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18 February 2015
Dubuque Woman Pleads Guilty to Violating the Anti-Structuring RegulationsRead the Press Release
Contact: Steve Young
A Dubuque woman who broke up cash deposits to avoid federal reporting requirements pled guilty on February 17, 2015, in federal court in Cedar Rapids.
Janet E. Malone, 68, from Dubuque, Iowa, was convicted of one misdemeanor count of willful violation of an anti-structuring regulation.
In a plea agreement, Malone admitted that she made 12 structured cash deposits totaling $89,100.00 into her bank account. The deposits were made approximately one year after IRS agents warned Malone’s husband, in her presence, that structuring laws forbid such transactions.
Sentencing before United States District Court Magistrate Judge Jon S. Scoles will be set after a presentence report is prepared. Malone remains free on bond previously set pending sentencing. Malone faces a possible maximum sentence of less than one years’ imprisonment, a $100,000.00 fine, $25.00 in special assessments, and up to one year of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Matthew J. Cole and was investigated by the Internal Revenue Service.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-CR-01006.
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Drug Indictment in Kansas Began with Traffic Stop in UtahRead the Press Release
KANSAS CITY, KAN. – An investigation that began with a traffic stop in Utah led to a federal indictment in Kansas City, Kan., Wednesday charging five people with drug trafficking, U.S. Attorney Barry Grissom said.
Ana Claudia Rodriguez-Rodriguez, 39; Sergio Lopez, 41; Migel Lopez-Lopez, 22; Daniel Rivera, 32; and Andres Marquez, 22, are charged with one count of conspiracy to distribute methamphetamine.
According to court documents, Rodriguez-Rodriguez was stopped by the Utah Highway Patrol Jan. 21, 2015, driving a red 1991 Jeep Cherokee. Troopers found approximately 10 pounds of methamphetamine in the car. Investigators determined that she was headed to the Kansas City area to deliver the drugs. In Kansas City, Kan., officers set up a sting operation and arrested the other defendants when they attempted to take delivery of the drugs.
If convicted, they face a penalty of not less than 10 years and a fine up to $10 million. The Utah Highway Patrol and the Drug Enforcement Administration investigated. Special Assistant U.S. Attorney Erin Tomasic is prosecuting.
OTHER INDICTMENTS
Derick Allen Spicer, 34, is charged with failing to register as required by the federal Sex Offender Registration and Notification Act. The crime is alleged to have occurred Dec. 12, 2014.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The U.S. Marshals Service investigated. Assistant U.S. Attorney Kim Martin is prosecuting.
Andrew J. Denning, 23, Wichita, Kan., and Tyler W. Lewis, 22, Wichita, Kan., are charged with one count of distributing marijuana and one count each of unlawfully possessing a firearm in furtherance of drug trafficking. The crimes are alleged to have occurred Feb. 3, 2015, in Sedgwick County, Kan.
If convicted, they face a maximum penalty of five years in federal prison and a fine up to $250,000 on the marijuana count and a penalty of not less than five years on the gun charges. The Wichita Police Department investigated. Assistant U.S. Attorney Mona Furst is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
District Man Sentenced to over Nine Years in PrisonRead the Press Release
For Series of Burglaries Targeting Senior Citizens
-Defendant Posed as a Cable Company Worker to Gain Entry Into Houses-WASHINGTON – Tyrone Calliham, 47, of Washington, D.C., was sentenced today to nine years and two months in prison for a series of burglaries and thefts, all targeting senior citizens, in which he gained entry to the victims’ residences by posing as a cable company employee, U.S. Attorney Ronald C. Machen Jr. announced.
Calliham pled guilty in November 2014, in the Superior Court of the District of Columbia, to two counts count of first-degree burglary of a senior citizen; three counts of attempted first-degree burglary of a senior citizen, and one count of first-degree identity theft. He was sentenced by the Honorable Milton C. Lee. Upon completion of his prison term, Calliham will be placed on five years of supervised release.
According to the government’s evidence, Calliham’s crimes spanned a period of several years. They took place in daylight hours, with Calliham typically knocking on the doors of senior citizens’ homes and pretending to be a cable company employee or a former cable worker. In at least one incident, he was wearing a shirt with the company’s logo. He typically said that he needed to come inside the homes to check the wiring or offered to perform services that would lower monthly cable bills. Once inside, he headed into various rooms and took money, wallets, credit cards, cellphones and other items. He pled guilty to charges stemming from five incidents on four days. The crimes took place in Northeast and Northwest Washington on Oct. 1, 2010; Aug. 16, 2013; June 26, 2014, and July 10, 2014. Victims ranged in age from 73 to 90.
In one incident, for example, on July 10, 2014, Calliham approached a 75-year-old woman outside her residence. He stated that he used to work for a cable company and he offered to do electrical work. She accepted. She allowed him into her home so he could see the circuit breakers. He then asked her to stand by the circuit breakers, saying he would yell to her from outside to turn them on and off. The victim stood by the circuit breakers, waiting, until a neighbor came to check on her some minutes later after seeing the defendant leave the location. He had left with the victim’s wallet.
Calliham was identified last year after he was caught on surveillance video and after he brazenly left his name with one of the victims. He was arrested in North Carolina and extradited to the District of Columbia. Far from being ashamed of what he had done, prior to his arrest, on his Facebook account, Calliham “Liked” an article on a news website about his own crimes.
In announcing the sentence, U.S. Attorney Machen commended the work of those who investigated the case from the Metropolitan Police Department (MPD). He also expressed appreciation for the assistance provided by the Prince George’s County, Md. Police Department. Finally, he commended the efforts of Assistant U.S. Attorney Christopher M. Bruckmann, of the Felony Major Crimes Trial Section, who investigated and prosecute the case.
15-23
District Man Pleads Guilty to Second-Degree Murder While Armed in 2013 Slaying of Howard University StudentRead the Press Release
-Killing Took Place in Botched Robbery Attempt-
WASHINGTON – Rasdavid Lagarde, 28, of Washington, D.C., pled guilty today to charges stemming from a botched attempted armed robbery of two Howard University students in which one of the victims was killed, U.S. Attorney Ronald C. Machen Jr. announced.
Lagarde pled guilty in the Superior Court of the District of Columbia to second-degree murder while armed for the death of 22-year-old Omar Sykes and attempted armed robbery and possession of a firearm during a crime of violence for the attack on the surviving victim. He is to be sentenced on May 8, 2015, by the Honorable Lynn Leibovitz. The plea, which is contingent on the Court’s approval, calls for a sentence of 20 to 30 years of incarceration.
According to the government’s evidence, on July 4, 2013, at about 11:20 p.m., Lagarde and an accomplice were in the 700 block of Fairmont Street NW. Mr. Sykes and another Howard University student were also on the block, walking ahead of them.
Lagarde’s accomplice pulled out a gun. He ran towards the student who was with Mr. Sykes, and ordered him to the ground. He struck the student in the head multiple times with the gun, hit him in the ribs, and kicked him. He then ordered the student multiple times not to look at him or Lagarde. At one point during the assault, Lagarde told the accomplice that he thought the student was looking at him. The accomplice then hit the student yet again.
During this attack, Lagarde pulled out a gun and approached Mr. Sykes to assist in the robbery. Lagarde’s accomplice ordered Mr. Sykes to the ground and tried to force him to the ground next to the other victim. As Lagarde attempted to pistol-whip Mr. Sykes, Lagarde fired his gun at Mr. Sykes. Mr. Sykes was shot by a single gunshot that traversed through his arm and into his chest. Lagarde and the accomplice then fled from Fairmont Street.
Mr. Sykes died from the gunshot wound. The other student suffered lacerations to his head, including a huge gash to his forehead that required multiple stitches to treat. He also suffered several bruised ribs.Lagarde was arrested by the Metropolitan Police Department (MPD) on Oct. 15, 2013 for the murder of Mr. Sykes. He told detectives that the accomplice initiated the robbery. However, once the attempted robbery began, Lagarde helped with it. Lagarde admitted that he was armed with a .380 firearm, which he used during the robbery attempt. Lagarde stated that he did not intend for the gun to fire, but it did fire during a tussle with Mr. Sykes when he tried to force Mr. Sykes to the ground. No other arrests have been made in the case.
In announcing the guilty plea, U.S. Attorney Machen commended the work of the detectives of the Criminal Investigations Division Homicide Branch, crime scene officers, and the Third Police District of the Metropolitan Police Department, as well as Jacob Kunkle of the FBI’s Cellular Analysis Survey Team. He also expressed appreciation to those who worked on the case from the U.S. Attorney’s Office, including Marcia Rinker, James Brennan, M. Laverne Forrest, Debra Cannon, and Michael Hailey, all of the Victim/Witness Assistance Unit; Paralegal Specialist Vanessa Trent-Valentine; former Paralegal Specialists Fern Rhedrick and Marian Russell; Investigative Analyst Zachary McMenamin, Litigation Technology Specialist Jeanie Latimore-Brown, and Intern Abhi Mehta. He also praised the efforts of Assistant U.S. Attorneys Shana Fulton and Veronica Sanchez, who investigated, indicted and prosecuted the case.
15-24
Department of Justice and Federal Trade Commission Announce Agenda for Public Workshop on Examining U.S. Health Care CompetitionRead the Press Release
The Department of Justice and the Federal Trade Commission (FTC) have issued the agenda for their joint public workshop, Examining Health Care Competition, which will be held on Feb. 24 and 25, 2015, at the Constitution Center Auditorium located at 400 7th Street S.W., Washington, D.C., 20024.
The workshop will study recent developments related to health care provider organization and payment models, with an emphasis on how they may affect competition in the provision of health care services. Specific discussion topics will include early observations regarding accountable care organizations; alternatives to traditional fee-for-service payment models; trends in provider consolidation; trends in provider network and benefit design strategies, as well as contracting practices and regulatory activity that may enhance or undermine these strategies; and early observations regarding health insurance exchanges.
The workshop will be webcast live on the FTC’s website. Registration information and directions to the FTC Conference Center are available on the event web page. Advance registration is not required, but is strongly encouraged.
Public comments can be submitted through April 30, 2015. Suggested comment topics, and instructions on how to submit comments online and by mail, can be found in the Federal Register notice.
Reasonable accommodations for people with disabilities who wish to attend the workshop in person are available upon request. Requests should be submitted via email to [email protected] or by calling Lara Kittelson at 202-326-3388. Requests should be made in advance. Please include a detailed description of the accommodation needed and provide contact information.
Press contacts:
Department of Justice
Office of Public Affairs
Emily Pierce
202-514-2007Federal Trade Commission
Office of Public Affairs
Betsy Lordan
202-326-3707Staff contacts:
Department of Justice
Antitrust Division, Office of Legal Policy
Patrick M. Kuhlmann
202-305-4639Federal Trade Commission
Office of Policy Planning
Stephanie A. Wilkinson
202-326-2084Co-Creator of “Blackshades” Malware Pleads Guilty in Manhattan Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ALEX YÜCEL, the co-creator of malicious software known as the Blackshades Remote Access Tool, or “RAT,” which has been sold and distributed through YÜCEL’s Blackshades organization to thousands of people in more than 100 countries, pled guilty today in Manhattan federal court to one count of distribution of malicious software. U.S. District Judge P. Kevin Castel presided over the plea proceedings.
Manhattan U.S. Attorney Preet Bharara said: “Through his creation and sale of the Blackshades RAT, Alex Yücel enabled anyone, for just $40, to violate the property and privacy of his victims. With his guilty plea today, Yücel will now have to pay for his conduct. This Office will continue to work with our law enforcement partners at the Federal Bureau of Investigation and around the world to find and prosecute those who create, market, and employ malicious software.”
According to the allegations in documents filed in Manhattan federal court, and statements made at today’s plea and other court proceedings:
Beginning in at least 2010, the “Blackshades” organization, which Yücel owned and controlled, sold and distributed malware to thousands of cybercriminals throughout the world. Blackshades’ flagship product was the RAT – a sophisticated piece of malware that enabled cybercriminals secretly and remotely to gain control over a victim’s computer. After installing the RAT on a victim’s computer, a user of the RAT had free rein to, among other things, access and view documents, photographs, and other files on the victim’s computer, record all of the keystrokes entered on the victim’s keyboard, steal the passwords to the victim’s online accounts, and even activate the victim’s web camera to spy on the victim – all of which could be done without the victim’s knowledge. A Blackshades user could also exploit victims’ computers for Distributed Denial of Service (“DDoS”) attacks by commanding Blackshades-infected computers to overwhelm websites or computer servers with traffic, and thereby disable them.
The RAT was typically advertised on forums for computer hackers and marketed as a product that conveniently combined the features of several different types of hacking tools. Copies of the Blackshades RAT were available for sale, typically for $40 each, on a website maintained by Blackshades. After purchasing a copy of the RAT, a user had to install the RAT on a victim’s computer – i.e., “infect” a victim’s computer. The infection of a victim’s computer could be accomplished in several ways, including by tricking victims into clicking on malicious links or by hiring others to install the RAT on victims’ computers.
Once a computer was infected with the RAT, the user of the RAT had complete control over the computer. The user could, among other things, remotely activate the victim’s web camera. In this way, the user could spy on anyone within view of the victim’s webcam inside the victim’s home or in any other private spaces where the victim’s computer was used. The RAT also contained a “keylogger” feature that allowed users to record each key that victims typed on their computer keyboards. To help users steal a victim’s passwords and other log-in credentials, the RAT also had a “form grabber” feature. The “form grabber” automatically captured log-in information that victims entered into “forms” on their infected computers (e.g., log-in screens or order purchase screens for online accounts).
YÜCEL co-created the Blackshades RAT with Michael Hogue and operated the Blackshades organization with the help of several employees. The RAT was purchased by at least several thousand users in more than 100 countries and used to infect more than half a million computers worldwide.
