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13 February 2015
Oregon Resident Pleads Guilty to Accessory After the Fact in Connection with 2009 Suicide Bombing of ISI Headquarters in PakistanRead the Press Release
PORTLAND, Ore. – Reaz Qadir Khan, 51, a naturalized U.S. citizen residing in Portland, pleaded guilty to the crime of accessory after the fact for the assistance he provided to individuals connected to the May 27, 2009, suicide bomb attack at the headquarters of Pakistan’s intelligence service in Lahore, Pakistan, that killed approximately 30 individuals and injured 300 more.
In entering his plea before U. S. District Court Judge Michael Mosman, Khan admitted arranging for suicide bomber Ali Jaleel to receive approximately $2,450 inside of Pakistan prior to Jaleel’s participation in the May 27, 2009 bombing. Khan further admitted to providing advice and financial assistance to Jaleel’s wives after the bombing knowing that such assistance would hinder and prevent the apprehension of Jaleel’s wives and others in the Maldives who may have been involved with Jaleel.
On May 27, 2009, Jaleel and two others conducted the suicide attack at the ISI Headquarters in Lahore. The blast resulted in the death of approximately 30 people and injured 300 more. In a video released by the media outlet of al-Qaeda shortly after the attack, Jaleel made a statement taking responsibility for the attack and he was shown preparing for the attack at a training camp in what is believed to be the Federally Administered Tribal Area of Pakistan.
The maximum sentence for accessory after the fact is 15 years in prison and a fine of up to $125,000. The parties have agreed to jointly request that the Court impose a sentence of 87 months in prison at defendant’s sentencing, which is set for June 8, 2015.
This case was investigated by the FBI’s Joint Terrorism Task Force. The prosecution is being handled by Assistant U.S. Attorneys Ethan D. Knight and Charles F. Gorder, Jr. from the U.S. Attorney’s Office for the District of Oregon. Trial Attorney David P. Cora, from the Counterterrorism Section of the Justice Department’s National Security Division, is assisting.
Oregon Resident Pleads Guilty to Accessory After the Fact in Connection with 2009 Suicide Bombing of ISI Headquarters in PakistanRead the Press Release
Assistant Attorney General John P. Carlin of the National Security Division and U.S. Attorney S. Amanda Marshall of the District of Oregon announced today that Reaz Qadir Khan, 50, a naturalized U.S. citizen residing in Portland, Oregon, pleaded guilty to the crime of accessory after the fact for providing assistance to individuals connected to the 2009 suicide bomb attack at the headquarters of Pakistan’s intelligence service that killed approximately 30 individuals and injured 300 more.
In his plea entered before U. S. District Court Judge Michael Mosman, Khan admitted to providing advice and financial assistance to suicide bomber Ali Jaleel’s wives after the bombing knowing that such assistance would hinder and prevent the apprehension of Jaleel’s wives and others in the Maldives who may have been involved with Jaleel.
On May 27, 2009, Jaleel and two others conducted the suicide attack at the ISI headquarters in Lahore, Pakistan. In a video released by the media outlet of al-Qaeda shortly after the attack, Jaleel made a statement taking responsibility for the attack and was shown preparing for the attack at a training camp in what is believed to be the Federally Administered Tribal Area of Pakistan.
In the plea agreement, the defense and government jointly recommended a prison sentence of 87 months. Sentencing is scheduled for June 8, 2015.
This case was investigated by the FBI. The prosecution is being handled by Assistant U.S. Attorneys Ethan D. Knight and Charles F. Gorder Jr. of the District of Oregon, with assistance from Trial Attorney David P. Cora of the National Security Division.
Ohio Federal Court Prohibits Tax Return Preparer from Engaging in Prohibited ConductRead the Press Release
A federal court in Dayton, Ohio, has entered a permanent injunction against a tax return preparer that requires him to sign tax returns and furnish his Preparer Tax Identification Number (PTIN) on returns he prepares, as well as retain a list or copy of each of the returns that he prepares, the Justice Department announced today.
The court also barred Rodger S. Thomas Sr. from preparing documents that he knows will result in an understatement of his customers’ tax liabilities.
According to the government’s complaint, from 2006 through 2009, Thomas is alleged to have prepared tax returns for customers that claimed false business deductions on their Schedule C (profit and loss from business) and fictitious deductions on their Schedule A (itemized deductions). Also according to the suit, Thomas also allegedly prepared false Forms 1099 in order to inflate customers’ income and maximize their Earned Income Tax Credits. The complaint alleged that Thomas would then report these payments on the Schedule C of his own income tax returns as expenses incurred by his business Ramjet Express. The complaint further alleged that Thomas failed to sign or affix a PTIN to many of the returns that he prepared, negotiated refund checks by filing false Forms 1040 for customers and then, in violation of federal law, deposited the funds into his personal bank account.
In 2012, Thomas pleaded guilty to one count of making a false statement on an income tax return and one count of aiding and assisting in the filing of a false income tax return. He was subsequently sentenced to serve 24 months in prison and was released in March 2014.
The court’s order requires Thomas to contact and notify all persons for whom he has prepared a federal tax return or a claim for refund for since Jan. 1, 2006, of the injunction entered against him.
Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2015. The IRS has some tips on their website for choosing a tax preparer, and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Oakdale Inmates Sentenced for Inflicting Severe Injuries on Fellow InmatesRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced that three inmates were sentenced Thursday in two separate cases for severe beatings of other inmates. United States District Judge Patricia Minaldi presided over the hearings.
Virginia man sentenced to 41 months in prison for beatings
Douglas Darrell Harris, 32, of Petersburg, Va., was sentenced to 41 months in prison on one count of assault at a federal correctional institution. He was also sentenced to three years of supervised release.
According to evidence presented at the November 6, 2014 guilty plea, Harris assaulted a fellow inmate twice on April 1, 2014 at the Oakdale Federal Correctional Institution. One of the beatings was caught on camera, and the other was witnessed by a guard. As a result of the beatings, the injured inmate suffered fractured fingers, a fractured humerus, blurred vision and head pain. He also suffered a seizure and was admitted into the intensive care unit. Additionally, his hands were so badly injured they required surgery.
Mexican nationals sentenced to 60 months in prison for assault
Martin Alfonso Olivas-Lopez, 40, and Pablo Palacios-Gomez, 36, both of Mexico, were sentenced to 60 months in prison on one count of assault at a federal correctional institution. They are to be transported back to Mexico upon completion of their prison terms.
According to evidence presented at the November 20, 2014 guilty pleas, Olivas-Lopez and Palacios-Gomez assaulted another inmate on May 7, 2014 outside of Olivas-Lopez’s cell at the Oakdale Federal Correctional Institution. The assault was captured on the prison’s camera system. They punched the inmate in the head repeatedly and continued the assault after he had fallen to the ground. They then meticulously cleaned the area. The inmate suffered lacerations on his head, a nasal bone fracture, and a swollen eye and jaw.
The FBI and the U.S. Bureau of Prisons investigated the cases. Assistant U.S. Attorney Robert C. Abendroth prosecuted the cases.
North Texas Man Convicted in Fictional Disney SchemeRead the Press Release
Department of Justice
Office of Public AffairsSHERMAN, Texas – A 35-year-old Plano, Texas man has been found guilty of federal violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Thomas W. Lucas, Jr., was found guilty by a jury of seven counts of wire fraud and one count of making a false statement to the FBI today following a five-day trial before U.S. District Judge Amos Mazzant. The jury deliberated for less than an hour before returning their verdict.
According to information presented in court, from 2006 to 2010, Lucas devised and executed an elaborate scheme to defraud more than 100 investors out of approximately $60 million by telling them he had insider information regarding a Walt Disney resort and theme parks planned for the North Texas area. Originally, according to Lucas, the Disney Resort and Theme Park was to be called, “The King Ranch Project,” but that changed in 2007 to “Frontier Disney DFW,” both of which were completely fabricated. Disney witnesses, including Disney’s then Chairman of Parks and Resorts and executive assistants, testified at the trial that the information presented to investors by Lucas was not authentic and that Disney had never had any intentions of opening a Disney resort and theme park in north Texas at any time. Lucas pocketed approximately $450,000 from fees and commissions gleaned from the various land deals closed on his fraudulent Disney information. When confronted by the FBI about the scheme, Lucas falsely blamed the Disney information on a man he had previously met at a methadone rehabilitation clinic, who is now deceased.
On Sep. 11, 2013, Lucas was indicted by a federal grand jury in the Eastern District of Texas and charged with multiple counts of wire fraud and providing a false statement to federal agents.
Lucas faces up to 20 years in federal prison. A sentencing date has not been set.
This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Christopher Eason and J. Andrew Williams.
Member of Violent Home Invasion Robbery Crew Sentenced to 22 Years for Conspiring to Commit Drug Robberies and Conspiring to Distribute Cocaine and HeroinRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Henry Fiorentino was sentenced to 22 years in prison by United States District Judge John Gleeson. Fiorentino was convicted after a two-week jury trial in November 2014 of conspiring to commit Hobbs Act robberies and conspiring to distribute cocaine and heroin.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York.
Fiorentino was a leading member of a violent robbery crew responsible for more than 100 robberies of narcotics traffickers in the New York metropolitan area and elsewhere that netted more than 250 kilograms of cocaine and $1 million in drug proceeds. Beginning in approximately January 2001, crew members posed as law enforcement officers, staged fake arrests of the traffickers, and then forcibly seized the traffickers’ contraband. Members of the robbery crew restrained victims with handcuffs, rope, or duct tape and often brandished firearms and physically assaulted the victims. The Crew members then sold the stolen drugs and divided the proceeds among themselves.
Fiorentino participated in at least 19 separate robberies and attempted robberies. During these crimes, he personally entered the residences and, on numerous occasions, he or fellow crew members brandished firearms and abducted or restrained victims. During all of the robberies and attempted robberies, Fiorentino posed as a police officer. The robberies and attempted robberies in which Fiorentino directly participated involved at least 230 kilograms of cocaine and approximately $66,000 in drug proceeds.
Ms. Lynch extended her grateful appreciation to the Drug Enforcement Administration, New York, U.S. Immigration and Customs Enforcement, Homeland Security Investigations, and the New York City Police Department.
The government’s case is being prosecuted by Assistant United States Attorneys Alexander Solomon and Sylvia Shweder.
The Defendant:
HENRY FIORENTINO
Age: 46
Bronx, NY
E.D.N.Y. Docket No. 08-CR-242 (S-8)(JG)
Member of Megaupload Conspiracy Pleads Guilty to Copyright Infringement Charges and is Sentenced to One Year in U.S. PrisonRead the Press Release
A computer programmer for the Mega copyright piracy conspiracy, Andrus Nomm, 36, of Estonia, pleaded guilty today in connection with his involvement with Megaupload.com and associated piracy websites. He was sentenced to a year and a day in federal prison for conspiring to commit felony copyright infringement.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington Field Office made the announcement. U.S. District Judge Liam O’Grady of the Eastern District of Virginia accepted the guilty plea and imposed the sentence.
“This conviction is a significant step forward in the largest criminal copyright case in U.S. history,” said Assistant Attorney General Caldwell. “The Mega conspirators are charged with massive worldwide online piracy of movies, music and other copyrighted U.S. works. We intend to see to it that all those responsible are held accountable for illegally enriching themselves by stealing the creative work of U.S. artists and creators.”
“This outcome is the result of years of hard work by our office and our partners from the Criminal Division and the Federal Bureau of Investigation,” said U.S. Attorney Dana J. Boente. “The Mega Conspiracy engaged in massive criminal infringement of copyrighted works on the Internet, and we are confident that this case will be a sign to those who would abuse technology for illegal profit.”
“Today one conspirator who infringed upon the work of countless artists, actors and musicians takes responsibility for his actions,” said Assistant Director in Charge McCabe. “We continue to pursue his co-conspirators until they face justice in the American legal system. This sentence and the remaining charges in this case are the direct result of the hard work of dedicated FBI Special Agents, intelligence analysts and prosecutors who have invested countless hours of effort to bring justice in this case.”
Nomm agreed to waive his extradition hearing in the Netherlands, where he was arrested in January 2012, and plead guilty in the United States. In light of his role in the conspiracy and acceptance of responsibility, prosecutors agreed to recommend the sentence of a year and a day in federal prison.
Nomm was initially charged along with six other individuals and two privately-held corporations by a federal grand jury on Jan. 5, 2012, and a superseding indictment with additional charges was subsequently returned on Feb. 16, 2012. The superseding indictment charged the defendants with three separate conspiracies: conspiracy to commit racketeering, conspiracy to commit copyright infringement and conspiracy to commit money laundering. In addition, the defendants are charged with five counts of criminal copyright infringement and five counts of wire fraud. The indictment alleges that, for more than five years, the Mega Conspiracy operated websites that willfully reproduced and distributed infringing copies of copyrighted works, including works that had not been commercially released. The charges and allegations contained in an indictment are merely accusations and the remaining defendants are presumed innocent unless and until proven guilty.
In court papers, Nomm agreed that the harm caused to copyright holders by the Mega Conspiracy’s criminal conduct exceeded $400 million. He further acknowledged that the group obtained at least $175 million in proceeds through their conduct. Megaupload.com had claimed that, at one time, it accounted for four percent of total Internet traffic, having more than one billion total visits, 150 million registered users and 50 million daily visitors.
In a statement of facts filed with his plea agreement, Nomm admitted that he was a computer programmer who worked for the Mega Conspiracy from 2007 until his arrest in January 2012. Nomm further admitted that, through his work as a computer programmer, he was aware that copyright-infringing content was stored on the websites, including copyright protected motion pictures and television programs, some of which contained the “FBI Anti-Piracy” warning. Nomm also admitted that he personally downloaded copyright-infringing files from the Mega websites. Despite his knowledge in this regard, Nomm continued to participate in the Mega Conspiracy.
An extradition hearing for co-defendants Kim Dotcom, Mathias Ortmann, Bram Van der Kolk and Finn Batato is currently scheduled for June 2015 in Auckland, New Zealand. Co-defendants Julius Bencko and Sven Echternach remain at large.
This case is being investigated by the FBI’s Headquarters and Washington Field Office. The case is being prosecuted by Senior Counsel Ryan K. Dickey and Brian L. Levine of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Jay V. Prabhu of the Eastern District of Virginia. The Criminal Division’s Office of International Affairs also provided significant assistance.
