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Thursday 15 January 2015
Snyder Dentist Indicted on Tax ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned an indictment charging Charles Weber, 59, of Snyder, NY, with making and subscribing a false tax return. The charges carry a maximum penalty of three years in prison, a fine of $250,000 or both.Assistant U.S. Attorney MaryEllen Kresse, who is handling the case, stated that Weber is a dentist with a private practice in Williamsville, NY. In April 2009, the defendant filed tax returns for 2006 and 2007, falsely claiming that he was not a United States citizen and had not been present in the United States at any time during 2006 or 2007. Weber also falsely stated that his only taxable income in 2006 and 2007 came from dividends, failing to disclose that he had been engaged in the operation of his dental practice during those years and as a result received reportable income. The defendant signed the tax returns under the penalties of perjury.
Weber was arraigned before U.S. Magistrate Judge Hugh B. Scott.
The indictment is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service, under the direction Special Agent-in-Charge Shantelle P. Kitchen.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Shreveport Woman Pleads Guilty to Stealing More Than $39,000 in Social Security PaymentsRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced today that a Shreveport woman pleaded guilty to stealing more than $39,000 in Social Security benefit payments.
Stephanie D. Lynn, 49, of Shreveport, pleaded guilty before U.S. District Judge S. Maurice Hicks Jr. to one count of theft of government funds. According to evidence presented at the guilty plea, from May 2009 to December 2013, Lynn cashed and used her deceased son’s Social Security benefit checks, to which she was not entitled. She also did not inform the Social Security Administration that her son had died and submitted paperwork stating that he was alive in order to continue receiving the checks. The total amount taken was $39,435.
Lynn faces up to 10 years in prison, three years of supervised release, a $250,000 fine and restitution. A sentencing date of April 29, 2015 was set.
The Social Security Administration, Office of Inspector General, conducted the investigation. Assistant U.S. Attorney Seth D. Reeg is prosecuting the case.
Sentencings for January 8 - 14, 2015Read the Press Release
Anthony Stoner, 29, of Gillette, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on January 14, 2015, for conspiracy to possess with intent to distribute 500 grams or more of methamphetamine and for possession of firearms in furtherance of a drug trafficking crime. Stoner was arrested in Gillette, Wyoming. He received 180 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $200.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.
Sergio Bucio-Cuellar, 47, of Mexico, was sentenced by Federal District Court Judge Scott W. Skavdahl on January 14, 2015, for illegal re-entry of a previously deported alien into the United States. Bucio-Cuellar was arrested in Cheyenne, Wyoming. He received 12 months imprisonment, was ordered to pay a $100.00 special assessment, and is subjection to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Miguel Angel Rodriguez-Bustos, 41, of Mexico, was sentenced by Federal District Court Judge Scott W. Skavdahl on January 14, 2015, for illegal re-entry of a previously deported alien into the United States. Rodriguez-Bustos was arrested in Rawlins, Wyoming. He received time served, plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Freddy Urbina, 42, of Nicaragua, was sentenced by Federal District Court Judge Scott W. Skavdahl on January 13, 2015, for illegal re-entry of a previously deported alien into the United States. Urbina was arrested in Casper, Wyoming. He received time served, plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Raul Gomez-Medina, 40, of Mexico, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on January 12, 2015, for illegal re-entry of a previously deported alien into the United States. Gomez-Medina was arrested in Jackson, Wyoming. He received time served, plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Oscar Asencio-Melian, aka Oscar Ascencio-Ramirez, Luis Orland Polo-Abadia, and Oscar Omar-Rodriguez, 40, of Guatemala, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on January 12, 2015, for illegal re-entry of a previously deported alien into the United States and for misuse of a social security number. Asencio-Melian was arrested in Sundance. He received 15 months imprisonment, to be followed by three years of supervised release, was ordered to pay a $200.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Camerron Morris, 37, of Green River, Wyoming, was sentenced by Chief Federal District
Court Judge Nancy D. Freudenthal on January 12, 2015, for conspiracy to possess with intent to
distribute heroin. Morris was arrested in Green River, Wyoming. She received 15 months
imprisonment, to be followed by three years of supervised release, and was ordered to pay a
$100.00 special assessment and a $200.00 fine. This case was investigated by the Sweetwater
County Sheriff’s Office, the Wyoming Division of Criminal Investigation and the U.S. Drug
Enforcement Administration.Trevor James Tucker, 42, of Ogden, Utah, was sentenced by Federal District Court Judge Scott
W. Skavdahl on January 9, 2015, for conspiracy to possess with intent to distribute, and to
distribute, 500 grams or more of methamphetamine. Tucker was arrested in Salt Lake City,
Utah. He received 57 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
Wyoming Division of Criminal Investigation.Lonnie Lindell, 43, of Cheyenne, Wyoming, was sentenced by Chief Federal District Court
Judge Nancy D. Freudenthal on January 9, 2015, for theft of government money. Lindell was
arrested in Cheyenne, Wyoming. He received two years of probation, with special conditions,
and was ordered to pay a $100.00 special assessment and restitution in the amount of
$149,824.00. This case was investigated by the U.S. Social Security, Office of the Inspector
General.Derek Keith Taylor, 42, of Layton, Utah, was sentenced by Chief Federal District Court Judge
Nancy D. Freudenthal on January 8, 2015, on one count of conspiracy to possess with intent to
distribute, and to distribute, at least 500 grams of methamphetamine; one count of possession
with intent to distribute methamphetamine; and one count of conspiracy to launder money.
Taylor was arrested in Evanston, Wyoming. He received 120 months imprisonment, to be
followed by five years of supervised release, and was ordered to pay a $300.00 special
assessment. This case was investigated by the Wyoming Division of Criminal Investigation and
the U.S. Drug Enforcement Administration.Sacramento Drug Dealer Sentenced to More Than 21 Years in PrisonRead the Press Release
SACRAMENTO, Calif. — John Winton Harris, 31, of Sacramento, was sentenced today by United States District Judge Morrison C. England Jr. to 21 years and 10 months in prison for possessing more than 163 grams of crack cocaine, United States Attorney Benjamin B. Wagner announced.
According to evidence presented at trial, Sacramento police officers responded to a domestic violence complaint at an apartment complex in Sacramento. When the officers entered the apartment, they found Harris crouched in the kitchen area. He was moved to a different location in the apartment, and when officers found a large amount of cocaine base where he had been crouching in the kitchen, Harris attempted to flee. Harris claimed he did not live in the apartment, but officers found mail addressed to him at that address, as well as other personal items belonging to him in the apartment. Harris’s cellphone revealed photographs of Harris in the same apartment with a large amount of currency only days before, as well as text messages indicating he was involved in the distribution of cocaine base that very week.
The sentence imposed on Harris was based not just upon the circumstances of his offense, but also his substantial criminal history, which rendered him a career criminal under federal law. Another factor the court considered in imposing sentence was the finding that Harris obstructed justice by testifying falsely at a hearing held during his trial.
This case was the product of an investigation by the United States Drug Enforcement Administration and the Sacramento Police Department. Assistant United States Attorneys Todd Pickles and Chris Highsmith prosecuted the case.
Rochester Man Charged with Enticement of A Minor and Production of Child PornogrpahyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y. – U.S. Attorney William J. Hochul, Jr. announced today that Roger Eric Powell, 48, of Rochester, NY, was charged by criminal complaint with enticement of a minor and production of child pornography. Enticement of a minor carries a mandatory minimum sentence of 10 years in prison, a maximum of life and a fine of $250,000. Production of child pornography carries a mandatory minimum sentence of 15 years, a maximum of 40, and a $250,000 fine.Assistant U.S. Attorney Tiffany H. Lee, who is handling the case, stated that according to the complaint, on January 2, 2015, a complainant told law enforcement officers that her child, aged 14, had been engaging in sexually explicit communications with the defendant. When the child spoke with officers, the child advised that the two communicated on Facebook and that Powell sent two explicit images of himself to the child. The child also indicated that the defendant made multiple requests for explicit photos in return. In order to get the defendant to stop bothering the child, the child sent an explicit picture to Powell.
Law enforcement officers reviewed the child’s Facebook account and saw the exchanges between the defendant and the child. Officers then took over the Facebook account and engaged in communications with Powell. The defendant revealed in those communications about having engaged in prior sexual conduct with the child that was later confirmed by the child to law enforcement. A search warrant was executed at Powell’s residence and the defendant admitted to engaging in inappropriate communications with the child.
The criminal complaint is the culmination of an investigation on the part of the Federal Bureau of Investigation Child Exploitation Task Force. The Task Force includes members of the Rochester Police Department, under the direction of Chief Michael Ciminelli, the Monroe County Sheriff’s, under the direction of Sheriff Patrick O’Flynn, and Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero. .
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Qazi Brothers Charged with Additional Terrorism Violations and Attempted Murder of Two Deputy U.S. MarshalsRead the Press Release
Qazi brothers, naturalized U.S. citizens originally from Pakistan, were charged today with additional terrorism violations and attempted murder of two Deputy U.S. Marshals while the brothers were in custody.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, John Carlin, Assistant Attorney General for National Security, George L. Piro, Special Agent in Charge, FBI, Miami Field Office, and members of the South Florida Joint Terrorism Task Force (JTTF) made the announcement.
Raees Alam Qazi, 22, and Sheheryar Alam Qazi, 32, were previously charged in November 2012 with conspiracy to provide material support to terrorists and conspiracy to use a weapon of mass destruction (explosives).
As alleged in the Superseding Indictment:
From at least July 2011 through Nov. 29, 2012, the defendants conspired to provide material support and resources – including property, service, lodging, communications equipment, and personnel – knowing and intending that this support be used in preparation for and in carrying out a violation of law – namely, a conspiracy to use a weapon of mass destruction. The indictment further alleges that during this time frame the defendants conspired to use a weapon of mass destruction (explosives) against persons and property within the United States. During the same time frame, the indictment alleges that the Qazi brothers conspired and attempted to provide material support to al-Qa’ida and al-Qa’ida in the Arabian Peninsula.
As further alleged, on or about April 8, 2014, while being moved within the United States Courthouse complex, the Qazi brothers simultaneously motioned with their heads to cause the Deputy U.S. Marshals to look at the ceiling, the Qazi brothers then simultaneously punched the Deputies in the face and struggled with them.
Further, while struggling with the Deputy U.S. Marshals, the Qazi brothers attempted to use potentially lethal force on them while exclaiming “Allahu Akbar,” an Arabic exhortation meaning “God is Great.”
The Superseding Indictment charges the Qazi brothers with the following counts:
Conspiring to Provide Material Support to a Foreign Terrorist Organization, al-Qa’ida and al-Qa’ida in the Arabian Peninsula;
Attempting to Provide Material Support to a Foreign Terrorist Organization, al-Qa’ida and al-Qa’ida in the Arabian Peninsula:
Conspiring to Forcibly Assault a Federal Employee, a deputy United States Marshal;
Forcibly Assaulting a Federal Employee, a deputy United States Marshal; and
Attempting to Murder a Federal Employee, a deputy United States Marshal.
The charge of conspiring to provide material support to terrorists carries a maximum potential sentence of 15 years in prison. The charge of conspiracy to use a weapon of mass destruction carries a maximum potential sentence of life in prison. The charge of conspiring to provide and providing material support to a Foreign Terrorist Organization, al-Qa’ida and al-Qa’ida in the Arabian Peninsula, carries a maximum potential sentence of 15 years in prison.
The charge of conspiring to forcibility assault a federal employee carries a maximum potential sentence of 5 years in prison; the charge of forcibly assaulting a federal employee carries a maximum potential sentence of 20 years in prison; and the charge of attempting to murder a federal employee carries a maximum potential sentence of 20 years in prison.
The case is being investigated by the FBI’s South Florida Joint Terrorism Task Force. The case is being prosecuted by Assistant U.S. Attorneys Karen E. Gilbert and Adam Fels, of the U.S. Attorney’s Office for the Southern District of Florida, and Jennifer Levy, Trial Attorney, Counterterrorism Section of the Justice Department’s National Security Division.
An indictment contains mere allegations. Defendants are presumed innocent unless and until proven guilty in a court of law.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Previously Convicted Sex Offender Sentenced to over 17 Years in Prison for Distribution of Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles, Jr. sentenced Brian P. Davis, age 50, of Dundalk, Maryland, today to 210 months in prison, followed by lifetime supervised release, for distribution of child pornography. Judge Quarles ordered that upon his release from prison, Davis must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA). In 1998, Davis was convicted of the sexual abuse of a minor in the Circuit Court of Baltimore County and as a result was required to register as a sex offender.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; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Colonel Marcus L. Brown, Superintendent of the Maryland State Police; Chief James W. Johnson of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.
According to Davis’ plea agreement, in 2005 he began using a file sharing network to search for, receive and distribute child pornography. Such networks are used to exchange and share files directly between computer users. On November 24, 2013, an undercover Baltimore County Police detective used a computer connected to the internet to conduct an investigation into the sharing of child pornography. The detective downloaded an image depicting a minor engaging in sexually explicit conduct from a user who was making files containing child pornography available for others to download. The user sharing files was subsequently identified as Davis and a search warrant was executed at Davis’ residence on December 11, 2013. When officers from the Baltimore County Police Department entered the residence to conduct the search, they found Davis’ desk top computer in the basement. The computer was on and running a file sharing network. A detective conducted a forensic preview of the computer and located images depicting children engaged in sexually explicit conduct. A full forensic examination of the computer found more than 600 images of child pornography, including images depicting prepubescent minors engaged in sexually explicit conduct.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI, HSI Baltimore, Maryland State Police Internet Crimes Against Children Task Force, Baltimore County Police Department and Baltimore County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Zachary A. Myers and Judson T. Mihok, who prosecuted the case.
Pittsburgh Man Pleads Guilty to Child Pornography ChargeRead the Press Release
PITTSBURGH – An Allegheny County man pleaded guilty in federal court to a charge of receipt of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
James Kerkan, 49, of Pittsburgh, Pa., pleaded guilty to one count before United States District Judge Cathy Bissoon.
In connection with the guilty plea, the court was advised that from on or about Aug. 13, 2014, and continuing until on or about Sept. 3, 2014, Kerkan received images and videos containing material depicting the sexual exploitation of minors.
Judge Bissoon scheduled sentencing for April 30, 2015, at 2:00 p.m. The law provides for a total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Jessica Lieber Smolar is prosecuting this case on behalf of the government.
The Pittsburgh Bureau of Police, Federal Bureau of Investigation, and the Allegheny County District Attorney’s Office conducted the investigation that led to the prosecution of Kerkan.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Physician-Owned Forest Park Medical Center to Pay $215,000 to Resolve Kickback Allegations Under Civil Settlement with United StatesRead the Press Release
Forest Park Medical Center, LLC (“FPMC”), a physician-owned hospital located in Dallas, Texas, will pay $215,000 under a civil settlement with the United States Department of Justice, announced Acting United States Attorney Richard L. Durbin, Jr. The settlement resolves allegations that the hospital paid kickbacks in exchange for referrals of patients covered by the federal workers’ compensation program, known as FECA.
FECA, a federal health care program administered by the United States Department of Labor (“DOL”), provides workers’ compensation benefits to federal workers who suffer job-related injuries. The program covers roughly 3 million federal civilian and postal employees. Benefits include payment of a covered worker’s medical and rehabilitation expenses. DOL uses federal funds to reimburse health care providers that treat injured workers covered by FECA.
The Department of Justice investigated whether FPMC violated the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), and submitted false claims for reimbursement to the FECA program in violation of the False Claims Act, 31 U.S.C. §§ 3729-3733. Between August 1, 2011 and March 1, 2012, FPMC caused payments to be made to individuals and entities located in the Western District of Texas for “marketing” and “management” services. The United States contends that these payments were, in reality, unlawful kickbacks made in exchange for the referral of patients covered by FECA in violation of the Anti-Kickback Statute. The United States further contends that, by billing the FECA program for services rendered to patients whose referrals were secured through kickbacks, FPMC submitted false claims for payment to the DOL in violation of the False Claims Act, which provides for treble damages and civil penalties.
