Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
20 February 2015
Little Rock Models Owner Indicted on Federal Enticement ChargesRead the Press Release
LITTLE ROCK – Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and Special Agent in Charge Raymond R. Parmer, Jr., of the New Orleans Field Office for Homeland Security Investigations, announced that Seth Christian Ganahl, age 42, of Maumelle, Arkansas, was indicted on multiple counts related to the sexual exploitation of minors. The U. S. Attorney’s Office announced today that it has set-up a phone number, 501-340-2647, if you have any information on Seth Ganahl, also known as Christian Canon, or regarding Little Rock Models in this on-going investigation.
The indictment, handed down by a Grand Jury in the Eastern District of Arkansas on February 4, 2015, charges Ganahl with two counts of attempted enticement of a minor to engage in sexual activity, one count of enticement of a minor to engage in sexual activity, one count of transportation of a minor with the intent to engage in sexual activity, one count of attempted production of child pornography, and two counts of production of child pornography. Ganahl made his initial appearance before United States Magistrate Judge J. Thomas Ray on February 18, 2015. He entered a plea of not guilty and was ordered to remain detained. His trial is set for March 23, 2015 before United States District Judge Kristine G. Baker.
Electronic devices seized in a search pursuant to federal search warrants revealed that Ganahl was using the name Christian Canon, and his business, Little Rock Models, to entice minors to send him photographs and videos of the minors engaged in sexually explicit conduct. Ganahl would then pay the minors for the photographs and videos. The evidence presented to the Grand Jury also included testimony from two minors that they went to Ganahl’s residence for the purpose of taking sexually explicit photographs. One minor, while at Ganahl’s residence, engaged in sexually explicit conduct with Ganahl, which he recorded.
The charges in the Indictment are based on an investigation that began in August 2014, when a minor disclosed to her mother and the Maumelle Police Department that Ganahl had previously asked her to engage in illicit sexual activity on multiple occasions. After the minor’s disclosure, a second minor disclosed that Ganahl had also asked her to engage in illicit sexual activity.
Ganahl was arrested by the Maumelle Police Department on August 27, 2014. He is currently charged in Pulaski County Circuit Court with 2 counts of sexual indecency with a child and 2 counts of sexual assault in the 2nd degree.
The investigation was conducted by the Little Rock Office of Homeland Security Investigations, the Arkansas State Police Crimes Against Children Division, and the Maumelle Police Department.
Statutory Penalties
18 U.S.C. 2422(b): Enticement of a Minor and Attempted Enticement of a Minor to Engage in Sexual Activity carries a penalty of NLT 10 years to life imprisonment, NLT 5 years to Life of supervised release, and a fine of up to $250,000.
18 USC 2423(a): Transportation of a Minor with intent to engage in criminal sexual activity carries a penalty of NLT 10 years to life imprisonment, NLT 5 years to Life of supervised release, and a fine of up to $250,000.
18 USC 2251(a): Production and Attempted of Child Pornography carries a penalty of NLT 15 years to life imprisonment, NLT 5 years to Life of supervised release, and a fine of up to $250,000.
Lincoln Man Sentenced for Distributing Child PornographyRead the Press Release
United States Attorney Deborah R. Gilg announced that Charles LeRoy Walker, 54, formerly of Lincoln, Nebraska, was sentenced today in Lincoln, Nebraska, to 70 months in prison by United States District Judge John M. Gerrard, for receiving and distributing child pornography. Walker will also be required to be on supervised release for five years after being released from prison and register as a sex offender.
In February of 2014, investigators with the Lincoln Police Department became aware of a computer that was sharing files that had been classified as containing child pornography. Further investigation identified the IP address, service provider and the address of Walker. A search warrant was served and Walker was taken into custody. After forensic examination of the computer equipment removed from Walker’s residence, more than 20,000 files affiliated with child sexual exploitation were located, along with several hundred videos.
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."
This case was investigated by the Lincoln Police Department.
Kodiak Man Indicted for Possession with Intent to Distribute MethamphetamineRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that a Kodiak man was indicted by a federal grand jury in Anchorage, Alaska on drug charges.
Teodoro Berdan, 55, of Kodiak, Alaska was charged with one count of possession with intent to distribute over 50 grams of a mixture or substance containing a detectable amount of methamphetamine. Berdan was arrested on February 7, 2015, in Kodiak after taking possession of a U.S. Postal Service parcel containing 122 grams of a substance that field tested positive for methamphetamine.
Assistant U.S. Attorney Bryan Schroder, who presented the case to the grand jury, indicated that Berdan faces a maximum sentence of 40 years in prison, and a $5,000,000 fine. Under the U.S. Sentencing Guidelines, the actual sentence imposed will be based on a number of factors, including the seriousness of the offense and any prior criminal history of the defendant.
The U.S. Postal Inspection Service conducted the investigation leading to the indictment in this case, with assistance from the FBI and the Kodiak Police Department.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Jury Convicts Lebanese-Born Man on Charges of Making False Statement to a Federal Agent and an Unlawful Attempt at NaturalizationRead the Press Release
This afternoon in San Antonio, a federal jury convicted 45-year-old Lebanese-born Wissam "Sam" Allouche of knowingly lying to federal authorities, announced Assistant Attorney General for National Security John Carlin, Acting United States Attorney Richard Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
Following a two-week trial, jurors convicted Allouche of making a false statement to the Department of Defense and unlawfully attempt to procure and obtain naturalization and citizenship. Evidence presented during trial revealed that Allouche, who migrated to the United States after marrying a U.S. Army soldier, lied to U.S. immigration authorities about whether he was still living with his spouse during the naturalization process in order to obtain United States citizenship. In addition, while seeking a contract linguist position with the U.S. Department of Defense that required a security clearance, evidence revealed that Allouche failed to disclose that he was a member of the Amal militia. Allouche was acquitted of one count of unlawfully obtaining citizenship by lying about his association with Amal and Hezbollah, both terrorist organizations at the time. Former relatives testified Allouche made statements that he killed an Israeli pilot captured by Hezbollah in retaliation for his imprisonment.
Allouche remains in federal custody pending sentencing scheduled for April 27, 2015. He faces up to ten years in federal prison.
The case was investigated by the FBI and the San Antonio Joint Terrorism Task Force. The case was prosecuted by Assistant U.S. Attorneys Mark Roomberg and Jay Hulings for the Western District of Texas.
Jackson County Resident Sentenced for Heroin OffenseRead the Press Release
On February 20, 2015, Frank R. Johnson, a/k/a “Mo,” 45, of Elkville, Ill., was sentenced for his involvement in a heroin conspiracy the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Johnson, who had previously pled guilty to a one-count indictment charging conspiracy to distribute heroin, was sentenced to 108 months in prison, to be followed by 3 years’ supervised release. Johnson was fined $400.00. Evidence at the plea and sentencing hearings established that Johnson was transporting ounce amounts of heroin from northern Illinois to Elkville for distribution. On numerous occasions, Johnson sold heroin to a confidential source working for law enforcement and to an undercover agent. When agents executed a search warrant at Johnson’s residence, they recovered heroin, digital scales, drug packaging materials, and a large amount of U.S. currency. At sentencing, the district court determined that Johnson was responsible for the distribution of approximately 825 grams of heroin. Johnson received an enhanced sentence based on the district court’s finding that Johnson had a leadership role in the criminal offense. The offense occurred between 2012 and January 2014, in Jackson and Franklin Counties.
The ongoing investigation is being conducted by the Southern Illinois Enforcement and Drug Enforcement Administration. The Jackson County Sheriff’s Office, West Frankfort Police Department, and Jackson County State’s Attorney’s Office assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Investment Executive Pleads Guilty in Manhattan Federal Court to Participating in $30 Million Insurance Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ALLEN REICHMAN, a former Executive Director of Investments at a New York investment firm, pled guilty today in Manhattan federal court to participating in a massive scheme to defraud his employer and insurance regulators in connection with the fraudulent purchase of an Oklahoma insurance company. REICHMAN pled guilty today before U.S. Magistrate Judge Henry B. Pitman.
Manhattan U.S. Attorney Preet Bharara said: “As Allen Reichman has now admitted, he deceived his employer to enable the illegal purchase of an insurance company. His associates looted the assets of the company, leaving it unable to pay policyholders, and Reichman pocketed over $200,000 in commissions on the fraudulent $30 million loan. He now awaits sentencing for his deceit and self-dealing.”
According to the information, plea agreement, and statements made during court proceedings:
During the relevant time period, REICHMAN was an executive at an investment bank and financial services company headquartered in New York, New York (the “Investment Firm”). From July 2008 to November 2009, REICHMAN conspired with Charles J. Antonucci, Sr. and Matthew L. Morris, the President and Senior Vice President, respectively, of Park Avenue Bank, a New York bank, and Wilbur Anthony Huff, a Kentucky businessman who controlled numerous entities located throughout the United States, to defraud the Investment Firm and Oklahoma insurance regulators regarding Antonucci’s purchase of Providence Property and Casualty Insurance Company (“Providence P&C”), an Oklahoma insurance company that was owed $5 million by a company Huff controlled. Providence P&C was licensed to operate by the Oklahoma Insurance Department (“OID”), which regulated various practices of Oklahoma insurance companies. Under the OID’s regulations and applicable Oklahoma law, Providence P&C was required to maintain a certain amount of assets to ensure that adequate funds were on hand to pay policyholders’ claims and anticipated claims.
REICHMAN and his co-conspirators schemed to defraud the Investment Firm into providing a $30 million loan to finance Antonucci’s purchase of Providence P&C and to defraud Oklahoma insurance regulators into approving the purchase. The $30 million loan from the Investment Firm to purchase Providence P&C was secured by Providence P&C’s own assets, including the reserve assets. Because Oklahoma insurance regulators had to approve any sale of Providence P&C, and because Oklahoma law forbade the use of Providence P&C’s assets as collateral for such a loan, REICHMAN, Huff, Morris, and Antonucci, made, and conspired to make, a number of material misstatements and material omissions to the Investment Firm and Oklahoma insurance regulators concerning the true nature of the financing for the purchase. Specifically, Investment Firm executives and others warned REICHMAN on several occasions that using Providence P&C’s assets as collateral for the loan was illegal and that he should not cause the loan to be issued. REICHMAN ignored these warnings and instead provided misleading information to various individuals at the Investment Firm and elsewhere regarding the loan, including directing Antonucci to sign a letter that provided false information regarding the collateral that would be used for the loan. Despite the warnings from Investment Firm executives and others, and REICHMAN’s knowledge that the loan was in fact illegal, on or about January 30, 2009, REICHMAN caused the Investment Firm to issue the illegal $30 million loan, which was secured by the very assets that were supposed to be unencumbered and maintained in reserve to pay Providence P&C’s policyholder claims.
After deceiving the Investment Firm into issuing the $30 million loan, REICHMAN received at least $200,000 in commissions from the Investment Firm as a result of the illegal loan. Ultimately, in November 2009, Providence P&C became insolvent and was placed in receivership because its surplus was encumbered by the $30 million loan, and therefore unavailable to pay policyholder claims, and because Huff, Morris, and Antonucci had pilfered Providence P&C’s remaining assets.
REICHMAN, 54, of of Irvington, New York, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum penalty of five years in prison. He will be sentenced by U.S. District Court Judge Naomi Reice Buchwald on a date to be determined. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. As part of his plea, REICHMAN also agreed to forfeit $200,000 to the United States and to provide restitution of $10 million to the Investment Firm.
Charles Antonucci, who was charged separately, pled guilty for his role in the scheme on October 8, 2010. Matthew L. Morris and Wilbur Anthony Huff pled guilty in connection with the case on October 17, 2014, and December 24, 2014, respectively.
Mr. Bharara praised the investigative work of the Special Inspector General for the Troubled Asset Relief Program, the Federal Bureau of Investigation, the IRS, the New York State Department of Financial Services, Immigration and Customs Enforcement’s Homeland Security Investigations, and the Office of Inspector General of the FDIC. Mr. Bharara also thanked the Department of Justice’s Tax Division and the United States Attorney’s Office for the Southern District of Florida for their assistance.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Janis Echenberg and Daniel B. Tehrani are in charge of the prosecution.
Huntsville Pharmaceutical Distribution Facility Agrees to Pay $300,000 PenaltyRead the Press Release
HUNTSVILLE -- A Huntsville pharmaceutical distribution facility has agreed to pay the federal government $300,000 to settle allegations that it failed to maintain complete and accurate records and inventories of controlled substances, including opioid painkillers, announced U.S. Attorney Joyce White Vance and Drug Enforcement Administration Special Agent in Charge Clay A. Morris.
Generics Bidco and the U.S. Attorney for the Northern District of Alabama finalized the settlement agreement this week. The settlement was reached without any filings in U.S. District Court. With the payment of the penalty, the government agrees to release Generics from all civil liability for violations of records keeping under the Controlled Substances Act.
"The $300,000 penalty in this matter represents the largest penalty collected in Alabama in a DEA compliance investigation," Vance said. "It is imperative that pharmaceutical companies, and all facilities registered with DEA to handle controlled substances, keep clear and current records on receipt and distribution of those narcotics so that they can be tracked and not at risk of being diverted for illegal use in our communities," she said. "I applaud the DEA for its diligent work to ensure all facilities registered with the agency comply with the strict record-keeping and control mechanisms of the Controlled Substances Act."
DEA conducted an accountability audit of Generics for Dec. 12, 2012, through July 14, 2014, and raised allegations that the business violated record-keeping provisions of the Controlled Substances Act by not keeping separate bi-annual inventories of Schedule II controlled substances and the less restricted Schedule III-V substances. DEA also charged that Generics did not keep records readily available, and that the audit showed substantial error in the accounting of the Schedule II and III drugs hydrocodone, carisoprodol, oxycodone and Meperitab.
Generics, as part of the settlement agreement, denies any intentional violation of regulations, but states it has updated several record-keeping procedures and has taken other voluntary measures to assist with compliance. The company cooperated fully in the DEA audit and follow-up proceedings.
Honduran National Pleads Guilty to Illegal Reentry into the United StatesRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JUAN RAMON ALVAREZ-MARTINEZ, a/k/a Juan Ramon-Alvarez, age 37, from Honduras, pled guilty yesterday to a one-count Indictment charging illegal reentry of removed alien.
