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10 February 2015
Four Columbia Residents Indicted in Heroin ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that four Columbia, Mo., residents were indicted by a federal grand jury today for their roles in a conspiracy to distribute heroin in which two persons suffered an overdose.
Javis Deonn Wideman, 36, also known as “Booby” or “Boobie,” James Delvico Borden, also known as “Earl Johnson,” 38, Alec Matthew Ell, 20, and Angelica Melanie Polston, 20, all of Columbia, were charged in a 10-count superseding indictment returned by a federal grand jury in Kansas City, Mo. Today’s indictment replaces a Dec. 17, 2014, indictment that charged only Ell and Polston, and a Jan. 21, 2015, criminal complaint that charged only Wideman and Borden.
Today’s indictment alleges that all four defendants participated in a conspiracy to distribute heroin in Boone County from February 2014 to Jan. 20, 2015. The conduct of Wideman and Borden as members of the conspiracy, the indictment says, involved 100 grams or more of heroin.
According to an affidavit filed in support of the original criminal complaint, Columbia police officers were dispatched to a residence on Jan. 10, 2015, in reference to a heroin overdose. Upon arrival, officers discovered an unresponsive man and woman. Medical personal were able to revive both of them and the woman was transported to the hospital for further treatment. Officers searched the residence and discovered a package of heroin, still unused, along with drug paraphernalia used to inject heroin. A resident told officers that Wideman had supplied the heroin.
Wideman was arrested on Jan. 20, 2015, the affidavit says, after a cooperating individual met Wideman to purchase a half gram of heroin. Borden was arrested at his residence on the same day. Officers executed a search warrant at Borden’s apartment and found approximately 100 grams of heroin packaged for distribution, along with scales and other items.
According to the affidavit, Wideman and Borden both participated in undercover purchases of heroin in August and September 2014 through an individual who was cooperating with a law enforcement investigation.
In addition to the conspiracy, Ell is charged separately with four counts of distributing heroin and one count of possessing heroin with the intent to distribute. Ell and Polston are also charged together in one count of distributing heroin. Wideman and Borden are each charged separately with one count of distributing heroin and they are charged together in one count of distributing heroin.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Special Assistant U.S. Attorney Stuart J. Zander. It was investigated by the Drug Enforcement Administration, the Columbia, Mo., Police Department, the Jefferson City, Mo., Police Department and MUSTANG (Mid-Missouri Unified Strike Team and Narcotics Group).
Former W.Va. State Police employee gets two years for child porn possessionRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced today that Jeffrey Erra Osborne, 49, of Clendenin, West Virginia, was sentenced to two years in federal prison and 10 years of supervised release.
Osborne was employed by the West Virginia State Police for 21 years, most recently as a forensic analyst.
On Nov. 24, 2014, Osborne pleaded guilty to possession of pictures of prepubescent minors engaged in sexual acts. Osborne admitted that on Jan. 17, 2014, he possessed the images on his personal computer in his residence. As part of Osborne’s plea agreement, he has surrendered possession of computers, hard drives and electronic storage devices seized during the execution of the search warrant.
United States District Judge John T. Copenhaver, Jr. imposed the sentence.
The case was investigated by the West Virginia Internet Crimes Against Children Task Force and West Virginia State Police. Assistant United States Attorney Lisa. G. Johnston was in charge of the prosecution.
The case was prosecuted as part of U.S. Attorney Goodwin’s ongoing initiative to combat child sexual exploitation and abuse in the Southern District of West Virginia.
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Former Starr County Deputy Sheriff Pleads Guilty to Drug TraffickingRead the Press Release
LAREDO, Texas - Amy Reyes, 32, a former deputy with the Starr County Sheriff’s Office (SCSO), and her bother Bobby Lee Reyes, 36, both of Rio Grande City, have entered guilty pleas to possession with intent to distribute 34 kilograms of marijuana, announced U.S. Attorney Kenneth Magidson.
On Nov. 10, 2014 Amy Reyes and her brother were arrested at the Border Patrol (BP) Checkpoint located on Highway-16 in Hebbronville. Bobby Lee Reyes was driving a 2010 Chevy Malibu vehicle, while his sister rode as a passenger in the front seat.
Upon primary inspection, a canine alerted to the presence of narcotics within the vehicle. Agents then conducted an x-ray examination, during which time agents discovered 12 bundles of marijuana, weighing 34.9 kilograms, underneath the vehicle’s floor carpet.
Both defendants admitted trafficking marijuana to Houston and expected to receive financial compensation for their involvement. Amy Reyes was employed as a deputy with SCSO, but has since been terminated.U.S. District Judge Marina Garcia Marmolejo will set sentencing in the near future. At that time, the siblings will face up to five years in federal prison and a possible $250,000 maximum fine. They were permitted to remain on bond pending that hearing.
The charges are the result of an investigation by BP and the Drug Enforcement Administration. Assistant U.S. Attorney Sanjeev Bhasker is prosecuting the case.
Former Rite Aid Vice President and New Jersey Businessman Plead Guilty in $29.1 Million Fraud & Kickback SchemeRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a former Rite Aid Vice President and a New Jersey business man have pleaded guilty to charges in connection with a $29.1 million dollar surplus inventory sales/kickback scheme. Rite Aid is a publicly-owned national drug store chain with its headquarters located in Camp Hill, Pennsylvania.
During a hearing before U.S. District Court Judge John E. Jones III this afternoon, Jay Findling, age 54, of Manalapan, New Jersey, pleaded guilty to an Information charging him with Conspiracy to commit Wire Fraud. In a separate proceeding held earlier in the day, Judge Jones also accepted the guilty plea of former Rite Aid Vice President Timothy P. Foster, age 65, of Portland, Oregon, to the same Information charging him with False Statements to Authorities. Both charges are punishable by up to 5 years imprisonment and a $250,000 fine.
According to U.S. Attorney Peter Smith, the charges are based upon Foster’s and Findling’s 9 year conspiracy to defraud Rite Aid via a surplus inventory sales scheme. During the time period in question, Foster worked for Rite Aid in Oregon. As the Vice President for Quality Assurance, Foster’s primary responsibilities involved the liquidation of surplus Rite Aid inventory across the United States. The scheme succeeded by making Rite Aid believe its surplus inventory had been sold to Findling’s company, J. Finn Industries, LLC, for amounts reported by Foster when, in fact, the inventory had been sold to third parties for greater amounts. Findling would then kick back a portion of his profits to Foster. The scheme started in 2001 and continued until February of 2010 when Foster resigned from Rite Aid.
During the guilty plea proceeding Findling admitted he established a bank account in New Jersey under the name of “Rite Aid Salvage Liquidation.” The account was used by the conspirators to collect the payments from the real buyers of the surplus Rite Aid inventory. After the payments were received, Findling would send lesser amounts dictated by Foster to Rite Aid for the goods, thus inducing Rite Aid to believe the inventory had been purchased by J. Finn Industries, not the real buyers. During the guilty plea proceeding the government alleged Findling received at least $127.7 million from the real buyers of the surplus Rite Aid inventory but, with Foster’s help, only tendered $98.6 million of that amount to Rite Aid, leaving Findling approximately $29.1 million in profits from the scheme. The government also alleged Findling kicked back approximately $5.7 million of the $29.1 million to Foster.
Foster admitted during his guilty plea hearing that he knowingly and willfully lied when he was interviewed by the FBI in January of 2014 and denied he conspired with Findling to defraud Rite Aid. Foster subsequently recanted his false statements when he was re-interviewed by the FBI on May 1, 2014. During that interview Foster not only admitted he conspired to defraud Rite Aid with Findling, he voluntarily surrendered $2.9 million in cash he had received from Findling over the life of the conspiracy. Foster had stored the cash stored in three 5 gallon paint containers in his Phoenix, Arizona garage.
The Information was filed pursuant to plea agreements with the two defendants. Both agreements require the defendants to cooperate with the government and to pay restitution to Rite Aid as ordered by the court. Findling’s plea agreement also obligated him to make a $11.6 million dollar, lump sum forfeiture payment to the government, which Findling turned over to the U.S. Marshal Service Asset Forfeiture Fund at the conclusion of the hearing.
The case was investigated by the Harrisburg Office of the FBI. Both defendants are being prosecuted by Assistant United States Attorney Kim Douglas Daniel assisted by David Clark, Litigation Financial Analyst.
Former Maricopa County Jail Inmate Sentenced for Tax FraudRead the Press Release
PHOENIX – On Feb. 9, 2015, Steven Scott Pearce, 57, of Phoenix, Ariz., was sentenced by U.S. District Judge Diane J. Humetewa to 33 months of imprisonment for preparing false tax refund claims while incarcerated at the Maricopa County Jail. Pearce pleaded guilty on Oct. 7, 2014, to conspiracy to file false claims.
As part of his plea agreement, Pearce admitted preparing federal income tax returns using other inmates’ names, social security numbers, and dates of birth, and then listing false income and tax withholding so that the Internal Revenue Service would issue a false refund. Pearce admitted working with others inside and outside the jail to help prepare the tax returns, mail the returns to the Internal Revenue Service, and cash refund checks. Pearce admitted that he prepared at least 17 tax returns claiming a total of approximately $285,000 in false tax refunds.
Most of the false tax refunds were identified before refunds were issued, and Pearce claimed at sentencing that he did not receive any profits. At the time, Pearce was serving a five year state prison sentence for unrelated crimes. Pearce’s 33-month sentence for the tax fraud scheme will be served consecutive to his state prison sentence.
The investigation in this case was conducted by the Maricopa County Sheriff’s Office and the Internal Revenue Service-Criminal Investigation. The prosecution was handled by James R. Knapp, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-14-0097-PHX-DJH
RELEASE NUMBER: 2015-011_Pearce
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
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Former Jackson Tax Preparer Found Guilty of Tax FraudRead the Press Release
A Jackson tax preparer was found guilty yesterday of 20 counts of filing false tax returns today by a federal jury after a week-long trial, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Jarod Koopman, Internal Revenue Service Criminal Investigation.
Richard Alan Williams was found guilty of three counts of subscribing and filing false personal income tax returns for himself and 17 counts of assisting in the preparation and filing of false tax returns for his customers. The case was tried before U.S. District Judge Stephen J. Murphy, III.
At trial, witness testimony and exhibits established that Williams owned and operated Imperial Tax Service on Prospect Street in Jackson, and prepared and filed false tax returns for individuals for the 2004, 2006 and 2007 tax years. These returns claimed false business expenses or losses. The falsified items caused the taxpayers’ refunds to be larger than what they were entitled to by either reducing their taxable income with phony business expense losses or increasing the Earned Income Credit they were entitled to receive by adding the right amount of phony business income.