Under the settlement announced today, FPMC will pay $215,000 to resolve the hospital’s potential False Claims Act liability. The settlement, which follows an earlier resolution reached with the United States Attorney’s Office for the Northern District of Texas regarding claims submitted to the TRICARE program, is not an admission of liability by FPMC or its affiliates. FPMC cooperated with the government’s investigation.
Acting United States Attorney Durbin commended the efforts of the investigating agencies, including the United States Postal Service -- Office of the Inspector General, United States Army Criminal Investigation Division -- Major Procurement Fraud Unit, Federal Bureau of Investigation, and the United States Department of Labor -- Office of the Inspector General. Assistant United States Attorney John J. LoCurto and Auditor Jamie Cole, CPA handled the investigation for the United States Attorney’s Office.
Physical Therapy Clinic Owner and Employee Sentenced for FraudRead the Press Release
BOSTON – The owner and operator of a Brockton physical therapy company and her employee were sentenced today for defrauding insurance companies in connection with physical therapy services purportedly provided to patients involved in car accidents.
Walkyrie Massie, a/k/a Vicky Lopes, 39, and Edward Rossi, 65, of Rochester, were sentenced by U.S. District Court Judge Richard G. Stearns to 30 months and 18 months, respectively, two years of supervised release, and ordered to pay $174,597 in restitution to the defrauded insurance companies. Massie and Rossi pleaded guilty to conspiracy to commit mail fraud and two counts of mail fraud in September and August 2014, respectively.
“The scam perpetrated by Massie and her employees defrauded insurance companies and deprived injured patients of proper care,” said U.S. Attorney Carmen M. Ortiz. “Patients deserve quality care and insurance providers need honest care-givers. This kind of fraud is corrosive to our healthcare system.”
“Westgate Physical Therapy was solely motivated by profit rather than patient care when it forged patient records and billed for medical care never provided scamming private insurance companies out of hundreds of thousands of dollars,” said Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “The FBI is dedicated to aggressively investigating this type of criminal activity because it has a great impact not only on private insurance companies but on the economy as a whole as well.”
Massie, the owner and operator of Westgate Physical Therapy in Brockton, and her employees submitted fraudulent medical progress notes to insurance companies, in connection with physical therapy the company purportedly provided to patients involved in car accidents. Specifically, Rossi, a licensed physical therapy assistant, was supposed to provide physical therapy to patients several times a week until the physical therapist, Deidre Chouinard, re evaluated the patient and signed off that the treatment was complete. Westgate would then send a bill to the responsible insurance company. The progress notes contained in the patients’ chart would also be used to determine personal injury protection payments, as well as any bodily injury settlements with other insurance companies.
In reality, for the majority of patients, Rossi simply filled in cookie-cutter treatment notes for patients who either never showed up that day, came into the clinic for mere minutes, or were not seen at all by Rossi because he was not present. Furthermore, Rossi signed notes for treatments that Massie performed, even though she was not licensed to do so. Based on these fraudulent submissions, from 2009 to 2011, Westgate billed insurance companies more than $400,000 and received more than $174,000 in payments.
During the investigation into Westgate’s activities, federal law enforcement used a cooperating witness, who claimed to have been in a car accident and sought treatment at Westgate. From March through June 2011, recordings made of this individual’s visits to Westgate captured how Massie boasted about forging the individual’s name to the sign-in sheets to falsely show that he had come in for treatment when he had not. In one recorded conversation, Rossi can be heard demonstrating how the therapy exercise equipment worked so that the individual would be able to describe the physical therapy if he were called in to give a statement to the insurance company about his injuries and treatment at Westgate.
In December 2014, Chouinard, Westgate’s physical therapist, was sentenced to three years of probation. A fourth defendant is awaiting trial.
U.S. Attorney Ortiz and SAC Lisi made the announcement today. The Massachusetts Insurance Fraud Bureau also assisted in this investigation. The case was prosecuted by Assistant U.S. Attorney Shelbey Wright.
Payroll Service Company Owners Indicted for Theft of over $2.5 Million Set Aside by Clients to Pay Federal and State TaxesRead the Press Release
AccuPay Owners Allegedly Stole Money Designated for IRS and Maryland Tax Agency
Baltimore, Maryland – A federal grand jury indicted Beverly Carden, age 53, and her husband Kevin Carden, age 54, both formerly of Bel Air, Maryland, yesterday on charges arising from a scheme to steal at least $2.5 million from their clients and the IRS.The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
“The indictment alleges that the defendants falsely told clients that their money was being used to pay their taxes, when in fact the defendants were stealing it,” said U.S. Attorney Rod J. Rosenstein. “Customers who hire payroll services companies expect that they will not have to worry, but this case is a reminder that people always need to be vigilant when they trust someone with their money.”
The defendants owned and operated AccuPay, Inc., a payroll service company located at 206 E. Churchville Road in Bel Air. Part of the payroll services that AccuPay offered to its clients was to complete and file federal and state tax returns, collect the funds from the clients to pay the taxes, and then pay those taxes to the taxing authorities. Beverly Carden oversaw all aspects of AccuPay’s business. Kevin Carden was responsible for inserting the clients’ payroll information into software that generated tax forms to be filed with the taxing authorities and for paying the clients’ employment taxes.
According to the 16 count indictment, from 2006 to March 2013, the defendants withdrew from the clients’ funds the full amount of taxes owed, but then paid the taxing authorities only a portion of such funds, fraudulently retaining at least $2.5 million for themselves. The defendants misrepresented to their clients that those funds had been paid to the relevant taxing authorities.
The indictment alleges that in order to keep the clients unaware that their taxes were not fully paid, Kevin Carden changed the address listed for certain clients to the address for AccuPay, without the clients’ consent, causing all future IRS correspondence, including notices of underpayment, to be sent to AccuPay rather than the client. In the instances in which clients received notice from the taxing authority that they had not paid the taxes they owed in full, the defendants falsely advised the clients that the underpayment was due to a mistake by the taxing authority, an error made by AccuPay employees or the software AccuPay used to file tax returns.
The indictment further alleges that to contact the IRS about her clients’ employment tax issues without her clients’ knowledge, Beverly Carden affixed or caused to be affixed client signatures on IRS power of attorney forms without the clients’ permission.
In late 2011, the defendants allegedly sent their clients a letter introducing a new chief financial officer (CFO) at AccuPay who was to audit all tax deposits and filings for all tax clients back to 2009 for compliance and correctness. The letter stated that the CFO was an Ivy League graduate with degrees in both accounting and law, who had over 30 years experience as a CPA, was formerly a special investigator with the New Jersey Attorney General’s office, as well as a former IRS Special Agent. The CFO was not identified by name. Beverly Carden made a similar representation in a letter to the office of a U.S. Congressman in which she attempted to explain difficulties that AccuPay was having with the IRS. Although the defendants did hire a CPA who was a former IRS revenue agent and former investigative auditor for the New Jersey Attorney General’s Office, who had attended but not graduated from an Ivy League institution, that individual was hired to prepare the defendants’ personal tax returns and AccuPay’s corporate tax returns – not to audit any payments or filings made on behalf of AccuPay’s clients.
Finally, the indictment alleges that the defendants filed a false individual tax return for 2011 in which they substantially understated their income, that Kevin Carden filed a false individual tax return for 2012 in which he substantially understated his income, and Beverly Carden failed to file a tax return for 2012.
The indictment seeks forfeiture of at least $2.5 million.
The defendants face a maximum sentence of 20 years in prison for conspiracy to commit mail and wire fraud; 20 years in prison on each of three counts of mail fraud and five counts of wire fraud; 10 years in prison for conspiracy to commit money laundering and on each of three counts of money laundering; three years in prison on each of two counts for filing a false tax return and one year for failing to file a tax return. The defendants are expected to have their initial appearances in federal court in Florida today and tomorrow.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the IRS - Criminal Investigation and FBI for their work in the investigation. Mr. Rosenstein praised the Bel Air Police Department for their assistance in the investigation, and thanked Assistant U.S. Attorney Evan T. Shea, who is prosecuting the case.
Orlando Man Sentenced to More than 13 Years for Robbing Credit UnionRead the Press Release
Orlando, FL – Chief U.S. District Judge Anne C. Conway today sentenced Joseph Cotto-Diaz (31, Orlando) to 13 years and 5 months in federal prison for aiding and abetting a credit union robbery with assault, and aiding and abetting the use and carrying of a firearm during that robbery. As part of his sentence, Cotto-Diaz was also ordered to pay restitution to his victims.
Cotto-Diaz pleaded guilty on October 1, 2014.
According to testimony and court documents, on the morning of January 25, 2012, Cotto-Diaz and three co-conspirators, including Raulier Rivas Lopez (29, Orlando), robbed the American Eagle Credit Union located at 7007 SeaWorld Drive, in Orlando. Cotto-Diaz, Lopez, and another co-conspirator, all wearing masks, entered the credit union and demanded money from the employees. Lopez pointed an AK-47-style rifle at the employees as Cotto-Diaz pepper-sprayed them. Approximately $7,000 was taken during the robbery.
After fleeing the credit union in a stolen van, the men drove to a nearby hotel parking lot and abandoned the vehicle. They then ran through a pre-cut hole in a chain-link fence, and met another co-conspirator who was waiting in a getaway car.
Lopez pleaded guilty on June 10, 2014, and was sentenced on September 11, 2014, to 14 years in federal prison.
This case was investigated by the Federal Bureau of Investigation and the Orange County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Joseph M. Schuster.
Oakley Man Pleads Guilty to Attempted Sexual Exploitation of a Minor ChildRead the Press Release
Defendant Admits he Attempted to Produce Child Pornography
POCATELLO - Ray Carl Short, 66, of Oakley, Idaho, pleaded guilty today to attempted sexual exploitation of a minor child, U.S. Attorney Wendy J. Olson announced. Olson said that as a part of his plea, Short admitted using a hidden security camera to attempt to capture images of a minor victim engaged in sexually explicit conduct. Short was charged by Information in Pocatello on December 22, 2014.
According to the plea agreement, a special agent with Homeland Security Investigations (HSI), Wilmington, Delaware, utilized a covert account on a peer-to-peer network to download 26 child pornography images and videos from Short in January 2014. In July, law enforcement agents searched Short’s residence pursuant to a federal search warrant and seized a laptop computer, a Brickhouse Security camera, and other related items. A forensic analysis of the laptop and other electronic media revealed approximately 2,934 images and 144 video files of suspected child pornography. The National Center for Missing and Exploited Children identified the victims in 345 of the images, 16 of the video files, and in 64 documented “Series” of child pornography.
In a folder located on Short’s computer hard drive and named for an additional minor victim, law enforcement agents found six video files and nine image files of the victim, several of which depicted the minor engaged in sexually explicit conduct. Additional similar videos and images of the victim were located in sub-folders. A review of the security camera’s memory card revealed recently recorded video files of the victim nude and getting ready for bed, and of the defendant placing the camera in, and retrieving it from, concealed locations of the victim’s bedroom.
On the day of the search warrant execution, Short admitted to having downloaded and received images that would be illegal or constitute child pornography and that there were images of child pornography on his laptop. In court, Short also admitted that he placed the Brickhouse camera in hidden locations in order to use the victim to take part in sexually explicit conduct for the purpose of producing visual depictions of such conduct.
The charge of attempted sexual exploitation of a minor is punishable by 15 to 30 years in prison, a maximum fine of $250,000, and a term of supervised release of five years to life.
Sentencing is set for April 8, 2015, before U.S. Chief District Judge B. Lynn Winmill at the federal courthouse in Pocatello.
The case was investigated by the U.S. Immigration and Custom Enforcement’s (ICE) Homeland Security Investigations (HSI), with the assistance of the Cassia County Sheriff’s Office and Cassia County Prosecutor’s Office.
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.”
Northern District of Iowa U.S. Attorney's Office Collects $3,760,255.36 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2014Read the Press Release
Contact: Steve Young
United States Attorney Kevin W. Techau announced today that the Northern District of Iowa collected $3,760,255.36 in criminal and civil actions in the fiscal year ending September 30, 2014 (FY 2014). Of this amount, $1,611,824.88 was collected in criminal actions and $2,148,430.48 was collected in civil actions.
Attorney General Eric Holder announced on November 19, 2014 that the Justice Department collected $24.7 billion in civil and criminal actions in FY 2014.
The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.
“Every day, the Justice Department’s federal prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people,” said Attorney General Holder. “Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy. And this result shows the fruits of the Justice Department’s tireless work in enforcing federal laws; in protecting the American people from violent crime, national security threats, discrimination, exploitation, and abuse; and in holding financial institutions accountable for their roles in causing the 2008 financial crisis.”
United States Attorney for the Northern District of Iowa, Kevin W. Techau reinforces the importance of these actions indicating, “These collections are a vital part of our mission to vindicate crime and hold accountable those who wrongfully profit at the expense of the United States. This office is dedicated to recovering funds for the federal treasury and for victims of federal crime.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s Office in the Northern District of Iowa, working with partner agencies and divisions, collected $541,517.00 in asset forfeiture actions in FY 2014. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
Niagara Falls Man Arrested, Charged with Sex Trafficking of A Minor and Transportation of A Minor to Engage in Criminal Sexual ActivityRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. U.S. Attorney William J. Hochul, Jr. announced today that Marcellus Overton, 39, of Niagara Falls, NY, was arrested and charged with sex trafficking of a minor and transportation of a minor to engage in criminal sexual activity. The charges carry a mandatory minimum of 10 years in prison and a maximum of life.Assistant U.S. Attorney John E. Rogowski, who is handling the case, stated that according to the indictment, between December 2012 and March 2013, the defendant knowingly enticed a victim under 18 years old to engage in a commercial sex act. The complaint further states that in March 2013, Overton knowingly transported a minor under 18 years old between New York and Georgia to engage in prostitution.
The defendant made an initial appearance on January 14, 2015 before U.S. Magistrate Judge Hugh B. Scott and is being detained. A detention hearing is scheduled for January 16, 2015.
“Each year, thousands of women and men become the victims of human trafficking in the United States,” said U.S. Attorney Hochul. “Whether forced into labor or commercial sexual exploitation, the lives of these victims are forever impacted. But our Office, working side by side with our law enforcement partners, is aggressively prosecuting all forms of trafficking wherever they occur. The Human Trafficking Task Force also includes non-government agencies who partner with us to effectively address this serious criminal activity.”
"The disturbing allegations in this case and cases like it serve to heighten the resolve of law enforcement in the effort against traffickers," said ICE HSI Special Agent in Charge Spero. " Sadly, many trafficking victims remain hidden in plain sight-- going unnoticed or unreported, which is why it is critical that we continue to raise awareness so more victims are identified and rescued and more exploiters are brought to justice."
The criminal complaint is the culmination of an investigation by Immigration and Customs Enforcement, Homeland Security investigations, under the direction of Special Agent in Charge James C. Spero.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
January is Human Trafficking Awareness Month. Every year, thousands of vulnerable persons, including women and children, are trafficked into the United States, threatened and beaten, and forced to perform services of a sexual nature against their will. Every year, thousands of workers and laborers are exploited and abused by employers. The exploitation of vulnerable individuals is an affront to fundamental human rights, and will not and cannot be tolerated. The Department of Justice and U.S. Attorney’s Offices are committed to the prosecution of human trafficking cases, and will continue to hold traffickers accountable for these heinous crimes.
New York Business Must Pay $3.5 Million for Trafficking Contraband CigarettesRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a retail business operating on a reservation in the state of New York pleaded guilty in federal court today to its role in a conspiracy to commit wire fraud and contraband cigarette trafficking, for which it must pay a total of more than $3.5 million in fine, forfeiture and restitution.
TSNE, doing business as Jan’s Smoke Shop, in Bascom, New York, a gas station and convenience store business recognized by the Tonawanda Seneca Nation, pleaded guilty before U.S. District Judge Brian C. Wimes.
TSNE participated in the conspiracy from September to November 2011 by ordering contraband cigarettes from co-conspirators and causing those cigarettes to be transported into the state of New York. New York pre-collects an excise tax of $4.35 per pack of cigarettes from wholesalers for sales to Indian nations and tribes. Federal and New York state law requires that tax stamps be affixed to cigarette packages – prior to their sale to consumers – reflecting that the required state taxes have been paid.
