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12 February 2015
Albany, New York - Man was Sentenced to 327 Months in Prison for Two Counts of Distribution of Child PornographyRead the Press Release
ALBANY, NEW YORK – RAYMOND T. DRAKE, age 53, of Albany, New York, was sentenced today to 327 months in prison for two counts of distribution of child pornography, one count of receiving child pornography, and three counts of possession of child pornography by Chief United States District Judge Gary L. Sharpe, announced United States Attorney Richard S. Hartunian and Homeland Security Investigations Assistant Special Agent in Charge Nicholas DiNicola. Drake must also serve a lifetime term of supervised release and register as a sex offender.
As part of his March 5, 2014 plea, DRAKE admitted that he distributed images of child pornography by e-mail and through a file sharing program. On January 25, 2013, investigators searched DRAKE’s residence and recovered more than 600 of photographs and several videos depicting child pornography.
"Child pornography is the most despicable victimization of our most vulnerable," said United States Attorney Richard S. Hartunian. "People who engage in viewing it and helping distribute it will be punished. My office will work with our federal and local partners to discover and prosecute defendants who engage in this crime."
This case was investigated by the Department of Homeland Security, Homeland Security Investigations, and was prosecuted by Assistant United States Attorney Jeffrey C. Coffman 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
5 Men Charged with Armed Robbery of Shop ‘N Save in CahokiaRead the Press Release
This case is one of many brought as a result of the United States Attorney Stephen R. Wigginton’s Metro-East Armed Robbery Initiative
Follow @SDILNewsStephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that Byron “Josh” Holton, 26, from Cahokia, LaMarcus D. Jackson, 28, from Centreville, Undray C. Webb, 25, from Cahokia, Devante J. Hodges, 22, from Cahokia and Durand L. Harper, 25, from Cahokia, have all been charged on a two-count Complaint with Interference with Commerce by Robbery, which is a violation of the Hobbs Act, and Carry and Use of a Firearm During a Crime of Violence in connection with the armed robbery of the Shop ‘n Save that occurred in Cahokia, Illinois on January 11, 2015.
The complaints filed in the U.S. District Court allege that on January 11, 2015 at approximately 9:40 p.m. four masked and gloved individuals entered the Shop ‘n Save grocery store located at 1028 Camp Jackson Road in Cahokia, Illinois. The four individuals were armed with a black handgun, a chrome semi-automatic handgun, a long barreled revolver, and a long rifle with a high capacity magazine. The four masked men pointed the firearms at employees and customers within Shop ‘n Save and threatened to kill them if they were not given money from the store safe. An employee was forced to fill a black book bag with money from the safe and the four men then fled on foot. Over $7,000 was taken during the robbery. The investigation led to the identification of Durand Harper as the “look out” and “getaway driver” before and after the robbery, and to Josh Holton, LaMarcus Jackson, Undray Webb, and Devante Hodges as the four masked gunman.
“I would like to stress the tremendous cooperation and coordination between the various federal and local departments resulting in the bringing of charges in this case. Great sharing of information and old-fashioned police work by the FBI, Sauget, and Cahokia resulted in armed individuals being swiftly brought to account.” said United States Attorney Wigginton.
If convicted of a violation of the Hobbs Act, each defendant faces a term in prison of up to 20 years, a fine of up to $250,000, or both, and a term of supervised release of up to 3 years. If convicted of the offense of Carry and Use of a Firearm During a Crime of Violence, all five defendants face a minimum term in prison of 7 years up to a maximum term of Life, consecutive to, meaning in addition to, any term of imprisonment imposed on the Hobbs Act violation, as well as a fine of up to $250,000 and a term of supervised release of up to 5 years.
A criminal complaint is a formal charge against a defendant that is comprised of the essential facts constituting the offense charged. Under the law, a defendant is presumed to be innocent of a charge until proven guilty beyond a reasonable doubt to the satisfaction of a jury.
The case is being investigated by the Cahokia Police Department, the Sauget Police Department, and the Federal Bureau of Investigation as part of the Metro East Armed Robbery Initiative. The case is assigned to Assistant United States Attorney Ali Summers for prosecution.
11 February 2015
Wingate, Texas, Man Pleads Guilty to Federal Child Pornography OffenseRead the Press Release
LUBBOCK, Texas — Larry Richie Fields, 45, of Wingate, Texas, appeared today in federal court before U.S. Magistrate Judge Nancy M. Koenig and pleaded guilty to one count of transportation of child pornography. Fields, who has been in federal custody since his arrest in January on related charges, faces a maximum statutory penalty of not less than five years and up to 20 years in federal prison, a $250,000 fine, and a lifetime of supervised release. Sentencing will be set at a later date. Acting U.S. Attorney John Parker of the Northern District of Texas made the announcement today.
According to documents filed in the case, on October 25, 2014, Fields used the Internet to transport two images of child pornography using an online social networking service. Over a period of years, beginning no later than 2012, Fields used various social networking services and online storage services to post and store images depicting minors engaging in sexually explicit conduct. Fields used multiple usernames to trade, collect, transport, and receive child pornography.
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.”
The case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); the Dallas Internet Crimes Against Children (ICAC) Task Force; the Texas Department of Public Safety, Criminal Investigations Division; the Taylor County Sheriff’s Office; and the San Angelo Police Department, Special Operations Division. Assistant U.S. Attorney Steven M. Sucsy of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution.
White County Man Sentenced to 25 Years in Federal Prison on Child Pornography ChargesRead the Press Release
Follow @SDILNewsA White County man was sentenced on February 10, 2015, to federal prison on child pornography charges, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
“Keeping predators away from children remains my highest priority.” noted United States Attorney Wigginton. “Some folks just need to be taken out of our society for such heinous acts.”
Gary Richard Walters, 39, of Norris City, IL, was sentenced to 300 months in prison and 7 years of supervised release. Walters had previously pleaded guilty to a one count Indictment which charged Production of Child Pornography, in that on July 6, 2013, in White County, Walters did knowingly entice and coerce a minor to engage in sexually explicit conduct, for the purpose of Walters producing a video of such conduct.
The investigation in this case was conducted by the Federal Bureau of Investigation.
The case is being handled by Assistant United States Attorney George Norwood.
White County Man Sentenced on Methamphetamine Related ChargesRead the Press Release
Follow @SDILNewsA White County man was sentenced on February 6, 2015, to federal prison on methamphetamine charges, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Luke L. Burnett, 31, of Crossville, IL, was sentenced to 108 months in prison, three years’ supervised release following his imprisonment, and fined $200. Burnett had previously pleaded guilty to one count in a federal indictment. Count 1 charged that on March 7, 2014, in White County, Burnett did knowingly and intentionally possess with the intent to distribute a mixture or substance containing methamphetamine.
The case was investigated by the Carmi office of the Southern Illinois Drug Task Force and the White County Sheriff’s Department with the assistance of the Illinois State Police and the Indiana State Police.
The case is being handled by Assistant United States Attorney George Norwood.
West Virginia Woman Pleads Guilty in Mystery Shopper ScamRead the Press Release
PITTSBURGH - A West Virginia woman pleaded guilty in federal court to a charge of fraud conspiracy, United States Attorney David J. Hickton announced today.
Linda Walker, 60, pleaded guilty to one count before United States District Judge Cathy Bissoon.
In connection with the guilty plea, Walker was involved in a Nigerian “Mystery Shopper” scam whereby she knowingly prepared and addressed fraudulent mail containing counterfeit instruments to victims, who believed they were acting as mystery shoppers. The victims unwittingly received the counterfeit commercial and Postal money orders and checks and cashed them to make small purchases for purposes of evaluating the commercial services provided. They then wire transferred excess funds back to Walker and others. After these transactions, the money orders and checks were returned as counterfeit by the victims’ banks and they were left to repay the bank from their own funds.
Judge Bissoon scheduled sentencing for June 5, 2015, at 11 a.m. The law provides for a maximum total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Paul E. Hull is prosecuting this case on behalf of the government.
The United States Postal Inspection Service and Homeland Security Investigations conducted the investigation leading to the prosecution of Linda Walker.
Warren Doctors Plead Guilty to Unlawful Distribution of Prescriptions PillsRead the Press Release
Two physicians who practiced in Warren pleaded guilty today to writing prescriptions for oxycodone without medical justification, and one also pleaded guilty to health care fraud, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by DEA Special Agent in Charge Joseph P. Reagan, Special Agent in Charge Lamont Pugh III of the U.S. Department of HHS Office of Inspector General’s Chicago Regional Office, and Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office.
During a hearing before U.S. District Judge Nancy Edmunds, Hussein “Sam” Awada, 45, of Royal Oak, admitted that from late 2010 through early 2012, he conspired with James Lyons, a patient “marketer,” to write prescriptions for oxycodone and Roxicodone in the names of people who were brought to him by Lyons, for no medical purpose. Lyons has admitted that he paid Awada for those prescriptions, then bought the pills from the “patients” and re-sold them to street dealers.
Awada also admitted that during this same time he billed Medicare, Medicaid, and Blue Cross Blue Shield for numerous medical procedures that were not medically justified. Awada’s plea agreement acknowledged that he prescribed more than 80,000 oxycodone and Roxicodone as part of his conspiracy with Lyons, and defrauded Medicare, Medicaid, and Blue Cross of about $2.3 million.
Lyons was recently sentenced to 48 months in custody for his part in this scheme.
Luis Collazo, 55, of Farmington Hills, admitted that in late 2012 he provided prescriptions to patients for controlled substance medications such as oxycodone although he knew that the patients had no medical need for the medications.
McQuade said, "More people die from overdoses of prescription drugs in America than from overdoses of all other drugs combined. We hope that prosecuting the doctors who are putting these drugs on the streets will deter others from contributing to this epidemic.”
DEA Special Agent in Charge Reagan stated, “The DEA has made it a priority to address the dangerous practice of illegally diverting prescription medications. Prescription drugs, such as oxycodone and Roxicodone, are controlled substances for a very good reason. If they are abused, they can lead to addiction, illness, or even death. As physicians, Mr. Awada and Mr. Collazo violated the public trust by illegally diverting prescription drugs on to the streets. These guilty pleas make it clear that the DEA, and our partners in law enforcement, will continue to utilize our investigative techniques to bring to justice those individuals that are responsible for the illegal distribution of prescription medicines.”“Not only did these physicians practice medicine, they practiced drug dealing and fraud. They put the public’s health and safety at risk and stole vital taxpayer dollars”, said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “The OIG will continue to work with our law enforcement partners to root out individuals who choose to abandon their professional obligations and commit criminal acts that jeopardize the public’s well-being and essential health care programs”.
Based on his guilty pleas Hussein Awada is facing a maximum of thirty years in prison and a fine of up to $1,250,000. Luis Collazo is facing a maximum of twenty years in prison and a $1 million fine. Both will also lose their privilege to write controlled substance prescriptions.
Vice President Biden and Attorney General Holder Honor Retired Lieutenant Brian Murphy and Officer Sam Lenda of the Oak Creek Police Department with the Medal of ValorRead the Press Release
WASHINGTON - Vice President Joe Biden and United States Attorney General Eric Holder today awarded the Public Safety Officer Medal of Valor to Retired Lieutenant Brian Murphy and Officer Sam Lenda of the Oak Creek Police Department, both outstanding law enforcement officers who, along with others locally and nationally, exhibited exceptional courage in protecting others, saving lives, and promoting the safety and the security of our communities—all above and beyond the call of duty.
Lieutenant Murphy and Officer Lenda received this important award for their valiant and selfless efforts during the hate crimes-prompted shootings at the Sikh Temple of Wisconsin on Sunday, August 5, 2012. Responding to numerous calls about a violent disturbance at the Gurdwara, Lieutenant Murphy first saw two fatally injured victims and the suspect running out of the place of worship. When Lieutenant Murphy drew his weapon, the suspect fired at him, hitting him in his throat, his hand, and his legs. Shortly thereafter, when Officer Lenda arrived on the scene, he began shooting at, striking, and partially disabling the shooter, who then crawled out of sight and took his own life.
Unaware of whether there were additional people perpetrating the violence, Officer Lenda then drove to the location of the shot and determined that the shooter was dead. He then sent other, responding officers of the Oak Creek Police Department to the location of Lieutenant Murphy, who, though seriously wounded, waved them off and directed them to assist and support members of the congregations in and around the Gurdwara.
After the initial shooting, the investigation of it, led by the Federal Bureau of Investigation and supported by many other law enforcement agencies, units, and offices, revealed that the shooter had entered the Temple and fired at least six rounds in the kitchen-pantry area, where many women and children were hiding. He then fled the building and into the adjacent parking lot, as Lieutenant Murphy was arriving on the scene. Approximately six minutes passed from the time of the first call until Officer Lenda incapacitated the shooter. Six revered members of the congregation died in this tragic event, and several others were injured. The courageous actions of both Lieutenant Murphy and Officer Lenda unmistakably prevented further injury and helped to save many lives.
In making the announcement of today’s special recognition, United States Attorney for the Eastern District of Wisconsin James L. Santelle commented: “In early August of 2014, on the second anniversary of the hate crimes violence at the Sikh Gurdwara in Oak Creek, our community gathered to recognize the supreme heroism and stellar law enforcement professionalism of Lieutenant Brian Murphy and Officer Savan “Sam” Lenda, both of the Oak Creek Police Department, by conferring on them the Attorney General’s Law Enforcement Congressional Badges of Bravery. In the 30 months since their selfless actions saved lives among the Sikh Congregation and confirmed for the world the commitment of all law enforcement to peace, understanding, engagement, and diversity, we continue to benefit from their service and its legacy—along with the critically important involvement of many other local, state, and federal officers who promote daily our safety and security. All of us in the Eastern District of Wisconsin join the Vice President and the Attorney General in again commending Brian and Sam and all of their colleagues for their valor.
Santelle continued: “In the wake of the most serious, life-sacrificing civil rights-related hate crime since the Sixteenth Street Baptist Church Bombing of September of 1963, we acknowledge today and always the abiding life, spirit, vision, and mission of our Sikh colleagues here in Eastern Wisconsin and across our nation. In the midst of this tragedy and in the 900 days that have passed since then, our Sikh colleagues have been steadfast in their courage, their industry, their service, and their partnership with people of all faiths and heritages in promoting the very best of what America is and always will be.”
In specific reference to the Medal of Valor recipients, Attorney General Holder added: “These are all exceptional individuals. Every one of them deserves our deepest gratitude and boundless respect. Yet even among the outstanding field of public servants who perform these critical responsibilities, day in and day out – in communities across the country – there are some who stand out. And today, with these prestigious medals, we recognize these exceptional few for extraordinary valor – above and beyond the call of duty.”
The Public Safety Officer Medal of Valor, authorized by the Public Safety Officer Medal of Valor Act of 2001, is the highest national award for valor presented to a public safety officer. The medal is awarded to public safety officers who have exhibited exceptional courage, regardless of personal safety, in the attempt to save or protect human life. Including today’s awardees, a total of 95 medals have been presented since the first recipients were honored in 2003.
The Medal of Valor is awarded by the President of the United States, or his designee, to public safety officers cited by the Attorney General. Public safety officers are nominated by the chiefs or directors of their employing agencies and recommended by the Medal of Valor Review Board. The Attorney General has designated the United States Department of Justice’s Office of Justice Programs (OJP) to serve as the federal point of contact for the Public Safety Medal of Valor.
More information about the award, the Medal of Valor Review Board members, and the nomination process is available at www.ojp.usdoj.gov/medalofvalor.
Vice President Biden and Attorney General Holder Honor Officer Andrew Michael Keith with Medal of ValorRead the Press Release
WASHINGTON, D.C. - Vice President Joe Biden and Attorney General Eric Holder today awarded the Public Safety Officer Medal of Valor to Officer Andrew Michael Keith of the Knoxville Police Department, who exhibited exceptional courage in saving and protecting others and whose heroic actions were above and beyond the call of duty.
Officer Keith receives the award for his heroic and quick reaction on March 13, 2012 to a Tennessee Highway Patrol car on fire after a collision with a truck. The car’s driver, Sgt. Lowell Russell, was unconscious and trapped in the vehicle.