Additionally, Williams declared that his own income was only $1 in 2004; $2 in 2006; and $10 in 2007 when, in fact, he earned substantial fees for preparing tax returns during each of those years. The taxpayers who testified that Williams had prepared their returns, but had added phony business expenses or income, were unaware of the false items Williams had included to increase their refunds. However, a number of them have since been audited by the IRS and have been directed to pay back the excess refunds they received for those years along with penalties and interest.
A sentencing hearing was set for June 5. The maximum penalty for each offense of conviction is up to three years imprisonment, a $250,000 fine, and 1 year of supervised release.
"IRS Criminal Investigation focuses on protecting revenue by identifying, investigating and prosecuting abusive return preparers. This case accentuates the importance for taxpayers to carefully select a tax return preparer,” said Special Agent in Charge Koopman.
The case was investigated by Special Agents of the IRS Criminal Investigations and prosecuted by Assistant U.S. Attorneys Christopher Varner and Ross I. MacKenzie.
Former District of Columbia Technology Executive Pleads Guilty to Failing to Pay Employment TaxesRead the Press Release
The former operator of the wireless technology company Distributive Networks LLC (Distributive Networks) pleaded guilty today in federal court to willfully failing to pay more than $900,000 in employment taxes, Acting Deputy Assistant Attorney General Larry J. Wszalek of the Justice Department’s Tax Division and the Internal Revenue Service (IRS) announced.
Kevin Bertram pleaded guilty to a criminal information filed in the U.S. District Court for the District of Columbia. According to court documents, Bertram operated Distributive Networks from 2004 through 2010. Distributive Networks was a wireless technology company located in the District of Columbia.
According to court documents, Bertram was responsible for Distributive Networks’ federal tax obligations and he failed to account for and pay employment taxes due and owed to the IRS. From late-2007 through mid-2009, Bertram failed to file IRS Forms 941 (Employer’s Quarterly Federal Tax Returns) and failed to pay $927,922 in employment taxes that he had withheld from his employees’ wages. These taxes included federal income, social security and Medicare taxes that the company was required to withhold from its employees’ wages, as well as the company’s portion of social security and Medicare taxes.
As a condition of the plea agreement, Bertram is required to make restitution to the IRS. Bertram also faces a statutory maximum sentence of five years in prison and a maximum fine of $250,000. U.S. District Court Judge Amy Berman Jackson set sentencing for May 5.
The case was investigated by special agents from IRS-Criminal Investigation and prosecuted by Trial Attorneys Melissa S. Siskind and Jeffrey A. McLellan of the Tax Division.
Former CFO Sentenced to 57 Months in Prison for Embezzling over $900,000 from Non-Profit EmployerRead the Press Release
SAN FRANCISCO - Robert Bradley Strahan, a/k/a Robin Bradley, a/k/a Kaola Bradley, was sentenced yesterday to 57 months in prison, and ordered to pay $1,105,481 in restitution for an embezzlement scheme, announced United States Attorney Melinda Haag, Federal Bureau of Investigation Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez.
Strahan, 51, of San Francisco, pleaded guilty on November 3, 2014, to wire fraud, mail fraud, and tax evasion. According to the plea agreement, Strahan admitted to embezzling more than $920,000 from a non-profit trade association in San Francisco where he worked as the chief financial officer. Strahan’s responsibilities included bookkeeping, payroll, and accounting. As the CFO, he had complete control over and access to the association’s books, records, and bank accounts. Without the knowledge or authorization of the non-profit trade association, Strahan wrote and cashed checks payable to himself and to “Cash” totaling over $550,000; he used the association’s credit cards to make unauthorized purchases totaling over $250,000; and he put an acquaintance on the payroll who received over $120,000 but did almost no work. To conceal the money that he embezzled, Strahan made false entries in the association’s accounting systems. Strahan also emailed false financial statements to the board of directors that omitted the funds he was taking for his personal use. Finally, Strahan did not pay income taxes on any of the money he embezzled for calendar years 2009 through 2013, resulting in tax due and owing to the Internal Revenue Service of over $175,000.
Strahanwas charged by superseding indictment on August 7, 2014, with three counts of wire fraud, two counts of mail fraud, and two counts of tax evasion.
The sentence was handed down by the Honorable Thelton E. Henderson, United States District Court Judge, in San Francisco, following guilty pleas to four counts – two counts of wire fraud, in violation of 18 U.S.C. § 1343, one count of mail fraud, in violation of 18 U.S.C. § 1341, and one count of tax evasion, in violation of 26 U.S.C. § 7201. Judge Henderson also sentenced the defendant to a 3 year period of supervised release and ordered the defendant to pay $1,105,481 in restitution to victims. Strahan was arrested on May 30, 2014, and has remained in custody since that time.
Hallie Mitchell Hoffman is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Mary Mallory and Bridget Kilkenny. The prosecution is the result of an investigation by the FBI and the IRS, Criminal Investigation.
Former Assistant Vice President of Bank Indicted for Bank Fraud and Embezzling more than $1 MillionRead the Press Release
NEWARK, N.J. - A former bank assistant vice president was indicted today by a federal grand jury in connection with a scheme to embezzle more than $1 million while she worked at a bank in Fort Lee, New Jersey, U.S. Attorney Paul J. Fishman announced.
Miye Chon, a/k/a/ “Karen Chon,” 34, of Englewood Cliffs, New Jersey, was charged with one count of bank fraud and 27 counts of theft, embezzlement or misapplication of funds by a bank officer or employee.
According to documents filed in this case and statements made is court:
Chon was employed by BankAsiana, a federally insured financial institution, as an operations officer and later as an assistant vice president and operations officer at the bank’s Fort Lee branch until the bank was acquired by Wilshire Bank in October 2013. Chon had access to customer accounts and the bank’s internal account records, computer system and vault. Over several years, Chon stole more than $1 million from BankAsiana’s customer accounts by regularly making unauthorized transfers from customer certificate of deposit (CD) accounts into BankAsiana’s vault cash account and then physically removing cash from the bank’s vault.
BankAsiana’s successor began an internal investigation after a customer found problems with the customer’s tax forms and account records. The bank discovered that Chon had accessed BankAsiana’s computer systems using her unique account access credentials on multiple occasions in order to make unauthorized transfers from customer CDs to the bank’s vault account and then removing the cash. Chon had avoided detection by making false entries in the bank’s records and by taking steps to transfer money back into customer CDs before they were set to reach maturity. She would transfer funds from newer CDs at the bank into maturing CDs that were short funds as a result of her having previously transferred money out of them.
Chon accomplished this scheme on dozens of occasions, typically taking tens of thousands of dollars at a time. One time, she converted $100,000 from a customer’s CD account. Bank records further show that during just one week between Sept. 27, 2013 and Oct. 4, 2013, Chon’s last day working at the bank, she made multiple unauthorized transfers from customer accounts in amounts totaling approximately $1.2 million to cover losses in other customer accounts that she had previously looted as part of the scheme. According to the successor bank’s investigation, the scheme resulted in a $1.4 million loss to the bank.
Chon faces a maximum potential sentence of 30 years in prison on each count and a fine of $1 million, or twice the gross gain or loss resulting from the scheme, as well as mandatory restitution in the full amount of the loss to the victim bank.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s indictment.
The charges in the indictment against Chon are merely accusations, and the defendant is considered innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorney Paul A. Murphy of the U.S. Attorney’s Office’s Economic Crimes Unit.
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Defense counsel: Matthew Jeon Esq., Fort Lee
Federal Jury Convicts Man of Possessing Firearm with Obliterated Serial NumberRead the Press Release
St. Thomas, USVI- After a two-day trial in District Court on St. Thomas, a federal jury today found Jace Clendinen, 31, guilty of possessing a firearm with an obliterated serial number, announced United States Attorney Ronald W. Sharpe.
According to the evidence presented at trial, on September 1, 2014, officers of the Virgin Islands Police Department were in the area of the Smith Bay Ballpark during Labor Day J’Ouvert activities when they witnessed an ammunition magazine fall from a flatbed truck carrying the band. Officers ordered everyone off of the truck to determine who had a firearm. Clendinen jumped from the truck and rapidly walked away from the officers. Officers pursued Clendinen and discovered a Fabrique Nationale firearm with an obliterated serial number in Clendinen’s pant leg.
Clendinen’s sentencing is scheduled for May 25, 2015. He faces a maximum sentence of five years in prison and a $250,000 fine.
United States Attorney Sharpe commended the efforts of the Virgin Islands Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives who investigated the case. The case was prosecuted by Assistant U.S. Attorneys Everard E. Potter and Segrid T. Sprotte.
Federal Grand Jury IndictmentsRead the Press Release
Contact Person: Beth Drake (803)929-3000
Greenville, South Carolina ----United States Attorney Bill Nettles stated today that a Federal Grand Jury in Greenville, South Carolina, returned Indictment(s) against the following: Foreign Nationals Charged with Illegal Re-entry
Evaristo Sanchez-Lozano, Margarito Pascual-Magana, and Abner Diaz-Lopez were each charged in Indictments with illegal re-entry to the United States, a violation of Title 8, United States Code, Section 1326. The maximum penalty each could receive, depending on their prior criminal history, is two to twenty years imprisonment. These cases were investigated by U.S. Immigration and Customs Enforcement (ICE) agents and are assigned to Assistant United States Attorney Max Cauthen of the Greenville office for prosecution.
The United States Attorney stated that all charges in these Indictments are merely accusations and that all defendants are presumed innocent until and unless proven guilty.Federal Grand Jury IndictmentsRead the Press Release
Contact Person: Beth Drake (803)929-3000
Columbia, South Carolina ----United States Attorney Bill Nettles stated today that a Federal Grand Jury in Charleston, South Carolina, returned Indictment(s) against the following: Charleston Man Indicted for Investment Fraud
Robert C. Jordan, age 64, of Charleston, South Carolina, was charged in a 6-count Indictment for Wire Fraud and Making a False Statement on a Loan Application, a violation of 18 U.S.C. §§ 1343 and 1014. The maximum penalty that Jordan could receive is 30 years imprisonment and a maximum fine of $1 million. The case was investigated by agents of the FBI and is assigned to Assistant United States Attorney Rhett DeHart of the Charleston office for prosecution.
St. Stephen Man Indicted for Theft of Government
Jerome Ravenell, age 58, of St. Stephen, South Carolina was charged in a 1-count Indictment for Theft of Government Property, a violation of 18 U. S. C. § 641. The maximum penalty that Ravenell could receive is 10 years imprisonment and a maximum fine of $250,000. The case was investigated by agents of the Social Security Administration and is assigned to Assistant United States Attorney Rhett DeHart of the Charleston office for prosecution.
