting fire to her family’s home at in Florissant, Missouri, on November 16, 2001. Bryant’s 15-year old son, Zachariah Andrew Kemper, became trapped in the basement and was killed during the fire. Bryant pled guilty to one-count of aiding and abetting the use of fire to commit mail fraud. She appeared before United States District Court Judge Audrey G. Fleissig to enter her guilty plea. A jury trial had been set for March 9.
The 2001 fire was originally the subject of state charges in which Sandra Bryant was charged with murder by arson. During the ensuing trial, the judge declared a mistrial after ruling that certain evidence relating to a polygraph examination indicating deception by Bryant had mistakenly been shown to the jury. The Missouri Supreme Court ultimately held that because the mistrial was declared over the defense objection, state prosecutors were barred from retrying the defendant in state court because of the United States Constitution’s "double jeopardy" provision. During the state trial, Bryant challenged her confession to detectives that detailed her involvement in the fire. With today’s guilty plea, Bryant unequivocally acknowledged and confirmed her participation in the arson scheme.
The federal indictment charged both Bryant and her ex-husband, Steven Kemper, for their involvement in the 2001 arson. On July 3, 2013, Steven Kemper, pled guilty to the same charge. Kemper’s sentencing has been set for April 8, 2015, at 1:30 p.m. Bryant’s sentencing has been set for June 11, 2015, at 2:00 p.m. Each defendant faces up to 10 years imprisonment.
This case was originally investigated by the Saint Louis County Police Department. The United States Bureau of Alcohol, Tobacco, Firearms, and Explosives took up the investigation after the Missouri Supreme Court decision barring the retrial by state prosecutors. The St. Louis County Prosecutor’s Office also provided significant assistance.
Unsealed Indictment Details Cocaine Trafficking, Tax EvasionRead the Press Release
A 12-count federal indictment was unsealed today charging Lawrence E. Tipton, 48, Angela G. Tipton, 46, both of Copley, and Ebony Brown, 41, of Stone Mountain, Georgia, with conspiracy to defraud the United States of America, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment further charges Lawrence and Angela Tipton with conspiracy to evade payment of taxes and attempt to evade and defeat the payment of taxes. Ebony Brown and Lawrence Tipton are charged with conspiracy to distribute cocaine, and Brown is also charged with three counts of distributing cocaine.
Finally, all three defendants are charged in various counts with engaging in unlawful monetary transactions.
From around April 2003 through December 31, 2014, Lawrence and Angela Tipton conspired to evade the payment of assessed taxes. Their conduct involved failing to report income, creating various business entities to hide their income and assets from the Internal Revenue Service, according to the indictment.
Lawrence Tipton, Angela Tipton, and Ebony Brown conspired to use a trucking business known as Palmyra Acres as a means to mingle proceeds of drug trafficking with apparent legitimate proceeds of a trucking operation. Lawrence Tipton and Ebony Brown conspired to distribute cocaine they acquired in Texas and Florida and sold in Ohio, according to the indictment.
All three defendants are charged with engaging in monetary transactions using proceeds of drug trafficking.
If convicted, a defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal records, 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 and in most cases it will be less than the maximum.
The investigation preceding the indictment was conducted by the Internal Revenue Service and the Drug Enforcement Administration. The case is being prosecuted by Assistant United States Attorneys Robert E. Bulford and Samuel A. Yannucci.
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.
Two Women Sentenced for Roles in Health Care FraudRead the Press Release
NORFOLK, Va. – Lisa Marie Barrett, age 50, of Norfolk, and Jaqueline J. Harris, age 34, of Portsmouth, were both sentenced yesterday for their roles in a massive Medicaid fraud conspiracy. Ms. Barrett was sentenced to serve a term of 96 months in prison, followed by a three-year term of supervised release, and was ordered to pay $126,126 in restitution to the Virginia Department of Medical Assistance Services. Ms. Harris was sentenced to serve 60 months imprisonment, followed by three years of supervised release, and ordered to pay $237,570 in restitution.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; Mark R. Herring, Virginia Attorney General; John S. Adams, Special Agent in Charge of the Federal Bureau of Investigations’ Norfolk Field Office; Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Washington, D.C. Field Office; Thomas J. Kelley, Special Agent in Charge, Internal Revenue Service-Criminal Investigations, Washington, D.C. Field Office; and Steven Anderson, Special Agent in Charge for the Washington Regional Office of the U.S. Department of Labor’s Office of Inspector General-Office of Labor Racketeering and Fraud Investigations, made the announcement after sentencing by United States Chief District Judge Rebecca Beach Smith.
Barrett pleaded guilty on December 1, 2014, to one charge each of health care fraud, aggravated identity theft, and perjury. According to court documents, Barrett worked for Progressive Counseling Services, LLC, as a qualified mental health professional responsible for providing mental health support services to Medicaid-eligible clients who purportedly suffered from severe psychiatric limitations. In reality, not only was Barrett not qualified to provide such services, she signed false progress notes in order to support reimbursement claims to Medicaid. Barrett signed progress notes that listed dates, times, and locations that conflicted with other progress notes, that consisted entirely of material copied verbatim from articles available on the Internet, and that contained descriptions of counseling sessions that were identical to the descriptions provided in other progress notes submitted by other counselors. Additionally, Barrett signed multiple notes that detailed counseling sessions that purportedly occurred while she was working as a parking attendant at a City of Norfolk parking garage. In total, Barrett personally signed 639 of these progress notes causing Medicaid to reimburse Progressive approximately $126,126.
Harris pleaded guilty on December 2, 2014, to one charge of health care fraud and one charge of perjury. According to court documents Harris was also not qualified to provide mental health support services, and signed fraudulent progress notes used in support of Medicaid billing. Harris personally signed 1,305 false and fraudulent progress notes, causing Medicaid to reimburse Progressive $237,570. The overwhelming majority of progress notes detailed meetings that never occurred. On the few instances when Harris actually met with clients, she merely drove them to appointments and on errands, provided transportation to their family members, and had them sign blank time sheets, which were then used to back up her false and fraudulent progress notes.
The total amount Medicaid overbilled Progressive as a result of all of its activities was approximately $2,483,752.00, according to the court documents.
In addition to their roles in Progressive’s Medicaid fraud conspiracy, Barrett and Harris also testified falsely under oath before the federal grand jury investigating Progressive’s Medicaid fraud conspiracy.
This case was investigated by the FBI’s Norfolk Field Office, the Medicaid Fraud Control Unit of the Virginia Attorney General’s Office, Homeland Security Investigations’ Norfolk Field Office, U.S. Department of Labor’s Office of Inspector General-Office of Labor Racketeering and Fraud Investigations, and the Internal Revenue Service, Criminal Investigations Division. Assistant U.S. Attorneys Joseph L. Kosky and V. Kathleen Dougherty are prosecuting the case for the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-137.Two Men from Crownpoint Plead Guilty to Federal Assault ChargesRead the Press Release
ALBUQUERQUE – Gabriel Largo, 27, and Joshua Largo, 20, both enrolled members of the Navajo Nation who reside in Crownpoint, N.M., pled guilty this morning in federal court to federal assault charges.