According to the Indictment, ALVAREZ-MARTINEZ was found by Border Patrol agents in the Eastern District of Louisiana after records showed he had been previously deported from the United States to Honduras on March 7, 2005.
ALVAREZ-MARTINEZ 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. District Judge Lance M. Africk set sentencing for April 2, 2015.
U.S. Attorney Polite praised the work of the U.S. Border Patrol in investigating this matter. Assistant U.S. Attorney Gregory M. Kennedy is in charge of the prosecution.
Gun Dealers Sentenced for Federal Firearms ViolationsRead the Press Release
Follow @USAO_CT
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that BRIAN VANACORE, 49, of North Branford, GREG BODYTKO, 55, of Northford, were sentenced yesterday Bridgeport federal court for violating federal firearms laws. U.S. Magistrate Judge William I. Garfinkel ordered VANACORE and BODYTKO to serve, one year of probation, pay a $500 fine and perform 100 hours of community service.
According to court documents and statements made in court, VANACORE and BODYTKO were the owners of BMG LLC (BMC), which operated a gun store at 2585 Berlin Turnpike in Newington. VANACORE and BMG had three separate federal firearms licenses to deal firearms in Connecticut, and BODYTKO was a 50 percent partner in the business with VANACORE.
In the summer of 2013, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) conducted a routine inspection of BMG’s Newington store. During the inspection, ATF inspectors found several firearms, including machine guns and silencers, which are required to be registered under the National Firearms Act. BMG records revealed that BMG had purchased these firearms, but had not changed the registration information in the National Firearms Registration and Transfer Record. As a result, each of the firearms remained registered to the individual who sold them to BMG. In total, BMG possessed 15 firearms that it should have registered under the National Firearms Registration and Transfer Record.
BMG, VANACORE and BODYTKO also failed, on numerous occasions, to report the sale of multiple handguns to the same individual, and failed to record in their Acquisition and Disposition records the acquisition and/or disposition of hundreds of firearms. On numerous occasions, the defendants failed to fill out properly, or failed to fill out at all, ATF Form 4473, a form that must be completed by individuals who purchase firearms from federally-licensed firearms dealers. They also failed to conduct necessary background checks on at least 10 separate occasions.
“Federally-licensed firearms dealers are our first line of defense in making certain that firearms don’t wind up in the hands of the wrong people,” stated U.S. Attorney Daly. Gun dealers who don’t comply with the rules and violate federal law will be prosecuted.
On March 5, 2014, VANACORE and BODYTKO each pleaded guilty to one count of failing to keep a complete and accurate written record in its acquisition and disposition records for firearms, and one count of failing to report the multiple sale of handguns. VANACORE also entered a guilty plea on behalf of BMG to one count of making false entries in dealer’s records.
BMG was previously sentenced to five years’ probation, and the store is no longer in operation.
VANACORE and BODYTKO were ordered to surrender their Federal Firearm Licenses (FFL) and they not permitted to reapply for an FFL for five years.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant U.S. Attorney Robert M. Spector.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Greece Man Found Guilty of Receiving and Possessing Child Pornography Following Non-Jury TrialRead 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 Nicholas M. Skvarla, of Greece, NY, was found guilty of receipt and possession of child pornography by U.S. District Judge Richard J. Arcara following a non-jury trial. The charges carry a mandatory minimum penalty of five years in prison and a maximum of 20 years and a $250,000 fine.Assistant U.S. Attorneys Aaron J. Mango and Bradley E. Tyler, who are handling the case, stated that in March 2008, the Monroe County Sheriff’s Department conducted an undercover peer to peer internet file sharing investigation. A deputy found numerous image and video files available for download from a particular Internet Protocol (IP) address. Further investigation determined the IP address belonged to the defendant.
The investigator downloaded images and videos over five dates in April, May and July of 2008. Of the 24 images and videos downloaded, at least 10 appeared to depict children under the age of 17 and depict minors engaged in sexually explicit conduct. On September 11, 2008, investigators conducted a search warrant at Skvarla’s Forgham Road residence at which time the defendant was arrested.
Several items seized from the defendant’s residence were turned over the Western New York Regional Computer Forensics Laboratory. A forensic examination determined that Skvarla’s computer and hard drive contained 139 images and 112 videos of suspected child pornography. A total of 32 known children were identified in the images.
The verdict is the culmination of an investigation on the part of the Monroe County Sheriff’s Department, under the direction of Sheriff Patrick O’Flynn, the Federal Bureau of Investigation Cyber Crime Task Force, Immigration and Customs Enforcement, Homeland Security Investigation, under the direction of Special Agent in Charge James C. Spero, and the Western New York Regional Computer Forensics Laboratory.
Sentencing is scheduled for May 26, 2015 at 12:30 p.m. before Judge Arcara.
Gibson City Man Sentenced to Eight Years in Federal Prison for Mail Fraud, Tax EvasionRead the Press Release
Peoria, Ill. – A Gibson City, Ill., man, Carl Kieser, has been sentenced to eight years in prison for mail fraud, tax evasion, and illegal application of a pesticide inconsistent with its labeling. Yesterday, Chief U.S. District Judge James E. Shadid ordered that Kieser, 63, serve 97 months (8 years, 1 month) in federal prison, and three years of supervised release following his release from prison. Kieser was ordered to report on May 5, 2015, to the federal Bureau of Prisons to begin serving his sentence. Kieser was also ordered to pay restitution in the total amount of $75,862; $71,411 to the IRS and $4,451 to victims he defrauded.
On Oct. 31, 2014, a jury convicted Kieser of three counts of mail fraud and illegal application of a pesticide inconsistent with its labeling. On July 8, 2014, Kieser had entered open pleas of guilty to four counts of tax evasion.
Kieser owned and operated Aquatic Control of Illinois, at his Gibson City Fishing and Camping Club, south of Gibson City on Route 47. At trial, the government presented evidence that Kieser manufactured, advertised, sold, and distributed a product he called Pond Clear Plus. Kieser produced Pond Clear Plus by mixing Diuron 80DF with other ingredients, including a blue pond dye. Diuron 80DF is a pesticide registered with the U.S. Environmental Protection Agency for the control of land-based weeds; the EPA-approved labeling for the pesticide warns that the chemical should not be applied directly to water due to its toxicity to fish and other aquatic wildlife.
Kieser’s advertisements for Pond Clear Plus in newspapers and magazines falsely and fraudulently represented that Pond Clear Plus could control lake weeds and algae “Mother Nature’s Way,” with “No Chemicals,” using a “biological method with live bacteria that dissolves plant nutrients, black muck, and rotten egg odor.” Kieser also falsely and fraudulently represented to customers that Pond Clear Plus contained no chemicals. In fact, as Kieser knew full well, Pond Clear Plus contained the chemical pesticide Diuron 80DF, which was prohibited by its EPA-approved labeling from being applied directly to water.As a result of his false advertising and representations, Kieser sold and distributed Pond Clear Plus to customers from approximately July 2007 to September 2012. Kieser obtained more than $400,000 in proceeds from customers from the sale of Pond Clear Plus, but failed to pay any federal income tax on his profits from 2008 to 2011.
Kieser provided Pond Clear Plus to his customers via Federal Express or some other means in 2.5 gallon jugs without any labels, including any labels informing customers that Pond Clear Plus contained Diuron 80DF and should not be applied directly to water. To the contrary, Kieser advised customers that Pond Clear Plus contained no chemicals and should be applied by pouring it directly into the customer’s pond or lake. Moreover, Kieser himself on occasion directly applied Pond Clear Plus to lakes or ponds for his customers. As a result, Diuron 80DF was directly applied to ponds and lakes throughout the U.S. in direct contravention of its EPA-approved labeling, and multiple customers experienced fish kills following the application of Pond Clear Plus to their ponds and lakes.
“Mail fraud is a crime that can have wide-ranging impacts, sometimes leading to serious public health threats,” said Randall Ashe, Special Agent in Charge of EPA’s criminal enforcement program in Illinois. “EPA’s mission of protecting public health and the environment is undermined when violators misuse and illegally market potentially harmful chemicals. This sentencing sends a strong message that violators who skirt the law to line their own pockets will pay the price.”
The case was prosecuted by Assistant U.S. Attorney Eugene L. Miller. The charges were investigated by the U.S. Environmental Protection Agency, Criminal Investigation Division, and the Internal Revenue Service Criminal Investigation Division, with the assistance of the Illinois Department of Natural Resources, the Illinois Environmental Protection Agency, and the Illinois Department of Agriculture.Georgia Couple Found Guilty of Tax FraudRead the Press Release
A Milledgeville, Georgia, couple were found guilty of tax fraud following a three-day jury trial for skimming more than $1.5 million in cash from their business without disclosing the income, the Department of Justice announced.
Kenneth Horner, 58, and Kimberly Horner, 53, were charged with filing false corporate and personal tax returns for the years 2007 and 2008. They were convicted of all four counts charged. Their sentencing is scheduled for May 6 at 10:00 a.m. before U.S. District Judge Timothy C. Batten Sr.
“This jury recognized the defendants’ handling of cash for what it really was: a ploy to avoid disclosing income and paying taxes,” said Acting U.S. Attorney John Horn of the Northern District of Georgia.
“In willfully failing to report their total business income to the IRS, the Horners cheated the system and dodged the same basic responsibility that millions of other business owners comply with every year: fairly and honestly reporting their earnings,” said Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “Today’s verdict establishes that those who engage in such criminal conduct will be held accountable. The Tax Division is committed to working with its law enforcement partners to identify, investigate and vigorously prosecute these offenders.”
“At this time of year, when hard-working citizens are sitting down to prepare their tax returns, it is especially disappointing to see the overt steps some individuals will take to hide their taxable funds from the government,” said Special Agent in Charge Veronica F. Hyman-Pillot of the Internal Revenue Service (IRS)-Criminal Investigation. “Taxpayers deserve our vigilance in the investigation and prosecution of individuals who willfully underreport their income and evade the payment of their fair share of taxes.”
According to Acting U.S. Attorney Horn, the charges and other information presented in court: Kenneth and Kimberly Horner owned Topcat Towing and Recovery Inc. (Topcat Towing), a towing business in Lithonia, Georgia. Between 2005 and 2008, Topcat Towing had an exclusive contract with DeKalb County, Georgia, for all county car tows needed from the south precinct of the county. Between 2005 and 2008, the defendants skimmed more than $1.5 million in cash receipts from their towing business and deposited those cash receipts into their personal bank account without disclosing the income to their tax return preparer or on corporate and personal tax returns filed with the IRS. The defendants tried to conceal their cash deposits from the government by “structuring” their deposits, which is the act of splitting up cash deposits that exceed $10,000 for the purpose of evading a Currency Transaction Report (CTR) from being filed.
Most financial institutions, including banks, are generally required to file CTRs for cash transactions that exceed $10,000. CTRs are submitted to the U.S. Department of Treasury. In 2007 and 2008, the defendants used their unreported cash, in part, to build a custom home in Conyers, Georgia, that was appraised at more than $900,000. The defendants owe approximately $400,000 in taxes to the IRS for their unreported income.
This case is being investigated by the IRS-Criminal Investigation. Trial Attorney Christopher J. Maietta of the Tax Division and Assistant U.S. Attorney Steven D. Grimberg of the Northern District of Georgia are prosecuting the case.
Former Plymouth Finance Director Pleads Guilty to Federal Theft and Tax ChargesRead the Press Release
Follow @USAO_CT
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DAVID J. BERTNAGEL, 41, of Thomaston, waived his right to indictment and pleaded guilty today in Bridgeport federal court to theft and tax charges stemming from his embezzlement of more than $800,000 from the Town of Plymouth.
According to court documents and statements made in court, from October 2011 through October 2014, BERTNAGEL was employed as the Finance Director for the Town of Plymouth. During that time period, BERTNAGEL issued 207 checks totaling approximately $808,030 from the Town’s payroll account to himself. BERTNAGEL used the embezzled funds to make mortgage payments, pay credit card bills, fund home improvement projects and purchase more than $100,000 in coins, stamps and other collectibles. He also converted more than $182,000 of the stolen funds by way of cashed checks, ATM withdrawals and money orders.
In addition, BERTNAGEL’s federal tax returns for the 2012 and 2013 tax years failed to report any of his embezzled income, resulting in a tax loss to the government of $145,564 for those two years. BERTNAGEL also did not file a tax return with the IRS for the 2011 tax year.
Since 2011, Plymouth has received approximately $450,000 in grant awards from the U.S. Department of Health and Human Services.
BERTNAGEL was arrested on January 20, 2015.
BERTNAGEL pleaded guilty to one count of theft from a local government receiving federal funds, which carries a maximum term of imprisonment of 10 years, and one count making and subscribing a false tax return, which carries a maximum term of imprisonment of three years. He is scheduled to be sentenced by U.S. District Judge Jeffrey Alker Meyer on May 15, 2015.
As part of his plea agreement, BERTNAGEL agreed to make restitution in the amount of $808,029.94 to the Town of Plymouth, and he must cooperate with the IRS to pay all outstanding taxes, penalties and interest. BERTNAGEL also has agreed to forfeit more than $45,000 that he held in bank accounts, and assorted jewelry, stamps, coins and other collectibles that were seized on the date of his arrest.
This matter is being investigated by the Connecticut Public Corruption Task Force, which includes the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigation Division, U.S. Postal Inspection Service, U.S. Department of Housing and Urban Development – Office of Inspector General and U.S. Department of Health and Human Services – Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorney Christopher M. Mattei.
Citizens are encouraged to report corrupt activity to the Connecticut Public Corruption Task Force by calling 1-800-CALL-FBI (1-800-225-5324).
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Former Military Contractor Pleads Guilty for Paying Bribe to Army Officer During Iraq WarRead the Press Release
A former military contractor who ran two Kuwaiti companies during the Iraq War pleaded guilty today for paying a $15,000 bribe to an Army National Guard officer in exchange for the award of a contract to provide buses to the United States Army, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania.
George H. Lee, 71, of Philadelphia, pleaded guilty today before U.S. District Judge Joel H. Slomsky in the Eastern District of Pennsylvania to one count of bribery of a public official. Sentencing has been scheduled for July 7, 2015.