Medical Device Maker Agrees to Pay $495,000 to Settle Allegations it Improperly Rewarded Military Physicians for Choosing Company DevicesRead the Press Release
MED-EL USA, based in Durham, NC, has settled claims that it improperly sought to influence military physicians to surgically implant MED-EL hearing devices in patients with hearing loss, Acting United States Attorney Annette L. Hayes announced today. MED-EL USA, a subsidiary of Austrian-based MED-EL, manufactures and sells cochlear implants and other hearing devices. The company agreed to pay the U.S. Army and U.S. Navy a total of $494,951 to settle allegations that it improperly provided meals and trips to an Army and a Navy Ear, Nose and Throat (ENT) specialist. The physicians were stationed at Madigan Army Medical Center in Tacoma, Washington and at the San Diego Naval Medical Center in San Diego, California.
“Patients need to be confident that their physician is selecting the best and most appropriate medical devices for their medical conditions – not the device that will result in free travel and/or a free meal for their doctor,” said Acting United States Attorney Annette L. Hayes. “That is why the Anti-Kickback Statute and False Claims Act generally prohibit payments to physicians, in cash or in-kind, in the hopes of influencing their medical decision-making and inducing them to order particular procedures, treatments and/or medical devices. Enforcement of these laws is particularly important in the military context given our obligation to provide quality healthcare to our servicemen and women and their families.”
According to today’s settlement, between 2010 and 2013, MED-EL USA embarked upon a deliberate campaign to increase the use of its products in Defense Department medical facilities. The government’s investigation revealed that MED-EL USA targeted the above-referenced Army and Navy ENTs and attempted to influence their choice of hearing devices by providing them free meals, overseas travel opportunities and honoraria requiring little to no actual work by the physicians. MED-EL USA sales to the military jumped from none to $400,000 during the period the two military physicians were the recipients of the company’s largesse.
In resolving the allegations involved in today’s settlement, MED-EL USA admits to no wrongdoing. Further, the company has dismissed its former Chief Operating Officer and terminated its relationship with the external sales consultant who orchestrated the alleged improper payments scheme.
The case was handled by Assistant United States Attorney Harold Malkin. Mr. Malkin heads the Affirmative Civil Enforcement (ACE) Unit for the U.S. Attorney’s Office.
The case was investigated by the Seattle Office of the Defense Criminal Investigative Service and the Army Criminal Investigation Command, Major Procurement Fraud Unit.Meadows Place Man Handed Significant Sentence for Child Pornography Production ChargeRead the Press Release
HOUSTON - William Butler Myers, 43, has been ordered to federal prison for 236 months for attempted production of child pornography involving a 14-year-old female, announced U.S. Attorney Kenneth Magidson. Myers, of Meadows Place, entered a plea of guilty Nov. 21, 2013.
Today, U.S. District Judge Melinda Harmon ordered the prison term which will be followed by a life term of supervised release. During that time, the court can imposed a number of special conditions designed to protect the children and prohibit the use of the Internet. He will also have to register as a sex offender.
The charges are the result of evidence found on a phone Myers took in for service at a cell phone repair shop. An employee had called law enforcement after he saw what he believed to be images of child pornography on the phone. Law enforcement reviewed the images and subsequently obtained a warrant for Myers residence in Meadows Place, at which time additional evidence was discovered and seized.
During the course of the investigation, law enforcement was eventually able to identify the victim.
Myers has been detained since his federal arrest on June 3, 2013, after the court found him to be a flight risk and danger to the community. He will remain there pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation was conducted by members of the Innocent Images Unit of the Houston FBI, including members of the Houston Police Department, which focuses its attention on investigating offenses involving the exploitation of children.
This case, prosecuted by Assistant U.S. Attorney Sherri Zack, 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."
Massena, New York - Man was Sentenced to 84 Months in Prison for Receipt of Child Pornography.Read the Press Release
PLATTSBURGH, NEW YORK – Robert Girard, 56, of Massena, New York, was sentenced to 84 months in prison for receipt of child pornography yesterday in United States District Court in Utica, New York, announced United States Attorney Richard S. Hartunian and Homeland Security Investigations Assistant Special Agent in Charge Nicholas DiNicola.
"The receipt and viewing of child pornography is an atrocious crime. As people continue to share child pornography, the children in the images continue to be victimized," said United States Attorney Richard S. Hartunian. "Through collaborative law enforcement efforts, our offices continue to investigate and prosecute these cases to the fullest extent of the law."
"Homeland Security Investigations aggressively targets child predators as child exploitation cases are among the agency’s highest priority," stated Nicholas DiNicola, Assistant Special Agent in Charge of Homeland Security Investigations Buffalo. "Working as a team with the U.S. Attorney’s Office and our partners in law enforcement, Homeland Security Investigations will continue to target individuals seeking to harm children."
Girard pled guilty on October 16, 2014 to one count of receipt of child pornography. As part of his plea, Girard admitted that he used peer-to-peer software to download and share child pornography over the internet. Girard’s sentence also includes a term of supervised release, registration as a sex offender, payment of a $100 special assessment, and forfeiture of any equipment or materials involved in the offense.
This prosecution resulted from an investigation conducted by the Department of Homeland Security, Homeland Security Investigations Massena. Assistant United States Attorney Katherine Kopita prosecuted the case as part of Project Safe Childhood. 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 identify and rescue victims. For more information about Project Safe Childhood, please visit
www.projectsafechildhood.gov .
Manhattan U.S. Attorney Announces Guilty Plea of Former U.S. Soldier for Conspiracy to Murder A DEA Agent and A DEA InformantRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that JOSEPH HUNTER, a former member of the U.S. Army, pled guilty in Manhattan federal court to charges that include conspiracy to murder an agent of the Drug Enforcement Administration (“DEA”) and a DEA informant, as well as conspiracy to import cocaine into the United States. HUNTER, who was arrested in September 2013 along with co-defendants Timothy Vamvakias, Dennis Gogel, Slawomir Soborski, and Michael Filter following a long-term DEA undercover investigation, pled guilty today before U.S. District Judge Laura Taylor Swain.
Manhattan U.S. Attorney Preet Bharara said: “Joseph Hunter has now admitted that he conspired to murder a DEA agent and an informant, and provide security and surveillance for a Colombian cocaine trafficking organization. Hunter, a former U.S. Army officer, became a soldier of misfortune who recruited and led an international band of criminal mercenaries. This global gun for hire will now be confined stateside in federal prison.”
According to the Indictment filed against HUNTER, Vamvakias, Gogel, Soborski, and Filter, and statements made at public court proceedings, including today’s guilty plea:
All five defendants previously served in the armed forces of their respective nations. HUNTER served in the U.S. Army between approximately 1983 and 2004; Vamvakias served in the U.S. Army between approximately 1991 and 2004; Gogel served in the German armed forces until 2010; Filter served in the German armed forces until 2009; and Soborski served in the Polish armed forces until 2011. HUNTER served as a sniper instructor and a senior drill sergeant, training other soldiers in marksmanship and tactics. Vamvakias attained the rank of sergeant and served both as infantryman and a military police officer. Gogel, Soborski, and Filter were also trained as snipers.
In 2013, HUNTER recruited Vamvakias, Gogel, Soborski, and Filter to serve as security for a Colombian drug trafficking organization and to perform contract killings. During meetings in Asia, Africa, and the Caribbean that began in January 2013 and continued through late September 2013, HUNTER communicated with three confidential sources (the “CSs”) working with the DEA, who purported to be Colombian narcotics traffickers. HUNTER agreed to serve as the head of security for the CSs’ purported narcotics trafficking organization, and assembled a “security team” consisting of Vamvakias, Gogel, Filter, and Soborski. HUNTER also told the CSs that he had previously been involved in contract killings – referred to as “bonus jobs” – and that some team members wanted to do as much “bonus work” as possible.
HUNTER and his co-defendants thereafter agreed, in meetings and communications with the CSs, to provide security and surveillance services to the narcotics trafficking organization. In late March 2013, in Thailand, Gogel, Filter, and Soborski surveilled a vessel on behalf of the CSs’ purported narcotics trafficking organization and reported their activities to HUNTER. In April 2013, in Mauritius, at the direction of the CSs, Gogel, Filter, and Soborski provided security for a meeting at which the participants discussed the distribution of illegal narcotics to the United States. In late June 2013, Vamvakias, Gogel, Filter, and Soborski conducted surveillance of a purported U.S.-registered aircraft at the direction of the third CS (“CS-3”), who posed as a member of the CSs’ narcotics trafficking organization. CS-3 informed the defendants that the aircraft was to be loaded with 300 kilograms of cocaine to be shipped to New York. The security team reported their activities to HUNTER.
Furthermore, HUNTER, Vamvakias, and Gogel agreed to commit murder-for-hire in Liberia by assassinating both a Special Agent of the DEA and a person who, according to the CSs, was providing information to the DEA about the CSs’ narcotics trafficking organization. In exchange for the murders, Vamvakias and Gogel were together to be paid approximately $700,000, and HUNTER was to receive an additional $100,000 for supervising the hit team. Communications between the defendants and the CSs occurred by telephone, over e-mail, and in a series of surreptitiously audio-recorded and videotaped meetings over an approximately nine-month period.
In mid-May 2013, at a meeting with the CSs in Thailand, HUNTER, Vamvakias, Gogel, and Soborski were told that a “bonus job” – that is, a contract killing – was in the offing, due to a leak within the CSs’ narcotics trafficking organization. In late May 2013, in email communications, HUNTER confirmed that his team would be willing to murder both a U.S. law enforcement agent and a source (a boat captain), who was purportedly providing information to U.S. law enforcement authorities about the CSs’ narcotics trafficking organization. HUNTER confirmed by email that his team would kill both the DEA agent and the informant. At a meeting in late June 2013, CS-3 explained to Vamvakias and Gogel that “the job is to kill a U.S. DEA agent and a source with the DEA,” who would be located in Liberia. Vamvakias and Gogel discussed the weapons that could be used and masks to be worn for the murders, and Vamvakias stated that it would be better to “hit the agent first” and then “the snitch.” In early July 2013, HUNTER sent via e-mail a list of the items needed for the murders, including “[t]wo Submachine Guns with silencers . . . [t]wo .22 pistols with Silencers.”
In mid-August 2013, at a meeting in Thailand, HUNTER, VAMVAKIS, and Gogel discussed in detail the weapons that would be used and the possibility of entering Liberia without having their passports stamped. They suggested that CS-3 fly them out of the country via private plane following the murders. Vamvakias stated that among other weapons, a sub-machine gun and two .22 caliber pistols would be needed for the murders, and CS-3 agreed to deliver the weapons to Liberia. The next day, at a meeting with Gogel, CS-3 confirmed that an order for the requested weapons had been made. Later that same day, Gogel met again with CS-3 and provided CS-3 with two highly sophisticated latex facemasks, which can make the wearer appear to be of another race, for CS-3 to transport to Liberia.
In late September 2013, Vamvakias and Gogel arrived in Liberia to commit the planned murders-for-hire.
HUNTER, 49, pleaded guilty to one count of conspiring to import cocaine (Count One), one count of conspiring to murder a federal law enforcement agent and a person assisting a federal law enforcement agent (Count Two), and one count of conspiring to possess a firearm in furtherance of a crime of violence (Count Four). As a result of his guilty pleas, HUNTER faces a mandatory term of imprisonment of ten years and a maximum possible term of imprisonment of life. HUNTER is scheduled to be sentenced by Judge Swain on May 29, 2015. The penalties described here are prescribed by Congress and provided for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Vamvakias, 43, pleaded guilty to Counts One, Two, Four, and Five of the Indictment on January 9, 2015, and is scheduled to be sentenced by Judge Swain on April 30, 2015. Gogel, 29, pleaded guilty to Counts One, Two, Four, and Five of the Indictment on January 13, 2015, and is scheduled to be sentenced by Judge Swain on May 1, 2015. Soborski, 41, pleaded guilty to Count One of the Indictment on February 10, 2015, and is scheduled to be sentenced by Judge Swain on May, 29, 2015.
The remaining defendant, Filter, 30, is charged with conspiracy to import cocaine into the United States. Trial is scheduled to commence before Judge Swain on March 9, 2015. The charges against Filter are merely accusations and he is presumed innocent unless and until proven guilty.
The guilty pleas were the result of the close cooperative efforts of the United States Attorney’s Office for the Southern District of New York; DEA’s Special Operations Division; DEA’s Bangkok, Ghana, Pretoria, Bucharest, Manila, Nassau and Copenhagen Offices; the Royal Thai Police Narcotics Suppression Bureau and Crime Suppression Division; the Royal Thai Immigration; the Royal Thai Attorney General’s Office; Republic of Liberia’s National Security Agency; the Republic of Liberia’s Attorney General’s Office; the Estonian Police and Border Guard; the Estonian National Criminal Police, Investigative Bureau; the Estonian State Prosecutors Office; the Royal Bahamas Police Force and Drug Enforcement Unit; Interpol; and the U.S. Department of Justice’s Office of International Affairs.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Michael Lockard, Anna Skotko, Aimee Hector, and Emil Bove are in charge of the prosecution.
Malone, New York - Man was Sentenced to Fourteen Years for his Conviction of Conspiracy to Distribute more than 1,000 Kilograms of MarijuanaRead the Press Release
PLATTSBURGH, NEW YORK – ALLEN PETERS, 43, of Malone, was sentenced yesterday to fourteen years in federal prison by United States District Court Judge Glenn T. Suddaby for his conviction of conspiracy to distribute more than 1,000 kilograms of marijuana, announced United States Attorney Richard S. Hartunian and James J. Hunt, Acting Special Agent in Charge of the Drug Enforcement Administration, New York Division (DEA). Additionally, the judge imposed six years of supervised release upon release from incarceration. Peters had faced a minimum of 10 years of incarceration for his conviction.
In January 2014, a jury convicted PETERS of conspiracy to possess with the intent to distribute more than 1,000 kilograms of marijuana. At trial, the government offered evidence that from at least 2005 to 2011, PETERS, and many others, smuggled thousands of pounds of marijuana into the United States and sent millions of dollars in drug proceeds back to Canada. They used property controlled by PETERS in Snye, Quebec, Canada on the Akwesasne Mohawk Indian Reservation as a staging area for the hockey bags of marijuana smuggled into the United States. The bags, which normally contained 100 to 200 pounds of marijuana, were then transported into the United States and distributed to cities across the Northeast.