The United States Attorney stated that all charges in these Indictments are merely accusations and that all defendants are presumed innocent until and unless proven guilty.Englewood Man Charged with Conspiracy to Commit Bank FraudRead the Press Release
A criminal information was filed charging Lawrence Cline, 62, of Englewood, Ohio, with conspiracy to commit bank fraud and bank fraud related to the sale of four homes in Toledo, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The conspiracy took place from at least November 2005 through July 2006, according to court documents.
If convicted, the defendant’s sentence will be determined by the Court after reviewing 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.
The investigating agency in this case is the Internal Revenue Service-Criminal Investigations, Toledo, Ohio. The case is being handled by Assistant United States Attorney Gene Crawford.
An information is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Duval County Man Sentenced to Prison for Identity Theft and Counterfeit ChecksRead the Press Release
Jacksonville, Florida – U.S. District Judge Marcia Morales Howard has sentenced Larry Bernard Taylor (49, Jacksonville) to 20 months in federal prison for identity theft and aiding and abetting the attempted passing of counterfeit checks. He pleaded guilty on November 13, 2014.
According to court documents, on February 26, 2014, the Florida Highway Patrol (FHP) conducted a traffic stop of a vehicle Jasper Shields was driving on Interstate 95 in Duval County. Larry Bernard Taylor was a passenger in the vehicle. When asked for identification, Taylor identified himself as L.C. and provided a Florida Identification Card to the FHP trooper in the name of L.C. After further questioning, Taylor admitted his true identity. Shields subsequently provided consent for a vehicle search, during which officers located 12 counterfeit business checks purportedly issued from Walgreens. The checks were made out to three different payees, in various amounts.
On February 2, 2015, Shields was sentenced to 57 months in federal prison for his role in the scheme to pass counterfeit business checks and for violating his supervised release.
This case was investigated by the United States Secret Service North Florida High-Tech Crime Task Force and the Florida Highway Patrol. It was prosecuted by Assistant United States Attorney Kevin C. Frein.
District Court Enters Permanent Injunction Against San Francisco Soy and Tofu Company and Senior Officers to Stop Distribution of Adulterated ProductsRead the Press Release
The U.S. District Court for the Northern District of California entered a consent decree of permanent injunction against Fong Kee Tofu Co. Inc., Yan Hui Fong, the firm’s co-owner and chief executive officer, and Jen Ying Fong and Suny Fong, co-owners and corporate officers, to prevent the distribution of adulterated tofu and other soy food products, the Department of Justice announced today.
The department filed a complaint in the Northern District of California on Jan. 23 at the request of the U.S. Food and Drug Administration (FDA). The complaint alleges that the defendants have a history of processing soy food products under insanitary conditions. As detailed in the complaint, the company receives, prepares, processes, manufactures, labels, packs, holds and distributes soy food products including soy drinks, firm tofu, soft tofu, fried tofu balls (oil bean cake) and soybean cake. The complaint also alleges that Yan Hui Fong, Suny Fong and Jen Yin Fong are Fong Kee Tofu’s corporate officers with the authority and responsibility for preventing and correcting violations of federal law at the company.
In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and to be bound by a permanent injunction that requires Fong Kee Tofu to cease all operations and requires that if the defendants wish to resume manufacturing and distributing food in the future, the FDA first must determine that the firm’s manufacturing practices have come into compliance with the law.
“Fong Kee Tofu was repeatedly informed that the sanitation practices at its facility were deficient,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division. “The failure to make sure that its facility was operating under sanitary conditions could be a serious risk to the public health and needed to be remedied.”
According to the complaint, FDA inspectors in 2014 observed pigeons on top of plastic-wrapped raw soybean pallets and they observed insects flying around the area used to process firm tofu. The complaint further alleges that employees were observed using utensils that had not been properly sanitized in food production and packing tofu without washing or sanitizing their hands after coming into contact with insanitary objects. In addition, according to the complaint, residue was observed on equipment used in processing tofu even after the equipment had been cleaned. Under federal law, food manufacturers are required to comply with current good manufacturing practices to ensure that all food distributed into interstate commerce is not adulterated.
The government is represented by Counsel Melanie Singh of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel for Enforcement Deeona Gaskin of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.
Defendants Sentenced in Drug Distribution ConspiracyRead the Press Release
WICHITA FALLS, Texas — Two defendants, who pleaded guilty in June 2014 to their respective roles in a crack cocaine/cocaine powder distribution conspiracy that operated in Wichita Falls and McAllen, Texas, have been sentenced, announced John Parker, Acting U.S. Attorney for the Northern District of Texas..
Yesterday, U.S. District Judge Reed C. O’Connor sentenced Rodolfo Trevino, 34, of Wichita Falls, to a 97-month term of imprisonment. Trevino pleaded guilty to one count of conspiracy to possess with the intent to distribute cocaine base and one count of money laundering. Judge O’Connor also ordered that Trevino forfeit a residence located in the University Park subdivision in Wichita Falls, a Land Rover Range Rover, a Hummer H2, a firearm and assorted ammunition.
In mid-December 2014, Judge O’Connor sentenced co-defendant Rene Villastrigo, Jr., 34, also of Wichita Falls, to 30 months in federal prison. He pleaded guilty to one count of conspiracy to possess with the intent to distribute cocaine.
Beginning sometime in 2012 and continuing to April 18, 2014, Trevino and Villastrigo conspired together and with Senobio Ortiz, Jr., of McAllen Texas, and others, to possess with the intent to distribute cocaine and cocaine base. Ortiz has pleaded guilty to one count of conspiracy to possess with the intent to distribute cocaine, and he is scheduled to be sentenced in April 2015.
According to court documents, Trevino traveled frequently to McAllen, where he recruited Ortiz to regularly transport cocaine and marijuana from McAllen to Wichita Falls. Trevino also recruited Villastrigo to rent a residence in Wichita Falls to store and repackage the cocaine and marijuana for distribution. Trevino used this residence to convert the powder cocaine into crack cocaine.
Trevino deposited the drug proceeds he acquired into bank accounts in Wichita Falls and withdrew those deposits in the McAllen area, intending for these financial transactions to conceal his drug trafficking activity.
On April 18, 2014, law enforcement executed a search warrant at a residence in Wichita Falls where Trevino and Villastrigo manufactured crack cocaine. Both Trevino and Villastrigo were present at the time, and officers found approximately 250 grams of cocaine base and eight packages of marijuana, each weighing more than one pound. Officers found a firearm during a search of Trevino’s girlfriend’s home, and they found ammunition for the firearm at Trevino’s home.
The FBI’s Safe Streets Task Force (SSTF), Wichita Falls Police Department, and Internal Revenue Service Criminal Investigation investigated. Assistant U.S. Attorney Suzanna Etessam prosecuted the criminal case, and Assistant U.S. Attorney John de la Garza prosecuted the forfeitures.
Convicted Sex Offender Pleads Guilty to Federal Charge of Failure to Register as A Sex OffenderRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today that Rodney Joel Neal (53, Montezuma, Georgia) has pleaded guilty to failing to register as a sex offender. He faces up to 10 years in federal prison and a $250,000 fine. Neal has been in custody since his arrest on October 10, 2014.
According to court documents, in May 1988, Neal was found guilty and sentenced for committing aggravated child molestation and child molestation in Macon County, Georgia. In July 2014, he moved from Georgia to Jacksonville, but failed to register as a sex offender in Florida, as required by the Sex Offender Registration and Notification Act.
The Sex Offender Registration and Notification Act is part of the Adam Walsh Child Protection and Safety Act of 2006. The Adam Walsh Act provides for the use of federal law enforcement resources, including the United States Marshals Service, to assist state and local authorities in locating and apprehending non-compliant sex offenders.
This case was investigated by the Jacksonville Sheriff’s Office, the United States Marshals Service, and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another 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 United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Community Book Discussions Aim to Spark Conversations, Understanding Across Racial DivideRead the Press Release
Local civic and social organizations are breaking racial, ethnic and religious boundaries by discussing Tanner Colby's Vestavia Hills-based book, Some of My Best Friends Are Black: The Strange Story of Integration in America. Discussions begin Sunday throughout the metro area.
The effort is the brainchild of Bettina Byrd-Giles, chief executive officer of Bethesda Life Center Inc. in Ensley, who has worked with race relations efforts in Birmingham for more than 20 years. As Bethesda's CEO, she has seen the devastating effects of de facto segregation first hand. Byrd-Giles sought and received support in organizing the community discussions from the Community Affairs Committee of REV Birmingham and U.S. Attorney Joyce White Vance.
"One of the many lessons we have learned from the tragedy in Ferguson is that communities have to be unafraid to talk openly about the difficult and sometimes painful issue of race," Vance said. "Open discussion can diminish the lack of racial tolerance and understanding," she said. "I am proud to be part of a community where so many people, from so many walks of life, are willing to come together with people they don't know in order to build better relationships and, ultimately, a stronger community."
"The doors are open; let us continue to dialogue truthfully. It is about more than just color, it is how and why people see what they see in others," said CAC Co-Chairwoman Alice Westery. At the pilot discussion Feb. 4 at the CAC Race Relation Round Table on Some of My Best Friends are Black, "the group that I facilitated continued to bring up the need to understand that black people, and all minorities, can feel it when they are not accepted or properly acknowledged as a human being with human rights," Westery said.
This year's annual Martin Luther King Jr. Unity Breakfast, where Colby was the keynote speaker, kicked off the February community book discussion. Participants have two avenues to get involved with the discussion. The first option is to organize a discussion in which one group invites a similar group or organization of a different culture to participate. The plan is for groups to have as much in common as possible, and facilitators will assist the discussion. The expectation is that these discussions will yield specific action steps to address de facto segregation. These matched group discussions are taking place Sunday through Feb. 21, and at least 20 are registered.
Some of the pairings include Sisters Chaverim, which is a group of Jewish and African American leaders. The Birmingham Alumnae Chapter of Delta Sigma Sorority Inc. is hosting The Junior League of Birmingham. The Rotary Club of Birmingham is hosting several African American civic leaders at a discussion at Taj India restaurant. The Vestavia community is also planning a discussion.
A second option is for people to join an open discussion in one of several metro area locations Feb. 22 - 28. The events will be led by experienced race relations facilitators who were former Anytown, AL, or National Coalition for Community Justice staff. There are two discussions targeted to the under-40 crowd. For locations and times, please visit Birmingham Magic City Crossings at this site: https://www.eventbrite.com/d/local/magic-city-crossings/. There is no cost for participating, but it is requested that participants read at least Parts I & II of Some of My Best Friends are Black.
The anticipated outcome is to discuss how the community remains segregated, despite the strides of the Civil Rights Movement to eliminate legalized racial segregation. Participants will be asked what they can do, personally and collectively, to address de facto segregation in the Birmingham metro area. The results will be collected by the facilitators and discussed to see what the next steps will be.