During his guilty plea, Lee admitted that as the president and chief executive officer of American Logistics Services (ALS), a Kuwaiti company providing supplies to the U.S. military in Iraq, he paid a $15,000 bribe to Lieutenant Markus E. McClain in exchange for McClain’s agreement to award an extension of a lucrative bus contract to ALS. Specifically, Lee admitted that in August 2004 several of his employees met with McClain at Camp Arifjan, Kuwait and offered McClain $15,000 and a Rolex watch in exchange for McClain’s agreement to award the contract extension to ALS. Lieutenant McClain initially declined, but one month later Lee renewed the offer, and McClain accepted $15,000 to use his official position to award the contract extension to ALS.
McClain previously pleaded guilty to one count of accepting a gratuity and is awaiting sentencing.
The case is being investigated by the U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service and the U.S. Department of Homeland Security – Immigration and Customs Enforcement, and was previously investigated by the Office of the Special Inspector General for Iraq Reconstruction. The case is being prosecuted by Trial Attorneys John Keller and Richard Evans of the Criminal Division’s Public Integrity Section.
Former Maverick County Justice of the Peace Cesar Iracheta Indicted by Federal Grand Jury for "Pay-To-Play" Bribery Scheme Involving County ContractsRead the Press Release
This morning, FBI agents arrested 56-year-old former Maverick County Justice of the Peace and Eagle Pass businessman Cesar Iracheta on federal bribery charges in a "pay-to-play" scheme involving County construction contracts announced Acting United States Attorney Richard Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
A federal grand jury indictment, returned on Wednesday and unsealed today, charges Iracheta with two counts of paying bribes. The indictment alleges that in 2010, Iracheta, doing business as C&A Construction, paid a bribe to a Maverick County commissioner in order to secure two Precinct 2 County construction contracts worth approximately $49,000. The indictment also alleges that in 2011, Iracheta paid a bribe to another Maverick County commissioner in order to secure a Precinct One County construction contract worth $22,500.
According to the indictment, Iracheta submitted inflated bids to Maverick County in order for there to be sufficient funds to perform the construction work, make a profit, and pay bribes to the County commissioners.
Upon conviction, Iracheta faces up to ten years in federal prison for each bribery charge.
This ongoing investigation is being conducted by the FBI and the Texas Department of Public Safety Criminal Investigative Division together with the Customs and Border Protection Office of Internal Affairs. Individuals who have first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741.
Assistant United States Attorney Katherine Griffin and Bryan Reeves are prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
Former IRS Employee and Three Others Indicted for Conspiracy to Commit Mail FraudRead the Press Release
FORMER IRS EMPLOYEE AND THREE OTHERS
INDICTED FOR CONSPIRACY TO COMMIT MAIL FRAUD
PENSACOLA, FLORIDA – Four Pensacola residents, including a former IRS tax examiner, have been indicted for conspiring to file false claims for payment in connection with the 2010 BP oil spill. The indictment was announced today by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
Rosa M. Bonner, 52, Ariyanna S. Lampley, 33, Jimmie A. McCorvey, 41, and Marcia D. McCorvey, 42, all of Pensacola, are charged with conspiracy to commit mail fraud for filing false claims with the Gulf Coast Claims Facility (“GCCF”) alleging lost income as a result of the 2010 BP oil spill in the Gulf of Mexico. The indictment alleges that between 2010 and 2012, the defendants agreed to have Jimmie McCorvey file false GCCF claims in their names. Lampley is also alleged to have provided Jimmie McCorvey with additional identities for filing false GCCF claims. The indictment alleges that as a result of these false claims, GCCF paid $95,200 to the defendants.
Jimmie McCorvey, who was an IRS employee at the time, is also charged with conspiring to file false tax returns. The indictment alleges that between 2009 and 2011, Jimmie McCorvey prepared and filed approximately 25 fraudulent federal income tax returns, resulting in the issuance of more than $62,000 in tax refund checks. The indictment further charges Jimmie McCorvey with aggravated identity theft for fraudulently using other people’s identities in both schemes.
Trial in this case is currently set for April 6, 2015, before Senior United States District Court Judge Roger Vinson. This case resulted from investigations by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation and is being prosecuted by Assistant United States Attorney Alicia Kim.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt at trial.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Former First Lady of Virginia Sentenced to PrisonRead the Press Release
RICHMOND, Va. – The former First Lady of Virginia, Maureen G. McDonnell, 60, of Glen Allen, Virginia, was sentenced today to one year and one day in prison, for soliciting and obtaining payments, loans, gifts and other items from Star Scientific, a Virginia-based corporation, and Jonnie R. Williams Sr., Star Scientific’s then chief executive officer, in violation of federal public corruption laws.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:14cr12.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Leslie R. Caldwell, Assistant Attorney General of the Justice Department’s Criminal Division; Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office; Richard Weber, Chief, IRS Criminal Investigation (IRS-CI); and Colonel W. Steven Flaherty, Virginia State Police Superintendent, made the announcement after sentencing by Senior U.S. District Judge James R. Spencer.
Former Virginia Governor Robert McDonnell and his wife, Maureen McDonnell, were convicted on Sept. 4, 2014, following a jury trial of one count of conspiracy to commit honest-services wire fraud and one count of conspiracy to obtain property under color of official right. Maureen McDonnell also was convicted of two counts of honest-services wire fraud and four counts of obtaining property under color of official right, while Robert McDonnell was convicted of three counts of honest-services wire fraud and six counts of obtaining property under color of official right. In total, Maureen McDonnell was convicted of eight of 13 counts and Robert McDonnell was convicted of 11 of 13 counts.
According to the evidence presented at trial, from April 2011 through March 2013, the McDonnell’s participated in a scheme to use the former governor’s official position to enrich themselves and their family members by soliciting and obtaining payments, loans, gifts and other things of value from Star Scientific and Jonnie R. Williams Sr. The McDonnell’s obtained these items in exchange for the former governor performing official actions to legitimize, promote and obtain research studies for Star’s products, including the dietary supplement Anatabloc.
According to evidence presented at trial, the McDonnell’s obtained from Williams more than $170,000 in direct payments as gifts and loans, thousands of dollars in golf outings, and numerous items. As part of the scheme, Robert McDonnell arranged meetings for Williams with Virginia government officials, hosted and attended events at the Governor’s Mansion designed to encourage Virginia university researchers to initiate studies of Star’s products and to promote Star’s products to doctors, contacted other Virginia government officials to encourage Virginia state research universities to initiate studies of Star’s products, and promoted Star’s products and facilitated its relationships with Virginia government officials.
The evidence further showed that the McDonnell’s attempted to conceal the things of value received from Williams and Star to hide the nature and scope of their dealings with Williams from the citizens of Virginia by, for example, routing gifts and loans through family members and corporate entities controlled by the former governor to avoid annual disclosure requirements.
The case is being prosecuted by Assistant U.S. Attorneys Michael S. Dry, Jessica D. Aber, and Ryan S. Faulconer of the U.S. Attorney’s Office for the Eastern District of Virginia, and Deputy Chief David V. Harbach II of the Criminal Division’s Public Integrity Section. The case is being investigated by the FBI’s Richmond Division, IRS-CI, and the Virginia State Police.Former Arizona Army National Guard Sergeant Sentenced to 52 Months in Prison for Participating in Scheme to Protect Purported Drug TraffickersRead the Press Release
Fifty-Seven Individuals Previously Convicted and Sentenced as Part of This Investigation
A former member of the Arizona Army National Guard was sentenced today to 52 months in prison for his role in a scheme to accept bribes from purported drug traffickers in exchange for using his military position to protect shipments of cocaine during transportation, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.
Raul Portillo, 42, of Phoenix, Arizona, pleaded guilty on Nov. 21, 2014, to one count of conspiracy to commit bribery and interfere with commerce by attempted extortion. U.S. District Judge James A. Soto of the District of Arizona imposed the sentence.
According to admissions made in connection with his guilty plea, Portillo, a sergeant in the Arizona Army National Guard, conspired with others from the Arizona Army National Guard to accept cash bribes to protect narcotics traffickers who were purportedly transporting and distributing cocaine from Arizona to other locations in the southwestern United States. Unbeknownst to Portillo and the other co-conspirators, however, the supposed narcotics traffickers were actually undercover FBI agents.
Specifically, Portillo admitted that he wore his official uniform, carried official forms of identification, used official vehicles and used his official authority, where necessary, to prevent police stops and searches as he drove cocaine shipments through checkpoints manned by the U.S. Border Patrol, the Arizona Department of Public Safety, and Nevada law enforcement officers. Portillo admitted that he took bribe payments totaling $12,000 for transporting cocaine on two separate occasions. Portillo also admitted that he accepted a $2,000 cash payment in exchange for recruiting an Immigration and Customs Enforcement inspector into the conspiracy.
In 2006, an arrest warrant was issued for Portillo, and Portillo was arrested in May 2011, arraigned and released on personal recognizance. Portillo admitted that in or around July 2011, he fled to avoid prosecution.
To date, 58 defendants have been convicted and sentenced for charges stemming from this investigation.
This case is part of a joint investigation conducted by the Southern Arizona Corruption Task Force (SACTF), which is comprised of the FBI, the Drug Enforcement Administration, the Bureau of Immigration and Customs Enforcement, and the Tucson Police Department. Though not part of the SACTF, the Arizona National Guard, Air Force Office of Special Investigations, Defense Criminal Investigative Service and Internal Revenue Service’s Criminal Investigation Division also participated in the investigation. The case is being prosecuted by Trial Attorneys Monique T. Abrishami and Peter N. Halpern of the Criminal Division’s Public Integrity Section.
Federal Indictment Charges 15 with Drug Trafficking Conspiracy; Six More Face State Drug ChargesRead the Press Release
Law enforcement arrested 13 during early-morning round up; Law enforcement still looking for two defendants
CHARLOTTE, N.C. – A federal criminal indictment was unsealed today in U.S. District Court, charging 15 defendants with drug trafficking conspiracy and related charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. FBI agents and officers with the Charlotte-Mecklenburg Police Department conducted an early morning round-up, arresting 13 of the 15 named in the federal indictment.
U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Chief Rodney D. Monroe, of the Charlotte-Mecklenburg Police Department (CMPD).
The 15 defendants named in a federal indictment unsealed today are:
• Noel Rondell Alexander, a/k/a “Floyd,” 25 of Charlotte. (in custody)
• Akanni Butler, a/k/a “KB,” 29, of Charlotte. (in custody)
• Anthony Carter, a/k/a “Sanchez,” 26, of Charlotte. (in custody)
• Akeem Ford, a/k/a “Nike,” 21, of Charlotte. (in custody)
• Kenate Funderburk, a/k/a “Tay,” 35, of Charlotte. (in custody)
• Shemia Glenn, a/k/a “Pooh,” 22, of Charlotte. (not arrested yet)
• Isaac Hampton, a/k/a “Ike,” 26, of Charlotte. (in custody)
• William Kee, III, 20, of Charlotte. (in custody)
• Anthony C. Lindsay, a/k/a “Chez,” 26, of Charlotte. (in custody)
• Keith Rivera, 23, of Charlotte. (in custody)
• Rodney Smith, a/k/a “Man,” 22, of Charlotte. (in custody)
• Jonathan Stewart, a/k/a “J Rock,” 29, of Charlotte. (in custody)
• Antonio Sullivan, a/k/a “Pooh,” 36, of Charlotte. (not arrested yet) • Vincent Thompson, 32, of Charlotte. (in custody)
• Jamel Watson, a/k/a “Man,”18, of Charlotte. (in custody)(See chart below for a breakdown of federal charges and potential penalties for each defendant).
In addition to the 15 federal defendants charged today, six more defendants face state drug and related charges:
• Demontrez Mobley, 21, of Charlotte. (in custody)
• Kadarian Cortez Ford, 18, of Charlotte (in custody)
• Larry Yeargin, 36, of Charlotte. (in custody)
• Elijah Parker, 20, formerly of Charlotte (previously in state custody)
• Scott Mayfield, 26, of Charlotte. (not arrested yet)
• Ty’Darrien Cortez Ford, 20, of Charlotte. (not arrested yet)The federal defendants will have their initial appearances today in federal court.
Today’s arrests and indictments are the result of an eight month investigation conducted by federal and local law enforcement agencies dedicated to making our streets and communities safer. The agencies involved in the initiative include the U.S. Attorney’s Office for the Western District of North Carolina, the FBI, CMPD’s Gang Unit, Vice & Narcotics Unit, and Metro Division, and the Mecklenburg County District Attorney’s Office, with assistance from the North Carolina Division of Community Corrections. The goal of the investigation is to target and reduce violent crime in Mecklenburg County, with special emphasis placed on a street corner in Beatties Ford Road area, formerly controlled by the conspirators.
“Today’s arrests are the result of a coordinated effort of law enforcement partners, working together to target a hot spot for criminal activity. We will continue to work side-by-side side to identify and prosecute those who are responsible for spreading drugs in our streets and wreaking havoc in our neighborhoods,” said U.S. Attorney Tompkins. Tompkins also commended all the agents and officers who participated in this morning’s round up and thanked them for their commitment to serving and protecting our communities.
“The FBI working alongside our law enforcement partners is committed to keeping North Carolina families safe by targeting those offenders whose criminal activities threaten the safety and stability of our communities,” said FBI’s Special Agent in Charge Strong.
“The Charlotte-Mecklenburg Police Department and our partner agencies will continue to be diligent in letting criminals know that these neighborhoods are not a safe haven for their illegal activity,” said Chief Monroe, CMPD. The charges contained in these indictments are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The investigation is being handled by the FBI’s Safe Streets Task Force, of which CMPD is a partner member. The prosecution is being handled by Assistant U.S. Attorney Dana Washington of the U.S. Attorney’s Office in Charlotte.
Federal Grand Jury Indicts Maverick County Commissioner Jose RosalesRead the Press Release
In Eagle Pass, TX, this afternoon, FBI agents arrested 35-year-old Maverick County Precinct 3 Commissioner and Eagle Pass ISD teacher Jose Luis Rosales after a federal grand jury in Del Rio charged him earlier this week in connection with an alleged bribery, kickback and bid-rigging scheme announced Acting United States Attorney Richard Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
A federal grand jury indictment, returned on Wednesday and unsealed today, charges Rosales with four counts of receiving bribes. The indictment alleges that in 2011 and 2012, Rosales manipulated the bidding process to guarantee that individuals he chose would be awarded Maverick County construction contracts. Those contractors deposited the checks issued to them by Maverick County and then made cash payments to Rosales. According to the indictment, the private contractors submitted inflated bids to Maverick County in order for there to be sufficient funds to perform the construction work, make a profit, and pay the bribe to Rosales.
