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Monday 29 December 2014
Denver Man Arrested for Production and Transportation of Child PornographyRead the Press Release
UPDATE: December 31, 2014
Today U.S. District Court Judge R. Brooke Jackson granted a stay of release on bond in U.S. v. Michael Yellowhorse after the U.S. Attorney’s Office appealed a decision made by a U.S. Magistrate Judge to release the defendant on a $25,000 unsecured bond with numerous conditions, including that he be held in home detention with electronic monitoring. Yellowhorse was arrested last week based on a Criminal Complaint for the production and transportation of child pornography.
DENVER – Michael Yellowhorse, born in 1987 and of Denver, Colorado, was arrested last week based on a Criminal Complaint for the production and transportation of child pornography, the U.S. Attorney’s Office and the U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) announced. Yellowhorse appeared this afternoon before U.S. Magistrate Judge Boyd N. Boland for a preliminary hearing and detention hearing. Magistrate Judge Boland found during the preliminary hearing that probable cause existed that Yellowhorse committed the crimes alleged in the Criminal Complaint. The Magistrate Judge then ordered the defendant released on bond. The government is considering filing a request for emergency stay of the release order to obtain a review of the conditions of the defendant’s release.
Yellowhorse made his initial appearance before a Magistrate Judge on the day he was arrested, December 23, 2014. At that hearing he was advised of his rights and the charges pending against him. The preliminary hearing and detention hearing occurred today, Monday, December 29, 2014.
According to the Criminal Complaint, Yellowhorse is charged with two counts of production of child pornography and one count of transportation of child pornography. During the hearings, evidence was presented that the defendant was investigated for posting images to a photo-sharing website popular amongst individuals interested in trading child pornography. Additionally, evidence was presented showing the defendant sent child pornography to an undercover investigator in Australia. Further investigation, to include preliminary analysis of the defendant’s cell phone and computer, revealed that the defendant created the child pornography he sent to the investigator in Australia.
If convicted, Yellowhorse faces not less than 15 years, not more than 30 years in federal prison, and a fine of not more than $250,000 for each of the two counts of producing child pornography. He faces not less than 5 years and not more than 20 years in prison, and up to a $250,000 fine for the one count of transportation of child pornography.
This case is being investigated by ICE HSI. The defendant is being prosecuted by Assistant U.S. Attorney Alecia Riewerts.
The charges are allegations, and the defendant is presumed innocent unless and until proven guilty.
A Criminal Complaint is a probable cause charging document. Anyone accused of committing a federal felony crime has a Constitutional right to be indicted by a federal grand jury.
This case was brought as part of Project Safe Childhood (PSC), 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 Attorney’s? Offices and the Criminal Division?s Child Exploitation and Obscenity Section, PSC 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 PSC, please visit http://www.justice.gov/psc/ For more information about Internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab ?resources.?
Delaware County Man Charged with Receipt and Possession of Child PornographyRead the Press Release
Paul LeClere, age 50, of Hopkinton, Iowa, has been charged with one count of receipt of child pornography and five counts of possession of child pornography. The charges are contained in an Indictment filed on December 17, 2014, in United States District Court in Cedar Rapids.
The Indictment alleges that, between 2003 and 2013, LeClere received and possessed child pornography.
If convicted, LeClere faces a mandatory minimum sentence of five years’ imprisonment and a possible maximum sentence of 110 years’ imprisonment, a $1,500,000 fine, a $600 special assessment, and at least five years and up to life on supervised release following any imprisonment.
LeClere appeared for a detention hearing on December 24, 2014, in federal court in Cedar Rapids and was released on bond. LeClere’s next appearance for trial is set for February 23, 2015.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
This case is being prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Scott County Sheriff’s Office, the Davenport Police Department, the Delaware County Sheriff’s Office, the Dubuque County Sheriff’s Office, the Clinton County Sheriff’s Office, and Homeland Security Investigations.
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.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 14-2054.Calera Man Pleads Guilty to Making a False StatementRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that MICHAEL GLENN VALLES, age 47, of Calera, Oklahoma, pled guilty to making a False Statement, in violation of Title 18, United States Code, Section 1014, punishable by not more than 30 years imprisonment and/or up to a $1,000,000.00 fine.
The charge arose from an investigation by the United States Department of Agriculture. The defendant was indicted in November, 2014.
The Indictment alleged that on or about January 22, 2010, within the Eastern District of Oklahoma, the defendant, knowingly made a false statement for the purpose of influencing the action of the United States Department of Agriculture, Farm Service Agency in connection with a security agreement in which the defendant listed $80,739.19 in value of cattle that he had purchased in August and September 2009 when in truth and in fact, as the defendant well knew, he had only purchased $27,178.91 worth of cattle during that time period.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report.
Assistant United States Attorney Melody Nelson represented the United States.
Bureau of Prisons Employee Admits Providing Mobile Phones to an Inmate at Federal Prison at Fort DixRead the Press Release
TRENTON, N.J. - A U.S. Bureau of Prisons employee today admitted providing two mobile phones to an inmate at Fort Dix Federal Correctional Institution (FCI Fort Dix), U.S. Attorney Paul J. Fishman announced.
Elizabeth M. Quinones, 30, of Willingboro, New Jersey, pleaded guilty before U.S. Magistrate Judge Tonianne J. Bongiovanni in Trenton federal court to an information charging her with one count of giving an inmate at FCI Fort Dix two mobile telephones.
According to documents filed in this case and statements made in court:
Quinones worked as a health services assistant at FCI Fort Dix, in Burlington County, New Jersey. Between May 2014 and June 2014, Quinones provided an FCI Fort Dix inmate with two mobile phones. Federal inmates housed at FCI Fort Dix are prohibited by federal statute from possessing mobile telephones.
The offense to which Quinones pleaded guilty is punishable by a maximum potential penalty of one year in prison and a $100,000 fine. Sentencing is scheduled for April 9, 2015.
U.S. Attorney Fishman credited special agents of the U.S. Department of Justice Office of the Inspector General, New Jersey Area Office, under the direction of Special Agent in Charge Ronald G. Gardella, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Eric W. Moran of the U.S. Attorney’s Office Special Prosecutions Division in Trenton.
14-461
Defense Counsel: Mark W. Catanzaro Esq., Trenton, N.J.
Benton County Man Sentenced to 5 Years for Failing to Register as A Sex OffenderRead the Press Release
A man who failed to register as a sex offender was sentenced today to five years in federal prison.
David Kimble, age 48, of Norway, Iowa, received the sentence after a September 25, 2014, guilty plea to one count of failing to register as a sex offender. At the guilty plea hearing, Kimble admitted that he moved from North Carolina to Iowa and did not register as a sex offender in Iowa. Kimble was required to register because of his 2004 Linn County conviction for assault with intent to commit sexual abuse.
Kimble was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Kimble was sentenced to 60 months’ imprisonment. A special assessment of $100 was imposed, and Kimble must also serve a five-year term of supervised release. He must comply with all sex offender registration and public notification requirements.
This case was prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the United States Marshals Service, the Linn County Sheriff’s Office, and the Cedar Rapids Police Department.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 14-77.Bank Branch Manager Sentenced to Two Years in Prison for Defrauding CustomersRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that today United States District Court Judge John E. Jones sentenced Tiffany K. Look, age 39, of Harrisburg, Pennsylvania, to 24 months in prison for mail fraud.
According to U.S. Attorney Peter Smith, at separate times between 2007 and 2013, Look was a branch manager at two area financial institutions, Mid Penn Bank and Members First Federal Credit Union. While at Mid Penn Bank, Look carried out a scheme to obtain money from a bank customer by taking out a fraudulent loan in the customer’s name. After she left Mid Penn Bank, and began working at Members First, Look continued the scheme by taking out fraudulent loans in the names of three customers of the credit union. Members First reported the fraud to law enforcement. Judge Jones ordered Look to be taken into custody to begin serving her sentence immediately. She was also ordered to pay restitution in the amount of $139,820.60.Charges were filed against Look in May 2014. She pled guilty later that month. The financial institutions cooperated with the investigation conducted by the United States Postal Inspectors and the Swatara Township and Hampden Township Police Departments. The case was prosecuted by Assistant United States Attorney Joseph J. Terz.
Wednesday 24 December 2014
Utility Company CFO Pleads Guilty to Defrauding Bank, IRSRead the Press Release
ERIE, Pa. - A former resident of Erie, Pennsylvania, pleaded guilty in federal court to charges of bank fraud and tax evasion, United States Attorney David J. Hickton announced today.
Brian M. Quimby, 48, pleaded guilty to two counts before Senior United States District Judge Maurice B. Cohill, Jr.
In connection with the guilty plea, the court was advised that while Quimby was employed as CFO of Thayer Power and Communications, he defrauded Key Bank. In addition, Quimby failed to file his income tax return for calendar year 2007.
Judge Cohill scheduled sentencing for May 4, 2015 at 11:00 a.m. The law provides for a total sentence of 35 years in prison, a fine of $1,250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued Quimby on bond.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation conducted the investigation that led to the prosecution of Quimby.
Second Conspirator Pleads Guilty in Lakeland SNAP Fraud RingRead the Press Release
Tampa, Florida - United States Attorney A. Lee Bentley, III announces that Basem Abualteen (48, Lakeland) pleaded guilty yesterday to conspiracy to defraud the United States. He faces a maximum penalty of five years in federal prison, and has agreed to make restitution (along with co-conspirators) in the amount of $2,110,778 to the U.S. Department of Agriculture (USDA) and the Food Nutrition Service.
According to the plea agreement, from January 2013 to August 27, 2014, Abualteen conspired with Hamzeh Abu-Aish and Shoeneikia Abu-Aish to defraud the USDA’s food stamp program, now known as the Supplemental Nutrition Assistance Program (SNAP). Hamzeh Abu-Aish was the owner of Finest Meat Market d/b/a Finest Super Market in Lakeland. Abualteen and Shoeneikia Abu-Aish worked as Finest store clerks beginning in about January 2013. Hamzeh Abu-Aish instructed the clerks to purchase SNAP benefits from SNAP recipients in exchange for cash and a commission, a practice called “cash back” or “discounting.” For example, a SNAP recipient would approach a store clerk and ask for $100 in cash. The store clerk would charge approximately $200 to the recipient’s Electronic Benefit Transfer (EBT) card, and then give the SNAP recipient $100 in cash. This practice is strictly prohibited by SNAP regulations. During the scheme, Finest SNAP EBT redemptions far exceeded the national and state averages of similarly sized stores. For example, during July 2013, the average SNAP benefit redemptions for a similarly sized store were $7,059 in Florida, and $6,490 nationally. Finest had $160,821 in SNAP benefit redemptions for the month of July alone. During Abualteen’s participation in the scheme, Finest submitted and received approximately $2,110,778 in fraudulent SNAP EBT redemptions.
On December 3, 2014, Shoenekia Abu-Aish pleaded guilty to conspiracy to commit wire fraud in connection with the same fraudulent SNAP scheme. On the same date, a grand jury returned a two count indictment charging Hamzeh Abu-Aish with conspiracy to commit wire fraud and conspiracy to defraud the United States.
This case was investigated by the Federal Bureau of Investigation and the U.S. Department of Agriculture-Office of Inspector General (USDA-OIG). It is being prosecuted by Assistant United States Attorney Mark E. Bini.
Orange County Man Charged with Defrauding Bay Area BanksRead the Press Release
SAN FRANCISCO –Daniel Rosenthal was arraigned today on charges of submitting fraudulent loan applications to three Bay Area banks using a false name and then laundering more than $2.5 million in fraudulently obtained proceeds, announced United States Attorney Melinda Haag and Federal Bureau of Investigation Special Agent in Charge David Johnson.
A federal grand jury in San Francisco indicted Daniel Rosenthal on December 23, 2014. According to the Indictment, Rosenthal, 31, of Yorba Linda, Calif., submitted fraudulent loan applications to three Bay Area banks using a false name, false bank statements, and false financial statements in support of the loan applications. According to the Indictment, Rosenthal falsely claimed that the loans were to be used to finance Sunshine Daydream, an event planning business that he falsely claimed to own. The Indictment also alleges that after receiving the loan proceeds, Rosenthal used some of the proceeds to purchase gold and send some of the money to a bank in Cyprus and to third parties.
Rosenthal was first charged in a Criminal Complaint filed on December 9, 2014. He was arrested in Yorba Linda, Calif., on December 11, 2014. He made his initial appearance in federal court in Santa Ana, California, on December 11, 2014, where he was detained and ordered transported to the Northern District of California. Rosenthal first appeared in federal court in San Francisco on December 22, 2014. Today, Rosenthal was ordered detained by the Honorable Bernard Zimmerman, U.S. Magistrate Judge, and is currently being held in the custody of the United States Marshal’s Service. Rosenthal is next scheduled to appear on January 12, 2015, at 2:00 p.m., for an initial appearance before the Honorable Vince Chhabria, U.S. District Court Judge.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted of bank fraud, Rosenthal faces a maximum sentence of 30 years in prison for each violation of 18 U.S.C. § 1344, plus restitution. If convicted of money laundering, Rosenthal faces a maximum sentence of 10 years in prison for each violation of 18 U.S.C. § 1957. If convicted of aggravated identity theft, Rosenthal faces a mandatory two-year sentence for each violation of 18 U.S.C. § 1028A . However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Denise Marie Barton is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Trina Khadoo. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Northern California Real Estate Investor Pleads Guilty to Bid Rigging and Fraud at Public Foreclosure AuctionsRead the Press Release
A Northern California real estate investor pleaded guilty for his role in bid rigging and fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Charles Rock was indicted on Dec. 3, 2014, in the U.S. District Court for the Northern District of California in Oakland, California. The indictment alleged that Charles Rock and others agreed not to compete at public foreclosure auctions in Contra Costa County, California, and diverted money to themselves that should have gone to mortgage holders and other beneficiaries. Charles Rock pleaded guilty to one count of bid rigging and two counts of mail fraud.
To date, 51 individuals have agreed to plead or have pleaded guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California. In addition, 21 real estate investors, including Charles Rock, have been charged in five multi-count indictments for their roles in bid-rigging and fraud schemes at foreclosure auctions in Alameda, Contra Costa, San Francisco, and San Mateo counties.
The indictment alleges, among other things, that as early as June 2008 until about January 2011, Charles Rock and others conspired to rig bids to obtain numerous properties sold at foreclosure auctions in Contra Costa County, negotiated payoffs for agreeing not to compete, held second, private auctions known as “rounds,” concealed those rounds and payoffs, and in the process, defrauded mortgage holders and other beneficiaries.
“This is the first post-indictment plea resulting from the investigation and marks a positive step forward in resolving the case,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “It is important for those who conspired to profit from rigged bids and illegal payoffs to take responsibility for their actions.”