For more information, please contact Bettina Byrd-Giles [email protected]
###California Man Sentenced to 72 Months for Role in Oxycodone and Money Laundering ConspiraciesRead the Press Release
Anchorage, Alaska-U.S. Attorney Karen L. Loeffler announced today that a California man was sentenced by U.S. District Court Judge Timothy M. Burgess to serve a 72 month term of imprisonment for his role in an oxycodone distribution and money laundering ring.
Anwar Hasan, 69, of Oakland, California, previously pled guilty to conspiring to distribute large quantities of oxycodone and, additionally, to conspiring to launder the proceeds of his drug trafficking activities. As part of his guilty plea, Hasan admitted to acquiring oxycodone pills in California and then selling them to distributors in New York, New Jersey, California and Alaska. He further admitted recruiting others to distribute oxycodone in Alaska because the prices were higher here.
After Hasan’s distributors sold the oxycodone they deposited the proceeds of their trafficking into a bank account that Hasan maintained. Between January and September 2010, Hasan received more than $284,000 in cash deposits to his bank account, despite only earning just over $15,000 in declared income for the same year. As part of his guilty plea, Hasan admitted that the $284,000 were the proceeds of oxycodone trafficking.
In announcing the 72-month sentence, Judge Burgess called Hasan’s actions dramatic and extremely serious. Judge Burgess also noted that it was clear that Hasan’s actions were motivated by money and emphasized the need to protect the public and deter others from committing similar crimes.
Following his prison term, Hasan will be on supervised release for a term of three years. In announcing the sentence, Ms. Loeffler praised the work of Homeland Security Investigations who served as the lead agency on the investigation that lead to Hasan’s conviction.
Bergen County, New Jersey, Doctor Admits Making Millions in Cash Deposits to Avoid Paying Taxes on Medical Practice IncomeRead the Press Release
NEWARK – A doctor who owns three immediate care facilities in Hudson County, New Jersey, today admitted making millions of dollars’ worth of cash deposits and fraudulently transferring his residence to a family member to evade taxes, U.S. Attorney Paul J. Fishman and Tax Division Principal Deputy Assistant Attorney General Caroline D. Ciraolo announced.
Medhat El Amir of Saddle River, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to Count One of an indictment, charging him with corruptly endeavoring to impede the due administration of the Internal Revenue Code, and Count Two, tax evasion, in connection with an individual income tax return for calendar year 2007.
According to documents filed in this case and statements made in court:
El Amir was a primary care doctor and 60 percent owner of Immediate Care P.C., which provided urgent care health services for patients at an office in North Bergen, New Jersey, and two offices in Jersey City, New Jersey.
From Feb. 11, 2005, through Dec. 31, 2010, El Amir attempted to impede the internal revenue laws in a number of ways. He admitted he fraudulently transferred his residence in Saddle River to his sister for $2.5 million to keep the property out of the reach of the IRS and the payroll taxes he owed through his former practice. El Amir also admitted cashing $7,261,083 in Immediate Care insurance company checks at a check cashing facility, depositing the majority of that income into a number of bank accounts to which he had access and using a portion of the money for personal expenses.
El Amir admitted he failed to report taxable income of $2,087,048 for the years 2007-2010, resulting in a $502,160 tax loss to the United States.
Despite earning a significant income through Immediate Care, El Amir did not file personal income tax returns, Forms 1040, for calendar years 2007, 2009 and 2010. While El Amir did file a personal income tax return for calendar year 2008, it substantially under-reported the income El Amir received from Immediate Care and claimed interest deductions to which he was not entitled. El Amir also caused to be sent to the IRS correspondence that under-reported the amount of income he and his wife received from Immediate Care in calendar year 2008.
The count of corruptly endeavoring to impede the due administration of the Internal Revenue Code carries a maximum potential penalty of three years in prison and a $250,000 fine. The count of tax evasion carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for June 10, 2015.
U.S. Attorney Fishman and Principal Deputy Assistant Attorney General Ciraolo credited special agents of the IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading to today’s guilty plea.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office 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 $635 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.
The government is represented by Assistant U.S. Attorney Deborah J. Gannett of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark and Trial Attorney Shawn T. Noud of the Justice Department’s Tax Division.
15-053
Defense counsel: Samuel R. DeLuca Esq., Jersey City, N.J.
El Amir, Medhat Indictment
Augusta Man Pleads Guilty to Pharmacy Robbery ChargeRead the Press Release
Contact: F. Todd Lowell
Assistant United States Attorney
Tel: (207) 945-0373
Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Lance M. Szady, 26, of Augusta, Maine pleaded guilty today in U.S. District Court to pharmacy robbery.
Court records show that on September 2, 2014, Dominic J. Pomerleau robbed the Rite Aid Pharmacy located on Hospital Street in Augusta, Maine. He approached the pharmacy counter with a note that demanded oxycodone and absconded with three bottles of oxycodone. Szady had driven Pomerleau to the pharmacy and waited for Pomerleau while Pomerleau committed the robbery. Szady drove Pomerleau and a female passenger, Nicole A. Breton, to Breton’s residence in Chelsea. All three spent the night at that residence and they consumed many of the pills that were taken in the robbery. Pomerleau pleaded guilty on January 23, 2015, to attempted pharmacy robbery and pharmacy robbery. On February 9, 2015, Breton pleaded guilty to being an accessory after the fact to pharmacy robbery.
Szady faces up to 20 years in prison, a $250,000 fine and restitution. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by the Augusta Police Department and the Federal Bureau of Investigation.
Attorney General Holder Statement on the Resignation of Tim Purdon as the United States Attorney of the District of North DakotaRead the Press Release
Attorney General Eric Holder released the following statement on the resignation of U.S. Attorney Tim Purdon:
“Tim Purdon has been an outstanding United States Attorney, a fierce advocate for the people of North Dakota and a strong national leader whose efforts to improve public safety in Indian Country have made a profound difference – and touched countless lives,” said Attorney General Eric Holder. “Throughout his tenure, Tim has distinguished himself as a skilled attorney and a consummate public servant, rising to challenges as diverse as human trafficking, violent crime, drug trafficking and fraud. His work to forge close partnerships with tribal leaders – and to develop and implement an Anti-Violence Strategy for Indian Country – have provided a model for success, increased federal prosecutions on North Dakota’s reservations and laid a strong foundation on which future efforts can be built. His exceptional leadership and wise counsel at the national level – advising me and other Justice Department officials as Chair of the Native American Issues Subcommittee – have had an important and enduring impact. And although we are all sorry to see him go, I am proud to join Tim’s dedicated colleagues in thanking him for his exemplary service as United States Attorney, and wishing him all the best as he begins a new chapter in his career.”
Area Man Sentenced for Drug and Gun OffensesRead the Press Release
GREENEVILLE, Tenn. – Anthony Douglas Williams, 28, of Greeneville, Tenn., was sentenced on Feb.10, 2015, by the Honorable R. Leon Jordan, U.S. District Court Judge, to serve 286 months in federal prison for his conviction on charges of possession with intent to distribute crack cocaine, and knowingly using and carrying a firearm during and in relation to a drug trafficking crime. There is no parole in the federal system.
In February 2014, members of the Johnson City Police Department came upon Williams after he had been involved in a traffic accident on Interstate 26. Upon questioning, and after attempts by Williams to provide false identifying information, officers confirmed Williams’s identity and the existence of several outstanding warrants for his arrest. When law enforcement then proceeded to take Williams into custody, a struggle ensued in which Williams tried to gain control of one of the officer’s guns. Williams was eventually subdued and placed under arrest.
Thereafter, a search of Williams uncovered two firearms, accompanying ammunition, approximately 16.32 grams of crack cocaine, approximately 8.90 grams of powder cocaine, 92 dihydrocodeinone pills, and several hundred dollars. A subsequent search of Williams’s vehicle unrevealed a third firearm, approximately 14.175 grams of marijuana, and four digital scales.
This case was the product of cooperation between the Johnson City Police Department, and Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorney Nick Regalia represented the United States.
This case was brought as part of Project Safe Neighborhoods (PSN), a comprehensive national strategy that creates local partnerships with law enforcement agencies to effectively enforce existing gun laws. It provides more options to prosecutors, allowing them to utilize local, state, and federal laws to ensure that criminals who commit gun crime face tough sentences. PSN gives each federal district the flexibility it needs to focus on individual challenges that a specific community faces.
Appleton Felon Sentenced to More Than 16 Years in Prison for Possession of Body Armor and MethamphetamineRead the Press Release
Defendant arrested after leading Stevens County Sheriff’s Office on high-speed chaseUnited States Attorney Andrew M. Luger today announced the sentencing of JOSHUA M. PROUDFOOT, 36, to 202 months in federal prison for possession of methamphetamine and illegally possessing body armor. PROUDFOOT pleaded guilty on September 4, 2014, to Possession with Intent to Distribute Methamphetamine and to being a Felon in Possession of Body Armor. PROUDFOOT was sentenced on February 6, 2015, before Judge Ann D. Montgomery in U.S. District Court in Minneapolis, Minn.
According to the defendant’s guilty plea and documents filed in court, on May 7, 2014, PROUDFOOT led police officers on a high-speed car chase lasting nearly two miles before the defendant lost control of his vehicle and crashed into a field. PROUDFOOT threw at least 14 bags of methamphetamine, totaling more than 20 grams, out of the driver’s side window during the chase. PROUDFOOT, who also had several yellow pills and a live round of .38-caliber ammunition, was arrested a short distance from the crash site after attempting to flee on foot.
According to the defendant’s guilty plea and documents filed in court, PROUDFOOT also possessed two backpacks containing a loaded .38-caliber revolver, additional ammunition and several empty small plastic baggies. In a car he owned, the defendant also had a Point Blank brand bulletproof vest, a loaded .40-caliber handgun, and a tin containing drug paraphernalia and several unidentified pills.
Stevens County Sheriff Jason Dingman said, “This was a significant case for Stevens County. I appreciate the partnership between the federal, state, and local agencies involved in this investigation.”
“The court imposed a just and appropriate sentence based on this defendant’s repeated violent behavior,” said Assistant U.S. Attorney Benjamin Bejar. “The case agent and investigators were instrumental in obtaining justice in this case.”
This case is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Bureau of Criminal Apprehension, Stevens County Sheriff’s Office, and the Morris Police Department.
Assistant United States Attorney Benjamin Bejar prosecuted this case.
Defendant Information: JOSHUA M. PROUDFOOT, 36
Appleton, Minn.