As part of this conspiracy, New York’s state excise tax of $4.35 per pack was not paid. As a result, TSNE’s foreseeable amount of total excise tax loss to the state of New York is approximately $1,900,080. Federal law enforcement agents reviewed invoices and other records and determined that TSNE made a profit of $700,650 on the sale of the contraband cigarettes.
Under the terms of today’s plea agreement, TSNE must pay a fine of $950,000, a money judgment to the government of $700,650 and restitution to the state of New York in the amount of $1,900,080. The total amount of fine, forfeiture and restitution is $3,550,730.
TSNE must also serve two years of probation. During that time, Jan's Smoke Shop will be prohibited from buying and selling any cigarettes (including premium brands and native brands), wholesale or otherwise. The government will dismiss the charges against Tara Sundown (who operated Jan’s Smoke Shop) contained in an Aug. 12, 2013, federal indictment.
According to the indictment, conspirators purchased more than $17 million worth of contraband cigarettes from ATF agents during an undercover operation in the Kansas City metropolitan area. Approximately 201,340 cartons of cigarettes – containing 10 packs per carton – were transported to New York without paying the required $4.35 per pack excise tax. The untaxed cigarettes were sold by New York retailers and smoke shops on the reservations in the state of New York. The total state excise tax lost to the state of New York was more than $8 million.
In addition to the federal indictment, the undercover operation resulted in a $3.5 million civil forfeiture. Following the seizures that occurred as a result of the investigation, the U.S. Attorney’s Office started a $3.5 million civil forfeiture case naming the assets taken up to that point. On Oct. 23, 2012, the court entered a default order of forfeiture for more than $2 million seized from bank accounts and by agents, more than 300 cases of seized cigarettes, a 2009 Cessna T206H Stationair aircraft, two 2012 Peterbilt 389 trucks and two 2012 Peterbilt 386 trucks. The seized cigarettes have been sold at auction for $532,500. The 2009 Cessna Aircraft has been sold for $450,000. The four trucks have been sold for the following amounts: $115,000; $115,000; $113,000; and $113,000. The civil case has been stayed pending the resolution of the criminal case.
In a related case, AJ’s Candy & Tobacco, LLC, a tobacco wholesaler located on a reservation in Irving, N.Y., pleaded guilty to its role in the conspiracy and has been sentenced. The court ordered AJ’s to pay a $1 million fine. The company also must forfeit to the government $221,550, which represents the proceeds of the offense. The court also ordered the company to pay an additional $535,050 in restitution to the state of New York. Under the terms of the company’s plea agreement, AJ’s is prohibited from selling premium cigarettes for two years.
This case is being prosecuted by Assistant U.S. Attorneys Paul S. Becker and Justin G. Davids. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, IRS – Criminal Investigation, the Federal Deposit Insurance Corporation – Office of Inspector General and the Kansas City, Mo., Police Department.
New Trial Date Set for Michael 'the Situation' Sorrentino and Marc SorrentinoRead the Press Release
Brothers Indicted for Tax Crimes Involving $8.9 Million in Income
NEWARK, N.J. - A new trial date has been set for television personality Michael “The Situation” Sorrentino and his brother, Marc Sorrentino, on charges they did not properly pay taxes on $8.9 million in income Michael Sorrentino received from promotional activities, U.S. Attorney Paul J. Fishman announced.
U.S. District Judge Susan D. Wigenton issued a complex case designation and a continuance order that sets the matter down for trial on Sept. 14, 2015.
The Sorrentinos are charged with one count of conspiracy to defraud the United States. Marc and Michael Sorrentino also are charged with three and two counts, respectively, of filing false tax returns for 2010 through 2012. Michael Sorrentino faces an additional count for allegedly failing to file a tax return for 2011. The original trial date was March 2, 2015.
The government is represented by Assistant U.S. Attorney Jonathan W. Romankow of the U.S. Attorney=s Office Criminal Division in Newark, and Trial Attorney Tino Lisella of the Tax Division of the U.S. Department of Justice.
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
15-017Defense counsel:
Michael Sorrentino: Richard Sapinski Esq., Newark
Marc Sorrentino: Chris Adams Esq., Colts Neck, N.J.Sorrentino, Michael and Marc Continuance Order
Morris County, New Jersey, Man Admits Receiving Images of Child PornographyRead the Press Release
NEWARK, N.J. – A Boonton, New Jersey, man today admitted using a computer in his home to download images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
Lucas J. Reinmann, 35, pleaded guilty today before U.S. District Judge Susan D. Wigenton to an information charging him with one count of knowingly receiving images of child pornography over the internet.
According to documents filed in this case and statements made in court:
Reinmann admitted that he downloaded images and videos of child sexual abuse from the internet to his computer using a peer-to-peer file sharing network. He also admitted possessing more than 600 images of child sexual abuse on his computers and USB drives, which were seized from his residence in July 2013.
The count to which Reinmann pleaded guilty carries a mandatory minimum penalty of five years in prison and a maximum potential penalty of 20 years in prison, followed by a mandatory minimum of five years of supervised release and a $250,000 fine. Sentencing is scheduled for April 20, 2015.
U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge John P. Woods; the Morris County Prosecutors Office, under the direction of Prosecutor Fredric M. Knapp; and the Boonton Township Police Department, under the direction of Chief Paul C. Fortunato with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the U.S. Attorney’s Office OCDETF Unit in Newark.
15-019Defense counsel: Edward V. Sapone Esq., New York
Middletown Man Charged Federally with Receipt and Possession of Child PornographyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced a Criminal Information has been filed in United States District Court in Harrisburg charging Steven Alan Shepherd, age 30, of Middletown, with receipt and possession of child pornography.
According to U.S. Attorney Peter Smith, as a result of a search of Shepherd’s home on May 1, 2014 thousands of images of child pornography were discovered and seized. Shepherd allegedly received the material via a computer in 2010.
The Criminal Information also seeks forfeiture of computer equipment and accessories involved or used in connection with the offense.The government also filed a plea agreement which is subject to approval by the court. The offense carries a mandatory minimum of five years imprisonment and a $250,000 fine.
This case was investigated by the United States Postal Inspection Service and the Pennsylvania State Police and is being prosecuted by Assistant United States Attorney Daryl F. Bloom.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Mexican national sentenced to two years for illegal reentryRead the Press Release
MARTINSBURG, WEST VIRGINIA – Mexican national Rogelio Portillo Vasquez, 38, was sentenced to 24 months in prison today for illegal reentry into the country, United States Attorney William J. Ihlenfeld, II, announced today.
Portillo Vasquez was previously deported to Mexico in May 2012. In September 2014, authorities discovered that he was in Jefferson County, West Virginia without permission. He pled guilty in December 2014 one count of “Re-entry by a Removed Alien.”
Assistant U.S. Attorney Paul Camilletti prosecuted the case on behalf of the government. U.S. Immigration and Customs Enforcement investigated.
U.S. District Judge Gina M. Groh presided.
Members of Mail Theft Ring Sentenced to 42 Months in PrisonRead the Press Release
Anchorage, Alaska – Acting U.S. Attorney Kevin Feldis announced today that an Anchorage woman has been sentenced in federal court in Anchorage for bank fraud and aggravated identity theft.
Elizabeth Ingalsbe, 45, of Anchorage, was sentenced today by United States District Court Judge Sharon L. Gleason, to 42 months in prison.
According to Assistant U.S. Attorney Aunnie Steward, Ingalsbe, as a member of a mail theft ring in Anchorage, cashed checks at the bank that had been stolen from victims’ mailboxes. The checks were altered to indicate a false payee and to increase the payment amount. The stolen checks included payments for rent, insurance premiums, a donation to a veteran’s memorial, and bill payments. The amounts were generally $100 or less and were falsely increased to $900 before Inglasbe cashed the checks. Ingalsbe victimized approximately 21 individuals and organizations.
The court noted Ingalsbe’s lengthy criminal history and the emotional impact to the victims who indicated that the safety and security in their home and community had been compromised by these crimes as reasons for the sentence imposed.
Acting U.S. Attorney Kevin Feldis stated, “Identity theft is a worldwide problem that can have devastating impact on its victims. In this case, the defendant victimized over 20 local citizens, putting their bank accounts, credit ratings, reputations and good names at risk. It is appropriate that the sentence imposed is significant and serves to deter others from committing similar crimes.”
United States Attorney Karen L. Loeffler commends the United States Postal Inspection Service for the investigation of this case.Manhattan U.S. Attorney Obtains More Than $300,000 in Judgments Against Seven Participants in Scheme to Defraud Federal Government into Paying for Tutoring Services That Were Never ProvidedRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States has obtained civil judgments against seven former employees of The Academic Advantage (“Academic Advantage”) in connection with their role in a scheme whereby Academic Advantage fraudulently obtained federal funds for tutoring services that it never provided. During the relevant period, Academic Advantage participated in a federally funded program pursuant to which it was to provide after-school tutoring to students attending underperforming New York City public schools. The civil judgments are against: (1) JASON ISAACS, an Executive Director of Academic Advantage and the senior-most official overseeing its New York City tutoring program; and (2) six individuals who supervised Academic Advantage’s tutoring program at particular New York City public schools — AYESHA YOUNG, ARLETTE HERNANDEZ, RAYVON JONES, TERESA OSORIO, ALICIA MCKAY, and KRISTIN JOYNER. The judgments against ISAACS, YOUNG, HERNANDEZ, JONES, OSORIO, MCKAY, and JOYNER are for $185,000, $33,308, $27,867, $24,951, $23,616, $20,838, and $20,412, respectively. U.S. District Judge Lewis A. Kaplan endorsed some of the judgments on January 14, 2015, and others on January 12, 2015. The above-referenced judgments are in addition to the more than $2.1 million in settlements and judgments that this Office previously obtained against Academic Advantage and three of its other former employees, Edwin Guzman, Luz Mercedes and Nilsa Dalmasi.
Manhattan U.S. Attorney Preet Bharara said: “With these judgments against seven more former employees of Academic Advantage for their roles in a scheme to fraudulently bill the government for tutoring services that were never provided, we continue our push to clean up corruption in the tutoring of our school kids. Today’s judgments should serve as a reminder that when companies engage in fraud, we will seek to hold those responsible accountable.”
According to the Government’s previously filed pleadings against Academic Advantage and the above-named individuals, as well as other documents filed in Manhattan federal court (including a settlement agreement between the Government and ISAACS):
From 2010 through 2012 (“Covered Period”), the New York City Department of Education (“NYCDOE”) received funds from the federal government to pay for Supplemental Educational Services (“SES”), which included after-school tutoring for students attending underperforming public schools. The NYCDOE entered into contracts with private entities to provide SES tutoring to students in New York City public schools. Students were eligible to receive SES tutoring if they met certain criteria, such as attending a school that had been identified as needing improvement or restructuring for at least two years. Private entities contracted by the NYCDOE to provide SES tutoring were required to have each student who attended a tutoring class sign a daily attendance sheet. A representative from the entity was also required to sign each attendance sheet, certifying that SES tutoring had been provided to all of the students whose signatures appeared on the attendance sheet.
Academic Advantage
During the Covered Period, Academic Advantage contracted with the NYCDOE to provide SES tutoring to students in New York City. Academic Advantage employed individuals whom it referred to as “Site Managers” to supervise its SES program at particular New York City public schools. The Site Managers supervised other employees, known as “Program Aides,” who were also assigned to those schools. Employees with the title “Director” supervised the Site Managers and Program Aides. The Directors reported to an “Executive Director” of Academic Advantage, the highest ranking official overseeing Academic Advantage’s New York City SES program.
During the Covered Period, ISAACS was the Executive Director, YOUNG was a Director, and HERNANDEZ, JONES, OSORIO, MCKAY, and JOYNER were Site Managers.
The Fraudulent Scheme
During the Covered Period, Academic Advantage obtained federal funds by falsely reporting that it had provided SES tutoring to certain students when no SES tutoring had, in fact, been provided to those students. As part of the scheme, Academic Advantage repeatedly submitted to the NYCDOE bills for students who had not actually received any tutoring.
In his settlement agreement with the Government, ISAACS admitted that throughout the Covered Period, Site Managers, Program Aides, and Directors engaged in the following fraudulent conduct in connection with Academic Advantage’s New York City SES program:
- Site Managers routinely forged student signatures on daily student attendance sheets to make it appear that more students had attended Academic Advantage’s SES tutoring classes than had, in fact, attended;
- Site Managers instructed Program Aides to forge student signatures on daily student attendance sheets;
- Program Aides followed the instructions they received from those Site Managers and forged student signatures on daily student attendance sheets;
- Site Managers and Program Aides instructed students to sign daily student attendance sheets for SES tutoring classes that those Site Managers and Program Aides knew the students either had not attended or would not be attending;
- Site Managers routinely signed false certifications on daily student attendance sheets, falsely certifying that after-school tutoring had been provided to all of the students whose purported signatures appeared on the sheets, even though those Site Managers knew that tutoring had not been provided to many of those students; and
- Some Directors knew — and others deliberately ignored or recklessly disregarded — that Site Managers and Program Aides were forging student signatures on daily student attendance sheets or otherwise falsifying student attendance records.
ISAACS further admitted that, during the Covered Period, he had access to information suggesting that Site Managers and/or Program Aides were forging student signatures on daily student attendance sheets and failed to investigate instances of potential forgeries. In addition, ISAACS admitted that Academic Advantage used the above-referenced falsified daily student attendance sheets to prepare invoices that it then submitted in connection with its SES tutoring program. Those invoices ultimately resulted in Academic Advantage being paid federal funds for SES tutoring that it never provided.
In addition to obtaining more than $2.4 million in civil settlements and judgments against Academic Advantage and its former employees, this Office has brought criminal actions against several of those former employees, including Guzman and Mercedes, who have pled guilty to criminal fraud charges.
This is the third coordinated proceeding this Office has pursued against New York City SES providers and their employees for falsifying attendance records and billing for tutoring they did not provide. In 2012 and 2013, this Office filed civil charges against The Princeton Review, Inc. (“Princeton Review”), and civil and criminal charges against several of its former employees. In 2013, this Office filed civil charges against TestQuest, Inc. (“TestQuest”), and civil and criminal charges against several of its former employees. Princeton Review settled the civil charges against it by admitting misconduct and committing to pay the Government up to $10 million. TestQuest settled with the Government for $1.75 million and admissions of wrongdoing. The following former employees of Princeton Review and TestQuest have pled guilty to criminal fraud charges, settled civil fraud charges, or both: Robert Stephen Green, Ana Azocar, Zorayma Azocar, Michael Logan, and Sandra Allen. In addition, Sylvia Brathwaite, a former employee of TestQuest, has had a default judgment entered against her.
Mr. Bharara thanked the U.S. Department of Education Office of the Inspector General for its extraordinary assistance in this case.
The above-referenced civil matters are being handled by the Civil Frauds Unit, and the criminal matters are being handled by the Complex Frauds Unit. Assistant U.S. Attorney Christopher B. Harwood is in charge of the matters.
Manhattan U.S. Attorney Announces Guilty Pleas of Former U.S. Soldier and Former German Soldier for Conspiracy to Murder A Dea Agent and Conspiracy to Import CocaineRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced the guilty pleas of TIMOTHY VAMVAKIAS, a former member of the U.S. Army, and DENNIS GOGEL, a former member of the German armed forces, to charges that include conspiracy to murder an agent of the Drug Enforcement Administration (“DEA”) and conspiracy to import cocaine into the United States. VAMVAKIAS and GOGEL, who were arrested in September 2013 along with co-defendants Joseph Hunter, Slawomir Soborski, and Michael Filter following a long-term DEA undercover investigation, each pled guilty before U.S. District Judge Laura Taylor Swain. VAMVAKIAS pled guilty on Friday, January 9, 2015, and GOGEL pled guilty on Tuesday, January 13, 2015.