“These charges demonstrate our continued commitment to investigate and prosecute individuals and organizations responsible for the corruption of the public foreclosure auction process,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “The FBI is committed to work these important cases and remains unwavering in our dedication to bring the members of these illegal conspiracies to justice.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than $1 million. Each count of mail fraud carries a maximum sentence of 20 years in prison and a $1 million fine.
Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties, California. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300, or call the FBI tip line at 415-553-7400.
Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established 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 nearly 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, please visit www.StopFraud.gov.
**The fraud charge(s) referenced in this press release were
subsequently dismissed on the government’s motion.**
Jury Finds Sacramento Man Guilty of Sex TraffickingRead the Press Release
SACRAMENTO, Calif. — Late Tuesday evening, a federal jury found a Sacramento man guilty of five counts of sex trafficking related to five victims, United States Attorney Benjamin B. Wagner announced.
After an 11-day trial before U.S. District Judge Troy L. Nunley, Percy Love III, 32, was convicted of three counts of sex trafficking by force, fraud and coercion, one count of sex trafficking of a minor, and one count of attempted sex trafficking of a minor.
This case is the product of an investigation by the FBI’s Child Exploitation Task Force, a multijurisdictional task force composed of representatives from the FBI and the Sacramento Police Department, with assistance from the Sacramento County District Attorney’s Office. Assistant United States Attorneys Michele Beckwith and Jason Hitt are prosecuting the case. Assistant U.S. Attorney Kyle Reardon, formerly with this office, prosecuted the case pretrial.
According to evidence produced at trial, Love targeted vulnerable young women and underage girls to work as prostitutes for him since at least 2007. The testimony of witnesses at trial, including the victims, revealed a pattern of conduct where Love used charm to recruit and brute force to control the women and girls who worked for him.
According to court documents, on July 22, 2013, Sacramento police officers were called to a report of domestic violence and found Love asleep in the front seat of a car with a woman, whose sister had called in the report. The woman explained to officers that she was in a “working relationship” with Love. She claimed that Love had beaten her many times, and she had bruises and cigarette burns on her hand, arm and stomach. Love was arrested that night for domestic violence and possession of Ecstasy.
On September 12, 2013, a federal grand jury indicted Love, charging him with two counts of sex trafficking by force, fraud, or coercion. After further investigation revealed more victims, a superseding indictment was brought on March 13, 2014. Love has been in custody since his arrest and represented himself during trial.
Sentencing is scheduled for March 12, 2015, before Judge Nunley. Love faces 15 years to life in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Former Napa Doctor Charged with Medicare Fraud and Distribution of Controlled SubstancesRead the Press Release
SAN FRANCISCO – Paul D. Woodward was arraigned yesterday for allegedly operating a scheme to defraud Medicare and allegedly distributing controlled substances, announced United States Attorney Melinda Haag, Office of Inspector General – Health and Human Services Special Agent in Charge Ivan Negroni, and Drug Enforcement Administration Special Agent in Charge Jeffrey J. Fitzpatrick.
A federal grand jury in San Francisco indicted Paul D. Woodward and Karen Kramer on December 4, 2014. The indictment remained under seal until December 11, 2014, when Kramer was arraigned on the charges. According to the Indictment, Woodward, 71, and Kramer, 54, both of Napa, Calif., were charged with conspiring to defraud Medicare by having Woodward write prescriptions to Kramer, at her request, for controlled substances, including fentanyl; Woodward falsely representing that the prescriptions were prescribed in the usual course of professional medical practice and for a legitimate medical purpose; and both Woodward and Kramer causing claims for those prescriptions to be submitted to Medicare for payment. Between January 2006 and June 2010, Medicare allegedly paid over $1.3 million for false and fraudulent prescriptions prescribed by Woodward to Kramer. Woodward is also charged with prescribing controlled substances, including oxycodone, hydromorphone, and hydrocodone, outside the usual course of professional medical practice and not for a legitimate medical purpose, to other patients.
Kramer was arrested on December 10, 2014, in Napa, and made her initial appearance in federal court in San Francisco on December 11, 2014. Kramer was ordered detained and is currently being held in the custody of the United States Marshal’s Service. Kramer will next appear before the Honorable Laurel Beeler, United States Magistrate Judge, on January 8, 2015, at 10:30 a.m. Woodward voluntarily appeared and made his initial appearance yesterday before the Honorable Bernard Zimmerman, United States Magistrate Judge. Woodward was released on a $100,000 secured bond. Both defendants are scheduled to appear on January 29, 2015, at 1:30 p.m., for an initial appearance before the Honorable William H. Orrick, U.S. District Court Judge.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted of the conspiracy to commit health care fraud or health care fraud charges, Woodward and Kramer face a maximum sentence of 10 years imprisonment and a fine of twice the gross gain or loss for each violation of 18 U.S.C. § 1347 and 1349, plus restitution if ordered. If convicted of the distribution of a controlled substance charges, Woodward faces a maximum sentence of 20 years imprisonment and a fine of $1 million. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Denise Marie Barton is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Maryam Beros, Trina Khadoo, and Bridget Kilkenny. The prosecution is the result of an investigation by Office of Inspector General – Health and Human and the Drug Enforcement Administration, with the assistance of the California Department of Insurance, the Napa County Sheriff’s Office, and the Napa Police Department.
Aurora Drug Dealer Is Sentenced to 54 Months in Federal Prison for Distribution of Cocaine and Money LaunderingRead the Press Release
DENVER – Robert Bellender, age 39, of Aurora, Colorado, was sentenced this week by U.S. District Court Judge Christine M. Arguello to serve 54 months in federal prison for possession with intent to distribute cocaine and money laundering, federal authorities announced. Following his prison sentence, Bellender was ordered to serve 5 years on supervised release. Bellender was taken into custody at the conclusion of the sentencing hearing.
Bellender was originally charged by a criminal complaint on May 10, 2013, followed by a superseding indictment on June 18, 2013. He then plead guilty on July 29, 2014. Other defendants charged in the superseding indictment include Korian Bascombe (aka k-Mac), Victor Rivas-Pinzon, Andrew T. Sorensen and Bruce Thomas. Sorensen pled guilty and was sentenced to time served. Rivas-Pinzon and Thomas plead guilty and were sentenced to 42 and 38 months in prison, respectively. Bascombe pled guilty on September 9, 2014 and scheduled to be sentenced on January 16, 2014 by Judge Arguello.
According to information contained in court documents, including the stipulated facts contained in Bellender’s plea agreement, the investigation started in October of 2011 and continued through the date of Bellender’s arrest on May 28, 2013. Numerous cocaine purchases from Bellender were made by a DEA undercover agent. Through investigative techniques, agents noted that codefendants Thomas, Sorensen and numerous other individuals, both known and unknown, were ordering quantities of powder and crack cocaine from Bellender on numerous occasions.
Bellender’s initial supplier of cocaine stopped distributing to him. At that point, Bellender began to purchase distribution quantities of powder cocaine and crack cocaine from Bascombe who was in turn being supplied with powder cocaine by Rivas-Pinzon. Bellender was selling both forms of cocaine during this entire period. Bellender and Bascombe were converting or “cooking” powder cocaine to convert it into the crack form.
Based on the investigation of the Front Range Task Force, which includes DEA, IRS CI and Aurora Police Department, from October of 2011 through May of 2013, Bellender and his coconspirators purchased and distributed or sold a conservatively estimated 20 kilograms or more of cocaine and 5 kilograms or more of crack cocaine. Bellender was purchasing cocaine from Bascombe for $1,200 per ounce. Twenty kilograms is the equivalent of approximately 705 ounces.
This case was investigated by agents with the Front Range Task Force which includes the Drug Enforcement Administration, IRS Criminal Investigation (IRS CI) and the Aurora Police Department.
The case is being prosecuted by Assistant U.S. Attorney James R. Boma.
Tuesday 23 December 2014
Youngstown, Ohio Man Convicted in Bath Salts and Synthetic Drug Distribution OperationRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – John Skruck, 59, of Youngstown, Ohio, was convicted in federal court for his role in distributing bath salts and synthetic drugs through local retail stores, United States Attorney William J. Ihlenfeld, II, announced today.
Skruck was a manager of the Hot Stuff Cool Things retail shops in Clarksburg and Buckhannon. He admitted that he participated in a scheme to distribute bath salts. Skruck further admitted to structuring financial transactions to shield more than $200,000.00 from the reporting requirements of the Internal Revenue Service throughout 2012.
Skruck pled guilty to one count of “Drug Conspiracy,” for which he faces 20 years in prison and a fine of up to $1,000,000.00. He also pled guilty to one count of “Structuring Monetary Transactions to Evade the Reporting Requirement,” for which he faces up to ten years in prison and a fine of up to $500,000.00. He also agreed to forfeit multiple parcels of real property, U.S. currency and bank accounts, vehicles, heavy equipment, a trailer, and a professional embroidery machine. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Three others have already been sentenced in connection with the drug distribution operation. Jeffrey J. Paglia, of Clarksburg, West Virginia, owner of the Hot Stuff Cool Things store in Rosebud Plaza, was sentenced to 87 months in prison. Jeremia J. Phillips and Derrick L. Calip were each sentenced to 21 months in prison.
Assistant U.S. Attorneys Robert McWilliams and Shawn Morgan are prosecuting the case on behalf of the government. The Internal Revenue Service Criminal Investigations, the Three Rivers Drug and Violent Crime Task Force, and the Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, are leading the investigation.
U.S. District Judge Irene M. Keeley presided.
- Woodlands Man Charged in Oil and Gas Investment Fraud
Wisconsin Man Sentenced in KBIC Child Sexual Abuse CaseRead the Press Release
MARQUETTE, MICHIGAN – Douglas Emil Kugler, Jr., 34, of Eagle River, Wisconsin, was sentenced to 71 months in federal prison for abusive sexual contact with a child under twelve years old, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge R. Allan Edgar ordered Kugler to serve 20 years of supervised release following completion of his prison term, and to pay a $100 special assessment.
The sentencing followed Kugler’s plea of guilty to the charge on August 13, 2014. The charge arose from an incident that occurred at a residence on Keweenaw Bay Indian Community reservation land between September 2004 and May 2006 involving Kugler, a non-Indian, and a boy between the ages of four and five. The incident came to light in December 2011, when the victim first disclosed what had happened to him. In sentencing Kugler, Judge Edgar found that Kugler had engaged in a pattern of prohibited sexual conduct with children.
The Keweenaw Bay Indian Community Tribal Police and the FBI investigated the case. Assistant U.S. Attorney Paul D. Lochner prosecuted the case..
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Wisconsin Man Sentenced in KBIC Child Sexual Abuse CaseRead the Press Release
MARQUETTE, MICHIGAN – Douglas Emil Kugler, Jr., 34, of Eagle River, Wisconsin, was sentenced to 71 months in federal prison for abusive sexual contact with a child under twelve years old, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge R. Allan Edgar ordered Kugler to serve 20 years of supervised release following completion of his prison term, and to pay a $100 special assessment.
The sentencing followed Kugler’s plea of guilty to the charge on August 13, 2014. The charge arose from an incident that occurred at a residence on Keweenaw Bay Indian Community reservation land between September 2004 and May 2006 involving Kugler, a non-Indian, and a boy between the ages of four and five. The incident came to light in December 2011, when the victim first disclosed what had happened to him. In sentencing Kugler, Judge Edgar found that Kugler had engaged in a pattern of prohibited sexual conduct with children.
The Keweenaw Bay Indian Community Tribal Police and the FBI investigated the case. Assistant U.S. Attorney Paul D. Lochner prosecuted the case..
Westminster Man Sentenced to 35 Years in Federal Prison for Transportation and Possession of Child PornographyRead the Press Release
DENVER -- Gregory Lynn Hopson, age 44, of Westminster, Colorado, was sentenced today by U.S. District Court Judge Lewis T. Babcock to serve 420 months (35 years) in federal prison for the transportation and possession of child pornography, to run concurrently with a Colorado state prison sentence for a prior felony conviction of sex assault on a child by a person in a position of trust, U.S. Attorney John Walsh and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Special Agent in Charge David Thompson announced. Following his prison sentence, Hopson was ordered to serve lifetime supervised release, and register as a sex offender. He was also ordered to pay restitution to the victim of his crime. Hopson, who appeared at the hearing in custody, was remanded at its conclusion.
Hopson was indicted by a federal grand jury on October 24, 2012. On September 25, 2013, Hopson was named in a superseding indictment. On September 29, 2014, Hopson pled guilty before Judge Babcock to the transportation and possession of child pornography. He was sentenced today, December 23, 2014. Hopson is currently serving a state prison sentence of 16 years to life for his second violation of probation for a sex assault on a child conviction out of Boulder County, Colorado.
According to the stipulated facts contained in the plea agreement, on March 5, 2011, special agents from ICE executed a search warrant at an address in Westminster. A resident at the address in question was a registered sex offender, on probation for sex assault on a child by a person in a position of trust in 2000. The defendant had admitted in that case to sexually abusing two children under the age of 12.
During the search HSI agents seized a computer and CD-ROMs. After un-encrypting the data, agents found a well-organized collection of thousands of images and videos of child pornography. The material depicted children as young as infants being sexually abused. One of the CD-ROMs contained images and videos of a minor child under the age of 12 with whom the defendant was in a position of trust. The images depicted the defendant engaged in sexually explicit conduct with the child or depicted the child’s genitalia in a lewd and lascivious way. It was further determined that Hopson exchanged child pornography with others. HSI agents uncovered approximately 300 emails that the defendant had sent or received – and attached to those emails were approximately 1,700 images and videos of child pornography.
“Defendant Hopson, by his repeated acts of victimization and criminal conduct, has made clear that he poses a real and present danger to children and to society,” said U.S. Attorney John Walsh. “The sentence imposed today will neutralize this dangerous perpetrator for 35 years and is a true victory for the community and for Colorado’s children.”
“Insidious crimes like this steal the innocence and youth of our nation’s children,” said Assistant Attorney General Caldwell. “The Department of Justice is committed to investigating, prosecuting and incapacitating those who prey upon the most vulnerable members of our society.”
“Anyone who collects and shares child pornography victimizes the most innocent and most vulnerable members of our society,” said Special Agent in Charge David Thompson, Homeland Security Investigations (HSI) in Denver. “This lengthy prison sentence recognizes the trauma that predators inflict on helpless children.”
This case was investigated by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI).
Hopson was prosecuted by Assistant U.S. Attorney and Chief of the Special Prosecutions Section, Judith A. Smith, Assistant U.S. Attorney Beth N. Gibson, and Department of Justice Child Exploitation and Obscenity Section Trial Attorney Keith Becker.