YÜCEL, 24, a Swedish national, was arrested in Moldova in November 2013. He was the first defendant ever to be extradited from Moldova to the United States. His guilty plea to distribution of malicious software carries a maximum sentence of 10 years in prison. He is scheduled to be sentenced by Judge Castel on May 22, 2015, at 11:00 a.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.
Michael Hogue, the co-creator of the RAT, pled guilty before Judge Castel in January 2013 and is awaiting sentencing.
Brendan Johnston, an administrator for the Blackshades organization, pled guilty on November 21, 2014, before U.S. District Judge Jesse M. Furman to conspiracy to commit computer hacking, which carries a maximum sentence of 10 years in prison. He is scheduled to be sentenced by Judge Furman on May 27, 2015, at 3:30 p.m.
Marlen Rappa, a customer of Blackshades who purchased the RAT and used it to infect victims’ computers, spy on those victims using their web cameras, and steal personal files from their computers, pled guilty on October 31, 2014, before U.S. District Judge Valerie E. Caproni. He is scheduled to be sentenced by Judge Caproni on March 13, 2015, at 3:00 p.m.
Kyle Fedorek, a customer of Blackshades who purchased the RAT and used it to steal financial and other account information from more than 400 victims, pled guilty on August 19, 2014, before U.S. Magistrate Judge Gabriel W. Gorenstein and is scheduled to be sentenced by U.S. District Judge Vernon S. Broderick on February 19, 2015, at 10:00 a.m.
Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Sarah Lai and Daniel Noble are in charge of the prosecution. Assistant U.S. Attorney Paul Monteleoni is in charge of the forfeiture aspects of the case.
U.S. v. Alex Yucel S1 Indictment
Career Offender Sentenced to Nearly 18 Years in Federal PrisonRead the Press Release
CORPUS CHRISTI, Texas - Raymond Estrada, 35, of Corpus Christi, has been ordered to serve a significant sentence following his conviction of possession with intent to distribute crack cocaine and the court’s finding that he was a career offender, announced U.S. Attorney Kenneth Magidson today. He pleaded guilty Nov. 3, 2015.
Estrada was on serving a term of supervised release following a 2008 conviction at the time he committed the offense charges in this case involving 56 grams of cocaine base.
Today, Senior U.S. District Judge Janis Graham Jack ordered he serve 188 months in federal prison to be followed by five years of supervised release. Estrada had been previously convicted of several felonies and was determined to be a career offender by the court. In addition, Judge Jack revoked Estrada’s supervised release on the 2008 conviction further ordered he serve an additional 24 months imprisonment, to run consecutively, for a total sentence of 212 months.
On May 15, 2014, Corpus Christi Police Department (CCPD) conducted a traffic stop on Estrada whom they believed was preparing to cook cocaine base. Law enforcement obtained a search warrant for his residence in Corpus Christi, at which time they discovered a digital scale and packing materials on the kitchen table. They also found a knit cap in a chair that contained approximately 56 grams of crack cocaine. He was immediately arrested.
Estrada will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charge stems from an investigation by Drug Enforcement Administration and the CCPD’s Gang and Narcotics Units. Assistant U.S. Attorney Lance Watt is prosecuted the case.Buffalo Doctor Sentenced to Prison for Defrauding University of Rochester and Filing A False A False Tax ReturnRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
Rochester, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Doron Feldman, 54, of Williamsville, NY, who was convicted of conspiracy to commit mail fraud and filing a false tax return, was sentenced to 24 months in prison by U.S. District Judge Frank P. Geraci. The defendant was also ordered to pay restitution to the University of Rochester totaling $1,460,000. In addition, Feldman must pay $157,000 in restitution to the Internal Revenue Service.
Assistant U.S. Attorney Richard A. Resnick, who handled the case, stated that the defendant practiced as an anesthesiologist for CGF Anesthesia and Associates in Buffalo, NY. CGF provided anesthesia services to patients undergoing surgery at Strong Memorial Hospital, Highland Hospital and other medical facilities in the Rochester, N.Y. area. Between September 2007 and December 2009, Feldman, along with co-defendant Debra Bulter and others, devised a scheme to defraud and obtain money from the Department of Anesthesiology at the University of Rochester.
In September 2007, fraudulent invoices were submitted to the Department of Anesthesiology for services that were never provided by Feldman. In her position as Program Administrator for the department, Debra Bulter approved payment of the fraudulent invoices. From 2008 through 2010, the Department of Anesthesiology paid fraudulent fees totaling approximately $1,460,000 with the defendant receiving approximately $630,000 of that amount.
Debra Bulter has been convicted of conspiracy to commit mail fraud and money laundering and is awaiting sentencing on March 19, 2015.
The sentencing is the culmination of a joint investigation on the part of the Internal Revenue Service, under the direction of Shantelle P. Kitchen, Special Agent in Charge, New York Field Office, and the United States Postal Inspection Service, under the direction of Shelly Binkowski, Inspector in Charge, Boston Division, United States Postal Inspection Service.
Bon Air Man Charged with Robbing Six South Hills BanksRead the Press Release
PITTSBURGH – An Allegheny County resident has been indicted by a federal grand jury in Pittsburgh on charges of bank robbery, United States Attorney David J. Hickton announced today.
The six-count indictment named Christopher Furay, 33, as the sole defendant.
According to the Indictment, between Dec. 1, 2014, and Jan. 16, 2015, Furay robbed six different banks in the Pittsburgh area including a First Commonwealth Bank located in Dormont, Pa.; a First National Bank located in Castle Shannon, Pa.; a PNC Bank located in Bethel Park, Pa.; a Citizens Bank located in Bethel Park, Pa.; a First Commonwealth Bank located in West Mifflin, Pa; and a Citizens Bank in Brentwood, Pa. All of the banks are insured by the Federal Deposit Insurance Corporation.
The law provides for a maximum total sentence of 20 years in prison, a fine of $250,000, or both, per count. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Cindy K. Chung is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, Dormont Borough Police Department, Castle Shannon Police Department, Bethel Park Police Department, West Mifflin Police Department, and Brentwood Police Department 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.
Austin Man Sentenced to 15 Years in Federal Prison for Production of Child PornographyRead the Press Release
In Austin today, U.S. District Judge Lee Yeakel sentenced 32-year-old Josh Rube to 15 years in federal prison followed by ten years of supervised release for production of child pornography announced Acting United States Attorney Richard L. Durbin, Jr., Federal Bureau of Investigation Special Agent in Charge Christopher Combs and Austin Police Chief Art Acevedo.
On May 30, 2014, federal and state authorities executed a search warrant on a recreational vehicle owned by the defendant and seized a digital camera, several computers and related storage media. An analysis of computer related equipment collected by authorities revealed numerous images of a minor female engaged in sexually explicit conduct, including several images where Rube sexually assaulted his victim. In October 2014, Rube pleaded guilty to enticing a person under the age of 18 into engaging in sexually explicit conduct for the purpose of producing images of such conduct.
This investigation was conducted by the FBI together with the Austin Police Department. Assistant United States Attorney Matthew Devlin prosecuted this case on behalf of the Government.
Attorney General Holder Statement on the Departure of Brendan Johnson as the United States Attorney of the District of South DakotaRead the Press Release
Attorney General Eric Holder released the following statement on the departure of U.S. Attorney Brendan Johnson:
“During Brendan Johnson's tenure as United States Attorney for South Dakota, he has distinguished himself as an exemplary leader, a passionate advocate for his fellow citizens, and an extraordinarily dedicated public servant," said Attorney General Holder. "As a lawyer and as a leader, Brendan has set a standard of excellence that will not soon be surpassed. Particularly with regard to public safety challenges on tribal lands, he has served as a key advisor to senior Justice Department officials - including me. As past Chair of the Native American Issues Subcommittee, he is not only a respected champion for tribal justice in his own right, but a critical national leader - offering sound guidance, wise counsel, and candid advice on a host of pressing issues. In standing against violent crime, fraud, drug trafficking, violence against women, and countless other threats, Brendan's fierce and determined service, on behalf of the people of South Dakota, has been without equal. Although he will be greatly missed, his many contributions will endure. I thank him for his outstanding service - to South Dakota, and to our nation - and wish him all the best as he takes on new challenges and opportunities.”
Albuquerque Man Sentenced to Fifteen Years for Federal Methamphetamine Trafficking and Firearms ConvictionRead the Press Release
ALBUQUERQUE – Charles Padilla, 46, of Albuquerque, N.M., was sentenced this morning to 15 years in federal prison followed by five years of supervised release for his conviction on methamphetamine trafficking and firearms charges. The sentence was announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Will R. Glaspy of the DEA’s El Paso Field Division, and Albuquerque Police Chief Gorden Eden, Jr.
Padilla was arrested on Nov. 30, 2012, on a criminal complaint charging him with possession of methamphetamine with intent to distribute. Padilla subsequently was indicted in Dec. 2012, and charged with two counts of possession of methamphetamine with intent to distribute and two counts of using and carrying firearms in furtherance of drug trafficking crimes.
According to court filings, on Nov. 30, 2012, law enforcement officers seized approximately 21 pounds of methamphetamine that were concealed in an underground storage area when they searched a residence located in southwest Albuquerque. Thereafter, officers surreptitiously recorded a telephone conversation during which Padilla acknowledged ownership of the methamphetamine. Following Padilla’s arrest, officers searched his residence and seized 19 firearms.
On July 28, 2014, Padilla pled guilty to a methamphetamine trafficking charge and a firearms count. In his plea agreement, Padilla admitted that on Nov. 30, 2012, he unlawfully possessed methamphetamine with the intention of distributing it to others. He also admitted possessing a firearm in furtherance of a drug trafficking crime.
This case was investigated by the Albuquerque office of the DEA and the Albuquerque Police Department and was prosecuted by Assistant U.S. Attorneys Joel R. Meyers and Shana B. Long.
Albuquerque Man Sentenced to 72 Months for Federal Child Pornography ConvictionRead the Press Release
ALBUQUERQUE – Faviano Lopez, 28, of Albuquerque, N.M., was sentenced this morning in federal court to 72 months in federal prison followed by five years of supervised release for receipt of a visual depiction of a minor engaged in sexually explicit conduct. Lopez will also be required to register as a sex offender. The sentence was announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Waldemar Rodriguez of Homeland Security Investigations (HSI) in El Paso, Texas; New Mexico State Police Chief Pete Kassetas, and Albuquerque Police Chief Gorden Eden, Jr.
Lopez was arrested on July 11, 2014, on a criminal complaint alleging federal child pornography charges. According to the criminal complaint, the investigation into Lopez was initiated by the Homeland Security Investigations and the New Mexico State Police in Nov. 2013, after the NMSP obtained information indicating that an IP address subscribed to the residence in which Lopez was residing was being used to share video and image files consistent with child pornography. In Feb. 2014, HSI and the Albuquerque Police Department executed a federal search warrant at Lopez’s residence and seized computer and computer-related media containing video and image files consistent with child pornography from Lopez’s bedroom. Lopez was arrested on state charges for violating his probation in Feb. 2014; those charges were later dismissed in favor of federal prosecution.
On Oct. 20, 2014, Lopez entered a guilty plea to a felony information charging him with receipt of child pornography. In his plea agreement, Lopez admitted receiving child pornography from May 2013 to Feb. 2014, by downloading images and videos of child pornography using a peer-to-peer file sharing system.
This case was investigated by the Albuquerque office of HSI, the New Mexico State Police and the Albuquerque Police Department, all of which are members of the New Mexico Internet Crimes Against Children (ICAC) Task Force. It was prosecuted by Assistant U.S. Attorney Jacob A. Wishard.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
The case also was brought as a part of the New Mexico ICAC Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 74 federal, state and local law enforcement agencies associated with the New Mexico ICAC Task Force, which is funded by a grant administered by the NMAGO. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
17 February 2015
Wheeling man convicted of selling crack cocaineRead the Press Release
WHEELING, WEST VIRGINIA – William “B.J.” Farmer, 39, of Wheeling, was convicted in federal court today of distributing crack cocaine, United States Attorney William J. Ihlenfeld, II, announced today.
An investigation by the Ohio Valley Drug and Violent Crime Task Force, a HIDTA-funded initiative, revealed that Farmer sold crack cocaine in Ohio County, West Virginia in June 2014.
Farmer pled guilty today to a criminal Information charging him with one count of “Distribution of Cocaine Base.” As a result of the guilty plea entered today, Mr. Farmer faces up to 20 months in prison.
In addition, Farmer admitted today that he had violated the conditions of a previously imposed period of supervised release. He was sentenced today to an additional 18 months in prison for the supervised release violation.
Assistant U.S. Attorney John Parr is prosecuting the case on behalf of the government.
Senior U.S. District Judge Frederick P. Stamp presided.
West Haven Man Who Embezzled Funds from Bank in New Canaan Where He Was Employed Is SentencedRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that STEPHEN DeCRESCENZO, 37, of West Haven, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to one day of imprisonment, time already served, six months in community confinement (“halfway house”) and three years of supervised release for embezzling more than $100,000 in funds from the bank where he was employed.
According to court documents and statements made in court, DeCRESCENZO was employed as personal banker for JPMorgan Chase Bank in New Canaan. Between approximately September 2008 and November 2011, DeCRESCENZO embezzled $106,028 in funds from customer accounts by transferring the funds into a separate customer account to which he had access. As part of his scheme, DeCRESCENZO disguised numerous withdrawals from the accounts as authorized cash withdrawals by customers when, in fact, he had stolen the money. DeCRESCENZO also wired funds stolen from a customer account into another bank account for his personal benefit.
DeCRESCENZO was ordered to pay full restitution.
On November 24, 2014, DeCRESCENZO pleaded guilty to one count of wire fraud.
DeCRESCENZO is a former member of the West Haven City Council.