"I would like to commend the various agencies from federal, tribal and local law enforcement agencies for their efforts in bringing this case to successful conclusion," said United States Attorney Richard S. Hartunian.
"The arrest, conviction and sentencing of Allan Peters exemplifies law enforcement’s commitment to enforcing the Controlled Substance Act," stated DEA Special Agent in Charge James J. Hunt. "I would like to commend the United States Attorney’s Office, Northern District of New York for their diligent work throughout this investigation, as well our law enforcement partners’ essential collaboration which led to today’s sentencing."
The investigation and prosecution of PETERS was the result of a joint investigation by the Drug Enforcement Administration (DEA), Homeland Security Investigations (HSI), the United States Border Patrol (USBP), Air and Marine Operations (AMO), the New York State Police, the St. Regis Mohawk Tribal Police Department (SRMTPD), the Akwesasne Mohawk Police Services (AMPS), and the District Attorneys of Franklin and Clinton Counties.
The case was prosecuted by Assista
MS-13 Members Sentenced for A Murder and ShootingRead the Press Release
ATLANTA – Miguel Guevara, Irvin Mejia Cruz, and Walter Aldana - members of the street gang known as Mara Salvatrucha 13, or MS-13 - have been sentenced for violent crimes they committed, including the murder of one man and the shootings of two others, one of whom was a 14-year-old boy.
“The gratuitous acts of violence these now-convicted gang members committed were intended to spread fear of their gang throughout the community,” said Acting United States Attorney John Horn. “Gangs like MS-13 have worked to establish a foothold in counties outside of Atlanta for years, and this case reveals the worst of the senseless violence that can arise from their activities—shooting at cars on the highway, or firing a gun into a group of middle school students playing basketball. This case also highlights the difficulties faced by youths who try to escape from the gang culture, as a murder occurred simply because a gang member wanted to drop out. Our strategy in cases like this is to decimate the entire gang structure, and eradicate the gang activity so that our citizens can go about their lives safely.”
“Violent criminal street gangs like MS-13 threaten everyone in our communities,” said Ryan L. Spradlin, acting special agent in charge of ICE Homeland Security Investigations in Atlanta. “These sentences, and the dozens of other convictions that resulted from this massive investigation, have made Atlanta neighborhoods safer places to live.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “The lengthy federal prison sentences handed down to these three violent members of MS-13, a Central American based gang known for its violence, will not only make our community safer but will send a message to other gang members that the FBI and its law enforcement partners will aggressively continue its efforts to disrupt and dismantle these organized crime groups such as MS-13.”
According to Acting United States Attorney Horn, the charges and other information presented in court: MS-13 is an international gang that has operated in the greater Atlanta, Ga, area since at least 2005. During the course of this investigation, which ended in 2010, more than 75 MS-13 members were arrested, charged, and/or deported. MS-13 members were organized into “cliques,” or groups, but they operated under the larger umbrella of MS-13. Each clique had a leader, often referred to as “the first word,” who conducted weekly meetings. At these meetings, members discussed their crimes against rival gang members and their plans to retaliate against rivals. The clique leaders collected dues from the gang members, which they used to buy guns and post bail for jailed gang members. Clique leaders often sent money back to MS-13 leaders in their home countries of El Salvador and Honduras, and clique leaders often reported back to MS-13 leaders in their home countries about MS-13 activities in the Atlanta area. The gang members staked out Gwinnett and DeKalb Counties as their home territory, where they committed murders, attempted murders, and armed robberies.
The evidence gathered during the investigation reflected that Miguel Guevara, a/k/a Blacky, was a member of MS-13 in 2006. He decided that he wanted to become less active in the gang and sought permission to “calm down” from the leader of his clique, Miguel Alvarado-Linares, a/k/a Joker. Alvarado-Linares discussed this with other members at a meeting of the clique on December 23, 2006. Everyone agreed that Guevara would have to shoot at a suspected rival gang member before he could become inactive. They went to the nightclub El Chaparral on Buford Highway, in DeKalb County, Ga., where they waited outside looking for suspected rival gang members.
In the early morning hours of December 24, 2006, they saw Celso Villalobos and Angel Gonzales walk out of the nightclub and drive away in a Toyota Corolla. As the Corolla pulled out of the parking lot, multiple MS-13 members began following it. The Corolla got onto I-85 and headed north. Guevara was in the passenger side of a Ford truck following the Corolla. The Ford truck pulled alongside the Corolla as it exited I-85 onto Highway 316 in Gwinnett County, Ga. At that moment, Guevara fired multiple shots. He hit the passenger, Angel Gonzales, in the head. He also struck the driver, Celso Villalobos, in the arm. Villalobos drove Gonzales to the Gwinnett County Medical Center, where he died of the gunshot wound to the head.
The evidence gathered during the investigation also showed that Irvin Mejia Cruz, a/k/a Triste, a/k/a Lil Triste, and Walter Aldana, a/k/a Goofy, belonged to the same clique of MS-13. On August 21, 2008, Mejia Cruz told Aldana that he would have to shoot someone if he wanted to earn more respect within the gang. Mejia Cruz then gave a gun to Aldana. Aldana left Mejia Cruz’s house and went a short distance where he saw a group of 13- and 14-year-olds gathered, some of whom were playing basketball. Aldana asked, “Who do you claim?” (that is, what gang do you belong to?). Without waiting for an answer, he started firing into the crowd and struck a 14-year-old boy in the back. Aldana then called out “Mara Salvatrucha” as he fled on foot. He returned the firearm to Mejia Cruz. The 14-year-old boy underwent surgery to have the bullet removed.
Miguel Guevara, a/k/a Blacky, 31, of Fort Walton Beach, Fla., has been sentenced to 30 years in prison to be followed by five years of supervised release. Guevara was convicted on these charges on Oct. 29, 2013, after he pleaded guilty.
Irvin Mejia Cruz, a/k/a Triste, a/k/a Lil Triste, 24, of Duluth, Ga., has been sentenced to nine years in prison to be followed by five years of supervised release. He was convicted on these charges on Oct. 21, 2013, after he pleaded guilty.
Walter Aldana, a/k/a Goofy, 24, of Norcross, Ga., has been sentenced to ten years in prison to be followed by five years of supervised release. Aldana was convicted of these charges on Oct. 21, 2013, after he pleaded guilty.
To date, 22 defendants have been convicted of RICO conspiracy for their participation in the violent activities of MS-13. 16 of the 22 defendants have already been sentenced. An additional 14 members of MS-13 were charged in separate indictments and have already been convicted and sentenced in federal court for their crimes as gang members.
This case was investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Federal Bureau of Investigation, Gwinnett County Police Department, and DeKalb County Police Department.
Assistant United States Attorney Paul R. Jones and U.S. Department of Justice, Organized Crime and Gang Section, Trial Attorney Joseph K. Wheatley prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Lincoln Man Sentenced for Possession of MethamphetamineRead the Press Release
United States Attorney Deborah R. Gilg announced that United States District Judge John M. Gerrard sentenced Luis Velez, age 52, of Lincoln, Nebraska, to 156 months imprisonment, to be followed by a 5 year term of supervised release following his earlier guilty plea to possession of methamphetamine with intent to distribute.
In December of 2013, the Lincoln Police Department served a search warrant at 1979 South Street in Lincoln. During the search of the apartment, police found 65.99 grams of methamphetamine in Luis Velez’s bedroom. Also found during their search was $2,700 and a 9mm handgun. Velez’s roommate, Daniel Kuta, was sentenced in December to 235 months in prison after he pled guilty to conspiracy to distribute methamphetamine.
This case was investigated by the Lincoln/Lancaster County Drug Task Force.
Leaders of the Hendry Street and Woodward Avenue Gangs Plead Guilty to Drug Trafficking and Firearm ChargesRead the Press Release
BOSTON – Alexis Hidalgo and Jonathan DaSilva, the respective leaders of two Boston street gangs -- the Hendry Street Gang and the Woodward Avenue Gang -- pleaded guilty today to drug trafficking and firearm charges.
Hidalgo, 34, and DaSilva, 31, both of Boston, each pleaded guilty before U.S. District Court Judge Rya W. Zobel to conspiracy to distribute crack cocaine, cocaine, marijuana, and oxycodone, as well as firearm related charges. In January 2013, Hidalgo and DaSilva were two of 29 defendants charged with drug trafficking and firearm charges arising out of Operation Concord, a joint investigation conducted by the Federal Bureau of Investigation, Boston Police Department, Massachusetts State Police, and Homeland Security Investigations that focused on gang violence and drug dealing in the Henry Street and Woodward Avenue areas of Boston. During the course of Operation Concord, law enforcement officials seized approximately $400,000 in cash, guns, jewelry, gold and silver bars, and several luxury vehicles.
From August 2011 through January 2013, Hidalgo and DaSilva, the respective heads of the Hendry Street and Woodward Avenue gangs, ran a lucrative drug trafficking business distributing crack cocaine, cocaine, marijuana, and oxycodone which was in turn distributed in Boston, Brockton, and Maine.
Hidalgo and DaSilva operated their drug business out of two primary locations: a house at 37 Hendry Street in Boston and a house known as “the Trap” at 36 Woodward Avenue in Boston. Customers seeking crack and marijuana would go to 37 Hendry Street to purchase drugs from gang members who stored the drugs and cooked cocaine into crack in the second floor apartment. In August 2012, 37 Hendry Street was shut down by the City of Boston as a result of numerous neighborhood complaints of drug and gang activity.
“The Trap” at 36 Woodward Avenue, which was run by DaSilva, operated as a round-the-clock distribution center for crack, oxycodone, cocaine and marijuana. When 37 Hendry Street was shut down, Hidalgo transferred his crack business to 36 Woodward Avenue.
Hidalgo and DaSilva used gang members to distribute and store drugs, drug proceeds, and to carry out gang-related missions. For example, on Oct. 23, 2012, DaSilva directed gang member Patrick “Pistol” Gomes to obtain a firearm and go to Roxbury District Courthouse to assist a fellow gang member who was “trapped” by a rival gang member. Gomes asked DaSilva if he had a “greenlight” to shoot if necessary and DaSilva gave Gomes the go-ahead. Investigators had Gomes stopped in his rental car by the police outside of the Roxbury courthouse where officers seized a fully loaded Ruger P89 semiautomatic handgun from the glove box. On Feb. 4, 2015, Gomes pleaded guilty to conspiracy to distribute cocaine base and marijuana and being a felon in possession of a firearm and ammunition.
The charging statutes provide a sentence of no less than 10 years and up to a lifetime in prison, a minimum of five years and up to a lifetime of supervised release, and a fine of $10 million on the charge of conspiracy to distribute controlled substances; no greater than 20 years in prison, a minimum of three years and up to a lifetime of supervised release, and a fine of $10 million on the charges of distribution of controlled substances; no greater than 10 years in prison, a minimum of three years and up to a lifetime of supervised release, and a fine of $250,000 on the charge of being a felon in possession of a firearm. Pursuant to their respective plea agreements with the government, and pending acceptance by the district court at sentencing, Hidalgo has agreed to a sentence of 144-168 months in prison and DaSilva has agreed to a sentence of 120-168 months in prison. Both defendants also agreed to the forfeiture of cash, jewelry, and luxury vehicles.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of Federal Bureau of Investigation, Boston Field Division; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement. The case was prosecuted by Assistant U.S. Attorney Emily Cummings of Ortiz’s Organized Crime and Gang Unit.
Leader of Salem Hells Angels Pleads Guilty to Federal Crimes in Connection with Brutal AssaultRead the Press Release
BOSTON – The leader of the Salem Chapter of the Hells Angels Motorcycle Club pleaded guilty today in U.S. District Court in Boston to criminal charges in connection with the assault and maiming of a former member of the Red Devils Motorcycle Club.
Sean Barr, 50, of Lynn, pleaded guilty before U.S. District Judge Nathaniel M. Gorton to conspiring to commit violent crimes in aid of racketeering, maiming in aid of racketeering, assault with a dangerous weapon in aid of racketeering, and assault resulting serious bodily injury in aid of racketeering. On Feb. 5, 2015, three co-defendants, Marc Eliason, 37, of Lynn; Robert DeFronzo, 47, of Saugus; and Brian Weymouth, 42, of Danvers, pleaded guilty to similar charges. Eliason and DeFronzo were members of the Salem Hells Angels and Weymouth was a member of the Red Devils. The Red Devils Motorcycle Club is a support club of the Hells Angels.
Barr, Eliason, DeFronzo and Weymouth were involved in luring the victim, who was targeted for failing to follow orders issued by the Salem Hells Angels, and assaulting the victim. The victim was targeted because he failed to assault a former member of the Salem Hells Angels, who had been “put out bad” from the Hells Angels. At the Byfield clubhouse, the victim was surrounded by the defendants and beaten. During the assault, Barr used a ballpeen hammer, a favored weapon of the Hells Angels, to maim the victim by breaking a number of bones in the victim’s hand. Eliason and Weymouth then stole the victim’s motorcycle.
The charging statutes provide a sentence of no greater than three years in prison, one year of supervised release, and a $250,000 fine on the charge of conspiring to commit violent crimes in aid of racketeering; 30 years in prison, five years of supervised release, and a $250,000 fine on the charge of maiming in aid of racketeering; 20 years in prison, three years of supervised release, and a $250,000 fine on the charge of assault with a dangerous weapon in aid of racketeering; and 20 years in prison, three years of supervised release, and a $250,000 fine on the charge of assault resulting in serious bodily injury in aid of racketeering. Pursuant to their respective plea agreements with the government, and pending acceptance by the district court at sentencing, Barr and Eliason have each agreed to sentences of 97 months in prison, and DeFronzo and Weymouth have each agreed to sentences of 57 months in prison.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of Federal Bureau of Investigation, Boston Field Division; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys Emily Cummings and Michael Crowley of Ortiz’s Organized Crime and Gang Unit.
La Plant Man Indicted for Sexual AbuseRead the Press Release
United States Attorney Brendan V. Johnson announced that a La Plant, South Dakota, man has been indicted by a federal grand jury for Sexual Abuse and Sexual Abuse of a Minor.
Henry Louis Chase Alone, age 31, was indicted on January 21, 2015. He appeared before U.S. Magistrate Judge John E. Simko on February 4, 2015, and pled not guilty to the Indictment.