Convicted: • Possession With Intent to Distribute Methamphetamine, 1 count
• Felon in Possession of Body Armor, 1 count
Sentenced: • 202 months in federal prison
• 8 years supervised releaseAnderson County Man Sentenced for Child Pornography ViolationsRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A 25-year-old Palestine, Texas man has been sentenced to federal prison for child pornography charges in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Joshua Quick pleaded guilty on Oct. 14, 2014 to receiving child pornography and was sentenced to 120 months in federal prison today by U.S. District Judge Leonard Davis. Quick was also ordered to register as a sex offender upon release from prison.According to information presented in court, on Sep. 14, 2013, Quick received child pornography on a computer after using the computer to solicit the participation of a minor to engage in sexually explicit conduct persuading the minor to produce images depicting child pornography. Quick was indicted by a federal grand jury on Feb. 26, 2014.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Anderson County Sheriff’s Office and the Urbandale, Iowa Police Department and prosecuted by Assistant U.S. Attorney Nathaniel C. Kummerfeld.Albuquerque Man Sentenced to Probation for Stealing from Department of Veterans AffairsRead the Press Release
ALBUQUERQUE – Scott Till, 57, of Albuquerque, N.M., was sentenced today to two years of probation for his theft of government funds conviction. Till also was ordered to pay restitution in the amount of $179,492.00 to the Department of Veterans Affairs
Till, who is not a veteran, pled guilty to a felony information on Oct. 6, 2014, and admitted that in Nov. 2011, he took money from the government to which he was not entitled. Till committed the crime by keeping open a bank account into which the Department of Veterans’ Affairs was depositing money, specifically to maintain sole access to that money, knowing that he was not entitled to it. Till committed the crime in Bernalillo County, N.M.
This case was investigated by the Department of Veterans Affairs Office of Inspector General and was prosecuted by Assistant U.S. Attorney Paul Mysliwiec.
9 February 2015
“tycoon” Owner Sentenced to Prison for Defrauding Lenders and IrsRead the Press Release
SAN DIEGO - Grant McCollough, a real estate investor and owner of Tycoon Investments, along with his wife Marisa McCollough, a former Wells Fargo Bank employee, were sentenced today by U.S. District Judge Michael M. Anello for participating in a mortgage fraud conspiracy involving dozens of properties in Colorado and Maui, Hawaii.
Grant McCollough was sentenced to 10 months in custody; Marisa McCollough was sentenced to four months. The court also ordered the couple to pay $25,746 in restitution to the IRS.
The McColloughs pleaded guilty on September 30, 2014, and admitted that as part of their conspiracy they recruited investors to act as “straw” buyers in real estate transactions. The defendants then arranged for false information to be submitted to mortgage lenders in support of the straw buyers’ loan applications. The McColloughs also fraudulently inflated the value of the homes and disguised the source of the down payments, in order to skim funds from the fraudulent transfer of property among their co-conspirators. They then hid their skimmed profits from the Internal Revenue Service.
Nearly all of the fraudulent mortgages were arranged by coconspirator Donald Totten, a mortgage loan officer and broker operating from Rancho Santa Fe. Totten was sentenced in October 2014 to 30 months in prison for his role in the scheme, which included mortgage fraud causing more than $20 million in losses to mortgage lenders, bankruptcy fraud, and filing a false tax return that failed to report more than $3 million in taxable income. Totten operated the businesses “Money World” and “Integrated Home Loans,” and specialized in brokering a particularly toxic stated-income, stated-asset “negative amortization” loan product, which allowed borrowers to make monthly payments less than the interest charged over the same period and without paying down the principle balance, so that the monthly payments were low but the outstanding balance of the loan increased over time.
Grant McCollough was not the only principal of Tycoon Investments involved in the conspiracy. McCollough’s business partner, Jason Kent, was also charged in the scheme. On July 21, 2014, Kent pleaded guilty to wire fraud, and admitted assisting Totten, Grant McCollough, Marisa McCollough, and others with carrying out this mortgage and “kickback” scheme. Kent’s case was transferred to the District of Hawaii and he is scheduled to be sentenced on February 26, 2015, before United States District Judge Leslie E. Kobayashi.
With Totten’s help, Marisa McCollough bought a $3.4 million oceanfront home in Lahaina, Hawaii. In order to qualify, she falsely claimed that she earned $90,000 per month, had close to $700,000 in savings, and made a down payment of $630,000. This was all false, and in fact Ms. McCollough did not contribute any of her own funds to the purchase. The McColloughs lived in the home for several years, but never made the mortgage payments they owed.
According to court documents, many of the fraudulently-obtained mortgage loans subsequently defaulted, causing mortgage lenders and secondary purchasers, including Fannie Mae and Freddie Mac, to suffer significant losses as a result of the conspiracy. Fannie Mae and Freddie Mac are government-sponsored enterprises with a mission to provide liquidity, stability, and affordability to the U.S. housing market. Both enterprises assist mortgage lenders by purchasing the loans they originate, enabling the lenders to replenish their funds to finance additional mortgage loans for American homebuyers. The statements borrowers make in loan applications are an important factor in Fannie Mae’s and Freddie Mac’s determination whether to purchase a mortgage loan.
DEFENDANTS Case Number: 14CR2787-MMA Grant McCollough Age: 38 Kearney, Nebraska Marisa McCollough Age: 36 Kearney, Nebraska CHARGES Conspiracy to commit wire fraud and defraud the United States, in violation of 18 U.S.C. § 371.
Maximum Penalties: 5 years’ imprisonment, $250,000 fine or twice the pecuniary gain or loss resulting from the offense, $100 special assessment, restitution.
DEFENDANT Case Number: 13CR2941-MMA Donald Totten Age: 58 Oakland, California CHARGES Conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349.
Maximum Penalties: 30 years’ imprisonment, $1,000,000 fine or twice the gain or loss resulting from the offense, $100 special assessment, restitution.
Filing a false tax return, in violation of 26 U.S.C. § 7206(1)
Maximum Penalties: 3 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
Bankruptcy fraud, in violation of 18 U.S.C. § 152
Maximum Penalties: 5 years’ imprisonment, $250,000 fine or twice the gain or loss resulting from the offense, $100 special assessment, restitution.
DEFENDANT Case Number: 14CR1667-MMA Jason Kent Age: 37 Lahaina, HI CHARGES Wire fraud affecting a financial institution, in violation of 18 U.S.C. § 1343.
Maximum Penalties: 30 years’ imprisonment, $1,000,000 fine or twice the gain or loss resulting from the offense, $100 special assessment, restitution.
DEFENDANT Case Number: 13CR2772-MMA Shellie Lockard Age: 44 Ventura, CA CHARGES Conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349
Maximum Penalties: 30 years’ imprisonment, $1,000,000 fine or twice the gain or loss resulting from the offense, $100 special assessment, restitution. INVESTIGATING AGENCIESFederal Bureau of Investigation
Federal Housing Finance Agency – Office of Inspector General
Internal Revenue Service, Criminal InvestigationWilliamson County Man Sentenced on Crack Cocaine and Cocaine OffensesRead the Press Release
Follow @SDILNewsOn February 6, 2015, Eric Scott Russell, 49, of Carbondale, was sentenced for crack cocaine and cocaine violations, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Russell, who had previously pled guilty to a two-count superseding indictment, charging conspiracy to distribute crack cocaine and cocaine and distribution of crack cocaine, was sentenced to 48 months in federal prison, 3 years’ supervised release, and fined $600.00.
The offenses occurred between 2012 and April 2013, in Williamson and Jackson Counties. Evidence at the plea and sentencing hearings established that Russell was involved with co-defendant Albert Wesley, a/k/a “Boogie,” and others in the distribution of crack cocaine and cocaine. On April 7, 2013, Russell sold crack cocaine to a confidential source working for law enforcement. At sentencing, the district court found that Russell was responsible for the distribution of over 155 grams of crack cocaine. Co-defendant Wesley was previously sentenced to 90 months in prison for his role in the conspiracy.
The investigation was conducted by the Jackson County Sheriff’s Office, Murphysboro Police Department, Carbondale Police Department, and Drug Enforcement Administration. The Williamson County State’s Attorney’s Office 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.
Wichita Man Sentenced in Mail Theft Fraud SchemeRead the Press Release
WICHITA, KAN. – A Wichita man was sentenced Monday to 15 months in federal prison for his role in a scheme to steal mail from postal boxes and cash counterfeit checks, U.S. Attorney Barry Grissom said.
Jeremy S. Robinson, 36, Wichita, Kan., pleaded guilty to one count of conspiracy to commit bank fraud and one count of conspiracy to steal mail. In his plea, he admitted that in 2013 and 2014 he and his co-defendants entered an agreement to steal mail from U.S. Postal Service blue boxes.
In some cases, the defendants removed the name of the original payee and replaced it with another name in order to cash the checks. In other cases, they manufactured counterfeit checks using account information from the stolen checks.
Co-defendants include:
Justin Anderson, who is set for sentencing March 30.
Jennifer R. Harper, who is set for sentencing March 23.
Madison P. Allen, who is set for trial March 27.
Grissom commended the U.S. Postal Inspection Service, the Sedgwick County Sheriff’s Department, the Wichita Police Department, the Derby Police Department and Assistant U.S. Attorney Debra Barnett for their work on the case.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Virginia man gets 16 years for robbing drug dealersRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced today that Robert L. Barcliff was sentenced to 16 years in federal prison.
Barcliff pleaded guilty in January 2014 to robbery affecting interstate commerce and to brandishing a firearm. On April 22, 2012, Barcliff, along with Keith Glenn, Robert Jared Smith and William Seltzer, carried out an armed home-invasion robbery in Marmet, West Virginia. Their targets were drug dealers that the robbers believed were from Detroit, and would be in possession of oxycodone and proceeds from pill sales.
Barcliff and Smith entered the apartment brandishing firearms to carry out the robbery. They stole money before fleeing the scene. A firearm was discharged inside the apartment during the robbery.
Glenn, Smith and Seltzer have all entered guilty pleas in federal court for charges related to this investigation, and are scheduled to be sentenced in February.
Beginning in the fall of 2011, Barcliff was part of a group that conspired and agreed to commit armed home invasion robberies of drug dealers in West Virginia, Virginia, Pennsylvania and Tennessee. The objective of the conspiracy and robberies was to steal drugs, drug proceeds and firearms. The group targeted drug dealers because they believed the dealers were not likely to call the police.
In January 2015, two men were convicted by a federal jury in Charleston for their roles in the conspiracy. Darrell E. Gillespie faces a mandatory minimum sentence of 30 years, and up to life, in federal prison, and Jamaa I. Johnson faces up to 45 years in prison when they are sentenced on May 6, 2015.
The case was investigated by the Federal Bureau of Investigation, South Charleston Police Department and Charleston Police Department. Assistant United States Attorney Monica D. Coleman was in charge of the prosecution.