This case was brought as part of Project Safe Childhood (PSC), 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 Attorney’s? Offices and the Criminal Division?s Child Exploitation and Obscenity Section, PSC 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 PSC, please visit http://www.justice.gov/psc/ For more information about Internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab ?resources.?
Week in Review – South BendRead the Press Release
South Bend, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITIONS
- Alfred Frank Dillard, 54, of South Bend, Indiana was sentenced to 12 months and 1 day imprisonment with 2 years supervised release after pleading guilty to the felony offense of being a felon in possession of a firearm. According to documents filed in this case, on October 27, 2013, Dillard was stopped on US31 in Fulton County, Indiana. When stopped, he was found to be in possession of an AK-47 type rifle, specifically a SKS, with collapsible stock and bayonet that was carried in his truck. This was a 7.62X39mm semi-automatic rifle. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Donald Schmid.
- Clifton Valentius Holiday, 27, of Winona Lake, Indiana was sentenced to 84 months imprisonment with 2 years supervised release after pleading guilty to the felony offense of being a felon in possession of a firearm. According to documents filed in this case, on March 2, 2014, officers while responding to a fight call at a residence in Winona Lake, Indiana found a Ruger handgun with a jammed round in the breach belonging to the defendant. Additional magazines and rounds of ammunition were also found. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Jesse Barrett.
Week in Review – HammondRead the Press Release
Hammond, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS
- D’Andre Lamonte Hall, 33, of Gary, Indiana pled guilty to the felony offense of Possessing with Intent to Distribute Cocaine. This charge was filed as a result of an investigation by the Federal Bureau of Investigation. Sentencing has been set for March 20, 2015. This case is being prosecuted by Assistant United States Attorney Nicholas Padilla.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
Virginia Woman Charged with Identity TheftRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania, announced that a criminal information was filed today charging Adrea Cannon, age 21, of Portsmouth, Virginia with aggravated identity theft in connection with the unlawful use of a bank account number belonging to a legitimate account holder on or about March 12, 2014.
Cannon faces a statutorily mandated term of imprisonment of 24 months and a fine in the amount of $250,000.The investigation was conducted by the United States Secret Service. The prosecution is assigned to Assistant United States Attorney Michelle Olshefski.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
United States Congressman Michael Grimm Pleads Guilty to Causing the Filing of a False and Fraudulent Tax ReturnRead the Press Release
Earlier today, United States Congressman Michael Grimm pleaded guilty at the federal courthouse in Brooklyn, New York, to aiding and assisting the preparation of a false tax return. Since 2011, Grimm has served as a member of the United States House of Representatives representing New York’s 11th Congressional District, which includes the borough of Staten Island and parts of the borough of Brooklyn, in New York City. When sentenced, Grimm faces a prison term of up to three years. In connection with his guilty plea, Grimm also agreed to pay restitution to the Internal Revenue Service (IRS), the New York State Department of Taxation and Finance, and the New York State Insurance Fund (NYSIF). Today’s guilty plea proceeding took place before the Honorable Pamela K. Chen, United States District Judge, Eastern District of New York.
The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office, and Richard Weber, Chief, IRS- Criminal Investigation.
“With today’s guilty plea, Michael Grimm has admitted that while running his business he chose lies and deception over honest dealings with federal and state authorities as well as his own employees. In addition to pleading guilty to causing the filing of a false tax return for his restaurant, Grimm has signed a statement admitting to the conduct underlying every charge filed against him. Michael Grimm has now publicly admitted that he hired unauthorized workers whom he paid “off the books” in cash, took deliberate steps to obstruct the federal and state governments from collecting taxes he properly owed, cheated New York State out of workers’ compensation insurance premiums, caused numerous false business and personal tax returns to be filed for several years, and lied under oath to cover up his crimes. He will now be held to account for all of his actions that led to those charges,” said U.S. Attorney Lynch. “This guilty plea makes clear that we and our partners in the FBI and the IRS will vigorously investigate and prosecute fraud wherever we find it, and that no one is above the law.” Ms. Lynch expressed her appreciation to the Public Integrity Section of Department of Justice, the Northern Criminal Enforcement Section of the Tax Division of the Department of Justice, the New York State Insurance Fund, the New York State Department of Taxation and Finance, and the New York State Department of Labor for their assistance in the investigation.
FBI Assistant Director-in-Charge Venizelos stated, “As an elected official, Grimm was responsible for deciding how taxpayers' money should be spent, yet he chose not to pay his fair share of taxes while operating his business. Adding insult to injury, while serving as a Member of Congress, Grimm lied under oath in an effort to conceal his criminal activity. The public expects their elected officials at all levels of government to behave honorably, or at a minimum, lawfully. As his guilty plea demonstrates, Grimm put self-interest above public service.”
Richard Weber, Chief, IRS-Criminal Investigation stated, “The public expects their elected officials to meet their tax obligations before they take office, while they hold office and when they leave office. Today, Mr. Grimm admitted to breaching the public's trust by fraudulently underreporting $900,000 in restaurant gross receipts and lowering payroll taxes through 'off-the-book' payments. As the only law enforcement agency with the authority to investigate federal tax crimes, IRS-Criminal Investigation is committed to ensuring that everyone pays their fair share. In the eyes of the law, public officials are not above the citizens they serve.”
In connection with his guilty plea, Grimm entered into a stipulation of facts, filed with the Court today, that acknowledged the scope of his criminal conduct. As part of that stipulation of facts, Grimm admitted that:
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From 2007 through 2009, Grimm was a member in Healthalicious, a restaurant located in Manhattan.During that time period, Grimm oversaw the day-to-day operations of the restaurant, which included the reporting and distribution of the restaurant’s payroll.
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Grimm under-reported the true amount that Healthalicious earned, using a portion of those unreported receipts to pay the restaurant’s workers “off the books” in cash.With Grimm’s knowledge, the restaurant employed those who were not lawfully admitted to the United States and who were not authorized to work in this country.
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In total, Grimm concealed over $900,000 in Healthalicious’ gross receipts from the accountant who prepared and filed the restaurant’s tax returns.That accountant used the false information provided by Grimm to prepare and file false federal and state tax returns for Healthalicious.
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Grimm also failed to report the “off the books” cash wages he was paying to Healthalicious workers, which resulted in the restaurant paying lower federal and state payroll taxes.Some Healthalicious employees received at least half of their wages in cash, while other workers were paid entirely in cash.Grimm tracked these payments in electronic spreadsheets, but failed to provide accurate information about the restaurant’s payroll to the payroll processing companies employed by the restaurant.As a result, Grimm caused the payroll processing companies to report to the IRS and the NYS Tax Department less than half of the wages Healthalicious actually paid its employees.
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Additionally, Grimm under-reported Healthalicious’ payroll to the New York State Insurance Fund (“NYSIF”), lowering the monthly workers’ compensation premium the restaurant paid to NYSIF.
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As part of his scheme, Grimm caused numerous false documents to be filed with federal and state tax authorities between 2007 and 2010, including: (1) Form 941 Employer’s Quarterly Federal Tax Returns for Healthalicious; (2) Form 1065 U.S. Return of Partnership Income tax returns for Healthalicious; (3) Forms W-2 reported annual wages of Healthalicious employees; (4) his Form 1040 U.S. Individual Income Tax Returns and Form IT-201 Resident Income Tax Returns; and (5) New York State Form ST-100 Quarterly Sales and Use Tax Returns.
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In total, Grimm’s conduct caused federal and New York State tax and NYSIF premium losses between $80,000 and $200,000.
Moreover, while a Member of Congress in January 2013, Grimm was deposed under oath by the attorney of a former employee in connection with a civil lawsuit relating to the labor practices at Healthalicious in which Grimm was a defendant. The lawsuit was pending in the United States District Court for the Southern District of New York. Today, as part of the stipulation of facts, Grimm admitted to testifying during the deposition to things that, at the time, he knew to be false. Specifically, Grimm testified during the deposition that Healthalicious employees had not been paid in cash, when he knew that restaurant employees had in fact been paid “off the books” in cash. Similarly, Grimm testified that, to the extent he used email in operating Healthalicious, he used a Yahoo account to which he no longer had access. Today, Grimm admitted that, at the time of the deposition, he in fact had access to an AOL account which he had used for Healthalicious related business and which contained many emails related to the restaurant.
The government’s case is being prosecuted by Assistant United States Attorneys Anthony M. Capozzolo, James D. Gatta, and Nathan Reilly.
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United States Congressman Michael Grimm Pleads Guilty to Causing the Filing of A False and Fraudulent Tax ReturnRead the Press Release
Earlier today, United States Congressman Michael Grimm pleaded guilty at the federal courthouse in Brooklyn, New York, to aiding and assisting the preparation of a false tax return. Since 2011, Grimm has served as a member of the United States House of Representatives representing New York’s 11th Congressional District, which includes the borough of Staten Island and parts of the borough of Brooklyn, in New York City. When sentenced, Grimm faces a prison term of up to three years. In connection with his guilty plea, Grimm also agreed to pay restitution to the Internal Revenue Service (IRS), the New York State Department of Taxation and Finance, and the New York State Insurance Fund (NYSIF). Today’s guilty plea proceeding took place before the Honorable Pamela K. Chen, United States District Judge, Eastern District of New York.
The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office, and Richard Weber, Chief, IRS- Criminal Investigation..
“With today’s guilty plea, Michael Grimm has admitted that while running his business he chose lies and deception over honest dealings with federal and state authorities as well as his own employees. In addition to pleading guilty to causing the filing of a false tax return for his restaurant, Grimm has signed a statement admitting to the conduct underlying every charge filed against him. Michael Grimm has now publicly admitted that he hired unauthorized workers whom he paid “off the books” in cash, took deliberate steps to obstruct the federal and state governments from collecting taxes he properly owed, cheated New York State out of workers’ compensation insurance premiums, caused numerous false business and personal tax returns to be filed for several years, and lied under oath to cover up his crimes. He will now be held to account for all of his actions that led to those charges,” said U.S. Attorney Lynch. “This guilty plea makes clear that we and our partners in the FBI and the IRS will vigorously investigate and prosecute fraud wherever we find it, and that no one is above the law.” Ms. Lynch expressed her appreciation to the Public Integrity Section of Department of Justice, the Northern Criminal Enforcement Section of the Tax Division of the Department of Justice, the New York State Insurance Fund, the New York State Department of Taxation and Finance, and the New York State Department of Labor for their assistance in the investigation.
FBI Assistant Director-in-Charge Venizelos stated, “As an elected official, Grimm was responsible for deciding how taxpayers' money should be spent, yet he chose not to pay his fair share of taxes while operating his business. Adding insult to injury, while serving as a Member of Congress, Grimm lied under oath in an effort to conceal his criminal activity. The public expects their elected officials at all levels of government to behave honorably, or at a minimum, lawfully. As his guilty plea demonstrates, Grimm put self-interest above public service.”
Richard Weber, Chief, IRS-Criminal Investigation stated, “The public expects their elected officials to meet their tax obligations before they take office, while they hold office and when they leave office. Today, Mr. Grimm admitted to breaching the public's trust by fraudulently underreporting $900,000 in restaurant gross receipts and lowering payroll taxes through 'off-the-book' payments. As the only law enforcement agency with the authority to investigate federal tax crimes, IRS-Criminal Investigation is committed to ensuring that everyone pays their fair share. In the eyes of the law, public officials are not above the citizens they serve.”
In connection with his guilty plea, Grimm entered into a stipulation of facts, filed with the Court today, that acknowledged the scope of his criminal conduct. As part of that stipulation of facts, Grimm admitted that:
- From 2007 through 2009, Grimm was a member in Healthalicious, a restaurant located in Manhattan. During that time period, Grimm oversaw the day-to-day operations of the restaurant, which included the reporting and distribution of the restaurant’s payroll.
- Grimm under-reported the true amount that Healthalicious earned, using a portion of those unreported receipts to pay the restaurant’s workers “off the books” in cash. With Grimm’s knowledge, the restaurant employed those who were not lawfully admitted to the United States and who were not authorized to work in this country.
- In total, Grimm concealed over $900,000 in Healthalicious’ gross receipts from the accountant who prepared and filed the restaurant’s tax returns. That accountant used the false information provided by Grimm to prepare and file false federal and state tax returns for Healthalicious.
- Grimm also failed to report the “off the books” cash wages he was paying to Healthalicious workers, which resulted in the restaurant paying lower federal and state payroll taxes. Some Healthalicious employees received at least half of their wages in cash, while other workers were paid entirely in cash. Grimm tracked these payments in electronic spreadsheets, but failed to provide accurate information about the restaurant’s payroll to the payroll processing companies employed by the restaurant. As a result, Grimm caused the payroll processing companies to report to the IRS and the NYS Tax Department less than half of the wages Healthalicious actually paid its employees.
- Additionally, Grimm under-reported Healthalicious’ payroll to the New York State Insurance Fund (“NYSIF”), lowering the monthly workers’ compensation premium the restaurant paid to NYSIF.
- As part of his scheme, Grimm caused numerous false documents to be filed with federal and state tax authorities between 2007 and 2010, including: (1) Form 941 Employer’s Quarterly Federal Tax Returns for Healthalicious; (2) Form 1065 U.S. Return of Partnership Income tax returns for Healthalicious; (3) Forms W-2 reported annual wages of Healthalicious employees; (4) his Form 1040 U.S. Individual Income Tax Returns and Form IT-201 Resident Income Tax Returns; and (5) New York State Form ST-100 Quarterly Sales and Use Tax Returns.
- In total, Grimm’s conduct caused federal and New York State tax and NYSIF premium losses between $80,000 and $200,000.
Moreover, while a Member of Congress in January 2013, Grimm was deposed under oath by the attorney of a former employee in connection with a civil lawsuit relating to the labor practices at Healthalicious in which Grimm was a defendant. The lawsuit was pending in the United States District Court for the Southern District of New York. Today, as part of the stipulation of facts, Grimm admitted to testifying during the deposition to things that, at the time, he knew to be false. Specifically, Grimm testified during the deposition that Healthalicious employees had not been paid in cash, when he knew that restaurant employees had in fact been paid “off the books” in cash. Similarly, Grimm testified that, to the extent he used email in operating Healthalicious, he used a Yahoo account to which he no longer had access. Today, Grimm admitted that, at the time of the deposition, he in fact had access to an AOL account which he had used for Healthalicious related business and which contained many emails related to the restaurant.
The government’s case is being prosecuted by Assistant United States Attorneys Anthony M. Capozzolo, James D. Gatta, and Nathan Reilly.
