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Thursday 18 December 2014
California Man Sentenced for Transporting Marijuana CashRead the Press Release
United States Attorney Deborah R. Gilg announced that on December 18, 2014, a California man was sentenced to 12 months plus one day in prison for interstate travel or transportation in aid of racketeering enterprises. Senior United States District Judge Richard G. Kopf also ordered Ryan William Perich, 30, of Elk Grove, California, to pay a fine of $6,000 and to serve three years on supervised release after completing his prison term.
On January 24, 2014, Perich was stopped on westbound I-80 near Lincoln by Lancaster County Sheriff’s Deputies for following a semi-tractor trailer truck too closely. He consented to a search of his rental vehicle, and a total of $934,722 in cash was found. Perich told the deputies he knew the money came from marijuana sales, and said he was transporting the cash to California from the east coast at the direction of other persons. Perich said the money did not belong to him. Papers found in the vehicle contained addresses and entry code numbers for storage units on the east coast and notes believed to contain records of drug debts and/or money collected. Homeland Security Investigations Agents served search warrants at several east coast storage facilities referenced in the notes found in Perich’s rental vehicle and obtained security videos and other information. Security video from one of those facilities showed Perich taking a number of boxes into the storage facility and leaving them there. The $934,722 cash was confiscated and was administratively forfeited to the United States of America by the Department of Homeland Security in April of 2014.
Information obtained from the Drug Enforcement Administration, (DEA), indicated that high-grade, indoor-grow marijuana would sell for approximately $4,500 per pound on the east coast. Based on that estimate, the $934,772 in cash would be roughly equivalent to 94 kilograms or approximately 208 pounds of marijuana.This case was investigated by Homeland Security Investigations and the Lancaster County Sheriff’s Department, with assistance from the Drug Enforcement Administration.
California Man Sentenced for Role in Health Care Fraud Conspiracy and Bank FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that THEODORE PLATANITIS, age 44, of Rancho Cordova, California, was sentenced yesterday after having previously pled guilty to conspiring to commit health care fraud and bank fraud.
U.S. District Judge Kurt D. Engelhardt sentenced PLATANITIS to serve 5 months probation and ordered restitution to the victim in the amount of $16,302.
According to court documents, PLATANITIS worked as a money carrier in an organization that hacked into the e-mail accounts of victims and then used that access to cause sums of money to be wired out of the victim’s bank accounts. PLATANITIS was recruited by unknown individuals to open bank account(s) in the United States to receive fraudulent wire transfers from the bank accounts of victims.
On August 24, 2011, the office manager for a New Orleans physician (“Doctor A”) received an e-mail from Doctor A’s America Online e-mail account requesting that the office manager wire $32,300 from Doctor A’s bank account to PLATANITIS’S bank account. In fact, it was not Doctor A who sent the email, but rather another individual had taken control of Doctor A’s e-mail account, and, without Doctor A’s authorization, drafted and sent the e-mail to Doctor A’s office manager purporting to be Doctor A. Doctor A’s office manager complied with the e-mail, and the money was wired to PLATANITIS’S account.
Once the deposit in the amount of approximately $32,000 had been fraudulently deposited into PLATANITIS’S account, PLATANITIS withdrew approximately $16,150 in cash and, acting upon instructions given to him, took the cash to various Western Union locations in Rancho Cordova, California. He then wired different amounts to different locations in Malaysia in amounts not more than $5,000. Shortly thereafter, PLATANITIS returned to a bank branch and attempted to withdraw the remainder of the funds he had fraudulently obtained from Doctor A from his business account.
U.S. Attorney praised the work of the Federal Bureau of Investigation in investigating this matter. Assistant United States Attorney Jordan Ginsberg was in charge of the prosecution.
California Investment Manager Sentenced to 225 Months in Prison for $33 Million Fraud SchemeRead the Press Release
A California investment manager was sentenced yesterday to serve 225 months in prison for orchestrating a $33 million Ponzi scheme resulting in $15.2 million in losses to investors.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Carlie Christensen of the District of Utah, Special Agent in Charge Mary Rook of the FBI’s Salt Lake City Field Office and Special Agent in Charge John Collins of the Internal Revenue Service-Criminal Investigation’s (IRS-CI) Las Vegas Field Office made the announcement.
Robert L. Holloway, 57, of San Diego, California, was found guilty on Aug. 5, 2014, after a seven-day jury trial, of four counts of wire fraud and one count of making a false income tax return. In addition to the prison sentence, U.S. District Judge Robert J. Shelby of the District of Utah ordered Holloway to pay $15.2 million in restitution.
Evidence presented at trial established that Holloway served as the chief executive officer and managing partner of US Ventures LC between May 2005 and April 2007. From October 2005 until at least April 2007, Holloway recruited investors by making false representations, including that US Ventures used proprietary trading software that was consistently profitable, that US Ventures generated returns of 0.8 percent per trading day and that US Ventures would retain a 30 percent share of investors’ profits as a management fee.
The evidence also showed that Holloway generated and distributed reports to investors showing false daily returns on their investments. Indeed, between October 2005 and April 2007, contrary to the returns shown on the false reports, US Ventures lost more than $10 million in trading, and the “profit” figures on the investor reports were entirely fabricated. US Ventures raised more than $33 million from investors for its purported trading activities.
Evidence at trial further demonstrated that Holloway and US Ventures made “profit distributions” to investors from funds solicited from new investors, and that Holloway misappropriated investors’ funds for a variety of personal expenses, including supporting his then-wife’s eBay business, and purchasing hundreds of thousands of dollars of jewelry. During 2006 alone, Holloway diverted more than $1.2 million in investor funds to a “business” account that he used as a personal account. During that same year, Holloway falsely claimed a gross income of only $27,500 on his personal tax return.
The case was investigated by the FBI’s Salt Lake City Field Office and the IRS-CI’s Las Vegas Field Office. The Commodity Futures Trading Commission and the Securities and Exchange Commission also provided assistance in the investigation. This case was prosecuted by Trial Attorney Thomas B.W. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jason R. Burt of the District of Utah.
California Investment Manager Sentenced to 225 Months in Prison for $33 Million Fraud SchemeRead the Press Release
SALT LAKE CITY - A California investment manager was sentenced late Wednesday afternoon to 225 months in prison for orchestrating a $33 million Ponzi scheme resulting in $15.2 million in losses to investors. U.S. District Judge Robert J. Shelby imposed the sentence in federal court in Salt Lake City.
Robert L. Holloway, 57, of San Diego, California, was found guilty on Aug. 5, 2014, after a seven-day jury trial, of four counts of wire fraud and one count of making a false income tax return. In addition to the prison sentence, Judge Shelby also ordered Holloway to pay $15.2 million in restitution.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Carlie Christensen of the District of Utah, Special Agent in Charge Mary Rook of the FBI’s Salt Lake City Field Office and Special Agent in Charge John Collins of the Internal Revenue Service-Criminal Investigation’s (IRS-CI) Las Vegas Field Office made the announcement.
Evidence presented at trial established that Holloway served as the chief executive officer and managing partner of US Ventures LC between May 2005 and April 2007. From October 2005 until at least April 2007, Holloway recruited investors by making false representations, including that US Ventures used proprietary trading software that was consistently profitable, that US Ventures generated returns of 0.8 percent per trading day and that US Ventures would retain a 30 percent share of investors’ profits as a management fee.
The evidence also showed that Holloway generated and distributed reports to investors showing false daily returns on their investments. Indeed, between October 2005 and April 2007, contrary to the returns shown on the false reports, US Ventures lost more than $10 million in trading, and the “profit” figures on the investor reports were entirely fabricated. US Ventures raised more than $33 million from investors for its purported trading activities.
Evidence at trial further demonstrated that Holloway and US Ventures made “profit distributions” to investors from funds solicited from new investors, and that Holloway misappropriated investors’ funds for a variety of personal expenses, including supporting his then-wife’s eBay business, and purchasing hundreds of thousands of dollars of jewelry. During 2006 alone, Holloway diverted more than $1.2 million in investor funds to a “business” account that he used as a personal account. During that same year, Holloway falsely claimed a gross income of only $27,500 on his personal tax return.
The case was investigated by the FBI’s Salt Lake City Field Office and the IRS-CI’s Las Vegas Field Office. The Commodity Futures Trading Commission and the Securities and Exchange Commission also provided assistance in the investigation. This case was prosecuted by Trial Attorney Thomas B.W. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jason R. Burt of the District of Utah.
Business Partners Plead Guilty to Running Multi-million Dollar Foreclosure Rescue Scam in Bakersfield, Visalia and SalinasRead the Press Release
FRESNO, Calif. — Juan Ramon Curiel, 36, of Visalia, pleaded guilty today to conspiracy to commit mail fraud and bankruptcy fraud in connection with a foreclosure rescue scheme he orchestrated, United States Attorney Benjamin B. Wagner announced. Curiel’s co-defendant and business partner, Santiago Palacios-Hernandez, 45, of Salinas, pleaded guilty to the same conspiracy charge last week.
According to court documents, Curiel and Palacios-Hernandez operated Star Reliable Mortgage, with offices in Bakersfield, Visalia and Salinas. Between August 2010 and October 2011, Curiel and Palacios-Hernandez conspired to defraud homeowners and lenders by offering clients a purported “loan elimination” program that would enable homeowners to own their homes “free and clear” of any loans or mortgages.
Curiel and Palacios-Hernandez charged clients upfront fees ranging from $2,500 up to $4,500 and additional monthly fees and told their clients to stop paying their mortgages. Curiel and Palacios-Hernandez filed various fraudulent documents at county recorders’ offices on behalf of the clients supposedly replacing the legitimate trustees with fictitious trusts affiliated with the defendants or documents that transferred the property to a bankruptcy debtor all in an effort to “cloud title” and halt or stall the foreclosure process. Because foreclosures were stalled, clients continued to pay the monthly fees to defendants believing that their services were legitimate and successful. Instead of owning their homes “free and clear,” however, many of the clients lost their homes in foreclosure.
Curiel and Palacios-Hernandez admitted in their plea agreements that their criminal conduct caused losses of more than $2.5 million. Curiel separately admitted in his plea agreement that he fraudulently filed bankruptcy for one of his clients.
This case is the product of an investigation by the Federal Bureau of Investigation and the Tulare County District Attorney’s Office. Assistant United States Attorneys Christopher Baker and Patrick Delahunty are prosecuting the case.
Curiel and Palacios-Hernandez are scheduled to be sentenced by U.S. District Judge Lawrence J. O’Neill on March 9, 2015, and February 23, 2015, respectively. The maximum statutory penalty they face for conspiracy to commit mail fraud is 30 years in prison and a $1 million fine. Curiel additionally faces a maximum statutory penalty of five years in prison and a $250,000 fine for the bankruptcy fraud conviction. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This announcement was done in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. For more information on the task force, please visit www.StopFraud.gov.
Bismarck Woman Sentenced for Role in Bank RobberyRead the Press Release
FARGO – U.S. Attorney Timothy Q. Purdon announced that on Dec. 18, 2014, Nicole Marie Speed, 35, from Bismarck N.D., was sentenced before U.S. District Judge Ralph R. Erickson to serve Judge Erickson sentenced Speed to 60 months’ probation on condition she be placed on 12 months of home confinement with electronic monitoring and complete 750 hours community service. Speed had previously pled guilty to Accessory after the Fact in connection with the bank robbery of the Northland Financial bank in Medina, North Dakota. She was also ordered to pay restitution of $2670 and a $100 special assessment to the Crime Victims Fund.
On Oct. 25, 2013, Speed provided a handgun to Satrone Boyd which was used in the bank robbery of Northland Financial Bank Medina, N.D. On October 25, 2013, at approximately 9:30 a.m., Boyd and codefendant Rendell Charles Hardy forcefully robbed Northland Financial in Medina, N.D. wearing clown masks. Hardy, in possession of a handgun, demanded money from bank employees after which the two men fled the scene.
Boyd and Hardy later changed vehicles southwest of Medina, N.D., before being identified at a truck stop near the Star Lite Motel in Jamestown, N.D. A surveillance video showed Boyd throwing the masks and a set of keys into the dumpster by the Star Lite Motel. Boyd was later apprehended in Fargo, North Dakota. Judge Erickson previously sentenced Hardy to serve 12 1/2 years in prison for bank robbery and possession of a firearm during the commission of a violent crime. Boyd was sentenced to serve 7 ½ years in prison for the bank robbery.
The case was investigated by the Federal Bureau of Investigation together with the Stutsman County Sheriff’s Office, the North Dakota Highway Patrol, the Dickinson Police Department and the Fargo Police Department.
Assistant U.S. Attorney Keith Reisenauer prosecuted the case.
Baltimore Couple Sentenced to Prison for Armed Robbery of a Convenience StoreRead the Press Release
Also Robbed Three More Convenience Stores at Gunpoint
Baltimore, Maryland – U.S. District Judge William D. Quarles, Jr. sentenced Brandon Ferrell, age 23, and Stephanie Amber Smith, age 24, both of Baltimore to 20 years in prison and thirteen years in prison, respectively, each followed by three years of supervised release, for the armed robbery of a convenience store on September 27, 2013, and possession of a firearm in furtherance of a crime of violence. The couple admitted that they committed three additional armed convenience store robberies two days later. Ferrell was sentenced on December 17, 2014 and Smith was sentenced today.
The sentences were 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; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Gregg L. Bernstein.According to their plea agreements, on September 27, 2013, Ferrell and Smith stole approximately $160 from a convenience store located in the 3500 block of Boston Street in Baltimore. Ferrell entered the store first, grabbed an iced-tea and walked to the counter. Then Smith entered the store, pointed a semi-automatic pistol at the clerk, and demanded money. Ferrell removed the money from the cash drawer located behind the counter. Ferrell and Smith then fled the store.
Ferrell and Smith robbed three other convenience stores at gunpoint on September 29, 2013.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney James G. Warwick, who prosecuted the case.