Gabriel Largo, Joshua Largo and their co-defendant Michael Benally, 31, a member of the Navajo Nation who resides in Littlewater, N.M., were arrested on Sept. 17, 2014, on a criminal complaint charging them with assaulting a Navajo man with a sledgehammer and a rock and causing him serious bodily injury. The complaint alleges that the assault took place in the Crownpoint Chapter of the Navajo Nation in McKinley County, N.M., on Sept. 5, 2014.
The three co-defendants subsequently were indicted on Oct. 7, 2014, in a four-count indictment. Count 1 charged Benally with assaulting the victim and causing him serious bodily injury on July 30, 2014. Count 2 charged Benally, Gabriel Largo and Joshua Largo with conspiring to assault the victim by chasing the victim, throwing rocks at him, kicking him, and striking him with a sledgehammer on Sept. 5, 2014. Counts 3 and 4 charged the three defendants with assault resulting in serious bodily injury and assault with a dangerous weapon.
During today’s proceedings, Gabriel Largo pled guilty to a felony information charging him with assault, and admitted that on Sept. 5, 2014, he and his co-defendants approached the victim, who was selling firewood. When the victim ran away from them, Gabriel Largo and his co-defendants chased the victim, threw rocks at him and knocked him down. The three men then hit and kicked the victim. In his plea agreement, Gabriel Largo admitted obtaining a sledgehammer from Benally and using it to strike the victim.
Joshua Largo also pled guilty to a felony information and admitted his participation in a conspiracy to assault the victim. Joshua Largo admitted joining his co-defendants in chasing the victim, throwing rocks at him and knocking him down, and hitting and kicking the victim.
At sentencing, Gabriel Largo faces a statutory maximum penalty of ten years in prison and Joshua Largo faces a statutory maximum penalty of five years in prison. Their sentencing hearings have yet to be scheduled.
Benally has entered a plea of not guilty and is pending trial. Charges in criminal complaints and indictments are merely accusations. Defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Crownpoint office of the Navajo Nation Division of Public Safety, and is being prosecuted by Assistant U.S. Attorney Linda Mott.
Two Defendants from Operation “Wild Wild East” SentencedRead the Press Release
U.S. Attorney Kenneth A. Polite announced that AMBROSE WILLIAMS, age 44, and ANTOINETTE KELLY, age 32, both of New Orleans, were sentenced today after having previously pled guilty to charges relating to their conspiracy to distribute and to possess with intent to distribute heroin.
U.S. District Judge Carl Barbier sentenced WILLIAMS, who pled guilty to one count of conspiracy to distribute and possess with intent to distribute over one kilogram of heroin, to 120 months incarceration, to be followed by five years of supervised release. KELLY, who pled guilty to one count of distributing a quantity of heroin, was sentenced to 15 months incarceration, to be followed by three years of supervised release.
WILLIAMS and KELLY were two of twelve defendants charged in a 23-count indictment on July 25, 2014. According to court documents, this indictment sprung from an investigation into a heroin-trafficking organization operating in New Orleans East. This organization was responsible for distributing at least 15 kilograms of heroin in the New Orleans area. As part of the arrests in this case, federal agents have seized from the twelve defendants approximately $1,200,000 in assets (a combination of vehicles, currency, jewelry, and real property) as proceeds made from the sale of heroin.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration in investigating this matter. Assistant United States Attorney Brandon S. Long was in charge of the prosecution.
Third Louisiana Resident Indicted for Insider Trading in Connection with the Acquisition of the Shaw GroupRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green of the Middle District of Louisiana and Stephanie Finley of the Western District of Louisiana jointly announced that another individual has been charged with insider trading in connection with the acquisition of the Shaw Group. A federal grand jury sitting in the Western District of Louisiana has indicted BILLY J. ADCOX, JR, age 44, of Ruston, Louisiana, with conspiracy to commit securities fraud (insider trading), in violation of Title 18, United States Code, Section 371, and securities fraud (insider trading), in violation of Title 15, United States Code, Sections 78j(b) and 78ff, and Title 17, Code of Federal Regulations, Sections 240.10b-5 and 240.10b5-1. If convicted, ADCOX faces significant incarceration, fines, restitution, and supervised release following imprisonment.
The Indictment alleges that from in or before July 2012, and continuing to at least December 2012, ADCOX, his close friend Jesse Roberts, along with John Doe, engaged in a scheme to profit from inside information about the upcoming merger between The Shaw Group (“Shaw”) and Chicago Bridge and Iron Company (“CB&I”).
According to the allegations contained in the Indictment, which was returned by the grand jury yesterday, in mid-2012, Shaw was considering a potential merger opportunity. At the time, Zeringue was the Vice President of Construction Operations for Shaw’s Plant Services Division. In late July 2012, Shaw and CB&I came to an agreement whereby CB&I acquired all outstanding shares of Shaw stock. The merger between the two companies was publicly announced on July 30, 2012 (“the public announcement”). As a result of the public announcement, Shaw’s stock price rose substantially.
The Indictment alleges that, prior to the public announcement and through his job at Shaw, Zeringue obtained inside information about the upcoming merger between Shaw and CB&I and passed the inside information to Roberts. The Indictment further alleges that Roberts subsequently passed the inside information to ADCOX, who, in turn, passed the inside information to John Doe and facilitated contact between Roberts and John Doe. Thereafter, ADCOX and John Doe allegedly purchased Shaw securities before the public announcement and sold their Shaw securities after the public announcement had caused Shaw’s stock price to rise, all at the expense of Shaw shareholders and potential Shaw shareholders who were not privy to the inside information. The Indictment also alleges that ADCOX made over $37,000 in proceeds from his illegal insider trading activities.
Prior to the Indictment announced today, Zeringue was charged in the Middle District of Louisiana with conspiracy to commit securities fraud. On June 27, 2014, Zeringue pled guilty as charged pursuant to a plea agreement with the United States.
Roberts, age 43, of Ruston, Louisiana, has also been charged with insider trading as part of the investigation. On Thursday, February 19, 2015, a federal grand jury sitting in the Middle District of Louisiana indicted Roberts, charging him with conspiracy to commit securities fraud (insider trading), in violation of Title 18, United States Code, Section 371, and securities fraud (insider trading), in violation of Title 15, United States Code, Sections 78j(b) and 78ff, and Title 17, Code of Federal Regulations, Sections 240.10b-5 and 240.10b5-1.
In announcing the Indictment, U.S. Attorneys Green and Finley praised the investigative work of the U.S. Secret Service, the Federal Bureau of Investigation, and the Internal Revenue Service-Criminal Investigation, and thanked the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority for their assistance.
This matter is being handled by the U.S. Attorney’s Offices for the Middle and Western Districts of Louisiana and the Baton Rouge offices of the FBI, Secret Service, and IRS-Criminal Investigation. It is being prosecuted by Assistant United States Attorneys Chris Dippel and Patricia Jones of the Middle District of Louisiana and Assistant United States Attorney Seth Reeg of the Western District of Louisiana.
NOTE: An indictment is an accusation by the Grand Jury. A defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.
Tampa Crack Cocaine Trafficker Sentenced to PrisonRead the Press Release
Tampa, FL – U.S. District Judge James S. Moody, Jr. today sentenced Lamar “Budda” Wilson (33) to 10 years in federal prison for possessing with the intent to distribute 28 grams or more of cocaine base, commonly known as “crack.” He pleaded guilty on November 14, 2014.