Manhattan U.S. Attorney Preet Bharara said: “Timothy Vamvakias and Dennis Gogel have now admitted their roles in a mercenary international narcotics and murder-for-hire conspiracy. These two former members of their countries’ armed forces traded patriotism for profit, plotting to murder a DEA agent and a witness, and facilitating the importation of cocaine, for a promised payoff. Now they face the prospect of lengthy prison terms.”
According to the Indictment filed against VAMVAKIAS, GOGEL, Hunter, Soborski, and Filter, and statements made at the plea proceedings:
All five defendants have previously served in the armed forces of their respective nations. VAMVAKIAS served in the U.S. Army between approximately 1991 and 2004; GOGEL served in the German armed forces between approximately 2006 and 2010; Hunter served in the U.S. Army between approximately 1983 and 2004; Filter served in the German armed forces between approximately 2006 and 2010; and Soborski served in the Polish armed forces between approximately 1998 and 2011. VAMVAKIAS attained the rank of sergeant and served both as infantryman and a military police officer. GOGEL was trained as a sniper. Hunter served as a sniper instructor and a senior drill sergeant, training other soldiers in marksmanship and tactics; and Soborski and Filter were also trained as snipers.
In 2013, VAMVAKIAS and GOGEL were recruited by Hunter to serve as security for a Colombian drug trafficking organization and to perform contract killings. During meetings in Asia, Africa, and the Caribbean, beginning in January 2013 and continuing through late September 2013, Hunter communicated with three confidential sources (the “CSs”) working with the DEA, who purported to be Colombian narcotics traffickers. Hunter agreed to serve as the head of security for the CSs’ purported narcotics trafficking organization, and assembled a “security team” consisting of VAMVAKIAS, GOGEL, Filter, and Soborski. Hunter also told the CSs that he had previously been involved in contract killings – referred to as “bonus jobs” – and that some team members wanted to do as much “bonus work” as possible.
VAMVAKIAS, GOGEL, and their co-defendants thereafter agreed, in meetings and communications with the CSs, to provide security and surveillance services to the narcotics trafficking organization. Furthermore, VAMVAKIS, GOGEL, and Hunter agreed to commit murder-for-hire in Liberia by assassinating both a Special Agent of the DEA and a person who, according to the CSs, was providing information to the DEA about the CSs’ narcotics trafficking organization. In exchange for the murders, VAMVAKIAS and GOGEL were together to be paid approximately $700,000, and Hunter was to receive an additional $100,000 for his leadership role. Communications between these defendants and the CSs occurred by telephone, via email, and in a series of surreptitiously audio-recorded and videotaped meetings over an approximately nine-month period.
In late March 2013, in Thailand, GOGEL and Filter surveilled a vessel on behalf of the CSs’ purported narcotics trafficking organization and reported their activities to Hunter. In April 2013, in Mauritius, at the direction of the CSs, GOGEL, Filter, and Soborski provided security for a meeting at which the participants discussed the distribution of illegal narcotics to the United States. In late June 2013, in the Bahamas, VAMVAKIAS, GOGEL, Filter, and Soborski conducted surveillance of a purported U.S.-registered aircraft at the direction of the third CS (“CS-3”), who posed as a member of the CSs’ narcotics trafficking organization. CS-3 informed the defendants that the aircraft was to be loaded with 300 kilograms of cocaine to be shipped to New York.
With respect to the murder-for-hire scheme, in mid-May 2013, at a meeting with the CSs in Thailand, VAMVAKIAS, GOGEL, Hunter and Soborski were told that a “bonus job” – that is, a contract killing – was in the offing, due to a leak within the CSs’ narcotics trafficking organization. In late May 2013, in email communications, Hunter confirmed that his team would be willing to murder both a U.S. law enforcement agent and a source (purportedly a boat captain) who was providing information to U.S. law enforcement authorities. Hunter confirmed by email that his team would kill both the DEA agent and the informant who was providing information to law enforcement about the CSs’ narcotics trafficking organization. VAMVAKIAS and GOGEL discussed the weapons that could be used and masks to be worn for the murders, and VAMVAKIAS stated that it would be better to “hit the agent first” and then “the snitch.” In early July 2013, Hunter sent via email a list of the items needed for the murders, including “[t]wo Submachine Guns with silencers . . . [t]wo .22 pistols with Silencers.”
In mid-August 2013, at a meeting in Thailand, Hunter told CS-3 that VAMVAKIAS and GOGEL would commit the murders. VAMVAKIS, GOGEL, and Hunter discussed in detail the weapons that would be used and the possibility of entering Liberia without having their passports stamped. They suggested that CS-3 fly them out of the country via private plane following the murders. VAMVAKIAS stated that among other weapons, a sub-machine gun and two .22 caliber pistols would be needed for the murders, and CS-3 agreed to deliver the weapons to Liberia. The next day, at a meeting with GOGEL, CS-3 confirmed that an order for the requested weapons had been made. Later that same day, GOGEL met again with CS-3 and provided CS-3 with two highly sophisticated latex facemasks, which can make the wearer appear to be of another race, for CS-3 to transport to Liberia.
In late September 2013, VAMVAKIAS and GOGEL arrived in Liberia to commit the planned murders-for-hire, where they were arrested. On the same day, Hunter was arrested in Thailand, and Soborski and Filter were arrested in Estonia.
VAMVAKIAS, 43, and GOGEL, 29, each pled guilty to one count of conspiring to import cocaine into the United States, one count of conspiring to murder a federal law enforcement agent and an individual assisting a federal law enforcement agent, one count of conspiring to possess machine guns and silencers during and in furtherance of the murders, and one count of conspiring to distribute cocaine on board an aircraft registered in the United States. As a result of their guilty pleas, VAMVAKIAS and GOGEL each face a mandatory term of 10 years in prison and a maximum possible term of life in prison. VAMVAKIAS is scheduled to be sentenced by Judge Swain on April 30, 2015. GOGEL is scheduled to be sentenced by Judge Swain on May 1, 2015.
The remaining defendants, Hunter, 49, Soborski, 41, and Filter, 30, are charged with conspiracy to import cocaine into the United States. Hunter is also charged with conspiracy to murder a law enforcement agent and a person assisting a law enforcement agent; conspiracy to kill a person to prevent communications to law enforcement agents; and conspiracy to possess a firearm in furtherance of a crime of violence. Each count carries a maximum penalty of life in prison. Trial is scheduled to commence before Judge Swain on March 9, 2015.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
The charges against Hunter, Soborski, and Filter are merely accusations and they are presumed innocent unless and until proven guilty.
The guilty pleas were the result of the close cooperative efforts of the United States Attorney’s Office for the Southern District of New York; DEA’s Special Operations Division; DEA’s Bangkok, Ghana, Pretoria, Bucharest, Manila, Nassau and Copenhagen Offices; the Royal Thai Police Narcotics Suppression Bureau and Crime Suppression Division; the Royal Thai Immigration; the Royal Thai Attorney General’s Office; Republic of Liberia’s National Security Agency; the Republic of Liberia’s Attorney General’s Office; the Estonian Police and Border Guard; the Estonian National Criminal Police, Investigative Bureau; the Estonian State Prosecutors Office; the Royal Bahamas Police Force and Drug Enforcement Unit; the Romanian National Police; Interpol; and the U.S. Department of Justice Office of International Affairs.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Michael Lockard, Anna Skotko, Aimee Hector, and Emil Bove are in charge of the prosecution.
Malaysian Defense Contractor Leonard Francis Pleads Guilty to Corruption Conspiracy Involving “Scores” of Navy Officials; A Navy Captain – The Highest Ranking so Far - Admits He Was One of ThemRead the Press Release
SAN DIEGO - Leonard Glenn Francis, owner and chief executive of Glenn Defense Marine Asia, pleaded guilty to bribery and fraud charges in federal court today, admitting that he presided over a massive, decade-long conspiracy involving “scores” of U.S. Navy officials, tens of millions of dollars in fraud and millions of dollars in bribes and gifts – from cash, prostitutes and luxury travel to Cuban cigars, Kobe beef and Spanish suckling pigs.
Also today, U.S. Navy Capt. Daniel Dusek, 47, was charged via information and pleaded guilty to a single count of conspiracy to commit bribery before U.S. Magistrate Judge William V. Gallo. Dusek, the highest-ranking of five current or former Navy officials to plead guilty in the case so far, admitted that he used his influence as Deputy Director of Operations for the 7th Fleet, headquartered in Yokosuka, Japan, and later as executive officer of the USS Essex and the commanding officer of the USS Bonhomme Richard, to benefit Francis and GDMA, which for decades provided port services to U.S. Navy ships. Dusek admitted that in return, Francis plied him with meals, alcohol, entertainment, gifts, dozens of nights and incidentals at luxury hotels and the services of prostitutes.
Francis, a 50-year-old Malaysian national, and his corporate entity GDMA, both pleaded guilty to conspiracy to commit bribery, bribery and conspiracy to defraud the United States before U.S. Magistrate Judge Jan M. Adler. According to the plea agreement, Francis faces up to 25 years in prison.
Francis also admitted to defrauding the U.S. Navy of tens of millions of dollars by routinely overbilling for everything from fuel to tugboats to sewage disposal. The government and Francis have agreed that Francis and GDMA should forfeit $35 million of the ill-gotten proceeds and pay full restitution to the U.S. Navy, an amount to be determined by U.S. District Judge Janis L. Sammartino upon sentencing.
In his plea agreement, Francis conceded that over the course of the conspiracy, he and GDMA gave public officials millions of dollars in things of value, including over $500,000 in cash; hundreds of thousands of dollars in the services of prostitutes and associated expenses; hundreds of thousands of dollars in travel expenses, including airfare, often first or business class, luxurious hotel stays, incidentals and spa treatments; hundreds of thousands of dollars in lavish meals, top-shelf alcohol and wine and entertainment; and hundreds of thousands of dollars in luxury gifts, including designer handbags and leather goods, watches, fountain pens, fine wine, champagne, Scotch, designer furniture, consumer electronics, ornamental swords and hand-made ship models.
Francis identified seven Navy officials who accepted his bribes – including Dusek; Commanders Jose Luis Sanchez and Michael Vannak Khem Misiewicz; Naval Criminal Investigative Service Special Agent John Beliveau; Petty Officer First Class Dan Layug; and two unnamed, yet-to-be-charged individuals - a contract specialist and a lieutenant commander. All of the charged Navy officials have pleaded guilty except Misiewicz, whose case is pending. Misiewicz has pleaded not guilty.
“It is astounding that Leonard Francis was able to purchase the integrity of Navy officials by offering them meaningless material possessions and the satisfaction of selfish indulgences,” said U.S. Attorney Laura Duffy. “In sacrificing their honor, these officers helped Francis defraud their country out of tens of millions of dollars. Now they will be held to account.”
“Today’s guilty pleas of Leonard Francis, his company, and a Navy officer are vitally important steps in our active, ongoing investigation,” said Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division. “We will continue our efforts to root out those implicated in this long-running corruption scheme, both inside the Navy and out. The interests of justice and national security demand nothing less.”
“The greed of all those involved in this massive fraud and bribery case has cost American taxpayers tens of millions of dollars,” said Naval Criminal Investigative Service Director Andrew Traver. “NCIS and our law enforcement partners have pored through mountains of documents and emails, discovering and documenting the crimes so that those who participated can be held accountable. Although today's pleas are a significant milestone in the case, this investigation is far from over; there is much more work to be done.”
“The guilty pleas entered today send a clear message to those who, driven by greed, betray the faith and trust of the American taxpayers" said Deputy Inspector General for Investigations James B. Burch of the Department of Defense, Defense Criminal Investigative Service. “The DCIS, along with its law enforcement partners, will relentlessly pursue those who corrupt the procurement process for their own personal benefit.”
“I'm extremely gratified that the work of our investigative support team could make a significant contribution to the outcome in this egregious case of defrauding the government and, ultimately, the American taxpayer,” said Anita Bales, Director of Defense Contract Audit Agency.
According to Dusek’s plea agreement, he hand-delivered Navy ship schedules to the GDMA office in Japan or emailed them directly to Francis or a GDMA employee on dozens of occasions, each time taking steps to avoid detection by law enforcement or U.S. Navy personnel. Dusek was so helpful to GDMA that an employee identified him as “an official GDMA card holder.” And he was rewarded for his efforts. In one example cited in the plea agreement, GDMA paid for a hotel for Dusek and his family at the Marriott Waikiki in Hawaii on July 19, 2010. A few weeks later, on August 5, 2010, GDMA paid for a hotel room for Dusek at the Shangri-La in Makati, Philippines and while there, GDMA provided him with the services of a prostitute.
Soon after, Francis asked Dusek to exercise his influence on GDMA’s behalf by steering the aircraft carrier USS Abraham Lincoln and its associated strike group to Port Klang, Malaysia – a port terminal owned by Francis. Dusek replied in a series of emails to GDMA in late August 2010 that he would make it happen. “Good discussion with N00 (Admiral) today and convince him that PKCC (Francis’ terminal) is the better choice,” Dusek wrote to Francis on August 21, 2010. Three days later, Dusek reported to Francis that he had “everyone in agreement that the next CSG (Carrier Strike Group) through the AOR (area of responsibility) will stop at PKCC. Dates will be 08-12 Oct.”
The USS Abraham Lincoln Carrier Strike Group did, in fact, make that visit to Francis’ port on October 8-12, 2010.
In an email to one of his employees, Francis wrote on October 3, 2010: “(Dusek) is a golden asset to drive the big decks (aircraft carriers) into our fat revenue GDMA ports.”
On September 17, 2013, when Dusek learned that Francis and Navy personnel had been arrested, he deleted the contents of his email accounts in an effort to avoid detection by law enforcement.
In the Francis plea agreement, Francis admitted that he required his Navy contacts to use their influence to benefit GDMA by steering contracts to GDMA; by scheduling and directing Navy ships to various ports favored by GDMA; and by advocating for and advancing GDMA’s interests with the Navy with respect to ship husbanding issues.
Francis also said Misciewicz provided classified and proprietary Navy information on dozens of occasions and in return, he gave cash and paid travel expenses for Misciewicz. The plea agreement lists eight examples.
Francis acknowledged that he recruited NCIS Special Agent Beliveau, who was the first to plead guilty in this case, to conduct regular searches of the NCIS database which housed information about ongoing NCIS investigations; to download NCIS reports involving investigations into the activities of GDMA and Francis and provide copies of these reports to Francis; and to give Francis advice and counsel on how to respond to, stall and thwart these investigations.
As part of his plea, Francis admitted that Beliveau gave him the identities of subjects of these investigations; the information provided by witnesses and documents, including identifying information about cooperating witnesses and their testimony; the aspects of GDMA’s billings that were of concern to the investigations; the fact that the investigations had obtained email accounts, and the identity of those accounts; the particulars about bank records and financial information sought by the investigations; the reports to prosecutors; and outlines of planned future investigative activities.
Besides Francis, two other GDMA executives - Alex Wisidagama and Edmond Aruffo – have pleaded guilty, acknowledging their roles in defrauding the United States. That brings the total of guilty pleas to seven of eight defendants.
Francis and Dusek are scheduled to be sentenced on April 3, 2015 at 9 a.m by Judge Sammartino.
The ongoing investigation is being conducted by NCIS, DCIS and the Defense Contract Audit Agency. The case is being prosecuted by Assistant U.S. Attorneys Mark W. Pletcher and Robert S. Huie of the Southern District of California and Director of Procurement Fraud Catherine Votaw and Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section.
Those with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.
DEFENDANT Case Number: 13-CR-3781, 3782 and 4287 Leonard Glenn Francis Age: 50 Singapore Glenn Defense Marine Asia Pte. Ltd. Singapore CHARGESConspiracy to Commit Bribery, in violation of 18 U.S.C. § 371. Maximum penalty five years in prison, $250,000 fine or twice the gross pecuniary gain or loss from the offense, whichever is greater;
Bribery, in violation of 18 U.S.C. § 201. Maximum 15 years in prison, $250,000 fine or twice the gross pecuniary gain or loss from the offense, whichever is greater. Mandatory restitution.
Conspiracy to Defraud the United States, in violation of in violation of 18 U.S.C. sec. 371. Maximum penalty five years in prison $250,000 fine or twice the gross pecuniary gain or loss from the offense, whichever is greater. Mandatory restitution.