Auburn Man Sentenced to 18 Months in Prison for Lying to Obtain Workers’ Compensation FundsRead the Press Release
SACRAMENTO, Calif. — Bruce Lee Cearlock, 79, of Auburn, was sentenced today by United States District Judge Troy L. Nunley to 18 months in prison for making false statements to obtain federal employee’s compensation, United States Attorney Benjamin B. Wagner announced. Cearlock was also ordered to pay restitution of over $73,000.
This case was the product of an investigation by the Department of Defense, Defense Criminal Investigative Service (DCIS), Sacramento; the Naval Criminal Investigative Service (NCIS); and the United States Department of Labor – Office of the Inspector General. Assistant United States Attorney Jean M. Hobler prosecuted the case.
According to court documents, Cearlock received workers’ compensation benefits under the Federal Employees’ Compensation Act (FECA) for an injury that he suffered as a civilian employee for the U.S. Navy on August 26, 1987. When filing the periodic reports required by the Office of Workers’ Compensation Program (OWCP) to justify continued payments, between 2006 and 2008, Cearlock stated under penalty of perjury that he was neither self-employed nor involved in “any business enterprise.”
However, from at least 1999 until 2011, Cearlock was involved in operating “Fuse,” a bar in San Francisco, and ran various businesses prior to Fuse dating back to 1987. In his role in operating Fuse, Cearlock hired and fired employees, made decisions on capital expenditures, and interacted with private citizens and public officials as the owner of Fuse. In addition, during this time period, Cearlock was the president and secretary of a privately held corporation, Alleycorp Inc., whose sole purpose was to own the Fuse nightclub. Shares in Alleycorp were split equally between Cearlock and his wife. On the basis of his statements to OWCP that he was not involved in any business enterprise, and his continuing statements that he was incapable of earning wages due to his 1987 injury, Cearlock continued to receive federal disability benefits.
Attorney Who Helped Owner of Marijuana Stores Launder Illegal Proceeds Pleads Guilty in Federal Money Laundering CaseRead the Press Release
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USDOJ: US Attorney's Office - CENTRAL DISTRICT OF CALIFORNIA - 164SANTA ANA, California – An attorney who engaged in a conspiracy that allowed the owner of a chain of marijuana stores to hide some of his income has pleaded guilty to federal financial offenses.
Guilty pleas by Richard C. Brizendine, 59, of Long Beach, were entered Monday by United States District Judge James V. Selna. Monday’s action concludes proceedings in which Brizendine pleaded guilty to two counts: money laundering and conspiracy to structure cash deposits to avoid federal reporting requirements.
Brizendine was an attorney for John Melvin Walker, who operated marijuana stores across Los Angeles and Orange counties and generated approximately $25 million in income over a six-year period. Brizendine conspired with Walker and others to accept cash from the marijuana operation and invest the funds into several corporations. According to court documents, Brizendine agreed to accept more than $10,000 in cash and then make smaller deposits into different bank accounts so as to not trigger federal requirements that financial institutions report currency transactions of more than $10,000 (this process is called structuring cash transactions). By pleading guilty, Brizendine specifically admitted that he structured approximately $389,700 for Walker.
The case against Brizendine was announced today after Judge Selna unsealed documents associated with the case.
Last year, Walker was sentenced to nearly 22 years in federal prison for operating a chain of marijuana and failing to reporter millions of dollars in revenues was on his taxes (see: http://www.justice.gov/usao/cac/Pressroom/2013/096.html).
Judge Selna is scheduled to sentence Brizendine on May 4, 2015. At that time, Brizendine will face a statutory maximum sentence of 10 years in federal prison. Until that time, he will remain free on a $500,000 bond.
The investigation of Brizendine and the marijuana operation was conducted by the Orange County Sheriff’s Department; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; IRS-Criminal Investigation; the California Board of Equalization; the Orange County District Attorney’s Office; and the Federal Bureau of Investigation.
Release No. 14-164
Attorney General Holder Directs Department to Include Gender Identity Under Sex Discrimination Employment ClaimsRead the Press Release
New Memo Applies to All Department of Justice Components and U.S. Attorneys
Attorney General Holder announced today that the Department of Justice will take the position in litigation that the protection of Title VII of the Civil Rights Act of 1964 extends to claims of discrimination based on an individual’s gender identity, including transgender status. Attorney General Holder informed all Department of Justice component heads and United States Attorneys in a memo that the department will no longer assert that Title VII’s prohibition against discrimination based on sex excludes discrimination based on gender identity per se, including transgender discrimination, reversing a previous Department of Justice position. Title VII makes it unlawful for employers to discriminate in the employment of an individual “because of such individual’s…sex,” among other protected characteristics.
“This important shift will ensure that the protections of the Civil Rights Act of 1964 are extended to those who suffer discrimination based on gender identity, including transgender status,” said Attorney General Holder. “This will help to foster fair and consistent treatment for all claimants. And it reaffirms the Justice Department’s commitment to protecting the civil rights of all Americans.”
The Attorney General’s memo is designed to foster consistent treatment of claimants throughout the government and reduce confusion. In addition to applying to the department’s civil obligations in defending federal interests, this memo clarifies the Civil Rights Division’s ability to file Title VII claims against state and local public employers on behalf of transgender individuals. The Department of Justice does not have authority to file suit against private employers.
Atlanta Internet Entrepreneur Convicted of Hiding Income and Assets in Swiss Bank AccountRead the Press Release
ATLANTA – Gregg A. Kaminsky has pleaded guilty to one count of wilfully failing to file a Foreign Bank Account Report with the U.S. Department of Treasury in connection with his concealment of income and assets in accounts in Switzerland, Hong Kong, and Thailand over several years, as well as his failure to report certain income earned in the virtual world, “Second Life.”
“This prosecution is a yet another reminder that the days of Americans hiding income and assets overseas are over,” said United States Attorney Sally Quillian Yates. “It also sends a strong message that U.S. taxpayers are required to report all of their taxable income to the IRS, whether that income is earned in the real world or in a virtual world.”
“U.S. citizens who seek to avoid their tax obligations by hiding income in undeclared bank accounts abroad should by now be fully on notice that they will be held accountable for their actions, both civilly and criminally,” stated IRS Criminal Investigation Special Agent in Charge, Veronica F. Hyman-Pillot. “Americans who file accurate, honest and timely returns can be assured that the government will hold accountable those who don’t.”
According to United States Attorney Yates, the charges and other information presented in court: Citizens and residents of the United States who have a financial interest in, or signature authority over, a financial account in a foreign country with an aggregate value of more than $10,000 at any time during a calendar year are required to file with the U.S. Department of Treasury a “Report of Foreign Bank and Financial Accounts,” commonly referred to as the “FBAR.” The FBAR for the applicable year must be filed by June 30 of the following year.
Kaminsky is an Internet entrepreneur who serves as the Chief Executive Officer of Circlenet LLC, based in Atlanta, Ga. From 2000 through 2008, Kaminsky owned and controlled a foreign bank account with Union Bank of Switzerland AG (“UBS”), one of the biggest banks in Switzerland and largest wealth managers in the world. By 2006, Kaminsky’s UBS account held approximately $1.1 million. From time to time between 2002 and 2009, Kaminsky caused funds to be wire-transferred from his UBS account in Switzerland to other foreign bank accounts controlled by him in Thailand and Hong Kong. Also during that time, Kaminsky caused his income from at least two different U.S. companies to be direct-deposited into his UBS account in Switzerland.
Yet, over this period, Kaminsky did not disclose his UBS account or other foreign financial accounts to the U. S. Treasury Department as required, and thereby concealed several hundred thousand dollars in taxable income, interest, and dividends from the U.S. Internal Revenue Service (IRS).
In addition, in 2007 and 2008, Kaminsky omitted his UBS account and associated income from Free Applications for Federal Student Aid (FASFA) that he electronically filed with the U.S. Department of Education in order to qualify for need-based federal financial aid assistance to fund his tuition for an Executive MBA program at Emory University. At the time of the FASFA applications, Kaminsky controlled over a half million dollars in his UBS account, which would have made him ineligible for federal student loan assistance.
On June 30, 2008, the U.S. Department of Justice sought court approval to compel UBS to disclose the identities of U.S. accountholders who may be using UBS accounts to hide assets overseas and thereby evade U.S. taxes. The request and the order authorizing it were widely reported by the media throughout the United States, which coverage continued throughout 2008 and 2009 as the U.S., UBS, and Switzerland negotiated a resolution and UBS began disclosing U.S. account holders to the IRS.
Following this news, Kaminsky closed his UBS account and transferred the balance of his UBS account to an account that he controlled at HSBC Bank in Hong Kong. Further, in spring 2010, Kaminsky filed FBARs for his Swiss and Hong Kong accounts for the very first time, also filing amended individual income tax returns for 2007 and 2008 that disclosed the previously unreported income in his UBS account. However, in his amended 2007 and 2008 returns, and in his subsequently filed returns for 2009 through 2011, Kaminsky still failed to report nearly $150,000 in taxable income earned from his business activities in the virtual world, “Second Life.”
Participants in Second Life, referred to as “residents,” can engage in a wide variety of business activities, including buying, renting, and sub-leasing virtual land and buying and selling other virtual goods, services, and experiences for their “avatars.” Transactions are conducted using a virtual currency, “Linden Dollars.” Linden Dollars can be bought and traded on the “Linden Exchange,” and are redeemable for cash.
Including his virtual world income, Kaminsky failed to report over $400,000 in income to the IRS between 2000 and 2012, resulting in a loss to the IRS of over $100,000.
Kaminsky, 46, of Atlanta, Ga., faces a maximum sentence of five years in prison and a criminal fine of up to $250,000. In addition, as part of his plea agreement with the United States, Kaminsky has agreed to pay a civil penalty to the IRS in the amount of $250,635.20, which is equivalent to fifty percent of the value of the balance in Kaminsky’s HSBC account in Hong Kong as of June 30, 2009.
Sentencing is scheduled for March 4, 2015 at 10:00 a.m. before Senior United States District Judge Willis B. Hunt.
This case is being investigated by Special Agents of the Criminal Investigation division of the U.S. Internal Revenue Service. Valuable assistance has also been provided by Special Agents of the U.S. Department of Education, Office of Inspector General.
Assistant United States Attorney David M. Chaiken is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Alexander County Man Sentenced for Federal Firearm OffenseRead the Press Release
Follow @SDILNewsOn December 16, 2014, Keithy D. Carter, a/k/a “Darnell K. Carter,” 21, of Tamms, IL, was sentenced for a federal firearm violation, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Carter, who had previously pled guilty to a one-count indictment, charging Unlawful Possession of a Firearm by a Felon, was sentenced to 70 months in prison, to be followed by 3 years’ supervised release, and fined $200.00. Evidence at the plea and sentencing hearings established that, on January 14, 2014, Carter possessed a Hi-Point, model C9, 9mm Luger semiautomatic pistol, in Tamms, Alexander County. The firearm had been used the day before by another individual to commit a homicide in Jackson County. Because Carter had previously been convicted of a felony, he is prohibited from possessing firearms.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The Carbondale Police Department and Jackson County State’s Attorney’s Office also assisted in the investigation.
The case was assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Albuquerque Man Sentenced to Twenty Years for Conviction on Robbery, Carjacking and Firearms ChargesRead the Press Release
Co-Defendant Previously Sentenced to Eighteen Years in Prison;
Case Prosecuted Under Federal “Worst of the Worst” Anti-Violence InitiativeALBUQUERQUE – Joel Meeks, 21, of Albuquerque, N.M., was sentenced late this afternoon to 20 years in federal prison for his conviction on robbery, carjacking and firearms charges. Meeks will be on supervised release for three years after completing his prison sentence. His co-defendant, Raul Ortega, 22, also of Albuquerque, previously was sentenced in Aug. 2014, to 18 years in federal prison followed by three years of supervised release. The two men jointly are required to pay $2,482.04 in restitution to the victims of their criminal conduct.
The sentences were announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Carol K.O. Lee of the Albuquerque office of the FBI, and Chief Gorden Eden, Jr., of the Albuquerque Police Department
Meeks and Ortega were arrested in April 2013, on an eight-count indictment charging the pair with offenses stemming from a series of armed robberies of commercial businesses and home invasions, including armed robbery and carjacking, occurring in Bernalillo County, N.M., from Dec. 6, 2012 to Jan. 17, 2013. According to court filings, Meeks robbed a business called “Up in Smoke” at gunpoint on Dec. 6, 2012. Meeks also robbed a business called “PDQ” at gunpoint on Dec. 7, 2012, and discharged his firearm while committing the crime. Meeks and Ortega jointly committed two carjackings on Jan. 13, 2013 and Jan. 17, 2013, and brandished firearms while committing those crimes.
On April 1, 2014, Meeks entered guilty pleas to Counts 3 and 4 of the indictment, which charged him with robbing the PDQ store on Dec. 7, 2012, and with discharging a firearm while robbing the store. He also pled guilty to Counts 5 and 7, which charged him with the Jan. 13, 2013 carjacking and Jan. 17, 2013 carjacking, respectively.
On Feb. 19, 2014, Ortega pled guilty to Counts 5 and 7 of the indictment, which charged him with the Jan 13, 2013 and Jan. 27, 2013 carjackings. He also pled guilty to Count 6, which charged him with using a firearm during the Jan 13, 2013 carjacking.
This case was brought who brought this case as part of a law enforcement initiative launched in July 2012, by the FBI’s Violent Crimes and Major Offender Squad and the Albuquerque Police Department’s Armed Robbery Unit that targets suspects implicated in commercial armed robberies. This initiative is part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under the worst of the worst anti-violence initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from our communities for as long as possible.This case was investigated by the Albuquerque office of the FBI and the Albuquerque Police Department, with assistance from the 2nd Judicial District Attorney’s Office and was prosecuted by Assistant U.S. Attorney Jon K. Stanford.