###
Virginia Man Sentenced to 33 Months in Prison for Traveling into the District of Columbia to Engage in Illicit Sexual Conduct with A MinorRead the Press Release
WASHINGTON – Michael Angel Gutierrez, 50, of Lorton, Va., was sentenced today to 33 months in prison on a federal charge of traveling interstate to engage in illicit sexual conduct with a minor, announced U.S. Attorney Ronald C. Machen Jr., Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Gutierrez pled guilty to the charge in October 2014 in the U.S. District Court for the District of Columbia. He was sentenced by the Honorable James E. Boasberg. Upon completion of his prison term, he will be placed on five years of supervised release. Gutierrez also will be required to register for 15 years as a sex offender.
According to the government's evidence, on Aug. 28, 2014, Gutierrez contacted an undercover officer with the FBI's Child Exploitation Task Force, who had posted an ad on a social network site. Over the next few days, Gutierrez engaged in e-mail, phone, and text message conversations with the undercover officer, whom the defendant believed was the father of an under-aged girl. During this period of time, Gutierrez arranged with the undercover officer to meet for the purpose of engaging in sexual acts with the child.
On Sept. 3, 2014, Gutierrez traveled from his apartment in Virginia to a pre-arranged meeting place in Washington, D.C. When he arrived at the meeting place, he was arrested.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
In announcing the sentence, U.S. Attorney Machen, Assistant Director in Charge McCabe, and Chief Lanier praised the work of the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also commended the efforts of Assistant U.S. Attorney Ari Redbord, who prosecuted the case.
15-017Virginia Beach Woman Sentenced to Two Years for Mail FraudRead the Press Release
NORFOLK, Va. –Paula G. Akers, age 51, of Virginia Beach, Va., was sentenced today to two years in prison, followed by three years of supervised release, for mail fraud.
Dana J. Boente, United States Attorney for the Eastern District of Virginia and John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after Jackson’s sentencing before United States District Judge Raymond A. Jackson.
Akers was charged with the offense in a criminal information that was filed in federal court on August 4, 2014. Akers later waived indictment and pleaded guilty to mail fraud on September 24, 2014.
According to court records, Akers, who was a long-time trusted bookkeeper of local construction companies, was found to be stealing hundreds of thousands of dollars from the companies. Akers opened personal credit cards at the same institutions as her clients, and then proceeded to use over $300,000 of the companies’ funds to pay her personal credit card bills for items such as spa visits, vacations, tanning and nail salons and numerous clothing stores. One of the victim companies almost had to shut its doors due to the theft.
This case was investigated by the FBI with the assistance of the Virginia Beach Police Department. Assistant United States Attorney Elizabeth Yusi prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-112.Virginia Beach Man Sentenced to 20 Years for Production of Child PornographyRead the Press Release
NEWPORT NEWS, Va. – Michael John Baigert, Jr., 21, of Virginia Beach, Virginia was sentenced today, on four counts of production of child pornography, to 240 months in prison for each count, to run concurrently, followed by a lifetime of supervised release. He was also ordered to pay Jane Doe 1 restitution in the amount of $2,031.36.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:14cr55.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after sentencing by U.S. District Judge Mark S. Davis.
Baigert plead guilty to the indictment on October 16, 2014. According to court documents, Baigert acknowledged that in August, 2013, he travelled from his home in Virginia Beach to York County to visit “Jane Doe 1” whom he met via an on-line messenger app called “KIK.” Baigert and “Jane Doe 1” entered a wooded area near her home where Baigert committed a number of sex acts on her. The victim reported to the York-Poquoson Sheriff’s Office that she had been sexually assaulted. Unbeknownst to the victim, Baigert recorded a portion of the sex acts on his iPhone. Detectives obtained a search warrant for the defendant’s home where they seized a number of items. Baigert admitted to detectives that he engaged in a number of sex acts with “Jane Doe 1” who he knew to be 14 or 15 years old. Further investigation revealed three other victims, age 16 or younger, with whom Baigert engaged in sexual activity. In each instance Baigert asked the victim if he could record their sexual activity and was told “no” each time. Baigert disputes that he asked any of the victims if he could record their sexual activity. Numerous homemade videos depicting young females engaged in sexually explicit conduct were found on electronic devices recovered from Baigert’ s home following execution of the search warrant.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Lisa R. McKeel is prosecuting the case.Uniontown Man Charged with Possessing and Distributing Child PornographyRead the Press Release
PITTSBURGH - A Fayette County resident has been indicted by a federal grand jury in Pittsburgh on charges of distribution and possession of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
The two-count indictment, returned on Feb. 3, named Ronald Rhodes, 57, of Uniontown, Pa., as the sole defendant.
According to the indictment, on or about April 3, 2014, Rhodes distributed a video containing material depicting the sexual exploitation of minors. The indictment further alleges that on or about Dec. 15, 2014, Rhodes knowingly possessed videos and images in computer graphic files, the production of which involved the use of minors engaging in sexually explicit conduct, some of whom had not yet attained 12 years of age.
Rhodes was detained today pending trial.
The law provides for a maximum total sentence of 30 years in prison, a fine of $500,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Jessica Lieber Smolar is prosecuting this case on behalf of the government.
Homeland Security Investigations and the United States Postal Inspection Service conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
U.S. Attorney’s Office Raises Awareness of Campus Sexual AssaultRead the Press Release
Tampa, FL – United States Attorney A. Lee Bentley, III announces that the U.S. Attorney’s Office for the Middle District of Florida has partnered with the Office on Violence Against Women (OVW) to co-host a one-day training on Campus Sexual Assault Prevention and Response. Since 1999, OVW has funded approximately 322 campus-based projects, totaling more than $122,789 million, to address sexual assault, domestic violence, dating violence, and stalking on campuses. Today’s training addressed specific topics, including prevention, response and investigation, effective collaborations, and best policy practices. More than 160 attendees participated, including law enforcement, state prosecutors, colleges and universities staff, victim advocates, and victim-service providers.
The White House Task Force to Protect Students from Sexual Assault was established in 2014, with a mandate to strengthen federal enforcement efforts and provide schools with additional tools to help combat sexual assault on their campuses. The Department of Justice has tailored this collaborative victim-centered campus sexual assault training to address particular areas of need in our communities.
For more information about the training and OVW’s Grants to Reduce Sexual Assault, Domestic Violence, Dating Violence, and Stalking on Campus Program, please contact Darlene Johnson at (202) 307-6795. Information about the Office on Violence Against Women can be found by visiting: www.justice.gov/ovw.
Two Men Who Orchestrated $21 Million Movie Investment Scheme Sentenced to Federal Prison for Defrauding Hundreds of InvestorsRead the Press Release
LOS ANGELES – Two men who were leaders of a scheme involving a company called Gigapix that defrauded hundreds of victims by promising large returns on movie investments and a production company’s imminent public offering were sentenced today, receiving sentences of up to eight years in federal prison.
The two defendants sentenced this morning – Christopher Blauvelt, 59, a former Woodland Hills resident who was transient when he was arrested last year, and David Pritchard, 67, of Hollywood (formerly of Malibu) – were convicted at trial last year on a series of federal charges, including mail fraud, wire fraud and offering for sale unregistered securities.
United States District Judge Manuel Real sentenced Blauvelt to eight years in prison, and Pritchard was sentenced to five years.
Judge Real scheduled a restitution hearing for April 20.
The case centers on a company called Gigapix that was founded by Blauvelt in 2002 and took on Pritchard as a partner in 2006. During the subsequent seven years, Blauvelt, who was the chief executive officer of Gigaix, and Pritchard., who was the president of the company, hired telemarketers to solicit potential investors. These who were solicited to invest were told that Gigpix was an animation company similar to Pixar Animation Studios, and that Gigapix was developing projects expected to generate large profits when the company went public.
As part of the scheme, telemarketers – known as “fronters” – used lead lists purchased by the defendants to find potential investors and then used scripts touting the supposed merits of Gigapix. When investors expressed an interest, materials about the investment were mailed to them. At that time, the potential investors were turned over to “closers,” who collected their money.
Two Gigapix telemarketers who acted as closers – Gregory Pusateri, 50, of Woodland Hills, and Cheri Brown, 65, of Studio City – were also convicted at a trial, and they are scheduled to be sentenced by Judge Real on February 23.
In addition to raising money for Gigpix, the defendants also raised funds to produce a movie titled “OZ3D.” While soliciting money for Gigapix and “OZ3D,” the defendants made numerous misrepresentations to potential investors and withheld material facts. For example, according to court documents, investors were told that Gigapix was a financially successful company, they would receive high returns on their investments in less than 18 months, the investments carried little or no risk, and investors would see returns within a year or 18 months of investing. Investors were also told there was an urgency to invest in Gigapix and “OZ3D” because the window of opportunity to invest and the number of shares available were limited.
Investors were told that a minimum of 65 percent of the money invested in “OZ3D” would be used to produce and distribute the movie, and that only a small percentage of investor money would be used to pay commissions and finder’s fees. However, less than 5 percent of the investors’ money was used to finance the film. Of the millions raised for the Gigapix investment, less than 20 percent of those funds were spent on the production of movies or television shows. The majority of the money raised from investors was spent on salaries, commissions and overhead.
Approximately 730 victims lost virtually all of the money – approximately $21 million – that they invested in Gigapix and “OZ3D.”
“This case involves an egregious fraud of massive proportions that targeted non-wealthy victims who the defendants heartlessly misled,” prosecutors wrote in sentencing documents. “The effects of this crime on the victims are truly devastating in every way,” and compounded issues affecting elderly victims, low-income victims, victims who suffered from illnesses such as cancer and the effects of polio, and victims who were supporting children with Down syndrome and spina bifida.
This investigation was conducted by the Federal Bureau of Investigation.
elease No. 15-011
Toledo Man Faces Child Pornography IndictmentRead the Press Release
An indictment was filed charging Joshua R. McMillan, 26, of Toledo, with receipt and distribution of material involving the sexual exploitation of a child between January 23, 2013 and May 2, 2013, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, and 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.
The investigating agency in this case is the Federal Bureau of Investigation. The case is being handled by Assistant United States Attorney Alissa M. Sterling.
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.
Theresa Blow Imprisoned for Grand Isle EmbezzlementsRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that Theresa Blow, 65, who now lives in Enosburg Falls, was sentenced yesterday in United States District Court in Burlington to one year and one day of imprisonment following her guilty plea to a charge of federal program embezzlement. U.S. District Judge William K. Sessions III also ordered that Blow serve three years of supervised release following completion of her prison term and pay restitution of more than $117,000. The court ordered Blow to surrender to the Bureau of Prisons on March 10 to begin serving her sentence.
Last September, Blow pled guilty to a one-count information charging her with embezzling from the Champlain Islands Parent-Child Center, a non-profit pre-school and after-school care center in South Hero for which she served as a contract bookkeeper. According to court records, between 2010 and March 2014, Blow embezzled more than $61,000 from the Center by writing without authorization checks that were made payable to herself or to her husband's business, then forging the signature of the authorized signer on the Center's checking account. Blow deposited the forged checks into her personal bank account and used the proceeds for her own benefit.