The Defendant:
MICHAEL GRIMM
Age: 44
Staten Island, New York
E.D.N.Y. Docket No. 14-CR-248 (PKC)
Uniontown Man Charged with Child Pornography PossessionRead the Press Release
PITTSBURGH - A resident of Fayette County, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of possession of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
The one-count indictment named Jeremy S. Burnworth, 35, of Uniontown, Pa., as the sole defendant.
According to the indictment, on or about June 2, 2014, Burnworth knowingly possessed images in digital files, the production of which involved the use of minors engaging in sexually explicit conduct, some of whom had not yet attained 12 years of age.
The law provides for a maximum total sentence of 20 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Jessica Lieber Smolar is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the Reserve Township Police Department, and the Pennsylvania Office of Attorney General conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
U.S. Attorney's Office Collects More Than $2.3 Billion in Civil and Criminal Actions in Fiscal Year 2014Read the Press Release
(PHILADELPHIA) - U.S. Attorney Zane David Memeger announced today that the Eastern District of Pennsylvania collected $2,373,688,153 in criminal and civil actions in Fiscal Year (FY) 2014.
The Department of Justice collected $24.7 billion in civil and criminal actions in FY 2014. The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.
“Recouping federal funds that were misspent due to fraud, including substantial health care and mortgage insurance funds, is a critical part of our mission,” said Memeger. “Our nation’s taxpayers deserve our most aggressive efforts to recover their hard-earned tax dollars that have been misappropriated. During fiscal year 2014, we continued to honor this mission with these tremendous resolutions and collections.”
The recoveries in the Eastern District of Pennsylvania include more than $1.6 billion in civil and criminal penalties paid by healthcare giant Johnson & Johnson (J&J) to resolve misbranding and unapproved use allegations. J&J paid a $1.273 billion civil settlement to resolve allegations of off-label marketing for Risperdal and Invega, as well as the alleged payment of kickbacks to physicians involving Risperdal. Janssen Pharmaceuticals, Inc. (Janssen), a subsidiary of J&J, paid $400 million in a criminal fine and forfeiture for promoting Risperdal to health care providers for unapproved uses.
The collections also include: a $56.5 million civil settlement with Shire Pharmaceuticals LLC to resolve False Claims Act allegations; a $150 million civil settlement with Amedisys Inc. and its affiliates to resolve False Claims Act allegations; a $7.3 million civil settlement with pharmaceutical company Astellas Pharma US, Inc., to resolve False Claims Act allegations; and a $172.9 million civil settlement with specialty pharmaceuticals company Endo Health Solutions, Inc. and its subsidiary Endo Pharmaceuticals Inc. (Endo), to resolve allegations of off-label marketing.
Additionally, the U.S. Attorney’s office in the Eastern District of Pennsylvania, working with partner agencies and divisions, collected approximately $15 billion in asset forfeiture actions in FY 2014, which includes a $13 billion settlement with JP Morgan - the largest settlement with a single entity in American history - to resolve federal and state civil claims arising out of the packaging, marketing, sale and issuance of residential mortgage-backed securities (RMBS).
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud and other misconduct and collected fines imposed on individuals and corporations for violations of federal health, safety, civil rights, and environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration, and Department of Education.
Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
U.S. Attorney's Office Collects $22,164,212.92 in Fiscal Year 2014Read the Press Release
CHARLOTTE, N.C. - U.S. Attorney Anne M. Tompkins announced today that the Western District of North Carolina (WDNC) collected $22,164,212.92 in criminal and civil actions in Fiscal Year (FY) 2014. Of this amount, WDNC collected $9,677,978.82 in criminal actions and $12,486,234.10 in civil actions.*
Attorney General Eric Holder announced last month that the Justice Department collected $24.7 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2014. The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.
“Every day, the Justice Department’s federal prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people,” said Attorney General Holder. “Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy. And this result shows the fruits of the Justice Department’s tireless work in enforcing federal laws; in protecting the American people from violent crime, national security threats, discrimination, exploitation, and abuse; and in holding financial institutions accountable for their roles in causing the 2008 financial crisis.”
“The men and women of the U.S. Attorney’s Office for the Western District of North Carolina are dedicated public servants tasked with an important mission: to enforce the laws of our nation and to ensure that criminals do not profit from their illegal activities. I am proud of their hard work and their commitment to recovering taxpayer dollars, securing restitution for victims of federal crimes and protecting the public from fraud, waste and abuse,” said U.S. Attorney Tompkins.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing criminal and civil actions and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. Criminal actions comprise criminal fines, special assessments and restitution. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. For example, in FY 2014, in US v. Martin, WDNC collected assets and cash from Gary D. Martin totaling $4,656,140.31, to be applied toward restitution for the victims of the scheme. WDNC prosecuted Martin for his involvement in the $32.5 million Queen Shoals Ponzi scheme. Martin was sentenced in March 2013 to 10 years in prison and was ordered to pay $31,707,038 as restitution. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
In FY 2014, the largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education. In WDNC, in US vs. Mark Le, the office collected $2.1 million of its $6.2 million civil settlement with Dr. Le, on civil fraud allegations arising from the submission of fraudulent reimbursement claims to Medicare and Medicaid for medically unnecessary diagnostic tests and procedures.
Additionally, the Western District of North Carolina worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $850,830,833.59 in cases pursued jointly with these offices. Of this amount, $850,786,750 was collected in civil actions and $44,083.59 was collected in criminal actions. In FY 2014, in US v. Bank of America Corp., et al. (Mortgage Services Global Settlement), WDNC shared in on $850 million collected from Bank of America as part of the multi-district settlement with the nation’s five largest mortgage servicers – Bank of America, Wells Fargo, Citigroup, JPMorgan Chase, and Ally. As part of the 2012 settlement, the servicers agreed to pay a $25 billion to resolve allegations of abuse and fraud in mortgage loan servicing and foreclosures.
In addition to the criminal and civil actions, the U.S. Attorney’s office in Western District of North Carolina, working with partner agencies and divisions, collected $4,415,201 in asset forfeiture actions in FY 2014. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
* In measuring collections recovered in FY 2014, the figures necessarily include some cases that were resolved in previous years but the proceeds were collected in FY 2014. Similarly, the FY 2014 figures do not include some cases resolved in the 2014 fiscal year, for which collections will begin in FY 2015.
U.S. Attorney for Northern District of Texas Announces ResignationRead the Press Release
DALLAS, Texas —Sarah R. Saldaña has announced her resignation as United States Attorney for the Northern District of Texas, effective immediately. She was nominated by President Barack Obama to be Assistant Secretary of the U.S. Department of Homeland Security on August 28, 2014 and was confirmed by the United States Senate on December 16, 2014. The President signed her commission last Thursday, December 18, and the Honorable Chief District Judge Jorge Solis administered the oath of office to her this afternoon.
“I am overwhelmed by the outpouring of good wishes and kind remarks from the North Texas law enforcement and citizen community,” Saldaña said. “I have never had a greater privilege than to serve this community as United States Attorney. And at this particular time, when the perils faced by law enforcement are heightened even beyond that which they face every day, I offer my utmost gratitude and admiration for the extraordinary service provided by police departments, sheriff’s offices, and all state and federal officers everywhere, particularly those with whom I have served side-by-side for the last 10 years in the 100 counties of this district.”
Saldaña has served as United States Attorney for the Northern District of Texas since September 29, 2011. Prior to that appointment, she served as Deputy Criminal Chief of the District’s Major Fraud/Public Corruption Section, having joined the office in 2004. As United States Attorney, Saldaña has directed some of the most high-profile and successful prosecutions in the country. Moreover, faced with significant challenges during her tenure, including hiring freezes, an unprecedented sixteen-day government shutdown, and new Department of Justice policies aimed at managing limited resources on the most important federal law enforcement priorities, Saldaña’s office actually increased the number of cases prosecuted by 51% from 2011 to 2014.
Most recently, Saldaña served on the Attorney General’s Advisory Committee as one of 17 United States Attorneys appointed by the AG to advise him on policy, management and operational issues affecting the Department of Justice.
From 1985 to 1999, Saldaña was an Attorney at Haynes and Boone, LLP and Baker Botts LLP. She clerked for Judge Harold Barefoot Sanders in U.S. District Court for the Northern District of Texas from 1984 to 1985. From 1974 to 1981, she worked for several federal agencies including the Equal Employment Opportunity Commission, the Department of Labor, and the Department of Housing and Urban Development. She received her J.D. from Southern Methodist University and her B.A. from Texas A&I University.
Upon Saldaña’s departure, First Assistant United States Attorney John R. Parker will be appointed Acting United States Attorney until a new United States Attorney is selected.
The United States Attorney’s Office for the Northern District of Texas has prosecutive responsibility over 100 counties in the northern and western areas of Texas, encompassing nearly 96,000 square miles and a population in excess of seven million. The District is headquartered in Dallas and has staffed offices in Fort Worth, Lubbock, Abilene, and Amarillo, Texas.
Two New Haven Men Sentenced to Federal Prison for Roles in Gang-related Crack Cocaine Distribution RingRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that two New Haven men involved in a gang-related crack cocaine distribution ring were sentenced today by U.S. District Judge Alvin W. Thompson in Hartford. MUJAHID MUHAMMED, also known as “Doughboy,” 29, was sentenced to 120 months of imprisonment, followed by five years of supervised release, and GREGORY TEEL, also known as “Detwan,” 36, was sentenced to 58 months of imprisonment, followed by three years of supervised release.
According to court documents and statements made in court, this matter stems from an investigation conducted by the FBI New Haven Safe Streets Task Force into drug distribution and related gang activity in The Hill neighborhood of New Haven. The investigation, which included the use of court-authorized wiretaps, revealed that members and associates of the Southside Bloods were distributing large quantities of crack cocaine. MUHAMMED was the leader of the organization in New Haven.
On August 7, 2013, MUHAMMED pleaded guilty to one count of conspiracy to possess with intent to distribute 280 grams or more of cocaine base (“crack”), and on December 4, 2013, TEEL pleaded guilty to one count of conspiracy to possess with intent to distribute a quantity of cocaine base.
Eight other individuals were charged as a result of this investigation. All have pleaded guilty.
This matter was investigated by the FBI’s New Haven Safe Streets Task Force, including the New Haven, Hamden and Milford Police Departments, and the State of Connecticut Department of Correction. The case is being prosecuted by Assistant U.S. Attorneys Anthony Kaplan and Gordon Hall.
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[email protected]Two Men Charged with Operating Multimillion Dollar Fraud SchemeRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that a federal grand jury in New Haven has returned an 11-count indictment charging DAVID C. JACKSON, also known as “C. David Manns,” “Charles Jackson” and “Andrew D. Smithson,” 53, and ALEX HURT, also known as “Alex Dante,” 45, with various offenses related to an advance fee fraud scheme that defrauded individuals out of several million dollars.
The indictment was returned yesterday. JACKSON, who has resided in Maryland, Ohio and Pennsylvania, has been detained since his arrest on a criminal complaint on August 26, 2014. HURT, recently of Dover, Massachusetts, has been ordered to report to the District of Connecticut for his arraignment.
As alleged in the indictment and in previously-filed court documents, in approximately September 2009, JACKSON, using the alias “C. David Manns,” established Jalin Realty Capital Advisors, LLC, using a business address in Dayton, Ohio. In 2011, JACKSON changed the name of his business to American Capital Holdings, LLC, using business addresses in Pittsburgh, Pennsylvania. Soon after changing the business name, JACKSON began introducing himself to victim clients as “Charles Jackson.”
HURT held himself out as Vice President of Brightway Financial Group, LLC, a company that used a business addresses in Grapevine, Texas.
The indictment alleges that JACKSON, HURT and others defrauded individuals, including Connecticut residents, who wired funds to them in anticipation of receiving large business loans. The upfront fees were alternately described as “application fees,” “collateral fees” or “commitment fees.” The victims were promised a refund of the upfront fees if their loan transactions were not completed. In order to convince victim-borrowers that the loans were legitimate and Jalin and ACH had successfully secured loans in the past, JACKSON provided victims and potential victims the name and phone number of a co-conspirator and told them that they could contact his co-conspirator for a reference. After she was contacted, the co-conspirator falsely represented to victims and potential victims that she had, in fact, received funding from JACKSON for a construction loan, and that she had successfully done a project financed with her co-conspirator and Jalin.
Through this alleged scheme, more than 20 individuals provided JACKSON and HURT with millions of dollars in advance fees for business loans that were never provided. Some of the individuals received partial refunds of the advance fees they had provided, but the refunds were made using fees that had been paid by other victims.
The indictment charges JACKSON and HURT with one count of conspiracy to commit wire fraud and multiple counts of wire fraud, offenses that carry a maximum term of imprisonment of 20 years on each count. The indictment also charges HURT with one count of making a false statement to federal law enforcement, which carries a maximum term of imprisonment of five years.
U.S. Attorney Daly stressed that an indictment is only a charge and is not evidence of guilt. Charges are only allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and the Ansonia Police Department, and is being prosecuted by Assistant U.S. Attorneys Anthony E. Kaplan and Michael S. McGarry.
Citizens with information that may be helpful to this ongoing investigation are encouraged to contact the FBI at (203) 777-6311.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
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[email protected]Trivillian's Pharmacy, owner charged with federal criminal healthcare and drug crimesRead the Press Release
Butterfield agrees to settle civil claims to Medicare and Medicaid for $1.1 million
CHARLESTON, W.Va. – United States Attorney Booth Goodwin today announced that Trivillian’s Pharmacy, a long-standing Kanawha City retail and compounding pharmacy, was charged by information with two counts of health care fraud and one count of misbranding drugs.
Paula Butterfield, Trivillian’s owner, operator and pharmacist-in-charge, was also charged by information with making a false statement in a healthcare matter.
Goodwin also announced his office has reached a civil settlement with Trivilllian’s and Butterfield, recovering $1.1 million on behalf of Medicare and West Virginia Medicaid. The settlement represents more than three times the loss suffered by Medicare and Medicaid.
“Cheating Medicare and Medicaid is really cheating the American taxpayer,” Goodwin said. “Thanks to this settlement, money that was taken from the taxpayers by fraud can now be used to provide health care to the many people who depend on these programs.”
One information alleges that Trivillian’s defrauded Medicare and Medicaid by dispensing compounded drugs while billing for more expensive brand name drugs, dispensing generic drugs while billing for more expensive brand name drugs, billing for drugs that were never dispensed and dispensing drugs that were compounded outside of a safe and clean environment. The information also charges Trivillian’s with dispensing compounded drugs under labels and identification numbers associated with name brand drugs.
Butterfield, a Medicare beneficiary, is charged in a separate information with submitting false claims to Medicare on her own behalf, seeking payment for drugs that were never dispensed to her.