Alabama Medical Clerk Sentenced to Prison for Stolen Identity Tax Refund Fraud Scheme that Involved Corrupt U.S. Postal Service EmployeeRead the Press Release
An Alabama woman was sentenced today to serve 70 months in prison for her involvement in a stolen identity tax refund fraud (SIRF) scheme, Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama announced.
Sasha Webb was also ordered to serve three years of supervised release following her prison sentence and to pay $528,823 in restitution.
According to court documents and court proceedings in this and related cases, Webb worked as a medical records clerk at an Alabama Department of Corrections facility in Elmore County, Alabama, where she had access to the means of identification of inmates from databases maintained by the Alabama Department of Corrections. On several occasions in 2009 and 2010, Webb stole identities from those databases and sold them to Harvey James and his sister, Jacqueline Slaton, for the purpose of filing false tax returns.
Between 2010 and 2012, James and Slaton used those stolen identities to file false federal and state tax returns. James and Slaton directed some of the false refunds to be sent to either prepaid debit cards or issued via check. James’s brother-in-law, Gregory Slaton, recruited Vernon Harrison, a U.S. Postal Service employee, to the scheme. James directed prepaid debit cards and state tax refund checks to be mailed to addresses that Harrison provided from his postal route. Harrison collected the debit cards and checks and provided them to Gregory Slaton who in turn gave them to James and Jacqueline Slaton. In total, James and Slaton filed more than 1,000 federal and state income tax returns that claimed more than $1 million in fraudulent tax refunds.
On Oct. 31, 2013, Harrison was sentenced to serve 111 months in prison. James was sentenced on April 29, 2014, to serve 110 months in prison and Jacqueline Slaton was sentenced on Oct. 23, 2012, to serve 70 months in prison. Gregory Slaton was sentenced on Oct. 28, 2014, to serve 70 months in prison.
The case was investigated by special agents of the Internal Revenue Service - Criminal Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the U.S. Postal Service’s Office of the Inspector General. Trial Attorneys Jason H. Poole and Michael C. Boteler of the Tax Division are prosecuting the case with the assistance of Assistant U.S. Attorney Todd Brown for the Middle District of Alabama.
Additional information about the Tax Division and its enforcement efforts may be found at the division website.
Alabama Man Sentenced for Stolen Identity Refund Fraud Using Names Stolen from Nursing HomesRead the Press Release
A Pike Road, Alabama, man was sentenced to serve 51 months in prison today for committing stolen identity refund fraud (SIRF) crimes, announced Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama.
Charlie Jackson pleaded guilty to wire fraud and aggravated identity theft on May 5, and was also ordered to serve three years of supervised release following his prison term and to pay $98,177 in restitution. According to court documents, from October 2010 up until April 2013, Jackson was involved in SIRF crimes—the use of stolen identities to steal money from the Internal Revenue Service (IRS)—by filing fraudulent tax returns claiming refunds in the victims’ names. He admitted to obtaining stolen identities from various sources, including from nursing homes. Altogether, the false tax returns filed by Jackson fraudulently claimed more than $170,000 in refunds. Many of the returns were detected as fraudulent by the IRS and were not issued, however, Jackson was successful in defrauding the IRS of more than $90,000 in illegitimate refunds.
This case was investigated by special agents of the IRS-Criminal Investigation. Trial Attorneys Michael C. Boteler and Charles M. Edgar Jr. of the Tax Division prosecuted the case with the assistance of Assistant U.S. Attorney Todd Brown and the U.S. Attorney’s Office for the Middle District of Alabama.
Additional information about the Tax Division and its enforcement efforts may be found on the division website.
Alabama Man Indicted for Stolen Identity Refund FraudRead the Press Release
An Alabama man was indicted for stolen identity refund fraud, Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama announced today following the unsealing of the indictment.
Jerome Marcel Newton was indicted on one count of mail fraud and one count of aggravated identity theft.
According to the indictment, Newton obtained personal identifying information through various means, including by using other individuals to collect identities and by recruiting people to provide their identities. Newton is alleged to have used the identities he obtained to file fraudulent tax returns, directing the refunds claimed on the returns into bank accounts or onto prepaid debit cards.
An indictment merely alleges that crimes have been committed and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Newton faces a statutory maximum sentence of 20 years in prison for the mail fraud count and a statutory mandatory sentence of two-years in prison for the aggravated identity theft count. The actual sentence imposed on Newton if convicted, however, will be decided by a federal judge after consulting the sentencing guidelines, which are not binding but provide appropriate sentencing ranges for most offenders. Newton is also subject to fines and mandatory restitution if convicted.
This case was investigated by special agents of the Internal Revenue Service - Criminal Investigation, with assistance from the Sheriff’s Office for Douglas County, Georgia. Trial Attorneys Jason Poole and Michael Boteler of the department’s Tax Division are prosecuting the case with the assistance of Assistant U.S. Attorney Todd Brown and the U.S. Attorney’s Office for the Middle District of Alabama.
Additional information about the Tax Division and its enforcement efforts can be found on the division’s website.
66-Count Indictment Charges Rhode Island Businessman with Aggravated Identity Theft, Filing False Tax Returns Seeking $3.56 Million in Tax RefundsRead the Press Release
PROVIDENCE, R.I. – Anthony Delfarno, 52, of East Greenwich, R.I., was arraigned in U.S. District Court in Providence today on a 66-count federal indictment which alleges that Delfarno used personal identifying information of his minor and adult children, his former spouse and a girlfriend, along with information from more than a dozen corporations that he created, to file fraudulent tax returns seeking more than $3.5 million dollars in tax refunds.
According to the indictment returned on Wednesday and unsealed today, it is alleged that between April 2009 and September 2013, Delfarno repeatedly made false representations on personal and business tax documents he filed with the IRS seeking $3,557,653 in tax refunds, when in fact the true holdings by the IRS totaled $15,544.02.
The indictment alleges that Delfarno opened numerous bank accounts in Rhode Island, into which he directed that the refunds be deposited. According to information presented to the court, it is alleged that Delfarno collected more than $1.4 million dollars in tax refunds to which he was not entitled.
The indictment and arrest of Anthony Delfarno is announced by United States Attorney Peter F. Neronha; William P. Offord, Special Agent in Charge of IRS Criminal Investigation; and Colonel Steven G. O’DonnellSuperintendent of the Rhode Island State Police.
The 66-count indictment charges Anthony Delfarno with 11 counts of wire fraud, 3 counts of aggravated identity theft and 52 counts of false claims against the United States. An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Delfarno was arrested this morning by agents from the Internal Revenue Service Criminal Investigation, who conducted the investigation with the assistance of the Rhode Island State Police. Delfarno was released to home detention with GPS monitoring and $100,000 unsecured bond following his arraignment before U.S. District Court Magistrate Judge Patricia A. Sullivan. A not guilty plea was entered on Delfarno’ s behalf.
Wire fraud is punishable by statutory penalties of up to 20 years in federal prison and a fine of up to $250,000; false claims against the United States is punishable by a statutory penalty of up to 5 years in federal prison and a fine of up to $250,000; and aggravated identity theft is punishable by a statutory penalty of a mandatory sentence of two years in federal prison, to be served consecutive to all other penalties imposed.
The case is being prosecuted by Assistant U.S. Attorney Richard W. Rose.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. The President established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.
The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]
Wednesday 17 December 2014
Youngstown Man Charged with Failing to Register as a Sex OffenderRead the Press Release
A federal grand jury returned a one-count indictment charging Anthony Rivera-Santana, 38, of Youngstown, with failure to register as a sex offender, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.The indictment charges that beginning on or about May 1, 2013, to December 3, 2014, Rivera-Santana failed to register as a sex offender as required under the Sex Offender Registration and Notification Act, after having traveled in interstate commerce.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the United States Marshals Service. The matter is being prosecuted by Assistant United States Attorney David M. Toepfer.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Yancey Co. Man Sentenced to More Than 21 Years in Prison Production of Child Pornography ChargesRead the Press Release
ASHEVILLE, N.C. – Today, U.S. District Judge Martin Reidinger sentenced Brian Wayne Moore to 262 months in prison on federal production of child pornography charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Moore was also ordered to register as a sex offender and to serve the rest of his life under court supervision after he is released from prison. Judge Reidinger also ordered Moore to have no contact with victims of child pornography.
U.S. Attorney Tompkins is joined in making today’s announcement by Brock D. Nicholson, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas and Sheriff Gary Banks of the Yancey County Sheriff’s Office.
In August 2013, Moore, 28, of Burnsville, N.C., pleaded guilty to one count of production of child pornography and one count of possessing child pornography. According to filed documents and statements made in court, in May 2012, law enforcement became aware of Moore’s production of child pornography after it was reported by a family member. Law enforcement later searched a cellular phone and computer equipment pursuant to a search warrant. Court records indicate that after producing the child pornography, Moore distributed it to another person he met on the Internet who he believed to be a sixteen year old.
Moore has been in federal custody since February 2013. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation was handled jointly by HSI and the Yancey County Sheriff’s Office.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice, aimed at combating the growing online sexual exploitation of children. By combining resources, federal, state and local agencies are better able to locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue those victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Waipahu Man Charged with Producing and Possessing Child PornographyRead the Press Release
HONOLULU -- A federal grand jury returned an indictment today charging Derek M. West, 32, a resident of Waipahu, Hawaii, with three counts of producing child pornography, and one count of possessing child pornography. West was arraigned following the indictment and pled not guilty before Magistrate Judge Kevin S.C. Chang, who ordered West detained without bail pending trial, scheduled for February 17, 2015 before District Judge Derrick K. Watson.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to a complaint and affidavit signed on December 16, 2014, the case began with a report to the Honolulu Police Department (HPD) that child pornography had been found on West’s cellular telephone. The affidavit alleges HPD detectives obtained a search warrant for the telephone, and found approximately 482 images that depicted children engaged in sexually explicit conduct, including a two year-old engaged in a sexual act with a person identified as West. HPD detectives then contacted the Federal Bureau of Investigation (FBI) because some images were found in a computer application based in Canada. West was arrested on December 16, 2014 by FBI agents and HPD officers.
If convicted of the charges in the indictment, West faces a minimum of 15 years and a maximum of 30 years as to each of the three production of child pornography counts, and up to ten years as to the possession of child pornography count. The charges in the indictment are merely accusations, and West is presumed innocent until proven guilty.
The arrest and charges resulted from a joint investigation conducted by the HPD, FBI and Homeland Security Investigations. The case is being prosecuted by Assistant U.S. Attorney Larry Tong.
University of Great Falls Student Sentenced to Six Month in Custody for FAFSA FraudRead the Press Release
GREAT FALLS – Former University of Great Falls student, Brenden James Leischner, 24, now of Indio, California, was sentenced to six months in federal custody for Federal Student Financial Aid Fraud, by U.S. District Judge Brian Morris. The United States Attorney’s Office announced that today’s sentence also included five years’ probation, $82,237 in restitution to the U.S. Department of Education, $2500 in payment for court-appointed counsel to the U.S. District Court, and a $25 special assessment.
At an earlier hearing, federal prosecutors told the Court that Brenden Leischner, son of Mark and Tammy Leischner, who have also plead guilty to multiple felonies involving embezzlement of federal funds, bankruptcy fraud, obstruction of justice and federal student financial aid fraud, applied for admission and was accepted to the University of Great Falls (UGF) in the Fall of 2009 as a Criminal Justice major. While enrolled at UGF, Leischner and his parents completed multiple Free Application for Federal Student Aid (FAFSA) applications in which they concealed significant income that would have disqualified them for student and parental loans and grants.
On August 29, 2012, Mark Leischner applied for a PLUS Loan (Parent Loan for Undergraduate Student) which was declined the next day due to lack of credit-worthiness. A week later, on September 8, 2012, Mark Leischner filed an Endorser Addendum for Federal Direct PLUS Loan and listed his son-in-law, as a co-signer for the $17,500 loan. The son-in-law had sufficient credit worthiness so the loan was approved, obligating the son-in-law to pay the debt. Brenden’s sister, told law enforcement that Brenden stayed with them for a portion of that summer and had a bedroom downstairs where the family file cabinet was kept and had access to her husband’s social security number. The son-in-law later filed an identity theft complaint with Yellowstone County for his father-in-law’s use of his name and social security account number to obtain the loan and harm his credit. The son-in-law had discovered the theft of his identity when he had attempted to get new mortgage financing and had been denied because of the PLUS loan.
This loan was processed through the University of Great Falls. When the money arrived Brenden went to the Financial Aid office and asked for the entire amount—less what the college retained to pay his bills to them—and they wrote him a check for $13,374 which Brenden took to his bank and converted all but $1000 into cash; of which, according to Brenden, he gave $6000 to Mark Leischner to pay on a past due mortgage payment and other bills, all unassociated with Brenden’s educational expenses. After becoming aware of the federal student aid fraud investigation, Mark Leischner called the Financial Aid office and said something to the effect of “I think Brenden may have made off with the money from that loan.”
By 2013, Brenden Leischner was an emancipated adult and filed his own FAFSA—without having to disclose any income or assets but his own, on May 2, 2013, for aid in the 2013-2014 academic year. He claimed to be married and may have or not had a legally recognizable marriage under common law. There is no evidence that he and his girlfriend were ever married by license or ceremony. On her FAFSA, his then girlfriend indicated they were married as well. Independent married students get more federal aid than unmarried students.
Brenden Leischner failed to disclose that he had received a $105,000 medical malpractice insurance payment two months earlier, in February 2013. Leischner deposited $50,000 of his medical settlement with the investment company Waddell and Reed and then made withdrawals totaling $16,000 from the investment in the form of checks issued payable to him in April ($3,500), May ($7,500) and June 2013 ($5,000). After reviewing these check disbursements, Brenden admitted he had cash funds available in May 2013. Investigation disclosed that after receiving the $105,000, Brenden Leischner bought himself a Hummer and took an extended vacation to Hawaii with his girlfriend.