Upon conviction, Rosales faces up to ten years in federal prison for each bribery charge.
This ongoing investigation is being conducted by the FBI and the Texas Department of Public Safety Criminal Investigative Division together with the Customs and Border Protection Office of Internal Affairs and the Eagle Pass Independent School District Police Department. Individuals who have first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741.
Assistant United States Attorney Katherine Griffin and Bryan Reeves are prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
February Grand JuryRead the Press Release
United States Attorney Deborah R. Gilg announced the federal Grand Jury for the District of Nebraska has returned 26 indictments charging 26 defendants. Indictments are charging documents that contain one or more individual counts that are merely accusations, and every defendant is presumed innocent unless and until proven guilty.
* Luis Aguilar-Nada, age 41, of Omaha, is charged with illegal reentry into the United States on or about January 26, 2015, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Life Taban Aquilino, a/k/a Lyfe Israel Haim, of Omaha, is charged in a two-count Indictment. Count I of the Indictment alleges that on or about May 16, 2013 the defendant made a false statement in an application for a passport. The maximum penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count II of the Indictment charges Aquilino with aggravated identity theft on or about May 16, 2013. The maximum possible penalty if convicted is 2 years consecutive to any other term of imprisonment imposed on Count I of the Indictment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Mario Cervantes-Camacho, a/k/a Mario G. Cervantes, age 43, of Omaha, is charged in a two-count Indictment. Count I of the Indictment alleges that on or about February 12, 2015, the defendant used a Social Security card knowing said document was not issued lawfully for his use. The maximum possible penalty if convicted is 10 years imprisonment, a fine of $250,000, a 3 year term of supervised release, and a $100 special assessment. Count II of the Indictment alleges that on or about January 27, 2012, Cervantes-Camacho falsely represented a Social Security account number as belonging to him for the purpose of obtaining a benefit to which he was not entitled. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Francisco Chairez-De La Rosa, age 32, of Lincoln, is charged with illegal reentry into the United States on or about January 21, 2015, following deportation after conviction for a felony offense. The maximum possible penalty if convicted is 20 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Jose Cornejo-Lopez, age 32, of Ralston, is charged in a two-count Indictment. Count I of the Indictment charges the defendant with felon in possession of a firearm on or about October 20, 2014. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count II of the Indictment charges Cornejo-Lopez with possession with intent to distribute 50 grams of more of a mixture of methamphetamine on or about October 20, 2014. The maximum possible penalty if convicted is 40 years imprisonment, a $5,000,000 fine, a 4 year term of supervised release and a $100 special assessment.
* Roman Cortez Cisneros, age 40, of Omaha, is charged with illegal reentry into the United States on or about January 15, 2015, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Rogelio Sanchez Estrella, age 25, is charged with illegal reentry into the United States on or about January 21, 2015, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Emanuel Gallegos-Hernandez, a/k/a Emmanuel Gallegos, age 26, of Omaha, is charged with illegal reentry into the United States on or about January 20, 2015, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Carlos Efrain Gallegos-Ruiz, age 33, is charged with illegal reentry into the United States on or about December 19, 2014, following deportation after conviction for a felony offense. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Carlos Ruben Gama-Garcia, a/k/a Ruben Rodriguez, age 47, of Hastings, Nebraska, is charged in a six-count Indictment. Count I of the Indictment charges the defendant with illegal reentry into the United States on or about February 10, 2015, following deportation. The maximum possible penalty if convicted is 20 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment. Counts II, IV and VI of the Indictment allege that on or about on or about March 15, 2013; on or about June 22, 2014; and on or about August 16, 2011, Gama-Garcia falsely represented a Social Security account number as belonging to him for the purpose of obtaining a benefit to which he was not entitled. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment for each count. Counts III and V of the Indictment allege that on or about March 15, 2013 and on or about June 22, 2014, the defendant used identification documents knowing said documents were not issued lawfully for his use. The maximum possible penalty if convicted is 5 years imprisonment, a fine of $250,000, a 3 year term of supervised release, and a $100 special assessment for each count.
* Santiago Gonzalo-Florentino, a/k/a Santiago G. Flores, age 37, of Omaha, is charged with illegal reentry into the United States on or about January 21, 2015, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Stephanie Hagemeier, age 42, of Hastings, Nebraska, is charged in a three-count Indictment. Count I of the Indictment charges the defendant with making a false statement to a government agency on or about November 4, 2014. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count II of the Indictment charges Hagemeier with aiding and abetting aggravated identity theft on or about November 4, 2014. The maximum possible penalty if convicted is 2 years consecutive to Count III, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count III of the Indictment charges the defendant with aiding and abetting the false representation of a social security number. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Francisco Samuel Nava Hernandez, a/k/a Samuel Nava, 27, of Lincoln, is charged with possession with intent to distribute 50 grams of more of a mixture of methamphetamine on or about February 4, 2015. The maximum possible penalty if convicted is 40 years imprisonment, a $5,000,000 fine, a 4 year term of supervised release and a $100 special assessment.
* Marvin Patricio Hernandez, age 38, of Omaha, is charged with illegal reentry into the United States on or about January 13, 2015, following deportation after conviction for a felony offense. The maximum possible penalty if convicted is 20 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Evaristo Hernandez-Perez, age 52, of Omaha, is charged with illegal reentry into the United States on or about January 22, 2015, following deportation. The maximum possible penalty if convicted is 20 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Michael Huyck, of Lincoln, is charged in a three-count Indictment. Count I of the Indictment charges the defendant with receipt and attempted receipt of child pornography on or about August 20, 2010 thru October 1, 2010. The maximum possible penalty if convicted is 20 years imprisonment, a $250,000 fine, supervised release for life, and a $100 special assessment. Counts II and III of the Indictment charge Huyck with access with intent to view on or about August 20, 2010 thru April 9, 2013 and on or about November 20, 2012 thru April 9, 2013. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, supervised release for Life, and $100 special assessment for each count.
* Alexander Marroquin Avalos, age 30, of Omaha, is charged with illegal reentry into the United States on or about February 4, 2015, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Armando Medina-Vargas, age 29, of Omaha, is charged in a two-count Indictment. Count I of the Indictment charges the defendant with conspiracy to distribute 50 grams or more of methamphetamine between on or about February 2014, and December 23, 2014. The maximum possible penalty if convicted is Life imprisonment, a $10,000,000 fine, a 5 year term of supervised release, and a $100 special assessment. Count II of the Indictment charges Medina-Vargas with possession with intent to deliver 50 grams or more of methamphetamine on or about December 23, 2014. The maximum possible penalty if convicted is Life imprisonment, a $10,000,000 fine, a 5 year term of supervised release, and a $100 special assessment. The Indictment also contains an allegation to forfeit proceeds of the offense or property used to commit the offense, including $10,572.00 in U.S. currency.
* Jose J. Nevarez, age 43, of Schuyler, Nebraska, is charged in a three-count Indictment. Counts I thru III of the Indictment charge the defendant with distribution of 5 grams or more of methamphetamine on or about October, 29, 2014; on or about November 4, 2014; and on or about November 12, 2014. The maximum possible penalty if convicted is 40 years imprisonment, a $5,000,000 fine, a 4 year term of supervised release, and a $100 special assessment for each count.
* Raul Pano-Abarca, a/k/a Arturo Aguilar, a/k/a Agapito Garcia, age 27, of Omaha, is charged with illegal reentry into the United States on or about January 20, 2015, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Victorio Ramos Lopez, a/k/a Wilfrido Diaz Lopez, age 31, of Bellevue, is charged with illegal reentry into the United States on or about January 29, 2015, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Victor Rangel, age 27, of San Jose, California, is charged with possession with intent to distribute 50 grams or more of a mixture of methamphetamine on or about January 29, 2015. The maximum possible penalty if convicted is 40 years imprisonment, a $5,000,000 fine, a 4 year term of supervised release, and a $100 special assessment for each count.
* Carlos Reynoso-Mendez, age 34, is charged with conspiracy to distribute and possess with intent to distribute a mixture of methamphetamine beginning on or about November 17, 2014, and continuing to on or about December 16, 2014. The maximum possible penalty if convicted is 20 years imprisonment, a $1,000,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Oscar Aaron Rojo Castillo, age 32, of Bellevue, is charged with illegal reentry into the United States on or about January 29, 2015, following deportation after conviction for a felony offense. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Jose Salinas-Cruz, age 29, is charged with illegal reentry into the United States on or about January 22, 2015, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Valentin Alejo Xochihua, age 35, of Omaha, is charged in a two-count Indictment. Counts I and II charge the defendant with distribution of a mixture of methamphetamine on or about November 25, 2014 and on or about December 8, 2014. The maximum possible penalty if convicted is 20 years imprisonment, a $1,000,000 fine, a 3 year term of supervised release, and a $100 special assessment for each count.
East St. Louis Resident Resentenced to 135 Months for Role in KidnappingRead the Press Release
Jevon M. Jenkins, from East St. Louis, Illinois, was resentenced today by United States District Court Judge David R. Herndon to 135 months in federal prison for Aiding and Abetting Kidnaping, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Court documents indicate that in July 2012, Jenkins and others physically assaulted a Cahokia man in East St. Louis. Jenkins then aided and abetted a co-defendant in confining the Cahokia man in a vehicle and driving him across the Popular Street Bridge into Missouri.
Prior to imposing sentence, Judge Herndon considered the facts and circumstances surrounding Jenkins’ conviction and his criminal history, commenting that the “brutality of the case was quite shocking” and this was a “horrendous crime against a human being.” Judge Herndon then sentenced Jenkins to 135 months in federal prison. There is no parole in the federal prison system. In addition to the prison sentence, Judge Herndon sentenced Jenkins to serve 5-years of supervised release and to pay restitution to the victim. According to United States Attorney Stephen R. Wigginton, “What the victim in this case endured should never be experienced by any human being. We are proud of the sentence imposed today by Judge Herndon. It sends a strong message to criminals: crimes of brutality and torture will not be tolerated.”
U.S. Attorney Wigginton added that: “This case would not have been successful without the courage and perseverance of law enforcement, the witnesses, and especially the victim. We are grateful for the cooperative efforts of the Federal Bureau of Investigation, the Illinois State Police, the Columbia, Illinois Police Department, and the East St. Louis, Illinois, Police Department, who comprised the Save Our Streets Task Force active in the summer of 2012.”
This case was prosecuted by Assistant United States Attorney Monica A. Stump.
East Saint Louis Man Sentenced for Healthcare FraudRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that Maurice L. Burks, 44, of East St. Louis, IL, was sentenced on a one-count indictment charging that Burks engaged in a scheme to commit health care fraud. On February 20, 2015, the district court sentenced Burks to six months of incarceration and ordered him to pay $1,016.82 in restitution as well as a $100 special assessment.
Burks was the personal assistant for his brother. Information in the record showed that Burks billed for hours of care when he was at work or while his brother was hospitalized. Rather than these crucial funds going to providing personal assistants for needy individuals, Burks simply pocketed the payments for his own financial gain.
Especially vulnerable to fraud are programs, such as the one implemented in Illinois, that allows the Medicaid recipient to control the selection and payment of personal care attendants. In most cases, the personal care assistant is a relative or family friend, who often is a ghost employee. In a typical fraud scenario, the payments made by the State of Illinois are split between the Medicaid recipient and the ghost employee.
The investigation was conducted by the U.S. Department of Health and Human Services Office of Inspector General and the Illinois State Police - Medicaid Fraud Control Bureau. The case was prosecuted by Assistant U.S. Attorney Michael Hallock.
If you suspect or know of an individual or company that is not complying with healthcare laws or public aid programs, you may report this activity to the local office of the U.S. Department of Health and Human Services Office of Inspector General or call 800.447.8477.
Duke Energy Subsidiaries Charged with Clean Water Act ViolationsRead the Press Release
RALEIGH – The United States Attorney’s Offices for the Eastern, Middle, and Western Districts of North Carolina, along with the Department of Justice – Environmental Crimes Section, filed criminal charges today against three subsidiaries of Duke Energy Corporation: Duke Energy Business Services LLC, Duke Energy Carolinas LLC, and Duke Energy Progress, Inc. for multiple violations of the Clean Water Act.
The three U.S. Attorney’s Offices filed separate criminal bills of information in their respective federal courts, alleging violations of the Clean Water Act at the following Duke facilities: Dan River Steam Station (Rockingham County); Cape Fear Steam Electric Plant (Chatham County); Asheville Steam Electric Generating Plant (Buncombe County); H.F. Lee Steam Electric Plant (Wayne County); and Riverbend Steam Station (Gaston County). The alleged violations include unlawfully failing to maintain equipment at the Dan River and Cape Fear facilities and unlawfully discharging coal ash and/or coal ash wastewater from impoundments at the Dan River, Asheville, Lee, and Riverbend facilities.
The U.S. Attorney’s Offices for Middle and Western Districts also filed papers asking their courts to transfer the cases to be heard in the Eastern District of North Carolina.
The defendants face a maximum penalty on each charged count of five years probation; a fine in an amount of the greater of not less than $2,500 nor more than $25,000 per day of violation; $200,000.00; or twice the gross gain or loss; restitution; and a special assessment of $125.00.
Persons directly and proximately harmed as a result of the conduct charged in this matter may have rights under the Crime Victims’ Rights Act. See 18 U.S.C. § 3771. If you believe that you are a crime victim in this matter, please contact the United States Attorney’s Office for the Eastern District of North Carolina at [email protected] no later than March 6, 2015.
A criminal information is not a finding of guilt. A corporation charged by criminal information is presumed innocent unless and until proven guilty in a court of law.
The U.S. Attorney’s Offices will have no further comment on this matter until after court proceedings.
Duke Energy Subsidiaries Charged with Clean Water Act ViolationsRead the Press Release
CHARLOTTE, N.C. – The United States Attorney’s Offices for the Eastern, Middle, and Western Districts of North Carolina, along with the Department of Justice – Environmental Crimes Section, filed criminal charges today against three subsidiaries of Duke Energy Corporation: Duke Energy Business Services LLC, Duke Energy Carolinas LLC, and Duke Energy Progress, Inc. for multiple violations of the Clean Water Act.