If convicted, the pharmacy faces a fine of up to $1 million or twice the gross financial gain or twice the gross financial loss resulting from the pharmacy’s conduct, whichever is greater; not less than two years nor more than 10 years of probation; a mandatory special assessment of $800; and an order of restitution.
If convicted, Butterfield faces a maximum of five years in prison; a fine of $250,000, or twice the gross financial gain or twice the gross financial loss resulting from her conduct, whichever is greater; a term of supervised release of three years; a mandatory special assessment of $100; and an order of restitution.
The investigation was conducted by United States Health and Human Services, the United States Food and Drug Administration, the West Virginia State Police, the West Virginia Medicaid Fraud Control Unit and the Drug Enforcement Administration.
Assistant United States Attorney Eumi Choi is in charge of the prosecution, and Assistant United States Attorney John Gianola is responsible for the civil settlement.
Click here to view a copy of the Trivillian’s information
Click here to view a copy of the Butterfield information
Click here to view the civil settlementAn information is a formal court charge filed after the defendant has voluntarily waved their right to be indicted by a grand jury. The charges are merely accusations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Taos Pueblo Man Pleads Guilty to Federal Assault ChargeRead the Press Release
ALBUQUERQUE – Nathan Mondragon, 28, a member and resident of Taos Pueblo, N.M., pleaded guilty this morning to an indictment charging him with an assault resulting in serious bodily injury. The guilty plea was entered under a plea agreement with the U.S. Attorney’s Office.
Mondragon was arrested on Sept. 23, 2014, on a criminal complaint charging him with assault with a deadly weapon and assault resulting in serious bodily injury. According to the complaint, Mondragon assaulted another Taos Pueblo member on Sept. 14, 2014, in Taos County, N.M., on land owned by the Taos Pueblo Indian Tribe. The complaint alleges that Mondragon stabbed the victim multiple times before fleeing the crime scene. Mondragon was apprehended on Sept. 14, 2014, by New Mexico State Police and held in tribal custody until his arrest on federal charges.
On Oct. 21, 2014, Mondragon was indicted and charged with assault with a dangerous weapon and assault resulting in serious bodily injury.
During today’s proceedings, Mondragon entered a guilty plea to Count 2 of the indictment charging him with assault resulting in serious bodily injury. Mondragon admitted that on Sept. 14, 2014, he assaulted the victim by stabbing him with a knife at a location within Taos Pueblo.
At sentencing Mondragon faces a statutory maximum penalty of ten years in federal prison. He remains in federal custody pending his sentencing hearing which has yet to be scheduled.This case was investigated by the Northern Pueblos Agency of the BIA’s Office of Justice Services and the Taos Pueblo Tribal Police Department. Assistant U.S. Attorney David Adams is prosecuting this case.
Seven People Indicted in Cocaine Conspiracy Including Five Keeseville Residents, One Plattsburgh ResidentRead the Press Release
Investigation Yields Seizure of Over 500 Grams of Cocaine
PLATTSBURGH, NEW YORK –United States Attorney Richard S. Hartunian, Drug Enforcement Administration Special Agent in Charge James J. Hunt, and New York State Police Troop B Headquarters Bureau of Criminal Investigations Captain Robert S. LaFountain announced that a grand jury has indicted seven individuals on drug trafficking charges.
“The plague of addictive drugs like cocaine devastates lives and communities,” stated United States Attorney Richard S. Hartunian. “We will continue to work with our law enforcement partners to get these substances off our streets and prosecute distributers to the fullest extent of the law.”
DEA Special Agent in Charge James J. Hunt stated, “This investigation is the essence of DEA’s mission - to identify and dismantle drug trafficking organizations responsible for threatening our communities with drug abuse and the perils associated. By working with our federal, local and state law enforcement partners, DEA not only dismantled a local cocaine distribution organization based in Plattsburgh, but located and arrested the cocaine source in New York City.”
“These arrests underscore the extraordinary results that are achieved by the dedication and perseverance of the state, local and federal law enforcement officers who worked so diligently on this case,” said New York State Police Captain Robert S. LaFountain. “The New York State Police are committed to working with our law enforcement partners to identify, investigate and arrest those involved in the distribution and sale of narcotic drugs."
The indictment charges the following individuals with conspiracy to possess with intent to distribute and to distribute cocaine:
• Thomas Farlekas, 31, of Bronx, New York
• Earl Mudd, 48, of Keeseville, New York
• Michael Moran, 43, of Keeseville, New York
• Kelly Nusbaum-Allen, 43, of Plattsburgh, New York
• Clayton Barber, Jr. aka “Junior,” 34, of Keeseville, New York
• Suzanne Gill, 30, of Keeseville, New York
• Joseph Hathaway, 38, of Keeseville, New YorkFarlekas and Mudd face at least ten (10) years and up to life imprisonment, and a fine of up to $10,000,000. Moran faces at least five (5) years imprisonment and up to forty (40) years imprisonment, and a fine of up to $5,000,000. The remaining defendants face up to twenty (20) years imprisonment and up to a $1,000,000 fine.
Farlekas, Mudd, and Moran appeared in United States District Court in Plattsburgh, New York on November 30, 2014. Farlekas and Mudd were detained pending trial and Moran was released on pretrial release supervision. Nusbaum-Allen appeared in United States District Court in Plattsburgh, New York on December 18, 2014, and was released on pretrial release supervision. Barber, Jr., Gill, and Hathaway appeared in United States District Court in Plattsburgh, New York on December 23, 2014. Gill was released on pretrial release supervision. Barber, Jr. and Hathaway were detained pending trial. Trial in this matter is currently scheduled for February 17, 2015 before Senior United States District Court Judge Lawrence E. Kahn in Albany, New York.
The charges contained in the indictment are merely accusations and the defendants are presumed innocent until and unless proven guilty.
The case was investigated by the U.S. Drug Enforcement Administration, the New York State Police, U.S. Border Patrol, and Homeland Security Investigations. Local law enforcement agencies involved include the Plattsburgh Police Department, Essex County Sheriff’s Department, and Malone Village Police Department. The United States is represented in this prosecution by Assistant United States Attorney Katherine Kopita.
Robert Lustyik, Former FBI Special Agent, Pleads Guilty to Bribery Scheme in White Plains Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Leslie R. Caldwell, the Assistant Attorney General of the Justice Department’s Criminal Division, and Michael E. Horowitz, the Justice Department Inspector General, announced that ROBERT LUSTYIK, a former Special Agent with the Federal Bureau of Investigation (“FBI”), pleaded guilty today in White Plains federal court to all counts with which he is charged, including bribery, conspiracy to commit fraud, and theft of government property. LUSTYIK pleaded guilty before United States District Judge Vincent L. Briccetti,.
U.S. Attorney Preet Bharara said: “Robert Lustyik today admitted to conducting a bribery scheme in which, for his own personal gain, he secretly sold information and documents to which he had access as an FBI agent. Lustyik betrayed our system of justice: he breached not only the law, but also his sworn oath, and the great trust and confidence placed in him by citizens and colleagues. For his criminal conduct he now faces, as he must, serious, commensurate penalties.”
Assistant Attorney General Leslie R. Caldwell said: “Robert Lustyik discarded the FBI’s principles of ‘fidelity, bravery, and integrity,’ and sold his badge to the highest bidder. Greed has no place in public service or law enforcement. The Department of Justice will root out corruption wherever it takes hold, and hold accountable those who abuse the public’s trust for personal gain.”
Inspector General Michael E. Horowitz said: “The Department of Justice Office of the Inspector General is committed to working with our law enforcement partners to identify, investigate, and bring to justice all DOJ employees who engage misconduct.”
According to the Complaint, the Indictment, court hearings, and today’s plea proceeding:
LUSTYIK was an FBI Special Agent who worked on the counterintelligence squad in the White Plains Resident Agency. LUSTYIK’s co-defendant, Johannes Thaler, was LUSTYIK’s friend, and LUSTYIK’s other co-defendant, Rizve Ahmed, was an acquaintance of Thaler. From in or about September 2011 through March 2012, LUSTYIK, Thaler, and Ahmed engaged in a bribery scheme. As part of the scheme, LUSTYIK and Thaler solicited payments of money from Ahmed, in exchange for LUSTYIK’s agreement to provide internal, confidential documents and other confidential information to which LUSTYIK had access by virtue of his position as an FBI Special Agent. The documents and information pertained to a prominent citizen of Bangladesh (“Individual 1”). Ahmed perceived himself to be on the opposite side of a political rivalry with Individual 1. Ahmed sought, among other things, to obtain information about Individual 1, to locate Individual 1, and to harm Individual 1 and others associated with Individual 1.
As part of the scheme, LUSTYIK and Thaler exchanged text messages, including messages about how to pressure Ahmed to pay them additional money in exchange for confidential information. For example, in text messages, LUSTYIK told Thaler, “we need to push [Ahmed] for this meeting and get that 40 gs quick . . . . I will talk us into getting the cash . . . . I will work my magic . . . . We r sooooooo close.” Thaler responded, “I know. It’s all right there in front of us. Pretty soon we’ll be having lunch in our oceanfront restaurant . . . .”
As another example, in or about late January 2012, LUSTYIK, upon learning that Ahmed was considering using a different source to obtain confidential information about Individual 1, texted Thaler, “I want to kill C . . . . I hung my ass out the window n we got nothing? . . . . Tell [Ahmed], I’ve got [Individual 1’s] number and I’m pissed. . . . I will put a wire on n get [Ahmed and his associates] to admit they want [a Bangladeshi political figure] offed n we sell it to Individual 1].” LUSTYIK further texted THALER, “So bottom line. I need ten gs asap. We gotta squeeze C.”
LUSTYIK, 52, of Westchester County, pleaded guilty to all five counts in the Indictment in which he is charged. LUSTYIK pleaded guilty to (1) conspiracy to engage in a bribery scheme; (2) soliciting bribes by a public official; (3) conspiracy to defraud the citizens of the United States and the FBI; (4) theft of government property; and (5) unauthorized disclosure of a Suspicious Activity Report. He faces a maximum sentence of 55 years in prison. LUSTYIK is scheduled to be sentenced by Judge Briccetti on April 30, 2015, at 9:30 a.m.
Thaler and Ahmed previously pleaded guilty to bribery and conspiracy to commit fraud before Judge Briccetti. Thaler, 51, of New Fairfield, Connecticut, faces a maximum sentence of 35 years in prison. He is scheduled to be sentenced by Judge Briccetti on January 23, 2015, at 11:30 a.m. Ahmed, 35, of Danbury, Connecticut, faces a maximum sentence of 35 years in prison. He is scheduled to be sentenced by Judge Briccetti on January 23, 2015, at 2:30 p.m. 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.
Mr. Bharara praised the efforts of the Department of Justice Office of the Inspector General, which conducted the investigation in this case, and the Financial Crimes Enforcement Network for the U.S. Department of Treasury.
The prosecution is being handled by the Office’s White Plains Division and by the Public Integrity Section of the U.S. Department of Justice. Assistant United States Attorney Benjamin Allee and Trial Attorney Emily Rae Woods are in charge of the prosecution.
Lustyik Et Al.Indictment
Registered Sex Offender Sentenced to 35 Years in Federal Prison for Transportation and Possession of Child PornographyRead the Press Release
A registered sex offender was sentenced today to 35 years in prison for transporting and possessing child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John F. Walsh of the District of Colorado and Special Agent in Charge David Thompson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations’ (HSI) Denver Field Office.
“Insidious crimes like this steal the innocence and youth of our nation’s children,” said Assistant Attorney General Caldwell. “The Department of Justice is committed to investigating, prosecuting and incapacitating those who prey upon the most vulnerable members of our society.”
“Defendant Hopson, by his repeated acts of victimization and criminal conduct, has made clear that he poses a real and present danger to children and to society,” said U.S. Attorney Walsh. “The sentence imposed today will neutralize this dangerous perpetrator for 35 years and is a true victory for the community and for Colorado’s children.”
“Anyone who collects and shares child pornography victimizes the most innocent and most vulnerable members of our society,” said HSI Special Agent in Charge Thompson. “This lengthy prison sentence recognizes the trauma that predators inflict on helpless children.”
Gregory Lynn Hopson, 44, of Westminster, Colorado was indicted on Oct. 24, 2012, and pleaded guilty to transportation and possession of child pornography on Sept. 29, 2014. He has been in custody since his arrest on March 5, 2011. Based on the conduct described below, Hopson is currently serving a state prison sentence of 16 years to life for violating the terms of his state probation in connection with his prior conviction for sexual assault on a child. In addition to the prison sentence imposed today, Senior U.S. District Court Judge Lewis T. Babcock of the District of Colorado ordered Hopson to pay restitution to the victim of his crime.
According to Hopson’s admissions in his plea agreement, during the execution of a search warrant at his residence on March 5, 2011, ICE agents seized Hopson’s encrypted computer and CD-ROMs, which contained a well-organized collection of thousands of images and videos of child pornography. The material depicted children, including infants, being sexually abused. One of the CD-ROMs contained images and videos of Hopson engaged in sexually explicit conduct with a child under the age of 12 with whom Hopson was in a position of trust.
Hopson further admitted in his plea agreement that he exchanged child pornography with others over the Internet. In fact, ICE agents recovered approximately 300 emails that Hopson sent or received containing approximately 1,700 images and videos of child pornography.
At the time of the search warrant, Hopson was already a registered sex offender, having been convicted of sexually abusing two children under the age of 12. He was on intensive probation and was undergoing sex offender treatment when he committed these offenses.
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 http://www.justice.gov/psc/. For more information about Internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the resources tab.
This case was investigated by HSI, and prosecuted by Trial Attorney Keith Becker of the Criminal Division’s Child Exploitation and Obscenity Section, and Chief Judith A. Smith and Assistant U.S. Attorney Beth N. Gibson of the District of Colorado’s Special Prosecution Section.
Real Estate Developer Sentenced to 41 Months in Prison for Defrauding Investors of more than $15 MillionRead the Press Release
Baltimore, Maryland - U.S. District Judge J. Frederick Motz sentenced Brian McCloskey, age 42, of Baltimore today to 41 months in prison, followed by three years of supervised release, for conspiring to commit wire fraud arising from a $20 million investment fraud scheme. Judge Motz ordered McCloskey to pay restitution of $15.850 million.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 Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
According to his plea agreement and court documents Brian McCloskey, who owned a real estate development business known as the McCloskey Group, LLC., and Patrick Belzner, a home builder who began working with McCloskey in late 2008 or early 2009, conspired with others to perpetrate a fraudulent investment scheme with losses to the victims of more than $15 million.
McCloskey and Belzner’s co-conspirators included Kevin Sniffen, a licensed attorney and escrow agent and Mervyn Phelan, who operated IAG Underwriters (IAGU) which was in the business of underwriting loan applications submitted by real estate developers and then locating project financing from banks and other financial entities. Phelan employed Gregory Grantham, an attorney who held the position of IAGU’s general counsel.