DEFENDANT Case Number: 15-CR-131-JLS Daniel Dusek Age: 47 San Diego, CA CHARGESConspiracy to Commit Bribery, in violation of 18 U.S.C. § 371. Maximum penalty five years in prison, $250,000 fine or twice the gross pecuniary gain or loss from the offense, whichever is greater.
INVESTIGATING AGENCIESDefense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency*An indictment or complaint itself is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
Mississippi Army National Guard Captain Convicted of Defrauding the ArmyRead the Press Release
Hattiesburg, Miss - Jamie Jackson, 44, of Mendenhall, was convicted by a federal jury on Wednesday, January 14, 2015, of six counts of theft of government funds and six counts of wire fraud for carrying out a scheme to defraud the Army out of recruitment incentive payments, announced U.S. Attorney Gregory K. Davis.
The evidence presented at trial showed that in 2006 the National Guard Bureau instituted a recruiting program called the Guard Recruiter Assistance Program (GRAP) to incentivize current service members to tell their friends and family about the benefits of joining the National Guard. Soldiers who contacted potential recruits and connected them with a National Guard recruiter were eligible to receive up to $2,000 in incentive payments if their recruit joined the Guard and went to basic training.
Jackson, a Captain working at Camp Shelby, was not eligible to participate in GRAP because he was working full-time for the Guard. The evidence at trial showed that Jackson created a GRAP account in the name of his nephew, an enlisted Guardsman who was eligible for GRAP payments, and began entering the names of potential recruits into the GRAP system, as if his nephew was assisting them in their recruitment. The evidence showed that Jackson got the names and personal information of these potential recruits when he tutored them to help them pass the ASVAB military entrance exam. After the recruits passed the ASVAB and joined the Guard, the incentive payments were sent to a bank account Jackson controlled. Three of the recruits testified at trial that Jackson's nephew had not assisted in the recruiting. Two of the recruits had never met Jackson's nephew at all.
Jackson will be sentenced by U.S. District Judge Keith Starrett on April 9, 2015 at 1:30 p.m. He faces a maximum penalty of ten years in prison for one count of theft of government funds and up to one year in prison for each of the remaining five counts of theft of government funds. Additionally, he faces up to 20 years in prison for each of the six wire fraud counts, a fine of up to $250,000 per count, and a forfeiture judgment equal to the amount of money he illegally obtained. He will also be required to pay restitution to the Army.
The case was investigated by the Army Criminal Investigation Division, Defense Criminal Investigation Service and the United States Secret Service. It was prosecuted by Assistant U.S. Attorneys Scott Gilbert and Chris Wansley.
Lawrence County Sheriff’s Deputies Charged with Use of Unreasonable ForceRead the Press Release
CINCINNATI – A federal grand jury in Cincinnati has charged Jeremy S. Hanshaw, 36, of Coal Grove, Ronald S. Hatfield, 25, of Waterloo, and Jason D. Mays, 22, of South Point, with conspiring to deprive, and depriving, an arrestee of civil rights while acting under the color of law as deputies of the Lawrence County Sheriff’s Office.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and John A. Barrios, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the indictment unsealed today.
The indictment alleges that on or about August 16 to August 17, 2014, while working as deputies at the Lawrence County Jail, Hanshaw and Hatfield slammed, kicked and punched a victim when that victim was handcuffed behind his back and was not resisting or posing a physical threat to any officer. The officers allegedly slammed the victim to the ground and restrained him in a chokehold while lying on top of the victim. The indictment further alleges that Hanshaw choked the victim and delivered an elbow strike to the victim’s head while the victim was restrained on a medical gurney. Then-deputy Mays allegedly struck the victim in the neck with a closed fist and attempted to block a surveillance camera while his fellow officers had the victim on the ground.
In addition, one or more of the defendants allegedly wrote false entries on logs and reports in which they created a false justification for the assault on the victim.
Conspiracy to deprive an individual of civil rights and deprivation of civil rights are crimes punishable by up to 10 years in prison.
The defendants were arrested on January 15, 2015 by FBI agents.
“Good policing practices are essential,” U.S. Attorney Stewart said. “Law enforcement strategies must be consistent with constitutional rights.”
“The protection of civil rights is one of the FBI’s highest criminal priorities,” stated Acting Special Agent in Charge John A. Barrios. “The FBI is committed to holding accountable those who believe they can abuse the powers they have been granted.”
U.S. Attorney Stewart commended the investigation of this case by the FBI and recognized the Lawrence County Sheriff’s Office and the Lawrence County Prosecutor’s Office for their assistance, as well as Assistant U.S. Attorneys Emily Glatfelter and Alexis Zouhary, who are prosecuting the case.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
Lafayette Attorney Sentenced to 121 Months in Prison for Drug Conspiracy, Money LaunderingRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that Lafayette attorney Daniel James Stanford, 57, was sentenced to 121 months in prison for conspiring to distribute synthetic drugs, conspiring to introduce misbranded drugs into interstate commerce, and money laundering.
Stanford, of Lafayette, was sentenced by U.S. District Judge Elizabeth E. Foote for one count of conspiracy to distribute or possess with intent to distribute a controlled substance analogue, one count of conspiracy to introduce or cause to be introduced misbranded drugs into interstate commerce, one count of conspiracy to launder money, and five counts of money laundering. He was also ordered to serve six years of supervised release. The other defendants were sentenced on December 16, 2014. (*For a graphic listing the sentences of the other defendants refer to the end of this document.)
After eight days in trial, more than six hours of deliberation and testimony from 30-plus witnesses, a federal jury found Stanford guilty on August 29, 2014. Stanford was found not guilty on five counts of the indictment, which related to additional money laundering charges.In September of 2012, Curious Goods LLC and co-conspirators Alexander Derrick Reece, 42 of Gainesville, Fla.; Drew T. Green, 40 of Roswell, Ga.; Thomas William Malone Jr., 48 of Roswell, Ga.; Boyd Anthony Barrow, 46 of Canton, Ga.; Joshua Espinoza, 51 of Marietta, Ga.; Richard Joseph Buswell, 46 of Lafayette, La.; Daniel Paul Francis, 44 of Dawsonville, Ga.; and Stanford were charged in a 16-count indictment with conspiracy to distribute synthetic drugs, conspiracy to introduce misbranded drugs into interstate commerce, conspiracy to commit money laundering, and various money laundering charges.
At the time of the indictment, Curious Goods LLC was a business based in Lafayette that marketed smoking and other products in stores throughout Acadiana. The stores sold a product called “Mr. Miyagi” that was infused with synthetic cannabinoids. Although mislabeled as a potpourri, “Mr. Miyagi” was sold to be smoked for the sole purpose of getting the consumer “high.” The synthetic cannabinoids infused into “Mr. Miyagi” are considered Schedule I controlled dangerous substances under federal law. From March 1, 2011 to December 31, 2011, Curious Goods stores made approximately $5 million from the sale of “Mr. Miyagi.”
Barrow and Espinoza controlled and operated Pinnacle Products LLC/Pinnacle Products Group, based in Marietta, Ga. Pinnacle was the manufacturer of the “Mr. Miyagi” products and supplied the products to the local Curious Goods stores. Pinnacle obtained the synthetic cannabinoids used to manufacture “Mr. Miyagi” from NutraGenomics, which was located in Alpharetta, Ga., and was controlled by co-conspirators Green and Malone. NutraGenomics distributed synthetic cannabinoids throughout the United States.
Stanford, who is a criminal defense attorney, represented himself at trial. During opening statements, Stanford told the jury he was “absolutely not guilty of any of this.” However, at trial, the evidence showed that Stanford was actively involved with the Curious Goods enterprise, that he was well aware that the company sold a product called “Mr. Miyagi,” and that “Mr. Miyagi” was a substance that was infused with synthetic cannabinoids.
Exhibits introduced at trial exposed that “Mr. Miyagi” was specifically labelled “not for human consumption” but was sold as a product that would be smoked by users to get high. The evidence also demonstrated that the product was packaged to be intentionally false and misleading, marketed as potpourri. The exterior package label of “Mr. Miyagi” stated that it was to be used to refresh scents in drawers, closets, and cars. Evidence introduced at trial clearly demonstrated that Stanford knew the product was being consumed by humans, that it was harmful and not a scent refresher, and that the product was marketed to youthful customers. The intentional mislabeling and misbranding, spearheaded by Stanford, were part of a legal strategy and subterfuge to feign compliance with the law, to avoid law enforcement detection, and to avoid civil and criminal liability.
Among the many witnesses testifying at trial were local law enforcement and DEA Task Force agents who testified that during the execution of search warrants on December 8, 2011, they searched all Curious Goods store locations, including the company’s warehouse in Lafayette, and seized approximately 190 pounds of synthetic drugs worth approximately $517,000.
“The sentencing of this last defendant brings an end to this case, but not to our commitment to prosecute those who sell these illegal and dangerous drugs in our community,” Finley stated. “This case highlights how lucrative this industry is and the lengths that criminals are willing to go to profit while endangering the health and safety of citizens. Too many members of our community visited these shops that sold this poison, especially the youth. Stanford’s insatiable desire for money drove him to join this conspiracy and put many, many people in harm’s way. Today, his greed and criminal activity have consequences. Stanford misused his position as an attorney to facilitate the sales of a dangerous drug and to launder money. I want to thank the men and women of the federal, state and local law enforcement for bringing these defendants to justice. They are to be commended for years of hard work to get these illegal substances off the street and hold these criminals accountable. I hope that store owners, franchisees, investors and distributors who want to make a fast buck at the expense of others, think twice and understand that we will not hesitate to investigate and prosecute their criminal activity.”
Buswell was sentenced to 103 months in prison, Green was sentenced 117 months in prison, Malone was sentenced to 117 months in prison, Barrow was sentenced to 70 months in prison, Espinoza was sentenced to 61 months in prison, and Francis was sentenced to 42 months in prison. Green and Malone were also ordered to pay a $20,000 fine. Curious Goods LLC was ordered to pay a $40,000 fine. The company was also ordered to forfeit $859,989 in illegal proceeds derived from the scheme, as well as two cars and a speed boat.
The DEA, FBI, IRS, HSI, Louisiana State Police, Lafayette Parish Sheriff’s Office, Iberia Parish Sheriff’s Office, Vermilion Parish Sheriff’s Office and the Lafayette Police Department conducted this investigation. Assistant U.S. Attorneys John Luke Walker, J. Collin Sims, and Robert C. Abendroth prosecuted the case.
*Defendants Prison Term Supervised Release Fine CountsDrew Green
117 months
3 years
$20,000
1
Tommy Malone
117 months
3 years
$20,000
1
Boyd Barrow
70 months
3 years
1
Joshua Espinoza
61 months
3 years
1
Daniel Francis
42 months
1 year
2
Richard Buswell
103 months
3 years
1
Curious Goods LLC
$40,000
1
Justice Department Settles with Ohio Healthcare System over HIV DiscriminationRead the Press Release
The Justice Department announced today that, as part of its Barrier-Free Health Care Initiative, the department has reached a settlement with Genesis Healthcare System (Genesis) to resolve claims that Genesis discriminated against a woman with HIV in violation of the Americans with Disabilities Act (ADA). Genesis operates a healthcare system that includes a hospital, a network of more than 300 physicians, and multiple outpatient health care centers throughout southeastern Ohio.
Title III of the ADA prohibits public accommodations, such as healthcare providers, from discriminating against people with disabilities, including HIV. Following an investigation, the department found that Genesis discriminated against a woman with HIV when one of its primary care physicians refused to accept her as a new patient because of her HIV. Genesis refused to accept her as a patient despite the fact that she was only seeking a general practitioner for medical care unrelated to HIV. As a result, the woman had to seek medical treatment at the local emergency room for non-emergent health issues. The department’s investigation revealed that it was this doctor’s practice to refer any patients with HIV seeking a primary care physician to an HIV specialist.
“Exclusion of patients with HIV creates unfair and illegal barriers to medical care for people with HIV,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “Under the law, healthcare providers cannot deny care or refer a patient to a specialist unless the decision is based on current medical knowledge about the particular patient and condition, not on stereotypes about a disability. The ADA prohibits these types of discriminatory barriers, and the Justice Department is committed to tearing them down.”
Under the settlement, Genesis Healthcare System must pay $25,000 to the victim of discrimination, and $9,000 as a civil penalty. In addition, it must train its staff on the ADA, develop and implement a non-discrimination policy, and report to the department every time a person with HIV (or who is suspected of having HIV) is denied or discharged as a patient, with a written justification for the decision.
This settlement agreement is part of the department’s Barrier-Free Health Care Initiative, a partnership of the Civil Rights Division and U.S. Attorney’s offices across the nation to target enforcement efforts on a critical area for individuals with disabilities: access to health care. For more information on the Barrier-Free Health Care Initiative visit http://www.ada.gov/usao-agreements.htm.
For more information on the ADA, HIV discrimination, and this settlement, visit www.ada.gov/aids. Those interested in finding out more about the obligations of healthcare providers under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov. ADA complaints may be filed by email to [email protected].
Justice Department Settles Pay Discrimination Lawsuit Against Clark County, NevadaRead the Press Release
The Department of Justice announced today that it has entered into a consent decree with Clark County, Nevada, that, if approved by the United States District Court for the District of Nevada, will resolve the department’s lawsuit filed under Title VII of the Civil Rights Act of 1964 regarding compensation discrimination and retaliation. In its lawsuit, the department alleged that the county paid Therese Scupi, its Director of Diversity, significantly less than white and male county employees whose duties were substantially similar to hers. The complaint also alleged that the county subjected Scupi to retaliation when she complained of disparities in her pay that she believed were based on her race and sex.
Under the terms of the consent decree, the county has agreed to pay Scupi approximately $179,000 in back pay, compensatory damages, and pension contributions. In accordance with the decree, Clark County has also agreed to maintain employment policies, practices and procedures that comply with federal discrimination laws and to conduct training designed to prevent against and correct both discrimination in compensation and retaliation.
This lawsuit resulted from a joint project with the Equal Employment Opportunity Commission (EEOC) designed to ensure vigorous enforcement of Title VII against state and local governmental employers by enhancing cooperation between the EEOC and the Civil Rights Division.
“Title VII protects employees who have the courage to challenge discriminatory pay compensation practices without fear of retaliation from their employers,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “We are pleased to have been able to work cooperatively with the Equal Employment Opportunity Commission to achieve a broad range of injunctive and monetary relief in this important case.”
“Pay inequity remains as a hurdle for working women,” said District Director Rosa Viramontes of the EEOC’s Los Angeles District, which includes southern Nevada in its jurisdiction. “We were pleased that our partnership with the Department of Justice on this case yielded positive results and will lead to a more equitable working environment going forward.”
Scupi originally filed a charge of race and sex discrimination and retaliation with the EEOC, a federal agency that enforces laws against discrimination in employment. The EEOC’s Las Vegas local office investigated the matter, determined that there was reasonable cause to believe that discrimination and retaliation had occurred and referred the matter to the department.
The United States was represented by Civil Rights Division attorneys Antoinette Barksdale and Robert Galbreath.
Title VII prohibits discrimination in employment on the basis of gender, race, color, national origin or religion, and prohibits retaliation against an employee who opposes an unlawful employment practice, or because the employee has made a charge or participated in an investigation, proceeding or hearing under the act. The enforcement of Title VII and other federal employment discrimination laws is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division and its work is available on its website at www.justice.gov/crt.
The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on its website at www.eeoc.gov.
Justice Department Settles Immigration-Related Discrimination Claim Against Janitorial CompanyRead the Press Release
The Justice Department announced today that it reached a settlement agreement with U.S. Service Industries (USSI), a janitorial company headquartered in Bethesda, Maryland, and operating in Florida, Maryland, Virginia and Washington, D.C. The agreement resolves allegations that USSI violated the Immigration and Nationality Act (INA) by discriminating against work-authorized individuals who are not U.S. citizens.