This investigation was conducted by the Connecticut Financial Crimes Task Force, the Greenwich Police Department and the New Canaan Police Department. The case was prosecuted by Assistant U.S. Attorney Douglas P. Morabito.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Wahpeton Man Sentenced for Producing Child Pornography North Dakota's First Sextortion CaseRead the Press Release
Fargo - U.S. Attorney Timothy Q. Purdon announced that on Feb. 17, 2015, Dustin Coleman, age 22, Wahpeton, N.D., was sentenced before Honorable U. S. District Judge Ralph R. Erickson to serve 32 years’ incarceration for three counts of production of child pornography, two counts of extortion of sexually explicit images and videos from a child by threat of injury and damage to the reputation and three counts of possession of child pornography. Judge Erickson also sentenced Coleman to a lifetime of supervised release and pay an $800 special assessment to the Crime Victims Fund.
Beginning in 2013 and continuing until on about July 2013, Coleman used Kik Messenger and Touch, which are free messaging application for mobile devices, to transmit threatening communications with the intent to extort sexually explicit images and videos from female minors. Coleman used social networking websites such as Facebook to gather information about minor females located throughout the United States. He then used this information to extort the girls into creating sexually explicit images of themselves. On at least one occasion, he lied about already having possessed sexually explicit images of a minor female to extort sexually explicit images from her. Coleman used several different online screen names, including the screen name "debt collector" to both intimidate the minor females and conceal his identity and location when communicating with the minors.
After Coleman received sexually explicit images from minor females, he continued to demand that the victims send him additional and more graphic sexually explicit still images and videos. Coleman would communicate to the minor females that if they did not comply with his demands for additional material, he would injure their reputation by posting the sexually explicit images and videos to their friends and family. In at least one instance, he also threatened to sexually assault a minor female’s prepubescent sister if she did not comply. Coleman continued this pattern of extortion until law enforcement discovered his criminal activity while executing a search warrant for child pornography.
On August 26, 2013, Coleman’s former roommate in Wahpeton, North Dakota reported to the Wahpeton Police Department that she had viewed child pornography depicting a 14-year-old minor with whom she was familiar on Coleman’s electronic media. She took the media to a Wahpeton Police Department officer who obtained a search warrant for the media. This media was eventually forensically examined by a BCI special agent who discovered hundreds of sexually explicit images of young girls that appeared to be self-produced. Through further investigation, the BCI forensic agent was able to recover chats logs from the media which were associated with these sexually explicit images and videos. It was in these chats, that BCI discovered that defendant was extorting many of the girls into creating sexually explicit images and videos. In one instance, BCI recovered a chat log between the defendant and a 13-year-old minor girl who informed Defendant she was going to take her own life so as to avoid having to create additional material. HSI and BCI quickly located this girl who identified herself in the material found on Coleman’s media. The young girl further informed an HSI special agent that Coleman threatened to sexually assault her younger sister if she did not comply with his demands. A further forensic examination of the media also revealed child pornography depicting prepubescent children.
This case was investigated by the North Dakota Internet Crimes Against Children Task Force to include the Wahpeton Police Department, North Dakota Bureau of Criminal Investigations, and Homeland Security Investigations.
The case was prosecuted by Assistant U. S. Attorney Jennifer Puhl.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys’ Offices, Project Safe Childhood in conjunction with Internet Crimes Against Children Task Force (ICAC) help Federal, State and Local law enforcement agencies enhance their investigative responses to offenders who use the Internet, online communications systems or computer technology to sexually exploit children. The ICAC Program is a national network of 61 coordinated task forces engaging in proactive investigations, forensic investigations and criminal prosecutions. Project safe childhood also helps to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Union County Resident Sentenced for Methamphetamine OffenseRead the Press Release
Follow @SDILNewsOn February 13, 2015, Jonathan E. Merydith, 27, of Cobden, IL, was sentenced for a methamphetamine violation, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Merydith, who had previously pled guilty to a one-count indictment charging conspiracy to manufacture methamphetamine, was sentenced to 60 months in federal prison, to be followed by 3 years supervised release, and fined $200.00. The offense occurred between 2012 and March 2014, in Union, Williamson, and Jackson Counties. Evidence at the plea and sentencing hearings established that Merydith was involved with co-defendant Rusty Smith and others in the manufacture of methamphetamine. At sentencing, the district court determined that Merydith was responsible for the possession of more than 74 grams of pseudoephedrine. Co-defendant Ruth Diane Wiseman was previously sentenced to 18 months in prison for her role in the methamphetamine conspiracy. Co-defendants Rusty Smith and Shannon Connett have pled guilty and are awaiting sentencing.
The ongoing investigation is being conducted by the Union County Sheriff’s Office, Jackson County Sheriff’s Office, Illinois State Police, Williamson County Sheriff’s Office, Marion Police Department, Carbondale Police Department, Illinois State Police Methamphetamine Response Team and Drug Enforcement Administration. The 19th Judicial District Drug Task Force (Tennessee) assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
U.S. Attorney Dettelbach in Washington to Participate in Conference on Countering Violent ExtremismRead the Press Release
U.S. Attorney Steven M. Dettelbach is in Washington, D.C. to participate in a conference focused on countering violent extremism.
“This is an opportunity to further home a national security strategy designed to make us all safer,” Dettelbach said. “Not only can we share the important work done in our district but, as importantly, we will learn more about what is working in other parts of the country and internationally to prevent homegrown extremism. We need to continue to forge strong partnerships among different government agencies and with the community to counter the false narratives being put out by extremists and keep our communities and our citizens safe."
The conference, convened by the White House, will take place from Tuesday to Thursday. It will focus on domestic and international efforts to prevent violent extremists and their supporters from radicalizing, recruiting, or inspiring individuals or groups in the United States and abroad to commit acts of violence, efforts made even more imperative in light of recent, tragic attacks in Ottawa, Sydney, and Paris. This summit will build on the strategy the White House released in August of 2011, Empowering Local Partners to Prevent Violent Extremism in the United States, the first national strategy to prevent violent extremism domestically.
Efforts to devise a national strategy in this area rely heavily on well-informed and resilient local communities. National efforts must focus on building frameworks integrating a range of social service providers, including education administrators, mental health professionals, and religious leaders, with law enforcement agencies to address violent extremism as part of the broader mandate of community safety and crime prevention. The summit will highlight best practices and emerging efforts in that vein.The U.S. Attorney’s Office for the Northern District of Ohio has prosecuted domestic terrorism and religiously motivated attacks in recent years, including a group of self-described anarchists who plotted to blow up a bridge in Northeast Ohio, the arson of the largest mosque in the Toledo area and a man in the Toledo area who illegally assembled an arsenal of weapons, ammunition and body armor while tracking the movements of Jewish and African-American leaders.
The office has also done extensive community outreach to a variety of communities, including hosting a “Civics Day” for Arab and Muslim teens, conducting computer safety training for teens and parents and held town hall meetings focused on improving relationships between the community and law enforcement.
Two Kansas Men Sentenced for Trafficking in Designer DrugsRead the Press Release
TOPEKA, KAN. - A father and son from Kansas who launched a global sales and supply network for smokable synthetic cannabinoids – also called synthetic marijuana -- and other designer drugs were sentenced Tuesday to federal prison for violating the federal Food, Drug and Cosmetic Act, U.S. Attorney Barry Grissom said.
Clark Sloan, 55, Tonganoxie, Kan., was sentenced to 87 months in federal prison. His son, Jonathan Sloan, 34, Lawrence, Kan., was sentenced to 96 months in federal prison. In September 2014, they were convicted in a federal jury trial on 20 counts including one count of conspiracy, two counts of misbranding, 15 counts of mail fraud, one count of smuggling and one count of money laundering.
During trial, prosecutors presented evidence that the men conspired to manufacture and sell designer drugs, including a marijuana substitute called K2 that was named after the second-highest mountain in the world. The business, which began in a shop in Lawrence, Kan., grew to encompass a chain of suppliers, retailers, wholesalers and business associates with locations in Kansas, California, Massachusetts, New Jersey, Oregon, Nevada and Indiana, as well as in other nations including Argentina, Latvia, Germany, Lithuania, the United Kingdom, Ukraine, the Netherlands, Canada, Sweden, Singapore, Thailand and Uruguay. The defendants made at least $3.3 million from the sale of the drugs
Prosecutors presented evidence that Jonathan Sloan was co-owner of two businesses, Persephone's Journey, a retail store in Lawrence, Kan., and Bouncing Bear Botanicals, ostensibly a wholesaler of herbs and botanical products, with co-defendant Bradley Miller of Wichita, Kan. Bouncing Bear Botanicals was located in the basement of Persephone's Journey and then moved to a warehouse in Oskaloosa, Kan. Clark Sloan, who was Miller’s brother, developed and monitored the Web site for Bouncing Bear Botanicals and worked in marketing and Internet technologies.
Miller developed recipes for K2 and manufactured it. During trial, prosecutors presented evidence that:
- The defendants manufactured and distributed K2 as an "all natural product" but it contained synthetic chemicals called JWH Compounds that mimic the effects of the THC in marijuana. Their products also contained solvents, either the alcohol Everclear or acetone, as well as other additives.
- They manufactured and sold at least four types of K2 products: Standard, Citron, Blonde and Summit, with Standard being the least potent and Summit being the most potent, depending on the amount of JWH Compounds that were mixed with herbs.
- The defendants manufactured the K2 without quality controls, resulting in inconsistent potencies. They intended K2 products to be smoked like marijuana by recreational drug users, but they falsely referred to K2 products as aromatic incense and falsely labeled them as "not for consumption."
“Consumers must always be aware that they put their health at risk when they buy drugs from unknown sources online and in stores,” said Catherine Hermsen, Special Agent in Charge, FDA’s Office of Criminal Investigations. “OCI is committed to working to protect the U.S. public health.”
Co-defendant Bradley Miller is set for sentencing March 16.
Grissom commended the Food and Drug Administration, Assistant U.S. Attorney Tanya Treadway and Assistant U.S. Attorney Tony Mattivi for their work on the case.
Three Perry County Residents Charged with Methamphetamine ConspiracyRead the Press Release
Follow @SDILNewsThree Perry County residents were indicted on February 3, 2015, for conspiracy to manufacture methamphetamine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Skyler A. Elder, 25, Joseph D. Smith, 41, and Jamie L. Smith, 33, all of Pinckneyville, are charged in a one-count indictment charging conspiracy to manufacture methamphetamine. The indictment alleges that the offense occurred between 2012 and December 2014, in Perry, Jackson, and Randolph Franklin Counties. The Smiths made their initial appearances in federal court in Benton on February 9, 2015. They are currently on bond, pending an April 2015, jury trial. Elder made his initial appearance in federal court on February 13, 2015. He is currently being held without bond pending a February 17, 2015, detention hearing.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The methamphetamine offense carries a maximum penalty of up to 20 years in prison, to be followed by 3 years’ supervised release, and a $1,000,000 fine.
The ongoing investigation is being conducted by the Perry County Sheriff’s Office, Jackson County Sheriff’s Office, Perry County Drug Task Force, Murphysboro Police Department, and DuQuoin Police Department. The Pinckneyville Police Department and Illinois State Police Methamphetamine Response Team assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Three Jefferson City Men Charged with Distributing MethRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that three Jefferson City, Mo., men have been charged in federal court following a police chase that resulted in the seizure of a large quantity of methamphetamine.
David E. Rodebaugh, 40, Michael Pearson, 31, and Hernan Hurtado, 23, all of Jefferson City, were charged in separate, but related, criminal complaints filed in the U.S. District Court in Jefferson City, Mo., on Saturday, Feb. 14, 2015. All three defendants had their initial court appearances today and remain in federal custody pending detention hearings.
Rodebaugh and Pearson were each charged with one count of possessing methamphetamine with the intent to distribute and one count of participating in a conspiracy to possess methamphetamine with the intent to distribute. Hurtado was charged with one count of distributing methamphetamine.
According to affidavits filed in support of the federal criminal complaints, law enforcement officers were conducting surveillance of Rodebaugh on Friday, Feb. 13, 2015 as part of an ongoing drug-trafficking investigation. Rodebaugh and Pearson met with Hurtado in the parking lot at the Capital Mall in Jefferson City, the affidavit says, where Pearson took a plastic bag from the back cab area of Hurtado’s pickup and placed it in the back seat of the Acura he and Rodebaugh had driven to the mall.
Pearson drove the Acura, with Rodebaugh in the front passenger seat, as they left the mall. Police attempted to stop Pearson, the affidavit says, but he refused to stop and led officers in pursuit. The Acura was eventually rendered inoperable and Pearson fled on foot. Rodebaugh remained inside the Acura and was detained. Pearson was later located and arrested.
According to the affidavit, law enforcement officers found the plastic bag, which Rodebaugh later admitted he had thrown out the vehicle’s window during the pursuit, about 75 yards from where the Acura was stopped. Inside the plastic bag were two large bundles that contained approximately five pounds of methamphetamine.
Later that same afternoon, Hurtado called the Jefferson City, Mo., Police Department to report he had been robbed of $6,000 while at his home in Jefferson City. Hurtado voluntarily came to the police station, where he was questioned and arrested.
Dickinson cautioned that the charges contained in these complaints are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the Drug Enforcement Administration and MUSTANG (the Mid-Missouri Unified Strike Team and Narcotics Group).
Tennessee Resident Charged with Defrauding Contributors to Sandy Hook-related CharityRead the Press Release
Follow @USAO_CT
Deirdre M. Daly, United States Attorney for the District of Connecticut and Kevin J. Kline, Acting 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 indictment charging ROBERT TERRY BRUCE, 34, of Nashville, Tennessee, with defrauding contributors to an organization he established after the December 14, 2012 school shootings in Newtown.
The indictment was returned under seal on February 4, 2015, and BRUCE was arrested on Friday in Tennessee.
“This arrest serves as a warning to anyone who attempts to profit from the tragedy at Sandy Hook,” stated U.S. Attorney Daly. “With the assistance of the FBI, we will continue to prioritize the investigation of fraudulent schemes that exploit the generosity of donors responding to this tragedy.”