Beginning in 2009 and continuing through June 2011, Belzner and McCloskey persuaded a number of private lenders to loan funds to the McCloskey Group to establish that it had cash reserves or “liquidity” in connection with its efforts to secure funding for real estate development projects through IAGU. Belzner and McCloskey falsely represented that the funds would be maintained in an escrow account under the control of Kevin Sniffen; that the funds would not be used for any other purpose; and that the money would be returned to the lender, either upon the funding of the loan or after a specified period of time. In return for this temporary use of the lender’s funds, Belzner and McCloskey promised to pay substantial rates of interest.
Beginning in the late summer of 2010, Phelan and Grantham cooperated with Belzner and McCloskey in their scheme to defraud by (1) making false representations to help persuade lenders to make loans to the McCloskey Group in order to establish “liquidity”; (2) telling the lenders that the funds had to be placed in an escrow account controlled by Kevin Sniffen; and by (3) making false representations to dissuade previous escrow account lenders from demanding the return of their funds when the original time period established for the loan expired without the McCloskey Group obtaining financing for the project in question.
Once the lenders transferred their funds into the escrow accounts, Belzner and/or McCloskey removed those funds from the escrow accounts without the knowledge of the lenders. Belzner and McCloskey then used the stolen funds to repay earlier loans to the McCloskey Group and to Belzner personally; to meet ongoing business expenses of the McCloskey Group; and to support Belzner’s life-style. The total losses resulting from the scheme were approximately $20 million.Patrick J. Belzner, a/k/a “Patrick McCloskey,” age 45, of Selbyville, Delaware, was sentenced to 15 years in prison for wire fraud conspiracy, wire fraud and tax evasion, and was ordered to pay $19.805 million in restitution; Gregory E. Grantham, age 57, of Oceanside, California, was sentenced to five years in prison and ordered to forfeit and pay restitution of $17.4 million; and Kevin Sniffen was sentenced to three years in prison and ordered to pay restitution of $15.85 million.
Mervyn A. Phelan, Sr., age 74, of Newport Beach, California, pleaded guilty to his role in the conspiracy and is scheduled to be sentenced on January 23, 2015, at 2:45 p.m.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
United States Attorney Rod J. Rosenstein thanked the FBI and IRS – Criminal Investigation for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorneys Jefferson M. Gray and Kathleen Gavin, who prosecuted the case.
Owner of Car Dealership Charged with Large-Scale FraudRead the Press Release
NEWARK, N.J. - A complaint charging the owner of a Ramsey, New Jersey, auto dealership with allegedly engaging in a pattern of fraudulent activity through his business has been unsealed, U.S. Attorney Paul J. Fishman announced today.
Afzal Khan, a/k/a “Bobby Khan,” 32, of Egg Harbor Township, New Jersey, was charged by complaint with one count of wire fraud. He is currently being sought by law enforcement.
According to the complaint unsealed today in Newark federal court:
From at least December 2013 through September 2014, Khan, through Emporio Motor Group, engaged in acts to defraud lenders to Emporio and customers of the dealership.
As part of his criminal activities, Khan obtained loans from the auto finance division of a large bank for cars that he never delivered, but for which the purchaser was still responsible. He also obtained loans from the bank for cars that were delivered, but for which neither he nor Emporio had title. As a result, the purchasers of these cars were liable for the loan, but could not register the vehicles. In addition, Khan offered to sell cars for individuals on consignment, and then neither returned the cars nor provided any money from car sales.
For example, Emporio submitted a loan application in February 2014 for approximately $150,000 in connection with the sale of a 2013 Rolls Royce. The victim who had intended to purchase the car had signed the necessary paperwork for the purchase and financing of the car, but never received the vehicle. Khan himself sent some loan payment checks – some of which he stopped or were returned for insufficient funds – but failed to pay the balance on the car. The true owner of the Rolls Royce told law enforcement that it had never even been sold to Khan or left the owner’s possession.
As a result of Khan’s actions, the bank is exposed to a potential loss of more than $1.7 million. To date, more than 75 individuals have filed complaints concerning Khan’s actions at Emporio.
The charge of wire fraud carries a maximum potential penalty of 20 years in prison and a fine of the greater of $250,000 or twice the gross profits to Khan or twice the gross loss suffered to the victims of the offense.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; as well as officers of the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli, and the Borough of Ramsey Police Department, under the direction of Chief of Police Bryan H. Gurney, Chief of Police, with the investigation.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
14-458Khan, Afzal Complaint
Mortgage Lender Agrees to $4.2 Million SettlementRead the Press Release
A Southfield mortgage lender has agreed to pay $4.2 million to resolve allegations that it violated the False Claims Act in its origination of loans backed by the federal government, United States Attorney Barbara L. McQuade announced today.
GTL Investments, Inc., doing business as John Adams Mortgage Company (JAMCO), entered into the agreement with the U.S. Attorney’s Office for the Eastern District of Michigan to resolve allegations that it originated mortgage loans that had material underwriting deficiencies. The loans were guaranteed by the Federal Housing Administration.
The FHA makes home financing available by insuring residential mortgages for the purchase of properties with modest down-payments for purchasers meeting certain criteria, known as underwriting standards. The original lender or loan originator is responsible for making sure that the borrower meets these underwriting standards to minimize the possibility of default and the need for the FHA to pay the mortgage holder for the losses caused by the default.
An investigation by the Office of Inspector General for the Department of Housing and Urban Development found that GTL originated 31 FHA mortgage loans between January 2008 and April 2012 that had material underwriting deficiencies. Twenty-nine of these loans went to claim, causing the FHA damages of $2,445,912. The investigation also identified two loans that had not yet been presented for payment by the FHA with approximately $250,000 in potential losses. GTL has agreed to indemnify the FHA for these two loans.
“By holding accountable lenders who fail to comply with underwriting requirements, we hope to send a message to all lenders that they must comply with government standards for federally insured loans,” McQuade said.
Minneapolis Man Charged with Providing Stolen Cell Phones to Organized Crime RingRead the Press Release
United States Attorney Andrew M. Luger today announced a criminal complaint charging ABBAS ATEIA AL HUSSAINAWEE, 40, for acting as a runner for defendants separately charged with conspiring to engage in the interstate transportation of stolen goods, namely cell phones and other electronic devices. AL HUSSAINAWEE was charged on December 19, 2014, in U.S. District Court in St. Paul, Minn., with conspiracy to engage in interstate transportation of stolen goods. In a separate complaint filed today, AL HUSSAINAWEE was charged with possession with intent to distribute methamphetamine.
“This defendant is charged with being one of the many runners employed by the Mustafa Organization,” said U.S. Attorney Luger. “In August, my office charged 20 defendants with conspiracy to steal and sell mobile devices on the underground market. Our investigation continues to uncover others who fueled the theft of cell phones in Minnesota and elsewhere.”
According to the criminal complaint and documents filed in court, from at least 2006 through 2014, the separately charged Mustafa Organization and their criminal associates illegally obtained cellular telephones and other mobile devices for the purpose of trafficking them throughout the United States and internationally. The Mustafas paid runners who stole mobile devices or obtained them fraudulently by other means. AL HUSSAINAWEE is an alleged runner for the Mustafa Organization.
According to the criminal complaint and documents filed in court, AL HUSSAINAWEE regularly traveled to other states to steal phones, including to Michigan, Illinois, and Missouri. To avoid detection while burglarizing cell phone stores, AL HUSSAINAWEE broke into businesses adjacent to cell phone stores, and then gained entry to the cell phone store by breaking through the wall. He specifically targeted strip malls with vacant adjacent store space.
According to the criminal complaint and documents filed in court, on November 27, 2012, AL HUSSAINAWEE burglarized a Best Buy in Maplewood, Minn. The defendant broke into an adjacent business and broke through the wall to gain entry to the Best Buy. He stole 48 cellular phones, 20 iPads and five tablet computers. On December 12, 2014, AL HUSSAINAWEE burglarized a Verizon Store in Buffalo, Minn. He gained entry to the store by prying open the back door of a vacant business and then breaking through the sheetrock to gain access to the adjacent Verizon Store. The defendant stole $33,015 in cell phones.
According to the criminal complaint and documents filed in court, on July 14, 2014, the defendant stole 44 cell phones and iPads from a Verizon store in Waconia, Minn. The total value of the stolen merchandise was $22,279.97. On March 9, 2014, the defendant broke through the sheetrock of a Verizon store in Menomonie, Wis., and stole $32,000 worth of cell phones and iPads. AL HUSSAINAWEE was responsible for burglary or attempted burglary in at least 22 cell phone stores. The Mustafas paid AL HUSSAINAWEE in cash for the stolen merchandise.
According to a separate criminal complaint filed today, when agents executed a search warrant at AL HUSSAINAWEE’S home in Minneapolis, they discovered a backpack containing approximately 268 grams of methamphetamine.
This case is the result of an investigation conducted by the St. Paul Police Department, United States Secret Service, and Minnesota Bureau of Criminal Apprehension, under the auspices of the Minnesota Financial Crimes Task Force.
Assistant U.S. Attorneys Steven Schleicher and John Marti are prosecuting this case.
Defendant Information:
ABBAS ATEIA AL HUSSAINAWEE, 40
Minneapolis, Minn.
Charges:
• Conspiracy to engage in interstate transportation of stolen property, 1 count
• Possession with intent to distribute methamphetamine, 1 countThe charges contained in the criminal complaints are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Meth Cookers Who Burned Down Trailer SentencedRead the Press Release
MARQUETTE, MICHIGAN – U.S. Attorney Patrick Miles announced today the sentencing on December 22 of Leanna Lynn Horton, age 38, and Christopher Wayne Brow, age 34, both of Marquette. Horton and Brow had each pled guilty to a single charge of conspiracy to manufacture, distribute and possess with intent to distribute methamphetamine in Marquette County from July 2013 to May 8, 2014.
U.S. District Judge R. Allan Edgar sentenced Horton to 175 months in prison and Brow to 140 months. Detectives from the Upper Peninsula Substance Enforcement Team (UPSET) began investigating this conspiracy on October 26, 2013, after the Marquette Fire Department responded to a trailer fire in the Birch Grove Mobile Home Community on Pioneer Road in Marquette and found a methamphetamine lab. The trailer was a complete loss and eventually had to be towed from the trailer park.
END
Man Sentenced to Prison for Illegal Re-EntryRead the Press Release
A man who re-entered the United States illegally after being removed as a felon was sentenced today to thirteen months in federal prison.
Manuel Reveles-Martinez, age 33, a Mexican citizen living in Cedar Rapids, Iowa, received the prison term after a September 15, 2014, guilty plea to one count of illegal re-entry as a felon.
At the guilty plea, Reveles-Martinez admitted he re-entered the United States without permission after being removed from the country on November 8, 2013. On July 10, 2014, Reveles-Martinez was arrested in Cedar Rapids by agents with Immigration and Customs Enforcement. Reveles-Martinez had previously been convicted of operating while intoxicated (OWI) five times, including OWI third offense, a felony, in 2006.
Reveles-Martinez was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Reveles-Martinez was sentenced to thirteen months’ imprisonment. A special assessment of $100 was imposed. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Reveles-Martinez is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Daniel C. Tvedt and investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-CR-0073.
LeClaire Man is Sentenced in Federal Court for Conspiracy to Distribute MarijuanaRead the Press Release
DAVENPORT, IA - On December 22, 2014, Morgan Michael Hermiston, age 26, of LeClaire, Iowa, was sentenced by United States District Court Chief Judge James E. Gritzner to 46 months imprisonment, announced U. S. Attorney Nicholas A. Klinefeldt. Hermiston was also ordered to serve three years of supervised release following his imprisonment, and to pay $100 towards the Crime Victims Fund.
Beginning by at least November 2011, Hermiston entered into an agreement to receive marijuana from co-defendant Jared Fromknecht to distribute to others. Hermiston was aware that Fromknecht was shipping marijuana via mail from Colorado to Iowa for re-distribution. As part of this agreement, Hermiston arranged for Fromknecht to mail marijuana to others who then delivered this marijuana to Hermiston for distribution.
Hermiston pled guilty on October 4, 2013, to the charge of conspiracy to distribute marijuana. At sentencing, Hermiston admitted being responsible for over 100 kilograms of marijuana.
This case was investigated by the Drug Enforcement Administration, the Iowa Department of Public Safety-Division of Narcotics Enforcement, the United States Postal Inspections Service, and the Davenport, Iowa, Police Department. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
(Download Press Release)
Last of 18 Members of Methamphetamine Trafficking Ring Sentenced on Drug ChargesRead the Press Release
ASHEVILLE, N.C. – The last of 18 members of a methamphetamine trafficking organization was sentenced on Wednesday, December 17, 2014, to 46 months on drug charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Angela Leigh Wike, of Bryson City was also ordered to serve three years under court supervision.
U.S. Attorney Tompkins is joined in making today’s announcement by John S. Comer, Acting Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office and Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division.
In May of 2013, 18 members of the drug ring were arrested as the result of a joint law enforcement investigation conducted by DEA, ATF, North Carolina State Bureau of Investigation, Macon County Sheriff’s Office, Jackson County Sheriff’s Office, Swain County Sheriff’s Office, Franklin Police Department, and Cherokee Indian Police Department.
According to filed court documents and court proceedings, from May 2012 to April 2013, the drug ring operated primarily in Jackson, Haywood, Macon, Swain and Buncombe counties in Western North Carolina. Wake was the last defendant to be sentenced in this case. Those already sentenced are:
• Cipriano Ramos Altamirano – 135 months in prison and five years of supervised release.
• Claude Gregory Coggins – 70 months in prison and three years of supervised release.
• Anne Harvey Cresswell – 60 months in prison and three years of supervised release.
• Joseph Daniel Denmark – 60 months in prison and four years of supervised release.
• Patricia Leigh Dreml – 57 months in prison and two years of supervised release.
• Daniel Furman Gibson - 151 months in prison and four years of supervised release.
• Gerardo Beltran Llanas – 97 months in prison and three years of supervised release.
• Forest Shane Lynn – 30 months in prison and three years of supervised release. Joshua Bryan Parker – 60 months in prison and four years of supervised release.
• Eddie Dwayne Potts – 27 months in prison and three years of supervised release.
• Gerardo Rodriquez-Aragon – 46 months in prison and two years of supervised release.
• Javier Serna-Trejo – 37 months in prison and two years of supervised release.
• Chad Keith Shuler – 100 months in prison and four years of supervised release.
• Paul Michael Swofford – 30 months in prison and three years of supervised release.