When Officer Keith reached the scene, he radioed dispatch for the fire department to respond and used his shirt to beat back the flames while trying to reach the injured trooper. When he was able to make contact, he positioned Trooper Russell to keep the flames away from his body, while two citizens assisted in cutting Trooper Russell from his seatbelt. After freeing the trooper, Officer Keith then took control of the scene and kept people away from the vehicle, which exploded from a discharge of ammunition within. Due to the diligence of Officer Keith and the concerned citizens, Sgt. Russell survived the accident and his injuries and began rehabilitation a few weeks later.
United States Attorney William C. Killian stated, “Officer Keith exhibited remarkable valor, risking his own life to save the life of Sgt. Russell, and to protect bystanders from harm. He acted in the finest tradition of law enforcement on that night, reacting quickly to serve and protect his fellow citizens.”
At the ceremony, Attorney General Holder remarked, “These are all exceptional individuals. Every one of them deserves our deepest gratitude and boundless respect. Yet even among the outstanding field of public servants who perform these critical responsibilities, day in and day out – in communities across the country – there are some who stand out. And today, with these prestigious medals, we recognize these exceptional few for extraordinary valor – above and beyond the call of duty.”
The Public Safety Officer Medal of Valor, authorized by the Public Safety Officer Medal of Valor Act of 2001, is the highest national award for valor presented to a public safety officer. The medal is awarded to public safety officers who have exhibited exceptional courage, regardless of personal safety, in the attempt to save or protect human life. Including today’s awardees, a total of 95 medals have been presented since the first recipients were honored in 2003.
The Medal of Valor is awarded by the President of the United States, or his designee, to public safety officers cited by the Attorney General. Public safety officers are nominated by the chiefs or directors of their employing agencies and recommended by the Medal of Valor Review Board. The Attorney General has designated the U.S. Department of Justice’s department’s Office of Justice Programs (OJP) to serve as the federal point of contact for the Public Safety Medal of Valor.
More information about the award, the Medal of Valor Review Board members, and the nomination process is available at:www.ojp.usdoj.gov/medalofvalor.
Two U.S. Army Sergeants Plead Guilty to Taking Bribes While Deployed in AfghanistanRead the Press Release
Two sergeants with the U.S. Army have pleaded guilty for accepting bribes from Afghan truck drivers at Forward Operating Base Gardez, Afghanistan (FOB Gardez), in exchange for allowing the drivers to take thousands of gallons of fuel from the base for resale on the black market, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia.
James Edward Norris, 41, of Fort Irwin, California, and Seneca Darnell Hampton, 31, of Fort Benning, Georgia, each pleaded guilty before Chief U.S. District Judge Clay D. Land in the Middle District of Georgia to one count of conspiracy to commit bribery of a public official and one count of money laundering.
During their guilty pleas, Hampton and Norris admitted to conspiring with other soldiers stationed at FOB Gardez to solicit and accept approximately $2,000 per day from local Afghan truck drivers in exchange for permitting the truck drivers to take thousands of gallons of fuel from the base. Hampton admitted that he concealed the scheme by attributing the increase in fuel usage to colder winter temperatures.
Hampton and Norris admitted that they shipped the bribe money back to the United States in tough boxes. Norris further admitted that on June 7, 2013, after returning from deployment, he purchased a 2008 Cadillac Escalade with $31,000 cash derived from the bribery scheme. Hampton further admitted that on May 20, 2013, after returning from deployment, he purchased a 2013 GMC Sierra with $29,000 cash derived from the bribery scheme.
As part of their plea agreements, Hampton and Norris agreed to forfeit the proceeds they received from the bribery scheme and the vehicles they purchased with those proceeds, as well as to pay full restitution. Sentencing has been scheduled for May 21, 2015.
The case is being investigated by the U.S. Army Criminal Investigation Command, the Office of the Special Inspector General for Afghanistan Reconstruction, the Defense Criminal Investigative Service and the Defense Contract Audit Agency, Investigative Support Division. The case is being prosecuted by Trial Attorney John Keller of the Criminal Division’s Public Integrity Section.
Two Richland County Residents Indicted on Methamphetamine Related ChargesRead the Press Release
Follow @SDILNewsJesse L. Benefield, 27, of Claremont, IL, and Sherry K. Auteberry, 49, of Olney, Illinois, were indicted on February 3, 2015, on methamphetamine related charges in a two count Indictment returned by a Federal Grand Jury sitting in Benton, Illinois, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Count 1 charges that from May 2014, until on or about January 26, 2015, in Richland County, and elsewhere within the Southern District of Illinois, Benefield and Auteberry conspired with others known and unknown to the Grand Jury to manufacture methamphetamine.
Count 2 charges that from November 2, 2008, to on or about January 23, 2015, in Richland County, Auteberry possessed pseudoephedrine pills, knowing and having reasonable cause to believe that the pills would be used to manufacture methamphetamine.
With respect to Count 1, Benefield and Auteberry each face up to 20 years in prison, up to a $1,000,000 fine, and supervised release of at least 3 years.
With respect to Count 2, Auteberry faces up to 20 years in prison, up to a $250,000 fine, and supervised release of up to 3 years.
An Indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The investigation in this case was conducted by the Richland County Sheriff’s Office.
The case is being handled by Assistant United States Attorney George Norwood.
Two New Jersey Men Charged in Scheme to Extort Thousands of Dollars from Hudson County ProjectRead the Press Release
NEWARK, N.J. – Two New Jersey men are in FBI custody today on charges arising from a scheme to extort thousands of dollars in corrupt payments in connection with arranging approvals to provide landfill materials for a Hudson County Improvement Authority project, U.S. Attorney Paul J. Fishman announced.
Gerard Pica, 65, of Middletown, New Jersey, and James Castaldo, 59, of Beachwood, New Jersey, were indicted by a federal grand jury Feb. 10, 2015, and each charged with two counts of conspiracy to commit extortion under color of official right affecting interstate commerce, two counts of extortion under color of official right affecting interstate commerce, and two counts of accepting and agreeing to accept corrupt payments. All the charges are related to Gerard Pica’s employment at the Hudson County Improvement Authority (HCIA). They are scheduled to appear this afternoon before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.
According to the documents filed in this case and statements made in court:
The HCIA was overseeing the construction of a nine-hole public golf course located at Lincoln Park West in Jersey City, New Jersey (the “LPW project”). As part of its construction, the LPW project required several hundred thousand cubic yards of soil, fill material and crushed stone to be incorporated into the site, as well as to serve as road bedding during the construction of the golf course. As the overseer of the LPW project, one of the functions of the HCIA – either directly or through a designated contractor – was to serve as a gatekeeper for any material to be delivered to the LPW site. It was the HCIA’s responsibility to solicit, evaluate and decide which contractors’ proposals to accept for the provision of soil and fill material for the LPW project.
From at least August 2010 to November 2011, Pica and Castaldo and others schemed to obtain payments from certain contractors in exchange for Pica and another individual using their influence over the HCIA on two matters. Within the HCIA, an individual referred to in the indictment as “Employee 1” had authority and discretion over matters involving the selection of, and the administration of the conduct of, contractors seeking to deliver soil and fill material to the LPW project site. As a result of Pica’s employment with the HCIA and his association with Employee 1, Pica had the ability to influence the HCIA’s decisions regarding the selection of contractors to provide soil and fill material to the LPW project.
The first three counts of the indictment involve an alleged scheme by Pica and Castaldo to obtain corrupt payments from a person listed in the indictment as “Individual 1,” who was an associate of Pica and the owner of an environmental consulting firm. Pica and Castaldo agreed to obtain payments from Individual 1 to be shared among Pica, Castaldo and Employee 1 in exchange for Pica and Employee 1 using their authority and influence at the HCIA to ensure that Individual 1 and Individual 1’s company received approval to provide soil and fill material for the LPW project, at a certain per ton price to be paid by Individual 1 to the HCIA. It was part of the agreement that Individual 1 would pay Castaldo $3 per ton of fill and soil material delivered to the site for the benefit of Pica, Castaldo and Employee 1.
In Counts Four through Six of the indictment, Pica and Castaldo arranged to obtain corrupt payments from a person referred to in the indictment as Individual 3, the owner of a recycling business in Bayonne, New Jersey. Pica and Castaldo agreed to obtain payments from Individual 3 to be shared among Pica, Castaldo, and Employee 1 in exchange for Pica and Employee 1 again using their authority and influence at the HCIA to ensure that Individual 3 and Individual 3’s company received approval to provide fill materials, including crushed stone, for the LPW project, at a certain per cubic yard price to be paid by Individual 3 to the HCIA. It was part of the arrangement that Individual 3 would pay Castaldo $2 per cubic yard of fill and soil material delivered to the site for the benefit of Pica, Castaldo and Employee 1.
Counts One, Two, Four and Five of the indictment carry a maximum penalty of 20 years in prison; Counts Three and Six carry a maximum penalty of 10 years in prison. The maximum fines for all of the violations are $250,000 or twice the gain or loss resulting from the offense.
The indictment also seeks forfeiture of $53,861 in connection with the commission of the offenses charge in the indictment.
U.S. Attorney Fishman credited special agents from the FBI, under direction of Special Agent in Charge Richard M. Frankel in Newark and special agents with the N.J. State Commission of Investigation, under the direction of Executive Director Philip J. Degnan, for the investigation leading to the charges.
The government is represented by Assistant U.S. Attorneys David L. Foster and Mark McCarren of the U.S. Attorney’s Office, Special Prosecutions Division in Newark.
15-055
Defense counsel: Gerard Pica: Gerald Krovatin Esq., Newark
James Castaldo: TBDTwo Men Sentenced to Seven Years in Prison for Defrauding Investors in Separate Multi-Million Dollar Investment Fraud SchemesRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad, Jr. sentenced two defendants to lengthy prison sentences for operating separate multi-million dollar investment fraud schemes. Stephen E. Maiden, 41, of Vienna, Va., was sentenced to 84 months in prison, followed by one year of supervised release for carrying out an $8.9 million Ponzi scheme, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Maiden, who pleaded guilty to securities fraud in May 2013, was also ordered to pay $7,755,752 as restitution.
In a separate case, Judge Conrad sentenced James Alexander Shepherd, 59, of Vass, N.C to 84 months in prison and three years of supervised release for defrauding more than 100 investors of in excess of $6 million. Judge Conrad delayed issuing a final order of restitution to permit the parties to file additional court briefs. The United States is seeking a restitution order of approximately $8 million for victims of the scheme. Shepherd pleaded guilty to one count of securities fraud in June 2013.
United States v. Stephen Maiden
According to filed court documents and today’s sentencing hearing, Maiden, formerly of Charlotte, carried out the scheme through his Charlotte-based hedge fund, Maiden Capital Opportunity Fund (“Maiden Capital”), which he formed in 2006. According to court records, Maiden represented to his victims that the fund was doing well and was profitable. By at least February 2009, however, he had lost the majority of the fund’s assets in failed investments. Beginning in at least February 2009, Maiden began transmitting bogus account statements to his investor victims and to Maiden Capital’s fund administrator, falsely reporting favorable returns. To keep the scheme going, Maiden used money from new investors to satisfy withdrawal requests made by other fund investors, falsely characterizing the transactions as payments from Maiden Capital’s successful operations. As a result of his unlawful conduct, Maiden caused a total loss of at least $8.9 million to approximately 39 victims.
United States v. James Alexander Shepard
According to filed court documents and court proceedings, from 2006 to 2013, Shepherd defrauded investors in Union County and elsewhere of approximately $6 million. Court documents indicate that Shepherd carried out the fraud by promising his victims returns on their investments in funds Shepherd owned and controlled, including “The Shepherd Major Play Option Fund, L.P.” (the “Major Play Fund”) and the “Shepherd’s Model Hedge Fund” (the “Hedge Fund”). In addition, Shepherd had some individual investors that invested their money independent of any particular investment vehicle. In about 2006, and without his investors’ knowledge, Shepherd began misappropriating investor money from the Major Play Fund, and used it, among other things, to pay investors of his hedge fund, to trade in his personal accounts, and to fund the operations of his newsletter he distributed nationwide, court filings show. According to court records, Shepherd also used the money to fund his personal lifestyle, including to build a $2 million home and to make mortgage payments on that residence.
According to court records, to conceal his fraudulent conduct, Shepherd sent to investors certified financial statements for the Major Play fund, accompanied by an Independent Auditor’s Report. This assured investors that an independent audit on the fund had been conducted in compliance with the rules of the U.S. Commodities Futures Trading Commission (“CFTC”). The false financial statements also misrepresented to investor victims the financial condition of the fund. For example, in December 2012, Shepherd’s a fraudulent statement stated that the fund had a $6,041,850 cash balance, when in reality the fund had less than $100,000 at the time.
Shepherd used forged bank documents and names of fictitious bank employees, among other things, to trick an accountant into providing the Independent Auditor’s Report. According to court records, Shepherd’s scheme was uncovered when in March 2013 the accountant insisted on verifying the cash balance of fund’s bank account electronically, through the audit confirmation website www.confirmation.com, which is now the commonly used method of verification by accountants. Shepherd delayed and then refused to give the accountant authority to utilize the website to verify the cash balance of the Major Play Fund, court records show. In March 2013, the accountant notified the National Futures Association (NFA) that his audit opinion could no longer be relied upon.
In making today’s announcement, U.S. Attorney Anne Tompkins said “Prosecuting fraudsters who prey on innocent investors is a top priority of my Office. Each of these two defendants chose a path of deceit and lies to fulfill their greedy self-interest. As a result, both now have lengthy jail sentences to reflect on the inestimable damage they caused to their victims. My Office will continue to aggressively investigate and prosecute those who seek to victimize innocent investors.”
“These prison sentences are a stark reminder to con artists; no matter how elaborate or complex the scheme, you will be caught and held accountable. Unfortunately, victims lose billions of dollars annually to fraudsters. Investors should be cautious and question promises of large payoffs,” said John Strong, Special Agent in Charge of the FBI in North Carolina.
Both Maiden and Shepherd have been released on bond and will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The FBI handled both investigations. U.S. Attorney Tompkins also thanked CFTC and NFA for their invaluable assistance in Shepherd’s case.
Assistant U.S. Attorneys Kurt Meyers and Mark T. Odulio, of the U.S. Attorney’s Office in Charlotte prosecuted Shepherd, and AUSA Odulio prosecuted Maiden.
Twice Removed Illegal Alien Sentenced to Time Served for Again Re-entering U.S.Read the Press Release
PITTSBURGH - A resident of Mexico pleaded guilty and was sentenced in federal court to 6 months time served on his conviction of reentry of removed alien, United States Attorney David J. Hickton announced today.
United States District Judge Arthur J. Schwab imposed the sentence on Salvador Lopez-Santiz, a/k/a Salvadore Santos, 24, of Mexico.
According to information presented to the court, alien Lopez-Santiz, who had been twice before removed from the United States - on Oct. 13, 2012 and Oct. 24, 2012 - was found in the United States in Pittsburgh, Pa., on Aug. 12, 2014 without having obtained permission to reentry the country.
Prior to imposing sentence, Judge Schwab stated that the sentence was sufficient but not greater than necessary in this instance; but if defendant again re-enters the U.S. without permission a subsequent sentence could be substantially greater.
Assistant United States Attorney Leo M. Dillon prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Department of Homeland Security for the investigation leading to the successful prosecution of Lopez-Santiz.
Tucson Cocaine Distributors SentencedRead the Press Release
TUCSON, Ariz. – Joel Sesma-Garcia, 40, was sentenced on Feb. 10, 2015, and Gerald Fidel Herrera, 41, was sentenced on Jan. 30, 2015, by U.S. District Judge Jennifer G. Zipps to 25 years and 15 years’ imprisonment, respectively, for their roles in a cocaine distribution ring that operated from 2008 to 2012 and spanned five states. Both are from Tucson, Ariz.