According to court documents, Wilson arranged to sell an ounce of crack cocaine to a DEA confidential informant (CI). On September 23, 2013, Wilson met the CI at a location in Hillsborough County, where he was paid $1,050 for an ounce of crack cocaine.
This case was investigated by the Drug Enforcement Administration. It was prosecuted by Assistant United States Attorney Shauna S. Hale.
St. Thomas Man Indicted on Child Pornography ChargesRead the Press Release
St. Thomas, USVI – A federal grand jury returned a four-count indictment on March 5, 2015, charging Donnie W. Williams, 31, of St. Thomas with federal child exploitation offenses, United States Attorney Ronald W. Sharpe announced today. The first three counts charge Williams with receipt of child pornography, and the last count charges him with possession of child pornography.
Williams was released on bond after his arrest on January 30, 2015, and is awaiting arraignment and advice of rights on the indictment. According to the indictment, Williams used his laptop computer to download child pornography images from a peer-to-peer sharing network. If convicted Williams faces a mandatory five years in prison and fines of up to $250,000.
United States Attorney Sharpe reminds the public that an indictment is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless found guilty.
Suspected child exploitation or missing children cases may be reported to the National Center for Missing and Exploited Children via its toll-free 24–hour hotline at 202-514-5678, or Homeland Security Investigations at (340) 693-2250.
This case is being investigated by the U.S. Department of Homeland Security Homeland Security Investigations, and is being prosecuted by Assistant U.S. Attorney Everard E. Potter.
St. Petersburg Cocaine Trafficker Sentenced to PrisonRead the Press Release
Tampa, FL – U.S. District Judge Steven D. Merryday has sentenced Octavius R. Henderson (35, St. Petersburg) to 20 years in federal prison for conspiring with others to possess with the intent to distribute 5 kilograms or more of cocaine. He pleaded guilty on December 16, 2014.
According to court documents, Henderson and others were involved in a years-long drug conspiracy that was responsible for the distribution of at least 149 kilograms of cocaine in St. Petersburg. During a search of a St. Petersburg residence used by Henderson and others as a “stash house” for narcotics and money, agents located digital scales, mixing agents, containers with cocaine residue, and a “kilo” press. Agents also located 850 grams of cocaine and $71,930 in U.S. currency inside the stash house.
This case was investigated by the Drug Enforcement Administration. It was prosecuted by Assistant United States Attorney Shauna S. Hale. This case results from an ongoing Organized Crime Drug Enforcement Task Force (OCDETF) investigation. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Six Defendants Indicted on Federal Firearms ChargesRead the Press Release
FRESNO, Calif. — A federal grand jury has returned separate indictments against Mikkey Santos, 18; Tyrone Smith, 19; Javier Lamadrid, 33; Humberto Garcia, 23; and Michael Johnson, 35, all of Fresno; and Samuel Zaragoza-Villanueva, 37, of Mexico, for violating federal firearm laws, United States Attorney Benjamin B. Wagner announced today.
The indictments resulted from joint investigations by the Fresno Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Department of Homeland Security/Homeland Security Investigations (HSI), and the Federal Bureau of Investigation (FBI). The cases are part of Project Safe Neighborhoods, which is a joint initiative to combat gang and gun violence. The cases are being prosecuted by Assistant U.S. Attorney Kimberly Sanchez.
Samuel Zaragoza-Villanueva was charged with being an alien in possession of ammunition. According to court documents, on February 26, 2015, members of the Multi-Agency Gang Enforcement Consortium (MAGEC) conducted a search at the defendant’s residence and seized ammunition. The government alleges that the defendant is a citizen and native of Mexico, and is unlawfully present in the United States.Mikkey Santos was charged with possession of an unregistered firearm. According to court documents, on February 12, 2015, Fresno Police Department officers served a search warrant at the defendant’s apartment in Fresno. An unregistered rifle, with a barrel length of less than 16 inches and an overall length less than 26 inches, was recovered during the search.
Tyrone Smith was charged with being a felon in possession of a firearm. According to court documents, on February 16, 2015, Fresno Police Department officers attempted to stop a vehicle in which the defendant was a passenger. The vehicle fled at high speed and officers pursued it. The defendant threw a handgun out of the window during the pursuit, and was ultimately apprehended.
Javier LaMadrid was charged with being a felon in possession of a firearm. According to court documents, on February 4, 2015 Fresno Police Department officers made a traffic stop on a vehicle in which the defendant was a passenger. A small child and another adult female were also in the car. Police found a loaded handgun between the passenger-side door and the passenger seat where the defendant was seated.Humberto Garcia was charged with being a felon in possession of a firearm. According to court documents, on February 21, 2015, the defendant was in possession of a shotgun. The defendant has multiple prior felony convictions.
Michael Johnson was charged with being a felon in possession of a firearm. According to court documents, on February 19, 2015, the defendant was in possession of a Glock, .40 caliber firearm. The defendant has multiple prior felony convictions.
“ATF remains committed to working with Fresno Police Department and our other federal partners to combat gun violence and remove violent offenders from the streets of Fresno,” said Joseph M. Riehl, Special Agent in Charge of the ATF San Francisco Field Division. “Project Safe Neighborhoods is one way that ATF agents are working to remove guns from the hands of convicted felons and violent criminals.”
If convicted, the defendants face up to 10 years imprisonment, a $250,000 fine (except for Santos, who faces up to a $10,000 fine), and 3 years of supervised release. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.Settlement of Trespass Claims Against Statoil Oil & Gas LP and Statoil Oil & Gas Services, Inc.Read the Press Release
BISMARCK - U.S. Attorney Timothy Purdon today announced Statoil Oil & Gas LP and Statoil Oil & Gas Services, Inc., of Austin, Texas (collectively "Statoil") have agreed to pay the United States $1,989,560.72 to resolve civil claims against Statoil relating to mineral trespass.
The North Dakota Field Office of the Bureau of Land Management routinely reviews data regarding existing oil wells to assess whether the wells are impacting federally owned minerals. In October 2013 information was developed indicating that an oil well operated by Statoil drilled into unleased federally owned minerals located in McKenzie County, North Dakota. A joint investigation by the United States Department of the Interior’s Office of Inspector General and the Bureau of Land Management's Special Investigations Group confirmed that on or about December 16, 2011 Statoil began drilling a well which later entered into unleased federally owned minerals. The well, designated Jay 24-13 #1H, had been planned by Statoil’s predecessor, Brigham Oil & Gas L.P., and was drilled approximately two weeks after Statoil acquired Brigham Oil & Gas L.P. Statoil later produced and sold federally owned oil and natural gas from the well valued at nearly $2,000,000. Statoil has fully cooperated with the United States in its investigation of this incident.
Under the terms of the settlement, the United States will recover the full value of the federal oil and natural gas.
The case was investigated by Special Agent T. Lynn Gannon, United States Department of the Interior Office of Inspector General, Energy Investigations Unit.
Assistant United States Attorney James Patrick Thomas handled the matter for the United States.