The three U.S. Attorney’s Offices filed separate criminal bills of information in their respective federal courts, alleging violations of the Clean Water Act at the following Duke facilities: Dan River Steam Station (Rockingham County); Cape Fear Steam Electric Plant (Chatham County); Asheville Steam Electric Generating Plant (Buncombe County); H.F. Lee Steam Electric Plant (Wayne County); and Riverbend Steam Station (Gaston County). The alleged violations include unlawfully failing to maintain equipment at the Dan River and Cape Fear facilities and unlawfully discharging coal ash and/or coal ash wastewater from impoundments at the Dan River, Asheville, Lee, and Riverbend facilities.
The U.S. Attorney’s Offices for Middle and Western Districts also filed papers asking their courts to transfer the cases to be heard in the Eastern District of North Carolina.
The defendants face a maximum penalty on each charged count of five years probation; a fine in an amount of the greater of not less than $2,500 nor more than $25,000 per day of violation; $200,000.00; or twice the gross gain or loss; restitution; and a special assessment of $125.00.
Persons directly and proximately harmed as a result of the conduct charged in this matter may have rights under the Crime Victims’ Rights Act. See 18 U.S.C. § 3771. If you believe that you are a crime victim in this matter, please contact the United States Attorney’s Office for the Eastern District of North Carolina at [email protected] no later than March 6, 2015.
A criminal information is not a finding of guilt. A corporation charged by criminal information is presumed innocent unless and until proven guilty in a court of law.
The U.S. Attorney’s Offices will have no further comment on this matter until after court proceedings.
U.S. v. Duke EnergyDrug Charge Filed Against Philadelphia ManRead the Press Release
PHILADELPHIA - Johnny Santiago, 20, of Philadelphia, PA, was charged today by Information with one count of attempted possession with intent to distribute 500 grams or more of cocaine, announced United States Attorney Zane David Memeger.
If convicted, the defendant faces a maximum possible sentence of 40 years in prison with a mandatory minimum five year term, a fine of up to $5 million, at least four years of supervised release up to a lifetime of supervised release, and a $100 special assessment.
The case was investigated by United States Postal Inspection Service. It is being prosecuted by Assistant United States Attorney Linwood C. Wright, Jr.
District Man Pleads Guilty to Sexually Abusing 7-Year-Old Girl Child Disclosed What Took Place to MotherRead the Press Release
WASHINGTON – A 55-year-old man from Washington, D.C. pled guilty today to a felony charge for sexually abusing a seven-year old girl in May 2014, U.S. Attorney Ronald C. Machen Jr. announced.
The defendant, who is not identified here to protect the privacy of the victim, pled guilty in the Superior Court of the District of Columbia to one count of second-degree child sexual abuse, in an Alford plea. Under such a plea, the defendant does not admit the allegations but agrees that the government has enough evidence to secure a conviction. He is scheduled to be sentenced on April 24, 2015 by the Honorable Milton C. Lee. The defendant faces up to 10 years in prison. He will also be required to register as a sex offender.
According to the government’s factual proffer at today’s plea hearing, the defendant molested the girl, a relative, on May 24, 2014, in a home in Southeast Washington. The girl told her mother what happened, and DNA evidence later confirmed the girl’s allegations.
In announcing today’s plea, U.S. Attorney Machen praised the work of those who investigated the case from the Metropolitan Police Department’s Youth Division. He also expressed appreciation for the work of the child abuse experts at the Child and Adolescent Protection Center at Children’s National Medical Center, as well as the Children’s Advocacy Center, which conducted the child forensic interview and provided other critical services to the victim. U.S. Attorney Machen acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist D’Yvonne Key and Victim/Witness Advocate Lezlie Richardson. Finally, he commended the work of Assistant U.S. Attorney Peter V. Taylor, who investigated and prosecuted the matter.
15-027
Des Moines Pharmacist Sentenced to Two Years in PrisonRead the Press Release
DES MOINES, IA – On February 20, 2015, Mark Graziano, previous owner of Bauder Pharmacy in Des Moines, Iowa, was sentenced by Chief Judge James E. Gritzner to 24 months in prison and three years of supervised release following the period of imprisonment, announced United States Attorney Nick Klinefeldt. Graziano stipulated that the federal tax loss was $455,204 and the State of Iowa tax loss was $122,301, and Judge Gritzner also ordered restitution in the amount of $577,505.
Graziano pled guilty to the charges of conspiracy to distribute a controlled substance and tax evasion on November 6, 2014. By agreement, Graziano agreed to forfeit the property listed in the Notice of Forfeiture in the Second Superseding Indictment, and the property is in the process of being sold with the proceeds being applied toward the restitution judgment.
“In addition to cheating on his taxes, Graziano has now admitted that he illegally sold hydrocodone pills out of Bauder Pharmacy” stated Nick Klinefeldt. “This occurred over five years, and involved hundreds of thousands of pills. Prescription drug abuse is a serious problem in this state and across the country. It wreaks havoc on the lives of all those involved. It has also been demonstrated to lead to the addiction of even more dangerous drugs, such as heroin. Though Graziano is a pharmacist, this activity had nothing to do with legitimate pharmacy practice. Graziano was a drug dealer: plain and simple.”
This case was investigated by the Drug Enforcement Administration and Internal Revenue Service Criminal Investigation. Prosecution of this matter was handled by the U.S. Attorney’s Office for the Southern District of Iowa.
(Download Press Release)
Defendant Sentenced for Theft of Government Property and Aggravated Identity TheftRead the Press Release
DEFENDANT SENTENCED FOR THEFT OF GOVERNMENT PROPERTY AND AGGRAVATED IDENTITY THEFT
TALLAHASSEE, FLORIDA – Kenitra Michelle Gilmer, 30, of Charlotte, North Carolina, was sentenced today by United States District Judge Mark Walker to 12 months in federal prison for theft of government property and 24 months in federal prison for aggravated identity theft. The sentences, which were ordered to run consecutively, were announced today by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
Gilmer’s charges stem from a traffic stop that occurred on February 8, 2012, in the Northern District of Florida. During the traffic stop, officers recovered approximately $52,194 in cash, 17 TurboTax debit cards in other people’s names, and receipts showing that the cards had been used. The TurboTax debit cards were loaded with fraudulently obtained income tax refunds. During the investigation, officers discovered video footage showing Gilmer using one of the TurboTax debit cards at a Publix grocery store.
The case was investigated by the Internal Revenue Service, Homeland Security Investigations, and the Madison County Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Herbert Lindsey.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Davenport Man Sentenced to Six Years in Federal Prison for Firearm OffenseRead the Press Release
DAVENPORT, IA – On February 20, 2015, David Terell Parrow, age 39, of Davenport, Iowa, was sentenced by United States District Judge Stephanie M. Rose to 72 months in prison for felon in possession of a firearm and ammunition, announced United States Attorney Nicholas A. Klinefeldt. Parrow was also ordered to serve two years of supervised release following the imprisonment and to pay $100 towards the Crime Victims Fund.
On July 5, 2014, police responded to a residence in Davenport, Iowa, reference a report of a disturbance and a suspect with a handgun. Upon arriving, officers proceeded to a backyard in that area and located Parrow. Officers approached Parrow and ordered him to the ground. As Parrow was being escorted to the ground, he pulled out a green and black 9mm handgun from his waistband and threw it in front of himself. This firearm was loaded with 5 rounds plus 1 round in the chamber. Police located 3.83 grams of crack cocaine concealed in Parrow’s sock. Prior to July 5, 2014, Parrow had been convicted of a crime punishable by imprisonment exceeding one year.
This case was investigated by the Davenport, Iowa, Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
(Download Press Release)
Convicted Tarrant County Tax Preparers Sentenced to Lengthy Federal Prison SentencesRead the Press Release
FORT WORTH, Texas — A husband and wife who were convicted at trial on multiple felony offenses stemming from their operation of a tax return preparation business in Tarrant County, were sentenced this morning by U.S. District Judge John McBryde, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Jacqueline Morrison and Gladstone Morrison, who operated Jacqueline Morrison & Associates (JMA) on North Collins in Arlington, Texas, and on James Street in Fort Worth, Texas, were each sentenced to serve 187 months in federal prison. In addition, Judge McBryde ordered them to pay nearly $18 million in restitution.
Specifically, in October 2014, a federal jury convicted Jacqueline and Gladstone Morrison each on one count of conspiracy to aid and assist in the preparation and presentation of false and fraudulent tax returns. Jacqueline Gladstone was also convicted on 13 counts and Gladstone Morrison on 12 counts of aiding and assisting in the preparation and presentation of false and fraudulent tax returns. Jacqueline was convicted on three counts and Gladstone on four counts of wire fraud.
Gladstone Morrison has been in custody since the conviction. Judge McBryde ordered Jacqueline Morrison to surrender to the Bureau of Prisons on March 13, 2015.
“This office is committed to working with IRS Criminal Investigation to pursue criminals who rob the U.S. Treasury by perpetrating tax fraud schemes,” said Acting U.S. Attorney Parker. “The aggressive prosecution of these individuals is vital to maintaining public confidence in our tax system.”
R. Damon Rowe, Special Agent in Charge of the Dallas Office of IRS Criminal Investigation said, “Most Certified Public Accountants strive for the highest ethical standards; Jacqueline Morrison, however, is one CPA who did not. She and her husband, Gladstone, abused the trust their clients placed in them and their company, Jacqueline Morrison & Associates. With today’s sentences, the Morrison’s are now being held accountable for their corrupt actions.”
The government presented evidence that the Morrison’s conspired to willfully aid and assist in and advise the preparation and presentation to the IRS of false and fraudulent individual income tax returns. Many of the tax returns were false and fraudulent because to increase client refunds, the returns claimed Schedule C business losses from income for which the Morrisons knew the taxpayers were not entitled. The Morrisons and JMA tax return preparers, who the Morrisons trained, would use the substantial losses reported on the false Schedules C to offset wage income, resulting in clients recovering all or most of their tax withholding. The Morrisons benefitted from this practice by charging higher fees for additional schedules, creating client loyalty and increasing their business through client referrals.
As part of the conspiracy, the Morrisons, according to evidence presented, developed a series of forms for the client to sign at the time the return was prepared. These forms were intended to protect the Morrisons by placing all the responsibility for any false information on the client, no matter how transparently implausible or unsubstantiated the information on the return.
During the time of the conspiracy, the Morrisons collected more than $2 million in fees from clients. They also attempted to profit by using JMA’s fraud to build a large client list, which they then leveraged into a lucrative franchise agreement with Express Tax Services, a subsidiary of H&R Block. However, after they entered the franchise agreement, the IRS terminated the Morrisons’ Electronic Filing Identification Numbers (EFINs) because of their fraudulent activities. To conceal that fact and perpetuate the continuation of the franchise agreement, the Morrisons provided Express Tax Services EFINs that belonged to a business associate.
Regarding the wire fraud offenses that occurred during the time of the conspiracy, the government presented evidence that the franchise agreement provided for the payment of $750,000 from Express Tax to the Morrisons. To secure the agreement, the Morrisons falsely represented to Express Tax that JMA was not under investigation, when in fact, they well knew JMA was the subject of a federal criminal investigation by IRS-Criminal Investigation.
Unbeknownst to Express Tax, the Morrisons entered into a separate agreement to sell JMA to an individual named V.H. Gladstone Morrison misled V.H. about the true nature of JMA’s relationship with Express Tax by telling V.H. that the arrangement was nothing more than a “co-branding” or “co-marketing” agreement.” Gladstone Morrison also tried to prevent Express Tax from learning they had executed an agreement to sell JMA to V.H. by falsely telling Express Tax that V.H. was only the Morrison’ office manager. By entering into parallel agreements with separate entities — Express Tax and V.H., the Morrisons received payments from both entities for the same asset.
When the Morrison’s agreements with both Express Tax and V.H. fell apart, they again tried to profit by selling JMA to RealTex Ventures LLC, owned by “D.A.” for $425,000. Again, the Morrisons represented that JMA was not under investigation, when it was.
The case was investigated by IRS Criminal Investigation. Assistant U.S. Attorneys Douglas Allen and Chris Wolfe prosecuted.
Conspirator Indicted in $3.9 Million Fraud SchemeRead the Press Release
Baltimore, Maryland – A federal grand jury has indicted Alberic Okou Agodio, age 30, of Bethesda, Maryland, on charges arising from a mortgage fraud scheme in which he used the names of immigrants and students, along with false financial information, to obtain approximately $3.8 million in home mortgage loans to buy approximately three dozen row houses in Baltimore, all of which are in default or foreclosure. The indictment was returned on February 18, 2015 and unsealed today upon his arrest.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Deputy Inspector General for Investigations Rene Febles of the Federal Housing Finance Agency Office of Inspector General; Special Agent in Charge Cary A. Rubenstein of the U.S. Department of Housing and Urban Development Office of Inspector General; Special Agent in Charge Fran Mace, of the Federal Deposit Insurance Corporation Office of Inspector General; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
Agodio was the founder and principal employee of A&O Consulting, LLC, which provided accounting and business consulting services; and AORE Investments, Inc., which Agodio described as a real estate firm based in Bethesda, Maryland.
According to the 16 count indictment, from June 2009 to November 2010, Agodio persuaded approximately three dozen immigrants and students who lived in the Maryland suburbs of Washington, D.C. to purchase row houses in Baltimore under their names. None of these “straw purchasers” had any experience in real estate transactions, nor the funds needed to buy the properties. Agodio told each straw purchaser that he would prepare the loan application; manage the property after its purchase by finding renters, collecting the rent and paying the mortgage; and would pay the straw purchaser $7,000 to $8,000 after the transaction closed. He further promised to sell the property in three years and give the individual up to 80% of the sale proceeds. Agodio also paid thousands of dollars in additional commissions to those straw purchasers who referred other individuals to him as potential buyers for similar transactions.
The indictment further alleges that Agodio falsely represented in the loan applications the straw purchasers’ assets and in many cases, their earnings as well. Agodio provided the necessary funds for the down payment and the buyer’s share of the closing costs, causing the settlement statement form to inaccurately reflect that the down payments and closing costs had been paid by the straw purchasers.
Following the closings, Agodio allegedly retained the keys to each property, and assumed the responsibility for finding renters and making the required monthly mortgage payments. The named purchasers never lived in the properties. Agodio eventually allowed all of the mortgages to go into default.