Between the Spring of 2008 and the arrests on Aug. 9, 2012, Sesma-Garcia and Herrera conspired to distribute over 527 kilograms of cocaine from Tucson, Ariz., to co-conspirators in Brooklyn, N.Y., Muscle Shoals, Ala., Cleveland, Ohio, and Bradenton, Fla. The cocaine was transported from Tucson to the distribution cities concealed within false compartments in vehicles that were either driven by co-conspirators or hauled cross-country on commercial car haulers. The co-conspirators in the distribution cities sent approximately $12 million in bulk cash back to Tucson as payment for the drugs, concealed within the same false compartments. Co-defendant Caleb Echeverria is pending sentencing on April 6, 2015, while 10 additional co-conspirators were arrested and prosecuted in New York, Alabama, and Arizona in connection with this criminal organization.
Investigators seized over $2.5 million in bulk cash and 17 firearms from the organization over the course of the conspiracy, during multiple traffic stops and search warrants in Alabama, Arizona, Arkansas, Kansas, Maryland, New York, and Ohio. The organization used drug proceeds to purchase dozens of vehicles to transport drugs and bulk cash, and for the personal use of Sesma-Garcia and his family. Among the luxury vehicles seized from Sesma-Garcia include a 2002 Ferrari Spyder, a 2008 Lamborghini Murcielago, a 2004 Lamborghini Gallardo, a 2008 Mercedes Benz AMG luxury sedan, a 2005 Hummer H2, a classic 1968 Chevy Camaro, and a 2001 Chevy Corvette.
The investigation in this case was conducted by the Organized Crime and Drug Enforcement Task Force (OCDETF) Tucson Strike Force, which is composed of agents and investigators from U.S. Immigration and Customs Enforcement, Homeland Security Investigations, U.S. Drug Enforcement Administration, the Federal Bureau of Investigation, Internal Revenue Service - Criminal Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Border Patrol, Tucson Police Department, South Tucson Police Department, and Sahuarita Police Department. The prosecution was handled by Mary Sue Feldmeier and Josh Ackerman, Assistant U.S. Attorneys, District of Arizona, Tucson.
CASE NUMBER: CR-12-01676-TUC-JGZ
District of Arizona 4:13-cr-01946-CKJ
District of Arizona: 4:14-cr-01398-JAS
Eastern District of New York: 12-cr-00707-KAM
Northern District of Alabama: 11-cr-00399-KOB
Cuyahoga County (Ohio) Court of Commons: CR11-548633
District of Kansas: 5:12-cr-40061-DDCRELEASE NUMBER: 2015-010_Sesma-Garcia et al
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Three men plead guilty to federal charges in BeckleyRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced today that three men pleaded guilty to federal charges in Beckley.
James Edward Chambers, 44, of Glen White, West Virginia, pleaded guilty to distribution of cocaine. He admitted that on Aug. 28, 2014, he sold cocaine to a confidential informant near Robert C. Byrd Drive in Beckley.
Sean Scott Hafesh, 26, of Trenton, New Jersey, pleaded guilty to distribution of heroin. He admitted that on Sept. 24, 2013, he sold heroin to a confidential informant on Skyline Drive in Beaver.
Chambers and Hafesh both face up to 20 years in federal prison and a $1 million fine. They are scheduled to be sentenced on May 20, 2015.
Michael Erwin Basham, 35, of Glen Daniel, West Virginia, pleaded guilty to using a communications device to commit a felony. He admitted that on Aug. 22, 2014, he used a phone to arrange the sale of oxycodone to a confidential informant.
Basham faces up to four years in federal prison and a $250,000 fine. He is scheduled to be sentenced on June 24, 2015.
United States District Judge Irene C. Berger presided over the plea hearings.
The cases are being investigated by the Beckley/Raleigh County Drug and Violent Crime Unit.
The cases are being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and opiates. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Three Plead Guilty to Violating the Clean Air Act at the Former Consumers Energy Facility in Comstock TownshipRead the Press Release
GRAND RAPIDS, MICHIGAN – Three individuals have pled guilty to violating the federal Clean Air Act for their roles in what environmental investigators believe may be the largest asbestos release in Michigan since it was declared a hazardous air pollutant in 1971.
LuAnne LaBrie of Kalamazoo, formerly known as LuAnne McClain; Cory Hammond of Hastings; and Robert “Mike” White of Kalamazoo each pled guilty in federal court to violating the Clean Air Act. LaBrie pled guilty to the felony offense of failing to notify federal or state authorities that asbestos material would be stripped and removed at the former power generation facility located at 6800 East Michigan Avenue in Comstock Township, Michigan. Hammond and White each pled guilty to failing to adequately wet asbestos material while stripping and removing asbestos inside that facility, also a felony violation.
In 2011, LaBrie, Hammond, and White agreed to salvage valuable material from the facility and share in the proceeds. All three defendants knew that asbestos was present inside of the facility. LaBrie supervised and controlled the facility, visited the site on a regular basis, and communicated with White and Hammond concerning the status of the salvage operation. Despite knowing that Hammond, White, and other laborers were stripping and removing asbestos insulation from pipes and facility components, LaBrie failed to notify the U.S. Environmental Protection Agency (EPA) or the State of Michigan that the salvage operation would involve the removal of asbestos inside the facility. Hammond and White admitted to failing to adequately wet asbestos material that had been stripped and removed until it was collected and sealed in a leak-tight container to prevent the release of asbestos particulates during the salvage operation. The defendants agreed to pay restitution to the EPA for remediation costs associated with the illegal asbestos removal at the facility.
The defendants face a maximum of 5 years in prison and a $250,000 fine for the offense, but the Court will determine the sentence after considering the federal sentencing guidelines and statutory sentencing factors. LaBrie will be sentenced in April 2015 by U.S. District Judge Gordon J. Quist. Hammond and White will be sentenced in July 2015 by U.S. District Judge Robert J. Jonker.
“Companies and individuals handling regulated asbestos material must follow basic workplace practices designed to protect both the workers who handle the hazardous material and the air we all breathe,” said U.S. Attorney Patrick Miles. “Those who attempt to evade the law by cutting corners to maximize profits and harm our environment will be held accountable for their actions.”
“Asbestos can cause cancer and other serious respiratory diseases and must be handled legally and safely,” said Randall Ashe, Special Agent in Charge of EPA’s criminal enforcement program in Michigan. “The defendants directed the break-up and removal of material containing asbestos, threatening not only the environment but the safety of their workers and the general public. Today’s pleas clearly show that anyone who tries to make money by breaking the law will ultimately pay the price.”
This case was investigated by the U.S. EPA Criminal Investigation Division, the Michigan Department of Natural Resources Environmental Investigation Section, and the Internal Revenue Service. Assistant U.S. Attorney Christopher O’Connor represented the United States.
Thirty Two Defendants Facing Federal or State Charges Alleging the Laundering of over $100 Million in Narcotics Proceeds Through Cash-For-Gold SchemeRead the Press Release
CHICAGO — Thirty-one defendants face federal money laundering charges for their roles in a conspiracy that allegedly laundered more than $100 million in drug proceeds for the Mexico-based Sinaloa Cartel by purchasing gold, reselling it to companies in Florida and California, then transmitting the money from the United States to Mexico. One additional defendant faces state money laundering charges in DuPage County. The federal charges, contained in a criminal complaint, stem from a multi-year investigation of money laundering and drug trafficking led by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); the Internal Revenue Service’s Criminal Investigation Division; and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), together with other federal, state, and local law enforcement agencies.
Agents this week seized 12 firearms while arresting 12 of the federal defendants. Ten of those defendants were arrested in the Chicago area, and two werearrested in Kentucky and Georgia. Four federal defendants, including two of the alleged conspiracy leaders, were already in state or federal custody. Fifteen defendants are fugitives, several of whom are believed to be in Mexico. Agents also arrested the defendant facing state charges. Prior to this week’s arrests, in the course of the three-and-a-half-year investigation, agents seized more than $2.8 million in U.S. currency, 28 firearms, 42 kilograms of cocaine (92 pounds), and over two tons of marijuana, as well as large amounts of heroin and methamphetamine.
Thirty-one of the defendants were charged with conspiring to launder narcotics proceeds for the Sinaloa Cartel in a 311-page criminal complaint that was filed Monday in U.S. District Court and unsealed following the arrests Tuesday morning. The federal defendants arrested yesterday in the Chicago area appeared before Magistrate Judge Daniel Martin in U.S. District Court yesterday and eight remain in federal custody pending detention hearings scheduled for later this week.
Alleged conspiracy leaders DIEGO PIENDA-SANCHEZ, 30, and CARLOS PARRA-PEDROZA, 31, were arrested on related money laundering charges in late-September 2014, while visiting the United States from their native Guadalajara, Mexico. A federal grand jury charged both men by indictment in December 2014, with multiple counts of money laundering based on four of the 49 separate instances of money laundering noted in the complaint filed on Monday. That case is currently before Judge Harry D. Leinenweber in U.S. District Court.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, with Gary Hartwig, Special Agent-in-Charge of HSI in Chicago; James C. Lee, Special Agent-in-Charge of IRS’s Criminal Investigation Division; and Carl J. Vasilko, Special Agent-in-Charge of ATF in Chicago. The following agencies also provided significant assistance in the investigation: the Drug Enforcement Administration; Cook County Sheriff’s Office; DuPage County Sheriff’s Office; Chicago Police Department; Buffalo Grove Police Department; the Joliet Metropolitan Area Narcotics Squad, and the United States Marshals Service. The investigation was conducted under the umbrella of the United States Organized Crime Drug Enforcement Task Force (OCDETF).
“The drug trade is driven by money earned at the expense of countless devastated lives and ravaged communities,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “These charges reflect the tireless work of federal, state, and local authorities to stop not only those individuals who make that destructive business possible, but profitable.”
“Chicago is a hub for narcotics money laundering, with dirty money changing hands all too often in public parking lots throughout the city and suburbs,” said Special Agent-in-Charge Hartwig. “Criminals are turning to sophisticated trade-based schemes to launder their money and cover their tracks, but these arrests should serve as a stern warning to those doing business with drug traffickers – you will ultimately pay the price.”
Special Agent in Charge James C. Lee of the Internal Revenue Service Criminal Investigation Division (IRS CI) in Chicago added, “IRS Criminal Investigation is committed to fighting the war on drugs. IRS CI brings, and will continue to bring, its financial expertise to disrupt and dismantle the Sinaloa Cartel’s drug trafficking organization.”
The complaint alleges that Pineda-Sanchez, Parra-Pedroza, and 29 associates laundered more than $100 million in drug proceeds since 2011 for the Sinaloa Cartel. The defendants’ money laundering activities on behalf of the Sinaloa Cartel spanned throughout the Unites States, including; Illinois, Wisconsin, Indiana, Ohio, Kentucky, Georgia, California, Texas, and North Carolina. Pineda-Sanchez and Parra-Pedroza are high ranking Mexico-based money brokers who allegedly used a network of individuals in Chicago, Fort Lauderdale, and Los Angeles to launder illicit drug proceeds through a gold-based scheme. According to the complaint, Pineda-Sanchez, Parra-Pedroza, and others routinely directed United States based members of their organization to collect narcotics proceeds, to use the money to purchase scrap and fine gold from local businesses, and to ship that gold to refineries based in Florida and California. The refineries in turn transmitted the cash value of the gold to Parra-Pedroza and other co-conspirators in Mexico.
As part of the undercover law enforcement operation, HSI Chicago collected more than $4.5 million in drug proceeds from 38 different money couriers on 49 occasions between June 2013 and August 2014.
The complaint details several instances in which Parra-Pedroza warned a confidential informant, who was working with law enforcement, of the dangers of losing drug money entrusted to the organization. In one such instance, Parra-Pedroza told the informant about unidentified Mexican associates who had coerced a man to accept responsibility for losing their drugs or money by “cut[ting] his fingers off.”
The money laundering complaint charges Pineda-Sanchez, Parra-Pedroza, and the following co-defendants with one count each of conspiring to commit money laundering: Jose Abel Mendoza-Parra, 22, of Mexico; Maria Loera-Alvarado, 36, of Mexico; Ernesto Ruiz-Ramirez, 25, of Joliet, Illinois; Mario Herrera, of Chicago; Anthony Leiva, 53, of Northlake, Illinois; Teodocio Caro, 54, of Mexico; Luis Reyna-Tellez, 19, of Cicero, Illinois; Hector Chavez-Cuevas, 36, of Cicero, Illinois; Juan Carlos Nunez-Galvez, of Berwyn, Illinois; Jose Sanantonio, 28, of Berwyn; Pedro Saucedo-Palominos, 42, of Chicago; Omar Lopez-Cabrera, 32, of Chicago; Virgil Durbin, 47, of Kentucky; Valentin Rodriguez, 37, of Markham, Illinois; Alma Lorena Ortiz de Rosas Vera, 38, of Mexico; Casmiro Isias-Padilla, 37, of Chicago; Efren Mota, 48, of Chicago; Felix Lemus-Guevara, 29, of Georgia; Pedro Urquiza-Osorio, 53, of Texas; Luis Armando Acosta-Vizcarra, 43, of Mexico; Joel Estrada, 27, of Chicago; Harranah Samori, 42, of Matteson, Illinois; Gabriel Salcedo, 53, of Berwyn; Tomas Salgado-Reyna, 30, Chicago; Oscar Acosta, 36, Melrose Park, Illinois; Federico Barrera-Perez, 45, of Chicago; Emmanuel Diaz, 28, of Naperville, Illinois; Jose Hernandez-Ochoa, 28, of Berwyn; Alfonso Nevarez, 40, of Northlake; and Oscar Montes-Lamas (deceased). Jaime Cabadas-Barajas, 30, of Chicago, faces one count of state money laundering charges in DuPage County.
If convicted, the defendants charged with federal money laundering face a maximum of 20 years’ imprisonment and a fine of $500,000 or twice the gross gain or loss resulting from the charged offense.
The government is represented by Assistant United States Attorneys Peter M. Flanagan and Ryan P. Fayhee, and by Special Assistant United States Attorney Minnie D. Yuen.
The public is reminded that complaints contain only charges and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Complaint
Son of Former Cartel Boss Convicted of Attempting to Export Ammunition into MexicoRead the Press Release
BROWNSVILLE, Texas - Osiel Cardenas Jr., 23, of Brownsville, has entered a plea of guilty to attempting to export ammunition into Mexico, announced U.S. Attorney Kenneth Magidson. Cardenas is the son of former head of the Gulf Cartel – Osiel Cardenas-Guillen – who was convicted and sentenced to 25 years in federal prison and ordered to pay a money judgment of $50 million.
On Dec. 31, 2014, Customs and Border Protection (CBP) officers were conducting south-bound inspection operations at the Brownsville and Matamoros International Port of Entry in Brownsville. Cardenas Jr. approached the inspection area driving a 2015 Cadillac Escalade and attempted to exit the U.S. and enter Matamoros, Mexico. He advised officers that he had no money, weapons or ammunition to declare. However, a subsequent search of the vehicle led to the discovery of 489 rounds of 9mm, .223mm and 7.62mm ammunition as well as two .223 rifle magazines.
Cardenas Jr. admitted that the ammunition seized from his vehicle belonged to him and that he had concealed it in order to avoid inspection because he knew that it was illegal to export them into Mexico. He stated that he did not have and had not ever applied for a U.S. Department of State license to export firearms or ammunition. He also admitted he had seen the signs posted near the Port of Entry stating it was against the law to take ammunition into Mexico.
U.S. District Judge Andrew Hanen accepted the plea today and has set sentencing for May 18, 2015, at which time Cardenas Jr. faces a up to 10 years in federal prison and a possible $250,000 fine. He will remain in custody pending that hearing.
The charges are the result of an investigation by CBP and Homeland Security Investigations. Assistant U.S. Attorneys Angel Castro and Jody Young are prosecuting the case.Sisters-in-Law and Former Tax Preparers Plead Guilty to Tax Fraud ConspiracyRead the Press Release
On Feb. 10, two former tax return preparers pleaded guilty in the U.S. District Court for the Middle District of Georgia to conspiring to defraud the United States by filing fraudulent tax returns, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division.