The Justice Department’s investigation found that USSI required workers who are not U.S. citizens to produce documents issued by the Department of Homeland Security as a condition of employment, but it did not make similar demands of U.S. citizens. The INA’s anti-discrimination provision prohibits employers from placing additional documentary burdens on workers during the employment eligibility verification process based on their citizenship status.
Under the settlement agreement, USSI will pay $132,000 in civil penalties to the United States; undergo training on the anti-discrimination provision of the INA; establish a $50,000 back pay fund to compensate any workers who may have lost wages; revise its employment eligibility verification policies; and be subject to monitoring of its employment eligibility verification practices for two years.
“Employers cannot create unlawful discriminatory obstacles for immigrants,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “It is important that large employers review their employment eligibility verification practices at all of their offices to make sure they are in compliance with the law.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) within the Justice Department is responsible for enforcing the anti-discrimination provision of the INA. Among other things, the statute prohibits citizenship status and national origin discrimination in hiring, firing or recruitment or referral for a fee, unfair documentary practices, retaliation and intimidation.
For more information about protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired), call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired), sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php, email [email protected] or visit OSC’s website at www.justice.gov/crt/about/osc.
Applicants or employees who believe they were subjected to different documentary requirements based on their citizenship status, immigration status or national origin, or discrimination based on their citizenship status, immigration status or national origin in hiring, firing, or recruitment or referral for a fee should contact OSC’s worker hotline for assistance.
Justice Department Reaches Settlement Agreement with First United Bank over Allegations of Discrimination on the Basis of National OriginRead the Press Release
The Justice Department announced today that First United Bank, of Dimmitt, Texas, will maintain uniform pricing policies, conduct employee training and pay $140,000 as part of a settlement to resolve allegations that it engaged in a pattern or practice of discrimination on the basis of national origin.
The settlement, which is subject to court approval, was filed in conjunction with the Justice Department’s complaint in the U.S. District Court for the Northern District of Texas. The complaint alleges that First United Bank charged higher prices on unsecured consumer loans made to Hispanic borrowers in violation of the Equal Credit Opportunity Act (ECOA).
“The Civil Rights Division is committed to ensuring that lenders price all types of loans based on appropriate credit factors and not based on prohibited factors such as national origin,” said Acting Assistant Attorney General Vanita Gupta for the Justice Department’s Civil Rights Division. “We commend First United Bank for implementing a system of loan pricing that provides objective guidance to the bank’s employees.”
The lawsuit originated from a referral by the Federal Deposit Insurance Corporation (FDIC) to the Civil Rights Division. First United Bank is a member of the FDIC.
Under the settlement, First United Bank will pay a total of $140,000 to compensate hundreds of victims of discrimination, monitor its loans for potential disparities based on national origin and provide equal credit opportunity training to its employees. First United Bank will also maintain its revised pricing policies to ensure that the price charged for its loans is set in a non-discriminatory manner consistent with the requirements of ECOA. The agreement also prohibits the bank from discriminating on the basis of national origin in any aspect of a credit transaction.
“This district is committed to ensuring banks and other lending institutions do not discriminate against borrowers on the basis of national origin,” said Acting U.S. Attorney John Parker for the Northern District of Texas. “I join the Acting Assistant Attorney General in recognizing First United Bank’s cooperation in accomplishing this settlement that will compensate hundreds of victims of this discrimination.”
The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Rights Division. Since the Fair Lending Unit was established in February 2010, it has filed or resolved 36 lending matters under the Fair Housing Act, ECOA and the Servicemembers Civil Relief Act. The settlements in these matters provide for over $1.2 billion in monetary relief for impacted communities and individual borrowers. The Attorney General’s annual reports to Congress subject to ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publication.
The Civil Rights Division and the FDIC are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov .
A copy of the complaint and proposed order, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.justice.gov/fairhousing.
Justice Department Reaches Settlement Agreement with First United Bank over Allegations of Discrimination on the Basis of National OriginRead the Press Release
WASHINGTON – The Justice Department announced today that First United Bank, of Dimmitt, Texas, will maintain uniform pricing policies, conduct employee training and pay $140,000 as part of a settlement to resolve allegations that it engaged in a pattern or practice of discrimination on the basis of national origin.
The settlement, which is subject to court approval, was filed in conjunction with the Justice Department’s complaint in the U.S. District Court for the Northern District of Texas. The complaint alleges that First United Bank charged higher prices on unsecured consumer loans made to Hispanic borrowers in violation of the Equal Credit Opportunity Act (ECOA).
“The Civil Rights Division is committed to ensuring that lenders price all types of loans based on appropriate credit factors and not based on prohibited factors such as national origin,” said Acting Assistant Attorney General Vanita Gupta for the Justice Department’s Civil Rights Division. “We commend First United Bank for implementing a system of loan pricing that provides objective guidance to the bank’s employees.”
The lawsuit originated from a referral by the Federal Deposit Insurance Corporation (FDIC) to the Civil Rights Division. First United Bank is a member of the FDIC.
Under the settlement, First United Bank will pay a total of $140,000 to compensate hundreds of victims of discrimination, monitor its loans for potential disparities based on national origin and provide equal credit opportunity training to its employees. First United Bank will also maintain its revised pricing policies to ensure that the price charged for its loans is set in a non-discriminatory manner consistent with the requirements of ECOA. The agreement also prohibits the bank from discriminating on the basis of national origin in any aspect of a credit transaction.
“This district is committed to ensuring banks and other lending institutions do not discriminate against borrowers on the basis of national origin,” said Acting U.S. Attorney John Parker for the Northern District of Texas. “I join the Acting Assistant Attorney General in recognizing First United Bank’s cooperation in accomplishing this settlement that will compensate hundreds of victims of this discrimination.”
The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Rights Division. Since the Fair Lending Unit was established in February 2010, it has filed or resolved 36 lending matters under the Fair Housing Act, ECOA and the Servicemembers Civil Relief Act. The settlements in these matters provide for over $1.2 billion in monetary relief for impacted communities and individual borrowers. The Attorney General’s annual reports to Congress subject to ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publication.
The Civil Rights Division and the FDIC are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov .
A copy of the complaint and proposed order, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.justice.gov/fairhousing.
Joint Federal Human Trafficking Task Forces Meeting to be held January 15, 2015Read the Press Release
Montgomery, Alabama - United States Attorney George L. Beck, Jr., will join with members of the Middle District of Alabama Human Trafficking Task Force, the Northern District of Alabama Human Trafficking Task Force, and the Southern District of Alabama Human Trafficking Task Force for a meeting tomorrow, January 15, 2015. The purpose of the meeting is to unite federal, state, and local law enforcement officials, prosecutors and victim service providers to discuss investigation strategies and victim resources, and to implement a state-wide protocol in an effort to combat human trafficking.
Human trafficking is recognized as “a modern-day form of slavery” and “is tied with the illegal arms industry as the second largest criminal industry in the world today,” according to the U.S. Department of Health and Human Services. Human trafficking often takes one of two forms – labor or sex trafficking. Labor trafficking may include forced labor or debt bondage, where a victim continually works to pay off an undefined and seemingly endless debt. Sex trafficking includes forcing victims to perform sexual acts, performances, or prostitution, or subjecting them to sexual abuse or torture. Victims may be subject to inhumane conditions and may be afraid to seek help due to language barriers, immigration status, or fear of the trafficker. Both Federal and Alabama law criminalize human trafficking, with penalties including significant prison time, large fines, and mandatory restitution.
“January is Human Trafficking Prevention month, and I am pleased that we can gather together for meaningful discussions and training on this vital subject,” stated U.S. Attorney George Beck Jr. from the Middle District of Alabama. “It is critical that citizens and law enforcement be more proactive and take every opportunity to learn how to recognize the signs of a terrible crime that results in the abuse, intimidation, and enslavement of women and children.”
The mission of the Middle District of Alabama Human Trafficking Task Force is “To Find and Free” victims of human trafficking. The Task Force began its work in 2009, initiated by the U.S. Attorney’s Office for the Middle District of Alabama, and thereafter partnered with the Montgomery County District Attorney’s Office.
The Task Force consists of federal, state, and local partners within the River Region and from the 23 counties which comprise the Middle District of Alabama. In addition to the United States Attorney’s Office for the Middle District of Alabama and the Montgomery County District Attorney’s Office, the Task Force partners include: the Federal Bureau of Investigation, the Homeland Security Investigations of the United States Department of Homeland Security, the Alabama Attorney General’s Office, the Alabama Fusion Center (which is a division of ALEA), the Montgomery Police Department, the Montgomery County Sheriff’s Office, One Place Family Justice Center, Legal Services Alabama, the Family Sunshine Center, the Alabama Coalition Against Domestic Violence, Stella’s Voice, SABRA Sanctuary of Selma, the Alabama Department of Youth Services, the Alabama Department of Child Abuse and Neglect Prevention, the Alabama Department of Education, survivors of human trafficking, college students, and local college chapters of International Justice Mission.
The meeting on Thursday will include training and a law enforcement case study. Members of law enforcement, victim service providers, and service organizations are invited to attend.
For more information, please contact Assistant United States Attorney Jerusha T. Adams at 334-223-7280 or Montgomery County Deputy District Attorney Carrie G. Shaw at 334-262-7378.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Inmate at USP Canaan Sentenced to 20 Years in Prison for Assault with Intent to Murder Another InmateRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 28-year-old inmate at the United States Penitentiary Canaan in Waymart, Pennsylvania, who admitted to assaulting a fellow inmate with the intent to commit murder, was sentenced to the statutory maximum of 20 years in prison today by Senior U.S. District Court Judge James M. Munley.
According to United States Attorney Peter Smith, the defendant, Joseph Wing, was serving a sentence of 540 months in prison at the time he committed the May 16, 2014 assault. Wing will begin serving today’s sentence after he completes serving the 540-month sentence. Judge Munley also ordered Wing to pay restitution to the Bureau of Prisons for its costs associated with the medical treatment of the victim.
Wing was indicted by a federal grand jury in June 2014, as a result of an investigation by the Federal Bureau of Investigation and Bureau of Prisons staff.
The case was prosecuted by Assistant U.S. Attorney Francis
P. Sempa.Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney’s Office announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Judge Lynch in Missoula on January 14, 2015, and entering pleas of Not Guilty were:
- JANET JORGENSON CARD, a 49-year-old resident of Whitehall, appeared on charges of conspiracy to possess methamphetamine with intent to distribute and possession with intent to distribute methamphetamine. If convicted of the most serious charge contained in the indictment, CARD faces 20 years in prison, $1,000,000 in fines and 3 years supervised release. The case was investigated by the Missouri River Drug Task Force and the Federal Bureau of Investigation. PACER Case Reference: 14-30
- ROBERT ANTHONY VAUGHN, a 37-year-old resident of Bozeman, appeared on charges of conspiracy to possess methamphetamine with intent to distribute and possession with intent to distribute methamphetamine. If convicted of the most serious charge contained in the indictment, VAUGHN faces 20 years in prison, $1,000,000 in fines and 3 years supervised release. The case was investigated by the Missouri River Drug Task Force and the Federal Bureau of Investigation. PACER Case Reference: 14-31
Appearing before U.S. Magistrate Judge Ostby in Billings on January 14, 2015, and entering pleas of Not Guilty were:
- ERIC JOHN STEVENS, a 21-year-old resident of Lodge Grass, appeared on charges of aggravated sexual abuse of a child and abusive sexual contact. If convicted of the most serious charge contained in the indictment, STEVENS faces life in prison, $250,000 in fines and lifetime supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference: 14-133
Appearing before U.S. Magistrate Judge Johnston in Great Falls on January 14, 2015, and entering pleas of Not Guilty were:
- BRANDON RAY BUCKLES, a 27-year-old resident of Poplar, appeared on charges of sexual abuse and false statement to a federal officers. If convicted of the most serious charges contained in the indictment, BUCKLES faces life in prison, $250,000 in fines and lifetime supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference: 15-01
Appearing before U.S. Magistrate Judge Ostby in Billings on January 9, 2015, and entering pleas of Not Guilty were:
- PEDRO LUIS CANDIDO, a 45-year-old resident of Sidney, appeared on charges of conspiracy to possess with intent to distribute methamphetamine and possession with intent to distribute methamphetamine. If convicted of the most serious charges contained in the indictment, CANDIDO faces 40 years in prison, $5,000,000 in fines and 4 years supervised release. The case was investigated by the Drug Enforcement Administration. PACER Case Reference: 14-127
- TONY REYES, a 42-year-old resident of Cody, Wyoming, appeared on charges of conspiracy to possess with intent to distribute and to distribute methamphetamine, possession of methamphetamine with intent to distribute, distribution of methamphetamine and conspiracy to commit money laundering. If convicted of the most serious charges contained in the indictment, REYES faces 40 years in prison, $5,000,000 in fines and 4 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference: 14-123
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Honduran National Sentenced for Illegal ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that URIS ORDONEZA-MENDOZA, age 32, a citizen of Honduras, was sentenced today after previously pleading guilty to a one-count Indictment for illegal reentry of a removed alien.
U.S. District Judge Helen G. Berrigan sentenced ORDONEZA-MENDOZA to time served. ORDONEZA-MENDOZA will be surrendered to the custody of the U.S. Immigration & Customs Enforcement for removal proceedings.
According to the court documents, on September 20, 2014, ORDONEZA-MENDOZA was found in the United States after having been deported previously on February 14, 2014.
U.S. Attorney Polite praised the work of the Department of Homeland Security in investigating this matter. Assistant United States Attorney Emily K. Greenfield was in charge of the prosecution.
Honduran National Indicted for Illegal ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ANGEL ENO CORNEJO-MORENO, age 40, a citizen of Honduras, was charged today in a one-count Indictment with illegal reentry into the United States after having been previously deported.
According to the Indictment, CORNEJO-MORENO was encountered by Immigration & Customs Enforcement agents in the Eastern District of Louisiana on December 8, 2014, after records showed he had been previously deported from the United States to Honduras on January 26, 2009.
If convicted, CORNEJO-MORENO faces a maximum term of imprisonment of two years, a maximum fine of $250,000, a maximum term of supervised release of one year, and a mandatory $100 special assessment.
U.S. Attorney Polite reiterated that an Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Immigration & Customs Enforcement and the Jefferson Parish Sheriff’s Department in investigating this matter. Assistant U. S. Attorney Rick Veters is in charge of the prosecution.
Head of the Gulf Cartel Pleads Guilty to Federal Drug Trafficking ChargesRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas - U.S. Attorney John M. Bales announced today that the current head of the Mexican drug trafficking organization, the Gulf Cartel, or Cartel del Golfo, has pleaded guilty to drug trafficking charges in the Eastern District of Texas.
Juan Francisco Saenz-Tamez, 23, of Camargo, Tamaulipas, Mexico, pleaded guilty to distribution and possession with intent to distribute cocaine, conspiracy to distribute and possession with intent to distribute marijuana, and conspiracy to commit money laundering. Saenz-Tamez entered his guilty plea on Jan. 13, 2015, before U.S. District Judge Marcia A. Crone.
According to information presented in court, a federal investigation into the large-scale trafficking of illegal drugs from Mexico into the Eastern District of Texas led to the identity of Saenz-Tamez. The investigation revealed Saenz-Tamez was responsible for the shipment of one-half ton of cocaine and 90 tons of marijuana into the Eastern District of Texas and then to locations across the nation, including Florida, Ohio, Michigan, Mississippi, Louisiana, Washington D.C., Pennsylvania, Tennessee, Maryland and Georgia. As a result of this scheme, $100 million was laundered by Saenz-Tamez and his drug trafficking organization.
Saenz-Tamez was indicted by a federal grand jury on Sep. 5, 2013 and charged with conspiracy with intent to distribute cocaine, conspiracy with intent to distribute marijuana, and conspiracy to money launder. Saenz-Tamez was arrested by federal agents on Oct. 9, 2014 while shopping in Edinburg, Texas.
Saenz-Tamez faces a minimum of 10 years and up to life in federal prison for the drug convictions and up to 20 years in federal prison for the money laundering conviction. A sentencing date has not been set.