Mark and Tammy Leischner, and Brendon Leischner’s uncle, James Eastlick, Jr. are scheduled for sentencing in federal court in March 2015. Brenden’s grandfather, James Eastlick, Sr., was sentenced to a year in federal prison in September 2014 for his role in the embezzlement of $311,000 of federal funds.The case was brought by the federal agents of the Guardians Project and was investigated by the Office of Inspector General of the Department of Interior, with the support of the Internal Revenue Service’s Criminal Investigation Division and the Office of Inspector General for the U.S. Department of Education.
United States Announces over $100,000 in Civil Fines for Three Remaining Defendants in CHG Time Card Fraud CaseRead the Press Release
Spokane – Today, the United States Attorney’s Office for the Eastern District of Washington announced that a former supervisor and two former managers of CH2M Hill Hanford Group Inc., (CHG) would each be required to pay tens of thousands of dollars in civil fines for their roles in the multimillion dollar CHG Time Card Fraud Scheme. Collectively the civil fines for these three remaining defendants totals over $100,000. The CHG Time Card Fraud Scheme involved routine and systematic inflation of overtime hours claimed by CHG workers over nearly a decade. The inflated hours were paid for directly by the Department of Energy (DOE) with taxpayer money. In addition to these civil fines, the investigation and prosecution of the scheme has resulted in 11 guilty pleas to felony conspiracy charges, two by former CHG supervisors, as well as an $18.5 million settlement with CHG, which itself admitted to the routine and systematic practice of defrauding the government with inflated labor hours.
In October a jury returned verdicts of not guilty for four former supervisors, known as Persons in Charge or PICs, for their alleged role in the CHG Time Card Fraud Scheme. The settlements with three of the remaining defendants: a former supervisor, Stephanie Hilton Livesey; and two former managers, Ryan Albert Dodd and Terrence Leroy Hissong; were part of individual global resolutions in which the pending criminal charges against them are anticipated to be dismissed.
“While we respect the decision of the jury in the PIC time card fraud trial, we do not understand it to be a rejection of what nearly a dozen former employees, including supervisors, have admitted to along with their former employer CHG- that there was a systemic pattern of time card fraud at CHG that stole millions from the taxpayers,” stated Michael C. Ormsby United States Attorney’s Office for the Eastern District of Washington. “Today’s resolution of three of the remaining defendants should serve as a further warning to those who would assist fraud at Hanford in any way- we will aggressively use all tools at our disposal to appropriately hold you accountable,” said Mr. Ormsby.
Ryan Albert Dodd was a Vice President at CHG during the time card fraud scheme and was placed on notice of the fraud as early as 2004, according to court documents filed by the United States Attorney. According to the civil settlement agreement, the United States contended that Mr. Dodd knowingly utilized the false time card information to justify inflated payments from DOE as well as to obtain corporate bonuses for himself. Under the terms of the settlement agreement Mr. Dodd did not admit to the allegations. Mr. Dodd has paid his fine of $44,000.00 in settlement of the allegations that he knowingly participated in the CHG Time Card Fraud Scheme.
Terrence Leroy Hissong worked for CHG as a Single Shell Tank Retrieval Director and as Tank Farms Management Director. Similar to Mr. Dodd, the United States contended that Mr. Hissong knowingly authorized overtime hours that he knew would not be fully worked but that would be charged nonetheless to the Department of Energy. The United States further contended that Mr. Hissong also knew that some workers, while not leaving the Tank Farms early, nonetheless lied on their time cards claiming that they were working a particular job when in fact they were doing busy work or no work at all while just running out the clock. As a result of his participation in the fraud, the United States claims Mr. Hissong received corporate bonuses that he otherwise would not have. Under the terms of the settlement agreement Mr. Hissong did not admit to the allegations. Mr. Hissong has paid a fine of $44,000.00 in settlement of the allegations that he knowingly participated in the CHG Time Card Fraud Scheme.
Stephanie Hilton Livesey worked for CHG as a first line manager with time card approval authority. The United States contended that she knowingly approved false time cards of the hourly workers below her which allowed them to be paid by DOE for hours they did not work. Unlike, Mr. Dodd and Mr. Hissong, Ms. Livesey did not receive corporate bonuses while at CHG. Ms. Livesey did not admit to the allegations under the terms of the settlement agreement. Ms. Livesey agreed to pay a fine of $22,000.00 in settlement of the allegations that she knowingly participated in the CHG Time Card Fraud Scheme.
The United States’ criminal case against these three defendants was captioned as United States of America vs. Ryan Albert Dodd, Terrence Leroy Hissong, and Stephanie Hilton Livesey, CR-13-6016-EFS. The United States’ civil settlements with those three defendants is available upon request to the United States Attorney’s Office for the Eastern District of Washington.
U.S. Broker-Dealer CEO and Managing Director Plead Guilty in Manhattan Federal Court to Massive International Bribery SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Leslie R. Caldwell, the Assistant Attorney General for the Criminal Division of the United States Department of Justice, announced the guilty pleas of BENITO CHINEA and JOSEPH DEMENESES , the former Chief Executive Officer and former Managing Director, respectively, of a United States broker-dealer (the “Broker-Dealer”), on felony charges arising from a conspiracy to pay bribes to Maria De Los Angeles Gonzalez De Hernandez (“Gonzalez”), who was a senior official in Venezuela’s state economic development bank, Banco de Desarrollo Económico y Social de Venezuela (“BANDES”). CHINEA and DEMENESES, working with others, arranged the bribe payments to Gonzalez in exchange for her directing BANDES’s financial trading business to the Broker-Dealer. CHINEA and DEMENESES pled guilty today in Manhattan federal court before United States District Judge Denise L. Cote.
Manhattan U.S. Attorney Preet Bharara stated: “In exchange for overseas trading business for their brokerage firm, Benito Chinea and Joseph Demeneses arranged millions of dollars in bribe payments to an officer at a state-run economic development bank of Venezuela. With their guilty pleas today, they are the latest defendants to answer for their roles in this massive international bribery conspiracy.”
Assistant Attorney General Leslie R. Caldwell said: “Benito Chinea and Joseph DeMeneses are the fifth and sixth defendants to plead guilty in connection with this far-reaching bribery scheme, which ranged from Wall Street to the streets of Caracas. The guilty pleas and the forfeiture of assets once again demonstrate that the Department is committed to holding corporate executives who engage in foreign bribery individually accountable and to deny them the proceeds of their corruption.”
According to the allegations in the Indictment and other documents previously filed in Manhattan federal court:
Background on the Broker-Dealer and BANDES
At all times relevant to the charges, CHINEA was the chief executive officer and DEMENESES was a managing director in the Broker Dealer, which was headquartered in New York, New York, with offices in Miami, Florida. In 2008, the Broker-Dealer established a group called the Global Markets Group, which included DEMENESES, Lujan, and Clarke, and which offered fixed income trading services to institutional clients. One of the Broker-Dealer’s clients was BANDES, which operated under the direction of the Venezuelan Ministry of Finance. The Venezuelan government had a majority ownership interest in BANDES and provided it with substantial funding. Gonzalez was a BANDES official and oversaw the development bank’s overseas trading activity. At her direction, BANDES conducted substantial trading through the Broker-Dealer. Most of the trades executed by the Broker-Dealer on behalf of BANDES involved fixed income investments for which the Broker-Dealer charged BANDES a mark-up on purchases and a mark-down on sales.
The Bribery Scheme
From late 2008 through 2012, CHINEA and DEMENESES, together with three Miami-based Broker-Dealer employees, Ernesto Lujan, Tomas Alberto Clarke Bethancourt, and Jose Alejandro Hurtado, participated in a bribery scheme in which Gonzalez directed trading business she controlled at BANDES to the Broker-Dealer, and in return, agents and employees of the Broker-Dealer split the revenue the Broker-Dealer generated from this trading business with Gonzalez. During this time period, the Broker-Dealer generated over $60 million in commissions from trades with BANDES.
In order to conceal their conduct, CHINEA, DEMENESES and their co-conspirators routed the payments to Gonzalez, frequently in six-figure amounts, through third-parties posing as “foreign finders” and into offshore bank accounts. In several instances, CHINEA personally signed checks worth millions of dollars that were made payable to one of these purported “foreign finders” and later deposited in a Swiss bank account.
As further alleged in court documents, as a result of the bribery scheme, BANDES quickly became the Broker-Dealer’s most profitable customer. As the relationship continued, however, Gonzalez became increasingly unhappy about the untimeliness of the payments due her from the Broker-Dealer, and she threatened to suspend BANDES’s business. In response, DEMENESES and Clarke agreed to pay Gonzalez approximately $1.5 million from their personal funds. CHINEA and DEMENESES agreed to use Broker-Dealer funds to reimburse DEMENESES and Clarke for these bribe payments. To conceal their true nature, CHINEA and DEMENESES agreed to hide these reimbursements in the Broker-Dealer’s books as sham loans from the Broker-Dealer to corporate entities associated with DeMeneses and Clarke.
CHINEA, 48, of Manalapan, New Jersey, and DEMENESES, 46, of Fairfield, Connecticut, each pled guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act and to violate the Travel Act. Each defendant faces a maximum term of five years in prison. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge. CHINEA and DEMENESES have also agreed to pay $3,636,432 and $2,670,612 in forfeiture, respectively, which amounts represent their earnings from the bribery scheme.
Each defendant also faces pending civil charges filed by the U.S. Securities and Exchange Commission.
Gonzalez, Clarke, Hurtado, and Lujan have also pled guilty in connection with the scheme.
Mr. Bharara praised Department of Justice’s Criminal Division and the Federal Bureau of Investigation for their work in the investigation. He also thanked the U.S. Securities & Exchange Commission for its assistance in this case.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Harry A. Chernoff and Jason H. Cowley, and Fraud Section Senior Deputy Chief James Koukios are in charge of the prosecution. Assistant United States Attorney Carolina Fornos is responsible for the forfeiture aspects of the case.
Additional information about the Justice Department’s FCPA enforcement efforts can be
found at www.justice.gov/criminal/fraud/fcpa.
Two Sentenced in Drug Trafficking ConspiracyRead the Press Release
PROVIDENCE, R.I. – Raymundo Done, 24, and Jorge Marcano, 30, of Providence, have been sentenced in U.S. District Court in Providence for their roles in a heroin trafficking conspiracy in Pawtucket and Providence, announced United States Attorney Peter F. Neronha; Michael Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration’s New England field division; and Pawtucket Police Chief Paul King.
Raymundo Done was sentenced today by U.S. District Court Chief Judge William E. Smith to 24 months probation, the first 6 months to be served in home confinement. Jorge Marcano was sentenced by U.S. District Court Chief Judge William E. Smith on January 27, 2014, to 36 months in federal prison to be followed by 3 years supervised release.
Marcano pleaded guilty on September 24, 2013, as charged in a federal indictment, to one count each of conspiracy to distribute and to possess with intent to distribute heroin, possession with the intent to distribute heroin and possession with the intent to distribute cocaine. Done pleaded guilty on September 8, 2014, as charged in the indictment, to one count of conspiracy to distribute and to possess with intent to distribute heroin.
According to court documents and information presented to the court, an investigation by DEA agents and Pawtucket Police in February, March and April 2013, determined that Marcano and Done were joined in a heroin distribution operation. The investigation included law enforcement and electronic surveillance of Marcano and Done’s drug trafficking activities and numerous controlled purchases of heroin. The investigation revealed that heroin sales were arranged through Marcano and that the drugs were delivered by Done at Marcano’s direction, often times in Pawtucket.
On April 7, 2013, law enforcement executed court authorized search warrants at four Providence residences connected to the defendants, on vehicles operated by Marcano and Done and the persons of Marcano and Done. Approximately 23 grams of heroin, 17 grams of cocaine and $7,400 in cash were seized. More than 14 grams of heroin and nearly 3 grams of cocaine were seized from inside a hide in a vehicle operated by Marcano, and approximately 9.5 grams of heroin, more than 13 grams of cocaine and $7,400 in cash were seized from Marcano’s residence. Also seized were items used in the packaging and distribution of illicit drugs.
The case was prosecuted by Assistant U.S. Attorney Paul F. Daly, Jr.
Providence Police assisted the DEA and Pawtucket Police in the execution of the search warrants at the four Providence residences.###
To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Two Charged in Conspiracy to Defraud the United States for More Than $10 MillionRead the Press Release
Health care fraud conspiracy lasted more than 10 Years
United States Attorney Andrew M. Luger today announced the indictment of THURLEE BELFREY, 48, and ROYLEE BELFREY, 48, for conspiracy to defraud the United States and healthcare fraud. For more than 15 years the BELFREYS own and operate businesses in Minnesota that provide healthcare services including nursing and home care. A significant portion of their revenue came from Medicaid. A separately charged defendant, KENNETH FRANK HARYCKI, 51, is charged by information for conspiracy to defraud the United States by preparing and filing tax forms for the BELFREYS which he knew to be fraudulent.1 THURLEE and ROYLEE BELFREY made initial appearances in United States District Court in St. Paul, Minn., on December 16, 2014.
“These defendants are charged with conspiring to obtain significant amounts of money from the United States by fraud,” said U.S. Attorney Luger. “When individuals steal from government agencies like Medicaid, they are effectively taking money from us all to line their own pockets. It is critically important that law enforcement actively investigate and prosecute healthcare fraud. I thank my partners at the Internal Revenue Service – Criminal Investigation Division, Federal Bureau of Investigation, and Department of Health and Human Services Office of the Inspector General for the hard work they all put into this case. ”
“The Special Agents of IRS Criminal Investigation are committed to protecting the integrity of our system of taxation by investigating tax and accounting professionals who conspire with others to violate the tax laws,” said Special Agent in Charge Shea Jones of IRS Criminal Investigation St. Paul Field Office. “All tax professionals, including CPA Kenneth Harycki, have a duty to their clients to prepare accurate and complete tax returns that comply with the law.”