According to court documents, from at least January 2008 through at least March 2010, sisters-in-law Angela Miller and Lee Lynwood operated a tax return preparation business and conspired to inflate their clients’ federal tax refunds by manipulating the tax returns to reflect false business income or loss amounts and to claim deductions and credits, such as the First-Time Homebuyer Credit, that the clients were not entitled to receive.
“The Department of Justice’s Tax Division, working with Internal Revenue Service-Criminal Investigation and the Offices of the U.S. Attorneys, is committed to prosecuting to the fullest extent of the law tax return preparers who willfully assist in the preparation and filing of false and fraudulent returns,” said Principal Deputy Assistant Attorney General Ciraolo.
Miller and Lynwood also took steps to continue their scheme by impeding the Internal Revenue Service’s (IRS) efforts to shut down their ability to electronically file tax returns. In May 2008, the IRS notified Miller and Lynwood that their Electronic Filing Number (EFIN) for filing electronic returns at their tax preparation business, A&L Tax Services, was being revoked. Miller and Lynwood then had an acquaintance apply for another EFIN in her name, which Miller and Lynwood used to continue to file fraudulent tax returns and conceal their preparation from the IRS. Further, Miller and Lynwood changed the name of their business to B&F Tax Services and caused a bank account for the B&F Tax Services to be opened in the acquaintance’s name as a nominee.
Miller and Lynwood filed false tax returns that claimed more than $130,000 in tax refunds during the course of the conspiracy. Miller and Lynwood each face a statutory maximum term of five years in prison, three years of supervised release and a fine of up to $250,000. Sentencing has not yet been scheduled.
Principal Deputy Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation and the D.C. Office of Tax and Revenue Criminal Investigation Division, who investigated the case, as well as Tax Division Trial Attorneys Hayden M. Brockett and Alex R. Effendi, who are prosecuting the case. Ciraolo also thanked the U.S. Attorney’s Office for the Middle District of Georgia for their assistance.
Additional information about the Tax Division and its enforcement efforts can be found on the division’s website.
Sisters-In-Law and Former Tax Return Preparers Plead Guilty to Tax Fraud ConspiracyRead the Press Release
WASHINGTON – On Feb. 10, two former tax return preparers pleaded guilty in the U.S. District Court for the Middle District of Georgia to conspiring to defraud the United States by filing fraudulent tax returns, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division.According to court documents, from at least January 2008 through at least March 2010, sisters-in-law Angela Miller and Lee Lynwood operated a tax return preparation business and conspired to inflate their clients’ federal tax refunds by manipulating the tax returns to reflect false business income or loss amounts and to claim deductions and credits, such as the First-Time Homebuyer Credit, that the clients were not entitled to receive.
“The Department of Justice’s Tax Division, working with Internal Revenue Service-Criminal Investigation and the Offices of the U.S. Attorneys, is committed to prosecuting to the fullest extent of the law tax return preparers who willfully assist in the preparation and filing of false and fraudulent returns,” said Principal Deputy Assistant Attorney General Ciraolo.
Miller and Lynwood also took steps to continue their scheme by impeding the Internal Revenue Service’s (IRS) efforts to shut down their ability to electronically file tax returns. In May 2008, the IRS notified Miller and Lynwood that their Electronic Filing Number (EFIN) for filing electronic returns at their tax preparation business, A&L Tax Services, was being revoked. Miller and Lynwood then had an acquaintance apply for another EFIN in her name, which Miller and Lynwood used to continue to file fraudulent tax returns and conceal their preparation from the IRS. Further, Miller and Lynwood changed the name of their business to B&F Tax Services and caused a bank account for the B&F Tax Services to be opened in the acquaintance’s name as a nominee.
Miller and Lynwood filed false tax returns that claimed more than $130,000 in tax refunds during the course of the conspiracy. Miller and Lynwood each face a statutory maximum term of five years in prison, three years of supervised release and a fine of up to $250,000. Sentencing has not yet been scheduled.
Principal Deputy Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation and the D.C. Office of Tax and Revenue Criminal Investigation Division, who investigated the case, as well as Tax Division Trial Attorneys Hayden M. Brockett and Alex R. Effendi, who are prosecuting the case. Ciraolo also thanked the U.S. Attorney’s Office for the Middle District of Georgia for their assistance.
Additional information about the Tax Division and its enforcement efforts can be found on the division’s website.
Shelby County, Tennessee High Intensity Drug Trafficking Area Task Force Receives National RecognitionRead the Press Release
Memphis, Tenn. – White House Drug Control Policy Director Michael Botticelli has awarded the Shelby County, TN High Intensity Drug Trafficking Area Program (HIDTA) Task Force the 2014 national award for Outstanding Prescription Drug Investigative Effort, announced Edward L. Stanton III, United States Attorney for the Western District of Tennessee; and Brian Chambers, Resident Agent in Charge, Drug Enforcement Administration – Memphis Resident Office.
Receiving the award at last week’s ceremony in Washington, DC were members of the Drug Enforcement Administration – Memphis Resident Office; Shelby County Sheriff’s Office; Memphis Police Department; and the United States Attorney’s Office for the Western District of Tennessee. These law enforcement officials were recognized for their joint work in a multi-state prescription drug investigation that led to the arrest of 56 individuals in Los Angeles, California; Little Rock, Arkansas; and Memphis, Tennessee.
United States Attorney Stanton, who has served on the Executive Board of Directors for the Gulf Coast HIDTA since 2010, congratulated the Shelby County HIDTA Task Force on receiving this national recognition and prestigious award. “Close collaboration with our federal, state and local law enforcement partners is critical to dismantling drug trafficking rings at the highest levels and ridding our communities of the drugs and violence associated with these dangerous organizations. This well-deserved award is a true testament to the outstanding work of a team of dedicated professionals committed to combatting the drug trade throughout west Tennessee and beyond,” United States Attorney Stanton said.
Disrupting and dismantling drug trafficking organizations is fundamental to the mission of the Gulf Coast HIDTA. In furtherance of this goal, members of the Shelby County HIDTA Task Force initiated a two-year investigation on two separate drug trafficking organizations operating in the Gulf Coast HIDTA area. These drug trafficking organizations were responsible for distributing large amounts of Dilaudid and oxycodone pills, which are narcotic pain relievers. During this investigation, intelligence gathered from intercepted calls and defendant interviews demonstrated that these drug trafficking organizations were distributing 250,000 oxycodone and Dilaudid pills annually. The investigation resulted in the dismantlement of these drug trafficking United States Attorney Edward L. Stanton III Western District of Tennessee organizations and the arrest of 56 individuals on federal and state charges. Fourteen individuals were indicted federally, and 27 were indicted in state court in Tennessee. Also, based on additional information provided to the Drug Enforcement Administration in Little Rock, 15 people were indicted on federal charges.
In total, 56 individuals were arrested in this multijurisdictional investigation. Agents in Tennessee seized 1,282 oxycodone pills, 990 Dilaudid pills, 1,704 hydrocodone pills, 476 alprazolam pills, 313 Adderall pills, and 375 Dexedrine pills. Agents also seized $46,281 in U.S. currency, $231,269.82 in financial instruments, and three residences (valued at $300,000) in Terrell, Texas.
The Office of National Drug Control Policy’s HIDTA program provides federal resources to designated areas to help reduce drug trafficking and its harmful consequences. Law enforcement organizations within HIDTAs assess drug-trafficking problems and design specific initiatives to decrease the production, manufacture, transportation, distribution, and chronic use of drugs and money laundering. The HIDTA program plays a vital role in making the nation safer and healthier by reducing drug use and its consequences. There are currently 28 HIDTAs, which include approximately 16 percent of all counties in the United States and 60 percent of the U.S. population. HIDTA-designated counties are located in 46 states, Puerto Rico, the U.S. Virgin Islands, and the District of Columbia.
United States Attorney Stanton also commended the agencies that comprise the Shelby County, TN HIDTA Task Force for their efforts in securing the award and for the overall success of the HIDTA program. These agencies include the Drug Enforcement Administration – Memphis Resident Office; Memphis Police Department; Shelby County Sheriff’s Office; Millington Police Department; Bartlett Police Department; Germantown Police Department; Collierville Police Department; Tipton County Sheriff’s Department; the Attorney General’s Office for the 25th Judicial District; and the Attorney General’s Office for the 30th Judicial District.
Pictured below are the following individuals from the Shelby County, TN HIDTA Task Force who attended the National HIDTA Awards Banquet in Washington, DC on February 5, 2015. They are from left to right:
Front Row (L to R): Tony Soto, Director – Gulf Coast HIDTA; Michael Botticelli, Director – Office of National Drug Control Policy; Brian Chambers, Resident Agent in Charge – DEA; Mary Lou Leary, Deputy Director – Office of National Drug Control Policy; Edward L. Stanton III, U.S. Attorney – U.S. Attorney’s Office.
Back Row (L to R): Lt. Robert McIntyre – Memphis Police Dept.; Garrison Taylor, Task Force Officer – DEA; Mark Dunbar, Asst. Chief – Shelby Co. Sheriff’s Office; Ian James, Detective – Memphis Police Dept.; Colonel Ralph Gary – Memphis Police Dept.; William Cash, Chief Deputy – Shelby Co. Sheriff’s Office; Michael Jackson, Detective – Memphis Police Dept.; William J. Renton, Jr., Deputy Director – Gulf Coast HIDTA; Tyler Gustafson, Special Agent – DEA; Michelle Parks, AUSA – U.S. Attorney’s Office.
Spanish Version
Seven Tampa Residents Plead Guilty in Stolen Identity Refund Fraud SchemeRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that seven individuals have pleaded guilty to engaging in a conspiracy to file fraudulent income tax returns. Brandon Gilchrist, Donterrio Troup, Terrance Johnson, Tanisha Johnson, and Shadae Cotton each pleaded guilty to conspiracy to commit theft of government funds and aggravated identity theft and theft of government funds. Each faces up to 15 years in federal prison. Mikeil Royal has pleaded guilty to conspiracy and aggravated identity theft. He faces a maximum penalty of five years’ imprisonment for the conspiracy count, to be followed by a mandatory two year term of imprisonment for the identity theft count. Kenneth Royal has pleaded guilty to conspiracy and theft of government funds charges and faces a maximum sentence of 15 years in federal prison. Sentencing dates have not yet been set.
According to court documents, the conspirators opened accounts at various local financial institutions and used those accounts to receive fraudulent income tax refunds. The conspirators caused the filing of numerous fraudulent federal income tax returns on behalf of deceased persons, usually individuals who shared the same last name as the defendant. As a consequence, the IRS wired income tax refunds, to which these individuals were not entitled, into the accounts previously established at their banks. The total loss to the IRS from this conspiracy was almost $488,658.00.
This case was investigated by the Internal Revenue Service-Criminal Investigation, with assistance from the Federal Bureau of Investigation and the Hillsborough County Sherriff’s Office. It is being prosecuted by Assistant United States Attorney Jay L. Hoffer.
San Juan County Man Pleads Guilty to Drug Trafficking and Firearms ChargesRead the Press Release
ALBUQUERQUE – Casey Wayne Stallings, 30, of Kirtland, N.M., entered a guilty plea in federal court this morning to methamphetamine trafficking and firearm charges. Under the terms of his plea agreement, Stallings will be sentenced to 15 years in federal prison. His co-defendant, Jessica Chance Lucero, 25, also of Kirtland, N.M., entered a guilty plea to misprision of a felony.
Stallings and Lucero were arrested on May 22, 2014, on an indictment charging them with methamphetamine trafficking and firearms charges. Counts 1 and 2 charged Stallings and Lucero with conspiracy and possession of methamphetamine with intent to distribute. Count 3 charged the defendants with using and carrying a firearm in relation to a drug trafficking crime. Counts 4 and 5 respectively charged Stallings and Lucero with being felons in possession of a firearm. According to the indictment, the defendants committed the five offenses in San Juan County, N.M., on Jan. 27, 2014.
During today’s change of plea hearing, Stallings pled guilty to Counts 2 and 3 of the indictment. In his plea agreement, Stallings admitted that he was a drug dealer and that on Jan. 27, 2014, he possessed a large quantity of methamphetamine at his residence that he intended to sell to his drug customers. Stallings also admitted that he kept a firearm in his residence for the purpose of protecting himself from drug customers and other drug dealers who might try to rob him. Stallings admitted that he was prohibited from possessing firearms and ammunition due to his previous felony convictions of charges of robbery, possession of a controlled substance, possession of marijuana, and aggravated assault with a deadly weapon.
Lucero pled guilty to an information charging her with misprision of a felony, and admitted that on Jan. 27, 2014, she failed to report to law enforcement that Stallings was committing federal felony offenses at their residence. More specifically, Lucero admitted knowing that Stallings was selling methamphetamine out of their residence and that he possessed a firearm despite his status as a convicted felon.
Under the terms of his plea agreement, Stallings will be sentenced to 15 years in prison followed by a term of supervised release to be determined by the court. Lucero faces a statutory maximum penalty of three years of imprisonment of three years. Their sentencing hearings have yet to be scheduled.
This case was investigated by the Albuquerque office of Homeland Security Investigations and the Region II HIDTA Narcotics Task Force. The case is being prosecuted by Assistant U.S. Attorneys Lynn Wei-Yu Wang and Samuel A. Hurtado.
The Region II HIDTA Narcotics Task Force is comprised of officers from the Farmington Police Department, San Juan County Sheriff’s Office, Bloomfield Police Department and Aztec Police Department. It is part of the High Intensity Drug Trafficking Areas (HIDTA) program which was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
San Felipe Pueblo Man Sentenced to Federal Prison for Sexual Abuse ConvictionRead the Press Release
ALBUQUERQUE – Daniel Phillip Tenorio, 55was sentenced today in federal court in Santa Fe, N.M., to 51 months in prison to be followed by five years of supervised release. He will be required to register as a sex offender after completing his prison sentence. Tenorio was sentenced based on a jury’s guilty verdict on sexual abuse charges. Tenorio’s sentence was announced by U.S. Attorney Damon P. Martinez and William McClure, Special Agent in Charge of District IV of BIA’s Office of Justice Services.
Tenorio, 55, a member and resident of San Felipe Pueblo in Sandoval County, N.M., was indicted in Sept. 2013, and charged with two counts of abusive sexual contact by use of force. According to the indictment, Tenorio had unlawful sexual contact with the victim between Jan. 2011 and Dec. 2011, in locations with San Felipe Pueblo in Sandoval County, N.M. Tenorio was convicted on both counts of the indictment on Aug. 21, 2014, following a four-day trial.
The evidence at trial established that on Jan. 24, 2012, the BIA initiated an investigation into Tenorio after receiving a referral from a school counselor reporting that a 16-year-old San Felipe Pueblo girl had disclosed possible sexual abuse. The victim testified about Tenorio’s practice of grabbing and fondling her breasts and bottom and making sexually explicit comments about what he wanted to do to her. Witnesses testified that they observed Tenorio grab and fondle the victim and direct sexually explicit remarks to her.
The evidence before the jury included two audio-taped interviews of Tenorio. During the first interview, Tenorio denied the victim’s allegations, but later admitted touching the victim in inappropriate ways and discussing sex in front of her. During the second interview, Tenorio admitted grabbing and fondling the victim’s chest and bottom and saying that he wanted to engage in sexual acts with her. He also admitted lying to the law enforcement officers when he initially denied the victim’s allegations. The evidence also included a handwritten statement by Tenorio in which he admitted having lied to the BIA and FBI when he denied the victim’s allegations, apologized for the way he treated the victim, and expressed remorse for his improper conduct. Tenorio testified in his own defense and claimed that he was coerced into admitting that he had improper sexual contact with the victim.