Sentencings for February 26 - March 2, 2015Read the Press Release
Jorge Gonzalez-Gonzalez, aka Jorge Luis Diego, 29, of Mexico, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on February 26, 2015, for conspiracy to possess with intent to distribute, and to distribute, methamphetamine, heroin and marijuana. Gonzalez-Gonzalez was arrested in Sheridan, Wyoming. He received 120 months imprisonment, to be followed by five years of supervised release, was ordered to pay a $400.00 fine and a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the Wyoming Division of Criminal Investigation.
Joseph Jovon Dawson, 31, of Aurora, Colorado, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on March 2, 2015, for transporting a minor for illegal sexual activity. Dawson was arrested in Casper, Wyoming. He received 120 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $100.00 special assessment. This case was investigated by the Casper Police Department; the Federal Bureau of Investigation; and the Denver Police Department.
Russian Man Sentenced in Ransomware SchemeRead the Press Release
BOSTON – A Russian man was sentenced yesterday to three years in prison for laundering profits from a scheme in which computer hackers essentially took people’s computers “hostage” electronically until a ransom was paid.
Aleksei Shushliannikov, 23, was sentenced by U.S. Senior District Judge Mark L. Wolf to three years in prison, three years of supervised release, forfeiture of profits and equipment, and restitution. In November 2014, Shushliannikov pleaded guilty to one count of conspiracy to commit money laundering, one count of using a fictitious name and address in connection with the U.S. mail, and one count of identity fraud. He was charged in October 2013.
The scheme began with computer hackers who actually, or seemingly, took over victims’ computers with a virus. The hackers told the victims that they would restore the computers’ function if the victims bought a MoneyPak and sent the MoneyPak number to the hackers. Sometimes the hackers posed as the FBI, saying that the FBI was freezing the victims’ computers as part of a law enforcement action, and that the victims could avoid arrest by paying a criminal fine via MoneyPak. A MoneyPak is a product or service that allows a customer to load cash onto a prepaid debit card that is associated with a MoneyPak number; therefore, a MoneyPak number is almost equivalent to cash. With that number, the customer, or anyone else, can transfer funds from one prepaid debit card to another electronically and with relative ease and anonymity.
But the hackers faced a problem. If they transferred the ransom to physical debit cards, they risked being caught on videotape while withdrawing the ransom as cash at banks and ATMs. So they sold the ransomed MoneyPak numbers over the Internet.
Shushliannikov participated in the scheme from December 2012 until February 2013 when he was caught. The conspiracy bought the ransomed MoneyPak numbers and, in order to cash them with relative anonymity, opened prepaid debit cards using the identities of other, uninvolved people, whose names, dates of birth, and other information he had bought on the Internet. The conspiracy then had the debit cards mailed to mail drops that Shushliannikov employed throughout New England.
Shushliannikov was responsible for finding appropriate mail drops at unsuspecting homeowners’ mailboxes. To avoid discovery, Shushliannikov selected houses throughout Massachusetts and New Hampshire that looked unoccupied, especially those with a “for sale” sign out front. Shushliannikov collected the debit cards from these houses’ mailboxes and brought the cards to his co-conspirator who then loaded the cards with the ransom money. Shushliannikov and the conspiracy then withdrew the funds as cash. Shushliannikov also deposited the ransom in other people’s bank accounts, from which the funds were periodically wired to accounts outside the United States.
Shushliannikov was discovered while removing mail from another person's mailbox in New Hampshire. His GPS linked him to other mail drop addresses used in the scheme. His apartment contained 246 prepaid debit cards, $26,000 in cash, and a money-counting machine, all of which have been forfeited. In total, the conspiracy had opened about 1,100 prepaid debit cards and laundered or intended to launder between $400,000 and $1 million.
United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistance was also provided by the Hampton, New Hampshire Police Department. The case was prosecuted by Assistant U.S. Attorney Scott L. Garland of Ortiz’s Anti-Terrorism and National Security Unit.
Russian Man Sentenced in Ransomware SchemeRead the Press Release
BOSTON – A Russian man was sentenced yesterday to three years in prison for laundering profits from a scheme in which computer hackers essentially took people’s computers “hostage” electronically until a ransom was paid.
Aleksei Shushliannikov, 23, was sentenced by U.S. Senior District Judge Mark L. Wolf to three years in prison, three years of supervised release, forfeiture of profits and equipment, and restitution. In November 2014, Shushliannikov pleaded guilty to one count of conspiracy to commit money laundering, one count of using a fictitious name and address in connection with the U.S. mail, and one count of identity fraud. He was charged in October 2013.
The scheme began with computer hackers who actually, or seemingly, took over victims’ computers with a virus. The hackers told the victims that they would restore the computers’ function if the victims bought a MoneyPak and sent the MoneyPak number to the hackers. Sometimes the hackers posed as the FBI, saying that the FBI was freezing the victims’ computers as part of a law enforcement action, and that the victims could avoid arrest by paying a criminal fine via MoneyPak. A MoneyPak is a product or service that allows a customer to load cash onto a prepaid debit card that is associated with a MoneyPak number; therefore, a MoneyPak number is almost equivalent to cash. With that number, the customer, or anyone else, can transfer funds from one prepaid debit card to another electronically and with relative ease and anonymity.
But the hackers faced a problem. If they transferred the ransom to physical debit cards, they risked being caught on videotape while withdrawing the ransom as cash at banks and ATMs. So they sold the ransomed MoneyPak numbers over the Internet to people like Shushliannikov and his co-conspirator.
Shushliannikov participated in the scheme from December 2012 until February 2013 when he was caught. His co-conspirator bought the ransomed MoneyPak numbers and, in order to cash them with relative anonymity, opened prepaid debit cards using the identities of other, uninvolved people, whose names, dates of birth, and other information he had bought on the Internet. The co-conspirator then had the debit cards mailed to mail drops that Shushliannikov employed throughout New England.
Shushliannikov was responsible for finding appropriate mail drops at unsuspecting homeowners’ mailboxes. To avoid discovery, Shushliannikov selected houses throughout Massachusetts and New Hampshire that looked unoccupied, especially those with a “for sale” sign out front. Shushliannikov collected the debit cards from these houses’ mailboxes and brought the cards to his co-conspirator who then loaded the cards with the ransom money. Shushliannikov and his co-conspirator then withdrew the funds as cash. Shushliannikov also deposited the ransom in other people’s bank accounts, from which the funds were periodically wired to accounts controlled by co-conspirators outside the United States.
Shushliannikov was discovered while removing mail from another person's mailbox in New Hampshire. His GPS linked him to other mail drop addresses used in the scheme. His apartment, which he shared with his co-conspirator, contained 246 prepaid debit cards, $26,000 in cash, and a money-counting machine, all of which have been forfeited. In total, he and his co-conspirator had opened about 1,100 prepaid debit cards and laundered or intended to launder between $400,000 and $1,000,000.
United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistance was also provided by the Hampton, New Hampshire Police Department. The case was prosecuted by Assistant U.S. Attorney Scott L. Garland of Ortiz’s Anti-Terrorism and National Security Unit.
Rochester Man Admits Carrying Gun While Selling DrugsRead the Press Release
CONTACT: Karen Brown
PHONE: (716) 843-5836
FAX: (716) 551-3051Rochester, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Jesus Velez, 21, of Rochester, New York, pleaded guilty before U.S. District Court Judge Charles J. Siragusa, to felony charges of Possession With Intent to Distribute Cocaine and Possession of a Firearm During and in Relation to a Drug Trafficking Crime. The drug charge carries a maximum penalty of 20 years in prison, a fine of $1,000,000 or both. The firearm charge carries a maximum penalty of line prison, a fine of $250,000 or both.