The information charged that, in roughly the same time frame, Blow also embezzled tens of thousands of dollars from Grand Isle County, which she served as appointed treasurer since 2008. At today's sentencing, the court determined the Grand Isle County embezzlement totaled more than $39,500.
Additionally, the court found that Blow had embezzled $2400 from a third employer, the Law Office of David Carter, a law firm in South Hero.
This case was investigated by the Vermont State Police and the Federal Bureau of Investigation.
Blow is represented by Mark Kaplan. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Texas Man Sentenced for Illegal Export of Night Vision DevicesRead the Press Release
Baltimore, Maryland – U.S. District Judge Ellen L. Hollander sentenced David Kelley, age 46, of Richmond, Texas today to 18 months in prison followed by three years of supervised release for the unlawful export of arms and munitions, specifically, night vision devices.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
According to his plea agreement, Kelley ran a business named "Optical Solutions and More" that sold night vision and other military-style items, primarily over eBay. Kelley entered into distributor agreements with night vision manufacturers in which he acknowledged that he was aware of restrictions known as the International Traffic in Arms Regulations (ITAR) which prohibited the unlicensed export of U.S. munitions list items, including the export of night vision devices using Generations 2 and newer technology.
After entering into these agreements, Kelley discussed circumventing ITAR restrictions with foreign customers who responded to his internet listings. Between May 2011 and February 2012, Kelley made approximately 60 shipments containing
ITAR-restricted weapons parts and night vision devices destined for customers in 24 countries, including Argentina, Australia, Russia, the Philippines, United Kingdom and Japan. To disguise the ITAR violations, Kelley variously labeled these shipments as "toys," "toy blocks," "spotting scope," and "monocular parts." In exchange for these shipments, Kelley collected over $140,000 in 150 separate PayPal transactions.
In September 201l, an undercover HSI agent located in Baltimore posed as a buyer from New Zealand and contacted Kelley to ask if Kelley would export an ATN Generation 4 Monocular Night Vision Device. Kelley acknowledged in an email that such an export violated ITAR and demanded additional payment for risking prosecution. On October 24, 2011, Kelley exported the device, which is designated as a defense article on the U.S. munitions list, to New Zealand, without first obtaining a license from the State Department.
United States Attorney Rod J. Rosenstein praised ICE Baltimore for its work in the investigation and thanked Assistant U.S. Attorney Adam K. Ake, who prosecuted the case.
Taking Methamphetamine to Delivery Service Earns Modesto Man 46 Months in Federal Prison; Money Courier from Turlock Sentenced to 12 Months in Same CaseRead the Press Release
FRESNO, Calif. — Armando Mendoza, 21, a Modesto resident, was sentenced today by United States District Judge Lawrence J. O'Neill to 46 months in prison for possession of methamphetamine with the intent to distribute, and Guillermo Paredes, Jr., 26, a Modesto resident, was also sentenced today by Judge O’Neill to 12 months in custody for conspiracy to smuggle bulk cash, United States Attorney Benjamin B. Wagner announced.
According to court documents, Mendoza and Paredes were involved with methamphetamine trafficking from Modesto to Hawaii. On August 8, 2012, Mendoza took a package containing approximately 1 ½ pounds of methamphetamine to a shipping facility for delivery to Hawaii. Law enforcement intercepted that package. On August 16, 2012, Paredes and a companion were arrested at the Honolulu airport while waiting for a return flight to California. Paredes had about $42,000 cash concealed on his person and in his luggage while his companion had about $29,000 cash similarly concealed. Law enforcement seized that cash.
This case was the product of an investigation by the Drug Enforcement Administration, the Stanislaus Drug Enforcement Agency and the Modesto Police Department. Assistant United States Attorney Kevin Rooney prosecuted the case.
Remaining defendants Miguel Leontapia, Eduardo Leon, and Gilberto Leon are scheduled to be sentenced on March 2, 2015, before Judge O’Neill.
Service Members to Receive over $123 Million for Unlawful Foreclosures Under the Servicemembers Civil Relief ActRead the Press Release
The Justice Department announced today that under its settlements with five of the nation’s largest mortgage servicers, 952 service members and their co-borrowers are eligible to receive over $123 million for non-judicial foreclosures that violated the Servicemembers Civil Relief Act (SCRA). The five mortgage servicers are JP Morgan Chase Bank N.A. (JP Morgan Chase); Wells Fargo Bank N.A. and Wells Fargo & Co. (Wells Fargo); Citi Residential Lending Inc., Citibank, NA and CitiMortgage Inc. (Citi); GMAC Mortgage, LLC, Ally Financial Inc. and Residential Capital LLC (GMAC Mortgage); and BAC Home Loans Servicing LP formerly known as Countrywide Home Loans Servicing LP (Bank of America).
In the first round of payments under the SCRA portion of the 2012 settlement known as the National Mortgage Settlement (NMS), 666 service members and their co-borrowers will receive over $88 million from JP Morgan Chase, Wells Fargo, Citi and GMAC Mortgage. The other 286 service members and their co-borrowers are receiving over $35 million from Bank of America through an earlier settlement. The non-judicial foreclosures at issue took place between Jan. 1, 2006, and Apr. 4, 2012.
“These unlawful judicial foreclosures forced hundreds of service members and their families out of their homes,” said Acting Associate Attorney General Stuart F. Delery. “While this compensation will provide a measure of relief, the fact is that service members should never have to worry about losing their home to an illegal foreclosure while they are serving our country. The department will continue to actively protect our service members and their families from such unjust actions.”
“We are very pleased that the men and women of the armed forces who were subjected to unlawful non-judicial foreclosures while they were serving our country are now receiving compensation,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “We look forward, in the coming months, to facilitating the compensation of additional service members who were subjected to unlawful judicial foreclosures or excess interest charges. We appreciate that JP Morgan Chase, Wells Fargo, Citi, GMAC Mortgage and Bank of America have been working cooperatively with the Justice Department to compensate the service members whose rights were violated.”
Section 533 of the SCRA prohibits non-judicial foreclosures against service members who are in military service or within the applicable post-service period, as long as they originated their mortgages before their period of military service began. Even in states that normally allow mortgage foreclosures to proceed non-judicially, the SCRA prohibits servicers from doing so against protected service members during their military service and applicable post-military service coverage period.
Under the NMS, for mortgages serviced by Wells Fargo, Citi and GMAC Mortgage, the identified service members will each receive $125,000, plus any lost equity in the property and interest on that equity. Eligible co-borrowers will also be compensated for their share of any lost equity in the property. To ensure consistency with an earlier private settlement, JP Morgan Chase will provide any identified service member either the property free and clear of any debt or the cash equivalent of the full value of the home at the time of sale, and the opportunity to submit a claim for compensation for any additional harm suffered, which will be determined by a special consultant, retired U.S. District Court Judge Edward N. Cahn. Payment amounts have been reduced for those service members or co-borrowers who have previously received compensation directly from the servicer or through a prior settlement, such as the independent foreclosure review conducted by the Office of the Comptroller of the Currency and the Federal Reserve Board. The Bank of America payments to identified service members with nonjudicial foreclosures were made under a 2011 settlement with the Department of Justice.
The NMS also provides compensation for two categories of service members: (1) those who were foreclosed upon pursuant to a court order where the mortgage servicer failed to file a proper affidavit with the court stating whether or not the service member was in military service; and (2) those service members who gave proper notice to the servicer, but were denied the full benefit of the SCRA’s 6% interest rate cap on pre-service mortgages. The service members entitled to compensation for these alleged violations will be identified later in 2015.
The following chart shows the number of service members who will be compensated by each of the servicers for the non-judicial foreclosures:
Amount of Money to be Distributed
Number of Service Members Eligible for Compensation
Bank of America
$35,369,756
286
Citi
$14,880,578
126
GMAC Mortgage
$13,720,588
113
JP Morgan Chase
$31,068,523
188
Wells Fargo
$28,358,179
239
TOTALS
$123,397,624
952
Borrowers should use the following contact information for questions about SCRA payments under the National Mortgage Settlement:
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Bank of America borrowers should call Rust Consulting, Inc., the settlement administrator, toll-free at 1-855-793-1370 or write to BAC Home Loans Servicing Settlement Administrator, c/o Rust Consulting, Inc., P.O. Box 1948, Faribault, MN 55021-6091.
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Citi borrowers should call Citi toll-free at 1-888-326-1166.
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GMAC Mortgage borrowers should call Rust Consulting Inc., the settlement administrator, toll-free at 1-866-708-0915 or write to P.O. Box 3061, Faribault, Minnesota 55021-2661.
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JPMorgan Chase borrowers should call Chase toll-free at 1-877-469-0110 or write to P.O. Box 183224, OH-7160/DOJ, Columbus, Ohio 43219-6009.
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Wells Fargo borrowers should call the Wells Fargo Home Mortgage Military Customer Service Center toll free at 1-877-839-2359.
Service members and their dependents who believe that their SCRA rights have been violated should contact an Armed Forces Legal Assistance office. To find the closest office, consult the military legal assistance office locator at http://legalassistance.law.af.mil and click on the Legal Services Locator. Additional information about the Justice Department’s enforcement of the SCRA and the other laws protecting service members is available at www.servicemembers.gov.
Today’s settlement was announced 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 is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes, enhancing coordination and cooperation among federal, state and local authorities, addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
Note: The release is corrected to reflect that the other 286 service members and their co-borrowers are receiving over $35 million from Bank of America through an earlier settlement.
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Sacramento Man Sentenced to Two Years for Conspiracy in Mortgage Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — Joshua Clymer, 28, of San Francisco, was sentenced today to two years in prison for conspiracy to commit mail and wire fraud in connection with a mortgage fraud scheme, United States Attorney Benjamin B. Wagner announced. Clymer previously pleaded guilty pursuant to a plea agreement.
According to court documents and evidence presented at the trial of co-defendant Leonard Williams, from late 2006 into 2008, Clymer and Williams conspired to carry out a loan origination and property flipping mortgage fraud scheme using the companies Diamond Hill Financial and Bay Area Real Estate Holdings. To carry out the scheme, Clymer and Williams recruited underqualified buyers, including family and friends, to purchase homes with promises of cash back, no money down, and illusory equity in the homes. Clymer and others assisted these home buyers in securing loans with fraudulent loan applications that contained lies about the buyers’ employment, income, assets, and intent to occupy the homes as a primary residence. In most cases the loan applications falsely stated that the buyers worked at Diamond Hill Financial, a company associated with Clymer and Williams. Hundreds of thousands of dollars in home loans were issued as a result. The profit to Clymer and Williams varied from $5,000 to over $30,000 per transaction, with the two of them often splitting the proceeds.