“Creating a fraudulent charity to exploit a tragedy for personal gain is unconscionable,” stated FBI Acting Special Agent in Charge Kline. “These investigations will continue to be a priority for the Federal Bureau of Investigation.”
According to the indictment, BRUCE founded 26.4.26, an organization that began soliciting charitable donations after the December 14, 2012 school shootings in Sandy Hook, Connecticut. In early 2013, BRUCE solicited and received contributions to 26.4.26 in connection with a charity athletic event in Gilford, New Hampshire called the Schools 4 Schools run. BRUCE promoted the event via social media, and solicited contributions to 26.4.26 through an online PayPal account by representing to potential donors that the purpose of the event was “to help raise funds for increased school safety, families of victims, memorials to teacher heroes, awareness and prevention in schools across America.” BRUCE further represented to potential donors that “all proceeds will go to the 26.4.26 Foundation.”
The indictment further alleges that, in early 2013, BRUCE also solicited contributions to 26.4.26 in connection with a charity athletic event in Tennessee called CrossFit Cares. As he had in the New Hampshire event, BRUCE promoted the event via social media, and solicited contributions to 26.4.26 through PayPal by representing to potential donors that “all proceeds will go to the 26.4.26 Foundation” and that the “mission of 26.4.26 is to provide funding for the families of victims, memorials for teacher heroes and to increase safety in schools across the country.”
Rather than using the funds raised to support his purported mission, the indictment alleges that BRUCE used most of the funds to enrich himself and to support his personal training business. Several of the victim donors are from Connecticut.
The indictment charges BRUCE with six counts of wire fraud, a charge that carries a maximum term of imprisonment of 20 years on each count.
Following his arrest on February 13, BRUCE appeared in federal court in Nashville and was released on a $20,000 bond. His arraignment in the District of Connecticut is scheduled for February 23 at 10:00 a.m. in Hartford.
U.S. Attorney Daly stressed that an indictment is only a charge and is not evidence of guilt. Charges are only allegations and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Susan Wines. U.S. Attorney Daly also acknowledged the critical assistance provided by the U.S. Attorney’s Office for the Middle District of Tennessee.
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(203) 821-3722 [email protected]Springfield Man Sentenced to 17 Years for Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., man who was part of a nationwide e-mail network was sentenced in federal court today for receiving and distributing child pornography.
Joseph Allen High, 44, of Springfield, was sentenced by U.S. District Judge M. Douglas Harpool to 17 years in federal prison without parole.
On Sept. 17, 2014, High pleaded guilty to receiving and distributing child pornography over the Internet.
High’s e-mail address was discovered by federal agents in Illinois during an investigation into a national e-mail network that exchanged child pornography among its members. More than 1,000 individuals utilized their e-mail accounts to trade images of child pornography with one another. Agents determined that High had received 17 videos and 72 images of child pornography between Dec. 17, 2012, and Feb. 16, 2013. The videos included children as young as three or four years old, and children being sexually assaulted by adults.
According to court documents, High sexually abused an 8-year-old girl on multiple occasions. Agents discovered Internet images of the child victim, clothed and asleep, by typing High’s e-mail address into the Google search engine.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the FBI and the Springfield, Mo., Police Department.
Project Safe Childhood
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."
Springfield Business Owner Sentenced for Filing False Tax ReturnsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the owner of a Springfield, Mo., business was sentenced in federal court today for filing false tax returns on more than $1.9 million of income over a five-year period.
Stephen J. Schroff, 53, of Springfield, was sentenced by U.S. District Judge Beth Phillips to two years in federal prison without parole. The court also ordered Schroff to pay $600,023 in restitution to the Internal Revenue Service.
Schroff was the owner and operator of Stephen Schroff, Inc., doing business as ABC Roofing in Springfield.
On Sept. 25, 2014, Schroff pleaded guilty to filing a materially false tax return. Schroff admitted that he filed false federal income tax returns for the years 2005 through 2009 by failing to report $1,925,622 of income.
According to court documents, during the commission of this offense, Schroff moved from a 3,000-square-foot home into a 4,000-square-foot home. Schroff also owned a Cadillac Escalade, a Chevy Corvette, a lake house, and a boat. Schroff invested money in a partnership that acquired rental property and began the development of a residential subdivision.
Schroff admitted that he concealed income from his business. In 2007 Schroff began diverting business receipts from ABC Roofing by cashing roofing customers’ checks instead of depositing them in the business bank account, and by depositing roofing customers’ checks into secret accounts at other banks. Schroff did not claim any of the embezzled business receipts as income when he filed federal tax returns in 2007, 2008 and 2009. In total, Schroff failed to report $1,223,572 of income from the embezzlement scheme.
Schroff’s actions resulted in a total tax loss to the federal government of $600,023.
This case was prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by IRS-Criminal Investigation and the IRS-Special Enforcement Program.
Santa Fe Man Pleads Guilty to Federal Crack Cocaine Trafficking ChargesRead the Press Release
ALBUQUERQUE – Matthew J. Holmes, 30, of Santa Fe, N.M., entered a guilty plea today in federal court in Albuquerque, N.M., to crack cocaine trafficking charges. Under the terms of his plea agreement, Holmes will be sentenced to a prison term within the range of nine to twelve years in federal prison followed by a term of supervised release to be determined by the court.
Holmes was arrested on Feb. 24, 2015, and charged in a criminal complaint with possession of crack cocaine with intent to distribute. According to the complaint, on Feb. 24, 2014, the Santa Fe Police Department (SFPD) received information that Holmes had an outstanding state arrest warrant. Based on that information, SFPD officers initiated a traffic stop on Holmes’ vehicle. After a brief foot pursuit, the officers were able to apprehend Holmes. At the time of his arrest, Holmes possessed a distribution quantity of crack cocaine and drug paraphernalia. Holmes subsequently was indicted and charged with possession of crack cocaine with intent to distribute.
During today’s proceedings Holmes pled guilty to the indictment and admitted that on Feb. 24, 2014, he possessed approximately 74.3 grams of crack cocaine in three plastic bags and $4,146.00 in cash. Holmes further admitted that he possessed the crack cocaine with the intent to distribute it to others.
Holmes has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Santa Fe office of the FBI and the HIDTA Region III Narcotics Task Force. The case is being prosecuted by Assistant U.S. Attorneys David M. Walsh and Norman Cairns.
The HIDTA Region III Narcotics Task Force is comprised of officers from the New Mexico State Police, the Santa Fe County Sheriff’s Office and the Santa Fe Police Department. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Russian National Charged in Largest Known Data Breach Prosecution Extradited to United StatesRead the Press Release
Defendant Brought From Netherlands
After Fighting Extradition for Over Two Years
A Russian national appeared in federal court in Newark today after being extradited from the Netherlands to face charges that he conspired in the largest international hacking and data breach scheme ever prosecuted in the United States, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Secretary Jeh Johnson of the Department of Homeland Security, U.S. Attorney Paul J. Fishman of the District of New Jersey and Acting Director Joseph P. Clancy of the U.S. Secret Service.
Vladimir Drinkman, 34, of Syktyykar and Moscow, Russia, was charged for his alleged role in a data theft conspiracy that targeted major corporate networks, stole more than 160 million credit card numbers, and caused hundreds of millions of dollars in losses. Prior to his extradition, he had been detained by the Dutch authorities since his arrest in the Netherlands on June 28, 2012.
Drinkman appeared today before U.S. Magistrate Judge James B. Clark and entered a plea of not guilty to all 11 counts charged in the indictment and was ordered detained without bail. Trial before U.S. District Judge Jerome B. Simandle was scheduled for April 27, 2015.
“Cyber criminals conceal themselves in one country and steal information located in another country, impacting victims around the world,” said Assistant Attorney General Caldwell. “Hackers often take advantage of international borders and differences in legal systems, hoping to evade extradition to face justice. This case and today's extradition demonstrates that through international cooperation, and through great teamwork between the Department of Justice and the Department of Homeland Security, we are able to bring cyber thieves to justice in the United States, wherever they may commit their crimes.”
“Drinkman’s extradition on the indictment this office brought more than a year and a half ago shows how relentlessly we will pursue those who are charged with these serious crimes,” said U.S. Attorney Fishman. “The incredibly sophisticated work with our partners at the U.S. Secret Service to uncover this enormous, far-reaching scheme demanded an equal effort by our colleagues at the Department of Justice Criminal Division in Washington and our law enforcement partners overseas to bring the defendant back to face these charges.”
“This case demonstrates our commitment to fulfilling an important part of our integrated mission; that of protecting our Nation’s critical financial infrastructure,” said Acting Director Clancy. “Our success in this investigation and other similar investigations is a credit to our skilled and relentless cyber investigators. Our determination, coupled with our network of foreign law enforcement partners, ensures that our investigative reach can expand beyond the borders of the United States.”
According to the second superseding indictment, unsealed on July 25, 2013, and other court filings, Drinkman and four co-defendants each served particular roles in the scheme. Drinkman and Alexandr Kalinin, 28, of St. Petersburg, Russia, each allegedly specialized in penetrating network security and gaining access to the corporate victims’ systems. Roman Kotov, 33, of Moscow, allegedly specialized in mining the networks Drinkman and Kalinin compromised to steal valuable data. According to allegations in the indictment, the hackers hid their activities using anonymous web-hosting services provided by Mikhail Rytikov, 27, of Odessa, Ukraine. Dmitriy Smilianets, 31, of Moscow, then allegedly sold the stolen information and distributed the proceeds of the scheme to the participants.
Drinkman and his co-defendants are charged with attacks on NASDAQ, 7-Eleven, Carrefour, JCP, Hannaford, Heartland, Wet Seal, Commidea, Dexia, JetBlue, Dow Jones, Euronet, Visa Jordan, Global Payment, Diners Singapore and Ingenicard. It is not alleged that the NASDAQ hack affected its trading platform.
Drinkman and Kalinin were previously charged in New Jersey as “Hacker 1” and “Hacker 2” in a 2009 indictment charging Albert Gonzalez, 33, of Miami, in connection with five corporate data breaches, including the breach of Heartland Payment Systems Inc., which at the time was the largest ever reported. Gonzalez is currently serving 20 years in federal prison for those offenses. Kalinin is also charged in two federal indictments in the Southern District of New York: one charges Kalinin in connection with hacking certain computer servers used by NASDAQ and the second charges him and another Russian hacker, Nikolay Nasenkov, with an international scheme to steal bank account information from U.S.-based financial institutions. Rytikov was previously charged in the Eastern District of Virginia with an unrelated scheme.
Drinkman and Smilianets were arrested at the request of the United States while traveling in the Netherlands on June 28, 2012. Smilianets was extradited on Sept. 7, 2012, and remains in federal custody. Kalinin, Kotov and Rytikov remain at large. All of the defendants are Russian nationals except for Rytikov, who is a citizen of Ukraine.
The Attacks
According to allegations in the indictment, the five defendants conspired with others to penetrate the computer networks of several of the largest payment processing companies, retailers and financial institutions in the world, stealing the personal identifying information of individuals. They allegedly took user names and passwords, means of identification, credit and debit card numbers and other corresponding personal identification information of cardholders. The conspirators allegedly acquired at least 160 million card numbers through hacking.
The initial entry was often gained using a “SQL injection attack.” SQL, or Structured Query Language, is a type of programming language designed to manage data held in particular types of databases. The hackers allegedly identified vulnerabilities in SQL databases and used those vulnerabilities to infiltrate a computer network. Once the network was infiltrated, the defendants allegedly placed malicious code, or malware, on the system. This malware created a “back door,” leaving the system vulnerable and helping the defendants maintain access to the network. In some cases, the defendants lost access to the system due to companies’ security efforts, but were allegedly able to regain access through persistent attacks.
Instant message chats obtained by law enforcement reveal that the defendants allegedly targeted the victim companies for many months, waiting patiently as their efforts to bypass security were underway, sometimes leaving malware implanted for more than a year.
The defendants allegedly used their access to the networks to install “sniffers,” which were programs designed to identify, collect and steal data from the victims’ computer networks. The defendants then allegedly used an array of computers located around the world to store the stolen data and ultimately sell it to others.
Selling the Data
After acquiring the card numbers and associated data—which they referred to as “dumps”—the conspirators allegedly sold it to resellers around the world. The buyers then sold the dumps through online forums or directly to individuals and organizations. Smilianets was allegedly in charge of sales, selling the data only to trusted identity theft wholesalers. He allegedly charged approximately $10 for each stolen American credit card number and associated data, approximately $50 for each European credit card number and associated data and approximately $15 for each Canadian credit card number and associated data, offering discounted pricing to bulk and repeat customers. Ultimately, the end users encoded each dump onto the magnetic strip of a blank plastic card and cashed out the value of the dump by either withdrawing money from ATMs or making purchases with the cards.
Covering Their Tracks
The defendants allegedly used a number of methods to conceal the scheme. Rytikov allegedly allowed his clients to hack with the knowledge he would never keep records of their online activities or share information with law enforcement.
Over the course of the conspiracy, the defendants allegedly communicated through private and encrypted communications channels to avoid detection. Fearing law enforcement would intercept even those communications, some of the conspirators allegedly attempted to meet in person.
To protect against detection by the victim companies, the defendants allegedly altered the settings on victim company networks to disable security mechanisms from logging their actions. The defendants also allegedly worked to evade existing protections by security software.
As a result of the scheme, financial institutions, credit card companies and consumers suffered hundreds of millions in losses—including more than $300 million in losses reported by just three of the corporate victims—and immeasurable losses to the identity theft victims in costs associated with stolen identities and false charges.
The charges and allegations contained indictments are merely accusations and the defendants are presumed innocent unless and until proven guilty.
The ongoing investigation is being conducted by the U.S. Secret Service. The case is being prosecuted by Trial Attorney Rick Green of the Criminal Division’s Computer Crime and Intellectual Property Section, Chief Gurbir S. Grewal of the District of New Jersey’s Economic Crimes Unit, and Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the District of New Jersey’s Economic Crimes Unit.