During the course of this scheme, Agodio and his co-conspirators obtained approximately $3.8 million in home mortgage loans to buy the row houses. A co-conspirator who owned the row houses paid Agodio an undisclosed kickback from the proceeds he received from the title company on each transaction, totaling over $1.2 million. Agodio used these funds to reimburse himself for making the down payments and closings costs, to pay the promised amount to the straw purchasers and to keep a substantial commission for himself.
The indictment also alleges that a fire occurred at one of the row house properties purchased through a straw purchaser. He falsely identified himself as the straw purchaser to the insurance company in order to collect $106,500 in insurance paid for the repair the property.
The indictment seeks forfeiture of $3,925,841.
Agodio faces a maximum sentence of 30 years in prison for conspiring to commit wire fraud, on each of nine counts for wire fraud, and for mail fraud; 20 years in prison on each of three counts for money laundering; and a mandatory minimum of two years in prison consecutive to any other prison term on each of two counts for aggravated identity theft. Adogio had his initial appearance in federal court in Baltimore at 2:30 p.m. today.
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.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available http://www.justice.gov/usao/md/priorities_financialfraud.html.
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 HUD- OIG, FDIC – OIG, FHFA - OIG and the FBI for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Jefferson M. Gray, who is prosecuting the case.
Columbia Man Charged with Child Pornography OffensesRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on February 20, 2015, Dan Stephen Daniels, 49, Columbia, IL, was arraigned on a two-count Indictment charging him, in Count 1, with Receipt of Child Pornography, and, in Count 2, Possession of Prepubescent Child Pornography. Daniels was ordered detained, that is, held without bond, after a detention hearing held immediately after his arraignment.
Count 1 alleges that, on or about October 12, 2014, Daniels knowingly received two (2) images of child pornography, one of a prepubescent male engaged in sexual intercourse with an adult female and the other of a prepubescent female in the lascivious display of her genitals. Count 2 alleges that, on or about October 17, 2014, Daniels knowingly possessed a desktop computer that contained images of child pornography that involved prepubescent minors or minors who had not attained 12 years of age.
Trial is scheduled for April 6, 2015. The penalty for Receipt of Child Pornography is a term of imprisonment of not less than five (5) years but not more than twenty (20) years, a fine up to $250,000, and a term of supervised release of not less than five (5) years to life. The penalty for Possession of Prepubescent Child Pornography is a term of imprisonment of not more than twenty (20) years, a fine up to $250,000, and a term of supervised release of not less than five (5) years to life.
An indictment is merely the method by which federal charges are lodged. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 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."
The case was investigated by the Columbia Police Department and the Federal Bureau of Investigation's Springfield Child Exploitation Task Force. The case is assigned to Assistant United States Attorney Angela Scott.
Colorado Man Pleads Guilty to Using a Firearm During Robbery of the Wells Fargo Bank in Farmington in September 2012Read the Press Release
ALBUQUERQUE – Robert O’Dell Neihart, 44, of Ignacio, Colo., pleaded guilty this morning in federal court in Las Cruces, N.M., to robbing a Wells Fargo Bank branch located on East Main Street in Farmington, N.M., while possessing a .45 caliber semi-automatic pistol. Under the terms of his plea agreement, Neihart will be sentenced to a term of incarceration within the range of 148 to 161 months followed by a term of supervised release to be determined by the court.
Neihart was arrested in Nov. 2012, on a two-count indictment charging him with the armed robbery of the bank on Sept. 21, 2012, and using a firearm during a crime of violence. Count 1 of the indictment also charged co-defendant Denise Myrick, 44, also of Ignacio, Colo., with aiding and abetting Neihart in robbing the bank. Prosecution of the case against Neihart was delayed by competency proceedings.
During today’s proceedings, Neihart pled guilty to both counts of the indictment, and admitted that on Sept. 21, 2012, he robbed the bank by approaching a teller and handing her a two-page letter demanding money. Neihart further admitted that he had a pistol in his possession at the time of the robbery. He admitted using the pistol to shoot at police vehicles that pursued him after the bank robbery. Neihart was arrested at his Colorado residence later that day by the officers who were in pursuit.
Neihart has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled.
Myrick pled guilty on Dec. 4, 2013, to a misdemeanor information charging her with aiding and abetting a bank robbery. In entering her guilty plea, Myrick admitted driving Neihart to the bank and assisting him in his attempted escape. She was sentenced on Mar. 4, 2014, to three years of probation.
This case was investigated by the Albuquerque and Farmington offices of the FBI, the Farmington Police Department, San Juan County Sheriff’s Office and the La Plata County Sheriff’s Department in Durango, Colo. Assistant U.S. Attorney William J. Pflugrath is prosecuting the case.
Chief Financial Officer Sentenced to 9 Years’ Imprisonment for Defrauding Investors of More Than $10 MillionIn Two Separate Fraud SchemesRead the Press Release
Earlier today, Frank E. Perkins, the Chief Financial Officer (“CFO”) of Harbor Funding Group, Inc. (“HFGI”) and Black Sand Mine, Inc. (“BSMI”), was sentenced in federal court in Brooklyn to 9 years’ imprisonment. In September 2014, Perkins pleaded guilty to two counts charging conspiracy to commit wire fraud and conspiracy to commit securities fraud and wire fraud for his role in defrauding: (i) developers and their clients in areas devastated by Hurricane Katrina of more than $9 million through an advance fee scheme; and (ii) investors of almost $1 million through an Alaskan gold mine investment scheme. As part of the sentence, Perkins was also sentenced to 3 years’ supervised release and ordered to pay a total of $10,707,894.59 in restitution to the victims of the two schemes. The sentencing for lead defendant William C. Lange is scheduled for March 12, 2015.
The sentences were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Philip R. Bartlett, Inspector in Charge, New York Division, U.S. Postal Inspection Service (USPIS), and Frank Montoya, Jr., Special Agent in Charge, Federal Bureau of Investigation, Seattle Field Office (FBI).
“Perkins and his co-defendants preyed upon investors seeking to rebuild areas devastated by Hurricane Katrina and stole their victims’ deposit money through an intricate web of lies and deceit. After they spent the more than $9 million they stole from their victims, Perkins and his co-defendants embarked on a gold mine investment scheme that was built and sold on lies. Today’s sentence sends a strong message that those who exploit tragedies to line their own pockets will be held accountable for their crimes,” stated United States Attorney Lynch. Ms. Lynch thanked the USPIS and the FBI for their hard work and dedication through the course of this six-year investigation and prosecution. Ms. Lynch also extended her appreciation to the United States Attorney’s Office for the Western District of Washington for their assistance in the case.
Perkins and his co-conspirators told land developers and their clients that HFGI had lenders and millions of dollars in funds available to provide financing for their real estate projects. As a condition for financing, HFGI required investors to place ten percent of the loan amount in an attorney escrow account. Contrary to Perkins’ representations, HFGI did not have lenders or funds available to finance the loans. As soon as the money was placed in escrow, Perkins and his co-conspirators stole it, at times through the use of a sham escrow agreement. Through this scheme, Perkins and his co-conspirators stole more than $9 million from approximately 300 individuals. As CFO, Perkins authorized the $9 million to be spent on, among other things, salaries, fishing and hunting trips for co-defendants William and Kristofor Lange, remodeling and landscaping for co-defendant William Lange’s new house, and other business ventures started by Perkins and his co-conspirators.
After the $9 million was spent, Perkins and his co-conspirators moved on to BSMI and the gold mine investment scheme. BSMI claimed that it would mine gold and other precious metals on Sitkinak Island in Alaska. Through the use of in-person presentations, cold calls, and “webinars,” Perkins and his co-conspirators convinced investors to purchase BSMI stock by lying to them about the credentials of BSMI’s officers and directors, BSMI’s assets and liabilities, the intended use of investor funds, and by concealing their prior involvement in HFGI. Perkins also concealed his prior involvement in HFGI. Almost $1 million collected from investors in BSMI was spent on salaries and other personal expenses for Perkins and his co-conspirators.
The government’s case is being prosecuted by Assistant United States Attorneys Winston M. Paes, Alixandra E. Smith, and Melanie Hendry.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement and 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 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The Defendant:
FRANK E. PERKINS
Age: 55
La Grange, Kentucky
E.D.N.Y. Docket No. 10-CR-968 (DLI)
Chief Engineer of Car-Carrier Vessel Sentenced to Prison for Obstruction of Justice in Marine Oil Pollution CaseRead the Press Release
Baltimore, Maryland – Chief U.S. District Judge Catherine C. Blake sentenced Noly Torato Vidad, age 47, of the Philippines, the Chief Engineer of the cargo vessel M/V Selene Leader, to eight months in prison, followed by one year of supervised release, for obstruction of justice and violating the Act to Prevent Pollution from Ships (APPS).
The sentence was announced by U.S. Attorney Rod J. Rosenstein; Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division John C. Cruden; and Coast Guard Captain Kevin Kiefer, Captain of the Port of Baltimore.
Vidad was the Chief Engineer and Ireneo Tomo Tuale was the first engineer on board the vessel, which was operated by Hachiuma Steamship Co, LTD, a Japanese company, between August 2013, and the end of January 2014. The M/V Selene Leader transported vehicles to and from ports in the United States, including the Port of Baltimore.
According to his plea agreement and other court documents, in January 2014, engine room crew members of the M/V Selene Leader, under the supervision of Vidad and Tuale, transferred oily wastes between oil tanks on board the ship using rubber hoses and then illegally bypassed pollution control equipment and discharged the oily wastes overboard into the ocean. Before such waste can be discharged into the sea, the law requires that it must first pass through an oil water separator, and the operation must be recorded in the vessel’s oil record book for inspection by the United States Coast Guard.
When the Coast Guard boarded the vessel in Baltimore on January 31, 2014, Mr. Vidad tried to obstruct the Coast Guard’s investigation and hide the illegal discharges of oil by falsifying the oil record book, destroying documents, lying to Coast Guard investigators, and instructing subordinate crew members to lie to the Coast Guard.
The Hachiuma Steamship Co., LTD previously pleaded guilty to violating the Act to Prevent Pollution from Ships (APPS), arising from the failure to maintain an accurate oil record book for the M/V Selene Leader. As ordered by Chief U.S. District Judge Catherine C. Blake Hachiuma Steamship paid a $1.8 million penalty, $450,000 of which was made payable to the National Fish and Wildlife Foundation to fund projects benefitting the Chesapeake Bay, and $250,000 was awarded to a whistleblower on board the M/V Selene Leader who alerted the Coast Guard about the illegal activities on board the vessel. The company was also placed on probation for three years during which it is to develop an environmental compliance program.
Ireneo Tomo Tuale, age 63, also of the Philippines, previously pleaded guilty to his participation in the scheme and is scheduled to be sentenced in federal court in Baltimore on March 3, 2015.
United States Attorney Rod J. Rosenstein and Assistant Attorney General John C. Cruden praised the Coast Guard Investigative Service for its work in the investigation and thanked Special Assistant U.S. Attorney David P. Kehoe, of the Environmental Crimes Section of the U.S. Department of Justice, and Assistant United States Attorney P. Michael Cunningham, who prosecuted the case.
Carmen Johnson Convicted on Charges Related to Two Separate Residential Mortgage Fraud SchemesRead the Press Release
Greenbelt, Maryland – A federal jury convicted Carmen Johnson, age 48, of Gambrills, Maryland, today on charges of conspiracy, wire fraud and making a false statement on a loan application, arising from two residential mortgage fraud schemes.
The conviction was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Cary A. Rubenstein of the U.S. Department of Housing and Urban Development Office of Inspector General; Deputy Inspector General for Investigations Rene Febles of the Federal Housing Finance Agency Office of Inspector General; Special Agent in Charge Kathy Michalko of the United States Secret Service – Washington Field Office; John L. Phillips, Assistant Inspector General for Investigations, U.S. Department of the Treasury - Office of Inspector General; and Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
According to the evidence presented at her seven day trial, in the first scheme, which operated from March 2007 to November 2008, Johnson conspired with real estate agent Edgar Tibakweitira and others to fraudulently obtain residential mortgage loans by making false statements during the loan application and approval process. In the second scheme, witnesses testified that between April and July 2008 Johnson conspired with real estate agent Nsane Phanuel Ligate and others in a similar mortgage fraud scheme involving two properties in Baltimore.
Johnson owned and operated CJ Lending and its predecessor Able Estate & Company, which provided credit repair services. Witnesses testified that in both schemes Carmen Johnson reported to credit bureaus and provided her fellow co-conspirators with false credit histories showing backdated lines of credit that were used to convince lenders to give mortgage loans. As part of both schemes, Johnson’s co-conspirators used stolen or false identity information, false documents – including W-2 forms, earnings and banks statements – and false credit information to induce lenders to provide mortgage loans to straw purchasers. Johnson’s co-conspirators also inflated the sales prices of the properties by creating false documents for repairs and renovations that were never made. After the settlement, the conspirators divided up the cash received for the purported repairs.
As a result of both schemes, losses to financial institutions totaled $2,309,646.
Johnson faces a maximum sentence of 30 years in prison on each of two conspiracy counts; 30 years in prison for each of 12 counts of wire fraud affecting a financial institution; and 30 years in prison on each of 10 counts of false statement on a loan application. U.S. District Judge George Jarrod Hazel has scheduled sentencing for June 3, 2015, at 10:00 a.m.
Co-conspirators Edgar Tibakweitira, a/k/a “Edgar Julian,” “Charles Edgar Tibakweitira,” and “Edgar Gaudious Tibakweitira,” age 46, of Severn, Maryland, Flavia Makundi, age 42, of Severn Park, Maryland, Ayoub Luziga, age 35, of Bowie, Maryland, Raymond Abraham, age 48, of Silver Spring, Maryland, Mokorya Cosmas Wambura, age 42, of Takoma Park, Maryland, Abdallah Suleiman Kitwara, age 44, of Bowie, Maryland, have pleaded guilty to their roles in the first scheme. Luziga was sentenced to 21 months in prison and ordered to pay restitution of $999,726. Kitwara was sentenced to 15 months in prison and ordered to pay $290,954 in restitution. Abraham was sentenced to 33 months in prison and ordered to pay $999,726 in restitution. Annika Boas, age 37, of Mount Rainier, Maryland, was convicted after trial and sentenced to 27 months in prison and ordered to pay restitution of $511,147. Makundi was sentenced to time served. Tibakweitira is scheduled to be sentenced on March 23, 2015.