The penalty upon conviction is any term of years up to life imprisonment and/or a $250,000 fine, a mandatory minimum of 5 years up to lifetime supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment charges that in July 2000, at Manderson, Chase Alone sexually abused a girl under the age of 16.
The charges are merely accusations and Chase Alone is presumed innocent until and unless proven guilty.
The investigation was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Sarah B. Collins is prosecuting the case.
Chase Alone was detained pending trial. A trial date has not been set.
KC Man Sentenced to 10 Years for Illegal Firearms Following Fatal CollisionRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was sentenced in federal court today for illegally possessing firearms, following a high-speed car chase that ended with a collision that killed an employee of the Kansas City Police Crime Laboratory.
Larneal D. Davis, 29, of Kansas City, was sentenced by U.S. District Judge Howard F. Sachs to 10 years in federal prison without parole.
On Aug. 12, 2014, Davis pleaded guilty to being a felon in possession of firearms. Davis admitted that he possessed two firearms in the vehicle he was driving on July 6, 2013. The two firearms – a Taurus .40-caliber semi-automatic pistol and a Ruger, .380-caliber semi-automatic pistol – were discovered in Davis’s wrecked vehicle following its collision with another vehicle at 65th Street and Troost in Kansas City.
Michael Chou, a crime scene technician at the Kansas City Police Crime Laboratory, was killed when his vehicle was broadsided by Davis’s vehicle while Davis was fleeing from Kansas City police officers. Davis was arrested a short distance from the accident scene after a brief pursuit on foot.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Davis has prior felony convictions for possession of crack cocaine with intent to distribute, carrying a firearm in connection with a drug offense and distribution of a controlled substance.
This case was prosecuted by Assistant U.S. Attorney D. Michael Green. It was investigated by the Kansas City, Mo., Police Department.
Johnson County Man Sentenced to 27 Months in Federal Prison on Obscenity ConvictionRead the Press Release
LUBBOCK, Texas — Christopher Wayne Howard, 26, of Joshua, Texas, was sentenced today by U.S. District Judge Sam R. Cummings to 27 months in federal prison, following his guilty plea in October 2014 to one count of transferring obscene material to a minor, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Judge Cummings ordered Howard to surrender to the Federal Bureau of Prisons to commence service of his sentence on March 20, 2015.
According to documents filed in the case, in March 2014, Howard engaged in a series of online and telephone texting communications with “Jane Doe,” a person he knew to be a 13-year-old-female. During the communications, Howard often turned the subject to sexually explicit matters. On March 13, 2014, Howard chatted with “Jane Doe” and used an online application to send her an obscene, sexually explicit photograph of an adult male.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the 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 sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the San Angelo Police Department’s Special Operations Division investigated. Assistant U.S. Attorney Steven M. Sucsy prosecuted.
Jefferson County Man Sentenced to Thirteen Years on Methamphetamine ChargesRead the Press Release
Follow @SDILNewsA Jefferson County man was sentenced today to federal prison on methamphetamine charges, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Monty D. Hamson, 49, of Mt. Vernon, Illinois, was sentenced to 156 months in federal prison, to be followed by three years’ supervised release, and fined $500. Hamson had previously pleaded guilty to two counts in a federal indictment. Count 1 charged that from May 2010, until on or about February 19, 2014, in Jefferson County, Hamson conspired with others known and unknown to the Grand Jury to manufacture methamphetamine. Count 2 charged that on February 19, 2014, in Jefferson County, Hamson possessed equipment, chemicals, products, or materials which may be used to manufacture methamphetamine, knowing, intending, and having reasonable cause to believe, that those items would be used to manufacture methamphetamine.
The investigation in this case was conducted by the Joint Narcotics Unit of the Mt. Vernon Police Department and the Jefferson County Sheriff’s Department.
The case is being handled by Assistant United States Attorney George Norwood.
Indicted Lewisville, Texas, Resident to Remain in Federal CustodyRead the Press Release
DALLAS — A federal grand jury in Dallas returned an indictment last week, that was unsealed today, charging a Lewisville, Texas, man with offenses stemming from his theft of others’ personal identifying information to steal income tax refunds, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Defendant John Bash made his initial appearance in federal court today, before U.S. Magistrate Judge Paul D. Stickney, who ordered him detained. During the hearing, it was revealed that Bash, who was arrested by special agents with the Internal Revenue Service (IRS) Criminal Investigation (CI) at his residence in Lewisville, is 30-years-old.
The indictment charges Bash with two counts of conspiracy to commit theft of federal public money and two counts of aggravated identity theft.
It alleges that beginning in January 2012, Bash conspired to steal federal public money, that is, income tax returns. As part of the conspiracy, according to the indictment, Bash would obtain the personal identifying information of third persons, including their names, Social Security Numbers and dates of birth. Then, Bash would prepare and submit false federal income tax returns to the IRS using that information. Bash prepared the false income tax returns to include false income and withholding information in a way that would result in a claim for a refund. He filed the returns requesting the refunds either be mailed in the form of a check to an address controlled by a conspirator or loaded onto debit cards acquired by a conspirator.
A federal indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. Upon conviction, however, the penalty for each count of conspiracy to commit theft of federal public money is 10 years in federal prison and a $250,000 fine. Each count of aggravated identity theft carries, upon conviction, a mandatory two-year sentence.
IRSCI is investigating. Assistant U.S. Attorney Aaron Wiley is in charge of the prosecution.
Illinois Physician Pleads Guilty to Taking Kickbacks from Pharmaceutical Company and Agrees to Pay $3.79 Million to Settle Civil False Claims Act CaseRead the Press Release
The Department of Justice announced today that an Illinois physician, Dr. Michael J. Reinstein, pleaded guilty to a federal crime for receiving illegal kickbacks and benefits totaling nearly $600,000 from two pharmaceutical companies in exchange for regularly prescribing an anti-psychotic drug — clozapine — to his patients. Reinstein also agreed to pay the United States and the state of Illinois $3.79 million to settle a parallel civil lawsuit alleging that, by prescribing clozapine in exchange for kickbacks, Reinstein caused the submission of false claims to Medicare and Medicaid for the clozapine he prescribed for thousands of elderly and indigent patients in at least 30 Chicago-area nursing homes and other facilities.
“The Department of Justice is committed to ensuring that physicians who accept payments from pharmaceutical manufacturers to influence prescribing decisions are held accountable,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division. “Schemes such as this one undermine the health care system and take advantage of elderly patients who are among the most vulnerable health care recipients.”
“Physicians must prescribe medications for their patients solely on the basis of the patients’ best medical interests and not because those decisions were improperly influenced by kickbacks and other financial favors,” said U.S. Attorney Zachary T. Fardon of the Northern District of Illinois.
Both the criminal and civil cases involve the promotion of generic clozapine, a rarely prescribed anti-psychotic drug that has serious potential side effects and is generally considered a drug of last resort, particularly for elderly patients. While clozapine has been shown to be effective for treatment-resistant forms of schizophrenia, it is also known to cause numerous side effects, including a potentially deadly decrease in white blood cells, seizures, inflammation of the heart muscle and increased mortality in elderly patients.
Reinstein pleaded guilty to one count of violating the federal Medicare and Medicaid Anti-Kickback Statute at his arraignment in U.S. District Court after he was charged on Feb. 3.
The civil settlement resolves a civil action filed against Reinstein by the federal government for accepting payments from pharmaceutical manufacturer Teva Pharmaceuticals USA Inc. and a subsidiary, IVAX LLC, to induce the use of generic clozapine. The United States alleged that in exchange for these payments, Reinstein prescribed clozapine for Medicare and Medicaid beneficiaries. The United States also alleged that Reinstein submitted and/or caused to be submitted to both Medicaid and Medicare claims for “pharmacologic management” of those patients for whom he prescribed clozapine. However, Reinstein allegedly did not engage in meaningful pharmacological management, because his prescribing decisions for his clozapine patients were based on the kickbacks he received rather than his independent medical judgment or the individual needs of his patients. In March 2014, Teva Pharmaceuticals USA Inc. and IVAX LLC, paid the United States and the state of Illinois $27.6 million to settle allegations that they violated the state and federal False Claims Acts by making payments to Reinstein in return for him prescribing clozapine to his patients.
As set forth in the plea agreement, the payment scheme involving Reinstein began in August 2003, when Reinstein agreed to switch his patients to generic clozapine if IVAX agreed to pay Reinstein $50,000 under a one-year “consulting agreement” and to provide other benefits to Reinstein, in violation of the federal Medicare and Medicaid Anti-Kickback statute. In addition to direct payments to Reinstein, IVAX allegedly also provided all-expenses paid trips to Miami for Reinstein, his wife and various employees of Reinstein. Reinstein quickly became the largest prescriber of generic clozapine in the country and prescribed the drug to many elderly patients. Allegedly, the payments and other forms of remuneration from IVAX and later Teva Pharmaceuticals continued for many years and resulted in the submission of thousands of false claims to the Medicare Part D and Illinois Medicaid programs.
The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs. The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient.
The plea agreement and civil settlement illustrate the government’s emphasis on combating health care fraud and mark another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $23.6 billion through False Claims Act cases, with more than $15.1 billion of that amount recovered in cases involving fraud against federal health care programs.
The U.S. Attorney’s Office for the Northern District of Illinois represented the United States in connection with the plea agreement. The civil settlement with Reinstein was the result of a coordinated effort by the U.S. Attorney’s Office for the Northern District of Illinois, the Civil Division’s Commercial Litigation Branch, the Department of Health and Human Services’ Office of Inspector General, the FBI and the Illinois Attorney General’s Office.
Except to the extent admitted by Reinstein in his guilty plea, the claims resolved by the civil settlement are allegations only, and there has been no determination of liability. The civil case is captioned United States v. Reinstein, Civil Action, No. 12-C-9167 (N.D. Ill.).
Hillview, Kentucky Police Chief Convicted of Making A False Statement to Federal AgentsRead the Press Release
LOUISVILLE, Ky. – Hillview, Kentucky Police Chief Glenn A. Caple was convicted today of making a false statement to federal agents when questioned about his knowledge and involvement in moving evidence found on an elected official’s property on January 4, 2012, announced Acting United States Attorney John E. Kuhn, Jr.
“We thank the jurors for their consideration of the evidence in reaching a unanimous guilty verdict,” stated Acting U.S. Attorney John Kuhn. “We must have faith and trust in our police that they will follow the letter of the law – and will be honest with other law enforcement agents investigating crimes. We cannot have our police knowingly and willfully lying to federal agents out of expedience or self-interest. Chief Caple knew better; he broke the law and an important public trust.”
During the four-day trial, the United States proved that Caple lied to federal agents on April 26, 2012, when he was questioned by the Federal Bureau of Investigation (FBI) about his involvement in directing subordinate Hillview Police officers to move evidence, a backpack characterized as a mobile meth lab, from its original location on the residence of the Hillview mayor and/or initially stating to federal agents that the suspected backpack was not found by Hillview police on the mayor’s property.
Hillview, Kentucky is a city of approximately 9,400 residents located in Bullitt County, Kentucky near Jefferson County. Hillview police officers testified under oath that a mobile meth lab in a black backpack was found in a tire next to a garage on the mayor’s property. They further testified that Chief Caple asked a Hillview police officer to move the backpack to a location believed to be off of the mayor’s property and failed to report the incident, in order to protect the mayor from bad publicity.
Jurors deliberated just over one hour before reaching a guilty verdict. Sentencing is scheduled before Senior District Judge Charles R. Simpson III on May 18, 2015, in Louisville. Caple faces no more than five years in prison, a fine of $250,000 and a three year period of supervised release.
This case is being prosecuted by Assistant United States Attorneys Thomas Dyke and Marisa Ford and was investigated by the Louisville field office of the FBI.
Hedge Fund Manager Sentenced to Prison for $7.9 Million Investment Fraud SchemeRead the Press Release
BATON ROUGE, LA – United States Attorney Walt Green announced today that JAMES R. HOLDMAN, age 59, of Zachary, Louisiana, was sentenced yesterday before U.S. District Judge James J. Brady to sixty (60) months imprisonment as a result of a mail fraud scheme in which he defrauded investors out of millions of dollars. HOLDMAN was also sentenced to serve two years of supervised release following his release from imprisonment and ordered to pay the victims of his scheme $7,910,074 in restitution.
HOLDMAN operated a hedge fund called Greenwing Capital Management, LLC (“Greenwing”). As the owner and operator of the fund, HOLDMAN solicited and received millions of dollars in investment funds from the victim investors, many of whom were retirees, including former military veterans and survivors of Hurricane Katrina. The victim investors hailed primarily from South Louisiana and Mississippi. Throughout 2008, HOLDMAN’s investments suffered substantial losses. However, HOLDMAN concealed his failed investments by falsely representing to the victim investors that their accounts were earning positive rates of return when, in fact, HOLDMAN had lost nearly all of their funds.
By making these false representations, HOLDMAN was able to defraud the victim investors into keeping their remaining money with Greenwing and, in some cases, investing more money, thereby allowing HOLDMAN to continue receiving money in the form of fees for his own personal use and benefit. In order to continue to conceal his fraud, HOLDMAN continued to put the victim investors’ money at risk in an attempt to recoup his losses.
Ultimately, in October 2008, HOLDMAN sent out a form letter to victim investors falsely informing them that a sharp downturn in the stock market related to the financial crisis had caused a 98.67% loss in their investment in a one-month period and had forced him to close the fund. In fact, HOLDMAN had steadily been losing the victims’ money throughout 2008.
U.S. Attorney Green stated: “Investment fraud is a devastating crime that goes on far too often. We will continue to pursue such matters aggressively, particularly when the victims include some of our community’s most vulnerable. My appreciation goes to our federal and state law enforcement partners, both here in Louisiana and in Texas and Mississippi, for helping us uncover and address this scheme.”
The case is being prosecuted by Assistant U.S. Attorneys Shubhra Shivpuri and Chris Dippel. The joint investigation was conducted by the Federal Bureau of Investigation, the Louisiana Office of Financial Institutions, the Texas State Securities Board, and the Securities and Charities Division of the Mississippi Office of the Secretary of State.