The Criminal Division’s Office of International Affairs assisted with the case, as did public prosecutors with the Dutch Ministry of Security and Justice and the National High Tech Crime Unit of the Dutch National Police.
Drinkman et al Indictment
Russian National Charged in Largest Known Data Breach Conspiracy Extradited to Face Indictment in New JerseyRead the Press Release
Defendant Brought From the Netherlands After Fighting Extradition for Over Two Years
NEWARK, N.J. – A Russian national appeared in Newark federal court today after being extradited from the Netherlands to face charges that he conspired in the largest international hacking and data breach scheme ever prosecuted in the United States, New Jersey U.S. Attorney Paul J. Fishman, U.S. Secret Service Acting Director Joseph P. Clancy and Assistant Attorney General Leslie Caldwell and announced.
Vladimir Drinkman, 34, of Syktyykar and Moscow, Russia, was arrested in the Netherlands on June 28, 2012, and charged in a scheme that targeted major corporate networks, stole more than 160 million credit card numbers, and resulted in hundreds of millions of dollars in losses. He had been detained by the Dutch authorities pending the resolution of the extradition proceedings.
He appeared today before U.S. Magistrate Judge James B. Clark III, entered a plea of not guilty to all 11 counts charged in the indictment and was ordered detained. Trial before U.S. district Judge Jerome B. Simandle is scheduled for April 27, 2015.
“Drinkman’s extradition on the indictment this office brought more than a year and a half ago shows how relentlessly we will pursue those who are charged with these serious crimes,” U.S. Attorney Fishman said. “The incredibly sophisticated work with our partners at the U.S. Secret Service to uncover this enormous, far-reaching scheme demanded an equal effort by our colleagues at the Department of Justice Criminal Division in Washington and our law enforcement partners overseas to bring the defendant back to face these charges.”
“This case demonstrates our commitment to fulfilling an important part of our integrated mission; that of protecting our Nation’s critical financial infrastructure,” Secret Service Acting Director Joseph P. Clancy said. “Our success in this investigation and other similar investigations is a credit to our skilled and relentless cyber investigators. Our determination, coupled with our network of foreign law enforcement partners, ensures that our investigative reach can expand beyond the borders of the United States.”
“Cyber criminals conceal themselves in one country and steal information located in another country, impacting victims around the world,” Assistant Attorney General Caldwell said. “Hackers often take advantage of international borders and differences in legal systems, hoping to evade extradition to face justice. This case and today's extradition demonstrates that through international cooperation, and through great teamwork between the Department of Justice and the Department of Homeland Security, we are able to bring cyber thieves to justice in the United States, wherever they may commit their crimes.”
Drinkman and four co-defendants allegedly sought corporate victims engaged in financial transactions, retailers that received and transmitted financial data and other institutions with information they could exploit for profit. The defendants are charged with attacks on NASDAQ, 7-Eleven, Carrefour, JCP, Hannaford, Heartland, Wet Seal, Commidea, Dexia, JetBlue, Dow Jones, Euronet, Visa Jordan, Global Payment, Diners Singapore and Ingenicard. It is not alleged that the NASDAQ hack affected its trading platform.
According to the second superseding indictment, unsealed in Newark federal court July 25, 2013, and other court filings:
The five defendants each served particular roles in the scheme. Drinkman and Alexandr Kalinin, 28, of St. Petersburg, Russia, each specialized in penetrating network security and gaining access to the corporate victims’ systems. Roman Kotov, 33, of Moscow, also a hacker, specialized in mining the networks Drinkman and Kalinin compromised to steal valuable data. The hackers hid their activities using anonymous web-hosting services provided by Mikhail Rytikov, 27, of Odessa, Ukraine. Dmitriy Smilianets, 31, of Moscow, sold the information stolen by the other conspirators and distributed the proceeds of the scheme to the participants.
Drinkman and Kalinin were previously charged in New Jersey as “Hacker 1” and “Hacker 2” in a 2009 indictment charging Albert Gonzalez, 33, of Miami, in connection with five corporate data breaches – including the breach of Heartland Payment Systems Inc., which at the time was the largest ever reported. Gonzalez is currently serving 20 years in federal prison for those offenses. Kalinin is also charged in two federal indictments in the Southern District of New York: One charges Kalinin in connection with hacking certain computer servers used by NASDAQ and the second indictment charges him and another Russian hacker, Nikolay Nasenkov, with an international scheme to steal bank account information from U.S.-based financial institutions. Rytikov was previously charged in the Eastern District of Virginia with an unrelated scheme.
Drinkman and Smilianets were arrested at the request of the United States while traveling in the Netherlands on June 28, 2012. Smilianets was extradited Sept. 7, 2012, and remains in federal custody. Kalinin, Kotov and Rytikov remain at large. All of the defendants are Russian nationals except for Rytikov, who is a citizen of Ukraine.
The Attacks
The five defendants conspired with others to penetrate the computer networks of several of the largest payment processing companies, retailers and financial institutions in the world, stealing the personal identifying information of individuals. They took user names and passwords, means of identification, credit and debit card numbers and other corresponding personal identification information of cardholders. Conservatively, the conspirators unlawfully acquired more than 160 millioncard numbers through hacking.The initial entry was often gained using a “SQL injection attack.” SQL, or Structured Query Language, is a type of programing language designed to manage data held in particular types of databases; the hackers identified vulnerabilities in SQL databases and used those vulnerabilities to infiltrate a computer network. Once the network was infiltrated, the defendants placed malicious code, or malware, on the system. This malware created a “back door,” leaving the system vulnerable and helping the defendants maintain access to the network. In some cases, the defendants lost access to the system due to companies’ security efforts, but were able to regain access through persistent attacks.
Instant message chats obtained by law enforcement revealed the defendants often targeted the victim companies for many months, waiting patiently as their efforts to bypass security were underway. The defendants had malware implanted in multiple companies’ servers for more than a year.The defendants used their access to the networks to install “sniffers,” which were programs designed to identify, collect and steal data from the victims’ computer networks. The defendants then used an array of computers located around the world to store the stolen data and ultimately sell it to others.
Selling the Data
After acquiring the card numbers and associated data – which they referred to as “dumps” – the conspirators sold it to resellers around the world. The buyers then sold the dumps through online forums or directly to individuals and organizations. Smilianets was in charge of sales, selling the data only to trusted identity theft wholesalers. He would charge approximately $10 for each stolen American credit card number and associated data, approximately $50 for each European credit card number and associated data and approximately $15 for each Canadian credit card number and associated data – offering discounted pricing to bulk and repeat customers. Ultimately, the end users encoded each dump onto the magnetic strip of a blank plastic card and cashed out the value of the dump by either withdrawing money from ATMs or making purchases with the cards.
Covering Their Tracks
The defendants used a number of methods to conceal the scheme. Unlike traditional Internet service providers, Rytikov allowed his clients to hack with the knowledge he would never keep records of their online activities or share information with law enforcement.
Over the course of the conspiracy, the defendants communicated through private and encrypted communications channels to avoid detection. Fearing law enforcement would intercept even those communications, some of the conspirators attempted to meet in person.
To protect against detection by the victim companies, the defendants altered the settings on victim company networks to disable security mechanisms from logging their actions. The defendants also worked to evade existing protections by security software.
* * *
As a result of the scheme, financial institutions, credit card companies and consumers suffered hundreds of millions in losses – including more than $300 million in losses reported by just three of the corporate victims – and immeasurable losses to the identity theft victims in costs associated with stolen identities and false charges.
The maximum potential penalties for each defendant per count are as follows:
Count(s)Defendants
Violation
Maximum Penalty/Count
All
Conspiracy to gain unauthorized access to computers
5 years; $250,000 fine or twice the gain or loss from the offense
2
All
Conspiracy to commit wire fraud
30 years; $1 million fine or twice the gain or loss from the offense
3-8
Drinkman
Kalinin
Kotov
SmilianetsUnauthorized access to computers
5 years; $250,000 fine or twice the gain or loss from the offense
9-11
Drinkman
Kalinin
Kotov
SmilianetsWire fraud
30 years; $1 million fine or twice the gain or loss from the offense
U.S. Attorney Fishman credited the special agents of the U.S. Secret Service, Criminal Investigations, under the direction of Acting Director Joseph P. Clancy, and special agents from the Newark Division, under the direction of Special Agent in Charge Carl Agnelli, for the ongoing investigation.
The government is represented by Gurbir S. Grewal, Chief of the U.S. Attorney’s Office Economic Crimes Unit, and Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit, Trial Attorney Rick Green of the Criminal Division’s Computer Crime and Intellectual Property Section, and Judith Friedman of the Office of International Affairs.
U.S. Attorney Fishman thanked the Department’s Office of International Affairs in Washington for their extraordinary support, as well as public prosecutors with the Dutch Ministry of Security and Justice and the National High Tech Crime Unit of the Dutch National Police.
The charges and allegations contained in the indictment are merely accusations and the defendants are considered innocent unless and until proven guilty.
15-060
Defense counsel: Vladimir Drinkman: Florian Miedel Esq., New York; Bart Stapert Esq., Amsterdam, Netherlands
Dmitriy Smilianets: Andrey Tikhomirov Esq., Brooklyn, N.Y.Real Estate Agent Sentenced to Prison for Fraudulent Short Sale SchemeRead the Press Release
FRESNO, Calif. —Minerva Sanchez, 48, of Fremont, was sentenced today by Senior U.S. District Judge Anthony W. Ishii to 21 months in prison for conspiring to commit bank fraud, United States Attorney Benjamin B. Wagner announced. Sanchez also was ordered to pay restitution to financial institutions in the amount of $421,372.
According to court documents, Sanchez was a licensed real estate agent who, beginning in or around March 2010, represented the seller of a home in Patterson, California. Sanchez recommended that the seller undertake a short-sale of his home using Sanchez’s son as the straw buyer. The seller, acting on Sanchez’s advice, submitted to Tri Counties Bank and Freddie Mac false and fraudulent short-sale applications, and caused these financial institutions to approve the charge-off of funds for the short-sale of the seller’s home.
With Sanchez’s knowledge, the seller provided the straw buyer with the full purchase price of the home ($355,000). Sanchez provided the seller with a “hardship letter” for him to use in connection with the short-sale application, which misrepresented the seller’s inability to make his monthly mortgage payments. In fact, Sanchez knew that the seller could make his monthly mortgage payments with proceeds from a pending sale of other real property he owned.
Sanchez, along with the seller and straw buyer, made other misrepresentations to the financial institutions in connection with the short-sale, including false statements that the transaction was “arm’s length,” and false statements concerning the parties’ hidden agreement that the seller would provide the straw buyer with the purchase money for the short-sale and ultimately regain ownership of his home following the short-sale. In her plea agreement, Sanchez admitted that her criminal conduct caused the financial institutions to lose more than $316,000.
This case was the product of an investigation by the Federal Housing Finance Agency-Office of Inspector General and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Christopher Baker prosecuted the case.
On June 10, 2013, the seller of the Patterson property, Agustin Simon, 52, of Gustine, pleaded guilty to conspiring to commit bank fraud in connection with this scheme. He is scheduled to be sentenced on February 23, 2015, before U.S. District Judge Lawrence J. O’Neill.
Proprieter of "sowet" Website Indicted for Promoting Massage Parlors That Offered Sexual ServicesRead the Press Release
DEFENDANT USED INTERNET AND CREDIT CARDS VIA INTERSTATE COMMERCE TO PROMOTE PROSTITUTION BUSINESSES FOR HIS PERSONAL FINANCIAL GAIN
DENVER – David A. Warmack, of Adams County, Colorado, was arrested on February 13, 2015, based on a sealed indictment returned by a federal grand jury in Denver on February 11, 2015, on charges of Use of a Facility in Interstate Commerce to Promote a Business Enterprise Involving Prostitution, the U.S. Attorney’s Office, the FBI, and the Colorado State Patrol announced. Warmack is scheduled to appear before a U.S. Magistrate Judge in Denver this afternoon, where he will be advised of his rights and the charges pending against him.According to the indictment, beginning in August 2011 and continuing through July 2014, Warmack owned and operated a website business named “Sowet.com”. The website promoted and facilitated prostitution that was taking place at various massage parlors across Metro Denver. The massage parlors offered not only massages but also unlawful sexual services.
The defendant charged the owners of the massage parlors for advertisements on his “Sowet” website. He visited some of the businesses, getting unlawful sexual services in exchange for writing a review of the parlor and the specific prostitute that he posted on his site. Further, Warmack posted sexually suggestive photographs of the women in an effort to attract business to the massage parlors.
In his attempt to drive business to the massage parlors, the defendant:
- Personally visited a site, obtained a massage and sexual services so he could give personal testimonials
- Giving internet reviews of the individual sites, including details of the women at each location
- Providing reviews of the physical location of the massage parlor, including the inside cleanliness and other conditions
- Posting advertisements with information about location, hours of operation, names of workers, and cost of services for each location
- Operational procedures of the individual massage parlors, including “door fees”
Warmack also ran a forum on his “Sowet” website where website users could discuss topics on bulletin boards related to the massage parlors. The defendant served as the administrator for these bulletin boards. He also counseled those using the massage parlors on how to handle any law enforcement questioning which they might encounter should law enforcement inspect a massage parlor while they are present.
The defendant received a monthly fee from each of the massage parlors, collecting anywhere from $150 to $400 per location. For some massage parlors, Warmack went further, promoting the businesses by paying for and arranging for additional advertising on other websites, such as “backpage.com” and “craigslist.com”. He collected fees for his additional promotional services.
The main massage parlors Warmack promoted included:
- Happy Feet, in Golden, from 2011 to 2012
- Sunday Spa, in Aurora, from 2012 to 2013
- Jewell Spa, in Lakewood, from 2012 to 2013
- Abalone Spa, in Wheat Ridge, in 2013
- Maize Spa, in Aurora, from 2013 to 2014
- Hill Relaxation Spa, in Parker, in 2014
The indictment includes 20 counts of Use of a Facility in Interstate Commerce to Promote a Business Enterprise Involving Prostitution, including credit card transactions, use of the internet for advertising purposes, and flying in workers to Colorado from other states to work at the various Metro Denver locations.