According to the indictment and documents filed in court, THURLEE and ROYLEE BELFREY owned, managed, and participated in the operation of multiple businesses in Minnesota, including Royal Health Care (Royal), Model Health Care (Model), and Integrated Health Care Services (Integrated). On October 5, 2001, investigators from the Medicaid Fraud Unit of the State of Minnesota executed a search warrant at Royal, and interviewed the BELFREYS. On June 10, 2003, THURLEE BELFREY pleaded guilty and was convicted of theft by false representation for more than $35,000 relating to Royal’s participation in the Medicaid program. Under Medicaid rules, a person convicted of a health care offense may be barred from participating in any capacity or profiting from healthcare services compensated by all Federal health care programs, including Medicaid. On February 20, 2004, THURLEE BELFREY was suspended for a period of 20 years from participation of the Minnesota Health Care Program, which administers Medicaid in Minnesota. On September 30, 2004, THURLEE BELFREY was excluded from participating in all Federal health care programs for at least 10 years.
According to the indictment and documents filed in court, sometime in 2002, THURLEE and ROYLEE BELFREY recruited a relative to be named as the owner of Model, in order to conceal THURLEE BELFREY’S role with the new company. From 2002 until at least March 20, 2014, the BELFREYS conspired to defraud Medicaid by causing THURLEE BELFREY to operate, manage, and profit from Model and other health care businesses, in violation of his suspension by the Minnesota Department of Human Services (DHS) and the United States Department of Health and Human Services (DHHS). Model illegally submitted thousands of fraudulent claims and received millions of dollars in fraudulent proceeds from Medicaid during the course of the conspiracy.
According to the indictment and documents filed in court, in order to conceal their fraudulent activity, the BELFREYS moved the proceeds of their fraudulent Medicaid claims between other businesses and bank accounts. During the conspiracy, the BELFREYS and the businesses they managed were associated with no less than 138 personal and business bank accounts, which they regularly opened and closed. They used funds paid from State and Federal health care programs for personal expenses, including $3,376.82 for Royal Caribbean Cruises, $7,276 for Sun Country Airlines, $991.12 at the W Hotel, $8,548.21 at the Trump International Resort in Miami, Fla., $2,360 at Louis Vuitton, $5,730.16 at the Dara Condo Hotel in Las Vegas, Nev., $6,378.78 to Alaska Air, $3,458.70 at the Lavo Las Vegas Restaurant, and $9,364.20 for Delta Airlines. The BELFREYS or a family member also made cash withdrawals of at least $48,783.50.
According to the HARYCKI information and documents filed in court, KENNETH FRANK HARYCKI was a certified public accountant. From at least 2007 until at least 2014, HARYCKI owned and operated a business that provided bookkeeping, payroll, and accounting services, including tax-related services. In 2007, HARYCKI began providing services to THURLEE AND ROYLEE BELFREY, including tax-related services. HARYCKI regularly prepared Model’s IRS quarterly Form 941, which reports an employer’s payroll and FICA tax liabilities to the IRS. HARYCKI knew that the BELFREYS were deducting and collecting payroll taxes from their employees, but not paying those funds to the government. HARYCKI made no attempt to correct the forms, and instead fabricated entries onto the forms to match other records and assist the BELFREYS to avoid detection by the government.
According to the HARYCKI information, on February 18, 2010, HARYCKI created the entity MKH Holdings, Inc., to assume control over bank accounts used to fund Model and other businesses operated by the BELFREYS. MKH Holdings was used to cause funds not accurately reported on income tax returns to be paid to the BELFREYS and others. During the course of the conspiracy, HARYCKI also incorporated other businesses, obtained employer identification numbers, paid for personal expenses, and opened and used numerous bank accounts for the benefit of the BELFREYS in order to avoid payment of taxes.
This case is the result of an investigation conducted by the Internal Revenue Service – Criminal Investigation Division, Federal Bureau of Investigation, and Department of Health and Human Services Office of the Inspector General.
This case is being prosecuted by Assistant U.S. Attorney Robert Lewis.
Defendant Information:
THURLEE BELFREY, 48
Saint Paul, Minn.
Charges:
• Conspiracy to Defraud the United States, 1 count
• Health Care Fraud, 1 count
ROYLEE BELFREY, 48
Saint Paul, Minn.
Charges:
• Conspiracy to Defraud the United States, 1 count
• Health Care Fraud, 1 count
KENNETH FRANK HARYCKI, 51
Stillwater, Minn.
Charges:
• Conspiracy to Defraud the United States, 1 countBelfrey Indictment
Harycki Information
The charges are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Two Bridgeport Men Admit Roles in Robbery SpreeRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that LANCELOT SUPERSAD, 19, and ANTHONY SANTIAGO, 21, both of Bridgeport, have pleaded guilty in Bridgeport federal court to conspiring to commit multiple robberies earlier this year.
According to court documents and statements made in court, on April 26, 2014, SUPERSAD and others committed an armed robbery of the CVS Pharmacy on Grasmere Avenue in Fairfield, stealing approximately $2,376. On May 3, 2014, SUPERSAD and others attempted an armed robbery of the Mobil Gas station on Noble Avenue in Bridgeport. On May 10, 2014, SUPERSAD and others committed an armed robbery of a Webster Bank branch on Main Street in Bridgeport, stealing approximately $4,170. On June 1, 2014, SUPERSAD and others committed an armed robbery of a Pizza Hut on Boston Avenue in Bridgeport, stealing approximately $250. On June 26, 2014, SUPERSAD, SANTIAGO and others committed an armed robbery of the Residence Inn on Bridgeport Avenue in Shelton, stealing approximately $200. On July 2, 2014, SUPERSAD, SANTIAGO and others attempted an armed robbery of the Sikorsky Financial Credit Union on Oronoque Lane in Stratford. Also on July 2, 2014, SUPERSAD, SANTIAGO and others committed an armed robbery of the TD Bank located on Post Road East in Westport.
SUPERSAD and SANTIAGO were arrested on July 2, 2014, and are detained.
On December 15, 2014, SUPERSAD waived his right to indictment and pleaded guilty to one count of conspiracy to affect commerce by robbery, which carries a maximum term of imprisonment of 20 years. SANTIAGO waived his right to indictment and pleaded guilty to the same charge today.
This case has been assigned to Chief U.S. District Judge Janet C. Hall in New Haven. Sentencing dates are not yet scheduled.
This ongoing investigation is being conducted by the Federal Bureau of Investigation and the Westport, Shelton, Fairfield, Stratford, and Bridgeport Police Departments. The case is being prosecuted by Assistant U.S. Attorney Felice M. Duffy.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Tulalip Tribal Chief Judge Theresa Pouley Visits U.S. Attorney's Office to Celebrate Native American -- Alaska Native Heritage MonthRead the Press Release
In honor of Native American/Alaska Native Heritage Month, Tulalip Tribal Chief Judge Theresa Pouley spoke to the U.S. Attorney’s Office about justice in Indian Country. The Tulalip Tribes are one of three tribal entities in the country that were authorized by Attorney General Holder to set up a pilot program to prosecute domestic violence cases involving non-native defendants in tribal court under the Violence Against Women Act (VAWA) of 2013. Judge Pouley noted that over the last nine months five cases have been brought as part of the pilot project with three convictions, one dismissal and one case scheduled for trial in January 2015. More on VAWA is available here.
Judge Pouley is also the Associate Justice of the Colville Court of Appeals, and is the former Chief Judge of the Lummi Tribal Court. Judge Pouley was appointed to the Indian Law & Order Commission by President Obama in 2011. Judge Pouley graduated from Wayne State University Law School in 1987 and is admitted to the Michigan and Washington Bars. She is a member of the Colville Confederated Tribes in eastern Washington. More on Judge Pouley is available here.
Tilghman Island Fisherman Sentenced to Prison for Illegal Fish Harvesting in the Chesapeake BayRead the Press Release
William J. Lednum, 41, of Tilghman Island, Maryland, was sentenced today in federal court in Baltimore to a year and day in prison, respectively followed by six months of home detention as part of three years of supervised release, for conspiring to violate the Lacey Act and to defraud the United States through their illegal harvesting and sale of 185,925 pounds of striped bass. Lednum was also ordered to pay $498,293.40 in restitution to the State of Maryland for the damage caused to the Striped Bass fishery. In addition, Judge Bennett ordered Lednum to pay a fine of $40,000.
According to their plea agreements, Lednum and his co-defendant, Michael D. Hayden, were “captains” on fishing vessels owned by them, William J. Lednum Fisheries, d/b/a, Michael D. Hayden, Jr., and Michael D. Hayden, Jr., Inc. The defendants also employed numerous “helpers” as part of this scheme, including, co-defendants Kent Sadler and Lawrence Daniel Murphy.
From at least 2007 to 2011, Hayden and Lednum engaged in a scheme to illegally poach tens of thousands of pounds of striped bass from the Chesapeake Bay in violation of Maryland regulations relating to harvest method, amounts, tagging, and reporting. In an effort to conceal their crimes, Hayden and Lednum falsified paperwork related to their harvests and submitted those falsified documents to the state of Maryland. The state of Maryland in turn submits such paperwork to numerous Federal and interstate agencies responsible for setting harvest levels all along the eastern seaboard. Hayden and Lednum shipped and sold the striped bass to wholesalers in New York, Pennsylvania, Delaware and Maryland, receiving a total of $498,293.47 for the poached fish.
The investigation in this case started in February 2011 when the Maryland Department of Natural Resources found tens of thousands of pounds of striped bass snagged in illegal, anchored nets before the season officially reopened. The conspirators were seen on the water in the vicinity of the illegal nets. The subsequent investigation unveiled a wider criminal enterprise for which Hayden and Lednum were sentenced today.
Co-defendants Michael D. Hayden, 43, of Tilghman Island, Lawrence “Daniel” Murphy, 37, of St. Michaels, Maryland, and Kent Conley Sadler, 31, of Tilghman Island, previously pleaded guilty to their participation in the conspiracy. Murphy is scheduled to be sentenced on December 19, 2014, Sadler is scheduled to be sentenced on January 7, 2015 and Hayden is scheduled to be sentenced on Feb. 27, 2015.
The investigation into this case was conducted by the Maryland Department of Natural Resources and the U.S. Fish and Wildlife Service. The prosecution was handled by Todd W. Gleason and Shennie Patel of the Department of Justice’s Environmental Crimes Section, and Assistant U.S. Attorney P. Michael Cunningham.
Tilghman Island Fisherman Sentenced to Prison for Illegal Fish Harvesting in the Chesapeake BayRead the Press Release
Ship Captain Poached Hundreds of Thousands of Pounds of Striped Bass
Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced William J. Lednum, age 41, of Tilghman Island, Maryland, today to a year and a day in prison, followed by six months of home detention as part of three years of supervised release, for conspiring to violate the Lacey Act and to defraud the United States through the illegal harvesting and sale of 185,925 pounds of striped bass. Judge Bennett also ordered Lednum to pay $498,293.40 in restitution to the State of Maryland for the damage caused to the Striped Bass fishery. In addition, Judge Bennett ordered Lednum to pay a fine of $40,000.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division Sam Hirsch; Secretary Joe Gill of the Maryland Department of Natural Resources (DNR); and Honora Gordon, Regional Special Agent in Charge for the U.S. Fish and Wildlife Service.
“We are very pleased with today's court decision,” said DNR Secretary Joe Gill. “This individual was stealing from Maryland citizens and law-abiding waterman. We are proud of the great work done by Maryland Natural Resources Police officers.”
According to his plea agreement, Lednum and his co-defendant, Michael D. Hayden, were “captains” on fishing vessels owned by them, William J. Lednum Fisheries, d/b/a, Michael D. Hayden, Jr., and Michael D. Hayden, Jr., Inc. The defendants also employed numerous “helpers” as part of this scheme, including, co-defendants Kent Sadler and Lawrence Daniel Murphy.
From at least 2007 to 2011, Lednum and Hayden engaged in a scheme to illegally poach at least 185,925 pounds of striped bass from the Chesapeake Bay in violation of Maryland regulations relating to harvest method, amounts, tagging, and reporting. In an effort to conceal their crimes, Lednum and Hayden admitted that they falsified paperwork related to their harvests and submitted those falsified documents to the State of Maryland. The State of Maryland in turn submits such paperwork to numerous Federal and interstate agencies responsible for setting harvest levels all along the eastern seaboard. Lednum and Hayden shipped and sold the striped bass to wholesalers in New York, Pennsylvania, Delaware and Maryland, receiving a total of $498,293.47 for the poached fish.
The investigation in this case started in February 2011 when the Maryland Department of Natural Resources found tens of thousands of pounds of striped bass snagged in illegal, anchored nets before the season officially reopened. The conspirators were seen on the water in the vicinity of the illegal nets. The subsequent investigation unveiled a wider criminal enterprise for which Hayden and Lednum were sentenced today.
Co-defendants Michael D. Hayden, age 43, of Tilghman Island, Lawrence “Daniel” Murphy, age 37, of St. Michaels, Maryland, and Kent Conley Sadler, age 31, of Tilghman Island, previously pleaded guilty to their participation in the conspiracy. Murphy is scheduled to be sentenced on December 19, 2014, Sadler is scheduled to be sentenced on January 7, 2015 and Hayden is scheduled to be sentenced on February 27, 2015.
United States Attorney Rod J. Rosenstein praised the Maryland Department of Natural Resources and U.S. Fish and Wildlife Service for their work in the investigation. Mr. Rosenstein thanked Todd W. Gleason and Shennie Patel of the Department of Justice’s Environmental Crimes Section, and Assistant U.S. Attorney P. Michael Cunningham, who prosecuted the case.Three Defendants Sentenced in Vehicle Insurance Fraud SchemeRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that three defendants in an insurance fraud scheme were sentenced and one ordered to pay more than $190,000 for staging automobile accidents in order to collect insurance payments.
Oliver Lockett, 44, of Breaux Bridge, was sentenced to 60 months in prison, three years of supervised release and ordered to pay $193,074.86 restitution; Aleric Johnson, 50, of New Iberia, was sentenced to 12 months in prison, two years of supervised release, and was ordered to pay $62,492.30 restitution; and Buddy Estelle, 53, of New Iberia, was sentenced to 12 months in prison and three years of supervised release. Each was sentenced for one count of conspiracy to commit wire fraud. District Judge Richard T. Haik presided over the hearings.