Clymer’s sentencing marks the last of 14 defendants to be sentenced for mortgage fraud offenses in connection with this and related cases. Others who have already been convicted and sentenced include Garret Gililland (94 months), Leonard Williams (87 months), Niche Fortune (57 months), Kesha Haynie (46 months), Eric Clawson (37 months), Anthony Symmes (35 months), Carlos Chamorro (27 months), Shane Burreson (23 months), Christopher M. Chiavola (22 months), William E. Baker (18 months), Nicole Magpusao (535 days), Brandon Resendez (9 months), and Remy Heng (6 months home detention). Twelve of the defendants pleaded guilty, including Clymer. Juries have convicted the two defendants who went to trial, Haynie and Clymer’s coconspirator Leonard Williams.
This case is the product of an investigation by the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigation; and the Butte County District Attorney’s Office’s Major Crimes Unit. Assistant United States Attorneys Christopher S. Hales and Audrey B. Hemesath prosecuted the case.Retired Air Force General Agrees to Pay $125,000 to Settle Civil PenaltyRead the Press Release
ALEXANDRIA, Va. – David Deptula, 62, of Oakton, Virginia, has agreed to pay $125,000 to settle civil penalty claims relating to allegations that he engaged in a prohibited conflict of interest while he served as the Chief Executive Officer for Mav6, LLC (“Mav6”), a privately owned defense contracting company.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement.
Deptula most recently served as a Lieutenant General with the United States Air Force until his retirement on October 1, 2010. Following his retirement from the Air Force, Deptula became the CEO for Mav6 on February 22, 2011. From June 2011 to July 2012, while serving as CEO of Mav6, Deptula engaged in communications or appearances on behalf of Mav6 before United States’ officers regarding a U.S. military defense program known as Blue Devil Block II, a program in which the United States contends Deptula participated personally and substantially while he was with the Air Force. As part of the civil settlement, Deptula has agreed to pay $125,000 to resolve allegations that his conduct violated conflict of interest prohibitions under federal law. The civil penalty claims settled by Deptula and the United States are allegations only; there has been no determination of civil liability.
This case was investigated by the FBI’s Washington Field Office and the U.S. Air Force Office of Special Investigations. The resolution obtained in this matter was the result of an investigation by Assistant U.S. Attorneys Gerard Mene and Peter Hyun of the Civil Division of the U.S. Attorney’s Office for the Eastern District of Virginia.Raleigh Identity Thief Sent to Prison for 42 Months for Role in Credit Card and Cigarette Trafficking SchemeRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that today in federal court Chief United States District Judge James C. Dever, III sentenced IBRAHIM BARRIE, 32, of Raleigh, to serve a total of 42 months in prison, followed by 3 years of supervised release, on charges of Aggravated Identity Theft, in violation of Title 18, United States Code, Section 1028A(a)(1), and Conspiracy to Commit Access Device Fraud, in violation of Title 18, United States Code, Section 1029(b)(2). BARRIE was also ordered to make restitution to victims.
According to the Criminal Information and other details discussed in open court, BARRIE was a participant in a credit card and cigarette trafficking scheme. The purpose of the scheme was to use stolen credit card account information to purchase large quantities of cigarettes in North Carolina which were resold in New York. To carry out the scheme, participants acquired stolen credit card data from other conspirators and encoded the stolen data onto the magnetic strip of what appeared to be legitimate gift cards. Managers in the scheme, including BARRIE, then distributed the cards to “runners” who traveled to various gas stations, convenience stores, and grocery stores located around the state to purchase dozens of cartons of cigarettes at a time using the counterfeit gift cards. The runners returned the cigarettes to the managers in the scheme, who paid the runners a kickback. Managers, including BARRIE, periodically make trips to New York to sell the cigarettes on the black market for cash.
On July 22, 2012, BARRIE was arrested on state charges after a concerned citizen indicated that BARRIE and others attempted to have the citizen purchase gasoline on BARRIE’s credit card in exchange for payment. A subsequent search of BARRIE and his vehicle revealed 20 cartons of cigarettes and 11 counterfeit gift cards. Additionally, on October 24, 2012, BARRIE was stopped by Virginia State Police. During a search of the defendant’s car police located 600 cartons of cigarettes.
Investigation of BARRIE’s case was conducted by the United States Secret Service, with the assistance of the Raleigh Police Department. Assistant United States Attorney William M. Gilmore represented the United States.
Perry County Woman Sentenced for Methamphetamine ConspiracyRead the Press Release
Follow @SDILNewsOn February 6, 2015, Lori A. Helmer, 49, of Pinckneyville, Illinois, was sentenced on a methamphetamine offense, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Helmer, who had previously pled guilty to a one-count indictment charging conspiracy to manufacture methamphetamine, was sentenced to 87 months in federal prison, to be followed by 3 years of supervised release, and fined $200. The offense occurred between 2012 and June 2013, in Perry, Jackson, and Randolph Counties. Evidence at the plea and sentencing hearings established that Helmer was involved with co-defendants Michael Lasky and Daniel Caraker and others in the manufacture of methamphetamine. Helmer would travel with others to obtain pseudoephedrine pills for use in the manufacturing process. At sentencing, the district court determined that Helmer was responsible for unlawfully obtaining more than 133 grams of pseudoephedrine. Lasky and Caraker were previously sentenced to prison terms of 108 months and 121 months, respectively, for their role in the methamphetamine conspiracy.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office, Perry County Sheriff’s Office, Perry County Drug Task Force, Murphysboro Police Department, DuQuoin Police Department, Pinckneyville Police Department, Illinois State Police Methamphetamine Response Team, and Drug Enforcement Administration. The Perry County State’s Attorney’s Office also assisted in the investigation.
The case was prosecuted by Assistant United States Attorney Amanda A. Robertson.
Ohio man sentenced to more than three years for painkiller traffickingRead the Press Release
WHEELING, WEST VIRGINIA – Ronald Gene Vance, 63, of Columbus, Ohio, was sentenced today to 37 months in prison for oxycodone trafficking, United States Attorney William J. Ihlenfeld, II, announced.
An investigation by the U.S. Drug Enforcement Administration and the Ohio Valley Drug and Violent Crime Task Force, a HIDTA-funded initiative, revealed that Vance repeatedly traveled to Baltimore, Maryland to purchase prescription pills for redistribution and sale in the Ohio County, West Virginia area.
Vance pled guilty in April 2014 to one count of “Conspiracy to Distribute Schedule I and Schedule II Controlled Substances.”
Assistant U.S. Attorney Randy Bernard prosecuted the case on behalf of the government.
Senior U.S. District Judge Frederick P. Stamp presided.
Northwood Man Faces Child Pornography ChargesRead the Press Release
An indictment was filed charging Steve Nesbit, 41, of Northwood, with receipt and distribution of child pornography and possession of child pornography, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
If convicted, the defendant’s sentence will be determined by the Court after reviewing 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.
The investigating agency in this case is the Federal Bureau of Investigation, Toledo. The case is being handled by Assistant United States Attorney Michael J. Freeman.
An indictment is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Norfolk Man Sentenced to 17 ½ Years for Receipt of Child PornographyRead the Press Release
NORFOLK, Va. – Kevin D. Jackson, age 35, of Norfolk, Va., was sentenced today to 17 ½ years in prison, followed by lifetime supervised release, for receipt of child pornography.
Dana J. Boente, United States Attorney for the Eastern District of Virginia and John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after Jackson’s sentencing before Senior United States District Judge Robert G. Doumar.
A Norfolk federal grand jury indicted Jackson on June 19, 2014, on four counts relating to child pornography. Jackson pleaded guilty to receipt of child pornography on October 2, 2014.
According to court records and evidence, Jackson sought out images of child pornography via the Internet for a number of years. A forensic examination confirmed that Jackson retained on his computer 54 videos and 189 pictures of child pornography. Jackson was also found to be sexually abusing a toddler and producing images of that abuse. Jackson was convicted in the City of Norfolk for the sexual abuse. Jackson also admitted to sexually abusing other minors.
This case was investigated by the FBI. Assistant United States Attorneys Randy Stoker and Elizabeth Yusi prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-99.Tweet
Modesto Resident Pleads Guilty in Tax Fraud ConsipracyRead the Press Release
FRESNO, Calif. — Christine Rose Caraway, 34, of Modesto, pled guilty today to one count of conspiracy to defraud the United States, United States Attorney Benjamin B. Wagner announced.
According to court documents, from about December 2010 to May 2011, Caraway and her former spouse Heath Roberson obtained personal identifying information from over 40 individuals. Caraway then used this information to generate false tax returns seeking over $121,000 in tax refunds and submitted them to the IRS. Caraway and Roberson funneled the tax refunds into accounts they controlled.
This case is the product of an investigation by the Internal Revenue Service’s Criminal Investigation Division. Assistant United States Attorney Michael G. Tierney is prosecuting the case.
Roberson pled guilty in April 2014 to one count of conspiring to defraud the United States. In July 2014, he was sentenced to serve two years, nine months in prison and to pay over $66,000 in restitution to the IRS.
Caraway is in custody and is scheduled to be sentenced by Senior United States District Judge Anthony W. Ishii on April 20, 2015. She faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Modesto Man Pleads Guilty to Stealing $127,000 in Government BenefitsRead the Press Release
FRESNO, Calif. —James Giulio Davidson, 59, resident of Modesto, California, pleaded guilty today to conspiring to steal government benefits, United States Attorney Benjamin B. Wagner announced.
According to the plea agreement and court documents, Davidson and his deceased wife and former co-defendant, Shirley Kay Davidson, stole more than $64,000.00 in Supplemental Security Income (“SSI”) benefits and $63,000.00 in In-Home Supportive Services (“IHSS”) from approximately January 2003 to July 2010. Shirley Kay Davidson created a fake person named Sharon Guinn to act as her and James Davidson’s purported IHSS caretaker. James and Shirley Davidson regularly filled out false time cards for the purported work provided by Sharon Guinn and then cashed the IHSS wages sent to this fake person for their personal use and benefit. Further, James and Shirley Davidson failed to report this fraudulent source of income to the Social Security Administration (“SSA”) during redetermination interviews for continued SSI benefits. Additionally, James and Shirley Davidson stated to the SSA that they separated in November 2007 when in fact they continued to live together, which increased the amount of SSI benefits they received.
This case was the product of an investigation by the Social Security Administration, Office of Inspector General. Assistant United States Attorneys Grant B. Rabenn and Michael Tierney are prosecuting the case.
Davidson is scheduled to be sentenced by Judge Anthony W. Ishii on April 20, 2015. Davidson faces a maximum statutory penalty of 5 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.