If convicted, Warmack faces not more than 5 years in federal prison per count. He also faces up to $250,000 fine per count.
“Thanks to the hard work of the Colorado Trafficking and Organized Crime Coalition, we were able to help put five illicit massage parlors out of business, and prosecute an individual who was helping those illegally run businesses make money,” said U.S. Attorney John Walsh.
“The arrest of David Warmack illustrates the FBI’s commitment to work with its partners to address individuals and businesses that promote and facilitate illegal prostitution and venues for human trafficking,” said FBI Denver Special Agent in Charge Thomas Ravenelle. “Thanks to the hard work of our law enforcement partners, the defendant’s illegal activity was identified, he was arrested, and is now being prosecuted.”
This case was investigated by the FBI and the Colorado State Patrol. Additional investigative assistance was provided by members of the Colorado Trafficking and Organized Crime Collation (CTOCC) to include the Arvada Police Department, Arapahoe County Sheriff’s Office, Aurora Police Department, Commerce City Police Department, Douglas County Sheriff’s Office, Jefferson County Sheriff’s Office, Lakewood Police Department, and the Wheat Ridge Police Department.
The defendant is being prosecuted by Assistant U.S. Attorney Tim Neff.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
- NOTE: CTOCC: In March 2012, a non-funded Task Force/Coalition named the Colorado Trafficking and Organized Crime Coalition (CTOCC) was created. Its mission is to tackle the emergent problem of involuntary servitude of adults and international victims (to include labor exploitation and commercial sex) within the State of Colorado. CTOCC investigates predicated venues that support human trafficking including the internet, restaurants, hotels, bars, labor camps, and businesses associated with prostitution. CTOCC’s goal is to investigate, dismantle, and prosecute groups and individuals that hide and launder illicit proceeds from criminal activity such as human trafficking. Currently the FBI partners with over twenty-five local, state, and federal partners that compose CTOCC.
Perry County Resident Pleads Guilty to Methamphetamine OffenseRead the Press Release
Follow @SDILNewsOn February 12, 2015, Donald K. Brown, Jr., a/k/a “DJ,” 31, DuQuoin, Illinois, pled guilty to a one-count indictment charging conspiracy to manufacture methamphetamine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
The indictment alleges that the offense occurred between 2012 and September 2014, in Perry, Jackson, Randolph, Williamson, and Franklin Counties. Evidence at the plea hearing established that Brown was involved with others in the manufacture of methamphetamine. In addition to manufacturing methamphetamine, Brown also allowed others to manufacture methamphetamine at his residence. Three co-defendants have previously pled guilty to their role in the methamphetamine conspiracy. Three co-defendants have pled not guilty and are awaiting jury trial. Brown is currently being held without bond pending a June 11, 2015, sentencing hearing.
The offense carries a penalty of a term in federal prison of up to 20 years, to be followed by 3 years’ supervised release, and a $1,000,000 fine.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office, Perry County Sheriff’s Office, Perry County Drug Task Force, Murphysboro Police Department, and DuQuoin Police Department. The Pinckneyville Police Department and Illinois State Police Methamphetamine Response Team assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Owner of Miami Home Health Company Pleads Guilty for Lead Role in $13 Million Medicare Fraud SchemeRead the Press Release
An owner of a Miami home health care company pleaded guilty today in connection with a $13 million Medicare fraud scheme that involved paying kickbacks and bribes to Medicare beneficiaries, doctors’ offices, medical clinics and others in exchange for patient referrals and fraudulent prescriptions to support fraudulent billings to Medicare.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.
Alexander Lara, 46, of Hollywood, Florida, pleaded guilty to one count of conspiracy to commit health care fraud before U.S. Magistrate Judge Chris M. McAliley of the Southern District of Florida. A sentencing hearing is scheduled for May 14, 2015.
According to his plea documents, Lara was an owner and operator of Longcare Home Health Corporation (Longcare Home Health), a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries. In connection with his guilty plea, Lara admitted that he and his co-conspirators actually operated Longcare Home Health for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary or not provided at all.
As an organizer and leader of the schemes at Longcare Home Health, Lara admitted that he personally paid kickbacks and bribes to patient recruiters and Medicare beneficiaries in exchange for patient referrals. Lara also admitted that he paid kickbacks and bribes to doctors’ offices and clinics in exchange for fraudulent prescriptions for medically unnecessary therapy and home health services for Medicare beneficiaries. These false prescriptions and recruited patients were used to fraudulently bill the Medicare program for home health care services, and Lara admitted that he personally oversaw the submission of these fraudulent claims. From approximately January 2009 through November 2014, Medicare paid approximately $13.7 million for the fraudulent claims submitted by Longcare Home Health.
The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Trial Attorney Anne P. McNamara of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers. To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
North Highlands Woman Receives 2 Years and 8 Months in Federal Prison for Agravated Identity Theft, Bank Fraud, and Possession of Stolen U.S. MailRead the Press Release
SACRAMENTO, Calif. — Elise Elizabeth Perez, 42, of North Highlands, California, was sentenced today by United States District Court Judge John A. Mendez to a total term of 32 months in prison for her convictions on four counts of bank fraud, a single count of aggravated identity theft, and two counts of possession of stolen U.S. Mail, United States Attorney Benjamin B. Wagner announced.
This case was investigated by the Sacramento Office of the United States Postal Inspection Service. The Sacramento County Sheriff's Office also assisted in the investigation. Assistant United States Attorney Michelle Rodriguez is prosecuting the case.
According to court documents, from April 2014 through May 2014, Perez executed a plan to steal from federally insured financial institutions. Perez executed her scheme by obtaining identification and financial information stolen U.S. Mail and other sources. Perez used that information to pose as victims, take over victims' bank accounts, write checks drawn on those accounts, and obtain cash and goods at the expense of various financial institutions. Perez pleaded guilty on August 19, 2014.Perez was remanded into federal custody after imposition of her sentence.
New Haven Man Sentenced to 3 Years in Federal Prison for Illegally Possessing FirearmRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JEROME T. WALKER, also known as “Ratchet,” 26, of New Haven, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 36 months of imprisonment, followed by three years of supervised release, for illegally possessing a firearm. WALKER also was ordered to perform 300 hours of community service.
According to court documents and statements made in court, on October 14, 2014, officers from the New Haven Police Department conducted a traffic stop of WALKER, who was driving with a suspended license, in the vicinity of Norton Street and Elm Street. After initially pulling over, WALKER accelerated from the scene at high rate of speed. A short time later, New Haven and Hamden Police officers found WALKER’s vehicle parked at a residence on Warner Street in Hamden. Officers then observed WALKER walking in front of the residence and he was placed under arrest. In the vicinity, officers found a duffel bag containing a Smith and Wesson .38 caliber revolver and a set of car keys belonging to the vehicle that WALKER had been driving.
WALKER has previously been convicted of multiple felony offenses. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
WALKER has been detained since his arrest. On November 17, 2014, he pleaded guilty to possession of a firearm by a previously convicted felon.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the New Haven Police Department and the Hamden Police Department. The case was prosecuted by Assistant U.S. Attorneys Anthony Kaplan and Jennifer Laraia.
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(203) 821-3722 [email protected]Nederland Man Receives Life Sentence for Drug Trafficking CrimesRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – A 40-year-old Nederland, Texas man has been sentenced to life in federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Stephen Shane Hall, also known as Shane Hall, was found guilty by a jury on Aug. 21, 2014, of conspiracy to possess with intent to distribute methamphetamine, possession with intent to distribute methamphetamine, and being a felon in possession of a firearm. Hall was sentenced to a mandatory life in federal prison today by U.S. District Judge Marcia Crone.
According to information presented in court, from February to August 2013, law enforcement officers investigated Hall and others regarding the distribution of methamphetamine in the Orange County area. On Aug. 31, 2013, a search warrant was executed at a residence on Spooner Road in Orange County, Texas. During the search, 57 grams of methamphetamine were discovered as well as many items relating to the distribution of narcotics. Officers also located three firearms inside the residence and garage area. A federal grand jury returned an indictment on Nov. 6, 2013, charging Stephen Shane Hall, Misty Hall, Kevin Trent Portie, and Scott Robicheaux with federal drug trafficking violations. Misty Hall, Portie, and Robicheaux pleaded guilty and have been sentenced.
The case was investigated by the Orange County Sheriff’s Office, the Jefferson County Sheriff’s Office, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the U.S. Drug Enforcement Administration, and the Beaumont Police Department. This case was prosecuted by Assistant U.S. Attorney Michelle Englade and Special Assistant U.S. Attorney Russell James.
Navajo Woman from Colorado Sentenced for Federal Child Abuse Conviction in New MexicoRead the Press Release
ALBUQUERQUE – Lorrena Ann Yazzie, 27, an enrolled member of the Navajo Nation who resides in Durango, Colo., was sentenced this morning in federal court to three years of probation for her child abuse conviction.
Yazzie was arrested on April 7, 2014, on a criminal complaint alleging an assault charge. According to the criminal complaint, Yazzie injured an infant who was a passenger in a vehicle she was driving when Yazzie caused a single-car collision by falling asleep at the wheel. Yazzie allegedly was intoxicated at the time of the collision. The collision occurred on April 2, 2014, south of Shiprock, N.M., which is located within the Navajo Indian Reservation. Yazzie subsequently was indicted and charged with assault resulting in serious bodily injury and child abuse.
On Nov. 7, 2014, Yazzie entered a guilty plea to the child abuse charge and admitted placing a child in a situation that endangered the child’s life or health.
This case was investigated by the Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety. Assistant U.S. Attorney Kyle T. Nayback prosecuted the case.
Manhattan U.S. Attorney Announces Charges Against Former Investment Management Firm Employee for Obstruction of Justice and PerjuryRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that STEVEN HART was charged last Friday with obstruction of justice and perjury relating to an investigation by the U.S. Securities and Exchange Commission (the “SEC”) into potential violations of the federal securities laws. HART, who was employed at an investment management firm headquartered in Englewood Cliffs, New Jersey (the “Investment Firm”), lied in sworn testimony to the SEC that he had obtained consent from the president of the Investment Firm (the “Investment Firm President”) to conduct match trades between a fund managed by the Investment Firm and a fund controlled and owned in part by HART. Moreover, when representatives of the SEC called the Investment Firm in an attempt to speak with the Investment Firm President, HART, on three occasions, answered the phone and pretended to be either the Investment Firm President or another employee. The case is assigned to United States District Judge Katherine P. Failla.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Steven Hart obstructed the SEC’s investigation into his conduct by lying to the SEC in sworn testimony. Even more audaciously, in phone calls from SEC attorneys seeking to speak to the investment firm’s president about Hart, Hart allegedly pretended to be the president. This alleged conduct merely delayed the inevitable: discovery of Steven Hart’s deception and the filing of criminal charges.”
According to the Information filed on February 13, 2015, in Manhattan federal court:
At all times relevant to this Information, HART worked at the Investment Firm, which managed several funds. HART, who reported directly to the Investment Firm President, served as a portfolio manager at the firm and, in that capacity, exercised trading authority over the brokerage accounts for one of the funds managed by the Investment Firm (the “Fund”). At the same time, HART also controlled and directed Octagon Capital Partners, LP (“Octagon”), a private investment fund with its principal place of business in New York, New York. Through Octagon, HART invested his own money and the money of several of his associates.
In or about 2009, the SEC was investigating HART’s trading activities at the Investment Firm (the “SEC Investigation”). First, the SEC was investigating whether HART, in his capacity as a portfolio manager at the Investment Firm, had conducted improper “match trades” or “cross trades” between his personal fund, Octagon, and the Fund. The SEC was also investigating whether HART had traded in securities based on material nonpublic information (“MNPI”) relating to confidentiallymarketed securities offerings – information that HART had obtained while being solicited to invest in these offerings.
As part of this investigation, SEC officials, among other things, issued a subpoena to the Investment Firm, directed to the Investment Firm President, seeking the production of several different categories of documents. HART received the subpoena at the Investment Firm before it was seen by any other employee and produced documents to the SEC in New York, New York, without (1) informing anyone else at the Investment Firm about the subpoena, or (2) informing the SEC that it was HART alone who responded to the subpoena.
Moreover, in the course of providing sworn testimony to the SEC, HART made several materially false statements. He falsely testified that the Investment Firm President had agreed that HART should conduct match trades involving the Fund as part of an investment strategy for the Fund. HART also falsely testified that he and the Investment Firm President had discussed the SEC Investigation, and that the Investment Firm President was aware that HART had been subpoenaed to testify before the SEC.
On multiple occasions, HART impersonated other employees of the Investment Firm during telephone conversations with the SEC. Specifically, on or about December 8, 2009, an SEC attorney called the Investment Firm to speak with the firm’s President about the SEC Investigation. HART received the phone call and pretended to be another employee of the Investment Firm. The SEC attorney asked HART, who was pretending to be another employee, to ask the Investment Firm President to return the call, which HART failed to do. The following day, the same SEC attorney again called the Investment Firm to speak with the firm’s President. HART again received the phone call and, on this occasion, pretended to be the Investment Firm President. During that call, HART, speaking as the Investment Firm President, falsely stated that: (1) the Investment Firm President was aware that HART had engaged in improper trading activity, but nevertheless wanted HART to remain an employee of the Investment Firm; and (2) the Investment Firm President was aware of, and had approved, Hart’s match trading activity as a means for the Fund to dispense of restricted shares of stock.