Assistant U.S. Attorney Jennifer M. Noto, who handled the case, stated that the defendant was observed by members of the Rochester Police Department carrying a loaded firearm while possessing cocaine that he intended to sell on July 11, 2014, in the City of Rochester.
The plea was the culmination of an investigation on the part of Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives under the direction of Special Agent in Charge Delano A. Reid, and officers of the Rochester Police Department under the direction of Chief Michael Ciminelli.
Sentencing is scheduled for June 5, 2015, at 9:15 A.M. EST, in Rochester, N.Y., in front of Judge Siragusa.
Registered Sex Offender Sentenced for New Sex CrimesRead the Press Release
BOISE - William Clarence Brower, 51, of Hazelton, Idaho, was sentenced yesterday by Chief United States District Judge B. Lynn Winmill to 110 months in prison, followed by 10 years of supervised release, for two counts of transfer of obscene images to minors and possession of child pornography, U.S. Attorney Wendy J. Olson announced. Brower pled guilty on November 25, 2014.
According to the plea agreement, the investigation began in February 2014, when the Idaho Internet Crimes Against Children Task Force (ICAC) received a request for assistance from the Massachusetts State Police regarding an unknown adult male using the social media website “Kik” messenger to send photographs of an erect penis to a 10-year-old female in Massachusetts. An undercover detective took over the child’s online identity and made the suspect aware that “she” was 10 years old. The suspect replied, “C00000l. I don't mind that you are so young,” followed by sexually explicit comments. After having learned he was communicating with a ten-year-old, the suspect continued to send similar pictures and sexual comments directed at the child.
Meanwhile, in an unrelated investigation, sheriff’s deputies in Maricopa County, Arizona, received a complaint from a family in Mesa, Arizona, that their 13-year-old daughter had been receiving unsolicited sexually explicit text messages from an unknown individual using “Kik” messenger. The messages were accompanied by images of an erect penis. The investigators in Massachusetts and Arizona independently developed information suggesting that an individual with last name Brower in Hazelton, Idaho, was responsible.
According to the plea agreement, Idaho ICAC investigators learned that the suspect, William Clarence Brower, of Hazelton, is a registered sex offender. He had been convicted in 2008 of felony indecent exposure in Twin Falls County. They served a search warrant at Brower’s residence on February 21, 2014. A forensic examiner found more than 24,000 digital images considered relevant to the investigation on Brower’s cell phone. These included pictures depicting child pornography, child erotica, images of a male subject wearing female undergarments, numerous images of a male exposing his penis, and non-pornographic images of numerous young females that appear to have been obtained through a social media application or web site. Brower was interviewed and took responsibility for using his cell phone to send using “Kik” messenger hundreds of sexually explicit photos of himself to random persons, most of whom he knew were under the age of 18. Brower also admitted that he possessed images and videos of child pornography.
The case was investigated by the Idaho Attorney General’s Office, Internet Crimes Against Children Task Force, the Boise Police Department, the Maricopa County Sheriff’s Department, the Department of State Police of the Commonwealth of Massachusetts, and the Jerome County Sheriff’s Department.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Operators of Cleveland Ambulette Company Charged with Health Care FraudRead the Press Release
Three people were indicted on five counts of health care fraud and one count of conspiracy to commit health care fraud in connection with the operation a Cleveland-based ambulette company, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Indicted are Nedal "Mark" Hasan 45, of North Olmsted, Kim Gullie, 56, of Cleveland, and Nancy Pyles, 68, of Roanoke, Texas. Together they operated Eman Transportation Services in Cleveland.
Ambulette services contract with the Ohio Medicaid program to transport patients in vehicles known as ambulettes. An ambulette is a specially equipped van designed for wheelchair passengers. Medicaid pays ambulette operators for driving Medicaid patients to and from Medicaid-covered appointments, so long as: (1) the patient rides in a wheelchair; (2) a medical doctor certifies the need for the wheelchair and ambulette; and (3) the ambulette itself otherwise meets safety specifications.
The defendants are charged with scheming to defraud Medicaid of approximately $245,000 by charging Medicaid for rides of patients who did not use or need wheelchairs and for transporting Medicaid recipients to non-covered appointments.
If convicted, the defendants’ sentences will be determined by the court after review of the federal sentencing guidelines and factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offenses and the characteristics of the violations.
The indictment is the result of an investigation by Ohio Attorney General Mike DeWine’s Medicaid Fraud Control Unit and the Office of the Inspector General, United States Department of Health and Human Services. The case is being prosecuted by Assistant U.S. Attorney Michael L. Collyer and Special Assistant U.S. Attorney Maritsa Flaherty, an Assistant Attorney General for the State of Ohio.
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.
Operator of Third Party Payroll Company Pleads Guilty to Federal Charges for Embezzling $11 Million from Client CompaniesRead the Press Release
CHARLOTTE, N.C. – James William Staz has pleaded guilty to federal charges for defrauding more than $11 million from clients of the third-party payroll company he jointly operated with his father, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. James Staz, 44, of Iron Station, N.C. appeared before U.S. Magistrate Judge David S. Keesler today and pleaded guilty to wire fraud, transactional money laundering and tax evasion. James Staz’s father, William James Staz, 72, of Huntersville, N.C., pleaded guilty in January 2015 to wire fraud and tax evasion charges.
U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).
According to court documents and today’s plea hearing, William and James Staz operated the third-party payroll company, “Employee Services.Net, Inc.” (ESN) and provided various services to client companies, including processing payroll, collecting and paying employment taxes, and preparing and filing employment tax forms. At its height, ESN had approximately 500 client companies nationwide. Court records show that James Staz was ESN’s vice president and later the company’s president. William Staz was a company shareholder and, through 2008, managed ESN’s day-to-day operations. According to court documents, ESN had access to the clients companies’ bank accounts and directly drafted the funds needed to cover expenses associated with the services it provided.
According to court records, from 2008 to March 2014, the two men defrauded at least 113 ESN clients of approximately $11 million dollars intended for payroll and employment tax payments and used it to support their personal lifestyles. According to the charging documents, during that time period, James Staz stole at least $3.7 million in client funds and directed the money to his personal bank account. In order to conceal his embezzlement, James Staz made false entries into ESN’s accounting system to make it appear as though the funds were used for legitimate client expenses. According to court records, James Staz used the money to pay for alcohol, strip club entertainment, jewelry, a Mercedes Benz and a luxury home. Court records also show that over the course of the scheme, William Staz drew a salary from ESN as high as $200,000, even for the time period he was serving a nine-month federal prison sentence.
James Staz has been detained since his arrest in October 2014. William Staz has been released on bond pending sentencing. They each face a maximum of 20 years in prison and a $250,000 fine for the wire fraud charge and five years in prison and a $100,000 fine for the tax evasion charge. James Staz also faces a maximum of 20 years in prison and a $500,000 fine or twice the amount of the criminally derived proceeds, whichever is greater, for the money laundering charge. As part of the plea agreement, both defendants have agreed to pay restitution, the amount of which will be determined by the Court at sentencing. A sentencing date for the defendants has not been set yet.