Nsane Phanuel Ligate, age 42, of Ashburn, Virginia, Cane Mwihava, age 43, of Bowie, Maryland, Larry Johnson, age 58, of Capital Heights, and Gladyness Silaa, age 36, of Bowie, Maryland have also pleaded guilty to their roles in the second mortgage fraud scheme. Larry Johnson was sentenced to eight months in prison consecutive to the current sentence he is serving on an unrelated case and ordered to pay restitution of $352,091. Silaa was sentenced six months home detention and ordered to pay $378,602 in restitution. Ligate and Mwihava are scheduled to be sentenced on March 16, 2015 and March 23, 2015, respectively.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available http://www.justice.gov/usao/md/priorities_financialfraud.html.
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. 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.
United States Attorney Rod J. Rosenstein praised HUD-OIG, FHFA-OIG, Treasury OIG, U.S. Secret Service and HSI Baltimore for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kristi N. O’Malley and Special Assistant U.S. Attorney Kevin Di Gregory, Investigative Counsel for the Federal Housing Finance Agency Inspector General, who are prosecuting the case.
Carbondale Resident Sentenced on Methamphetamine OffenseRead the Press Release
On February 19, 2015, Brandon K. Craig, 21, of Carbondale, Ill., was sentenced for his involvement in a methamphetamine conspiracy, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Craig, who had previously pled guilty to the one-count indictment charging conspiracy to manufacture methamphetamine, was sentenced to 57 months in federal prison, 3 years’ supervised release, and was fined $300. The offense occurred between 2010 and January 2014, in Jackson, Williamson, Union, and Franklin Counties. Evidence at the plea and sentencing hearings established that Craig was involved with others in the manufacture of methamphetamine. Craig was a methamphetamine cook and purchased pseudoephedrine for himself and others to use in the manufacture of methamphetamine. At sentencing, the district court found that Emery was responsible for the illegal possession of 247 grams of pseudoephedrine. Four co-defendants have previously been sentenced for their involvement in the methamphetamine conspiracy. Two co-defendants have pled guilty and are awaiting sentencing. Six co-defendants have pled not guilty and are awaiting jury trial.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office, Murphysboro Police Department, Carbondale Police Department, Illinois State Police/Southern Illinois Drug Task Force, and Drug Enforcement Administration.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
CEO of Kentwood Pharmacy Pleads GuiltyRead the Press Release
GRAND RAPIDS, MICHIGAN – Kim Duron Mulder, 55, formerly of Grand Rapids, and Charles Wayne Brooks, 63, of Alma, entered guilty pleas today before United States District Judge Robert J. Jonker on charges related to the illegal restocking and re-dispensing of recycled drugs at Kentwood Pharmacy. Mr. Mulder, formerly the CEO of Kentwood Pharmacy, pled guilty to a conspiracy to commit health care fraud based on billing Medicare, Medicaid, and private insurance plans for misbranded and adulterated drugs. Mr. Brooks, a pharmacist at Kentwood Pharmacy’s facility in Alma, pled guilty to misbranding prescription drugs that had been previously dispensed and returned to pharmacy stock. Mr. Mulder faces up to ten years’ imprisonment; Mr. Brooks faces up to three years’ imprisonment.
The convictions of Messrs. Mulder and Brooks conclude the federal prosecution of individuals involved with Kentwood Pharmacy. A total of 18 people were convicted of criminal offenses stemming from the practices at Kentwood Pharmacy, including the felony convictions of six licensed pharmacists. Most recently, in December 2014, Judge Jonker sentenced Richard Clarke, formerly Kentwood Pharmacy’s Vice President of Sales, to 14 years in prison for his involvement in a conspiracy to commit health care fraud and a separate charge of possession of child pornography. In December 2014, Judge Jonker also sentenced pharmacist Lawrence Harden to six years’ imprisonment for his involvement in the conspiracy to commit health care fraud. As part of the sentencing hearings, Judge Jonker found that public and private insurers paid more $80,000,000.00 for adulterated and misbranded drugs. Judge Jonker found that Messrs. Clarke and Harden were responsible for restitution amounts of over $8,000,000.00 and $6,000,000.00, respectively.
The federal investigation revealed that Kentwood Pharmacy violated state pharmacy rules and federal law by recycling drugs that were returned from nursing homes and adult foster care homes. These included cross-contaminated drugs that were previously mixed together, drugs bearing foreign substances and residues, and discolored and expired medications. The process by which Kentwood Pharmacy returned drugs to pharmacy stock resulted in the improper labeling of drugs, the placement of different drug dosages into stock bottles, and the placement of the altogether wrong drugs into stock bottles. Because Kentwood Pharmacy did not trace the returned drugs, at least one defendant was able to take and sell controlled prescriptions on the street in northern Michigan.
U.S. Attorney Patrick Miles said, “The Federal Food Drug and Cosmetic Act provides an essential regulatory framework to safeguard the public’s use of prescription drugs. These federal regulations are buttressed by explicit state laws which strictly limit the reuse of drugs which have left the control of pharmacies. The public must be able rely on pharmacists who have both professional and statutory duties to ensure that pharmacies operate in compliance with these federal and state laws regulating the handling, packaging, and distribution of drugs.”
This case was investigated by the U.S. Food and Drug Administration, the Federal Bureau of Investigation, the U.S. Drug Enforcement Administration, the U.S. Department of Health and Human Services, and the Internal Revenue Service. Assistant U.S. Attorneys Raymond E. Beckering III and Adam B. Townshend prosecuted the cases on behalf of the United States.The investigation of this case was initiated by confidential tips. If Michigan residents or medical professionals suspect possible violations of law or other dangerous practices involving pharmacies or prescription drugs, they can contact the FDA or the DEA.
END
CEO of China Based Energy Company Sentenced to Five Years in Prison for Securities FraudRead the Press Release
February 20, 2015
The Chief Executive Officer of an energy firm headquartered in Tukwila, Washington, was sentenced today in U.S. District Court in Seattle to five years in prison, three years of supervised release and a $10,000 fine for two counts of Securities Fraud, announced Acting United States Attorney Annette L. Hayes. DICKSON LEE, 66, served as the CEO of L & L Energy Inc., until his arrest last year. L&L, a formerly NASDAQ listed company, purported to be engaged in various aspects of the coal business including mining, washing, and wholesale distribution of coal, all within the People’s Republic of China. LEE falsified reports to the U.S. Securities and Exchange Commission (SEC) regarding the existence of a Chief Financial Officer and, in a separate scheme, issued under false pretenses hundreds of thousands of shares of L&L stock to individuals controlled by LEE in a scheme to raise cash for the company. At the sentencing hearing U.S. District Judge Richard A. Jones said the case should send a message to CEOs “if you engage in deceit and false representations. . . there will be severe consequences.”
“Investors rely on the representations made by publicly traded companies, both in accounting records and their filings with regulators such as the Securities and Exchange Commission,” said Acting U.S. Attorney Annette L. Hayes. “Mr. Lee’s fabrications about key facts concerning his company undermined one of the foundations of our capital markets. That is what he has been held to account for today.”
According to records in the case, in 2008 and 2009, while trying to get L&L stock listed on a national exchange, LEE falsely reported the identity of the company’s Chief Financial Officer (CFO) and lied about the existence of adequate internal controls in public SEC filings. In fact, the person LEE claimed was the CFO had refused to accept the position, and L&L had no CFO to ensure accurate financial reporting. In 2009, when the purported CFO discovered the fraud, LEE paid the individual tens of thousands of dollars in cash and stock in exchange for her silence, and never disclosed the arrangement to shareholders. Finally, in 2013, during a subsequent SEC investigation, LEE falsely testified under oath about the CFO’s role in the company.
In the second count of Securities Fraud, LEE admits that in 2011 and 2012, he issued 730,000 shares of company stock to third-parties in China who, at LEE’s direction, sold the shares on the market to generate revenue for cash-strapped L&L. At the time, LEE knew that the SEC had initiated an investigation into L&L’s affairs and that raising cash through established investment banks was no longer a viable option. LEE also knew that L&L’s Board had been specifically advised that it could not authorize the direct issuance and sale of stock without public disclosure of the investigation. LEE, therefore, secretly issued L&L stock to China-based individuals under false pretenses and then directed their sale without ever disclosing the truth about the company. In order to further conceal his actions, LEE directed that the shares be falsely recorded in L&L’s accounting records as having been issued for compensation for services, although none of these individuals provided any benefit to L&L in return for the shares.
“This case should serve as a warning to those out there who think that rules don’t apply to them, who let their greed outweigh their obligation to the public trust,” said Special Agent in Charge Frank Montoya, Jr., of the FBI’s Seattle field office. “Those people should know the FBI is deeply committed to protecting the community against those who would violate that trust.”
In their sentencing memo, prosecutors explain how these crimes impact the investing public, writing to the court: “Dickson Lee’s conduct was particularly egregious because he flagrantly and repeatedly sought to undermine basic gatekeeping systems erected to prevent unaccountable corporate executives from fleecing investors….Lee…betrayed a deep contempt for the regular investor. The consequence of Lee’s actions is continued mistrust by the public in corporate executives, erosion of confidence in the securities markets, and significantly higher investment costs as investors spend more to conduct their own due diligence. This limits participation and the result is a less open and less liquid market to the detriment of the economy.”
The case was investigated by the FBI. A parallel civil case is being pursued by the SEC. The case is being prosecuted by Assistant United States Attorney Kathryn Kim Frierson.
Bloomfield Man Pleads Guilty to Federal Statutory Rape ChargeRead the Press Release
ALBUQUERQUE – Orlando Harvey, 24, an enrolled member of the Navajo Nation who resides in Bloomfield, N.M., pleaded guilty this morning to a sexual abuse of a minor charge under a plea agreement with the U.S. Attorney’s Office.
Harvey was arrested on Dec. 22, 2014, on an indictment charging him with four counts of sexual abuse of a minor. According to the indictment, Harvey engaged in a sexual act with the victim who was under 16 years of age on four occasions between Aug. 2014 and Oct. 2014. The indictment alleged that the crimes occurred on the Navajo Indian Reservation in San Juan County, N.M.
During today’s hearing, Harvey entered a guilty plea to Count 1 of the indictment, and admitted engaging in a sexual act with the 15-year-old victim in Aug. 2014. Harvey admitted knowing that the victim was only 15 years old when he picked her up at school and drove her to his residence where they engaged in a sexual act. Harvey then drove the victim back to school. He acknowledged that he manipulated the victim into engaging in a sexual act with him.
Harvey has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled. At sentencing, Harvey faces a statutory maximum penalty of 15 years in prison.
This case was investigated by the Shiprock office of the Navajo Nation Division of Public Safety. The case is being prosecuted by Assistant U.S. Attorneys Raquel Ruiz Velez and Elaine Ramirez as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Biscayne Park Man Pleads Guilty to Identity Theft and Debit Card FraudRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that Kency Aime (29, Biscayne Park) has pleaded guilty to one count of access device (debit card) fraud and nine counts of identity theft. He faces a maximum penalty of 55 years in federal prison. A sentencing date has not yet been scheduled.
According to court documents, on May 7, 2014, a Florida Highway Patrol trooper observed a vehicle traveling above the posted speed limit on I-75 in Hamilton County, Florida. The trooper conducted a traffic stop and identified Aime as the driver and sole occupant of the vehicle. During the stop, the trooper smelled a very strong odor of marijuana coming from inside the vehicle and Aime admitted that he had been smoking marijuana.
During a search of the vehicle, troopers located 34 Mastercard and Visa debit cards, along with 296 sets of Personal Identifying Information (PII). Also found were two computers and cell phones. After obtaining federal search warrants, law enforcement located an additional 103 sets of PII on the computers and cell phones. Further investigation revealed that the Mastercard and Visa debit cards were applied for using stolen PII or obtained fraudulently and associated with fraudulent tax activity.
This case was investigated by the United States Secret Service North Florida High Tech Crime Task Force, the Internal Revenue Service – Criminal Investigation, and the Florida Highway Patrol. It is being prosecuted by Assistant United States Attorney Kevin C. Frein.
Baltimore Bank Robber Sentenced to 10 Years in PrisonRead the Press Release
Baltimore, Maryland – Chief U.S. District Judge Catherine C. Blake sentenced Arnold Threet, age 50, of Baltimore today to 10 years in prison, followed by three years of supervised release, for bank robbery. Chief Judge Blake also ordered Threet to pay restitution of $8,935.
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; and Chief James W. Johnson of the Baltimore County Police Department.
According to his plea agreement, on July 5, 2013, Threet and another individual robbed the First Mariner Bank in the 9800 block of York Road in Cockeysville, Maryland. Both robbers wore masks. They entered the bank and yelled for the people inside to get down. One of the robbers grabbed a teller, pushed what appeared to be a gun into her shoulder and ordered her to the ground. The other robber ordered another bank employee to walk from her desk toward him and get down on the ground. He then ordered her to crawl back to her desk area. The robbers stole $8,935.
A witness saw Threet in a parking lot near the bank and observed what appeared to be a black handgun in the waistband of Threet’s pants. Police officers stopped Threet’s vehicle and he was arrested. A search of the vehicle recovered the clothing, gloves and a pellet gun which are seen in the video of the bank robbery. Threet admitted that he committed the robbery and knew that the pellet gun would be used during the robbery.
United States Attorney Rod J. Rosenstein praised the FBI and Baltimore County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Bonnie S. Greenberg, who prosecuted the case.
Albuquerque Man Arrested on Federal Methamphetamine Trafficking ChargeRead the Press Release
ALBUQUERQUE – Michael Stewart, 55, of Albuquerque, N.M., appeared in federal court this morning on a criminal complaint charging him with possession of methamphetamine with intent to distribute. During his hearing, Stewart entered a not guilty plea to the charge against him and was ordered detained pending trial.
Stewart was arrested on Feb. 19, 2015, after DEA Task Force officers allegedly seized approximately 611.9 gross grams of methamphetamine and approximately $24,000.00 in cash from him and his vehicle during a traffic stop in northwest Albuquerque.
If convicted of the charge in the criminal complaint, Stewart faces a sentence of a mandatory minimum ten years in prison and a maximum of life imprisonment. Charges in complaints are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Albuquerque office of the DEA, Homeland Security Investigations and the Bernalillo County Sheriff’s Office, and is being prosecuted by Assistant U.S. Attorney Shana B. Long.