According to evidence presented at the guilty pleas, the defendants admitted to roles in vehicle accidents between sometime in 2003 until March 10, 2010. Lockett admitted to planning accidents where members of the scheme served either as a driver causing the accident or a witness. As a result, Lockett made multiple claims to insurance companies for property damage and personal injury. The accidents were staged in Lafayette Parish and surrounding areas.
The Louisiana State Police conducted the investigation. Assistant U.S. Attorney Kelly P. Uebinger prosecuted the case.
Ten People Indicted for Attending Dog-Fighting Venture in AkronRead the Press Release
Ten people were indicted in federal court for attending an animal-fighting venture, law enforcement officials said.
Indicted are: Alvin Banks, 56, of Akron; Carlton Davis and Anthony L. Harris, both 41 and both of Gary, Ind.; Donell Higginbotham, 35, of Pittsburgh; Mark Terrell McCraw, 29, of Hersporia, Calif.; Samuel G. Mobley, 38, of Gastonia, N.C.; Corey B. Moorefield, 45, of Pittsburgh; Darius D. Muse, 24, of Victorville, Calif.; Ryan A. Sadler, 32, of Gastonia, N.C. and Tommy L. Walker, 60, of East Chicago, Ind.
The indictment was announced by Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland Office, Akron Police Chief James Nice, Summit County Sheriff Steve Barry and Summit County Prosecutor Sherry Bevan Walsh.
Banks and McCraw face additional counts of sponsoring and exhibiting a canine in an animal fighting venture, as well as buying, selling, delivering, possessing, training and transporting canines for participation in an animal fighting venture.
Banks has also been charged with being a felon in possession of firearms and ammunition, possession with intent to manufacture and distribute less than 50 marijuana plants or less than 50 kilograms of marijuana, and for possession of firearms in furtherance of a drug trafficking crime.
Federal and local authorities raided a home on Cordova Avenue in Akron on Nov. 15, 2014 as part of an investigation into dog fighting. In addition to firearms, narcotics and more than $52,000 in cash, investigators discovered a blood-stained 16x16 foot ring used as part of an animal fighting venture, as well as two “break sticks” used to pry a dog’s mouth and teeth off another dog when the fight is finished. They also found eight pit bull or pit bull mixes, two of which were covered in blood and had fresh wounds from a fight that occurred just prior to the execution of the search warrant, according to court documents.
If convicted, a defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal records, if any, a defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigation preceding the indictment was conducted by the Akron Police Department, the Federal Bureau of Investigation and the Summit County Sheriff’s Office, with assistance from the Summit County Prosecutor’s Office and the Humane Society of Greater Akron. The case is being prosecuted by Assistant United States Attorney Linda H. Barr.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Task Force Busts Credit Union Robbery RingRead the Press Release
Joint investigation leads to multiple arrests and a federal complaint.
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick Miles announced today federal charges against multiple individuals in connection with eight robberies of credit unions, following an investigation by a state and federal violent crime task force. Ingham County Prosecutor Stuart Dunnings, Lansing Police Chief Michael Yankowski, Michigan State Police Captain Monica Yesh and FBI Special Agent in Charge Paul M. Abbate joined in the announcement.
Angelo George Mitchell, Allante Williams, Terrell Reese, James Steen, Defonta Howard and Jonathan Daffin have been federally charged with conspiracy to rob a credit union, a crime punishable by up to five years in prison. Robbery of a credit union is punishable by up to 20 years in prison. The affidavit in support of the federal complaint references eight robberies of credit unions and one attempted robbery that took place at various times between September 9 and December 11, 2014. The affidavit explains that on December 11, a surveillance team instigated a traffic stop by Michigan State Police Troopers of the six men. The complaint affidavit alleges the men were wearing makeup on their faces consistent with that seen by witnesses to prior credit union robberies and that the six men were on their way at the time to rob the DFCU Financial on Lake Lansing Road in Lansing, Michigan.
The other alleged victim credit unions identified in the affidavit are:
- Astera Credit Union, located at 301 East Jolly Road, Lansing, Michigan (twice);
- Lake Trust Credit Union, located at 300 North Clippert Street, Lansing, Michigan;
- Genisys Credit Union, located at 207 Huron Boulevard, Marysville, Michigan;
- CASE Credit Union, located at 4316 South Pennsylvania Avenue, Lansing, Michigan (twice);
- Lake Trust Credit Union, located at 2180 West Stadium Drive, Ann Arbor, Michigan;
- Community Choice Credit Union located at 34930 Ann Arbor Trail, Livonia, Michigan.
The arrests and charges are the result of a collaborative effort by a violent crime task force comprised of the Lansing Police Department, the Michigan State Police, the FBI, the Ingham County Prosecutor’s Office and the U.S. Attorney’s Office for the Western District of Michigan.
Following a preliminary hearing today in federal court, U.S. Magistrate Judge Hugh Brenneman found probable cause supporting the charge as to each defendant and all six were detained pending further proceedings. Assistant U.S. Attorneys Tim VerHey and Russell Kavalhuna indicated that they expect to present the matter to a federal grand jury for possible indictment in the coming weeks.The complaint and affidavit further allege that a Scantavia Ronda Isaac was involved in the conspiracy. She has not been arrested and anyone with information regarding her whereabouts should contact Detective St. Aubin at the Lansing Police Department. He can be reached at (517) 483-6862.
Charges in a complaint or indictment are merely accusations, and a defendant is presumed innocent until and unless proven guilty in a court of law.
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Statement by Deputy Attorney General James M. Cole on the President's Clemency DecisionsRead the Press Release
“The president’s actions today in providing clemency to eight individuals who were sentenced under outdated and unfair laws sustains his commitment to bring fairness to our criminal justice system. While all eight were properly held accountable for their criminal actions, their punishments did not fit their crimes, and sentencing laws and policies have since been updated to ensure more fairness for low-level offenders. All eight of these individuals meet the criteria I laid out under the President’s direction when I announced the Clemency Initiative in April: they are all non-violent, low-level offenders who have no significant criminal history nor ties to gangs or organized crime. All have served at least 10 years in prison with good conduct while incarcerated, and all would have gotten lesser sentences if convicted of the same crimes today."
“As I have said many times, for our criminal justice system to be effective, it needs to not only be fair; but it also must be perceived as being fair. That’s why we created the Clemency Initiative – in the hope of promoting that fundamental American ideal, equal justice under the law. The Justice Department will continue to identify applicants whom we can recommend to the president for commutation.”
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Statement of Manhattan U.S. Attorney Preet Bharara on Conviction of Rikers Island Correction Officer Terrence PendergrassRead the Press Release
“Our efforts to reform Rikers Island continue. Following last week’s conviction of correction officer Austin Romain for taking bribes and smuggling drugs into Rikers Island, today a jury convicted former Rikers Island captain Terrence Pendergrass of a federal civil rights crime. The jury unanimously found that Pendergrass violated Jason Echevarria’s constitutional rights by deliberately ignoring his pleas for help and depriving him of urgent medical care, leaving Echevarria to die alone in his cell. Echevarria should not have died, and the convictions of individual wrongdoers at Rikers Island – as well as the systemic, institution-wide reforms we are pursuing – should help prevent tragedies like Echevarria’s death from occurring again.”
Stamford Man Who Defrauded Investment Clients of $191k Sentenced to PrisonRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MICHAEL LOMBARDO, Jr., 38, of Stamford, was sentenced today by Senior U.S. District Judge Alfred V. Covello in Hartford to 12 months and one day of imprisonment, followed by three years of supervised release, for defrauding more than 20 of his investment clients.
According to court documents and statements made in open court, LOMBARDO worked for David Lerner Associates, Inc., a Westport-based company that provided investment services. LOMBARDO provided financial advice to the company’s clients with respect to their retirement savings and other investments. From approximately September 2011 to February 2014, LOMBARDO defrauded more than 20 clients by diverting more than $190,000 in client funds for his personal use. As part of his scheme, LOMBARDO submitted fraudulent requests to disburse a portion of the retirement accounts of clients. LOMBARDO would request that a disbursement check be sent, typically by overnight mail, to him at his Westport office. After he received the check, he would forge the client’s signature on the back of the check and then cause the check to be deposited into his personal bank account.
As part of his sentence, LOMBARDO was ordered to pay $191,068.73 in restitution.
On September 11, 2014, LOMBARDO pleaded guilty to one count of wire fraud.
This case was investigated by the Westport Police Department and the United States Secret Service and was prosecuted by Assistant U.S. Attorney Ray Miller.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]St. Louis County Man Indicted on Fraud ChargesRead the Press Release
St. Louis, MO – MARK KISTLER, of St. Louis County, was indicted today for bank fraud in connection with the financial exploitation of an elderly person.
According to the indictment, Kistler met the victim, identified as N.W., who was a patient at his father’s medical practice. Kistler initially did errands and jobs for N.W. and eventually began to pressure N.W. to give him money. Between 2007 and 2011, Kistler, with the help of his mother and two girlfriends, is alleged to have taken more than $200,000 from N.W. and continues to live rent free in a St. Louis county house purchased with N.W.’s funds and titled in his mother’s name.
The bank fraud is alleged to have involved arrangement of a straw purchase of a St. Louis city house using N.W.’s funds. The mother of Kistler’s then-girlfriend is alleged to have been recruited as the straw buyer or nominal buyer of the property because Kistler and his girlfriend had poor credit. When Kistler and his girlfriend stopped making payments on the property, the house was foreclosed upon and the lender suffered a $92,000 loss.
If convicted, bank fraud carries a maximum penalty of 30 years in prison and/or fines up to $1 million. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
Additionally, restitution will be sought for N.W. and the victim financial institution.
The case was investigated by the FBI and the U.S. Postal Inspection Service in cooperation with the Missouri Secretary of State Securities Enforcement Section, which is pursuing a civil enforcement action against Kistler. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
South Carolina Man Sentenced to More Than Four Years in Prison on Securities Fraud Conspiracy and Money Laundering ChargesRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Max O. Cogburn, Jr. sentenced Terry Wayne Gandy, 51, of Myrtle Beach, S.C. to serve 57 months in prison followed by three years of supervised release for stealing more than $2 million from investors, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Judge Cogburn also ordered Gandy to pay $3,076,411.34 as restitution to his victim investors.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) and and B.W. Colier, Acting Director of the North Carolina State Bureau of Investigation (SBI) join U.S. Attorney Tompkins in making today’s announcement.
According to filed court documents and today’s sentencing hearing, from 2000 to 2009 Gandy and his conspirators engaged in an investment fraud scheme that defrauded his victim investors of more than $2 million. According to court documents, Gandy was the owner and operator of TakeSix Trading Fund (TakeSix), which Gandy falsely held out to be a bona fide investment firm, when in fact TakeSix was never registered in North Carolina or elsewhere. Gandy used TakeSix to induce his victims to invest through the company, claiming, among other things, that their money would be invested in various project such as real estate and oil and gas wells. Contrary to Gandy’s claims, very little, if any, of the victim’s money was actually invested.
According to court documents and court proceedings, Gandy mainly targeted his former co-workers at Philipp Morris and solicited funds from them, promising rates of return anywhere between 20% to 30% annually. Instead of investing the victims’ money as promised, Gandy used it to fund his own personal lifestyle, including payment for luxury hotel accommodations on multiple trips to Las Vegas, cash withdrawals at Las Vegas casinos, purchase of luxury cars, and to pay purported “profits” to other investors who asked for their money, commonly known as “Ponzi” payments. Court records indicate that to further support his fraudulent scheme, Gandy provided his victim-investors false account statements depicting bogus and over-inflated account balances. In all, Gandy and his conspirators defrauded more than thirty victims of over $2 million. Co-conspirator John Reid Perkins earlier pleaded guilty to securities fraud conspiracy for his role in the scheme on September 6, 2013. Perkins is currently awaiting a sentencing date.
In handing down the 57 month sentence, Judge Cogburn emphasized that the “sentence is necessary to deter others who may be thinking of engaging in such unlawful conduct.”
Following the sentencing hearing, Gandy was permitted to remain 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 investigation was handled by FBI, IRS and SBI. Assistant United States Attorney Mark T. Odulio of the U.S. Attorney’s Office in Charlotte prosecuted the case.
Shenandoah, Iowa, Resident Sentenced to 57 Months for Possession of Child PornographyRead the Press Release
COUNCIL BLUFFS, IA - On December 16, 2014, Anthony J. Simmons, a 30 year-old resident of Shenandoah, Iowa, was sentenced by United States District Court Judge John A. Jarvey to serve 57 months in prison for possession of child pornography, and to serve 10 years of supervised release following imprisonment, announced United States Attorney Nicholas Klinefeldt.
During the Spring of 2013, investigators located sexually explicit pictures of a fifteen year-old female on Simmons’ computer. On June 5, 2014, Simmons entered a guilty plea to possession of child pornography.
The investigation was conducted by the Iowa Division of Criminal Investigations, Cyber Crimes Unit, and the case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Seven People and Florida Company Indicted for Health Care Fraud at Shaker Heights Surgical CenterRead the Press Release
A five-count indictment was filed charging seven people and a Florida company for their roles in a multi-million dollar health-care fraud conspiracy involving an experimental form of chiropractic manipulation, law enforcement officials said.
Indicted are: Physicians Surgical Group (PSG), a medical billing company headquartered in Boca Raton, FL.; Christopher Liva, 36, Edward Liva, 64, Carolyn Via, 51, all of Boca Raton, FL; Mark Fritz, age unknown, of Coral Springs, FL.; John Nickels, 60, Highland Heights; John Fortuna, 41, of Avon, and Antony Simone, 40, of Cleveland.
The Livas, Fritz, Nickels, Fortuna, Simone and the company are charged with one count each of conspiracy, wire fraud and health care fraud. Those six people are also charged with one count of money laundering. Ed Liva, Chris Liva and Via face an additional count of money laundering.