The investigation for the case was handled by the FBI and IRS-CI. The prosecution of the case is being handled by Assistant U.S. Attorney Kelli H. Ferry of the U.S. Attorney’s Office, in Charlotte.
New Orleans Woman Sentenced for Making False Statements on Tax ReturnsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JULIE MERLIN ZANCO, age 44, of New Orleans, was sentenced today after previously pleading guilty to making false statements on income tax returns.
U.S. District Judge Carl J. Barbier sentenced ZANCO to serve three years probation and pay $9,838 in restitution.
According to the court documents, in or about May 2012, ZANCO’S husband learned that someone had opened a brokerage account in his name and used that account to acquire collateralized mortgage obligations (CMOs), a type of bond that bore value from interest generated upon its sale, by fraudulent means. Even though they knew that the CMOs were not theirs, ZANCO and her husband gained control of the accounts and arranged for the interest proceeds of the CMOs to be diverted to other financial accounts under their control. Between about March 18, 2013, and November 18, 2013, ZANCO used the funds, totaling approximately $54,980, to engage in a variety of financial transactions for her personal use, including purchasing a boat. ZANCO failed to report the $54,980.00 as taxable income on her Tax Year 2013 tax return. As a result of her failing to report this income on her tax return, she received an $838 refund, while she should have been obligated to pay approximately $9,000 in tax to the Internal Revenue Service.
U.S. Attorney Polite praised the work of the Internal Revenue Service – Criminal Investigations and the Federal Bureau of Investigation. Assistant United States Attorney Jordan Ginsberg was in charge of the prosecution.
New Jersey Resident/Nigerian National Sentenced to 37 Months for New Hampshire Bank Fraud and ConspiracyRead the Press Release
CONCORD, NEW HAMPSHIRE – Olowaseun Adekoya, 29, a Nigerian National living in Sewaren, NJ, was sentenced in United States District Court for the District of New Hampshire to 37 months in prison, after being convicted by a jury of bank fraud and conspiracy to commit bank fraud in New Hampshire, announced United States Attorney John P. Kacavas.
Between September 26, 2013 and October 2, 2013, Adekoya communicated on-line with an undercover agent who had taken over the identity of a criminal with whom Adekoya had previously done business. The undercover agent advised Adekoya that he could create counterfeit ATM cards which Adekoya could use to fraudulently obtain money from banks in New Hampshire. As a result of those discussions, on October 1, 2013 Adekoya sent four individuals from New Jersey to Manchester, New Hampshire to engage in what he thought would be a $960,000 ATM bank fraud. The undercover agent and Adekoya had agreed that Adekoya would come to Manchester, NH and bring four “soldiers” with him, and that all five of them would each take 40 counterfeit ATM cards and travel to ATMs in Manchester, under cover of darkness, and fraudulently withdraw almost a million dollars.
Late on the evening of October 1, 2013 Adekoya’s four co-conspirators flew to New Hampshire and went to an agreed upon location where they picked up what they thought were 200 counterfeit ATM cards. In the early morning hours of October 2, 2013, the four then proceeded to ATM machines, where they were arrested. Mr. Adekoya, having not flown to New Hampshire with his confederates, was arrested at his home in Sewaren, NJ. The four co-conspirators, Darrell Harris, Adebayo Adegbesan, Kamau Brown and Aubrie Banks, all pled guilty before trial and two of them testified against Adekoya.
The case was investigated by the U.S. Secret Service with assistance from the United States Postal Inspection Service and the Federal Bureau of Investigation, and was prosecuted by Assistant U.S. Attorney Arnold H. Huftalen.
Missouri Woman Guilty of Tax Scheme to Obtain “Free Money”Read the Press Release
Tanya Nichols, 33, of St. Louis, Missouri, pleaded guilty on March 5, 2015, in US District Court for participating in an income tax refund scheme, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Nichols, and her half-brother Justin Durley, 30, of Hazelwood, Missouri, were indicted by the federal grand jury on August 20, 2014. They were charged in lengthy indictment that alleges Nichols functioned as a dishonest tax preparer who filed false tax returns to claim inflated refundable tax credits for low-income tax filers.
Nichols pleaded guilty to conspiracy to obstruct or impair the Internal Revenue Service in the lawful assessment and collection of income taxes and distribution of tax refunds, three counts of mail fraud and one count of theft of government property. Durley is charged with theft of government property. Durley is scheduled for trial on May 11, 2015.
The scheme to defraud was described as an ongoing federal income tax refund scheme where Nichols
prepared fraudulent income tax returns for individual tax filers in order to generate "refundable tax credits," such as the earned income tax credit (EIC) and the child tax credit, which were refunded to the filer. The false information contained in the income tax returns prevented the IRS from making an accurate ascertainment, computation, and assessment of tax liabilities. It also prevented the IRS from making a correct distribution of income tax refunds. The false tax returns generated a larger tax refund than the filer was entitled to receive. Nichols shared the proceeds generated from the fraudulent returns with the tax filers, while collecting a fee in excess of that typically charged by legitimate tax preparers.
Nichols also paid finders’ fees to those who recruited tax filers to participate in the scheme. The indictment charges that Nichols and her coconspirators solicited low-income individuals residing in St. Louis, Missouri and East St. Louis, Illinois to become participants in this refund scheme by promising IRS tax refunds, sometimes marketed as "free money."
The indictment explains that "refundable tax credits" are vulnerable to abuse because they have cash value to tax filers. That means a filer can receive "refund" payments for refundable credits even when the person filing the tax return has never paid any income tax whatsoever. In the case of low-income tax filers, it is common for a person to have little or no federal tax liability while still qualifying to receive these valuable refundable tax credits. This means that a low-income filer can receive a tax "refund" that exceeds the amount of income tax the filer actually paid. In that situation, the filer is not receiving a refund of their money; but rather they are actually profiting from the tax code by receiving thousands of dollars’ worth of refundable tax credits that exceed the filer’s tax obligations. The indictment alleges that Nichols took advantage of this system by falsifying income, employment, dependents, and other factors, to fraudulently generate these large refundable tax credits.
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Conspiracy is punishable by not more than 5 years’ imprisonment, a $250,000 fine, and not more than 5 years supervised release. Theft of government property is punishable by not more than 10 years’ imprisonment, a $250,000 fine and not more than three years supervised release. Each count of wire fraud is punishable by not more than 20 years’ imprisonment, a $250,000 fine, and not more than three years of supervised release. However, the United States Sentencing Guidelines must be applied to the case and considered by the Court during sentencing. Nichols is scheduled to be sentenced on June 12, 2015.
The investigation is being conducted by agents from the Internal Revenue Service / Criminal Investigations. The case is being prosecuted by Assistant United States Attorneys Steven D. Weinhoeft and Norman R. Smith.
An indictment is a formal charge against a defendant. Under the law, Justin Durley is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
Mexican National Sentenced for Immigration OffenseRead the Press Release
U.S. Attorney Kenneth A. Polite announced that APOLINAR MONJE-SANCHEZ, age 42, a native of Mexico, was sentenced today after previously pleading guilty to a one-count indictment for illegal entry of a removed alien.