• Ronald Edward Swofford – 46 months in prison and three years of supervised release.
• James Homer Taylor – 30 months in prison and three years of supervised release.
• Heather Marie West – 54 months in prison and three years of supervised release.Wike will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the DEA and ATF, assisted by the North Carolina State Bureau of Investigation, Macon County Sheriff’s Office, Jackson County Sheriff’s Office, Swain County Sheriff’s Office, Franklin Police Department, and Cherokee Indian Police Department. The prosecution is being handled for the government by Assistant U.S. Attorney Thomas Kent of the U.S. Attorney’s Office in Asheville.
Kentucky Businessman Pleads Guilty in Manhattan Federal Court to $53 Million Tax Scheme and Massive Fraud That Involved the Bribery of Bank OfficialsRead the Press Release
U.S. Attorney Preet Bharara for the Southern District of New York and Deputy Assistant Attorney General David A. Hubbert for the Tax Division of the Department of Justice announced that Wilbur Anthony Huff, a Kentucky businessman, pleaded guilty today in Manhattan federal court to various tax crimes that caused more than $50 million in losses to the Internal Revenue Service (IRS), and a massive fraud that involved the bribery of bank officials, the fraudulent purchase of an insurance company, and the defrauding of insurance regulators. Huff pleaded guilty this afternoon before U.S. District Judge Naomi Reice Buchwald.
“Today’s guilty plea ensures that Wilbur Huff will be punished for perpetuating a vortex of fraud – complete with bribery, tax crimes that caused $53 million in losses to the IRS, the fraudulent purchase of a company, and the defrauding of insurance regulators,” said U.S. Attorney Bharara. “Those who might be tempted to follow in Huff’s criminal footsteps should understand that this office and our law enforcement partners will aggressively pursue and root out fraud wherever we find it.”
Huff, 53, of Caneyville and Louisville, Kentucky, pleaded guilty to one count of corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws, which carries a maximum penalty of three years in prison, one count of aiding and assisting with the preparation and presentation of false and fraudulent tax returns, which carries a maximum penalty of three years in prison, one count of failing and causing the failure to pay taxes to the IRS, which carries a maximum penalty of one year in prison, and one count of conspiracy to (a) commit bank bribery, (b) commit fraud on bank regulators and the board and shareholders of a publicly-traded company, and (c) fraudulently purchase an Oklahoma insurance company, which carries a maximum penalty of five years in prison. He is scheduled to be sentenced by Judge Buchwald on April 8, 2015, at 2:30 p.m. 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, Huff also agreed to forfeit $10.8 million to the United States and to provide restitution in the following amounts to victims of his crimes: $70,100,000 to the Receiver for Park Avenue Property and Casualty Insurance Company; $4,857,266.62 to the Federal Deposit Insurance Corporation (FDIC); $597,420.29 to Valley National Bank (the successor of Park Avenue Bank); and $53,094,219 to the IRS.
According to the information, plea agreement, and statements made during court proceedings:
Background
Huff was a businessman who controlled numerous entities located throughout the United States (Huff-controlled entities). Huff controlled the companies and their finances, using them to orchestrate a $53 million fraud on the IRS as well as other illegal schemes. However, rather than exercise control of these companies openly, Huff concealed his control by installing other individuals to oversee the companies’ day-to-day functions and to serve as the companies’ titular owners, directors or officers. Huff also maintained a corrupt relationship with Park Avenue Bank and its executives, Charles J. Antonucci Sr., the president and chief executive officer, and Matthew L. Morris, the senior vice president.
Tax Crimes
From 2008 to 2010, Huff controlled O2HR, a professional employer organization (PEO) located in Tampa, Florida. Like other PEOs, O2HR was paid to manage the payroll, tax, and workers’ compensation insurance obligations of its client companies. However, instead of paying $53 million in taxes that O2HR’s clients owed the IRS, and instead of paying $5 million to Providence Property and Casualty Insurance Company (Providence P&C) – an Oklahoma-based insurance company – for workers’ compensation coverage expenses for O2HR clients, HUFF stole the money that his client companies had paid O2HR for those purposes. Among other things, Huff diverted millions of dollars from O2HR to fund his investments in unrelated business ventures, and to pay his family members’ personal expenses. The expenses included mortgages on Huff’s homes, rent payments for his children’s apartments, staff and equipment for Huff’s farm, designer clothing, jewelry, and luxury cars.
Conspiracy to Commit Bank Bribery, Defraud Bank Regulators, and Fraudulently Purchase an Oklahoma Insurance Company
From 2007 up to and including 2010, HUFF engaged in a massive multi-faceted conspiracy, in which he schemed to (i) bribe executives of Park Avenue Bank, (ii) defraud bank regulators and the board and shareholders of a publicly-traded company and (iii) fraudulently purchase an Oklahoma insurance company. As described in more detail below, Huff paid bribes totaling hundreds of thousands of dollars in cash and other items to Morris and Antonucci, in exchange for their favorable treatment at Park Avenue Bank.
As part of the corrupt relationship between Huff and the bank executives, Huff, Morris, Antonucci, and others conspired to defraud various entities and regulators during the relevant time period. Specifically, Huff conspired with Morris and Antonucci to falsely bolster Park Avenue Bank’s capital, by orchestrating a series of fraudulent transactions to make it appear that Park Avenue Bank had received an outside infusion of $6.5 million, and engaged in a series of further fraudulent actions to conceal from bank regulators the true source of the funds.
Huff further conspired with Morris, Antonucci, and others to defraud Oklahoma insurance regulators and others by making material misrepresentations and omissions regarding the source of $37.5 million used to purchase Providence Property and Casualty Insurance Company, an Oklahoma insurance company that provided workers’ compensation insurance for O2HR’s clients, and to whom O2HR owed a significant debt.
Bribery of Park Avenue Bank Executives
From 2007 to 2009, Huff paid Morris and Antonucci at least $400,000 in exchange for which they: (1) provided Huff with fraudulent letters of credit obligating Park Avenue Bank to pay an investor in one of Huff’s businesses $1.75 million if Huff failed to pay the investor back himself; (2) allowed the Huff-controlled entities to accrue $9 million in overdrafts; (3) facilitated intra-bank transfers in furtherance of Huff’s frauds; and (4) fraudulently caused Park Avenue Bank to issue at least $4.5 million in loans to the Huff-controlled entities.
Fraud on Bank Regulators and a Publicly-Traded Company
From 2008 to 2009, Huff, Morris, and Antonucci engaged in a scheme to prevent Park Avenue Bank from being designated as “undercapitalized” by regulators – a designation that would prohibit the bank from engaging in certain types of banking transactions, and that would subject the bank to a range of potential enforcement actions by regulators. Specifically, they engaged in a series of deceptive, “round-trip” financial transactions to make it appear that Antonucci had infused the bank with $6.5 million in new capital when, in actuality, the $6.5 million was part of the bank’s pre-existing capital. Huff, Morris, and Antonucci funneled the $6.5 million from the bank through accounts controlled by Huff to Antonucci. This was done to make it appear as though Antonucci was helping to stabilize the bank’s capitalization problem, so the bank could continue engaging in certain banking transactions that it would otherwise have been prohibited from doing, and to put the bank in a better posture to receive $11 million from the Troubled Asset Relief Program. To conceal their unlawful financial maneuvering, Huff created, or directed the creation of, documents falsely suggesting that Antonucci had earned the $6.5 million through a bogus transaction involving another company Antonucci owned. Huff, Morris, and Antonucci further concealed their scheme by stealing $2.3 million from General Employment Enterprises Inc., a publicly-traded temporary staffing company, in order to pay Park Avenue Bank back for monies used in connection with the $6.5 million transaction.
Fraud on Insurance Regulators and the Investment Firm
From July 2008 to November 2009, Huff, Morris, Antonucci, and Allen Reichman, an executive at an investment bank and financial services company headquartered in New York, New York (the “investment firm”), conspired to (i) defraud Oklahoma insurance regulators into allowing Antonucci to purchase the assets of Providence P&C – the Oklahoma insurance company that was owed $5 million by O2HR and (ii) defraud the investment firm into providing a $30 million loan to finance the purchase. Specifically, HUFF and Antonucci devised a scheme in which Antonucci would purchase Providence P&C’s assets by obtaining a $30 million loan from the Investment Firm, which used Providence P&C’s own assets as collateral for the loan. However, 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, Huff, Morris, Antonucci, and Reichman 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 Antonucci’s purchase of Providence P&C. Among other things, Reichman directed Antonucci to sign a letter that provided false information regarding the collateral that would be used for the loan, and Huff, Morris, and Antonucci conspired to falsely represent to Oklahoma insurance regulators that Park Avenue Bank – not the investment firm – was funding the purchase of Providence P&C.
After deceiving Oklahoma regulators into approving the sale of Providence P&C, Huff took $4 million of the company’s assets, which he used to continue the scheme to defraud O2HR’s clients. Ultimately, in November 2009, the insurance company became insolvent and was placed in receivership after Huff, Morris, and Antonucci had pilfered its remaining assets.
* * *
Charles Antonucci, who was charged separately by complaint on March 15, 2010, pleaded guilty to his role in the crimes described above on Oct. 8, 2010. Matthew L. Morris and Allen Reichman were charged by Indictment with Huff on Oct. 1, 2012. Morris pleaded guilty in connection with the case on Oct.17.
Reichman is currently scheduled to go to trial March 2, 2015 before Judge Buchwald. The charges against Reichman are allegations and he is presumed innocent unless and until proven guilty beyond a reasonable doubt.
U.S. Attorney Bharara praised the investigative work of the Special Inspector General for the Troubled Asset Relief Program, the FBI, the IRS, the New York State Department of Financial Services, Immigration and Customs Enforcement (ICE)’s Homeland Security Investigations (HSI), and the Office of Inspector General of the FDIC. Mr. Bharara also thanked the Department of Justice’s Tax Division and the U.S. 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’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.
The case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Janis Echenberg and Daniel Tehrani and Special Assistant U.S. Attorney Tino Lisella are in charge of the criminal case.
Kentucky Businessman Pleads Guilty in Manhattan Federal Court to $53 Million Tax Scheme and Massive Fraud That Involved the Bribery of Bank OfficialsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and David A. Hubbert, Deputy Assistant Attorney General for the Tax Division of the Department of Justice, announced that WILBUR ANTHONY HUFF, a Kentucky businessman, pled guilty today in Manhattan federal court to various tax crimes that caused more than $50 million in losses to the Internal Revenue Service (“IRS”), and a massive fraud that involved the bribery of bank officials, the fraudulent purchase of an insurance company, and the defrauding of insurance regulators. HUFF pled guilty this afternoon before U.S. District Judge Naomi Reice Buchwald.
Manhattan U.S. Attorney Preet Bharara said: “Today’s guilty plea ensures that Wilbur Huff will be punished for perpetuating a vortex of fraud – complete with bribery, tax crimes that caused $53 million in losses to the IRS, the fraudulent purchase of a company, and the defrauding of insurance regulators. Those who might be tempted to follow in Huff’s criminal footsteps should understand that this Office and our law enforcement partners will aggressively pursue and root out fraud wherever we find it.”
According to the information, plea agreement, and statements made during court proceedings:
HUFF was a businessman who controlled numerous entities located throughout the United States (“HUFF-Controlled Entities”). HUFF controlled the companies and their finances, using them to orchestrate a $53 million fraud on the IRS as well as other illegal schemes. However, rather than exercise control of these companies openly, HUFF concealed his control by installing other individuals to oversee the companies’ day-to-day functions and to serve as the companies’ titular owners, directors, or officers. HUFF also maintained a corrupt relationship with Park Avenue Bank and its executives, Charles J. Antonucci, Sr., the President and Chief Executive Officer, and Matthew L. Morris, the Senior Vice President.
Tax Crimes
From 2008 to 2010, HUFF controlled O2HR, a professional employer organization (“PEO”) located in Tampa, Florida. Like other PEOs, O2HR was paid to manage the payroll, tax, and workers’ compensation insurance obligations of its client companies. However, instead of paying $53 million in taxes that O2HR’s clients owed the IRS, and instead of paying $5 million to Providence Property and Casualty Insurance Company (“Providence P&C”) – an Oklahoma-based insurance company – for workers’ compensation coverage expenses for O2HR clients, HUFF stole the money that his client companies had paid O2HR for those purposes. Among other things, HUFF diverted millions of dollars from O2HR to fund his investments in unrelated business ventures, and to pay his family members’ personal expenses. The expenses included mortgages on HUFF’s homes, rent payments for his children’s apartments, staff and equipment for HUFF’s farm, designer clothing, jewelry, and luxury cars.
Conspiracy to Commit Bank Bribery, Defraud Bank Regulators, and Fraudulently Purchase an Oklahoma Insurance Company
From 2007 up to and including 2010, HUFF engaged in a massive multi-faceted conspiracy, in which he schemed to (i) bribe executives of Park Avenue Bank, (ii) defraud bank regulators and the board and shareholders of a publicly-traded company and (iii) fraudulently purchase an Oklahoma insurance company. As described in more detail below, HUFF paid bribes totaling hundreds of thousands of dollars in cash and other items to Morris and Antonucci, in exchange for their favorable treatment at Park Avenue Bank.
As part of the corrupt relationship between HUFF and the bank executives, HUFF, Morris, Antonucci, and others conspired to defraud various entities and regulators during the relevant time period. Specifically, Huff conspired with Morris and Antonucci to falsely bolster Park Avenue Bank’s capital, by orchestrating a series of fraudulent transactions to make it appear that Park Avenue Bank had received an outside infusion of $6.5 million, and engaged in a series of further fraudulent actions to conceal from bank regulators the true source of the funds.
HUFF further conspired with Morris, Antonucci, and others to defraud Oklahoma insurance regulators and others by making material misrepresentations and omissions regarding the source of $37.5 million used to purchase Providence Property and Casualty Insurance Company, an Oklahoma insurance company that provided workers’ compensation insurance for O2HR’s clients, and to whom O2HR owed a significant debt.
Bribery of Park Avenue Bank Executives
From 2007 to 2009, HUFF paid Morris and Antonucci at least $400,000 in exchange for which they: (1) provided HUFF with fraudulent letters of credit obligating Park Avenue Bank to pay an investor in one of HUFF’s businesses $1.75 million if HUFF failed to pay the investor back himself; (2) allowed the HUFF-Controlled Entities to accrue $9 million in overdrafts; (3) facilitated intra-bank transfers in furtherance of HUFF’s frauds; and (4) fraudulently caused Park Avenue Bank to issue at least $4.5 million in loans to the HUFF-Controlled Entities.