Alabama Man Sentenced for $10.2 Million Securities Fraud ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Northport, Ala., man was sentenced in federal court today for his role in a $10.2 million securities fraud and wire fraud conspiracy that victimized thousands of investors across the United States and Canada who bought shares in Petro America Corporation, which was purported to be a profitable company with $284 billion in assets.
More than 12,000 victims invested in excess of $10.2 million in Petro America. Contrary to the fraudulent representations the conspirators made to victim-investors, Petro America had no oil, no realistic prospects for obtaining, transporting or storing large amounts of oil, no significant assets, no revenue and no employees other than the CEO.
Russell Hopkins, 51, of Northport, was sentenced by U.S. District Judge Brian C. Wimes to four years and three months in federal prison without parole. The court also ordered Hopkins to pay $673,465 in restitution.
Hopkins is among nine co-defendants who pleaded guilty to their roles in the scheme. Five additional co-defendants were convicted at trial, including CEO Isreal Owen Hawkins, 59, of Kansas City, Kan. Hawkins was sentenced on Oct. 8, 2013, to 30 years in federal prison without parole.
Hopkins, who pleaded guilty on July 13, 2011, admitted that he participated in a conspiracy to commit securities fraud and wire fraud that began Sept. 1, 2008. Hopkins promoted Petro America and sold shares to investors, although he was never licensed to sell securities and despite cease and desist orders from both Missouri and Kansas.
Hopkins and other conspirators used religious language in their pitches and often recruited through churches. The sale of Petro America stock was accomplished by making innumerable false misrepresentations and omissions to investors. For example, conspirators falsely claimed that Petro America was worth $284 billion and Petro America stock was worth $24 per share in order to induce people to invest. There was no basis for those numbers.
In an attempt to enable Petro to continue selling its stock after the Missouri cease and desist order was issued on Nov. 12, 2008, and to enable the conspirators to continue to profit, Hawkins gifted billions of shares to Hopkins and other co-defendants. These secondary sellers agreed to sell the stock and they often returned some of the proceeds as kick-back payments to Hawkins and others. Hopkins and other secondary sellers often represented that they were merely investors selling their own shares; they did not disclose that cease and desist orders had been issued, nor did they disclose that most or all of the shares had been gifted to them. Almost no investor proceeds were being reinvested by Petro; instead, conspirators were spending investor proceeds on personal expenditures.
From June 2009 through February 2011, Hopkins made at least $673,465 from the sale of Petro stock to at least 61 investors throughout the United States.
While much of the time Hopkins simply repeated information to investors that he had heard from others, he knew that it was incomplete and potentially misleading. In his dealings with investors, Hopkins intentionally and willfully did not provide certain material information to investors, including: 1) the existence of cease and desist orders in Missouri and Kansas; 2) specific negative information contained in the cease and desist orders; 3) the fact that the stock was unregistered; 4) the fact that the stock was either gifted to him, or sold to him at a price grossly discounted from the offer price; and 5) the fact that he was selling the investors his personal shares. When he sold the stock, Hopkins adopted numerous positive claims concerning Petro’s future potential to become a publicly traded company, and of its claimed assets, which he knew were overly optimistic and misleading.
Starting around July 2010, Hopkins agreed to pay for some of Petro’s “expenses.” In sum, Hopkins paid $32,000 out of his proceeds from the sale of his shares for expenses including Petro’s Pink Sheets registration, payments for accounting and IT work, and $500 weekly payments for Petro conference calls. Hopkins was told that Alvin Sykes was a consultant for Petro who needed to go to Washington D.C., so Hopkins paid for Sykes’s airfare and hotel.
This case is being prosecuted by Assistant U.S. Attorneys Daniel M. Nelson and Kathleen D. Mahoney. It was investigated by IRS-Criminal Investigation, the U.S. Postal Inspection Service and the Office of the Missouri Securities Commissioner.
19 February 2015
Wichita Man Pleads Guilty to Robbery at Dollar GeneralRead the Press Release
WICHITA, KAN. - A Wichita man pleaded guilty in federal court in Wichita Thursday to a robbery charge, U.S. Attorney Barry Grissom said.
Eric Emmanuel Dear, 23, Wichita, Kan., pleaded guilty to one count of commercial robbery. In his plea, he admitted that on July 27, 2014, he robbed the Dollar General Store at 2747 E. Boulevard Plaza in Wichita.
He entered the store about 10:25 a.m., approached the cash register and demanded money. He carried what appeared to be a handgun in his right hand. During the robbery, he touched the counter with his left hand. Fingerprints taken from the counter were matched to three fingers on his left hand. No firearm was recovered.
Sentencing is set for May 7. Both parties have agreed to recommend a sentence of 57 months in federal prison. Grissom commended the Wichita Police Department, the FBI and Assistant U.S. David Lind for their work on the case.
Westbrook Woman Pleads Guilty to Adulterating a Dietary SupplementRead the Press Release
Contact: James W. Chapman, Jr.
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Kathy Jordan, age 61, of Westbrook, Maine, pleaded guilty today in U.S. District Court to adulterating a food item, namely a bottle of fish oil capsules, with intent to defraud.
According to court documents, on April 3, 2012, Jordan purchased a bottle of fish oil capsules, face cream and shampoo from a retail pharmacy store near her home. She returned all three items the following day for a full refund. One week later, the bottle of fish oil capsules was resold to another customer. That customer discovered that the bottle contained other items in addition to fish oil, and returned the bottle to the pharmacy. The pharmacy determined that some of the fish oil capsules had been removed and replaced with stool softener capsules and Dilantin, a prescription anti-seizure medication. Jordan told investigators that she returned the bottle of fish oil capsules after substituting some of the fish oil with other drugs in her home so that she could get a full refund.
Jordan faces up to three years in jail and a $250,000 fine. She will be sentenced after completion of a pre-sentence investigation report by the U.S. Probation Office.
This case was investigated by the Food and Drug Administration, Office of Inspector General.
Washington, D.C., Man Pleads Guilty to Federal Charges in Massive Identity Theft and Tax Fraud SchemeRead the Press Release
Admits Working with Others to Seek More Than $1.1 Million in Fraudulent Refunds
A Washington, D.C., man pleaded guilty to various crimes committed in a far-reaching identity theft and tax fraud scheme in which he and others filed fraudulent federal income tax returns seeking more than $1.1 million in refunds, the Justice Department announced today.
James Nelson, 31, is among approximately a dozen people who have pleaded guilty in the U.S. District Court for the District of Columbia to charges in one of the largest prosecutions to date involving the use of stolen identifying information. The overall case involves the filing of at least 12,000 fraudulent federal income tax returns that sought refunds of at least $40 million.
The guilty plea, unsealed today, was announced by U.S. Attorney Ronald C. Machen Jr. of the District of Columbia, Principal Deputy Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service-Criminal Investigation (IRS-CI) Washington Field Office, Acting Inspector in Charge David M. McGinnis of the U.S. Postal Inspection Service’s (USPIS) Washington Division, Assistant Inspector General for Investigations John L. Phillips of the U.S. Department of Treasury, and Special Agent in Charge Kathy A. Michalko of the U.S. Secret Service’s Washington Field Office.
Nelson pleaded guilty to conspiracy to defraud the United States with respect to claims, aiding and abetting in the making of false claims for refund, and aiding and abetting in fraud and related activity involving identification information. Under federal sentencing guidelines, Nelson faces an estimated range of 41 to 51 months in prison and a fine of up to $75,000 at his sentencing before the Honorable U.S. District Judge Ellen S. Huvelle of the District of Columbia. In addition, as part of his plea agreement, Nelson must pay $636,026 in restitution to the IRS.
“James Nelson now joins numerous others who have pleaded guilty in this prosecution of a D.C.–based scheme involving at least 12,000 fake income tax returns,” said U.S. Attorney Machen. “Honest taxpayers – like those filing their returns this week – are victimized by these scammers who use stolen identities to generate fraudulent tax refunds and drain money from the U.S. Treasury. This prosecution is not over. We will remain aggressive in our efforts to investigate and prosecute tax refund fraud involving identity theft.”
“One of the Tax Division’s highest priorities is prosecuting individuals such as James Nelson and his co-conspirators, who use stolen identities to file fictitious income tax returns and claim fraudulent refunds,” said Principal Deputy Acting Assistant Attorney General Ciraolo. “This street crime threatens the very fabric of tax administration and often victimizes the most vulnerable members of our communities. The Tax Division is committed to working with our partners in law enforcement to identify these schemes, dismantle the criminal operations, and punish the offenders who view the Federal Treasury as their own personal bank account.”
“Perpetrators of identity theft schemes are motivated by greed, acting as if they are above the law and with total disregard for the consequences to the victims,” said Special Agent in Charge Kelly. “The actions of criminals, such as Mr. Nelson, create distressing hardships for many innocent taxpayers and have a devastating impact on the entire community.”
“Postal Inspectors are proud to join our federal law enforcement partners to bring this case to a successful resolution,” said Acting Inspector in Charge McGinnis. “By joining forces, we are able to bring justice to those who would misuse the U.S. mail in order to defraud innocent citizens and the U.S. government.”
“I am proud of the work done by our Office of Investigations, cooperating with other law enforcement organizations in detecting and deterring this fraud and protecting the integrity of the nation’s tax system,” said Assistant Inspector General Phillips.
“Our success in this case and similar investigations is a result of our close work with law enforcement partners,” said Special Agent in Charge Michalko. “The Secret Service worked closely with the Internal Revenue Service and the Department of Justice to share information and resources that ultimately brought James Nelson to justice. This case demonstrates there is no such thing as anonymity for those engaging in identity theft and fraudulent schemes.”
According to the government’s evidence, Nelson was among participants in a massive and sophisticated identity theft and false tax refund scheme involving an extensive network of more than 130 people, many of whom were receiving public assistance. The refunds were sought since 2006, often in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners. In other cases, the refunds were sent to people who were willing participants in the scheme. The refunds listed more than 400 “taxpayer” addresses in the District of Columbia.
From December 2007 through January 2012, according to the government’s evidence, Nelson used his residential addresses, then in the District of Columbia, for the receipt of some of the fraudulently obtained tax refunds. He also recruited others to receive fraudulent refunds at their addresses. For example, Nelson paid one woman about $150 per check for each refund check delivered to her residential address in the District of Columbia.
Approximately 360 fraudulent federal income tax returns were filed with the IRS listing the addresses that were under Nelson’s control. The returns sought refunds of approximately $908,500. As a result, the IRS sent out 238 checks, totaling about $524,795, and 184 of those checks, totaling $432,804, were ultimately cashed.
Nelson also recruited others to negotiate at least 86 other refund checks, totaling approximately $203,222, causing a total intended loss to the U.S. Treasury of more than $1.1 million.
In announcing the plea, U.S. Attorney Machen, Principal Deputy Acting Assistant Attorney General Ciraolo, Special Agent in Charge Kelly, Acting Inspector in Charge McGinnis, Assistant Inspector General Phillips and Special Agent in Charge Michalko commended those who investigated the case. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including former Assistant U.S. Attorney Sherri L. Schornstein and Paralegal Specialist Donna Galindo. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Ellen Chubin Epstein of the District of Columbia’s Fraud and Public Corruption Section and Trial Attorneys Jessica N. Moran and Jeffrey B. Bender of the Tax Division, who are prosecuting the case.
Waco Businessman Pleads Guilty to Federal Wire Fraud ChargesRead the Press Release
In Waco, Charles D. Jones, 61-year-old owner of Charles D. Jones Capital Management, Inc. (CDJCM), faces up to 20 years in federal prison after pleading guilty to wire fraud in connection with the theft of more than $8 million from his clients announced Acting United States Attorney Richard L. Durbin, Jr., U.S. Secret Service Special Agent in Charge Kathleen Hickman, Dallas Field Office, and Texas Department of Public Safety Director Steve McCraw.
According to court records, CDJCM provided fee-only personalized financial planning and investment management for individuals, trusts, foundations and retirement plans. From 2005 to 2012, the defendant stole money and property from his victim clients and used the stolen proceeds for his own personal benefit. To further perpetuate his Ponzi scheme, the defendant created false account statements and mailed or e-mailed them to his victim clients. Jones also caused fraudulent tax returns to be filed in order to cover up his theft. By the defendant’s own estimate, he stole approximately $8,378.524.94 from his clients.
Jones remains on bond pending sentencing which is scheduled for 1:00pm on April 15, 2015, before United States District Judge Walter S. Smith, Jr., in Waco.
This investigation was conducted by the United States Secret Service and the Texas Department of Public Safety Special Crimes Unit. Assistant United States Attorney Greg Gloff is prosecuting this case on behalf of the Government.
Virginia man gets nearly six years for armed robbery of drug dealerRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced today that William Seltzer, 29, of Wytheville, Virginia, was sentenced to 70 months in federal prison.
In July 2013, Seltzer pleaded guilty to aiding and abetting armed robbery affecting interstate commerce. He admitted that on April 22, 2012, he, Robert Barcliff, Keith Glenn and Robert Jared Smith carried out an armed home-invasion robbery in Marmet, West Virginia. They believed the victim to be a drug dealer in possession of oxycodone pills or proceeds from drug sales. Seltzer worked with Barcliff to set up the robbery, and provided information to him about the location of the victim. After receiving word from Seltzer that it was time to enter the apartment, Barcliff and Smith entered the apartment brandishing firearms to carry out the robbery. They stole drug proceeds from the victim before fleeing. A firearm was discharged during the robbery.
This robbery was part of a larger conspiracy committed by Robert Barcliff and his associates. Beginning in the fall of 2011, Barcliff, Keith Glenn, Brandon Davis, Darrell Gillespie, Jamaa Johnson and others conspired and agreed to commit armed home-invasion robberies of drug dealers in West Virginia, Virginia, Pennsylvania and Tennessee. The objective of the conspiracy and robberies was to steal drugs, drug proceeds and firearms. The group targeted drug dealers because they believed them not likely to call the police.
Barcliff was recently sentenced to 16 years in federal prison. Johnson and Gillespie are scheduled to be sentenced in May 2015.
United States District Judge Thomas E. Johnston imposed the sentence.
The case was investigated by the Federal Bureau of Investigation, South Charleston Police Department and Charleston Police Department. Assistant United States Attorney Monica D. Coleman handled the prosecution.
###