PSG was owned by Christopher Liva, Edward Liva and Carolyn Via. Those three people, along with four others not named in the indictment, also owned Shaker Heights Surgical Center, located at 3235 Lee Road. Fritz was the chief financial officer at PSG. Fortuna and Simone were licensed chiropractors while Nickels was a medical doctor and anesthesiologist, according to court documents.
The defendants deceived various private insurance companies to pay millions of dollars on behalf of patients who underwent an experimental form of manipulation under anesthesia at Shaker Heights Surgical Center. Manipulation under anesthesia is an aggressive form of therapy typically reserved for patients who had failed with conservative chiropractic care. There were serious risks associated with it, according to the indictment.
Because of the pain involved, patients were put under conscious sedation and it was recognized as a surgical procedure. It was not performed in an office setting but rather an outpatient surgical facility and typically generated three types of insurance claims -- for professional fees, facility fees and fees for anesthesia services, according to the indictment.
Beginning in 2008, Chris Liva and others began marketing Shaker Heights Surgical Center and the manipulation under anesthesia procedure to chiropractors in Ohio, typically at restaurants in downtown Cleveland or the Youngstown area. In return for referring patients to Shaker Heights Surgical Center for the manipulation under anesthesia procedure, chiropractors were paid a flat fee of $4,000 per patient referred for a three-day session of procedures. Patients were advised they would not have to pay anything for the procedure, according to the indictment.
The defendants disregarded diagnoses, used false diagnoses, submitted false billing claims, represented that procedures were performed by osteopathic and medical doctors when in reality they were performed by osteopathic doctors and chiropractors, waived patients’ required co-payments and deductibles, and took other steps as part of the criminal conspiracy. This took place between 2007 and 2010, according to the indictment.
Prosecutors are also seeking to seize property derived from the criminal conspiracy, including two properties in Boca Raton, FL., a Royal Oak Offshore Chronograph watch and 4.18-karat diamond stud earrings, as well as money, according to the indictment.
“This group bilked insurance companies through a series of false claims and diagnoses to get money, diamonds and expensive homes,” said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
“This clinic was established not to help the sick and injured, but for the purpose of stealing insurance money,” said Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office. “The individuals charged provided patients with a false diagnosis and submitted inflated claims to insurance companies – all in an effort to line their own pockets. The FBI, along with our federal, state, local and private industry partners, is committed to prosecuting these health care fraud schemes.”
“These defendants went to great lengths to try and hide their ill-gotten cash,” said Kathy Enstrom, Special Agent in Charge, Internal Revenue Service, Cincinnati Field Office. “The IRS will continue to follow the money trail in criminal conspiracies.”
The case is being prosecuted by Assistant U.S. Attorneys Michael L. Collyer and Christos N. Georgalis following an investigation by the FBI and IRS-CI.
If convicted, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Rochester Man Pleads Guilty to Drug & Firearm PossessionRead 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 Leroy J. Smith, 37, of Rochester, NY, pleaded guilty plea to possession of a firearm as a convicted felon, and possession of a firearm in furtherance of a drug trafficking crime before U.S. District Judge Frank P. Geraci. The charges carry a mandatory minimum sentence of five years in prison and a maximum of life.Assistant U.S. Attorney Robert Marangola, who is handling the case, stated that between January and June 2012, the defendant possessed a 20 gauge shotgun while he was also in possession of quantities of marijuana for distribution. Smith came to the attention of law enforcement in 2013 during a law enforcement initiative in the vicinity of Linnert Street in Rochester. At that time, the defendant was in possession of a Colt .38 caliber double action revolver.
The plea was the culmination of an investigation on the part of Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of James S. Higgins, Special Agent in Charge, New York Field Office.
Sentencing is scheduled for March 19, 2015 at 3:00 p.m. before Judge Geraci.
Rikers Island Correction Officer Found Guilty in Manhattan Federal Court of Deliberately Ignoring Urgent Medical Needs of Inmate Who DiedRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that TERRENCE PENDERGRASS, a correction officer and former captain, was found guilty today in federal court of deliberately ignoring the urgent medical needs of a Rikers Island inmate who had ingested a corrosive disinfectant and later died, in violation of the inmate’s rights under the United States Constitution.
U.S. Attorney Bharara stated: “Our efforts to reform Rikers Island continue. Following last week’s conviction of correction officer Austin Romain for taking bribes and smuggling drugs into Rikers Island, today a jury convicted former Rikers Island captain Terrence Pendergrass of a federal civil rights crime. The jury unanimously found that Pendergrass violated Jason Echevarria’s constitutional rights by deliberately ignoring his pleas for help and depriving him of urgent medical care, leaving Echevarria to die alone in his cell. Echevarria should not have died, and the convictions of individual wrongdoers at Rikers Island – as well as the systemic, institution-wide reforms we are pursuing – should help prevent tragedies like Echevarria’s death from occurring again.”
According to the Complaint, Indictment, and evidence presented at trial:
Rikers Island is a jail complex, located in the Bronx, New York, maintained by the New York City Department of Correction. At the time of his death, Jason Echevarria was an inmate incarcerated on Rikers Island in the Mental Health Assessment Unit for Infracted Inmates (known as “MHAUII”), a unit housing inmates who had committed infractions while incarcerated and who were identified as needing mental health treatment.
On the afternoon of August 18, 2012, Echevarria swallowed a powerful disinfectant/detergent combination in powder form, commonly referred to as a “soap ball,” used to clean and disinfect cells. Echevarria had been given the soap ball by a new correction officer for the purpose of cleaning Echevarria’s cell following a sewage backup. The soap ball contained, among other things, ammonium chloride, a corrosive chemical that is life threatening if ingested.
After Echevarria swallowed the soap ball, he began banging on his cell door and asking for help. Echevarria also told a correction officer that he had swallowed a soap ball and needed help. That correction officer in turn informed PENDERGRASS, the captain on duty at that time. As the captain on duty, PENDERGRASS was responsible for arranging for medical treatment for the inmates in his unit. Rather than arrange for that care, however, PENDERGRASS responded that the correction officer should only call on PENDERGRASS if he needed help with the extraction of an inmate from a cell or if there was a dead body. A short time later, the same correction officer told PENDERGRASS that he saw vomit in Echevarria’s cell, and PENDERGRASS responded that Echevarria should be told to “hold it.” Soon after, another correction officer told PENDERGRASS that Echevarria had swallowed a soap ball and that a pharmacy technician had told that officer that Echevarria needed a doctor. Despite what he had been told, and despite going to Echevarria’s cell himself after Echevarria had vomited, PENDERGRASS did not call for medical help. He also ordered an officer who was trying to call for help to hang up the phone.
PENDERGRASS, 50, of Howard Beach, New York, was convicted of one count of deprivation of rights under color of law. He faces a maximum sentence of 10 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. Sentencing has been scheduled for April 17, 2015, at 4:00 p.m., before U.S. District Judge Ronnie Abrams.
United States Attorney Bharara praised the work of the Federal Bureau of Investigation, and expressed his appreciation for the assistance of the New York City Department of Correction, Investigation Division, the Bronx County District Attorney’s Office, and the New York City Department of Investigation in the investigation of this matter.
This case is being prosecuted jointly by the Office’s Civil Rights Unit and Public Corruption Unit. Assistant U.S. Attorneys Lara K. Eshkenazi and Daniel C. Richenthal are in charge of the prosecution.
U.S. v. Terrence Pendergrass Indictment
Rapid City Man Convicted of Drug ConspiracyRead the Press Release
United States Attorney Brendan V. Johnson announced that Luis Olivares, age 42, of Rapid City, South Dakota, was found guilty of Conspiracy to Distribute Methamphetamine, Possession of Firearms During a Drug Trafficking Crime, Felon and Fugitive in Possession of Firearms, Possession of Methamphetamine with the Intent to Distribute, and Distribution of Methamphetamine. The federal jury returned the guilty verdict on December 10, 2014, at the conclusion of an eight-day jury trial in Rapid City.
The charges carry a 20-year minimum mandatory and up to life in custody and/or a $20,000,000 fine, 5 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund. There is a pending motion, filed by the United States, that may result in mandatory life imprisonment.
The conviction stems from Olivares recruiting others to illegally distribute and possess with the intent to distribute 500 grams or more of methamphetamine in South Dakota and elsewhere dating back to 2008. Olivares distributed this substance with his co-conspirators in Rapid City and western South Dakota. Previous felony convictions prohibit Olivares from possessing firearms. However, on more than one occasion, Olivares was in possession of firearms while dealing drugs.
A turning point in the case came when Olivares crashed his vehicle while attempting to elude law enforcement though a high-speed chase. Once he crashed and was apprehended, several packages of methamphetamine were found inside the vehicle.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives, Drug Enforcement Administration, the Unified Narcotics Enforcement Team, the Rapid City Police Department, the Pennington County Sheriff’s Office, and the South Dakota Highway Patrol. Assistant U.S. Attorneys Kathryn N. Rich and Jay Miller prosecuted the case.
A presentence investigation was ordered and a sentencing date will be set. The defendant was remanded to the custody of the U.S. Marshals Service.
President Obama Grants Commutations and PardonsRead the Press Release
WASHINGTON, D.C. – Today President Barack Obama granted clemency to twenty individuals, consisting of eight commutations and twelve pardons.
The President granted commutations of sentence to the following eight individuals:
- Sidney Earl Johnson, Jr. – Mobile, AL
Offense: Conspiracy to distribute and possess with intent to distribute cocaine base; possession with intent to distribute cocaine base; use of a communication facility to commit a felony (Southern District of Alabama)
Sentence: Life imprisonment; 10 years’ supervised release (Apr. 13, 1994)
Commutation Grant: Prison sentence commuted to expire on June 12, 2015.
- Cathy Lee Jones – Portsmouth, VA
Offense: Conspiracy to possess with intent to distribute and distribute heroin and cocaine base (Eastern District of Virginia)
Sentence: 262 months’ imprisonment; five years’ supervised release (Apr. 29, 2003)
Commutation Grant: Prison sentence commuted to expire on April 15, 2015.
- Rickey Marcell McCall – Birmingham, AL
Offense: Possession with intent to distribute in excess of 50 grams of a mixture and substance containing cocaine base; possession of a firearm by a convicted felon (two counts) (Northern District of Alabama)
Sentence: Life imprisonment; 120 months’ supervised release (Jan. 11, 2001)
Commutation Grant: Prison sentence commuted to expire on April 15, 2015.
- Larry Nailor – Memphis, TN
Offense: Possession of a controlled substance with intent to distribute approximately 50 grams of cocaine base (Western District of Tennessee)
Sentence: Life imprisonment; 10 years’ supervised release (Nov. 7, 1997)
Commutation Grant: Prison sentence commuted to expire on April 15, 2015.
- Antonio Gromyko Reeves – Kennett, MO
Offense: Distribution of five grams or more of cocaine base (Eastern District of Missouri)
Sentence: 188 months’ imprisonment; four years’ supervised release (May 21, 2004)
Commutation Grant: Prison sentence commuted to expire on April 15, 2015.
- Jennifer Regenos – Muscatine, IA
Offense: Conspiracy to distribute methamphetamine (Southern District of Iowa)
Sentence: 240 months’ imprisonment; 10 years’ supervised release (Mar. 25, 2002)
Commutation Grant: Prison sentence commuted to expire on April 15, 2015.
- Barbara Lammsies Scrivner – Portland, OR
Offense: Conspiracy to manufacture, possess with intent to distribute, and distribute methamphetamine; possession with intent to distribute methamphetamine (District of Oregon)
Sentence: 360 months’ imprisonment; five years’ supervised release (July 3, 1995)
Commutation Grant: Prison sentence commuted to expire on June 12, 2015.
- Israel Abel Torres – Dallas, TX
Offense: Conspiracy to possess with intent to distribute controlled substances; possession with intent to distribute cocaine base (Eastern District of Texas)
Sentence: Life imprisonment; 10 years’ supervised release; $1,000 fine (Dec. 4, 1998)
Commutation Grant: Prison sentence commuted to expire on April 15, 2015.
The President granted pardons to the following twelve individuals:
- Roy Norman Auvil – Bartonville, IL
Offense: Possession of an unregistered distilling apparatus; working a distillery on which the required sign is not placed (District of South Carolina)
Sentence: Five years’ probation (Nov. 16, 1964)
- Bernard Bryan Bulcourf – McIntosh, FL
Offense: Counterfeiting Federal Reserve notes (Southern District of Florida)
Sentence: 90 days’ confinement in a community treatment center, followed by three years’ probation (Nov. 18, 1988)
- Steve Charlie Calamars – San Antonio, TX
Offense: Possession of phenyl-2-propanone with intent to manufacture a quantity of methamphetamine (Western District of Texas)
Sentence: 57 months’ imprisonment; three years’ supervised release (May 31, 1989; as amended Apr. 8, 1994)
- Diane Mary DeBarri, fka Diane Mary Wilhelm – Fairless Hills, PA
Offense: Conspiracy to manufacture and distribute methamphetamine; distribution of methamphetamine (Eastern District of Pennsylvania)
Sentence: 90 days’ imprisonment; five years’ probation conditioned on performance of community service as directed by the court (June 15, 1984)
- Donnie Keith Ellison – London, KY
Offense: Manufacture of marijuana (Eastern District of Kentucky)
Sentence: Five months’ imprisonment; three years’ supervised release (Sept. 1, 1995)
- John Marshall French – Clovis, CA
Offense: Conspiracy to transport a stolen motor vehicle in interstate commerce (District of South Carolina)
Sentence: Three years’ probation conditioned on performance of 100 hours of community service and payment of $2,337 restitution (Mar. 2, 1993)
- Ricardo Marcial Lomedico, Sr. – Point Roberts, WA
Offense: Misappropriation of bank funds by an employee (Western District of Washington)
Sentence: Five years’ imprisonment (Nov. 21, 1969)
- David Raymond Mannix – Lafayette, OR
Offense: Conspiracy to commit larceny; theft of military property (U.S. Marine Corps general court-martial convened at Camp Pendleton, CA)
Sentence: 75 days’ confinement; forfeiture of $350 pay per month for three months; reduction to Private First Class, pay grade E-2 (Oct. 18, 1989, as approved Mar. 2, 1990)
- David Neil Mercer – Grand Junction, CO
Offense: Archaeological Resources Protection Act violation (District of Utah)
Sentence: 36 months’ probation; $2,500 fine; $1,437.72 joint and several restitution (Apr. 9, 1997)
- Claire Holbrook Mulford, fka Claire Audrey Holbrook – Flint, TX
Offense: Using a residence to distribute methamphetamine; carrying a firearm during a drug-trafficking crime (Eastern District of Texas)
Sentence: 70 months’ imprisonment; two years’ supervised release (Dec. 3, 1993)
- Brian Edward Sledz – Naperville, IL
Offense: Wire fraud; violation of the Commodity Exchange Act (Northern District of Illinois)
Sentence: One year of probation conditioned on payment of $1,318 costs of supervision and $8,297.91 restitution (Apr. 29, 1993)
- Albert Byron Stork – Delta, CO
Offense: Filing a false tax return (District of Colorado)
Sentence: Six months’ confinement in a jail-type or treatment institution; three years’ probation (May 8, 1987)
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Ponchatoula Man Pleads Guilty to Collecting over 500,000 Images of Child PornographyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ROBERT SWAN, age 52, of Ponchatoula, pled guilty today for his role in sexual exploiting children, including receiving images depicting the sexual victimization of children.