This case was investigated by the Southern Pueblos Agency of the BIA’s Office of Justice Services with assistance from the Albuquerque office of the FBI, and was prosecuted by Assistant U.S. Attorneys Kyle T. Nayback and Novaline D. Wilson.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Rochester Man Sentenced on Drug and Gun ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Wayne Spencer, 31, of Rochester, NY, who was convicted of conspiracy to possess with intent to distribute 500 grams or more of cocaine and possession of a firearm in furtherance of a drug trafficking crime, was sentenced to 121 months by U.S. District Court Judge Charles J. Siragusa.Assistant U.S. Attorney Jennifer Noto, who handled the case, stated that between January 2010 and April 2014, the defendant was engaged in a conspiracy to sell cocaine in the Rochester area. On April 28, 2014, during a search of his residence by the Monroe County Probation Office, officers located a loaded semiautomatic handgun and approximately 450 grams of cocaine, a digital scale and numerous unused baggies commonly used to package cocaine for resale, in addition to the loaded firearm.
The sentencing is the culmination of an investigation on the part of the Monroe County Probation Office, under the direction of Chief Probation Officer Robert Burns, as well as officers of the Rochester Police Department, under the direction of Chief Michael Ciminelli.
Ridgeway Man Sentenced to 5 Years in Prison for Marijuana OffensesRead the Press Release
Follow @SDILNewsRyan Earl Bess, 34, of Ridgeway, Illinois, was sentenced today in United States District Court in Benton to a 5 year prison term for conspiring with two other individuals to grow more than 100 marijuana plants, announced Stephen R. Wigginton, United States Attorney for the Southern District of Illinois. Bess, and codefendants Daniel J. Fulkerson and Paul E. Reynolds, were charged by a Federal Grand Jury on September 5, 2012, with one count of conspiring to grow more than 100 marijuana plants and one count of actually growing the plants in Gallatin County between April 2012 and August 29, 2012. Ryan fled Illinois following his indictment and was arrested in Colorado in May 2014. He pled guilty to the charges on October 22nd.
In addition to the 5 year prison sentence, Bess was ordered to pay fines and special assessments totaling $400 to the United States and was placed on a 4 year term of supervised release to follow his incarceration. Following his sentencing, Bess was returned to the custody of the United States Marshal, where has been held without bond since his arrest in Colorado, to await designation to a Federal Bureau of Prisons facility.
Fulkerson and Reynolds also previously pled guilty to the charged offenses and were sentenced to prison terms of 60 months and 120 months, respectively.
The case was investigated by the Carmi office of the Southern Illinois Drug Task Force and was prosecuted by Assistant United States Attorney James M. Cutchin.
Richmond Man Sentenced to 120 Months for Possessing FirearmRead the Press Release
RICHMOND, Va. – Robert L. Coley, 29, of Richmond, Virginia, was sentenced today to 120 months in prison, followed by 3 years of supervised release, for possessing a firearm as a convicted felon. Coley was also sentenced to a concurrent term of 18 months in prison for violating the terms of supervised release imposed in connection with his previous federal conviction.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Charles E. Smith, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives’ Washington Field Division, made the announcement after sentencing by U.S. District Judge John A. Gibney, Jr. and Senior U.S. District Judge James R. Spencer.
A jury found Coley guilty on November 4, 2014. According to evidence presented at trial, in the early morning hours of April 28, 2014, Coley fled on foot from a traffic stop in downtown Richmond after police officers detected a firearm in his waistband. During the foot pursuit, officers observed Coley toss the firearm over a fence. After detaining Coley, officers returned to the area where Coley had tossed the firearm and recovered a Smith & Wesson .40 caliber handgun. The handgun was lodged in a chain-link fence and was loaded with a magazine containing 14 rounds of ammunition.
Coley had been convicted of state and federal felony offenses prior to April 28, 2014, and was on supervised release for his prior federal conviction at the time of the instant offense. Federal law prohibits anyone who has been convicted of a crime punishable by more than one year in prison from possessing a firearm or ammunition. Coley was also prohibited by the terms of his supervised release for his previous felony conviction from possessing a firearm. Coley’s possession of the firearm in this case was also the basis for the supervised release violation.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Richmond Police Department. Assistant U.S. Attorney Dominick S. Gerace prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:14CR00102.Private Investigators Indicted in E-Mail Hacking SchemeRead the Press Release
SAN JOSE – Nathan Moser, Peter Siragusa, AKA Bobby Russo, Carlo Pacileo, Trent Williams, and Sumit Gupta, AKA Sumit Vishnoi, were charged with crimes related to a conspiracy to access the e-mail accounts, Skype accounts, and computers of people opposing Moser’s and Siragua’s clients’ in civil lawsuits, announced United States Attorney Melinda Haag and Federal Bureau of Investigation Special Agent in Charge David J. Johnson.
A federal grand jury indicted Moser, 41, of Menlo Park, Calif.; Siragusa, 59, of Novato, Calif.; Pacileo, 44, of El Segundo, Calif.; Williams, 24, of Martinez, Calif.; and Gupta, 26, of Jabalapur, India, on January 15, 2015, charging them with one count of Conspiracy, in violation of 18 U.S.C. § 1030(b), six counts of Accessing a Protected Computer and Obtaining Information, in violation of 18 U.S.C. § 1030(a)(2)(C), and two counts of Interception of Electronic Communications, in violation of 18 U.S.C. § 2511(1)(a). The indictment was unsealed in court in San Jose, Calif., yesterday.
According to the Indictment, Moser was a private investigator and owner of Moser and Associates in Menlo Park. Siragusa was also a private investigator and owner of Siragusa Investigations in Novato. Although Moser and Siragusa operated separate businesses, they often assisted in each other’s investigations. The Indictment further alleges that Williams and Gupta were computer hackers hired by Moser and Siragusa to access the e-mail accounts, Skype accounts, and protected computers of individuals without authorization. Pacileo was the director of security for ViSalus, a network marketing company based in Los Angeles and one of Moser’s clients.
The Indictment alleges that the object of the defendants’ conspiracy was to obtain information that would assist Moser’s and Siragusa’s clients, including Pacileo, in the clients’ lawsuits. According to the indictment, once retained by a client, Moser and Siragusa would hire Williams and Gupta, among others, to hack into the victims’ e-mail accounts, Skype accounts, and protected computers. In addition to that conduct, the defendants allegedly installed and used a keylogger—a tool that intercepts and logs the particular keys struck on a keyboard in a covert manner so that the person using the keyboard is unaware that his or her actions are being monitored—to obtain information that would assist Moser’s and Siragusa’s clients.
According to the Indictment, Ocean Avenue, a network marketing company based in South Jordan, Utah, was a competitor of ViSalus that had hired several former ViSalus employees. As a result, ViSalus initiated a civil lawsuit against Ocean Avenue employees. Pacileo hired Moser to investigate Ocean Avenue. Moser allegedly enlisted Siragusa to assist with the investigation, and together they hired hackers to illegally obtain information to assist in the lawsuit.
Moser, Siragusa, and Williams made their initial appearances in San Jose yesterday before the Honorable Paul S. Grewal, U.S. Magistrate Judge. Moser was released on a $100,000 bond, with his wife signing as surety and custodian. Moser’s next hearing is scheduled for identification of counsel today before Judge Grewal. Siragusa was released pending the filing of a $100,000 secured bond on or before February 20, 2015. His next hearing is scheduled for February 23, 2015, at 1:30 p.m. before the Honorable Edward J. Davila, U.S. District Judge, in San Jose. Williams, who remains in custody, has a detention hearing scheduled for February 13, 2015, at 1:30 p.m., before Judge Grewal.
Pacileo made his initial appearance in Los Angeles before the Honorable Ralph Zarefsky, U.S. Magistrate Judge, and was released pending the filing of a $25,000 secured bond on or before February 13, 2015. His next hearing is scheduled for February 23, 2015 before Judge Davila.
An arrest warrant has been issued by the court for Gupta, who is believed to be in India. FBI Agents in San Jose are working with the FBI office in New Delhi, India, to secure Gupta’s prosecution.
The maximum statutory penalty for a violation of 18 U.S.C. § 1030(b) is 5 years custody, 3 years supervised release, and a fine of $250,000. The maximum statutory penalty for each violation of 18 U.S.C. § 1030(a)(2)(C) is 10 years custody, 3 years supervised release, and a fine of $250,000. The maximum statutory penalty for each violation of 18 U.S.C. § 2511(1)(a) is 5 years custody, 3 years supervised release, and a fine of $250,000. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Matt Parrella and Michelle Kane are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Elise Etter. The prosecution is the result of an investigation by the FBI.
Presidential Task Force Releases Implementation Plan for the National Strategy for Combating Wildlife TraffickingRead the Press Release
Recognizing that wildlife trafficking is an urgent conservation and national security threat, the Departments of Justice, State and the Interior today unveiled the implementation plan for the U.S. National Strategy for Combating Wildlife Trafficking. The agencies are co-chairs of the president’s Task Force on Combating Wildlife Trafficking which comprises seventeen federal agencies and offices.
The implementation plan builds upon the Strategy, which was issued by President Obama on Feb. 11, 2014, and reaffirms our nation’s commitment to work in partnership with governments, local communities, nongovernmental organizations and the private sector to stem the illegal trade in wildlife.
“Illegal wildlife trafficking has become one of the most profitable types of transnational organized crime, and its impact has been devastating,” said Assistant Attorney General for the Environment and Natural Resources Division John C. Cruden. “Wildlife trafficking threatens security, undermines the rule of law, fuels corruption, hinders sustainable economic development, and contributes to the spread of disease. This illicit trade is decimating many species worldwide, and some like rhinoceroses, elephants, and tigers face extinction in our lifetimes if we do not reverse this trend. The Justice Department is committed to its role in President Obama’s national strategy to combat wildlife trafficking, both by enforcing our nation’s wildlife laws like the Lacey Act and the Endangered Species Act and by working closely with other federal agencies to assist our foreign partners’ enforcement efforts.”
Incorporating recommendations from the secretary of the Interior’s Advisory Council on Wildlife Trafficking, the framework will guide and direct new and ongoing efforts of the task force in executing the Strategy.
Building upon the Strategy’s three objectives – strengthening enforcement, reducing demand for illegally traded wildlife, and expanding international cooperation – the plan lays out next steps, identifies lead and participating agencies for each objective, and defines how progress will be measured.
Some of those steps included in the implementation plan are:
- Continuing efforts to implement and enforce administrative actions to strengthen controls over trade in elephant ivory in the United States;
- Leveraging partnerships to reduce demand both domestically and abroad; and
- Strengthening enforcement capacity, cooperation, and partnerships with counterparts in other countries.
The Task Force has made significant strides toward meeting the objectives since the National Strategy was announced one year ago. A fact sheet describing these important steps related to law enforcement, demand reduction and international cooperation can be found here.
The United States is also using trade agreements and trade policy to press for groundbreaking commitments on wildlife trafficking and wildlife conservation in the Trans-Pacific Partnership Agreement (TPP) with eleven other countries in the Asia-Pacific region and the Transatlantic Partnership Agreement (T-TIP) with the European Union (EU). These commitments would be fully enforceable, including through recourse to trade sanctions, with far-reaching benefits for species like rhinos, sharks, and pangolins.
Read more about the Justice Department’s work to combat wildlife trafficking.
Potomac Man Sentenced to over 7 Years in Prison for Receiving Child PornographyRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Marion Lee Martin, Jr., age 58, of Potomac, Maryland, today to 85 months in prison followed by a lifetime of supervised release for receiving child pornography. Judge Grimm ordered that upon his release from prison, Martin must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Chief J. Thomas Manger of the Montgomery County Police Department.
According to his plea agreement, in January 2013, Martin uploaded files to his internet cloud account which depicted real children engaged in sexually explicit conduct. On May 8, 2013, a search warrant was executed at his residence and a large number of digital devices and removable media, some of which contained child pornography, were seized. Martin admitted that he had been collecting images of children since approximately 1977, and his sexual interest was in girls, including the ages of nine to 11.
Martin also told law enforcement that he worked in a photo lab at a local CVS store and would also copy, for his own personal collection, images of children that customers would drop off for processing. Evidence seized during the May 8 search revealed video files depicting prepubescent and pubescent girls taken in a CVS store.
On October 30, 2013, Martin admitted to law enforcement that he had been using his cell phone to take videos of girls, clothed, at the store where he worked; and that he had bought a new laptop and cell phone since the May 2013 search of his home. A second search warrant was executed at his home in January 2014. Three laptops, five tablets, seven cameras, 24 memory cards, a Google Glass device and other digital media storage devices were seized.
Martin had at least tens of thousands of images and videos of child pornography and child erotica images and videos stored on the digital devices and removable media seized from both searches of his home. Some of the images and videos depicted real children engaged in sexually explicit conduct.
The case was investigated by the FBI-led Maryland Child Exploitation Task Force, created in 2010 to combat the sexual exploitation of children, with members from 10 state and federal law enforcement agencies.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI and Montgomery County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Nicolas Mitchell, who prosecuted the case.
Pittsburgh Man Pleads Guilty in Multiple Fraud SchemesRead the Press Release
PITTSBURGH - A Pittsburgh man pleaded guilty in federal court to charges of bank embezzlement, bank fraud, mail fraud, filing a false income tax return, conspiracy and aggravated identity theft, United States Attorney David J. Hickton announced today.
Joseph Graziano, Jr., 29, pleaded guilty to six counts in two cases before Senior United States District Judge Terrrence F. McVerry.
In connection with the guilty pleas, the court was advised that from May 12, 2008 through March 25, 2011, the defendant was employed by Bank of New York Mellon as a Corporate Trust Administrator. In this position, he had the access and ability to wire funds in and out of accounts held by the bank’s corporate trust customers. Graziano used this access to embezzle $2,441,294.35 from Bank of New York Mellon by wiring funds from the corporate trust accounts into his own bank accounts. In federal income tax returns, the defendant failed to report the embezzled funds as income. In the time before and after the defendant was employed by Bank of New York Mellon, he also engaged in schemes to defraud five other banks including Dollar Bank, First Niagara Bank, First Commonwealth Bank, Ameriserv Financial Bank and PNC Bank. In these schemes, Graziano submitted fraudulent loan documents to induce the banks to extend credit to him. Following the bank embezzlement and the bank frauds, the defendant began engaging in a new and separate scheme to defraud through the online marketplace www.ebay.com. Graziano defrauded eBay buyers by offering personal electronics for sale on eBay. After the buyers submitted payment to the defendant's PayPal account, the defendant sent the buyers empty boxes, falsely claiming that the boxes' contents had been stolen during shipping. After the defendant had been indicted on charges relating to those offenses, and while he was on pretrial release, he began to engage in new and separate criminal conduct. Only a few months after he was charged in the original indictment, Graziano engaged in a conspiracy to purchase counterfeit United States currency through a source in Uganda with the intent to pass the counterfeit currency at retail locations in the United States. He used a stolen identity to set up a mailbox to receive the shipments of counterfeit currency from Uganda and also attempted to open a credit card and bank accounts using the stolen identity.
Judge McVerry scheduled sentencing for May 22, 2015. The law provides for a mandatory minimum sentence of two years, a total sentence of 90 years in prison, a fine of $3,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, Judge McVerry ordered that the defendant remain detained.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting these cases on behalf of the government.
The Federal Bureau of Investigation, United States Postal Inspection Service, Internal Revenue Service - Criminal Investigation Division, Homeland Security Investigations, and the United States Secret Service conducted the investigations that led to the prosecution of Graziano.
Pennsylvania and Louisiana Residents Charged in $2.2 Million Fraud Scheme Involving U.S. Treasury ChecksRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today the conviction of one defendant, and the unsealing of an indictment against another defendant, in an ongoing investigation into a check cashing business in Baton Rouge that cashed more than $2.2 million in fraudulently-obtained U.S. Treasury checks during 2012 and 2013.
In one case, ANYELINA REYES, age 36, of Baton Rouge, Louisiana, has been charged in a Bill of Information, filed on July 15, 2014, with conspiracy to steal government funds, in violation of Title 18, United States Code, Section 371. On November 20, 2014, REYES appeared before Chief U.S. District Judge Brian A. Jackson and pled guilty.