U.S. District Court Judge Susie Morgan sentenced MONJE-SANCHEZ to time served, which was five months. MONJE-SANCHEZ will be surrendered to the custody of the U.S. Immigration and Customs Enforcement for removal proceedings.
According to court documents, the defendant was encountered by federal agents at the Union Passenger Terminal in New Orleans on October 1, 2014. MONJE-SANCHEZ had previously been removed from the United States on April 29, 2010.
U.S. Attorney Polite praised the work of the U.S. Customs and Border Protection agency in investigating this matter. Assistant United States Attorney Jon Maestri was in charge of the prosecution.
Metro-East Resident Pleads Guilty to Participating in Fraudulent Tax Refund SchemeRead the Press Release
Sylvia Baker, 30, from Fairview Heights, Illinois, pled guilty to conspiracy to defraud the United States by making false claims for tax refunds to the Internal Revenue Service by submitting false federal income tax returns, and also pled guilty to five additional counts for making false claims for federal tax refunds, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Baker faces a prison sentence of up to 35 years, a fine of up to $1,500,000, and up to 3 years’ supervised release after serving her sentence and mandatory restitution. Her sentencing has been scheduled for July 10, 2015.
The prosecution is the result of an investigation conducted by the Internal Revenue Service/Criminal Investigations. The case is being prosecuted by Assistant United States Attorney Norman R. Smith.
Marshalltown Man Sentenced to 210 Months in Prison for Transportation of Child PornographyRead the Press Release
DES MOINES, IA – On February 19, 2015, John Vivian Sims, age 36, of Marshalltown, Iowa, was sentenced to 210 months in prison, followed by 5 years of supervised release, by United States District Court Senior Judge Robert W. Pratt for transportation of child pornography, announced United States Attorney Nicholas A. Klinefeldt.
Sims had been under investigation in the Summer of 2012 by local law enforcement for a string of burglaries committed in Marshalltown, Iowa. When Sims fled the area, the investigation into his whereabouts revealed he had used his cell phone to persuade four minors from Oregon, Texas, New Jersey, and Florida, respectively, to take nude photographs of themselves and send them to him via email. Sims was federally charged in May 2014 with three counts of production of child pornography and one count of transportation of child pornography. He pleaded guilty to the transportation charge in October of 2014.
Any persons having knowledge of a child being sexually abused, or of a person committing child pornography crimes, are encouraged to call the Iowa Sexual Abuse Hotline at 1-800-284-7821.
The investigation was conducted by the Marshalltown, Iowa, Police Department, and the case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Marquette Felon Sentenced to Prison for Possessing FirearmRead the Press Release
MARQUETTE, MICHIGAN – Joseph Glenn Etheridge, 37, of Marquette, Michigan, was sentenced to 70 months (6 years) in prison followed by three years of supervised release, U.S. Attorney Patrick A. Miles, Jr. announced today. U.S. District Judge Robert Holmes Bell handed down the sentence.
On November 21, 2014, Etheridge pleaded guilty to an indictment charging him with being a felon in possession of a firearm. The charge arose from an investigation surrounding the discharge of a shotgun in Skandia, Michigan on February 10, 2014. Etheridge had been seen with a shotgun earlier in the day and was found hiding in a nearby residence he had broken into after firing the shotgun. Etheridge had previously been convicted of two felony home invasion charges in Michigan’s Third Circuit Court in Detroit.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and Michigan State Police investigated the case. Assistant U.S. Attorney Paul D. Lochner prosecuted the case.
Managing Director of Venture Capital Firm Arrested and Charged in Manhattan Federal Court in Connection with Multimillion-Dollar Ponzi SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Andrew Vale, the Special Agent in Charge of the Albany Division of the FBI, announced today that GREGORY W. GRAY, JR., was arrested yesterday in Florida on securities fraud, wire fraud, and perjury charges stemming from his scheme to defraud investors in multiple funds created and controlled by GRAY of approximately $5 million dollars.
Among other illicit activity, GRAY allegedly fraudulently induced an investor (“Investor-1”) to invest $5 million in a fund controlled by GRAY, based on the false representation that GRAY would invest that money, through the fund, in shares of Uber Technologies, Inc. (“Uber”). In fact, GRAY allegedly did not invest any of Investor-1’s $5 million in Uber, instead using that $5 million investment to repay investors who believed they had invested in shares of Twitter, Inc. (“Twitter”), including Investor-1 himself, who also believed he had invested in Twitter. In support of the scheme, GRAY allegedly forged a stock transfer agreement, which he provided to Investor-1, purporting to show that GRAY, through a fund he controlled, had used the $5 million investment to purchase over 175,000 shares of Uber. In fact, and as GRAY well knew, he had purchased no Uber shares whatsoever.
GRAY was presented today before a United States Magistrate Judge in federal court in West Palm Beach, Florida.
U.S. Attorney Preet Bharara said: “As alleged, Gregory Gray dangled the opportunity to invest in new companies like Twitter and Uber to entice his victims into fraudulent investment schemes and, in an effort to extricate himself from one scam, he devised another. Then, as the Complaint charges, he made things worse by lying about it to the SEC. The investments Gray allegedly offered were fake but the charges he faces are real.”
FBI Assistant Director in Charge Diego Rodriguez said: “With the cachet of Uber and Twitter, Gray allegedly convinced investors to join his fund. Instead of making real investments, he allegedly used the money to pay off old debts. Mr. Ponzi may be dead, but the illicit behavior for which he is known is alive and well. We will continue policing our markets to protect their integrity and investors.”
FBI Special Agent in Charge Andrew Vale said: “Yesterday’s arrest is the result of the hard work and cooperation between the FBI, SEC and the U.S. Attorney’s Office to bring this individual to justice. This multimillion-dollar fraud scheme demonstrates the significant impact white collar criminals can have on the hard-working individuals of our communities, and the FBI, in concert with our federal partners, will continue the dedicated pursuit of those who violate the law for personal gain.”
According to the three-count Complaint unsealed yesterday in Manhattan federal court:
From at least April 2014 through February 2015, GRAY engaged in a Ponzi scheme to defraud investors who believed they had invested in funds GRAY controlled at Archipel Capital, LLC (“Archipel”), where GRAY was the Senior Managing Director.
From June 2012 through November 2013, GRAY raised over $5.2 million, from approximately 52 investors, for four Archipel “Social Media Funds.” GRAY promised to use that capital to purchase shares of Twitter before the company’s initial public offering (“IPO”). Based on GRAY’s representations to investors, GRAY promised to purchase over 200,000 pre-IPO Twitter shares.
GRAY frequently commingled funds of the various Archipel investment vehicles that he managed. Ultimately, GRAY’s withdrawals from the Social Media Funds left those funds with insufficient money to purchase the full complement of pre-IPO Twitter shares he had promised investors.
On November 6, 2013, Twitter had its IPO and began trading on the New York Stock Exchange. At that time, contrary to his representations to investors, GRAY had purchased only 80,000 pre-IPO Twitter shares for a total cost of $1,875,000. GRAY accordingly owed his investors millions of dollars’ worth of Twitter shares.