Fraud on Bank Regulators and a Publicly-Traded Company
From 2008 to 2009, HUFF, Morris, and Antonucci engaged in a scheme to prevent Park Avenue Bank from being designated as “undercapitalized” by regulators – a designation that would prohibit the Bank from engaging in certain types of banking transactions, and that would subject the Bank to a range of potential enforcement actions by regulators. Specifically, they engaged in a series of deceptive, “round-trip” financial transactions to make it appear that Antonucci had infused the Bank with $6.5 million in new capital when, in actuality, the $6.5 million was part of the Bank’s pre-existing capital. HUFF, Morris, and Antonucci funneled the $6.5 million from the Bank through accounts controlled by HUFF to Antonucci. This was done to make it appear as though Antonucci was helping to stabilize the Bank’s capitalization problem, so the Bank could continue engaging in certain banking transactions that it would otherwise have been prohibited from doing, and to put the Bank in a better posture to receive $11 million from the Troubled Asset Relief Program. To conceal their unlawful financial maneuvering, HUFF created, or directed the creation of, documents falsely suggesting that Antonucci had earned the $6.5 million through a bogus transaction involving another company Antonucci owned. HUFF, Morris, and Antonucci further concealed their scheme by stealing $2.3 million from General Employment Enterprises, Inc., a publicly-traded temporary staffing company, in order to pay Park Avenue Bank back for monies used in connection with the $6.5 million transaction.
Fraud on Insurance Regulators and the Investment Firm
From July 2008 to November 2009, HUFF, Morris, Antonucci, and Allen Reichman, an executive at an investment bank and financial services company headquartered in New York, New York (the “Investment Firm”), conspired to (i) defraud Oklahoma insurance regulators into allowing Antonucci to purchase the assets of Providence P&C – the Oklahoma insurance company that was owed $5 million by O2HR and (ii) defraud the Investment firm into providing a $30 million loan to finance the purchase. Specifically, HUFF and Antonucci devised a scheme in which Antonucci would purchase Providence P&C’s assets by obtaining a $30 million loan from the “Investment Firm,” which used Providence P&C’s own assets as collateral for the loan. However, 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, HUFF, Morris, Antonucci, and Reichman 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 Antonucci’s purchase of Providence P&C. Among other things, Reichman directed Antonucci to sign a letter that provided false information regarding the collateral that would be used for the loan, and HUFF, Morris, and Antonucci conspired to falsely represent to Oklahoma insurance regulators that Park Avenue Bank – not the Investment Firm – was funding the purchase of Providence P&C.
After deceiving Oklahoma regulators into approving the sale of Providence P&C, HUFF took $4 million dollars of the company’s assets, which he used to continue the scheme to defraud O2HR’s clients. Ultimately, in November 2009, the insurance company became insolvent and was placed in receivership after HUFF, Morris, and Antonucci had pilfered its remaining assets.
HUFF, 53, of Caneyville and Louisville, Kentucky, pleaded guilty to one count of corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws, which carries a maximum penalty of three years in prison, one count of aiding and assisting with the preparation and presentation of false and fraudulent tax returns, which carries a maximum penalty of three years in prison, one count of failing and causing the failure to pay taxes to the IRS, which carries a maximum penalty of one year in prison, and one count of conspiracy to (a) commit bank bribery, (b) commit fraud on bank regulators and the board and shareholders of a publicly-traded company, and (c) fraudulently purchase an Oklahoma insurance company, which carries a maximum penalty of five years in prison. He is scheduled to be sentenced by Judge Buchwald on April 8, 2015, at 2:30 p.m. 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, Huff also agreed to forfeit $10.8 million to the United States and to provide restitution in the following amounts to victims of his crimes: $70,100,000 to the Receiver for Park Avenue Property and Casualty Insurance Company; $4,857,266.62 to the Federal Deposit Insurance Corporation (“FDIC”); $597,420.29 to Valley National Bank (the successor of Park Avenue Bank); and $53,094,219 to the Internal Revenue Service.
Charles Antonucci, who was charged separately by complaint on March 15, 2010, pleaded guilty to his role in the crimes described above on October 8, 2010. Matthew L. Morris and Allen Reichman were charged by Indictment with HUFF on October 1, 2012. Morris pleaded guilty in connection with the case on October 17, 2014.
Reichman is currently scheduled to go to trial before Judge Buchwald beginning on March 2, 2015. The charges against Reichman are allegations and he is presumed innocent unless and until proven guilty beyond a reasonable doubt.
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’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.
The case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Janis Echenberg and Daniel Tehrani and Special Assistant U.S. Attorney Tino Lisella are in charge of the criminal case.
Justice Department Reaches Settlement with the County of Erie, New York to Prevent Disability Discrimination at the Erie County JailRead the Press Release
The Justice Department announced today that it reached a settlement agreement with the County of Erie, New York, to ensure equal access to the facilities and services of the Erie County Holding Center and the Erie County Correctional Facility, collectively referred to as the Erie County Jail. The Erie County Holding Center, located in Buffalo, New York, is primarily a pretrial detention facility and is the second largest detention facility in New York State. The Erie County Correctional Facility, located in Alden, New York, holds inmates of various classifications and processes more than 20,000 inmates annually.
The Justice Department initiated a compliance review of the Erie County Jail under the Americans with Disabilities Act (ADA) and the Rehabilitation Act of 1973 after receiving complaints alleging that, because the Erie County Jail did not have a sufficient number of accessible cells and shower facilities, the jail housed inmates with mobility disabilities in its medical unit even though they did not require medical treatment. The department determined that the jail’s medical unit also did not have accessible features. In resolution of the department’s findings, the agreement requires the Erie County Jail to:
- Complete specified accessibility modifications to its facilities within four years, including providing accessible cells in various classifications and housing units, providing accessible showers and toilet facilities, and providing accessible features in the medical unit.
- Ensure that a minimum of three percent, but no fewer than one, of the total number of cells in its newly constructed and altered facilities are accessible to inmates with mobility disabilities.
- Ensure that inmates with disabilities are not housed in designated medical areas unless they are receiving medical care or treatment.
- Ensure that wheelchairs and other adaptive equipment used by inmates with disabilities are routinely maintained, repaired, and generally kept in safe, operable condition.
- Provide appropriate devices, such as medical trapezes, hearing aid batteries, or special shoes, as required to meet the needs of inmates with disabilities.
- Ensure that when inmates who are deaf or have hearing loss are handcuffed or restrained, they are handcuffed or restrained in a manner that permits effective communication (e.g., handcuffing detainees in the front so they can sign) unless legitimate security concerns dictate otherwise.
- Ensure that when inmates who are blind or have low vision are handcuffed or restrained, they are handcuffed or restrained in a manner that permits safe mobility, including the use of a cane or sighted guide.
- Designate a disabilities coordinator who coordinates ADA access at the Erie County Holding Center and the Erie County Correctional Facility.
- Develop and implement an ADA grievance policy for resolving inmate ADA complaints.
- Develop and implement an effective communication policy for inmates who are deaf, have hearing loss, blind or have low vision.
“The ADA prohibits discrimination by public entities on the basis of disability, including the denial by correctional facilities and jails of equal services to individuals with disabilities,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “With this agreement, the Erie County Jail is taking important steps to ensure that people incarcerated in the jail are not endangered or discriminated against because of their disabilities.”
To read the settlement agreement or for more information on the ADA, visit the ADA website at www.ada.gov. Those interested in finding out more about this settlement or the obligations of public entities under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website. ADA complaints may be filed by email to [email protected].
Justice Department Files Pregnancy Discrimination Lawsuit Against the Chicago Board of EducationRead the Press Release
The Justice Department today announced the filing of a lawsuit against the Chicago Board of Education, alleging that the board discriminated against pregnant teachers at Scammon Elementary School by subjecting them to adverse personnel actions, including termination in some instances, after they announced their pregnancies. According to the complaint, these adverse personnel actions were in violation of Title VII of the Civil Rights Act of 1964. Title VII is a federal statute that prohibits employment discrimination on the basis of sex, race, color, national origin and religion. The statute explicitly prohibits employers from discriminating against female employees due to pregnancy, childbirth or related medical conditions.
The suit, filed in the United States District Court for the Northern District of Illinois, alleges that, starting in 2009, the principal at Scammon subjected female teachers to lower performance evaluations, discipline, threatened termination and/or termination because of their pregnancies. The complaint further alleges that the board approved the firing of six recently pregnant teachers employed at Scammon and forced two other recently pregnant teachers to leave Scammon. The department’s complaint seeks a court order that would require the board to develop and implement policies that would prevent its employees from being subjected to discrimination due to their pregnancies. The relief sought also includes monetary damages as compensation for those teachers who were harmed by the alleged discrimination.
Two teachers who had been pregnant while working at Scammon filed charges of sex discrimination with the Chicago District Office of the Equal Employment Opportunity Commission (EEOC). The EEOC investigated the charges and determined that there was reasonable cause to believe discrimination occurred against the two charging parties as well as against other pregnant teachers. The EEOC was unsuccessful in its attempts to conciliate the matter before referring it to the Department of Justice.
“No woman should have to make a choice between her job and having a family,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “Federal law requires employers to maintain a workplace free of discrimination on the basis of sex.”
“Despite much progress, we continue to see the persistence of overt pregnancy discrimination, as well as the emergence of more subtle discriminatory practices in the workplace,” said EEOC Chair Jenny R. Yang.
“The EEOC will continue to vigorously enforce Title VII’s prohibition of discrimination against pregnant employees,” said John P. Rowe, former District Director of the EEOC’s Chicago District Office. Rowe led the EEOC’s administrative investigation of the charges filed by the two teachers.
This lawsuit is brought by the Department of Justice as a result of a joint effort to enhance collaboration between the EEOC and the Justice Department’s Civil Rights Division for vigorous enforcement of Title VII.
More information about Title VII and other federal employment laws is available on the website of the Employment Litigation Section of the Civil Rights Division (www.justice.gov/crt/about/emp/).
The continued enforcement of Title VII has been a priority of the Justice Department’s Civil Rights Division. Additional information on the Civil Rights Division’s work is available on its website at www.justice.gov/crt/. Pregnancy discrimination, in particular, has been identified by the EEOC as a strategic enforcement priority, and earlier this year, the agency issued updated guidance, which is available at www.eeoc.gov/laws/types/pregnancy_guidance.cfm
Identifying new law enforcement tools to enhance asset tracing and recovery focus of INTERPOL meetingRead the Press Release
UNITED NATIONS, New York – Identifying new mechanisms to assist law enforcement efforts in identifying and seizing criminal assets was the focus of an INTERPOL meeting at the United Nations headquarters.
During the three-day (17 – 19 December) working group meeting some 90 experts from 32 countries and six international organizations, including a number of UN agencies, the International Criminal Court and the World Bank, discussed the creation of operational tools through which INTERPOL could assist in asset tracing and recovery.
Organized by the INTERPOL General Secretariat in cooperation with the US National Central Bureau in Washington DC, the aim of the second session of the Expert Working Group on the Identification, Location and Seizure of Assets was to provide practitioners with new insight and instruments to enhance law enforcement and judicial cooperation.
Headed by chairman Ambassador Eugenio María Curia and Joël Sollier, INTERPOL General Counsel, the group recommended the creation of a new INTERPOL notice to locate, identify and obtain information on, seize or freeze criminal assets in compliance with national and international laws and obligations, supported by the establishment of an operational database.
The experts also recommended further consideration of developing mechanisms to simplify and expedite the transmission of mutual legal assistance requests using the secured INTERPOL communications channel (e-MLA). Rapid law enforcement action is particularly important to bridge the gap between lengthy legal assistance procedures and the high speed at which criminals move and hide proceeds.
With studies showing less than 10 percent of all criminal gains are being recovered, one of the key drivers behind the creation of the expert working group is to increase the number of criminal assets being frozen, confiscated for the benefit of society or given back to original owners.
The working group session was addressed by New York City Police Commissioner William Bratton who highlighted the important role of asset recovery in daily police work.
The meeting, attended by three INTERPOL Executive Committee members, Vice President for the Americas, Alan Bersin and Delegates for Europe, Filippo Dispenza and Alexander Prokopchuk, followed the recent briefing to the UN Security Council by INTERPOL Secretary General Jürgen Stock.
In his address to the Security Council, Mr Stock emphasized INTERPOL’s important role in providing assistance for the implementation of UN sanctions, and highlighted the work of the expert working group in supporting the coordination of international law enforcement efforts in asset tracing and freezing.
Howard County Man Exiled to 8 Years in Prison for Illegally Possessing Firearms in a School ZoneRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Terrance Milik Marshall, age 41, of Scaggsville, Maryland, yesterday to eight years in prison, followed by three years of supervised release, for illegally possessing two firearms in a school zone.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; and Chief Mark A. Magaw of the Prince George’s County Police Department.
According to Marshall=s plea agreement, on February 7, 2014, during a routine patrol, law enforcement observed Marshall’s vehicle idling an a non-residential area in Hyattsville, within 1,000 feet of a school. Marshall was sitting in the vehicle smoking a cigar. When the officer got out and approached Marshall’s vehicle, Marshall jumped out and refused to return to his vehicle. Marshall told the officer “I don’t want to talk to you. I’m leaving,” then locked his car using the key-fob, and took off running. The officer caught up with Marshall and detained him.
Upon returning to the vehicle, the officer shined his flashlight into the vehicle and saw a 9mm firearm with an extended magazine in an orange bag on the front passenger seat. Marshall was then placed under arrest. On February 6, 2014, Marshall had been parked in the school zone at the same location and had in his possession at that time a semiautomatic firearm. Both firearms were recovered from the orange bag, loaded with 30 and 15 rounds of 9mm ammunition, respectively.United States Attorney Rod J. Rosenstein commended the ATF and Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney David I. Salem and Special Assistant U.S. Attorney Jennifer Sykes, of the U.S. Department of Justice, Organized Crime and Gang Section, who prosecuted the case.
Georgia Woman Sentenced for Writing Fraudulent Painkiller PrescriptionsRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – April Davis, 23, of Marietta, Georgia, was sentenced today for her role in a scheme to fraudulently obtain prescription painkillers, United States Attorney William J. Ihlenfeld, II, announced.
An investigation by the Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, revealed that Davis participated in a scheme to obtain prescription painkillers using fraudulent prescriptions. Davis would forge prescriptions from an emergency room doctor in Georgia. She would then provide the falsified prescriptions to her mother to fill at a pharmacy in Bridgeport, West Virginia. Her mother would then ship painkillers from West Virginia to Davis in Georgia.
Davis pled guilty in September 2014 to one count of “Aiding and Abetting the Fraudulent Obtaining Possession of a Controlled Substance.” She was sentenced today to five years of probation.
Assistant U.S. Attorney John Parr prosecuted the case on behalf of the government.
U.S. District Judge Irene M. Keeley presided.