As REYES acknowledged in Court in connection with her guilty plea, in 2012 and 2013, she operated a store called “A&R Elite Team, LLC,” which was located on Florida Boulevard in Baton Rouge. REYES admitted that she was aware of a scheme to obtain United States Treasury checks that had been fraudulently obtained and that, after opening a bank account for her store, she agreed to help facilitate the scheme by using her store’s bank account to cash the Treasury checks. From April of 2012 through April of 2013, REYES deposited approximately 370 fraudulently-obtained Treasury checks into her business account, with such checks having a total face value of approximately $2.2 million. After depositing the checks into her account, and after retaining a percentage of the funds for herself, REYES would withdraw the remainder of the funds, in cash, and transmit the funds to her co-conspirators. As a result of her role in the scheme, REYES faces significant incarceration, fines, restitution, and supervised release following imprisonment.
In a related case, ALBELK REYES SERRATA, age 25, of Allentown, Pennsylvania, has been indicted and charged with conspiracy to steal government funds, in violation of Title 18, United States Code, Section 371, and theft of government funds, in violation of Title 18, United States Code, Section 641. The Indictment, which was filed on October 2, 2014 and recently unsealed, alleges that throughout 2012 and 2013, SERRATA also participated in a scheme to obtain fraudulent United States Treasury checks and have them cashed in Baton Rouge. The Indictment further alleges that, in April and May of 2014, SERRATA participated in the theft of (5) additional Treasury checks having a face value of approximately $28,000. SERRATA also faces significant incarceration, fines, restitution, and supervised release following imprisonment.
U.S. Attorney Green stated: “My office takes identity theft and crimes involving fraudulently-issued United States Treasury checks very seriously, especially when millions of taxpayer dollars are at stake. We will continue to work aggressively to investigate and prosecute schemes like these, which not only impact the United States Treasury, but also make it harder for taxpayers to properly file their own taxes and place their trust in the Internal Revenue Service.”
“Individuals who use stolen identities in furtherance of tax fraud, and those who assist in these schemes, will be prosecuted for their actions,” stated Jerome R. McDuffie, Acting Special Agent in Charge, IRS Criminal Investigation. “These cases should serve as a strong warning to those who are considering similar conduct for their own gain. Our agency will continue to work closely with the Department of Justice to protect the integrity of the tax system and protect the public from criminals who use others’ identities for illegal purposes."
This ongoing investigation is being handled by the Internal Revenue Service—Criminal Investigation Division. The matter is being prosecuted by Assistant United States Attorney Alan A. Stevens, who serves as a Deputy Chief of the Criminal Division, and Assistant U.S. Attorney Ryan Crosswell.
NOTE: An indictment is an accusation by the Grand Jury. A defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.
Owners of Bronx Grocery Store That Trafficked in Prescription Drugs Charged in Manhattan Federal Court with Orchestrating October 2010 Near-Fatal Shooting of Rival TraffickerRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and William J. Bratton, Commissioner of the New York City Police Department (“NYPD”), announced today additional criminal charges filed in Manhattan federal court against CARLOS PANIAGUA (“CARLOS PANIAGUA”), JOSE OSVALDO PANIAGUA, JR., (“OSVALDO PANIAGUA JR.”), and JOSE RAFAEL PANIAGUA (“RAFAEL PANIAGUA”), who operated a massive prescription drug ring out of the Joaquin Grocery & Deli Store (the “Joaquin Grocery”) in the Bronx, New York, for orchestrating the October 2010 near-fatal shooting of a rival prescription drug trafficker. CARLOS PANIAGUA, OSVALDO PANIAGUA JR., and RAFAEL PANIAGUA, along with three other defendants, were initially arrested in June 2014 and charged with trafficking in oxycodone, HIV medication, and other prescription drugs. Concurrently with their arrests, and with the assistance of the New York City Law Department, the doors to the Joaquin Grocery were padlocked pursuant to a judicial order from Bronx Supreme Court. The case is assigned to U.S. District Judge Andrew L. Carter.
In addition, two additional members of the conspiracy to distribute oxycodone – VICTOR LUNA, and RAMON PICHARDO – were arrested this morning pursuant to the Superseding Indictment returned yesterday. As alleged, LUNA and PICHARDO distributed oxycodone to and with the individuals who operated the Joaquin Grocery.
Manhattan U.S. Attorney Preet Bharara said: “As with traditional drugs, prescription drug trafficking is a gateway to violence and a plague on the neighborhoods in which it is carried out. As alleged, the defendants not only turned their store into a drug market that took advantage of impoverished Medicaid beneficiaries, but were willing to, and nearly did, kill to maintain their illegal business. My office will continue work with our partners at the FBI and NYPD to investigate and vigorously prosecute these and other alleged prescription drug traffickers for their illegal drug businesses and for any resulting violence.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “Second-hand medications pose significant risks to consumers, and the business of trading prescription drugs for money often encourages people to resist the treatment they need. Engaging in the illegal distribution of prescription drugs is a slippery slope, especially when criminals pick up the prescription pad. The additional charges in this case, which were announced today, detail the violence that often coincides with backdoor drug deals. The FBI and our partners are eternally committed to exposing these markets and shutting them down once and for all.”
Police Commissioner William J. Bratton said: “Thanks to the continued efforts of our investigators, our federal law enforcement partners, and the prosecutors involved in this case, these individuals will now be held accountable for not only allegedly taking part in this illegal prescription drug ring but also for plotting a murder.”
According to the allegations contained in the Complaint unsealed in June 2014, the Indictment unsealed in September 2014, the Superseding Indictment returned yesterday in Manhattan federal court, and statements made in court:
Until June 2014, CARLOS PANIAGUA, OSVALDO PANIAGUA JR., and RAFAEL PANIAGUA operated Joaquin Grocery, a grocery store at 598 Morris Avenue in the Bronx, New York. In addition to selling grocery products, the Joaquin Grocery operated for years as a marketplace for Medicaid beneficiaries to sell their Medicaid-reimbursed prescription medication, including Oxycontin, Percocet, and expensive HIV medications. The drug transactions at the Joaquin Grocery typically took place in a small room behind a door at the back of the store, where Medicaid beneficiaries provided their pill bottles to the defendants for cash. With respect to non-controlled medication such as HIV medication, the defendants removed the patient labels from the medication bottles with lighter fluid, which contains toxic substances, so that the bottles appeared brand new and could eventually be re-sold to pharmacies. With respect to controlled medication such as Oxycontin, the defendants amassed large quantities of pills and re-sold them on the street.
In 2010, a competitor in the prescription drug trafficking business (the “Competitor”) began poaching customers on the same street as the Joaquin Grocery. Ultimately, CARLOS PANIAGUA, OSVALDO PANIAGUA JR., and RAFAEL PANIAGUA planned to have the Competitor killed, and hired individuals from New Jersey to travel to the Bronx to carry out the murder. On October 13, 2010, while standing in front of a store on the same block as the Joaquin Grocery, the Competitor was shot twice, including once in the head, by one of the individuals hired by the defendants. The Competitor was taken to a nearby hospital and ultimately survived.
CARLOS PANIAGUA, OSVALDO PANIAGUA JR., and RAFAEL PANIAGUA are
each charged with one count of engaging in a conspiracy to distribute and possess with the intent to distribute a controlled substance (Count One); one count of engaging in a conspiracy to commit the unlawful misbranding, adulteration, and wholesale distribution of prescription drugs (Count Two); one count of engaging in a conspiracy to commit murder for hire (Count Three); and one count of aiding and abetting the use of a firearm in connection with the murder-for-hire conspiracy (Count Four). They each face a mandatory minimum sentence of 10 years in prison on Count Four and maximum sentences of 20 years in prison on Counts One and Three, five years in prison on Count Two, and 10 years in prison on Count Four.
LUNA and PICHARDO are each charged with one count of engaging in a conspiracy to distribute and possess with the intent to distribute a controlled substance. They each face a maximum sentence of 20 years in prison.
The previous charges against two other defendants, Osvaldo Paniagua Sr. and Joan Torres, remain unchanged.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI and NYPD, and thanked the New York City Law Department for its assistance.
Mr. Bharara also thanked the FBI’s Health Care Fraud Task Force for their work in this investigation, which he noted is ongoing. The New York FBI Health Care Fraud Task Force was formed in 2007 in an effort to combat health care fraud in the greater New York City area. The task force comprises agents, officers, and investigators from the FBI, the NYPD, the New York State Insurance Fraud Bureau, the U.S. Department of Labor, the U.S. Office of Personnel Management Inspector General, the U.S. Food and Drug Administration, the New York State Attorney General’s Office, the New York State Office of Medicaid Inspector General, the New York State Health and Hospitals Inspector General, the New York City Human Resources Administration’s Bureau of Fraud Investigation, and the National Insurance Crime Bureau.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorney Russell Capone is in charge of the prosecution.
The charges contained in the Superseding Indictment, the Indictment, and the Complaint are merely accusations and the defendants are presumed innocent unless and until proven guilty.
US v. Jose Carlos Paniagua, et al. (Joaquin Grocery) S4 Indictment
Otero County Man Charged with Violating the Federal Firearms LawsRead the Press Release
ALBUQUERQUE – David Ausborn Hiles, 48, of La Luz, N.M., has been charged with violating the federal firearms laws in a criminal complaint filed by the Bureau of Alcohol, Tobacco, Firearms and Explosives. During proceedings in federal court in Las Cruces, N.M., earlier today, Hiles pleaded not guilty to the charges in the criminal complaint, and was ordered detained pending trial based on a judicial finding that he poses a danger to the community.
The criminal complaint charges Hiles with being a felon in possession of firearms and ammunition. It alleges that Hiles unlawfully possessed 36 firearms and ammunition at his residence in Otero County, N.M., on Nov. 25, 2014. According to the criminal complaint, the New Mexico State Police found the firearms and ammunition while executing a search warrant at Hiles’ residence. In Nov. 2014, Hiles was prohibited from possessing either firearms or ammunition because he previously has been convicted of the felony offense of aggravated assault with a deadly weapon.
If convicted of the charges in the criminal complaint, Hiles faces up to ten years in federal prison. Charges in criminal complaints are mere accusations. Defendants are presumed innocent unless found guilty in a court of law.
This case was investigated by the Las Cruces office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the New Mexico State Police, with assistance from the 12th Judicial District Attorney’s Office for the State of New Mexico. Assistant U.S. Attorney Maria Y. Armijo is prosecuting the case.
Oklahoma Army National Guard Soldier Pays $12,000 to Settle Allegations of False ClaimsRead the Press Release
Oklahoma City, Oklahoma -- Sanford C. Coats, United States Attorney for the Western District of Oklahoma announces that Staff Sergeant Kasey Ray Bickerstaff has agreed to pay $12,000 to settle civil penalty claims stemming from allegations that he violated the False Claims Act by submitting, or causing to be submitted, false claims under the Army National Guard’s Recruiting Assistance Program (G-RAP).
Staff Sgt. Kasey Ray Bickerstaff is a member of the Oklahoma Army National Guard. He registered as a recruiter assistant under the G-RAP to help the Guard supplement its enlistment efforts. As a recruiter assistant, Bickerstaff could earn bonuses for individuals he recruited to join the National Guard.
The United States contends that from January 2009 through April 2010, Bickerstaff submitted or caused to be submitted four false claims under the G-RAP program to obtain bonus payments for potential soldiers whom he did not assist in recruiting and to which he was not entitled.
In order to resolve the allegations brought by the United States, Bickerstaff agreed to pay $12,000. In reaching this settlement, Bickerstaff did not admit liability and the government did not make any concessions regarding the legitimacy of the claims. The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.
This case was investigated by the U.S. Army Criminal Investigation Command. The case was prosecuted by Assistant United States Attorney Ronald R. Gallegos.
Ohio man convicted of possession of child pornographyRead the Press Release
WHEELING, WEST VIRGINIA – Alex J. Galensky, 32, of, Martins Ferry, Ohio, was convicted today in federal court of possession of child pornography, United States Attorney William J. Ihlenfeld, II, announced.
During an investigation by the West Virginia State Police, Galensky was discovered in May 2014 in possession of child pornography involving a minor under the age of 12.
Galensky pled guilty today to a criminal Information charging him with one count of “Possession of Child Pornography.” He faces up to 20 years in prison and a fine of up to $250,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen Vogrin prosecuted the case on behalf of the government.
U.S. Magistrate Judge James E. Seibert presided.
Office Employee Fraudulently Used Employer's DEA Registration to Prescribe Controlled Substances to Self, Son and Son's FriendsRead the Press Release
ROANOKE, VIRGINIA – A Roanoke woman, who fraudulently used her employer’s DEA Registration Number to illegally prescribe controlled prescription drugs to her son, daughter-in-law, and others, pled guilty this morning in the United States District Court for the Western District of Virginia in Roanoke.
Vicki Chilton Mullen, 63, of Roanoke, Va. and her son, Gregory Daniel Mullen, 39, of Vinton, Va., pled guilty today in District Court. Today in District Court, each defendant pled guilty to one count of distributing hydrocodone (Lortab), one count of distributing Ambien, one count of conspiring to distribute hydrocodone, one count of conspiring to distribute Ambien, one count of using a DEA registration number issued to another person, and one count of acquiring a controlled substance by misrepresentation or fraud. In addition, Gregory Keith Roach, 44, of Hurt, Va., pled guilty last week to one count of obtaining possession of a controlled substance through misrepresentation or fraud and one count of conspiracy to obtain controlled substances by fraud. Chastity Carter Mullen, 39, of Vinton, Va., wife of Gregory Daniel Mullen, also pled guilty last week to one count of conspiracy to distribute controlled substances and to obtain controlled substances by fraud.
“The abuse of prescription drugs is an epidemic in the Western District of Virginia. The illegal use and abuse of these drugs is destroying lives and communities,” Acting United States Attorney Anthony P. Giorno said today. “We will continue to be vigilant in attacking this problem through vigorous enforcement and effective prevention programs.”
According to evidence presented at today’s guilty plea hearing by Assistant United States Attorney Jennie L.M. Waering, Vicki Mullen worked in a Roanoke podiatrist’s office from 2004 to 2012. By virtue of her position she had the access and ability to call in patient prescriptions to pharmacies and advising pharmacies of refill requests. From around December 2007 to August 2012, Vicki Mullen used the podiatrist’s DEA registration number to call in prescriptions and to fax prescriptions for hydrocodone (Lortab), Ambien and others drugs, to pharmacies for Greg Mullen, Chastity Mullen, Gregory Roach, and others. In addition, Gregory Mullen, and others, provided Vicki Mullen with the names and personal identifying information of individuals for the purpose of Vicki Mullen calling in unauthorized prescriptions in those persons’ names, without their knowledge. The unauthorized prescriptions were picked up at various locations by Vicki Mullen, Gregory Mullen, Chastity Mullen, Gregory Roach and others. Vicki Mullen, Greg Mullen and others were addicted to prescription drugs and used some of these prescriptions for personal use. Approximately 45 names were used unknowingly for this drug scheme.
Between 2008 and 2012, 127,686 pills of Lortab (hydrocodone) were dispensed by Vicki Mullen using her using employer’s DEA Registration Number to call-in prescriptions and to fax refill authorizations. During that same time, 5,370 Ambien pills were dispensed in the same manner.
In addition, David Brian Turner was also charged as part of the same conspiracy and is scheduled to plead guilty next week. Walter Bingham has also been charged and could face a March jury trial.
The investigation of the case was conducted by Tactical Diversion Squad of the Drug Enforcement Administration, which includes agents from the Department of Health and Human Services, Office of Inspector General, the Virginia State Police, the DEA Diversion Program, and Task Force law enforcement officers from local jurisdictions that include the Montgomery County Sheriff’s Office, Bedford County Sheriff’s Office, Pittsylvania County Sheriff’s Office, Washington County Sheriff’s Office and Roanoke County Sheriff’s Office. Assistant United States Attorney Jennie L.W. Waering is prosecuting the case for the United States.
Northwest Arkansas Man Found Guilty of Federal Tax FraudRead the Press Release
A Springdale, Arkansas, man was convicted by a jury today in the U.S. District Court located in Fayetteville, Arkansas, of tax crimes, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Conner Eldridge of the Western District of Arkansas.