Healthcare Company Executives Sentenced to Prison for Fraud and KickbacksRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced that IMEH U. EBERE, age 55, of Baton Rouge, Louisiana, and SHEILA R. HIVES, age 51, of Baker, Louisiana, have each been sentenced by Chief U.S. District Judge Brian A. Jackson for health care fraud offenses in connection with their roles at Golden Medical Equipment & Supply, Inc. (“Golden”), a Baton Rouge-based company that provided durable medical equipment in the Baton Rouge area. EBERE was sentenced to serve twenty-two (22) months in prison, followed by a two-year term of supervised release, and was ordered to pay $444,061.72 in restitution. HIVES was sentenced to a term of probation and was ordered to pay $7,687.50 in restitution.
In 2012, a federal grand jury indicted EBERE and HIVES, charging them with a variety of offenses arising out of a fraudulent scheme through which EBERE and Golden submitted false reimbursement claims to Medicare for enteral nutrition that Golden had purportedly provided to Medicare beneficiaries. Enteral nutrition is designed for individuals who suffer from health conditions that prevent food from reaching the digestive tract, therefore preventing the individuals from maintaining their weight and strength. Enteral nutrition is administered via a feeding tube.
On July 23, 2014, HIVES pled guilty before Chief Judge Jackson to receiving health care kickbacks, in violation of Title 18, United States Code, Section 1320a-7b(b)(1)(A). HIVES admitted that she received illegal kickbacks from EBERE to induce HIVES to refer Medicare beneficiaries to EBERE and Golden. Approximately one week later, on July 29, 2014, EBERE pled guilty before Chief Judge Jackson to conspiracy to commit health care fraud, in violation of Title 18, United States Code, Section 1349. EBERE admitted that, through her company, she submitted numerous fraudulent claims to Medicare for enteral nutrition-related products that she had purportedly provided to Medicare beneficiaries, even though the beneficiaries did not have feeding tubes and therefore did not need enteral nutrition and did not qualify for it. EBERE admitted that, from September 2003 through November 2011, through Golden, she submitted approximately $800,000 in enteral nutrition related claims alone.
The case was investigated by the Office of Inspector General for the U.S. Department of Health and Human Services (DHH-OIG), the Federal Bureau of Investigation (FBI), and the Medicaid Fraud Control Unit of the Louisiana State Attorney General’s Office (MFCU), and was brought as part of the Medicare Fraud Strike Force, under the supervision of the United States Attorney’s Office and the Fraud Section of the Criminal Division of the U.S. Department of Justice. This case is being prosecuted by Assistant U.S. Attorney Shubhra Shivpuri, with assistance from DOJ Trial Attorney Dustin M. Davis.
Grand Jury Returns Superseding Indictment Against Westbank Gang MembersRead the Press Release
U.S. Attorney Kenneth A. Polite announced the return of a second superseding Indictment charging members of a violent Westbank gang associated with the Harvey Hustlers with violating federal drug and firearm laws, including multiple murders and shootings. A federal grand jury returned the second superseding Indictment yesterday against Harry Smoot, 30, Frankie Hookfin, 23, Ray Woodruff, 21, Andre Addison, a/k/a “Dooda,” 23, Lance Singleton, a/k/a “Life Taker,” 24, Terrance Kelley, a/k/a “Streets,” 28, Isaac Smith, a/k/a “Ike,” 21, Joequell Lewis, a/k/a “Blow,” 27, Chris Brown, a/k/a “Ten,” 32, Richard Thomas, a/k/a “Stizzle," 39, Terrell Wade, a/k/a “T-Dog,” 39, and Clifford Sonnier a/k/a “Dut,” 25, all of Jefferson Parish. This Indictment is a product of an ongoing investigation into the violent acts in furtherance of the drug trafficking by this violent Westbank gang.
The second superseding Indictment charges all defendants with conspiracy to distribute more than one kilogram of heroin and over 280 grams of crack cocaine, six defendants with three counts of murder in furtherance of drug trafficking activities, four defendants with two counts of discharging firearms in furtherance of drug trafficking crimes, as well as multiple counts of other firearms violations. All defendants are presently in custody pending trial.
If convicted of any of the murders in furtherance of drug trafficking, the defendants will face a maximum sentence of life in prison, a $250,000 fine, and five years of supervised release. If convicted of any additional shootings in furtherance of drug trafficking, the defendants face a mandatory sentence of 10 years of imprisonment to be served consecutive with any other sentence, a $250,000 fine, and five years of supervised release. All defendants are facing 10 years to life, a $10,000,000 fine, and at least five years of supervised release if convicted of conspiracy to distribute heroin and cocaine.
U. S. Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendants must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation and the Jefferson Parish Sheriff’s Office in investigating this matter. Assistant United States Attorneys Collin Sims, David Haller, and Myles Ranier are in charge of the prosecution.
Four Convicted for Roles in Multi-Million Dollar Mortgage Fraud Scheme in Federal Court TrialRead the Press Release
SACRAMENTO, Calif. — After a 21-day trial, a federal jury found Nadia Kuzmenko, 35, resident of Loomis, Peter Kuzmenko, 36, resident of Sacramento, Edward Shevtsov, 51, resident of Sacramento, and Aaron New, 39, resident of Sacramento, guilty of multiple counts of mail and wire fraud associated with their involvement in a mortgage fraud scheme that cost financial institutions approximately $16 million, United States Attorney Benjamin B. Wagner announced today.
Peter Kuzmenko, Edward Shevtsov, and Aaron New were also found guilty of money laundering associated with the scheme. Nadia Kuzmenko was also found guilty of witness tampering.
According to evidence presented at trial, from late 2006 through 2007, the defendants engaged in a mortgage fraud scheme involving over 30 properties in the Sacramento area. The defendants were responsible for securing more than $26 million in residential mortgage loans on over 30 homes purchased through straw buyers. Records introduced at trial showed each of these defendants personally received hundreds of thousands or millions of dollars.
Nadia Kuzmenko was a licensed real estate sales person who, along with her sister Vera Kuzmenko, created fraudulent loan applications on behalf of the straw buyers. The loan applications contained materially false information as to the straw buyers’ income, employment, assets, and intent to occupy the residences. The loan paperwork also hid from lenders millions in dollars of payments that went to the defendants. With respect to the witness tampering count, the evidence showed that after she learned the FBI was investigating her, Nadia Kuzmenko told various witnesses to lie to the FBI and blame a dead woman for the fraud.
Aaron New was a licensed real estate broker who submitted the fraudulent loan applications to lending institutions and convinced home sellers to sign off on fraudulent invoices to divert money out of escrow and to the defendants. New also served as a straw buyer himself.
Peter Kuzmenko and Edward Shevtsov recruited straw buyers and helped create fraudulent loan paperwork. They also controlled shell accounts in which millions of dollars were diverted out of escrow based on fraudulent invoices and false representations made to lenders. Peter Kuzmenko was also a straw buyer himself.
“The defendants convicted today were important players in a network of fraudsters responsible for millions of dollars in losses associated with dozens of inflated property sales using multiple straw buyers,” said U.S. Attorney Benjamin B. Wagner. “As the guilty verdicts in this case demonstrate, mortgage fraudsters who believe they can escape accountability for their crime by blaming others and offering false alibis are mistaken. Our enforcement efforts in this area are far from done.”
“While today’s verdict is a victory for justice it does not change the fact that these individuals victimized their community and severely damaged the regional economy with their multi-million dollar fraud scheme,” said Assistant Special Agent in Charge John Gliatta for the FBI’s Sacramento field office. “As in this case, the FBI will vigorously investigate large, complex financial fraud to ensure those who are victimizing the community are brought to justice.”
“Mortgage fraud is an incredibly destructive crime that leaves many victims in its wake”, said José M. Martínez, Special Agent in Charge, IRS-Criminal Investigation. “The impact on homeowners and communities is devastating. While this verdict cannot reverse the damage caused by these defendants, it highlights the ongoing commitment of IRS-CI to hold accountable those involved in these types of crimes.”
The case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorneys Lee S. Bickley and Michael D. Anderson and Special U.S. Attorney David J. Ward are prosecuting the case.
The defendants are scheduled to be sentenced by Judge John A. Mendez on May 26, 2015. Each defendant faces a maximum statutory penalty of 20 years on each of their counts of conviction for wire and mail fraud. Nadia Kuzmenko faces an additional 20 years for witness tampering. Peter Kuzmenko, Edward Shevtsov, and Aaron New face up to 20 years on each of the counts of conviction for money laundering. Co-defendants Vera Kuzmenko and Rachel Siders are still awaiting trial.
Fort Myers Man Convicted of Drug ConspiracyRead the Press Release
Fort Myers, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury today found Titus Lamar Bellot (28, Fort Myers) guilty of conspiracy to possess with intent to distribute the controlled substance methylone. He faces a maximum penalty of 20 years in federal prison. His sentencing hearing is scheduled for May 18, 2015.
Bellot was indicted on April 30, 2014.
According to the testimony and evidence presented at trial, on April 21, 2014, U.S. Customs and Border Protection officials at an international mail facility in New York encountered an International Express Mail parcel from the People’s Republic of China. After searching the parcel, they determined that it contained methylone. U.S. Immigration and Customs Enforcement’s Homeland Security Investigations agents made a controlled delivery of the package to an address in Lehigh Acres, Florida. Deena Williams, who was convicted after a jury trial on February 5, 2015, accepted the package. Agents then entered the house and discovered that Williams had opened the package and removed the drugs. Bellot came to the house a short time later to pick up the drugs. Further investigation confirmed that the package belonged to him.
This case was investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Jeffrey F. Michelland.
Former Wells Fargo Investment Banker and Three Conpsirators Sentenced for Insider Trading ConspiracyRead the Press Release
Investment Banker Received Kickbacks in Cash And Gold For Stolen Inside Information
CHARLOTTE, N.C. – A former Wells Fargo investment banker and three of his conspirators were sentenced today on insider trading conspiracy and related charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Today’s sentencings stem from the Charlotte-based FBI investigation, “Operation Insider Out,” which began in early 2012 and identified targets involved in insider trading activities in the Charlotte area.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation, Charlotte Division joins U.S. Attorney Tompkins in making today’s announcement.
John W. Femenia, 33, of Greenwich, Conn., was sentenced to five years in prison and two years of supervised release. Shawn C. Hegedus, 34, of Centereach, N.Y. was sentenced to ten years in prison and two years of supervised release. Matthew J. Musante, 34, of Miami, Fla., was sentenced to 42 months in prison followed by two years of supervised release. They each pleaded guilty to insider trading and money laundering conspiracy charges. Danielle C. Laurenti, 34, of Massapequa Park, N.Y. was sentenced to 19 months (time served) in prison followed by two years of supervised release. Laurenti pleaded guilty to one count of insider trading conspiracy.
Four other codefendants who previously pleaded guilty to insider trading conspiracy have already been sentenced:
• Roger A. Williams, 53, of Georgetown, S.C., was sentenced to 24 months in prison and one year of supervised release.
• Kenneth M. Raby, 52, of Greer, S.C., was sentenced to 18 months in prison and one year of supervised release.
• Aaron M. Wens, 34, of Encinitas, Calif., was sentenced to six months in prison and one year of supervised release.
• Frank M. Burgess, Jr., 44, of Charlotte, was sentenced to six months in prison and one year of supervised release.
• James A. Hayes, 40, also of Charlotte, was sentenced to one year of probation.According to filed court documents and today’s sentencing hearings, from March 2010 through December 2012, the conspirators conducted illegal insider trading activities based on stolen material non-public information, including information on Wells Fargo and its clients’ upcoming corporate mergers and acquisitions. Stealing material non-public inside information allows a trader to cheat and earn substantial profits by trading before such news becomes public, thereby earning substantial profits by trading again once the news becomes public and impacts the price of a stock.
Femenia, an investment banker who lived in Charlotte and later in New York, stole from his employer, Wells Fargo, and its clients, material nonpublic information about upcoming mergers and acquisitions, and passed the inside information to his conspirators who then used it to conduct illegal trades. These conspirators then passed the confidential inside information to other conspirators who also then traded on that information, court records indicate. The criminal conspiracy netted over $11 million in proceeds as a result of the illegal insider trading activities, court records show.
According to court records, Femenia was paid kickbacks for the stolen information in several forms. Court records indicate that Hegedus, who was a stockbroker and Femenia’s high-school friend, used the proceeds of the insider trading to buy 55 gold bars. Femenia then sold four of the gold bars for $70,877. Femenia also received kickbacks in cash, including via ATM cash deposits made to account in the name of Femenia’s girlfriend. Court records indicate that Hegedus and his wife, Laurenti, laundered proceeds of the insider trading through a casino in Las Vegas. Court records also show that Femenia and Hegedus engaged in mortgage fraud through the fraudulent purchase of a luxury home in Waxhaw, N.C.
In announcing today’s sentencings, U.S. District Judge Robert J. Conrad Jr. stated that the sentences imposed were intended to deter other insider traders and to recognize the seriousness of the offense.
Femenia and Musante have been released on bond and will be ordered to self-report to the Federal Bureau of Prisons (BOP) to begin serving their sentences. Hegedus, who previously fled to Cuba, has been detained since his return to the United States over the summer of 2013 and will be transferred to BOP’s custody upon designation of a federal facility.
U.S. Attorney Tompkins commended the FBI for their investigation of the case, and thanked the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, and Wells Fargo for their invaluable assistance.
The prosecution for the government was handled by Assistant United States Attorneys Kurt W. Meyers and Kelli H. Ferry of the Charlotte office.
President Obama established the Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The President’s Financial Fraud Enforcement Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.stopfraud.gov.Former Smucker Employee Sentenced to Nearly Five Years in Prison for Stealing $4.1 Million from the CompanyRead the Press Release
A former employee was was sentenced to nearly five years in prison for a 16-year scheme to defraud J.M. Smucker Company, of Orville, Ohio, of more than $4.1 million, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office.
Mark R. Kershey, age 54, of Akron and formerly of Massillon, was sentenced to 58 months in prison by U.S. District Judge Donald C. Nugent. The judge also ordered Kershey to pay more than $4.1 million in restitution to Smucker and its insurance company and to forfeit two airplanes and four automobiles.
Kershey was employed as Smucker’s chief airplane mechanic at the Akron-Canton airport when, from approximately October 1997 through January 2013, he devised a false billing scheme using a fictitious entity he controlled, under the name of Aircraft Parts Services, Co., according to court documents.