"This guilty plea marks a great victory in our long struggle against illegal narcotics trafficking and yet we must reiterate what should be self-evident - enforcement is only one part of the solution to what has been an interminable and ugly problem in American culture,” said U.S. Attorney Bales. “The American appetite for narcotics is a stain on our national honor and a dark cloud for our future. The agents working on this case are amazing - they are true American heroes and I congratulate them all."
IRS-CI Special Agent in Charge Lucy Cruz stated, "This is an important victory for the American public; the role of IRS-CI in narcotics investigations is to follow the money so we can financially disrupt and dismantle major drug trafficking organizations. We are committed to taking the profits away from drug traffickers and putting those individuals in jail. IRS-CI is proud to provide financial expertise as we work alongside our law enforcement partners and bring these criminals to justice."
“It’s a good day for law enforcement whenever we can take several tons of drugs off of America’s streets,” said Brian M. Moskowitz, special agent in charge of Homeland Security Investigations in Houston. “It’s even better when we can also dismantle and cripple the organization behind those drugs, and remove its leadership, as our law enforcement team did in this case.”
This case is the result of ongoing Organized Crime Drug Enforcement Task Force (OCDETF) joint investigations, Operation South Park, Operation La Mano Negra, Operation Frontera Chica, Operation Fowl Play and Operation Iceberg. 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.This joint law enforcement investigation was led by the U.S. Drug Enforcement Administration and Homeland Security Investigations, Houston HIDTA Group 33, Internal Revenue Service – Criminal Investigation, United States Marshals Service, Texas Department of Public Safety, Texas Attorney General’s Office, National Guard of Texas – Joint Counterdrug, Beaumont Police Department, Houston Police Department, Nacogdoches Police Department, Nacogdoches Sheriff’s Office, Jefferson County Sheriff’s Office, and the Harris County Sheriff’s Office. This case is being prosecuted by Assistant U.S. Attorney John Craft.
Hammond Man Indicted for Gun and Drug ViolationsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that GENORD PERRY, age 36, of Hammond, was charged today in a five-count Indictment for violations of the Federal Controlled Substances Act and the Federal Gun Control Act. Specifically, PERRY was charged with three counts of distributing a quantity of heroin, in violation of Title 21, United States Code, Section 841(a)(1) and 841(b)(1)(C) (Counts One, Two and Four). In addition, he was charged with two counts of possessing a semiautomatic handgun in furtherance of a drug trafficking crime, in violation of Title 18, United States Code, Sections 924(c)(1)(A) & (C) (Counts Three and Five).
Counts One, Two, and Four each carry a maximum term of imprisonment of 20 years, a fine of up to $1,000,000, and a minimum of 3 years of supervised release following any term of imprisonment. Count Three carries a minimum term of imprisonment of 5 years, a fine of up to $250,000, and a maximum of 5 years of supervised release following any term of imprisonment. Court Five carries an additional minimum term of imprisonment of 25 years, a fine of up to $250,000, and a maximum of 5 years of supervised release following any term of imprisonment.
U.S. Attorney Polite reiterated that the indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration and the Hammond Police Department in investigating this matter. Assistant U.S. Attorney James S. C. Baehr is in charge of the prosecution.
Gallup Man Sentenced to 72 Months for Voluntary Manslaughter ConvictionRead the Press Release
ALBUQUERQUE – Melvyn Lee Morgan, 31, an enrolled member of the Navajo Nation who resides in Gallup, N.M., was sentenced to 72 months in federal prison for his voluntary manslaughter conviction. He will be on supervised release for three years after completing his prison sentence.
Morgan and co-defendant Danny Dan Don Brown, 27, a Navajo man from Church Rock, N.M., were charged in a criminal complaint in Dec. 2011, with murdering a third Navajo man on Dec. 3, 2011. According to the complaint, the murder occurred in Church Rock, which is located in the Navajo Indian Reservation. Brown and Morgan were arrested on Dec. 27, 2011, and have been in federal custody since that time. The two were indicted on Jan. 24, 2012, and charged with second degree murder.
According to court records, late on the night of Dec. 3, 2011, Morgan, Brown and the victim had a fight after drinking alcohol. During the fight, Morgan and Brown repeatedly kicked and punched the victim, who died as a result of injuries he sustained.
Brown pled guilty to second degree murder on Feb. 5, 2013, and was sentenced in June 2013, to 162 months (13.5 years) in federal prison followed by two years of supervised release.
Yesterday Morgan pled guilty to a felony information charging him with voluntary manslaughter. In this plea agreement, Morgan admitted that on Dec. 3, 2011, he fought with Brown and the victim after drinking alcohol. Morgan noticed that the victim was having difficulty breathing following the fight and left the scene of the fight to seek aid for the victim. However, the victim died before Morgan returned to the scene with police officers.
This case was investigated by the Gallup office of the FBI, the Crownpoint office of the Navajo Nation Division of Public Safety, and the McKinley County Sheriff’s Office. Assistant U.S. Attorney Paul H. Spiers prosecuted the case.Forty Individuals Arrested and Indicted for Social Security FraudRead the Press Release
On Jan. 12 and 13, 2015, a federal grand jury in the District of Puerto Rico returned 39 separate indictments charging one doctor, Luis Escabi-Pérez, and 39 other individuals for fraud in the application process for Social Security Administration (SSA) disability insurance benefits in Puerto Rico, announced U.S. Attorney Rosa Emilia Rodríguez Vélez for the District of Puerto Rico.
The SSA is responsible for the implementation of the Disability Insurance Benefits Program. The SSA provides monetary benefits to workers with severe, long-term disabilities who have worked in SSA-covered employment for a required length of time. Spouses and dependent children of disabled workers may also be eligible to receive benefits.
Pursuant to SSA regulations, a claimant must prove to SSA that he or she is disabled by furnishing medical and other evidence with the application. The application and supporting evidence would then be evaluated by SSA to determine the individual’s medical impairments and determine the effect of the impairment on the claimant’s ability to work on a sustained basis.
Escabi-Pérez, a psychiatrist, submitted psychiatric medical reports to the SSA in support of applications for disability insurance benefits submitted by his patients. Escabi-Pérez charged a fee for the medical visits, typically in the amount of $100. In addition, the defendant typically charged a fee in the amount of $500 for the preparation and submittal of a psychiatric medical report to the SSA. He would at times also charge additional fees of up to $5,000 to backdate medical records in order to create the appearance of a longer history of medical treatment.
For example, on Jan. 15, 2014, Escabi-Pérez submitted a medical report to the SSA suggesting that a patient, who was generally in good health and was not suffering from any physical or mental disabling conditions, was in fact suffering from disabling psychiatric conditions, and that the first medical visit of this patient to him was in April 2013, when in truth this patient’s first visit was in November 2013.
The patient initially received $11,242 as a retroactive payment calculated from the date of entitlement through the approval date. Thereafter, the patient received monthly disability insurance benefit payments of approximately $1,536. The total amount of benefits paid to the patient from the date of entitlement through the date of this indictment is approximately $27,096. Escabi-Pérez is also facing one charge of wire fraud. As part of the manner and means of the conspiracy, the doctor faxed the psychiatric report to the SSA supporting the existence of the alleged psychiatric conditions suffered by the patient, in spite of the fact that these psychiatric conditions were contrived.
Five indictments charge five individuals along with Escabi-Pérez of conspiracy to defraud the United States, wire fraud, theft of government property, concealment of failure to disclose an event to SSA and false statement in determining rights for disability. These defendants, aiding and abetting each other, knowingly and willfully embezzled, stole and converted to their own use the social security disability insurance benefit payments to which the defendants knew that they were not entitled.
Another five defendants filed SSA applications during 2011, which indicated the defendants were unable to work due to “back problems, cervical conditions, pain, carpal tunnel, arms numbed, legs numbed, depression,” among others. These defendants are charged with theft of government property because they embezzled, stole and converted to their own use, or the use of others, social security disability insurance benefit payments to which they knew they were not entitled. These defendants are also charged with false statement in determining rights for disability because they lied in the disability report (Form SSA-3368). The defendants stated that they stopped working because of their conditions, although the defendants knew that they stopped working because of a release agreement signed with pharmaceutical companies.
A third charge is for concealment or failure to disclose an event to SSA. These defendants intentionally concealed or failed to disclose the fact that their medical conditions had improved.
Twenty-nine defendants are facing two charges: theft of government property and concealment or failure to disclose an event to SSA.
The defendants who illegally received the benefits are Wilma Bolet, Juana Concepción-Santana, Miriam Cosme-García, Yesenia De Jesús, Ramona García, María García-Reyes, Pedro Laureano-Vázquez, Juan López-Rivera, Elizabeth Maldonado-Laureano, Fernando Marrero-Padilla, Ernie Martell-Orta, Ángel Montes-Orria, Lourdes Reyes-Medina, Candi, Rojas-Molina, Ángel Román-Santana, Miguel Santana-Ríos, José Valle-Oliveras, Edna Vargas-Valdés, Agustín Vázquez-Izquierdo, Orlando Pérez-Juarbe, Jorge Fraguada-Romero, Elsie Boneta-Román, Julio César Álamo-Casiano, Manuel Rivera-Santos, Francisco Declet, Luis Reyes-Serrano, Ismael Alicea-Berdecía, Rosa Espinosa-González, Johany Díaz-Oquendo, Ángel Rivera-Adorno, Myrna Ruiz-Rosso, William Feliciano, Edwin Figueroa, Ana Morales-de Jesús, Rosa Pagán-Ramos, Alberto Sostre-Cintrón, Constancia Vega-García, Raúl Domínguez and Ana Ruiz-Rivera.
“This case is the result of the continued efforts of the SSA and the FBI. Since August 2013, when 75 individuals were indicted for similar charges, including the current charges, we have filed a total of 115 indictments,” said U.S. Attorney Rodríguez-Vélez. “This is a great example of ongoing efforts by the Government to deter fraud against the social security programs. The Department of Justice is committed to investigate and prosecute those who engage in fraudulent schemes. Hopefully this round of arrests will discourage more people from getting involved in these types of schemes, because the investigation continues.”
The SSA in New York and Baltimore conducted a lengthy analysis of medical source documentation in social security’s files, wherein a pattern of fraudulent activity was discovered, initiating a full investigation. What followed was lengthy, intensive and complex investigative work—interviews, surveillances and other investigative activity.
“This fraud conspiracy scheme involving unscrupulous medical professionals and SSA disability claimants has been exposed and those involved are being brought to justice. It was only after the analysis of medical source documentation in SSA files that SSA OIG (Office of Inspector General) was able to identify the fraudulent pattern,” said Special Agent-in-Charge Edward J. Ryan of the SSA OIG’sOffice of Investigations. “This intensive and complex investigative work with the FBI and PRPD (Puerto Rico Police Department) consisted of numerous surveillances and other investigative activities that I cannot detail. This intelligence was also shared with the Health and Human Services OIG for their files. The evidence was provided to the U.S. Attorney’s Office which culminated in the additional arrests this morning. OIG will continue to work with our partners to protect the integrity of the Social Security Trust Fund.”
“This is another social security disability benefits fraud case where shameless individuals illegally obtained the benefits provided by the federal government,” said Special Agent in Charge Carlos Cases of the FBI’s San Juan Division. “This is not a victimless crime, but rather an outrageous, despicable and reprehensible act that deprives those who truly need assistance. Combating social security disability benefits fraud will continue to be a priority for the FBI in Puerto Rico.”
The case was investigated by the SSA-OIG with the collaboration of the FBI and the PRPD. The case was indicted by First Assistant U.S. Attorney María Domínguez and Special Assistant U.S. Attorney Vanessa D. Bonano-Rodríguez for the District of Puerto Rico.
Fort Dodge Couple to Federal Prison for Drug ConspiracyRead the Press Release
Contact: Steve Young
A couple who conspired to distribute methamphetamine and marijuana were sentenced December 19, 2014, and January 13, 2015, to more than 10 years in federal prison.
Carl Duckett (Kifer), 32, and Jessica Duckett, 28, both from Fort Dodge, Iowa, received the prison term after August and September guilty pleas to conspiracy to distribute methamphetamine and marijuana. Carl also pled guilty to possession of a firearm by a prohibited person. In 2012, Carl and Jessica were each convicted of possession with intent to distribute a controlled substance in Iowa.
At the guilty pleas, both admitted their involvement from 2006 through October 2013 in a conspiracy that distributed at least 15 kilograms of methamphetamine and over 100 pounds of marijuana in the Fort Dodge, Iowa, area. In 2011 during a search warrant at the Duckett residence, law enforcement seized numerous growing marijuana plants, methamphetamine and several firearms. In 2013, another search warrant was executed and six ounces of methamphetamine, three pounds of marijuana and $9000 was seized from the Duckett residence.
Both were sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Carl was sentenced to 183 months’ imprisonment. Jessica was sentenced to 120 months’ imprisonment. A special assessment of $200 was imposed for Carl and $100 special assessment for Jessica. Each must also serve a 5-year term of supervised release after the prison term. There is no parole in the federal system. Both are being held in the United States Marshal’s custody until they can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and investigated by the Fort Dodge Police Department, the Webster County Sheriff’s Office, the Iowa Division of Narcotics Enforcement, and the Iowa Division of Criminal Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 13-3046.
Former Warren County, New Jersey, Title Agent Admits Role in Multi-Million Dollar Mortgage Fraud SchemeRead the Press Release
NEWARK, N.J. - A former real estate title agent admitted yesterday to carrying out a mortgage fraud scheme in which she obtained seven loans, totaling more than $3.7 million, on two properties located in Wood-Ridge, New Jersey and Belvidere, New Jersey.
Prior to going to trial, Ania Nowak, 48, of Belvidere, pleaded guilty before U.S. District Judge Stanley R. Chesler to Count One of the superseding indictment charging her with conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court:
Ania Nowak was the owner and operator of A.N. Title Agency LLC and was an agent for Stewart Title Guaranty Company. Nowak had a duty to review a property’s title to determine ownership and the existence of any prior liens and truthfully disclose them in the title insurance documents. She also had a duty to issue title insurance policies to lenders guaranteeing there were no other liens so that they would be first in line to have the property sold if the borrower stopped making mortgage payments. Nowak also acted as a settlement agent and was required to disburse loan money in accordance with lender instructions, pay off any existing liens and record loan documents in the appropriate county clerk’s office.
Nowak admitted her role in obtaining seven mortgage loans through fraudulent means, including: an April 2005 loan for her sham sale of the Wood-Ridge property to her husband, Zbigniew Cichy, 45, of Belvidere; a November 2005 refinancing loan for the Wood-Ridge property; a 2005 construction loan to build a house on the Belvidere property owned by Cichy; an August 2006 loan on the Belvidere property; May 2007 loans for a sham sale of the Belvidere property to another conspirator in the scheme, Kim Salvemini, 60, of Wallington, New Jersey ; Salvemini’s May 2007 refinancing loan on the Belvidere property; and Cichy’s November 2007 refinancing loan on the Belvidere property. Nowak admitted that, for each of the seven loans, she lied on loan documents, failed to pay off prior mortgages at closing, failed to record the mortgages and any deeds and that most of the loans went into default for non-payment.
The wire fraud conspiracy charge to which Nowak pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss resulting from the offense. Sentencing is scheduled for May 5, 2015.
Salvemini previously pleaded guilty to her role in the scheme and awaits sentencing. Charges against Cichy are still pending and he is presumed innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to the guilty plea.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu and Senior Litigation Counsel Leslie F. Schwartz of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark.
Today’s guilty plea 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. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
15-018Defense counsel: Peter R. Willis Esq., Jersey City, New Jersey
Former UPS Driver Who Stole Guns, Jewelry and Phones Being Shipped Is Found Guilty of Federal Weapons ChargesRead the Press Release
RIVERSIDE, California – A former United Parcel Service driver was found guilty today of federal gun trafficking charges for stealing dozens of guns going through the shipping company’s Ontario hub and providing them to another man who sold the weapons on the street.
Curtis Ivory Hays II, 37, of Rancho Cucamonga, was convicted of firearms and other offenses following a six-day trial in United States District Court.
Hays, who was found guilty of 15 counts, faces a statutory maximum sentence of 115 years in federal prison when he is sentenced on March 30 by United States District Judge Virginia A. Phillips.