Doyle Smith, 56, was found guilty following a three-day trial before the Honorable U.S. District Judge Timothy L. Brooks of four counts of subscribing and filing a false tax return, one count of corruptly endeavoring to obstruct and impede the administration of the internal revenue laws and one count of presenting a fictitious financial obligation.
According to evidence introduced at trial, in 2008 and 2009, Smith submitted four false individual federal tax returns for tax years 2005 through 2008, which falsely reported a total of more than $1.4 million in fictitious federal tax withholdings. Based on these fictitious withholding amounts, Smith claimed a total of $1,021,457 in income tax refunds to which he was not entitled to receive for those tax years. Smith also submitted false claims and correspondence to both the Internal Revenue Service (IRS) and third-parties in an attempt to cause the IRS and U.S. Treasury to pay his debts to third parties and to obstruct the IRS’ tax administration efforts. For example, in January 2010, Smith mailed to the Department of Arkansas Finance and Administration a fictitious financial instrument titled “U.S. Treasury Trust Account Money Order.” This fictitious document purportedly obligated U.S. Treasury funds in the amount of $129,439 to pay for outstanding sales taxes that Smith owed to the state of Arkansas.
“Today’s jury verdict makes it clear that individuals who steal from the government through the filing of false and fraudulent claims for refunds and fictitious financial instruments will be pursued and prosecuted to the fullest extent of the law,” said Principal Deputy Assistant Attorney General Ciraolo. “The Department of Justice’s Tax Division is committed to working with its federal and state law enforcement partners to identify those who seek to manipulate and abuse our federal tax system, and to hold such individuals accountable.”
“This case involves a scheme in which the defendant attempted to steal taxpayer money from the U.S. Treasury for his own personal gain,” said U.S. Attorney Eldridge. “This type of fraud is a serious crime, and an insult to hard-working, law abiding citizens and taxpayers. Today’s conviction sends a strong message that our office and our law enforcement partners will aggressively pursue fraud wherever we find it.”
“At the IRS, protecting taxpayer money is a matter we take extremely seriously,” said Special Agent in Charge Christopher A. Henry of the IRS-Criminal Investigation. “An integral part of the agency’s mission involves detecting and catching fraudulent tax refund claims. The object of these schemes is to defraud the government and the taxpaying public. Today’s conviction should serve as a warning to those that would attempt to enrich themselves by fraudulent means.”
“It is the Treasury Inspector General for Tax Administration’s (TIGTA) mission to protect the integrity of the Internal Revenue Service and promote the fair administration of our federal tax system,” said Special Agent in Charge Ruben Florez of TIGTA’s Dallas Field Division. “TIGTA and its law-enforcement partners will vigorously investigate individuals that attempt to corruptly interfere with the administration of the internal revenue laws through fraudulent means, and will do everything within its power to ensure that those involved will be prosecuted to the fullest extent of the law.”
In this case, the statutory maximum sentences are three years in prison and a $250,000 fine for each count of filing a false tax return; three years in prison and a $250,000 fine for the count of impeding the internal revenue laws; and 25 years in prison and a $250,000 fine for the count of presenting a fictitious financial obligation.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Eldridge commended the special agents of IRS-Criminal Investigation and the TIGTA who investigated the case, as well as Trial Attorneys Robert Kemins and David Zisserson of the Tax Division who are prosecuting the case.
Northwest Arkansas Man Found Guilty of Federal Tax FraudRead the Press Release
Fayetteville, Arkansas – A Springdale, Arkansas man was convicted by a jury today in the U.S. District Court in Fayetteville, Arkansas, of tax crimes, announced U.S. Attorney Conner Eldridge of the Western District of Arkansas and Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Doyle Smith, 56, was found guilty following a three-day trial before the Honorable U.S. District Judge Timothy L. Brooks on four counts of subscribing a false tax return, one count of corruptly endeavoring to obstruct and impede the administration of the Internal Revenue Laws, and one count of presenting a fictitious obligation.
According to evidence introduced at trial, in 2008 and 2009, Smith submitted four false individual federal tax returns for tax years 2005 through 2008, which falsely reported a total of more than $1.4 million in fictitious federal tax withholdings. Based on these fictitious withholding amounts, Smith claimed a total of $1,021,457 in income tax refunds to which he was not entitled to receive for those tax years. Smith also submitted false claims and correspondence to both the Internal Revenue Service (IRS) and third-parties in an attempt to cause the IRS and U.S. Treasury to pay his debts to third parties and to obstruct the IRS’ tax administration efforts. For example, in January 2010, Smith mailed to the Department of Arkansas Finance and Administration a fictitious financial instrument titled “U.S. Treasury Trust Account Money Order.” This fictitious document purportedly obligated U.S. Treasury funds in the amount of $129,439 to pay for outstanding sales taxes that Smith owed to the state of Arkansas.
“This case involves a scheme in which the defendant attempted to steal taxpayer money from the U.S. Treasury for his own personal gain,” said U.S. Attorney Eldridge. “This type of fraud is a serious crime, and an insult to hard-working, law abiding citizens and taxpayers. Today’s conviction sends a strong message that our office and our law enforcement partners will aggressively pursue fraud wherever we find it.”
“Today’s jury verdict makes it clear that individuals who steal from the government through the filing of false and fraudulent claims for refunds and fictitious financial instruments will be pursued and prosecuted to the fullest extent of the law,” said Principal Deputy Assistant Attorney General Ciraolo. “The Department of Justice’s Tax Division is committed to working with its federal and state law enforcement partners to identify those who seek to manipulate and abuse our federal tax system, and to hold such individuals accountable.”
“At the IRS, protecting taxpayer money is a matter we take extremely seriously,” said Special Agent in Charge Christopher A. Henry of the IRS-Criminal Investigation. “An integral part of the agency’s mission involves detecting and catching fraudulent tax refund claims. The object of these schemes is to defraud the government and the taxpaying public. Today’s conviction should serve as a warning to those that would attempt to enrich themselves by fraudulent means.”
“It is the Treasury Inspector General for Tax Administration’s (TIGTA) mission to protect the integrity of the Internal Revenue Service and promote the fair administration of our federal tax system,” said Special Agent in Charge Ruben Florez of TIGTA’s Dallas Field Division. “TIGTA and its law-enforcement partners will vigorously investigate individuals that attempt to corruptly interfere with the administration of the internal revenue laws through fraudulent means, and will do everything within its power to ensure that those involved will be prosecuted to the fullest extent of the law.”
In this case, the statutory maximum sentences are three years in prison and a $250,000 fine for each count of filing a false tax return; three years in prison and a $250,000 fine for the count of impeding the internal revenue laws; and 25 years in prison and a $250,000 fine for the count of presenting a fictitious financial obligation.
U.S. Attorney Eldridge and Principal Deputy Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation and the TIGTA who investigated the case, as well as Trial Attorneys Robert Kemins and David Zisserson of the Tax Division who are prosecuting the case.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
North Little Rock Man Indicted on 10 Counts of Wire Fraud in Scheme to Steal Feeding Program FundsRead the Press Release
LITTLE ROCK – Another feeding program sponsor has been indicted for his role in a scheme to steal federal money. Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced that Christopher Nichols, age 24, of North Little Rock, has surrendered to authorities after the filing of a 10-count indictment.
The indictment, returned by a Federal Grand Jury on February 4, 2015, charges Nichols with wire fraud as part of a scheme to fraudulently obtain United States Department of Agriculture (USDA) program funds.
According to the indictment, the USDA funds the Child and Adult Care Feeding Program, which includes an at-risk afterschool component. In Arkansas, the feeding programs are administered by the Arkansas Department of Human Services (DHS). Sponsors who want to participate in the feeding programs must submit an application to DHS for approval. Once approved, they can provide meals as part of the feeding program and be reimbursed based on the number of eligible meals they serve.
The indictment states that Nichols operated as a sponsor for a feeding program through an organization called A Vision For Success. It alleges that a relative of Nichols worked for DHS and processed applications from sponsors applying to participate in the feeding programs.
The indictment alleges that Nichols applied with DHS to participate as a sponsor and that his relative at DHS approved his applications. The only employees Nichols listed on his applications were additional family members. The indictment states that he falsely represented his average daily attendance and greatly inflated the number of meals provided; few or no children were actually fed.
“With reportedly over 200,000 children at risk of hunger in Arkansas because they are not getting nutritious food needed to thrive, this indictment is a small step toward ensuring the funding for nutritious feeding programs in Arkansas is actually feeding children,” stated Thyer. “This is the second indictment and fourth person charged in connection to feeding programs in Arkansas. In December, 2014, my office indicted three individuals for their roles in a conspiracy to steal federal money through feeding programs administered by the Department of Agriculture. I expect that as the investigation into Arkansas’ feeding programs continues, there will be additional indictments. We will not tolerate the blatant disregard of the welfare of Arkansas’ children by those who steal the very money meant to alleviate the burgeoning need to put nutritious food in the mouths of hungry children. If you are aware of any fraudulent activity regarding these feeding programs, please email that information to my office at [email protected].”
“It is again another example of the collaborative efforts of local, state and federal agencies to aggressively investigate and prosecute these individuals whose depravity has no bounds,” stated Secret Service Special Agent in Charge Brian Marr. “This manipulator of the system who took food from children, and expensed it off to the people of the state of Arkansas, deserves every bit of punishment allowable by law.”
United States Department of Agriculture, Office of Inspector General, Assistant Special Agent-in-Charge Dax Roberson, Southwest Region said, “I want to thank the U.S. Attorney’s office, OIG special agents, and our investigative partners for their hard work on this investigation. When the integrity of nutrition programs for needy children is violated by criminal conduct, the Office of Inspector General will pursue justice to the fullest extent of the law.”
“Stealing money from a fund that was reputedly feeding underprivileged and disadvantaged children is deplorable,” stated Assistant Special Agent in Charge James Hendricks with the Little Rock FBI, “We appreciate the tireless efforts of our partners, Internal Revenue Service, United States Department of Agriculture, United States Secret Service and the U.S. Attorney’s Office for their diligent resolve to investigate this appalling crime.”
“IRS Criminal Investigation is proud to work with our law enforcement partners to identify, investigate and prosecute financial fraud schemes, especially when the victims of the fraud are disadvantaged children that programs such as this are meant to benefit,” stated Christopher A. Henry, Special Agent in Charge of the IRS- Criminal Investigation Nashville Field Office.
The statutory penalty for wire fraud is not more than 20 years imprisonment, not more than a $250,000 fine, or both, and not more than 3 years supervised release.
The investigation is ongoing and is conducted by the United States Secret Service, Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigations, United States Department of Agriculture – Office of the Inspector General, and United States Marshals Service. The case is being prosecuted by Assistant United States Attorneys Jana Harris and Allison W. Bragg.
An indictment contains only allegations. Defendants are presumed innocent until proven guilty.
New York man gets more than nine years for role in robbing drug dealersRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced today that Keith I. Glenn, 31, of New York, was sentenced to more than nine years in federal prison for being a felon in possession of a firearm.
In October 2013, Glenn pleaded guilty to possessing a firearm while participating in armed home invasion robberies of drug dealers. He admitted that on March 22, 2012, he, Robert Barcliff, Brandon Davis and Darrell Gillespie robbed someone they believed to be a drug dealer in Bristol, Virginia. They entered the victim’s home brandishing weapons, and stole firearms, ammunition and drugs. The group then returned to South Charleston to divide the spoils.
On March 22, 2012, Glenn also participated in an attempted robbery in Dunbar, West Virginia. He, Davis and Gillespie attempted to rob a drug dealer in the Roxalana Hills apartment complex but failed when the victim resisted. The group was later arrested by police.
Glenn further admitted that on April 22, 2012, he, Barcliff, Robert Jared Smith and William Seltzer carried out an armed home-invasion robbery in Marmet, West Virginia, of drug dealers believed to be from Detroit. A firearm was discharged during the robbery.
Smith, Seltzer and Davis have pleaded guilty to charges related to this investigation, and await sentencing in February. Barcliff was recently sentenced to 16 years in federal prison. Gillespie was convicted by a federal jury and awaits sentencing in May 2015.
Beginning in the fall of 2011, Glenn was part of a group that conspired and agreed to commit armed home invasion robberies of drug dealers in West Virginia, Virginia, Pennsylvania and Tennessee. The objective of the conspiracy and robberies was to steal drugs, drug proceeds and firearms. The group targeted drug dealers because they believed the dealers were not likely to call the police.
United States District Judge Thomas E. Johnston imposed the sentence.
The case was investigated by the Federal Bureau of Investigation, South Charleston Police Department and Charleston Police Department. Assistant United States Attorney Monica D. Coleman handled the prosecution.
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Monroe County Man Charged with Heroin Trafficking ConspiracyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Stroudsburg man was arrested by federal agents yesterday on drug trafficking charges brought by a federal grand jury.
According to United States Attorney Peter Smith, the grand jury returned a Criminal Indictment last week alleging that Eddie Pace, age 40, conspired with others to distribute and possess with intent to distribute more than 100 grams of heroin and more than 500 grams of cocaine in Monroe County and elsewhere. The indictment also charges Pace with distributing heroin on November 6, 2014 and January 14, 2015.
The charges stem from an investigation by special agents of the Federal Bureau of Investigation, the Pennsylvania State Police, Monroe County Detectives, the Monroe County Drug Task Force, and the Stroud Area Regional Police Department.
Pace was arraigned on the charges today before U.S. Magistrate Judge Karoline Mehalchick in Scranton. He was ordered to be detained in prison pending trial in the case.
If he is convicted of the charges, Pace faces a mandatory minimum sentence of 10 years in prison and a potential maximum sentence of life in prison for the conspiracy charge, and a potential maximum sentence of 30 years in prison for each distribution charge.
The case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
(Indictment)
Mexican National Sentenced as Leader and Organizer of MarijuanaRead the Press Release
BOISE — Juan Pablo Villasenor-Villa, 25, of Michoacan, Mexico, was sentenced yesterday to 288 months in prison for continuing criminal enterprise involving the unlawful growing of thousands of marijuana plants, and possession of large quantities of harvested marijuana with intent to distribute it, as well as damage to federal public lands, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Villasenor-Villa to pay $33,265 in restitution, to pay a $500 special assessment, and to serve five years of supervised release following his release from prison. Villasenor-Villa, the organizer and leader of two marijuana growing operations, was convicted on November 4, 2014, following a one-week jury trial.
“This lengthy sentence reflects the seriousness of this offense and size of these marijuana operations, the need for just punishment, and especially the need for deterrence,” said Olson. “If other people intend to be involved in this type of abuse of public lands, they need to consider the consequences of a sentence like this.”
Villasenor-Villa is the final defendant to be sentenced in connection with the two marijuana growing operations discovered in the Boise National Forest in September 2013. The court previously sentenced the other participants who were working in the marijuana growing operation under the direction of Villasenor-Villa. Jose Ayala-Talavera was sentenced to 111 months for conspiracy to manufacture and distribute a controlled substance, injury to government property, and possession of a firearm in furtherance of a drug trafficking crime. Marcos Solano-Farias was sentenced to 30 months for conspiracy to manufacture and distribute a controlled substance, possession of a firearm by a prohibited person, and injury to government property. Carlos Cerda-Carpio was sentenced to 27 months for conspiracy to manufacture and distribute a controlled substance, and possession of a firearm by a prohibited person. Gilberto Duran Contreras was sentenced to 30 months for conspiracy to manufacture and distribute a controlled substance and injury to government property. Mariah Villasenor-Rodriguez, Villasenor-Villa’s wife, was sentenced to 21 months for possession of more than 100 kilograms of marijuana with intent to distribute.