According to court documents, on January 30, 2013, investigators with the State of Louisiana Department of Justice – Office of the Attorney General, Cyber Crime Unit, executed a search warrant on SWAN’S residence. The search was based on evidence obtained by law enforcement that between about November 30, 2012, and December 1, 2012, SWAN distributed, by making publicly available in the shared folder of his peer-to-peer program, videos depicting the sexual victimization of children between the ages of two and ten. Agents seized fifteen separate digital devices, including multiple computers, hard drives, and flash drives.
While reviewing materials seized in the search, agents found digital materials evidencing that in about January 2010, SWAN and his associate, Thomas Middleton, forced a then-three year-old girl to engage in sexually explicit conduct, which SWAN recorded.
Additionally, agents found that between about May 2010 and January 2013, SWAN had downloaded, saved, and catalogued at least 500,000 images and videos—one of the largest collections of child pornography found in the State of Louisiana—depicting children as young as at least four weeks old being forced to engage in sexually explicit conduct. Titles of many of the videos were consistent with the content of the videos.
Because of SWAN’S prior conviction in 1987 for lewd and lascivious assault of a minor in Escambia County, Florida, SWAN faces a mandatory minimum term of imprisonment of fifteen years and a maximum sentence of forty years, followed by up to a life term of supervised release, and a $250,000 fine. He can also be required to register as a sex offender. Sentencing before U.S. District Judge Berrigan has been scheduled for March 25, 2015.
“Robert Swan has been brought to justice for collecting over 500,000 images of child pornography, one of the largest collections ever seized in our state,” stated U.S. Attorney Polite. “Our Office, along with our federal and state law enforcement partners, will remain vigilant in fighting the sexual exploitation of our region’s most vulnerable victims -- our children.”
“Robert Swan is every parent’s worst nightmare,” said Louisiana Attorney General Buddy Caldwell. “When our Cyber Crime Unit begins an undercover investigation, we never know how dangerous the person lurking on the other side of the computer will be. In this case, our forensic examination revealed that Swan not only possessed or shared half a million images depicting the sexual abuse of children, but also that he actually teamed up with another pedophile to abuse an innocent child. We are very pleased and proud that our Cyber Crime Unit was instrumental in putting this pedophile behind bars.”
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
U.S. Attorney Polite praised the work of the State of Louisiana Department of Justice – Office of the Attorney General, Cyber Crime Unit in investigating this matter. Assistant United States Attorney Jordan Ginsberg is in charge of the prosecution.
Pepper Pike Woman Indicted for $476,000 ID Theft and Tax Fraud SchemeRead the Press Release
A Pepper Pike woman was indicted for an identity-theft scheme in which she attempted to claim $476,000 in fraudulent tax refunds, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio and Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
Ghana Johnson, 45, was indicted on one count of wire fraud, five counts of filing false claims for income tax refunds and five counts of aggravated identity theft.
"This defendant stole identities from unsuspecting people and then tried to get rich off of taxpayers," Dettelbach said.
“Investigating refund fraud and identity theft is a priority for IRS Criminal Investigation,” Enstrom said. “Stealing identities and filing false tax returns is a serious crime that hurts innocent taxpayers.”
She electronically filed 106 false, fictitious, and fraudulent tax returns for tax years 2010 and 2011 — in her own name and others’ — claiming a total of $476,503 in tax refunds. Johnson requested that these false income tax refunds be paid by direct deposit to prepaid debit cards, according to the indictment.
Johnson used stolen means of identification, including names and Social Security numbers, to execute her scheme. She obtained these means of identification in a variety of ways, including from stolen admission records from a medical and dental assistant school in Cleveland, according to the indictment.
Johnson held herself out to be an income tax preparer to family, friends, and others; even though Johnson did not list herself as an income tax preparer on any of the fraudulent income tax returns she filed in the names of others, according to the indictment.
Johnson falsified wage income, federal income tax withholdings, dependents, exemptions, and tax credit information in order to obtain income tax refunds for which neither Johnson nor the individuals she prepared the income tax returns for were entitled to receive. Many of the fraudulent income tax returns filed by Johnson shared common characteristics, including addresses, employers, wages, federal income tax withholdings, and tax credits, according to the indictment.
The Internal Revenue Service, Criminal Investigation Unit, in Cleveland, Ohio conducted the investigation. The case is being prosecuted by Assistant United States Attorney Miranda E. Dugi.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial, in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Pennsylvania Woman Pleads Guilty to Possession, Sale and Transprortation of A Stolen FirearmRead 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 Ciera Leann Bennett, 23, of Lawrenceville, Pennsylvania, pleaded guilty before U.S. District Judge Frank P. Geraci to possession and sale of a stolen firearm and transportation of a stolen firearm over state lines. The charges carry a maximum penalty of 10 years in prison, a fine of $250,000 or both.Assistant U.S. Attorney Charles E. Moynihan, who is handling the case, stated that Bennett was arrested after an investigation by the Pennsylvania State Police into the theft of a .38 caliber revolver from the owner in Tioga, Pennsylvania. On April 26, 2012, the defendant and co-defendant, Danelle Wilson, transported the stolen .38 caliber revolver from Tioga, Pennsylvania, to Elmira, NY, and sold it.
On December 31, 2012, the firearm was recovered in Ithaca, NY. Ballistic tests on the firearm concluded that the firearm had been used in an officer-related shooting in October of 2012, in which an Ithaca police officer was seriously injured. Bennett admitted that she took the gun from her mother without permission, sold it and used the money from the sale to buy drugs.
The plea is the culmination of an investigation on the part of the Federal Bureau of Investigation and the Pennsylvania State Police.
Sentencing is scheduled for March 19, 2015, at 3:30 PM before Judge Geraci.
Parmelee Man Sentenced for Assault with A Dangerous WeaponRead the Press Release
United States Attorney Brendan V. Johnson announced that a Parmelee, South Dakota, man convicted of Assault with a Dangerous Weapon was sentenced on December 15, 2014, by U.S. District Judge Roberto A. Lange.
Franklin Running Horse, age 48, was sentenced to 27 months in custody, 2 years of supervised release, and $100 special assessment to the Federal Crime Victims Fund.
Running Horse was indicted by a federal grand jury on July 15, 2014. He pled guilty on September 24, 2014.
The conviction stems from an incident which happened on April 10, 2014, when Running Horse, who had been drinking with his wife, got into an argument with her. Running Horse pushed the victim down and kicked her with shod feet in her face and posterior.
This case was investigated by the Rosebud Sioux Tribe law Enforcement Services. Assistant U.S. Attorney Tim Maher prosecuted the case.
Running Horse was immediately turned over to the custody of the U.S. Marshals Service.
Panama City Man Indicted on Child Pornography ChargesRead the Press Release
Follow @NDFLNewsPANAMA CITY, FLORIDA – A federal grand jury returned an indictment yesterday charging Timothy K. Smith, Jr., 37, with distribution, receipt, and possession of child pornography. Count one of the indictment alleges that on or about June 28, 2014, Smith knowingly and intentionally distributed images and videos of child pornography. Counts two and three allege that between August 21, 2012, and August 21, 2014, Smith knowingly received and possessed child pornography that involved a prepubescent minor and a minor younger than 12. The indictment was announced today by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
The indictment results from an investigation by agents of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Florida Department of Law Enforcement, and the North Florida Internet Crimes Against Children Task Force. The case is being prosecuted by Assistant United States Attorney Kathryn Risinger.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt in a court of law.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. Our office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Oxford Man Admits Operating Ponzi SchemeRead the Press Release
Follow @USAO_CT
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ROBERT E. LEE, JR., 50, of Oxford, pleaded guilty today in Bridgeport federal court to an indictment charging him with five counts of wire fraud stemming from his operation of a Ponzi scheme.
According to court documents and statements made in court, LEE was employed as a broker and financial advisor for various financial investment firms until July 2013 when he was terminated by his most recent employer, Rockwell Global Capital, LLC. Between January 2011 and March 2014, LEE defrauded individuals of more than $800,000 by claiming that he was investing their money in various investment vehicles when, in fact, he was maintaining custody of their funds in his personal bank account. He then used the money to make distributions to other investors, and for personal expenses. To conceal the scheme, LEE fabricated account statements and other documents, which he delivered to his victims.
LEE was arrested on May 12, 2014, and he is currently released on a $250,000 bond.Each count of wire fraud carries a maximum term of imprisonment of 20 years. LEE is scheduled to be sentenced by U.S. District Judge Jeffrey Alker Meyer on March 11, 2015.
The government is seeking the forfeiture of $358,077.17 that LEE held in an online trading account at the time of his arrest.
This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorneys David T. Huang and Christopher M. Mattei.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Owner of Dietary Supplement Company Pleads Guilty to Multimillion-Dollar Scheme to Adulterate Dietary SupplementsRead the Press Release
NEWARK, N.J. – The owner and president of a dietary supplement manufacturing company in Flanders, New Jersey, pleaded guilty today to conspiracy to commit wire fraud in relation to a scheme in which he directed the sale of diluted and adulterated dietary ingredients and supplements sold by his company, U.S. Attorney Paul J. Fishman announced.
Barry Steinlight, 69, of Hackettstown, New Jersey, pleaded guilty to a one-count information charging him with conspiring to commit wire fraud. As part of his plea agreement, Steinlight admitted that Raw Deal’s gross sales during the scheme were between $7 million and $20 million. Steinlight has agreed to forfeit more than $1 million in profits from the scheme.
“Barry Steinlight diluted his products, cheated his customers and lied to the Food and Drug Administration when they came to inspect his company,” U.S. Attorney Fishman said. “This scheme went on for four years and essentially became the business model at his company. People who sell and use dietary supplements have the right to expect that the ingredients are listed and they get what they paid for.”
“This dietary supplement company owner ignored his basic obligations in his pursuit for profit,” said Acting Assistant Attorney General Joyce R. Branda for the Department of Justice’s Civil Division. “American consumers have a right to know that the dietary supplements they purchase are safe to consume and that the ingredients listed on the label are actually in the bottle. This case demonstrates the Department of Justice’s commitment to ensuring that those who deal products affecting the health and safety of consumers are law abiding and that wrongdoers will be held accountable.”
According to documents filed in this case and statements made in court:
Steinlight was the president and owner of Raw Deal Inc., a dietary supplement manufacturing facility. From at least 2009 through November 2013, Steinlight instructed Raw Deal employees to add “fillers,” including maltodextrin, viobin cocoa replacer and rice flours to the dietary ingredients and supplements packaged for, and sold to, Raw Deal’s customers. These “fillers” were added without customer consent or knowledge. Steinlight also directed Raw Deal employees not to list the “fillers” as ingredients on the certificates of analysis (COAs) issued to its customers as proof of the identity of the ingredients contained in the products.
In addition to directing the dilution and adulteration of Raw Deal’s products, Steinlight also directed Raw Deal employees to create COAs that falsely certified that certain of Raw Deal’s products were kosher or organic. Further during an U.S. Food and Drug Administration (FDA) inspection of Raw Deal in February 2012, Steinlight instructed Raw Deal employees to alter a document before providing it to the FDA.
U.S. Attorney Fishman credited special agents of the FDA’s Office of Criminal Investigations, under the direction of Acting Special Agent in Charge James J. Royal, who investigated the case.
“When a company distributes adulterated and misbranded dietary supplements, they put consumers at risk,” said Acting Special Agent in Charge Royal. “Today’s plea agreement should serve as a reminder that FDA’s Office of Criminal Investigations will continue working with the Department of Justice to protect consumers from public health risks and fraud.”
The conspiracy charge carries a statutory maximum sentence of five years in prison and a maximum $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for March 30, 3015.The government is represented by Assistant U.S. Attorney Joseph Mack, Deputy Chief of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit, Special Assistant U.S. Attorney Shannon M. Singleton from the FDA’s Office of Chief Counsel, and Trial Attorneys Patrick Runkle and David Sullivan of the Civil Division’s Consumer Protection Branch. Paralegal Jeffrey Skonieczny of the U.S. Attorney’s Office also assisted in the criminal investigation.
U.S. Attorney Fishman reorganized the health care fraud practice at the U.S. Attorney’s Office for the District of New Jersey shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $620 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug, and Cosmetic Act and other statutes.
14-450
Defense counsel: William F. Maderer Esq., Florham Park, N.J.
Steinlight, Barry Information