Kershey submitted false invoices to Smucker in the name of Aircraft Parts Services, which in all or nearly all instances were for nonexistent parts and/or for purported outside services that he actually performed as part of his salaried employment duties. Kershey submitted most invoices in amounts less than $10,000, which he was authorized to approve. A supervisor approved a few larger invoices based on his trust in Kershey, according to court documents.
Kershey maintained a P.O. Box under the fake company name in Greentown, Ohio, to receive checks mailed by Smucker in reliance on the fraudulent invoices. Kershey used the proceeds of his scheme for personal uses, including the purchase and maintenance of two airplanes, the purchase of several automobiles, and payments for his personal residence, according to court documents.
Court documents describe Kershey’s efforts in late 2012 to deceive Smucker with respect to the final three checks payable to Aircraft Parts Services totaling $44,000, which Kershey had failed to negotiate. Kershey told the employee that Aircraft Parts Services had been sold to another Smucker vendor (referred to in the information as SAI), and submitted a letter to Smucker purportedly from SAI’s owner, that Kershey fabricated and forged, falsely confirming the purported sale to SAI. Smucker then issued replacement checks to SAI, that SAI deposited after discussion between Kershey and SAI’s owner.
Kershey previously pleaded guilty to one count of mail fraud.
The case is being handled by Special Assistant United States Attorney John M. Siegel following investigation by the Federal Bureau of Investigation, Canton, Ohio.
Former Nissan Employee Sentenced in Scheme to Defraud NissanRead the Press Release
Kenneth Carter, 45, of Corona, Calif., was sentenced today by U.S. District Judge William J. Haynes, Jr., to serve 60 months in prison for his role in a scheme to defraud Nissan North America by filing false Lemon Law claims on behalf of individuals who owned Nissan vehicles, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Carter was also ordered to pay restitution in the amount of $565,000 to Nissan North America.
On April 3, 2014, Kenneth Carter, along with co-defendants, Francisco DeLaRosa, 42, of West Covina, Calif., Adrian Franklin, 40, of Chandler, Arizona, Bruce Young, 49, of Compton, Calif., Tracey Young, 46, of Los Angeles, Calif., and Wendell Young, 34, of Inglewood, Calif., were indicted and charged with conspiracy to commit mail fraud, mail fraud, and conspiracy to commit money laundering, for their roles in a scheme to defraud Nissan North America.
The scheme originated from Kenneth Carter, a former employee of Nissan North America who was employed at Nissan’s Franklin, Tennessee headquarters from March 2007 through April 2008 as an “Arbitration Specialist”. Carter’s duties as an Arbitration Specialist included negotiating settlements with attorneys who brought claims on behalf of Nissan owners alleging violations of “Lemon Laws” or the “Federal Warranty Act.”
Between March 2007 and April 2008, Carter, along with Wendell Young, Adrian Franklin, Tracey Young, Francisco DeLaRosa, and others, provided information obtained from Nissan owners, such as the owner’s name, address, and vehicle identification number, which Carter used to file false and fraudulent Lemon Law claims with Nissan and requested settlement checks. Once Carter processed the false claims he caused settlement checks to be issued. Defendants Wendell Young, Adrian Franklin, Tracey Young, and Francisco DeLaRosa then directed the Nissan owners to deposit the checks into their bank accounts or to cash the checks and then “kick-back” a portion of the funds received from Nissan. A portion of the funds were then paid to Carter, and the remaining funds were kept by Wendell Young, Adrian Franklin, and Tracey Young.
Between March 2007 and April 2008 Carter caused more than 80 false claims to be paid by Nissan, totaling approximately $571,500.
Five other co-defendants were previously sentenced in the case:
- Francisco DeLaRosa was sentenced on June 13, 2014, to five months in a half-way house to be followed by five months of house arrest and ordered to pay $191,250.00 in restitution to Nissan North America.
- Adrian Franklin was sentenced on June 6, 2014, to 10 months in a half-way house and ordered to pay $191,250.00 in restitution to Nissan North America.
- Bruce Young was sentenced on August 15, 2014, to 15 months in prison and ordered to pay $78,000.00 in restitution to Nissan North America.
- Tracey Young was sentenced on June 13, 2014, to 12 months and one day in prison, to be followed by six months in a half-way house and ordered to pay $191,250.00 in restitution to Nissan North America.
- Wendell Young was sentenced on May 30, 2014, to 20 months in prison and ordered to pay $191,250.00 in restitution to Nissan.
The case was investigated by the IRS-Criminal Investigation and the Tennessee Bureau of Investigation. Assistant United States Attorneys Kathryn Ward Booth and Sandra G. Moses represented the government.
Former Klansman Sentenced for Cross BurningRead the Press Release
Timothy Flanagan, 33, was sentenced to nine months and ordered to pay a $5000 fine in federal court in Nashville, Tennessee, for his role in the April 30, 2012, cross burning in front of an interracial family’s home in Minor Hill, Tennessee, the Department of Justice announced. Flanagan previously pleaded guilty to one count of conspiring with others to threaten, intimidate and interfere with an African-American man’s enjoyment of his housing rights, and one count of interfering with those housing rights.
Flanagan—a former member of the Church of the National Knights, a Ku Klux Klan affiliate—admitted during the plea hearing that on the night of April 30, 2012, he and two other individuals devised a plan to burn a cross in the yard of an African American man in Minor Hill, Tennessee. Flanagan’s co-conspirator, Timothy Stafford, constructed a wooden cross in a workshop behind his house. Using Flanagan’s credit card, Stafford and co-conspirator Ivan “Rusty” London then purchased diesel-fuel with which to soak the cross. Flanagan and the other co-conspirators then drove the cross to the victim’s residence and, upon arriving at the residence, Flanagan and London exited the truck. The cross was placed in the driveway leading up to the house and was ignited. The co-conspirators burned the cross with the purpose of intimidating the African-American male who resided at that residence.
Timothy Stafford, 41, of Minor Hill, Tennessee, and Ivan “Rusty” London IV, 21, of Lexington, Kentucky, previously pleaded guilty for their roles in the conspiracy, and will be sentenced on March 3, and March 26, respectively.
“Hate-motivated crimes will not be tolerated in our country,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “The Justice Department will vigorously prosecute individuals that violate the rights of others because of race.”
“There can be no tolerance for such acts of intimidation when innocent persons are targeted simply because of their race,” said U.S. Attorney David Rivera of the Middle District of Tennessee. “The U.S. Attorney’s Office and our law enforcement partners will work tirelessly to protect the civil rights of all persons and bring to justice, anyone who would attempt to impede the constitutionally protected right to liberty of any person.”
This case was investigated by the Columbia, Tennessee, Division of the FBI and is being prosecuted by Trial Attorney Jared Fishman of the Civil Rights Division and by Assistant U.S. Attorney Hal McDonough of the Middle District of Tennessee.
Former Ceo of New London Manufacturing Company Sentenced for Clean Water Act ViolationRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, Tyler Amon, Special Agent in Charge of EPA’s Criminal Investigation Division, and Commissioner Robert Klee of the Connecticut Department of Energy and Environmental Protection announced that THOMAS H. FARIA, 38, the former chief executive officer and president of Faria Limited, LLC, doing business as Sheffield Pharmaceuticals, was sentenced today in Hartford federal court for violating the Clean Water Act. U.S. District Judge Alvin W. Thompson ordered FARIA to serve three years of probation, perform 300 hours of community service and pay a $30,000 fine.
According to court documents and statements made in court, the Clean Water Act requires that every company obtain a permit from the Connecticut Department of Energy and Environmental Protection (“CT DEEP”) before it can discharge its industrial wastewater to the public sewage system, commonly known as the publicly owned treatment works (“POTW”). Companies are also required, among other things, to test and monitor their industrial wastewater monthly to ensure that the chemical levels in the wastewater do not exceed federal and state limitations.
Sheffield Pharmaceuticals (“Sheffield”) has a factory at 170 Broad Street in New London that manufactures a wide range of over-the-counter pharmaceutical creams, ointments and toothpastes. From approximately 1986 to July 2011, Sheffield discharged industrial wastewater from its New London manufacturing operations to the New London POTW without a permit and in violation of Connecticut’s approved pretreatment program. The New London POTW discharges to the Thames River in southeastern Connecticut. During this entire time period, Sheffield lacked a pretreatment system at its factory to treat its industrial wastewater prior to discharge to the New London POTW, performed no regular monitoring of its discharges of industrial wastewater, and submitted no monthly monitoring reports to the CT DEEP.
After becoming the company’s president and chief executive officer in April 2003, FARIA soon learned through his own employees that Sheffield was discharging pollutants considered toxic under federal environmental law in its industrial wastewater without the required permit. FARIA also learned that in order to obtain a permit from CT DEEP, the company would have to install, at significant expense, a wastewater pretreatment system that would pretreat its industrial wastewater prior to discharging it to the New London POTW. Although FARIA’s own employees urged him to make the financial investment to bring the company into compliance, FARIA chose not to do so. FARIA continued this illegal course even when four environmental consulting firms, which the company had hired, advised him that the discharge of industrial wastewater to the public sewage treatment system, without a pretreatment system and CT DEEP permit, is illegal.
On April 20, 2011, the CT DEEP conducted an unannounced inspection of Sheffield. After finding that the company had no wastewater discharge permits, the CT DEEP inspector issued a Notice of Violation and cited the company for discharging manufacturing and laboratory wastewater without a permit. On or about May 27, 2011, Faria Limited, LLC submitted a permit application to CT DEEP so that the company could legally discharge industrial wastewater from its New London facility into the New London POTW. By July 2011, the company had installed a wastewater pretreatment system at its factory to pretreat the pollutants contained in its industrial wastewater prior to its discharge to the New London POTW.
“Managers of Connecticut factories who knowingly violate federal and state environmental law risk federal prosecution and a felony conviction,” said U.S. Attorney Daly. “The Clean Water Act applies to every industrial entity doing business in Connecticut. This Office will vigorously prosecute corporate officers whose decisions and actions threaten Connecticut’s natural resources and harm the public’s right to a clean environment. We recognize and thank the EPA and DEEP for their invaluable work in protecting the environmental integrity of Connecticut’s rivers and the Long Island Sound.”
“This defendant engaged in a longstanding scheme of illegally dumping millions of gallons of untreated pollutants to the sewer system over a period of seven years,” said EPA Special Agent in Charge Amon. “As the top executive, Defendant Faria cheated the public utility and undercut his competitors all while his employees and consultants were telling him to follow the law.”
“This case sends a clear signal that intentionally violating the environmental laws and regulations of Connecticut will not be tolerated and will be dealt with accordingly,” said DEEP Commissioner Robert Klee. “The U.S. Attorney’s office aggressively prosecuted this case and has brought it to a successful conclusion. I commend their efforts.”
On July 8, 2014, FARIA waived his right to indictment and pleaded guilty to one count of knowingly violating, or causing to be violated, the Clean Water Act. As a condition of his guilty plea, FARIA resigned from the company on March 7, 2014, and shall have no role in the operations or management of Faria Limited. He now resides in Portland, Oregon.
This matter was investigated by the U.S. Environmental Protection Agency and the Connecticut Department of Energy and Environmental Protection. The case was prosecuted by Assistant U.S. Attorney Hal Chen and Special Assistant U.S. Attorney Peter Kenyon.
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(203) 821-3722 [email protected]Former Bank of the West Employee Pleads Guilty to Federal Embezzlement ChargesRead the Press Release
ALBUQUERQUE – Angela Giddings, 38, of Albuquerque, N.M., pled guilty today to one count of embezzlement by a bank employee and embezzlement from Indian tribal organizations. Under the terms of her plea agreement she will serve 24 months in federal prison as well as a term of supervised release to be determined by the court.
Giddings was indicted on Dec. 16, 2014, and charged with 12 counts of embezzlement by a bank employee; six counts of embezzlement from Indian tribal organizations; and four counts of aggravated identity theft. The indictment alleges that Giddings committed these crimes in Bernalillo County, N.M., between Feb. 2, 2013, and July 18, 2014. At the time, Giddings was employed as a customer service manager for Bank of the West.
According to the indictment, Giddings embezzled funds entrusted to the bank by withdrawing and transferring funds from the accounts of customers without authorization and for her own use. The indictment alleges that Giddings’ allegedly unlawful withdraws and transfers ranged from $15,000.00 to $60,000.00. It also alleges that the victims of Giddings’ criminal conduct included the To’hajilee Community School Board and the Cañoncito Band of Navajos. The aggravated identity theft charges allege that Giddings used the names, addresses, and personal identifiers of individuals to commit felony offenses.
During today’s proceedings, Giddings pled guilty to one count of embezzlement by a bank employee and one count of embezzlement from an Indian tribal organization. In entering the guilty plea, Giddings admitted that between Jan. 9, 2012 and July 18, 2014, she misapplied and embezzled money by making unauthorized withdrawals and transfers for her own benefit. She further admitted that on July 18, 2014, she transferred $55,000.00 from a private individual’s account and $60,000.00 from the To’hajilee Community School Board account without authorization and for her own purposes with the intent to defraud.
This case was investigated by the Albuquerque office of the FBI and the Office of Inspector General of the Federal Deposit Insurance Corporation, and is being prosecuted by Assistant U.S. Attorney Jeremy Peña.
Former Accountant of Adult Entertainment Businesses Pleads Guilty to Tax Fraud ConspiracyRead the Press Release
A former accountant of adult entertainment businesses pled guilty for his participation in a tax fraud conspiracy.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Paul Anthony Ruggieri, of Parkland, pled guilty today to one count of conspiracy to defraud the United States.
According to court documents, Ruggieri provided accounting and return preparation services to Anthony Andreozzi [Case 9:13-cr-80174], F & A Concepts, Inc. (F & A) and Galaxy Communications, Inc. (Galaxy), two adult entertainment businesses owned and operated by Andreozzi in the State of Florida. Defendant Ruggieri also provided accounting services to the general public through his business, Strategic Accounting Alliance. Ruggieri and Andreozzi conspired for the purpose of unlawfully enriching Andreozzi by engaging in a fraudulent scheme to evade the payment of federal income taxes.