Finally, on December 11, 2009, the same SEC attorney, along with a second SEC attorney, called the Investment Firm to speak with the firm’s President. HART again received the phone call and again pretended to be the Investment Firm President. During that call, HART, speaking as the Investment Firm President, falsely stated to the SEC attorneys that: (1) HART’s match trading activity was an intentional strategy of the Investment Firm to take a loss on the trading in exchange for the ability to sell otherwise restricted shares of stock; (2) HART was still a valued employee of the Investment Firm who had earned the Investment Firm far more than whatever amount HART had gained through match trading; and (3) HART had fully disclosed to the Investment Firm President that HART had traded based on MNPI and that this was a one-time mistake that would not happen again. Each of these statements was false.
HART, 42, of New York, New York, faces a maximum sentence of 10 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the Judge.
The charges contained in the Information are merely accusations and the defendant is presumed innocent unless and until proven guilty.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Jason H. Cowley is in charge of the prosecution.
U.S. v. Steven Hart Information
Man Sentenced to over 20 Years in Prison for Armed Robbery of Farmers & Merchants Bank in Hoyleton, IllinoisRead the Press Release
Follow @SDILNewsDonald Ridley, 33, was sentenced to 246 months in prison on February 13, 2015, on a six-count indictment charging him with Bank Robbery, Carrying Using, and Brandishing a Firearm in Relation to a Crime of Violence, Making a False Statement to a Federal Law Enforcement Officer, and Obstruction of Justice, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced. Following his prison sentence, Ridley will be on federal supervised release for 5 years. Ridley was also ordered to pay restitution in the amount of $115,098, as well as a $500 special assessment. The sentencing hearing follows a four-day jury trial in federal court in East St. Louis, Illinois, where Ridley was found guilty on all counts.
Ridley and co-defendant Johnson entered Farmers & Merchants Bank both armed with firearms, masked, and wearing gloves. They ordered the employees and a customer to the ground and Donald Ridley emptied the tellers’ drawers and the bank vault while co-defendant Johnson pointed a firearm at the employees and customer inside the bank. The robbers left the bank in a stolen truck carrying a plastic bag containing $115,098 of Federally Insured Deposits (bank money). Unbeknownst to the robbers, Ridley had also taken dye packs when he emptied the bank teller drawers. The dye packs exploded while the robbers were in route to their getaway vehicle and the tear gas caused Ridley to spit out the truck’s driver side window. This same truck had been seen by two Washington County farmers the day before. The farmers also noticed a white Mitsubishi parked in the same place the truck was parked on the day of the robbery. The farmers were highly suspicious and recorded the license plate of the car. The farmers called the police when they saw that the truck had been returned and the white Mitsubishi was speeding away. The robbery truck was processed by a crime scene technician and saliva was found on the driver’s side weather strip. This stain was the sputum of defendant Ridley and contained his DNA. The bank robbery proceeds were never recovered and both robbers have been ordered to pay restitution.
At Ridley’s sentencing hearing, the District Judge stated that armed robberies are one of the most serious federal offenses and victims of bank robberies have psychological scars that last well beyond the day of the robbery. The judge determined that a maximum guideline sentence of 246 months (20.5 years) was needed to protect the public from Donald Ridley and to provide deterrence to others. The United States Attorney for the Southern District of Illinois noted that the crime would not have been solved without the quick thinking of the local farmers in remembering the license plate of the car and reporting the location of the robbery truck. “These men provided the first lead and the most important link which enabled law enforcement to solve this robbery. Sometimes it takes more than police work to solve crimes---it takes a watchful community.” said United States Attorney Wigginton.
This case was investigated by the Washington County Sherriff’s Department, the Illinois State Police and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Deirdre A. Durborow.
Lynn Gang Member Sentenced to Ten Years in Prison for Heroin TraffickingRead the Press Release
BOSTON – A Lynn gang member was sentenced today to 10 years in prison for heroin trafficking.
Jairo Fernandez, 27, was sentenced by U.S. District Court Judge Denise J. Casper to ten years in prison and four years of supervised release. In November 2014, Fernandez pleaded guilty to conspiracy to distribute heroin and distributing heroin. At that hearing, Fernandez admitted responsibility for over 100 grams of heroin.
The case was part of Operation Whiplash, an investigation of several street gangs in and around Lynn and Revere. Over the past two years, Operation Whiplash has resulted in federal and state charges against 47 leaders, members and associates of gangs, including Money Over Broken Bitches (MOBB), the Crips and Deuce Boyz in Lynn and the Bloods in Revere. As part of the investigation, law enforcement identified Fernandez as a member of the Deuce Boyz gang.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; and Lynn Police Chief Kevin F. Coppinger, made the announcement. Operation Whiplash was investigated by members of the FBI’s North Shore Gang Task Force, which includes members of the FBI; Massachusetts State Police; Essex County Sheriff’s Office; and Chelsea, Lynn and Revere Police Departments. The case was prosecuted by Assistant U.S. Attorneys Timothy E. Moran and Peter K. Levitt of Ortiz’s Organized Crime and Gang Unit.
Louisiana Man Receives Life Sentence for Orange County Drug ConspiracyRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – A 38-year-old Vinton, Louisiana man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Jeremy James Wimberly was found guilty by a jury on Sep. 5, 2014 of conspiracy to possess with intent to distribute methamphetamine, possession with intent to distribute methamphetamine, use of a firearm during a drug trafficking crime and being a felon in possession of a firearm. Wimberly was sentenced to life in federal prison today by U.S. District Judge Ron Clark.
According to information presented in court, in September and October 2013, Wimberly made two controlled deliveries of a large amount of methamphetamine to an individual in Orange County, Texas. After the drug transaction on Oct. 23, 2013, law enforcement officers attempted to make a traffic stop on Wimberly. However, he led them on a 23-mile high speed chase at speeds reaching approximately 135 mph in Orange County before running out of gas in south Newton County and fleeing on foot. Wimberly was found to have discarded a gun and a large quantity of methamphetamine during the chase. Further investigation revealed he was a convicted felon and prohibited from owning or possessing a firearm or ammunition. Wimberly was indicted by a federal grand jury on Nov. 6, 2013 and charged with federal drug and gun violations.
The case was investigated by the Orange County Sheriff’s Office, Orange Police Department, Bureau of Alcohol, Tobacco, Firearms, and Explosives, U.S. Drug Enforcement Administration, and the Beaumont Police Department. This case was prosecuted by Assistant U.S. Attorneys Michelle Englade and Baylor Wortham.
Local Physician Convicted of Health Care Fraud ChargesRead the Press Release
St. Louis, MO – DR. DEVON GOLDING has been convicted of multiple health care fraud related charges for billing for services not rendered and false statements involving a health care benefit plan. The five-day trial was held before United States District Judge John A. Ross. The verdict was returned late Friday evening, February 13, 2015.
According to testimony presented at trial, Dr. Golding billed for services on multiple occasions when he was actually out of town. Dr. Golding employed a registered nurse, who, at various times during her employment from September 2009 to November 2011, took the examination to become certified as a nurse practitioner. Each time, she failed the examination and advised Dr. Golding that she had failed the examinations. She worked five days a week and saw patients on these days. Dr. Golding typically came to the office 2-3 days a week. In Dr. Golding’s absence, the registered nurse examined and diagnosed patients, prescribed narcotic medications and ordered lab tests for the patients. The registered nurse also completed progress notes for the patients, which Dr. Golding signed upon his return to the office and thereby falsely indicated that he had seen the patients. Dr. Golding directed the registered nurse to provide these services, although he knew these services were beyond the scope of her license as a registered nurse.
Golding, St. Louis, Missouri, was convicted of three felony counts of health care fraud and two felony counts of making false statements related to health services. Sentencing has been set for May 21, 2015.
Each count of health care fraud carries a maximum penalty of ten years in prison and/or fines up to $250,000 and each count of making false statements carries a maximum of five years in prison and/or fines up to $250,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.This case was investigated by the United States Department of Health and Human Services-Office of the Inspector General, the Federal Bureau of Investigation and the Medicaid Fraud Control Unit of the Missouri Attorney General’s Office. Assistant United States Attorneys Dorothy McMurtry and Gwen Carroll are handling the case for the U.S. Attorney’s Office.
Leader of Sports Betting Ring Sentenced to 20 Months for Racketeering and Related ChargesRead the Press Release
PHILADELPHIA – Joseph Vito Mastronardo, Jr., 64, of Meadowbrook, PA, was sentenced today to 20 months in prison, to be served in a Level IV Bureau of Prisons Medical Facility. The sentence follows his guilty plea on January 31, 2014, for conspiring to participate in a racketeering enterprise (RICO), conducting an illegal gambling business, conducting four conspiracies to launder money, interstate travel in aid of racketeering, transmitting wagering information, and aggravated structuring of cash deposits. The defendant was the leader of the Mastronardo Bookmaking Organization, a multi-million dollar sports betting operation with bettors throughout the U.S. In addition to the prison term, U.S. District Court Judge Jan E. DuBois ordered the forfeiture of approximately $3.7 million, a fine in the amount of $100,000, and three years of supervised release.
Mastronardo, Jr., was one of 16 defendants indicted in case, 15 of whom were charged with conspiring to participate in a racketeering enterprise (RICO) and conducting an illegal gambling business. All of Mastronardo, Jr.’s co-defendants pleaded guilty and are awaiting sentencing; charges against Joanna Mastronardo will be dismissed.
At its peak, the Mastronardo Bookmaking Organization had more than 1,000 bettors and was generating millions of dollars a year. Between January 1, 2005 and January 1, 2011, the organization utilized internet websites (www.betroma.com and www.betrose.com) and telephone numbers that allowed bettors to place sports bets on football, baseball, basketball, golf, horse racing, and other sporting events. Residents of Costa Rica staffed the internet websites and answered the telephones. In 2006 and 2010, law enforcement seized over $2.1 million of cash that Mastronardo hid in and around his home, including in specially-built secret compartments and in PVC pipes that were buried in his backyard.
Joseph Vito Mastronardo, Jr., ran the organization by using the internet, telephone, Skype, e-mail, United States mail, and in-person communication. The Mastronardo Bookmaking Organization laundered the gambling proceeds by using a check cashing agency, two private bank accounts, and numerous international bank accounts. On occasion, Mastronardo, Jr., also provided instructions so that a losing bettor could pay a gambling debt through a charitable donation.
Other indicted defendants who pleaded guilty and are awaiting sentencing include: Mastronardo=s brother, John, who managed a number of bettors and collected gambling debts; Mastronardo’s son, Joseph F. Mastronardo, who worked as an office employee, collected debts, and performed other financial duties; Eric Woehlcke, who worked as an office employee, collected debts, and was a sub-agent; Joseph and Anna Rose Vitelli, who owned J & A Check Cashing, which was used to launder the gambling proceeds; and Patrick Tronoski, Schuyler Twaddle, Michael Loftus, and Ronald Gendrachi.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, the Montgomery County Detective Bureau, and the Montgomery County District Attorney=s Office. It is being prosecuted by Assistant United States Attorney Jason P. Bologna and Department of Justice Trial Attorney Kelly Pearson.
Lake Mary Man Sentenced to 10 Years for Receiving Child PornographyRead the Press Release
Orlando, Florida – Chief United States District Judge Anne C. Conway today sentenced Samuel Dunn (22, Lake Mary) to 10 years in federal prison for receiving child pornography. The Court also ordered him to serve a 15-year term of supervision following his release from prison and to forfeit the electronic devices that he had used to commit the crime. Dunn pleaded guilty on November 19, 2014.
According to court documents, an undercover FBI investigation determined that Dunn was making child pornography available for download by others using an Internet peer-to-peer file sharing program. On June 6, 2014, agents executed a federal search warrant at Dunn’s Lake Mary residence, where they recovered Dunn’s laptop computer and a thumb drive. A subsequent forensic examination revealed that the computer and thumb drive contained approximately 200 images and 21 videos depicting child pornography, including images of young children being sexually abused. Agents also interviewed Dunn, who told them that he had used the file sharing program to download child pornography for the last four to five years.
This case was investigated by the Federal Bureau of Investigation and the Seminole County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Shawn P. Napier.
This is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Kansas Man Pleads Guilty to Two Bank RobberiesRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Kan., man who was still on supervised release for a 2009 bank robbery conviction pleaded guilty in federal court today to robbing two more banks.
Antonio P. Gaitan, 36, of Kansas City, Kan., pleaded guilty before U.S. Chief District Judge Greg Kays to one count of bank robbery in an indictment returned in the Western District of Missouri and to a second count of bank robbery in an indictment returned in the District of Kansas.
By pleading guilty today, Gaitan admitted that he stole $4,114 from Country Club Bank, 1 Ward Parkway, Kansas City, Mo., on April 2, 2014. Gaitan also admitted that he stole $5,130 from Truity Credit Union in Lawrence, Kan., on April 5, 2014.
Gaitan was identified from surveillance photos from the Country Club Bank robbery. Investigators learned that Gaitan was traveling to Nebraska, and he was arrested by authorities in that state.
Gaitan recently had escaped from custody at Heartland Center for Behavioral Change after being sentenced to five years in prison and three years of supervised release for a 2009 bank robbery. His supervised release was revoked by the court.
Under the terms of today’s plea agreement, Gaitan will be sentenced to 10 years in federal prison without parole for the bank robberies, plus a consecutive revocation sentence of 24 to 31 months for violating his supervised release. Gaitan must pay $9,244 in restitution.
This case is being prosecuted by Special Assistant U.S. Attorney Leena Ramana. It was investigated by the FBI, the Kansas City, Mo., Police Department, the Lawrence, Kan., Police Department and the Omaha, Neb., Police Department.
Jury Convicts Connecticut Man for Responding to Craigslist Ad for Sexual Relationship with MinorRead the Press Release
BOSTON – A Connecticut man was convicted today in U.S. District Court in Boston for traveling to Watertown in response to an advertisement on Craigslist in which a woman sought an adult male that might be interested in a relationship with her minor daughter. The Craigslist advertisement was place by undercover Homeland Security Investigation agents.
Paul R. Hinkel, 57, of Chester, Conn. was convicted following a three-day jury trial for using the Internet to lure a minor to engage in sex. U.S. District Court Judge William G. Young scheduled sentencing for May 5, 2015. In March 2014, Hinkel was arrested and charged via criminal complaint.