In an attempt to make up the shortfall of Twitter stock, in April 2014, GRAY persuaded Investor-1 to invest $5 million in Archipel’s “Late Stage Fund,” which GRAY also controlled. GRAY promised that, through that fund, he would use Investor-1’s $5 million investment to purchase a purported multimillion-dollar, privately held allotment of Uber shares. However, instead of using the $5 million as promised, GRAY instead used the money to make cash payments to investors in the Social Media Funds and to purchase post-IPO Twitter shares for those same investors, including Investor-1 himself.
When Investor-1 requested documentation of the purchase of Uber shares as promised, GRAY provided Investor-1 with a fabricated stock transfer agreement (the “Uber Stock Transfer Agreement”) that purported to show that the Late Stage Fund had purchased 175,438 Uber shares. In truth and in fact, and as GRAY well knew, the fund had not purchased any Uber shares.
On February 24, 2015, GRAY gave sworn testimony to the SEC. During his testimony, GRAY falsely stated, in substance and in part, that the Uber Stock Transfer Agreement reflected a bona fide purchase of Uber shares by the Late Stage Fund.
GRAY, 39, was arrested yesterday at his home in Lake Worth, Florida. He is charged with one count of securities fraud, one count of wire fraud, and one count of perjury in connection with his testimony to the SEC. The securities fraud count and the wire fraud count each carry a maximum sentence of 20 years in prison. The perjury count carries a maximum sentence of five years in prison. The charges carry a maximum fine of $5 million, or twice the gross gain or loss from the offense. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the work of the Federal Bureau of Investigation, and thanked the SEC for its assistance. He added that the investigation is continuing.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Damian Williams and Michael Ferrara are in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Gregory Gray Complaint
Man Charged for Failing to Register as a Sex OffenderRead the Press Release
A grand jury returned a one-count indictment charging Scott Ray Moon, age 48, of Bartow, Florida, with failing to register as a sex offender in Ohio, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
If convicted, the defendant’s sentence will be determined by the Court 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 and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney Brian M. McDonough following an investigation by the Cleveland office of the United States Marshals Service.
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.
Las Cruces Man Pleads Guilty to Drug Trafficking ChargesRead the Press Release
ALBUQUERQUE – Anthony Calderon, 40, of Las Cruces, N.M., pleaded guilty this afternoon in federal court to heroin and methamphetamine trafficking charges. Under the terms of his plea agreement, Calderon will be sentenced to a prison term in the range of 24 to 36 months.
Calderon was arrested on Aug. 8, 2014, in Las Cruces on an indictment charging him with two counts of distributing heroin and one count of distributing methamphetamine in Doña Ana County, N.M. The indictment also charged Calderon’s co-defendant Orlando Roman, 34, also of Las Cruces, with one count of heroin distribution. Roman was arrested on Oct. 9, 2014.
During today’s proceedings, Calderon pled guilty to all three counts of the indictment and admitted that on April 15 and April 16, 2014, he distributed approximately 75.3 grams of heroin to a person working under the supervision of law enforcement. Calderon also admitted that on May 27, 2014, he distributed approximately 101.1 grams of methamphetamine to a person working under the supervision of law enforcement.
Co-defendant Roman has entered a plea of not guilty. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Las Cruces office of the FBI and is being prosecuted by Assistant U.S. Attorney Maria Y. Armijo of the U.S. Attorney’s Las Cruces Branch Office.
This case is being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Lambert Family Sentenced to Federal Prison for Brockton Embezzlement SchemeRead the Press Release
GREAT FALLS - Four members of a Brockton family were sentenced to federal prison terms today for their role in the embezzlement of over $130,000 from the Town of Brockton on the Fort Peck Indian Reservation, the latest development in the ongoing probe into public corruption involving federally funded programs known as the Guardians Project.
The United States Attorney’s Office announced that Desiree Lambert, 59, Bernard Lambert, 66, Kaycee Lambert, 35, and Kayla Lambert, 30, were all sentenced to prison during a federal court hearing on March 5, 2015, before U.S. District Judge Brian M. Morris.
The Lambert family was indicted in August of 2014 by a federal grand jury for wire fraud, public corruption, and aggravated identity theft. At the changes of plea, Assistant U.S. Attorney Ryan G. Weldon outlined the embezzlement scheme spearheaded by Desiree Lambert, then the Business Manager for the Town of Brockton. In her role as Business Manager, Desiree Lambert handled the municipality’s finances, books and records. Beginning in December 2012, Desiree Lambert began writing illegitimate checks to herself, her husband (Bernard Lambert), and her daughters (Kaycee and Kayla Lambert) and forging the signature of the Mayor of Brockton. The embezzlement scheme netted the Lamberts $132,563 over approximately a year-and-a-half time period. When interviewed, the Lamberts admitted to spending the money on gambling and other household items.
At sentencing, Weldon requested stiffer prison sentences for Bernard and Desiree Lambert due to their previous criminal history. In 2006, Bernard and Desiree Lambert embezzled $12,000 from the Department of Education while Bernard Lambert was the Superintendent of the Brockton School District and Desiree Lambert was the Director of the Fort Peck Department of Education. Desiree Lambert authorized four payments to her husband for writing ten grant applications on behalf of the Ft. Peck Department of Education. The alleged grant applications were for grants from various corporations and a 21st Century Grant from the U.S. Department of Education (DOE). Investigation revealed, through contact with the various corporations and the DOE, that none of the grant applications that Bernard Lambert was paid to write were ever received or funded. As a result of their past fraud, Bernard and Desiree Lambert each served a year in federal prison. After the pair was released from federal supervision in 2011, Desiree Lambert was hired to handle the finances of Brockton.
Weldon told the Court that “[u]ndeterred, this time the Lamberts regrouped and increased their criminal efforts with more vigor. As a result, they embezzled $132,563.95—many times more than that of the first conviction. Worse yet, they used their children to move money and feed their gambling addictions.”
Judge Morris sentenced Desiree Lambert to 44 months of prison, and Bernard Lambert received 20 months of prison. Desiree Lambert received an increase in her sentence, in part, because she abused and used her position with the Town of Brockton in order to embezzle public funds. Judge Morris also ordered Desiree and Bernard Lambert to serve three years of supervised release and to repay $132,563.95 in restitution.
Kayla Lambert and Kaycee Lambert facilitated the embezzlement and public corruption scheme by cashing fraudulent checks on behalf of their mother and father. Judge Morris sentenced Kayla Lambert to 5 months in federal prison, followed by two years of supervised release. Of the two years on supervised release, Kayla Lambert must spend 5 months in home confinement. Kaycee Lambert was sentenced to one more month in federal prison than Kayla. As a result, Kaycee received a federal prison sentence of 6 months, which will be followed by two years of supervised release. Of the two years on supervised release, Kaycee Lambert must spend 6 months in home confinement. Kayla Lambert was ordered to pay $93,656.00 in restitution, and Kaycee Lambert was ordered to pay $39,774.07 in restitution.
Because there is no parole in the federal system, the truth in sentencing guidelines mandate that the Lamberts will serve all of the time imposed by the court. In the federal system, Bernard and Desiree Lambert do have the opportunity to shorten the term of custody by earning credit for good behavior. However, this reduction will not exceed 15% of the overall sentence.
This case was investigated by the Federal Bureau of Investigation and the Department of Justice Office of Inspector General.