Court documents state that Andreozzi diverted corporate receipts of F & A and Galaxy for his own personal use. In order to conceal his diversion of corporate funds, Andreozzi instructed Ruggieri to falsify the corporate books and records by classifying certain personal expenditures of Andreozzi as business expenses. Ruggieri and Andreozzi caused the preparation and filing of false corporate tax returns for F & A and Galaxy, in that the corporate returns included fraudulent business expenses which reduced each corporation’s income. Ruggieri and Andreozzi also caused the filing of false personal income tax returns for Andreozzi for calendar years 2006, 2007, 2008 and 2009, in that the personal returns failed to include the diverted corporate income, thereby understating on Andreozzi’s personal returns his total income and tax due and owing.
On October 15, 2013, Andreozzi pled guilty to one count of conspiring to defraud the United States. Andreozzi is scheduled to be sentenced on March 6, 2015, at the Federal Courthouse in West Palm Beach, Florida, by U.S. District Judge Kenneth Ryskamp.
Ruggieri is scheduled to be sentenced on April 17, 2015, at the Federal Courthouse in West Palm Beach, Florida, by U.S. District Judge Kenneth Ryskamp. Each defendant faces a maximum of five years in prison.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Stephanie D. Evans.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Felon Sentenced to Seventeen Years in Federal Prison for Possessing a FirearmRead the Press Release
GRAND RAPIDS, MICHIGAN – Jamar Alonzo Quarles, 34, was sentenced today to seventeen years in federal prison for possessing a firearm as a convicted felon, U.S. Attorney Patrick A. Miles, Jr. announced. In addition to the prison term, U.S. District Judge Robert Jonker ordered Quarles to pay $2,500 in fines, and Judge Jonker imposed a five -year term of supervised release that will commence once Quarles is released from imprisonment.
Quarles pleaded guilty on September 9, 2014. The facts underlying his conviction were outlined in the government’s sentencing memorandum. On April 24, 2013, Quarles was released on parole in connection with a prior conviction for firing multiple rounds at another person. Thereafter, he acquired a pistol. On August 22, 2013, he menaced an ex-girlfriend with a “gun.” On or about August 24, 2013, Quarles became involved in a domestic dispute with his girlfriend. He prevented her from leaving his vehicle and then brought her to his home. He then prevented her from leaving his home, pointed a handgun at her head, and threatened to kill her. His girlfriend was ultimately able to escape and called the police. She directed police back to the defendant’s home, where they found the handgun, which had six rounds of ammunition in the magazine.
Quarles received a lengthy sentence because he was eligible for increased penalties under the Armed Career Criminal Act (“ACCA”). Under federal law, a person who possesses a firearm after sustaining at least three previous felony convictions of a certain type and severity must be sentenced to at least fifteen years in prison. Quarles’s prior convictions included incidents involving assault, battery, home-invasion, and firearms. In imposing sentence, Judge Jonker noted that Quarles was a model candidate for the increased penalties under the ACCA.
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Grand Rapids Police Department (GRPD) investigated the case. Assistant U.S. Attorney Sean M. Lewis and former Assistant U.S. Attorney Sean Maltbie prosecuted the case.
END
Federal Jury Convicts Burnet County Man of Firearms and Drug Trafficking ChargesRead the Press Release
In Austin last night, a jury convicted 44-year-old Bertram, TX, resident Jimmy Don Hardin of federal firearms and drug trafficking charges announced Acting United States Attorney Richard L. Durbin, Jr. and Texas Department of Public Safety Director Steve McCraw.
At the conclusion of a four-day trial, jurors convicted Hardin of conspiracy to possess with intent to distribute 500 grams or more of methamphetamine, possession of a firearm during a drug trafficking crime, possession of a stolen firearm and possession of a firearm by a convicted felon. Evidence presented during trial revealed that from May 2013 to December 2013, Hardin conspired with others to distribute methamphetamine throughout Burnet, Llano, Lampasas, Travis and Williamson counties. Authorities arrested Hardin on December 4, 2013, during the execution of a search warrant at his residence. At the time, Hardin was in possession of a stolen .45 caliber pistol as well as nine other firearms. Hardin’s criminal history revealed multiple convictions for manufacture of methamphetamine in Burnet County, TX.
Hardin remains in federal custody pending sentencing scheduled for April 23, 2015, before U.S. District Judge Lee Yeakel. He faces between ten years and life in federal prison. Two co-defendants--57-year-old Guillermo Naranjo Reyna, an illegal alien residing in Austin, and 60–year-old Nebes Montemayor of Austin--pleaded guilty to the drug conspiracy charge prior to trial. Reyna and Montemayor remain in federal custody pending sentencing scheduled for March 10, 2015, before Judge Yeakel. Reyna and Montemayor also face between ten years and life in federal prison.
This case was investigated by the Texas Department of Public Safety, Burnet County Sheriff’s Office, Burnet County District Attorney’s Office, Llano County Sheriff’s Office, Bastrop County Sheriff’s Office, Williamson County Sheriff’s Office, Austin Police Department, and the Cedar Park Police Department together with the Drug Enforcement Administration (DEA) and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Assistant United States Attorneys Doug Gardner and Matt Harding are prosecuting this case on behalf of the Government.
Federal Judge Sentences Sheboygan Sex and Heroin Trafficker to 25 Years ImprisonmentRead the Press Release
United States Attorney James L. Santelle announced today that United States District Court Judge Rudolph T. Randa sentenced Milwaukee native and former Sheboygan resident Jason Guidry (age: 33) to 25 years imprisonment following Guidry’s conviction on three sex-trafficking counts and one count of possession with the intent to distribute heroin. The sex-trafficking counts involved three separate females.
Evidence introduced at Guidry’s sentencing showed that he controlled his group of victimized females by addicting them to heroin and then further induced their prostitution by manipulating and threatening to manipulate his supply of heroin to them. As part of its presentation to Judge Randa, the United States presented expert testimony from Dr. Selahattin Kurter, who is one of a few number of Wisconsin medical doctors board certified in Addiction Medicine. Dr. Kurter testified about the addictive properties of heroin, its long-term effects on the brain, the onset of heroin withdrawal, and the coercive power of the drug on those addicted to it. In his sentencing comments, Judge Randa expressly recited Dr. Kurter’s statement that “heroin is the scourge of our nation.”
In making the public announcement of the criminal judgment imposed on Guidry, United States Attorney Santelle stated: “The sentence imposed on this defendant by Judge Randa is not only appropriate under all the facts and circumstances of this case but also sends yet another message to our community that human trafficking—and the terrible victimization that is at its core—will be answered decisively and significantly by our system of criminal justice. Mr. Guidry’s conduct was especially pernicious in that he used a highly addictive and often deadly drug to manipulate these victims into selling their bodies in the horrific sex trade business.” Santelle noted that this was the first federal conviction of a defendant in Wisconsin who used an addictive drug to control the trafficking activities of his victims.
Santelle stated further: “The investigation and prosecution of human trafficking cases in Eastern Wisconsin is among the highest priorities of my office, and, along with our equally committed federal, state, local, and Tribal law enforcement partners, we will continue to pursue the perpetrators of this heinous conduct with all of the resources available to us.” He commended specifically the detectives of the Sheboygan Police Department who were principally responsible for the investigative work upon which this prosecution, expertly handled by Assistant United States Attorney Joseph R. Wall, was premised.
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Federal Charges Filed in Sex Trafficking of MinorRead the Press Release
CHICAGO − A man who allegedly sex trafficked an underage girl by force was charged in a criminal complaint in U.S. District Court in Chicago. The defendant, ALLEN C. IROEGBULEM, 24, of Roselle, Illinois, was charged with sex trafficking of a minor. The charges were announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois and Robert J. Holley, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.
Iroegbulem appeared today before U.S. District Court Judge Daniel Martin at the Dirksen Federal Courthouse, was will remain in custody pending a detention hearing. The defendant was charged in a criminal complaint filed on February 4, 2015.
According to the complaint, beginning in December 2013, and continuing through February 2014, the defendant transported “Minor A” from the Chicagoland area to Rockford, Illinois, where he arranged for the minor to perform commercial sex acts with at least four men in exchange for money, all in the same night. The minor continued to perform sex acts at the direction of the defendant in hotel rooms throughout the Chicagoland area, at a house on the west-side of Chicago and in Wisconsin, where the minor was continually ordered to perform sex acts with several men at one time, over the course of three months. In addition, Iroegbulem physically assaulted the minor.
The complaint also states that the defendant provided another minor, “Minor C,” with drugs in a hotel room, causing her to pass out. He then arranged for two men to perform sex acts on Minor C while she was in a drugged state.
The investigation was conducted jointly by the FBI and the Carol Stream Police Department and assisted by the McHenry County State’s Attorney’s Office, the McHenry County Sheriff’s Department, the Woodstock Police Department, the DuPage County Sheriff’s Office, and the Schaumburg Police Department.
If convicted, the defendant faces a maximum penalty of life in prison.
The public is reminded that a complaint is not evidence of guilt and that all defendants in a criminal case are presumed innocent until proven guilty in a court of law.
The government is being represented by Assistant United States Attorney Bethany Biesenthal.
Complaint
Essex County, New Jersey, Man Charged in Armed CarjackingRead the Press Release
NEWARK, N.J. – An Irvington, New Jersey, man was charged today with brandishing a firearm while stealing a car in Newark, U.S. Attorney Paul J. Fishman announced.
Raheem Sylla, 23, of Irvington, is charged by complaint with one count of theft of a motor vehicle by force, violence, and intimidation, and one count of use of a firearm in furtherance of a crime of violence. The defendant is scheduled to appear this afternoon before U.S. Magistrate Judge Michael A. Hammer.
According to the criminal complaint:
During the early morning of Sept. 22, 2014, Sylla and a conspirator allegedly approached a 2000 Chevrolet Tahoe parked on a Newark street. Sylla went to the front driver’s window of the Tahoe, pointed a firearm at the driver’s chest and ordered the driver out of the car. The other conspirator approached the front passenger’s side window of the Tahoe and ordered the other passenger out of the car. Sylla and the other male then entered the car and fled.
A short time later, a Rutgers University police officer attempted to pull the Tahoe over for a traffic stop. Sylla tried to escape by driving away at a high rate of speed, but soon crashed and was subsequently apprehended by the Rutgers University police officer. A firearm was recovered from the Tahoe. Sylla has been in state custody since he was apprehended.
The carjacking count with which Brown is charged is punishable by a maximum potential penalty of 15 years in prison. The charge of use of a firearm in furtherance of a crime of violence is punishable by a maximum potential penalty of life in prison and a mandatory minimum sentence of seven years in prison, which must run consecutively to any other prison term. Each of the two counts also carries a maximum fine of $250,000.
U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives under the direction of Special Agent in Charge George P. Belsky; the Newark Police Department, under the direction of director Eugene Venable and Chief Anthony Campos; the Rutgers University Police Department, under the direction of Executive Director of Police Services Kenneth Cop; and the Essex County Prosecutor’s Office, under the direction of Acting Essex County Prosecutor Carolyn A. Murray; as well as criminal investigators from the U.S. Attorney’s Office in Newark with the investigation leading to the charges.
The government is represented by Special Assistant U.S. Attorney Andrew R. Tyler of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.
15-059
Sylla, Raheem Complaint
Eagle Butte Man Sentenced for Assault with A Dangerous WeaponRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota, man convicted of Assault with a Dangerous Weapon was sentenced on February 10, 2015, by U.S. District Judge Roberto A. Lange.
Lawrence Mexican, age 23, was sentenced to 42 months in custody, 2 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Mexican was indicted by a federal grand jury on September 16, 2014, for Assault with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury. He pled guilty to the Assault with a Dangerous Weapon charge on November 18, 2014.
The conviction arose from a July 2014 incident in Eagle Butte, in which Mexican and two others unlawfully assaulted a victim with shod feet, metal crutches, and wooden clubs, with intent to do bodily harm to the victim.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Division. Assistant U.S. Attorney Mikal Hanson prosecuted the case.
Mexican was immediately turned over to the custody of the U.S. Marshals Service to begin serving his sentence.
Drug Trafficker and Former Member of the Texas Mexican Mafia Sentenced to More Than 15 Years in PrisonRead the Press Release
CHARLOTTE, N.C. – Fred Carrasco, Jr., 37, of Mexico was sentenced today to 185 months in prison on drug trafficking and firearms offenses, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Robert J. Conrad, Jr. also ordered Carrasco to serve five years under court supervision upon completion of his prison term.
U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Rodney D. Monroe, of the Charlotte-Mecklenburg Police Department (CMPD).
According to court documents and court proceedings:
According to court documents and court proceedings, Carrasco is a former member of the Texas Mexican Mafia and an affiliate of the Sureños 13 and MS-13 gangs in Charlotte. Court records indicate that from 2005 to 2009, Carrasco was responsible for supplying more than 1,000 kilograms of marijuana and 500 grams of cocaine to Charlotte and elsewhere, which had been smuggled into the United States from Mexico. According to court records, Carrasco fled to Mexico in 2009 and returned in 2013 to face the federal drug trafficking charges filed in the Western District. He pleaded guilty in January 2014 to one count of conspiracy to distribute and to possess with intent to distribute marijuana and cocaine and one count of possession of a firearm in furtherance of a drug trafficking crime
Carrasco has been in federal custody since July 2013 and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
This FBI and CMPD investigated the case. The prosecution was handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.
District Man Sentenced to over 11 Years in Prison for String of Burglaries in Northwest WashingtonDefendant Committed Crimes While on Release After Earlier ArrestRead the Press Release
WASHINGTON - Anthony Hines, 21, of Washington, D.C., was sentenced today to 11 years and two months in prison for a series of crimes, including five burglaries that he carried out while he was awaiting trial in another case, U.S. Attorney Ronald C. Machen Jr. announced.
Hines pled guilty in December 2014, in the Superior Court of the District of Columbia, to two counts of first-degree burglary, one count of attempted burglary, and three misdemeanor charges. He was sentenced by the Honorable John McCabe. Upon completion of his prison term, Hines will be placed on five years of supervised release.
According to the government’s evidence, Hines was arrested on Sept. 27, 2014 in Southeast Washington for operating a vehicle that was reported stolen earlier that day from College Park, Md. He was released two days later on personal recognizance.
In the early morning hours of Oct. 18, 2014, Hines entered a residence in the 2600 Block of Woodley Place NW while the residents were sleeping. He stole, among other things, a cellphone and the keys to the victims’ vehicle, which he later stole. Halloween candy also was removed from the residence, and a trail of candy wrappers led to the house next door, which Hines also burglarized. Among the items taken from that residence were a digital camera, an iPad, video games, a bottle of wine, and the keys to a vehicle owned by one of the victims. Members of the Metropolitan Police Department (MPD) traced the stolen cellphone to a residential building and located the stolen vehicle three blocks away.