The associate who allegedly sold some of the firearms – Dennis Dell White Jr., 35, of Moreno Valley – previously pleaded guilty in the case and is scheduled to be sentenced by Judge Phillips on May 4.
The evidence at trial showed that Hays stole a series of packages containing guns that were supposed to be delivered to Turner’s Outdoorsman in Rancho Cucamonga. From May through October of 2012, Hays stole six shipments containing a total of 72 firearms.
Hays gave the stolen firearms to White, who illegally sold the weapons to other individuals, and some of the guns then were sold to others. The firearms included 12-gauge shotguns and .45-caliber handguns.
Hays also stole shipments containing jewelry and mobile phones that were supposed to be delivered to Costco in Rancho Cucamonga, and this merchandise also was given to White.
Hays was found guilty of conspiracy, six counts of theft of firearms, six counts of receipt and possession of stolen firearms, and two counts of theft of interstate shipments.
White pleaded guilty to one count of theft of firearms.
The investigation into the stolen firearms was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives in conjunction with the Ontario Police Department and the Riverside County Sheriff’s Department. Substantial assistance was provided by the San Bernardino County District Attorney’s Office.
Release No. 15-005
Former U.S. Border Patrol Agent Sentenced to 2 Years in PrisonRead the Press Release
FORMER U.S. BORDER PATROL AGENT SENTENCED TO 2 YEARS IN PRISON
TUCSON, Ariz. – Today, former U.S. Border Patrol Agent Raimundo Borjas, 41, of Douglas, Ariz., was sentenced to two years in prison by U.S. District Court Judge Jennifer G. Zipps, for conspiracy to commit money laundering. Judge Zipps also entered an order forfeiting $28,100 of the funds Borjas attempted to launder and entered a money judgment against Borjas for an additional $9,720, which represented Borjas’s profit from the offense. Borjas pleaded guilty on Aug. 1, 2014.
On Feb. 24, 2010, Borjas opened a personal checking account at Southeastern Arizona Federal Credit Union in Douglas, Ariz. Borjas deposited into the account cash that was dirty, frayed, and had holes in it (“mutilated cash”), totaling $61,600.
Borjas received the $61,600 in mutilated cash, which he believed was drug proceeds, from “Rigo.” Borjas and Rigo agreed that Borjas would deposit the mutilated cash, withdraw useable cash in the same amount, and delivered it back to Rigo. For his participation in this scheme, Borjas received 30% of the money he laundered.
During this period, Borjas withdrew $32,400 of the money in useable, clean bills and returned it to Rigo, receiving $9,720 as payment. Borjas was unable to withdraw the remaining $28,100 because the United States seized those funds.
The investigation is this case was conducted by the Cochise Border Corruption Task Force, which consists of agents from the Federal Bureau of Investigation, U.S. Department of Homeland Security Office of Inspector General, Customs and Border Protection Internal Affairs, and Internal Revenue Service Criminal Investigation, with assistance from the U.S. Department of Homeland Security Immigration and Customs Enforcement and the Douglas Police Department. The prosecution was handled by Mary Sue Feldmeier, Assistant U.S. Attorney, District of Arizona, Tucson.
CASE NUMBER: CR- 13-cr-00620-TUC-JCZ
RELEASE NUMBER: 2015-006_ Borjas
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Former Ponte Vedra Resident Sentenced to Nine Years for FraudRead the Press Release
Jacksonville, Florida – Senior U.S. District Judge Harvey E. Schlesinger has sentenced Mark Steven Szekely (54, Ponte Vedra) to nine years in federal prison for wire fraud. The Court also entered a money judgment in the amount of $454,972.65, the traceable proceeds of the offense, and ordered him to pay restitution to his victims in the same amount. Szekely pleaded guilty on October 14, 2014.
According to court documents and testimony presented during the sentencing hearing, Szekely conducted a scheme to defraud others in which he swindled at least 17 individuals out of $454,972.65. Among the victims were his friends, members of his church, his children’s teachers, and a 17-year-old high school student who had saved money from babysitting. As part of his scheme, Szekely represented that he was an accomplished author with connections to entertainment lawyers in New York City that could assist the victims with copyrighting, publishing, and/or producing their works into Broadway plays or films. In reality, Szekely had no such connections, and instead, fraudulently created a list of fictitious lawyers and other professionals. In addition, several of the victims were defrauded into investing in “annuities” tied to a book Szekely had written and was allegedly being produced into a movie. Court testimony established that Szekely had not worked for approximately 12 years and had supported himself and his family with the proceeds of his fraud.
This case was investigated by Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Mark B. Devereaux.
Former Mayor of Stillwater Pleads Guilty to Tax Fraud ConspiracyRead the Press Release
United States Attorney Andrew M. Luger today announced the guilty plea of KENNETH FRANK HARYCKI, 51, to conspiracy to defraud the United States by preparing and filing tax forms that he knew to be fraudulent. HARYCKI pleaded guilty today before U.S. District Judge Ann D. Montgomery in Minneapolis.
“As a former mayor, Mr. Harycki understands, better than most, the magnitude and impact of the fraud he helped to perpetrate,” said U.S. Attorney Luger. “By his guilty plea, Mr. Harycki has taken responsibility for his actions, but that does not excuse his criminal acts. This defendant not only violated his accounting license by covering up a tax fraud, he eroded the trust of the residents of Stillwater, who elected him to a position of high public office.”
According to his guilty plea, during the course of the conspiracy, HARYCKI owned and operated businesses that provided bookkeeping, payroll, and accounting services, including tax- related services, to clients. In 2007, the defendant began providing services to two separately charged co-conspirators. Within the first few payroll cycles for Model Health Care (Model), a company controlled by the two separately charged co-conspirators, the defendant concluded that while payroll taxes were being withheld from the wages of employees, those taxes were not being paid over to the government. The defendant learned that these co-conspirators had directed that the withheld taxes not be paid to the government and, instead, the taxes would be used for other purposes, including compensating the co-conspirators and their family members and funding other businesses operated by the co-conspirators.
According to the defendant’s guilty plea, on February 18, 2010, HARYCKI created the entity MKH Holdings, Inc., to assume control over bank accounts used to fund businesses operated by the co-conspirators. The entity was used to cause funds falsely reported on income tax returns to be paid to the co-conspirators and others. During the course of the conspiracy, HARYCKI also incorporated other businesses, obtained employer identification numbers, paid for personal expenses, filed false tax returns, and opened and used numerous bank accounts for the benefit of the separately charged co-conspirators in order to avoid payment of taxes.
The tax loss from the defendant’s relevant conduct is between $1 million and $2.5 million.
This case is the result of an investigation conducted by the Internal Revenue Service – Criminal Investigation Division, Federal Bureau of Investigation, and Department of Health and Human Services Office of the Inspector General.
This case is being prosecuted by Assistant U.S. Attorney Robert Lewis.
Defendant Information:
KENNETH FRANK HARYCKI, 51
Stillwater, Minn.
Convicted:
• Conspiracy to Defraud the United States, 1 countFormer Managing Law Clerk for Prominent Law Firm Indicted in Scheme to Trade on Inside InformationRead the Press Release
TRENTON, N.J. – A federal grand jury today indicted the managing clerk of the New York office of a prominent, international law firm for his alleged participation in a multi-year insider trading scheme that netted more than $5.6 million in illicit profits, New Jersey U.S. Attorney Paul J. Fishman announced.
Steven Metro, 40, of Katonah, New York, is charged by indictment with one count of conspiracy to commit securities and tender offer fraud, one count of securities fraud, and one count of tender offer fraud.
According to documents filed in this case and statements made in court:
From 2009 to 2013, Metro, who was then the managing clerk of the New York office of Simpson Thacher & Bartlett LLP (the “Law Firm”), one of the nation’s premier mergers and acquisitions firms, repeatedly provided material, nonpublic information to his friend and former law school classmate, Frank Tamayo, 41, of Brooklyn, New York. The inside information divulged by Metro to Tamayo related to corporate transactions, such as mergers and acquisitions or tender offers, in which the law firm represented a party or financial advisor to the transaction. As the firm’s managing clerk – a litigation-related function – Metro did not personally work on most of the corporate transactions at issue. In most instances, Metro allegedly stole the inside information by scouring the firm’s computer system using search terms such as “merger agreement,” “bid letter,” “engagement letter,” “due diligence,” as well as client names, client-matter numbers, or combinations thereof.
Metro then divulged the inside information to Tamayo in person, usually meeting at a bar, coffee shop, or other location near their respective workplaces in midtown Manhattan. During such meetings, Metro provided Tamayo inside information pertaining to, among other things, the names and/or ticker symbols of the companies whose securities should be purchased, the general timing of the planned deals, and information related to how the deals would affect the issuers’ stock price once announced. Tamayo generally would write the security’s ticker symbol on a small piece of paper or napkin and commit to memory any pricing/timing inside information provided by Metro.
After Tamayo received the inside information from Metro, Tamayo would meet with Vladimir Eydelman, 42, of Colts Neck, New Jersey, a professional stock broker. Tamayo usually would meet Eydelman near Eydelman’s workplace, such as at the large clock in New York City’s Grand Central Terminal, where Tamayo would pass the inside information on to Eydelman. Tamayo would show Eydelman the paper or napkin on which Tamayo had written the ticker symbol of the company whose securities should be purchased. After Eydelman memorized the ticker symbol, Tamayo then would chew the paper or napkin until it was destroyed.
After receiving the inside information provided by Metro, whom Eydelman knew as Tamayo’s source at a law firm, Eydelman purchased securities for himself, family members, friends, and/or clients, including Tamayo. Eydelman quickly sold the shares and covered any positions once the relevant deal was publicly announced and the stock price rose.
Throughout the course of the five-year scheme, Tamayo reinvested the approximately $7,000 in profits that Metro made on the first deal and updated Metro on the running balance of his profits from the insider trading scheme. As of October 2013, by which time the conspirators had traded ahead of at least 13 planned corporate transactions, Metro’s share of the profits had reached approximately $168,000. Metro sought to cash out his share of the accrued profits from the insider trading scheme, pressing Tamayo to “liberate some cash” during a meeting in January 2014. Eydelman paid approximately $7,000 in cash to Tamayo in February 2014, with the expectation that Tamayo would use the cash to compensate Metro.
Tamayo, Metro and Eydelman netted more than $5.6 million in illicit profits over the course of the five-year insider trading scheme.
The conspiracy count with which Metro is charged carries a maximum potential penalty of five years in prison and a fine of $250,000. The securities and tender offer fraud counts carry a maximum potential penalty of 20 years in prison and a fine of $5 million.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s indictment. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Daniel Hawke.
The government is represented by Assistant U.S. Attorneys Shirley U. Emehelu of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark, and R. Joseph R. Gribko of the U.S. Attorney’s Office in Trenton, as well as Assistant U.S. Attorney Barbara Ward of the Office’s Asset Forfeiture and Money Laundering Unit.
These charges are 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. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The charges and allegations contained in the indictment are merely accusations, and defendant is presumed innocent unless and until proven guilty.
Alleged Insider TradesAPPROX. DATE(S) OF PURCHASES
ANNOUNCEMENT DATE
SECURITY
APPROX. ILLICIT PROFIT
2/17/2009
Sirius XM Radio
$212,814
12/29/2009-1/15/2010
1/18/2010
Brinks Home Security
$773,154
7/8/2010-7/15/2010
7/15/2010
Smithtown Bancorp
$29,010
10/20/2010-10/29/2010
11/1/2010
CNA Surety Corporation
$241,141
4/11/2011-4/12/2011
4/13/2011
Graham Packing Company Inc.
$105,964
1/31/2011-4/19/2011
4/26/2011
SMART Modular Technologies
$1,575,382
4/4/2011-4/21/2011
4/27/2011
Vital Images, Inc.
$39,233
4/29/2011
5/2/2011
International Coal Group, Inc.
$231,276
6/21/2011-8/22/2011
8/23/2011
PharMerica Corp.
$1,517,092
4/16/2012-4/20/2012
5/1/2012
Collective Brands, Inc.
$360,775
5/14/2012-10/1/2012
N/A
“Company A”
N/A
9/20/2012-9/25/2012
9/27/2012
Sealy Corporation
$14,509
1/31/2013-2/15/2013
2/20/2013
Officemax Inc.
$573,332
APPROX. TOTAL ILLICIT PROFITS
$5,673,682
15-020 ###
Defense counsel: James Froccaro Esq. Port Washington, N.Y.
Former Law Enforcement Officer Sentenced to 25 Years for Child Sexual EnticementRead the Press Release
Orlando, Florida – Chief U.S. District Judge Anne C. Conway today sentenced Brian John McRee, Sr. (51, Jacksonville) to 25 years in federal prison for attempting to entice a minor to engage in sexual activity and for possessing child pornography. The Court also ordered him to serve a lifetime of supervision following his release from prison and to forfeit the electronic devices that he had used to commit the crimes. McRee pleaded guilty on August 28, 2014.
According to court documents, McRee attempted to entice a 14-year-old girl to engage in sexual activity. Unbeknownst to him, the “girl” was a law enforcement officer acting in an undercover capacity. McRee initially met the “girl” on a website known to be frequented by individuals who discuss incest and pedophilia. During the next six weeks, McRee communicated with the “girl” over the Internet, engaging her in sexual conversation and grooming her for sex. On May 17, 2014, he travelled to a prearranged location to meet the “girl” for sex and was subsequently arrested. He had in his possession numerous sexual aids, including condoms, alcohol for the child, erectile dysfunction medicine, and a digital camera. He also brought with him a laptop and three thumb drives containing a total of 300 images and 5 videos depicting the sexual abuse and exploitation of young girls. McRee admitted that he had travelled to have sex with the child and that he had downloaded child pornography from the Internet. He also admitted that he had recently been chatting about sex online with a 10-year-old.
McRee previously worked as a law enforcement officer for several sheriff’s offices from 1982 through 1999.
“Our children are our nation’s most important resource,” said Susan L. McCormick, special agent in charge of Homeland Security Investigations, Tampa. “And HSI remains committed to protecting our children against predators.”
This case was investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Volusia County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Karen L. Gable.
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, 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.
Former Executive Director of Adoption Agency Pleads Guilty to Submitting False Information to Accreditation AgencyRead the Press Release
The former Executive Director of International Adoption Guides Inc. (IAG), an adoption agency, pleaded guilty yesterday to making false and fraudulent statements to the Council on Accreditation with respect to IAG’s accreditation.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Bill Nettles of the District of South Carolina made the announcement.
Mary Mooney, 57, of Belmont, North Carolina, admitted as part of her guilty plea that she made false statements to the Council on Accreditation (COA), which granted IAG accreditation to provide adoption services in certain countries. IAG marketed itself as a COA-accredited adoption services provider and numerous clients relied on IAG’s accreditation to confirm that IAG’s adoption services were ethical and in compliance with U.S. and foreign law. Mooney admitted that in support of IAG’s application for accreditation she made several false representations, including: falsely stating that IAG was in substantial compliance with the relevant regulations; intentionally failing to list her co-defendant, Alisa Bivens, as one of IAG’s employees providing adoption services; and intentionally failing to disclose that James Harding, another co-defendant, was the functional director and head of the company. All of these false and fraudulent statements were material to COA’s decision to accredit IAG to conduct intercountry adoptions for purposes of the Hague Convention on the Protection of Children and Cooperation in Respect of Intercountry Adoptions. Without that accreditation, IAG would not have been legally permitted to facilitate intercountry adoptions from any country that was a party to that convention and numerous families would have never retained IAG to provide adoption services.
Mooney is the third defendant to plead guilty as a result of this investigation. Mooney pleaded guilty before Senior U.S. District Court Judge Sol Blatt Jr. of the District of South Carolina. A sentencing hearing will be scheduled at a later date.
This ongoing investigation is being conducted by the Bureau of Diplomatic Security. The department appreciates the assistance of the Office of Children’s Issues at the U.S. Department of State. The case is being prosecuted by Trial Attorney John W. Borchert of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jamie Lea Schoen of the District of South Carolina.