In February 2014, undercover federal agents placed an advertisement on Craigslist posing as a mother purporting to seek an adult male interested in a sexual relationship with her daughter. Hinkel responded to the advertisement, and was not deterred when it was revealed that the daughter was only 15-years-old. Hinkel proceeded to engage in hundreds of emails with the undercover agents, detailing the sexual activities in which he would engage with the teen. On March 19, 2014, Hinkel traveled from his home in Chester, Conn. to Watertown to meet and have sex with the fictional minor daughter. He carried a bag to the door with him, which agents later discovered contained sexual paraphernalia, men’s cologne and a stuffed animal. Hinkel was arrested by federal agents upon his arrival at the site in Watertown.
The charging statute provides a mandatory minimum sentence of 10 years and no greater than a lifetime in prison, and a lifetime of supervised release. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Bruce Foucart, Special Agent in Charge of Homeland Security Investigation in Boston, made the announcement today. Homeland Security Investigations, New Haven, Conn. Field Division; Customs & Border Protection, New York Air Unit; Watertown Police Department; and Massachusetts State Police also assisted with the investigation. The case was tried by Assistant U.S. Attorneys Eve A. Piemonte Stacey and Jordi de Llano of Ortiz’s Major Crimes Unit.
This case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Jury Convicts Cleveland Man of Running 'Pill Mills'Read the Press Release
CINCINNATI – A United States District Court jury convicted Christopher Stegawski, 65, of Cleveland, of conspiracy to distribute and dispense prescription drugs, namely oxycodone.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Ohio Attorney General Mike DeWine; Kathy Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), A.J. Groeber, Executive Director of the State Medical Board of Ohio; and Steven W. Schierholt, Executive Director, Ohio Board of Pharmacy, announced the verdict reached Friday, which was returned following a trial that began on February 5 before U.S. District Judge Michael R. Barrett.
According to court testimony, beginning about November 2009 until May 2012, Stegawski worked at a business initially known as Eastside Medical Specialist in Dayton, Ohio. In February 2010, the business moved to Lucasville, Ohio and the name was changed to Lucasville Medical Specialist. Stegawski took over the ownership of Lucasville Medical Specialist and listed his partner and co-conspirator, John Randy Callihan, as an employee.
Stegawski represented himself as a chronic pain management doctor at these clinics and an unnamed clinic located in Southpoint, Ohio. The clinics operated as “pill mills” by selling prescriptions for controlled substances, primarily oxycodone, without a legitimate need for the prescriptions. There was no valid doctor-patient relationship and many of the prescriptions were openly sold and diverted.
Stegawski had a DEA registration number that allowed him to order controlled substances for the clinics. Stegawski received a medical degree in Warsaw, Poland in 1977 and was purportedly trained to specialize in anesthesiology.
As many as 40 patients would visit the clinics each weekday. In some cases, customers traveled in excess of 200 miles roundtrip to obtain prescriptions from the doctor. Stegawski knowingly prescribed large amounts of prescription drugs to drug abusers and addicts, who were charged $200 cash per visit and received at most a cursory examination.
During the tenure of the pain clinics, many local pharmacies refused to honor any prescriptions written by Stegawski due to the “large quantities of narcotics” and his “catering to customers with prior drug abuse and arrest histories.”
“A majority of the patients interviewed admitted they had no legitimate pain to be prescribed the narcotics,” Criminal Chief Kenneth L. Parker told the court. “They were only going to the pain clinics to easily obtain prescriptions because they were addicted to pain pills, or because they were drug dealers themselves, selling the prescription pills on the street.”
The jury convicted Stegawski of one count of conspiracy to distribute and dispense prescription drugs, one count of conspiracy to launder money and two counts of maintaining a place for illegal distribution of drugs.
Conspiracy to distribute and dispense prescription drugs carries a maximum sentence of 20 years in prison and a $1 million fine; maintaining a place for the purpose of distributing carries a maximum of 20 years imprisonment and a $500,000 fine; money laundering is a crime punishable by up to 20 years in prison and a $500,000 fine.
Stegawski also faces potential forfeiture of a money judgment in his case.
Stegawski was indicted by a grand jury on May 16, 2012, charging him and co-defendant John Randy Callihan in an 11-count indictment. Callihan pleaded guilty to conspiracy to distribute and dispense prescription drugs and money laundering.
Stewart commended the cooperative investigation by agents and officers of the agencies named above including IRS Special Agent Robert Mullins, Ohio Board of Pharmacy Agent Jesse Wimberly, the Ohio Bureau of Criminal Investigation in Attorney General DeWine’s Office, the DEA, the Lawrence County Sheriff Jeff Lawless and the Sheriff’s Drug Task Force, Scioto County Sheriff Marty Donini, and the Riverside Police Department, as well as Criminal Chief Kenneth L. Parker and Assistant U.S. Attorney Timothy D. Oakley, who prosecuted the case.
Judge Increases Prison Sentence for Mercer County Drug Dealer from 78 to 90 MonthsRead the Press Release
PITTSBURGH - A Mercer County man has been re-sentenced in federal court to 90 months imprisonment, to run consecutive with his state court sexual assault sentence, on his conviction of violating federal narcotic laws, United States Attorney David J. Hickton announced today.
United States District Judge Mark R. Hornak imposed the sentence on Raymond Anthony Napolitan, 52, of Farrell, Pa.,
According to information presented to the Court, on Sept. 27, 2012, a federal jury found Napolitan guilty of possession with the intent to distribute 500 grams or more of cocaine on June 29, 2007. Judge Arthur Schwab then sentenced Napolitan to 78 months imprisonment. Both parties appealed from the judgment, and in August, 2014, the Third Circuit Court of Appeals affirmed the conviction but vacated the judgment, thereby remanding the case for re-sentencing before Judge Hornak. After extensive argument from both sides, Judge Hornak increased Napolitan’s sentence from 78 to 90 months.
Assistant United States Attorney Eric S. Rosen prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Southwest Mercer County Regional Police Department, the Pennsylvania Office of Attorney General Bureau of Narcotics Investigation and Drug Control, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation, the Mercer County Sheriff's Office, and the Mercer County Drug Task Force for the investigation leading to the successful prosecution of Raymond Anthony Napolitan.
Joplin Sex Offender Sentenced to 15 Years for Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Joplin, Mo., man who is a convicted sex offender was sentenced in federal court today for receiving and distributing child pornography over the Internet.
Donnie Ray Sumner, 44, of Joplin, was sentenced by U.S. District Judge Beth Phillips to 15 years in federal prison without parole. Sumner has a prior state felony conviction for possessing child pornography.
On April 23, 2014, Sumner pleaded guilty to receiving and distributing child pornography. Law enforcement officers executed a search warrant at Sumner’s residence on Jan. 21, 2013, and seized a desktop computer and a laptop computer that contained images of child pornography.
This case was prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the Southwest Missouri Cyber Crime Task Force.
Project Safe Childhood
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."
Jefferson County Man Sentenced for Child PornographyRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – A 53-year-old Port Arthur, Texas man has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
John “Johnny” Anthony Sassine pleaded guilty on Nov. 4, 2014 to attempting to transfer obscene material to a minor and was sentenced to 78 months in federal prison today by U.S. District Judge Ron Clark.According to information presented in court, in March 2013, an undercover officer in Jefferson County, Colorado, was working in an undercover capacity on a social networking sight posing as a 13-year-old female. The undercover officer received an unsolicited message from Sassine. The undercover officer and Sassine began an online chat conversation which became sexually explicit in nature. The undercover officer provided Sassine with a birthdate which would have made the minor 15 years of age. Sassine sent the undercover officer two sexually explicit photos and requested naked photos of the minor. Officials in Colorado coordinated with authorities in Port Arthur, Texas to identify and apprehend Sassine. On Apr. 12, 2013, a federal search warrant was executed at Sassine’s residence. At first Sassine denied having any computers in the home before admitting there were three laptops and a notebook computer in the residence. When asked if he knew why authorities were there, Sassine speculated it was because he had been to talking to someone “illegally” and admitted sending the sexually explicit photos of himself to someone he thought was under 16 years of age.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Department of Homeland Security HSI-ICE, Jefferson County Colorado District Attorney’s Office, Port Arthur Police Department and Beaumont Police Department. This case was prosecuted by Assistant U.S. Attorney Randall L. Fluke.In Milestone for Sentencing Reform, Attorney General Holder Announces Record Reduction in Mandatory Minimums Against Nonviolent Drug OffendersRead the Press Release
New Data Revealed by Justice Department Shows Rate at Which Feds Pursued Mandatory Minimum Penalties in Drug Trafficking Cases Has Hit Record Low
In One of His Final Speeches Before Stepping Down, Holder Lauds Progress In Sentencing Reform Initiative He Launched in ‘13
In a major advance for the sentencing reform project that has been one of his signature initiatives, Attorney General Eric Holder on Tuesday announced that federal drug prosecutors have shifted away from seeking mandatory minimums at record rates, while reserving stricter sentences for more serious offenders.
Speaking at the National Press Club, Attorney General Holder revealed that in the first full year since he imposed reforms to the Justice Department’s charging policies in nonviolent drug trafficking cases, federal prosecutors not only prosecuted fewer such cases overall, but also pursued mandatory minimum sentences at a dramatically lower rate than the year prior. In fact, according to the U.S. Sentencing Commission, in FY2014, federal drug prosecutors pursued mandatory minimums at the lowest rate on record.
“For years prior to this administration, federal prosecutors were not only encouraged – but required – to always seek the most severe prison sentence possible for all drug cases, no matter the relative risk they posed to public safety. I have made a break from that philosophy,” said Attorney General Holder. “While old habits are hard to break, these numbers show that a dramatic shift is underway in the mindset of prosecutors handling nonviolent drug offenses. I believe we have taken steps to institutionalize this fairer, more practical approach such that it will endure for years to come.”
The figures announced Tuesday were compiled by the U.S. Sentencing Commission at the request of the Justice Department to measure the impact of several reforms implemented in 2013 through Attorney General Holder’s “Smart on Crime” initiative. Those reforms—aimed at restoring fairness to the criminal justice system and at confronting the problem of America’s overcrowded prison system—instructed federal prosecutors to exercise greater discretion in selecting drug cases to bring to federal court. The data suggests prosecutors heeded that call, as the overall number of federal drug trafficking cases dropped by six percent in FY2014.
While the sheer number of drug cases went down, the data also showed that federal prosecutors have prioritized more serious cases. Holder pointed to a rise in the average guideline minimum sentence, from 96 months in FY2013 to 98 months this past year. That suggests the severity of offenses prosecuted in FY2014 was slightly higher.
Most important of all, Holder said, was the trend observed with respect to mandatory minimums. After several years in a row that saw federal prosecutors pursue such mandatory sentences in roughly two-thirds of drug cases, last year’s rate dropped to one-in-two. The Attorney General said this showed that the department was succeeding in reserving these strict sentences for the worst types of offenders rather than imposing indiscriminately.
“This figure, perhaps more than any other, shows the significant impact that our policy reforms are having,” said Attorney General Holder. “These are extremely encouraging results.”
Holder also presented statistics rebutting past criticisms of the “Smart on Crime” initiative. For instance, though some warned that the reduced application of mandatory minimums would remove the incentive for defendants to act as government witnesses, the Sentencing Commission’s data showed that defendants provided cooperation at the same rate as in years past.
Houston Woman Charged in Sister's Murder-for-hire SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Houston, Mo., woman has been charged in federal court with attempting to hire someone to murder her sister.
Leta Faye Douglas, of Houston, was charged in a criminal complaint filed in the U.S. District Court in Springfield, Mo., on Friday, Feb. 13, 2015. Douglas remains in federal custody pending her detention hearing on Thursday, Feb. 19, 2015.
Douglas allegedly asked her ex-husband to help her hire someone to kill her sister for $2,000.
According to an affidavit filed in support of the federal criminal complaint, Douglas sent a letter asking for help to her ex-husband in Nebraska. They have been divorced for 18 years, the affidavit says, and have not maintained contact.
Douglas’s ex-husband called her, the affidavit says, and during their telephone conversation, she told him she needed him to help her “take care of” her sister. According to the affidavit, Douglas’s parents were in a home for the elderly and her sister was in charge of their finances. Douglas claimed her sister would not handle their parents’ finances correctly, the affidavit says, but her ex-husband believed that Douglas wanted to have access to her parent's financial estate. Douglas told her ex-husband that she wanted her sister killed.
Douglas’s ex-husband initially told her that he did not want to help her. He believed she was serious, the affidavit says, so he reported the incident to the Nebraska State Patrol. Investigators then recorded a telephone call made to Douglas by her ex-husband on Jan. 27, 2015. During the telephone conversation, the affidavit says, he told her that he knew someone who would murder her sister. They allegedly agreed that Douglas would pay $2,000 after she received her tax return to have her sister killed.
On Feb. 2, 2015, Douglas allegedly called her ex-husband and told him she really wanted this done. Douglas allegedly told him that, if he took care of this, she would let him see his daughter (whom he has not had contact with in many years). He told Douglas to send him a picture of her sister and a map to her house, the affidavit says, which she did.
On Feb. 6, 2015, an undercover employee of the Missouri State Highway Patrol called Douglas and they arranged to meet at the Walmart in Houston. Douglas allegedly met with the undercover employee on Feb. 9, 2015, and they had a conversation while sitting in her vehicle. According to the affidavit, she gave the undercover employee a photograph of her sister and a hand-drawn map to her sister’s residence. She allegedly told him how to find her sister’s house and gave him a brief description of the interior layout of the house. Douglas told him that her sister’s husband would also be home and that they had two dogs inside the house, according to the affidavit. Douglas allegedly handed him an envelope that contained $2,000.
Dickinson cautioned that the charge contained in this complaint is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the FBI, the Missouri State Highway Patrol and the Nebraska State Patrol.