The next burglary took place at about 3 a.m. on Oct. 21, 2014. Hines entered a residence in the 1900 block of Calvert Street NW, while the victim was sleeping, and stole two iPhones, $150, and a watch. The victim awakened, and Hines ran from the residence.
Within the hour, Hines entered two more residences in the 1900 block of Belmont Street NW. He damaged a screen at the first residence and set off an alarm at the second. Police quickly responded and arrested him, finding the proceeds from the Calvert Street burglary. Police later executed a search warrant at Hines’s residence and recovered proceeds from numerous burglaries, including the Maryland residence from which the Maryland vehicle was stolen.
In announcing the sentence, U.S. Attorney Machen commended the work and collaboration of the Metropolitan Police Department’s Second and Third Districts and the Prince George’s County Police Department. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Allison Daniels and Assistant U.S. Attorney Christopher Macchiaroli, of the Felony Major Crimes Trial Section, who prosecuted the matter.
15-020District Man Pleads Guilty to Sexually Abusing Two Children-Defendant Had Prior Conviction for Similar Conduct-Read the Press Release
WASHINGTON – James Izlar, 37, of Washington, D.C., pled guilty today to charges stemming from the sexual abuse of two girls at a residence where they were staying in Southeast Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Izlar pled guilty in the Superior Court of the District of Columbia to two counts of second-degree child sexual abuse. The plea, which is contingent upon the Court’s approval, calls for a prison sentence between 9 ½ and 12 years, to be followed by a term of supervised release. The Honorable Jennifer Anderson scheduled sentencing for April 24, 2015.
According to the government’s evidence, Izlar was on supervised release for a previous child sexual abuse conviction involving a 2005 attack on a 13-year-old girl. In June 2013, he removed his GPS tracking device and began living in a house where the two girls, 6 and 9, were temporarily residing. The people in the house did not know that Izlar was a convicted sex offender. Soon thereafter, Izlar began inappropriately touching the girls, who reported the abuse to a family member. Police were notified, leading to Izlar’s arrest.
In announcing the plea, U.S. Attorney Machen commended the work of the detectives of the Metropolitan Police Department’s Youth Investigations Division. He also commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including former Victim/Witness Advocate Melissa Milam; Child Forensic Interview Specialists Karen Giannakoulias and Tracy Owusu, and Paralegal Specialist Joyce Arthur. Finally, he expressed appreciation for the work of Assistant U.S. Attorney John L. Hill, who is prosecuting the case.
15-019District Court Judge Sentences St. Croix Man to 69 Months in PrisonRead the Press Release
St. Croix, USVI – Senior District Court Jude Raymond L. Finch today sentenced Jahmall Augustine, 20, to 57 months in prison for his felon in possession of a firearm conviction, and 12 months for possession of prison contraband, announced United States Attorney Ronald W. Sharpe and U.S. Drug Enforcement Administration (DEA) Special Agent-in-Charge Vito S. Guarino.
Judge Finch also sentenced Augustine to three years of supervised release on the felon in possession count, and one year of supervised release on the prison contraband count. The contraband possession count is to be served consecutively to the felon in possession count. On September 8, 2014, Augustine pleaded guilty to one count of felon in possession of a firearm and possession of prison contraband.
Court records show that on May 1, 2014, acting on a tip, a police officer approached Augustine’s car. The officer observed three smoked marijuana cigarettes and two phials. After obtaining Augustine’s consent, the officer searched the car and found a firearm and eight phials containing marijuana.
Court records also show that on April 4, 2013, Bureau of Corrections officials conducted a search of a cell occupied by Augustine and another inmate at Golden Grove Adult Correctional and Detention Facility. The officers discovered and seized one baggie containing marijuana, and a homemade knife, commonly referred to as a shank, from under Augustine’s mattress, both of which are prohibited objects.
U.S. Attorney Sharpe commended the efforts of the Virgin Islands Police Department, the DEA and Bureau of Corrections, who investigated the cases, and Assistant U.S. Attorney Rhonda Williams-Henry, who prosecuted the cases.
Des Moines Area Attorney and Real Estate Agent Convicted of Bank FraudRead the Press Release
DES MOINES, IA - A Des Moines area attorney and real estate agent were both convicted of bank fraud after an eight-day jury trial, announced United States Attorney Nicholas A. Klinefeldt. Attorney Jason Springer was convicted of seven counts of bank fraud, and real estate agent Rick Makohoniuk was convicted of one count of bank fraud, in connection with a property flipping scheme. Bank fraud carries a maximum penalty of up to 30 years in prison, a fine not to exceed $1,000,000, or both. The court also will be authorized to impose orders of restitution. United States District Judge John A. Jarvey will schedule a sentencing date at a later time.
Springer, Makohoniuk, and three other men were charged with engaging in a scheme to defraud financial institutions from approximately March 2009 to March 2011, involving approximately eighteen homes in and around Des Moines, Iowa, and a loss of approximately $400,000. Two of the other men, Nathan Smith and Patrick Steven, with the assistance of Springer and others, negotiated short sales with lenders on behalf of homeowners. Smith and Steven also purchased the homes in the short sales while deceiving the lenders into believing that the price Smith and Steven paid in the short sale was the fair market value. In fact, Smith and Steven resold the homes for a higher price the same day they purchased the home in the short sale or soon after, all without the lenders’ knowledge. Springer furthered the scheme by conducting many of the fraudulent real estate closings, including signing and submitting false HUD-1 settlement statements that stated that Smith and Steven paid cash at closing for the short sales. In some cases, Smith and Steven brought no money to closing, whereas in other cases, Smith and Steven provided checks, but there were not sufficient funds in Smith and Steven’s bank account to cover the checks they brought to closings. Springer used the proceeds of the resale to fund the short sale. Makohoniuk, a realtor, is alleged to have submitted false documents to a lender with respect to one of the homes involved in the scheme.
The three following defendants charged in the indictment each entered guilty pleas; and are scheduled to be sentenced on May 14, 2015:
• Nathan Smith and Patrick Steven both pleaded guilty to one count of bank fraud; and
• Jerod Hogan, a Des Moines area mortgage broker, pleaded guilty to one count of conspiracy to make a false statement to a financial institution.
This case was investigated by the Federal Bureau of Investigation and the United States Department of Housing and Urban Development-Office of Inspector General, and was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Department of Justice Files Statement of Interest in Clanton, Alabama, Bond CaseRead the Press Release
The Department of Justice filed a statement of interest today with the U.S. District Court for the Middle District of Alabama in Varden v. City of Clanton. In this class action litigation, the plaintiff alleges that incarcerating individuals solely because of their inability to pay a cash bond violates the U.S. Constitution.
In her complaint, Varden alleges that she was required to pay a cash “bond” in a fixed dollar amount for each misdemeanor charge she faced or else she would remain incarcerated. In its statement of interest, the department aims to assist the court in evaluating the constitutionality of fixed-money bail practices. The statement asserts that, as courts have long recognized, any bail or bond scheme that mandates payment of pre-fixed amounts for different offenses in order to gain pre-trial release, without any regard for indigence, not only violates the Fourteenth Amendment’s Equal Protection Clause, but also constitutes poor public policy. Instead, courts should make an individualized assessment of each defendant to determine whether the defendant is a threat to public safety or a flight risk. Pretrial detention should be based on an objective evaluation of these factors, not on the defendant’s ability to pay.
“Bail practices that are indifferent to an individual’s ability to pay are incompatible with our Constitution and contrary to our values,” said Attorney General Eric Holder. “By taking action in this case, the Justice Department is sending a clear message: that we will not accept criminal justice procedures that have discriminatory effects. We will not hesitate to fight institutionalized injustice wherever it is found. And we will never waver in our effort to ensure that all Americans – regardless of background or circumstance – receive the equal rights and protections to which they are entitled under the law.”
“The criminal justice system should not work differently for the indigent and the wealthy” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “Bail practices that create a two tiered system of justice by treating the indigent and the wealthy differently undermine fundamental fairness in our nation’s criminal justice system.”
The statement of interest provides the court with a framework to assess the plaintiff’s claim of an unlawful bail scheme. As the department explains in the statement of interest, “Fundamental and long-standing principles of equal protection squarely prohibit bail schemes based solely on the ability to pay. Fixed-sum bail schemes do not meet these mandates. By using a predetermined schedule for bail amounts based solely on the charges a defendant faces, these schemes do not properly account for other important factors, such as the defendant’s potential dangerousness or risk of flight. The federal government recognized as much when it reformed its bail system over fifty years ago.”
Varden v. City of Clanton was filed in January 2015. The plaintiff seeks declaratory, injunctive and compensatory relief. A preliminary injunction hearing will be held on Feb. 24.
Delta Woman Sentenced in Connection with Hospice FraudRead the Press Release
OXFORD, Miss. - Felicia C. Adams, United States Attorney for the Northern District of Mississippi; Donald Alway Special Agent in Charge at the Federal Bureau of Investigation; Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General and Mississippi Attorney General Jim Hood announced that:
Betty Powell, 48, of Webb, Mississippi, was sentenced on February 12, 2015 by United States District Judge Sharion Aycock in Aberdeen, Mississippi to fourteen (14) months imprisonment to be followed by three (3) years of supervised release. She was also ordered to pay $244,500 in restitution to the Medicare program. Powell will report to the Federal Bureau of Prisons on April 6, 2015.
Powell previously pled guilty in August 2014 to conspiracy to commit healthcare fraud in violation of 18 U.S.C. §§ 1347 & 1349. Powell admitted to providing patient names and identifying information to Regina Swims-King in return for approximately $244,500 in payments from Swims-King. Swims-King has also pled guilty and been sentenced in this case for submitting fraudulent charges to Medicare and receiving millions of dollars in Medicare funds based on alleged hospice services for patients that were not eligible for hospice services; services that were never provided; or claims based on the forged signatures of physicians. Swims-King was sentenced to seventy (70) months imprisonment and ordered to pay $7,941,335.26 in restitution to the Medicare program.
Felicia C. Adams, United States Attorney for the Northern District of Mississippi said, “The United States Attorney’s Office for the Northern District of Mississippi is working aggressively to pursue unscrupulous health care providers who commit fraudulent acts and bring them to justice. Today’s sentence insures that these illegal practices will not be tolerated and fraudsters will be punished. Our office appreciates the hard work of all of the federal, state, and local agencies that participated in this investigation.”
"Health care fraud threatens the most vulnerable of our citizens by endangering the programs which provide care for them," stated Don Alway, Special Agent in Charge of the FBI in Mississippi. "I want to commend the investigators from the federal and state agencies who worked together on this case. We look forward to continued partnerships such as this among the law enforcement community in Mississippi.”
“Medical identity theft is a growing problem,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “As this case demonstrates, dishonest health care providers can make a lot of money by trafficking in patient information. But as this sentence shows, there is a price for stealing patient identities and the price is prison time.”
“Healthcare fraud is a serious problem in Mississippi and across the nation. These crimes steal money from government programs and have a direct impact on our State’s most vulnerable citizens. We will continue to pursue and prosecute these offenders. Joint State and Federal investigations and prosecutions are essential to protect our healthcare systems and our citizens,” said Attorney General Jim Hood.
This case was investigated by the Special Agents of the Federal Bureau of Investigation, Department of Health and Human Services, Office of Inspector General, and the Mississippi State Attorney General’s Office - Medicaid Fraud Control Unit, and was prosecuted by the United States Attorney’s Office for the Northern District of Mississippi.
Court Approves Consent Order in Alabama Desegregation Case to Improve Faculty Diversity and Ensure Fair and Equitable Student DisciplineRead the Press Release
The U.S. District Court for the Northern District of Alabama approved a consent order yesterday afternoon filed by the Justice Department, together with private plaintiffs and the Calhoun County, Alabama, School District, finding that the district has met its desegregation obligations in certain areas and providing for additional, comprehensive relief in the areas of faculty and staff hiring and recruitment as well as student discipline and school climate.
In approving the consent order, which amends a longstanding federal school desegregation decree, the district court declares that the 9,200-student school district has eliminated the vestiges of prior state-mandated segregation in the areas of student assignment, extracurricular activities, school facilities and transportation, thereby ending the court’s supervision in those areas. The order requires the district to take additional steps to reach full compliance, including adopting measures to promote racial diversity in its faculty and staff, expanding its use of positive behavioral supports and interventions throughout its schools, and revising its student discipline policies and procedures to ensure they are fair, non-discriminatory and limit the use of exclusionary discipline such as suspensions and expulsions.
“We commend the Calhoun County School District for the progress it has made in complying with its desegregation obligations, and for agreeing to take additional steps to reach our mutual goal of ensuring equal educational opportunities for all students,” said Acting Assistant Attorney General Vanita Gupta of the Justice Department’s Civil Rights Division. “We will continue to work closely with the district to implement this agreement and bring this case to a successful conclusion.”
The district may seek full dismissal of the case upon compliance with the terms of the three-year agreement. The Justice Department will monitor and enforce the district’s compliance with the order.
The enforcement of Title IV of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, among other bases, in public schools is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt.
Council Bluffs Resident Sentenced for Conspiracy to Distribute Methamphetamine and Possession of A FirearmRead the Press Release
COUNCIL BLUFFS, IA - On February 12, 2015, Ronald Wayne Shenk, a 48 year-old resident of Council Bluffs, Iowa, was sentenced by United States District Court Judge Stephanie M. Rose to 120 months in prison for conspiracy to distribute methamphetamine followed by a consecutive period of 60 months in prison for possession a firearm in relation to drug trafficking, announced United States Attorney Nicholas Klinefeldt. Shenk’s term of imprisonment is to be followed by five years of supervised release.
During the course of the investigation, law enforcement served a search warrant on Shenk’s residence in Council Bluffs, Iowa, on April 17, 2014. The search produced over one kilogram of methamphetamine, over ten thousand dollars in cash, and ten firearms. Law enforcement also located drug trafficking paraphernalia, including digital scales, multiple cellular telephones, drug notes and surveillance equipment. Shenk entered a guilty plea on October 2, 2014.
The investigation was conducted by the Southwest Iowa Narcotics Task Force, Mills County Sheriff’s Office, the Council Bluffs, Iowa, Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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