The two outdoor marijuana growing operations were located in the Boise National Forest, a few miles from Highway 21 in Boise County. Ayala-Talavera, Solano-Farias, and Cerda-Carpio were captured by law enforcement officers at a camp located next to a marijuana grow site on Rabbit Creek, with 1,411 live plants, as well as harvested marijuana. According to the plea agreements, investigators found and seized two semi-automatic handguns, an AK-47 type rifle in the camp, and several hundred marijuana plants that had already been harvested from the growing operation. Investigators located and eradicated all live marijuana plants. Law enforcement officers also found a related grow site at Beaver Creek, where they removed 5,463 marijuana plants. Duran-Contreras was arrested near this site. Investigators recovered harvested marijuana in one-pound, heat-sealed packages from Villasenor-Villa’s house and from a relative’s house in Caldwell, Idaho. They also recovered $68,500 in large bills of U.S. currency during the arrest of his wife and co-defendant, Mariah Villasenor-Rodriguez on September 12, 2013, in Caldwell.
“Vigorous prosecution of those who grow illegal drugs on federal land is a high priority of this office,” said Olson. “Those who operate marijuana grows not only traffic in illegal drugs, but they also damage wildlife and the environment and, through their possession and possible use of firearms, they pose a significant danger to all Idahoans who seek to use our national forests for hiking, hunting and recreation purposes. Drugs and guns are a dangerous and often violent combination. Today’s sentence demonstrates that the federal agents and federal prosecutors will carefully target those who use or possess firearms for unlawful drug businesses.”
The case is the result of an investigation through the Organized Crime and Drug Enforcement Task Force (OCDETF), which included the cooperative law enforcement efforts of the Drug Enforcement Administration, Bureau of Land Management, and United States Forest Service, with assistance from the Ada County Sheriff’s Office, Boise County Sheriff’s Office, Boise Police Department, City/County Narcotics Unit (Canyon County Sheriff’s Office and Caldwell Police Department), the Idaho National Guard, Meridian Police Department, Nampa Police Department, Spokane Police Department, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and Washington State Police.
The OCDETF program is a federal, multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
Photo 1168: Miles of irrigation tubing of several dimensions were removed from the Rabbit Creek grow, along with eradicated marijuana plants. This photo shows one load hauled out with long-lines by helicopter.
Photo 1189: A forest road at the trail entrance in the Boise National Forest near Little Beaver Creek. Juan Pablo Villasenor-Villa provides supplies for marijuana workers and gives them directions.
Metro-East Resident Pleads Guilty to Participating in Fraudulent Tax Refund SchemeRead the Press Release
Case Is One of Many Prosecuted By United States Attorney Wigginton Aimed at Those Who Commit Tax Fraud
Follow @SDILNewsSylvin Baker, 58, from East St. Louis, pled guilty to one count of making a false claim for a federal tax refund in submitting a false federal income tax return, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Baker faces a prison sentence of up to 5 years, a fine of up to $250,000, and up to 3 years’ supervised and mandatory restitution. Baker was indicted with three other metro east individuals for participating in a tax refund scheme. Sentencing has been set for May 22, 2015.
The prosecution is the result of an investigation conducted by the Internal Revenue Service/Criminal Investigations. The case is being prosecuted by Assistant United States Attorney Norman R. Smith.
Man Who Shot and Wounded Two Law Enforcement Officers in Nevada County Convicted in Federal Court TrialRead the Press Release
SACRAMENTO, Calif. — After a three-day trial, a federal jury found Brent Douglas Cole, age 61, resident of Nevada County, guilty of assault on a federal officer with a deadly weapon which inflicted bodily injury; assault on a person assisting a federal officer with a deadly weapon which inflicted bodily injury; and discharge of a firearm during and in relation to a crime of violence, United States Attorney Benjamin B. Wagner announced. The trial was held before United States District Judge Garland E. Burrell, Jr.
According to evidence presented at trial, on June 14, 2014, a Bureau of Land Management (BLM) Ranger stopped Cole after he observed him driving his vehicle down a brushed-in trail near the South Yuba River campground in Nevada County. After advising Cole that he could not drive on the trail, the BLM Ranger allowed Cole to leave without issuing him a citation. After Cole departed, the BLM Ranger traveled up the brushed-in trail and discovered a campsite in a small clearing. Located within the campsite, among other items, were two motorcycles, one of which had previously been reported stolen and the other had expired registration tags. The BLM Ranger decided to impound both motorcycles, and subsequently contacted the California Highway Patrol (CHP) to request their assistance.
A short time later, a CHP Officer arrived at the site to assist the BLM Ranger. While both officers were working in the campsite, Cole emerged from the brush surrounding the campsite and announced that he was coming to get his things. The BLM Ranger asked Cole if he was armed, and when Cole replied that he was, the BLM Ranger removed his handcuffs. Cole said he would not allow the BLM Ranger to place the handcuffs on him. He then drew a Taurus .44 caliber revolver from the right side of his waist, pointed the weapon at the BLM Ranger and fired multiple rounds. One round struck the BLM Ranger in the left shoulder. In response to Cole’s actions, both the BLM Ranger and the CHP Officer returned fire. Cole turned the weapon upon the CHP Officer and fired multiple rounds. One of the bullets struck the CHP Officer in the right leg. Cole was struck several times by law enforcement.
After expending his ammunition, and being shot multiple times, Cole told law enforcement he gave up. The two officers handcuffed Cole, called for assistance, and then rendered medical aid to Cole while waiting for fire and medical emergency services to arrive. Cole, the BLM Ranger, and the CHP Officer received medical attention and all survived their wounds.
“Protecting members of law enforcement who protect our communities is one of this office’s most important priorities,” said U.S. Attorney Wagner. “Violence directed at law enforcement officials who are lawfully performing their duties is unacceptable. As a result of the verdict today Mr. Cole is looking at many years in prison. We are grateful for the investigative assistance of our federal and state law enforcement partners, and we thank the Nevada County District Attorney’s Office for its essential assistance and cooperation.”
“Assaulting a federal officer and any officer assisting them in their lawful duties is intolerable,” said Assistant Special Agent in Charge Manuel Alvarez of the Federal Bureau of Investigation’s Sacramento field office. “The FBI will thoroughly investigate such egregious and violent crimes to ensure that the perpetrators face justice for the criminal acts they have committed.”
“This violent event underscores the potential dangers BLM officers face every day as we safeguard the public and natural resources,” said Kynan Barrios, BLM California Special Agent In-Charge. “We appreciate the strong support from all of our law enforcement partners, especially the California Highway Patrol and Nevada County Sheriff’s Department whose actions prevented this incident from ending in greater tragedy.”
“On behalf of the CHP, I wish to extend our appreciation to the Nevada County Sheriff’s Office, the Nevada County District Attorney’s Office, the Federal Bureau of Investigation, the Bureau of Land Management, and the members of the prosecution team and jury,” said CHP Commissioner Joe Farrow. “Officers across the nation face difficult challenges everyday working towards protecting the people in our communities. The fluent partnership between local, state, and federal agencies allowed for this case to be appropriately adjudicated.”
This case was the product of a collaborative state and federal investigation involving the Bureau of Land Management, the Federal Bureau of Investigation, the California Highway Patrol, Nevada County Sheriff’s Office, and the Nevada County District Attorney’s Office. Assistant United States Attorneys Michael D. McCoy and Heiko Coppola are prosecuting the case.
Cole is scheduled to be sentenced by Judge Burrell on May 1, 2015. Cole faces a maximum statutory penalty of 20 years on each of his first two counts of conviction. He faces a term of up to 10 years on the third, which must be served consecutively to any sentence he receives on the first two counts. He also faces a fine of up to $750,000. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Man Sentenced to 5 Years Probation for Unlawfully Procuring CitizenshipRead the Press Release
PITTSBURGH - A resident of Allegheny County has been sentenced in federal court to five years of probation on his conviction of unlawful procurement of citizenship or naturalization, United States Attorney David J. Hickton announced today.
United States District Judge Terrence F. McVerry imposed the sentence on Lahbib Hannoune, 35, of Pittsburgh, Pa.
According to the information presented to the court, Hannoune falsely answered in the negative a question about whether he had committed a crime for which he had not yet been arrested during his naturalization proceedings. At the time he answered the question, Hannoune had already engaged in unlawful contact with a person represented to be a minor for the purpose of engaging in online video display of sexual conduct. The person was actually an undercover police officer. Hannoune procured naturalized U.S. citizenship based upon his answer.
Judge McVerry ordered Hannoune’s naturalized citizenship be revoked, undoing the result of his fraud.
Assistant United States Attorney Paul E. Hull prosecuted this case on behalf of the government.
U.S. Attorney commended Homeland Security Investigations and the Office of Attorney General for the successful investigation leading to the prosecution of Lahbib Hannoune.
Louisiana Army National Guard Soldier Pleads Guilty to Conspiracy to Commit Theft of Government FundsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that RAMON E. MADRID, 29, a resident of Kenner, pled guilty yesterday to one count of conspiracy to commit theft of government funds.
According to court documents, MADRID’s co-defendant, PABLO PAZ, was a recruiter for the Louisiana Army National Guard. In this capacity, PAZ obtained personally identifiable information (PII), such as names, dates of birth and social security numbers, from potential soldiers that came to the recruiting station for the purpose of becoming a soldier. PAZ provided the PII of potential soldiers to MADRID without the knowledge or consent of the soldiers, to obtain Guard Recruiter Assistance Program (G-RAP) incentive payments to which they were not entitled. MADRID received approximately $30,000 in fraudulently obtained recruitment incentive payments, and provided a portion of the funds to PAZ.
MADRID faces a maximum term of five years imprisonment, a fine of up to $250,000, and up to three years of supervised release. U.S. District Judge Jay C. Zainey set sentencing for May 12, 2015.
U.S. Attorney Polite praised the work of the United States Army Criminal Investigation Division Command and the Defense Criminal Investigative Service in investigating this matter. Public Integrity Unit Chief Tracey N. Knight is in charge of the prosecution.
Lawyer Arrested in Multi-Million Dollar World Trade Center Reconstruction Insurance Fraud ScamRead the Press Release
Darius X. Johnson has been arrested on a criminal complaint alleging wire fraud and money laundering in connection with his sale of phony insurance bonds for construction of the World Trade Center PATH transportation hub (“WTC Hub”). His initial appearance is scheduled later today at the federal courthouse in Atlanta, Georgia. The government will seek his removal to the Eastern District of New York for prosecution.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Anthony Scandiffio, Deputy Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI); and Michael Nestor, Inspector General, Port Authority of New York and New Jersey.
According to the complaint, between September 2010 and June 2013, the defendant took part in a scheme to steal money by selling fake insurance bonds to contractors working on large construction projects in New York and elsewhere. Specifically, Johnson, an attorney, sold fraudulent bonds provided by a company called Diamond Indemnity Trust, to a construction subcontractor which had a $6.2 million subcontract to supply and install glasswork at the WTC Hub. To prove that the bonds were backed by assets that could be used if the subcontractor defaulted on the project, Johnson provided, among other things, a phony letter of credit falsely indicating more than $6 million was held in Johnson’s attorney/client trust account in Brooklyn, New York. In 2011, after the subcontractor paid its premium for the fraudulent bonds, Johnson used multiple transactions and bank accounts to wire a substantial portion of the premium payment to himself and a co-conspirator. In 2012, when the subcontractor filed for bankruptcy and defaulted on the WTC Hub project, Johnson and Diamond Indemnity Trust failed to honor the bonds. As a result, the WTC Hub general contractor was forced to pay an additional amount of approximately $2 million to complete the job.
“As alleged, Johnson used deception to personally benefit from the reconstruction of the World Trade Center site while adding significant cost to the project and jeopardizing its timely completion,” stated United States Attorney Lynch. “This Office will investigate and prosecute to the fullest extent those who use important infrastructure projects as vehicles for fraud, deceit, and personal gain.”
“Surety bonds on capital construction projects serve the critical purpose of insuring that the project gets completed in a timely manner, within projected costs, and that the subcontractors and suppliers are paid properly. Fraudulent surety bonds create a dual problem for the construction project and the owner. The premiums are paid out for the surety bonds, and no resulting benefit or protection is obtained. The defendant allegedly victimized a World Trade Center project that was being rebuilt after the terrorist attacks to line his pockets. The Port Authority of NY & NJ, Office of Inspector General will continue to work with our law enforcement partners to prevent and detect all types of construction fraud,” stated Port Authority Inspector General Nestor.
“The World Trade Center reconstruction site is sacred ground, so using its rebuilding to steal money by selling false insurance bonds as alleged in the complaint is a particularly disturbing crime,” said HSI Deputy Special Agent-in-Charge Scandiffio. “HSI is committed to leveraging its unique statutory authorities and investigative expertise to bring down individuals involved in these types of criminal activities.”
The charges contained in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces a maximum sentence of 30 years’ imprisonment on the wire fraud count and 10 years on the money laundering count. Additionally, if convicted, Johnson may be fined up to $1 million for the wire fraud count and $250,000, or up to twice the amount of criminally derived property involved in the transaction, for the money laundering count.
The government’s case is being prosecuted by Assistant United States Attorneys Whitman G.S. Knapp and Brian D. Morris, and Special Assistant United States Attorney Jonathan P. Lax.
This prosecution was the result of efforts by President Obama's Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit http://www.StopFraud.gov.
The Defendant:
DARIUS X. JOHNSON
Age: 48
Atlanta, Georgia
E.D.N.Y. Docket No. 15-M-120
Johnson County Deputy Sheriff’s Work Brought Down Synthetic Drug RingRead the Press Release
KANSAS CITY, KAN. - Tireless investigative work by a Johnson County deputy sheriff was the key to bringing down a drug trafficking ring in Olathe that sold more than $16 million worth of designer drugs in just 14 months, U.S. Attorney Barry Grissom said.
Deputy Christopher Farkes received the U.S. Attorney’s 2015 Guardian of Justice Award Wednesday. Farkes led a three-year investigation that resulted in federal indictments against 13 individuals including the owners of an Olathe-based business, Tracy Picanso and Roy Ehrett.
“Chris Farkes is very intelligent, with great intuition and a great passion for law enforcement,” Grissom said. “He was born to do the work he does.”
In December, Picanso and Ehrett each pleaded guilty to producing and selling misbranded and counterfeit drugs and conspiring to launder the proceeds. They admitted producing and selling dangerous controlled substances and controlled substance analogues of THC (the active ingredient in marijuana) and cocaine-like stimulants. The products sold under exotic names such as Head Trip, Black Arts, Pump It, Grave Digger and Voodoo Doll. The operation stretched from Kansas to Missouri, California, Texas, Georgia and Colorado, involving more than 15 companies with more than 40 financial accounts at more than 10 financial institutions.
“Chris has great analytical skills and an incredible memory,” said Assistant U.S. Attorney Tanya Treadway, who is prosecuting the case. “He has the tenacity and the ability to review mountains of documentary evidence and to weave together an evidentiary chain we can rely on at trial.”
Ryan Williams and Joseph Daneff Receive Guardian Awards for Operation Broken Bone
Also receiving the Guardian of Justice Awards on Tuesday were FBI Special Agent Ryan Williams and Detective Joseph Daneff of the Kansas City, Mo., Police Department. They worked on Operation Broken Bone, an investigation and successful prosecution of a drug trafficking ring that distributed more than $1.6 million worth of cocaine, crack cocaine and marijuana in the Kansas City metro area.
The traffickers employed couriers for transporting drugs and money, and maintained multiple residences where drugs were stored and distributed. Part of the investigation required tracking drug proceeds that were laundered through gambling casinos.
“Investigators overcame seemingly insurmountable obstacles in their quest for justice, leaving no stone unturned and no avenue unexplored,” said Assistant U.S. Attorney Sheri McCracken, who prosecuted the case.
Agencies involved in the joint investigation included the FBI, the Kansas City, Kan., Police Department and the Kansas City, Mo., Police Department.
“These law enforcement officers help set the standards for the men and women who safeguard our neighborhoods and protect the citizens of Kansas,” Grissom said.
The Guardian of Justice Awards recognizes law enforcement officers who did outstanding work on cases that were successfully prosecuted by the U.S. Attorney’s office. Since 2002, the award has been given to state and local law enforcement officers, as well as federal agents, who were nominated by federal prosecutors for their outstanding work.