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29 January 2015
Houston Man Sentenced for Conspiring to Steal from Home Equity Lines of Credit of Unsuspecting VictimsRead the Press Release
HOUSTON – Obinna Gregory Okoro, 25, of Houston, has been ordered to prison after conspiring to use personal identifiers of victims to create fake bank accounts online, link those accounts to existing bank accounts and drain them of the funds, announced United States Attorney Kenneth Magidson. Okoro pleaded guilty to one count of conspiring to commit bank fraud, one count of engaging in computer fraud and one count of aggravated identity theft Sept. 3, 2014.
Today, U.S. District Judge Nancy Atlas, who had accepted the plea ordered Okoro to serve 33 months for the conspiracy and computer fraud charges and a consecutive 24 months for the aggravated identity theft to be served consecutively for a total 57- month-term of imprisonment. He will also be required to serve three years of supervised release following completion of that prison term. Judge Atlas also ordered restitution in the amount of $455,686.39.
According to his plea agreement, in September 2013, Okoro and his co-conspirators stole $537,681 from PNC Bank N.A. Okoro and others created a fraudulent account at PNC Bank using the a victim’s personal identifiers, which they linked to the victim’s home equity line of credit (HELOC) account. They also posed as the victim to call PNC Bank in order to learn more about the accounts, order checks and increase the daily withdrawal limit. They accessed these accounts online to fraudulently transfer a total of $537,681 from the victim’s HELOC account to the account they created. From there, they withdrew and transferred much of this money.
Okoro’s plea agreement also indicates that in April 2014, Okoro and his co-conspirators stole money from a bank account jointly held by two victims. Okoro and co-conspirators used the victims’ personal identifiers to fraudulently open a bank account online at Commerce Bank N.A., which was linked to a legitimate account owned by the victims.
Posing as one of the victims, they called Commerce Bank. When the bank asked for personal identifiers to authenticate their identity, Okoro and his co-conspirators were able to provide the victims’ name, date of birth, Social Security number, direct deposit account number and mother’s maiden name. They then transferred money from the victims’ legitimate account to the fraudulent account that they created and withdrew this money. Altogether, Okoro and his co-conspirators fraudulently transferred about $25,027 from the victims’ account to the fraudulent Commerce Bank account they created. From there, Okoro and his co-conspirators withdrew (or spent in debit card transactions) approximately $21,463.04.Okoro has admitted he used some of the monies to buy an $85,000 BMW 650i. A Rolex watch appraised to have a fair market value of $47,800, a bracelet and a medallion were also seized at time of his arrest.
Okoro is and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges are the result of an investigation by the FBI. Assistant U.S. Attorney Michael Chu prosecuted the case.
Houston Man Convicted in Galleria Mall Bank RobberyRead the Press Release
HOUSTON - Emiliano Trevino, 25, has entered a guilty plea to one count of bank robbery, announced U.S. Attorney Kenneth Magidson.
On Oct. 16, 2014, Trevino robbed the BBVA Compass Bank at gunpoint located inside the Houston Galleria Mall on Westheimer Road in Houston. The robbery occurred at approximately 12:45 p.m. during normal shopping hours.
Trevino entered the bank and asked for a withdrawal of 20s, 50s and 100s. As he demanded the money, he pulled out a black revolver from his jacket, displaying the gun to the teller.
U.S. District Judge David Hittner accepted the guilty plea today and has sentencing for April 24, 2015. At that time, Trevino faces up to 25 years in prison and a possible $250,000 maximum fine.
Previously released on bond, Trevino was taken into custody following the sentencing today where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
This case was investigated by the FBI Violent Crimes Task Force with assistance of the Houston Police Department. Assistant United States Attorney Julie Searle is prosecuting.
Habitual Domestic Violence Offender Sentenced to Life Imprisonment for MurderRead the Press Release
PHOENIX – On Jan. 28, 2015, Willard John, 36, of Cibecue, Arizona, was sentenced by U.S. Senior District Judge James A. Teilborg to life imprisonment. On July 11, 2014, John was found guilty by a jury of second degree murder.
The facts of this investigation revealed that John, a member of the White Mountain Apache Tribe, brutally stabbed his wife to death on March 19, 2012, on the Fort Apache Indian Reservation, using a pair of household scissors. The evidence at trial showed that John had a lengthy history of abusing his wife.
The investigation was handled by the Federal Bureau of Investigation, with substantial assistance from the Bureau of Indian Affairs. The prosecution was handled by Dimitra H. Sampson.
CASE NUMBER: CR-12-8082-PCT-JAT
RELEASE NUMBER: 2015-009_John
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Greenbelt Man Sentenced to over 2 Years in Prison for Aggravated Identity Theft and Misuse of A Social Security NumberRead the Press Release
Greenbelt, Maryland – U.S. District Judge Deborah K. Chasanow sentenced Travis Lamont Phelps, age 46, of Greenbelt, Maryland today to 25 months in prison followed by three years of supervised release for misuse of a social security account number and aggravated identity theft. Judge Chasanow also ordered Phelps to pay restitution of $5,480.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Michael McGill of the Social Security Administration - Office of Inspector General, Philadelphia Field Division; and Lt. Colonel Anthony C. Satchell, Acting Superintendent of the Maryland State Police.
According to his plea agreement, Phelps was wanted in North Carolina for trafficking Ecstasy. On January 8, 2014, when law enforcement went to Phelps’ apartment on Edmonston Road, Phelps identified himself as Christopher James Williams and provided Virginia and Maryland identification cards, as well as a social security card in that name. The date of birth on the identification cards and the social security number belonged to Christopher James Williams, a real person who died in California in 1982.
Law enforcement interviewed Phelps, who admitted that he was not Christopher Williams and confirmed his identifying information, including his date of birth. Phelps knew that he was wanted on an outstanding North Carolina warrant and admitted that he assumed the Williams identity after researching possible alternate identities on the internet and determining that Williams was deceased. Phelps obtained the Maryland identification card in the Williams identity on December 12, 2013, after providing the social security number card, a birth certificate, and other documents in the Williams identity.
Between 2007 and the time of his arrest in 2014, Phelps also applied for credit from numerous companies in the Williams identity. The total past due balance on those lines of credit at the time of his arrest was at least $5,480.
United States Attorney Rod J. Rosenstein praised the Social Security Administration - Office of Inspector General and the Maryland State Police for their work in the investigation and thanked Special Assistant U.S. Attorney Lauren E. Perry and Assistant U.S. Attorney Joseph R. Baldwin, who prosecuted the case.
Greater Harrison County Drug Task Force recaps successful 2014Read the Press Release
BRIDGEPORT, WEST VIRGINIA – The leaders of the Greater Harrison County Drug and Violent Crime Task Force announced the results of their collaborative efforts in 2014 and discussed what they hope to accomplish in 2015, including increased collaboration among law enforcement at all levels.
“Drug addiction has become an epidemic nationwide and is affecting the quality of life in our communities every day. We are extremely fortunate to have pro-active law enforcement officers who understand the problems and dangers that drugs bring to our communities,” noted Bridgeport Police Chief John P. Walker. “It is important for the residents of our communities to know that together we can make a difference and we value their input. The officers serving on the Greater Harrison County Drug and Violent Crimes Task Force are to be commended for the excellent work and success they accomplished in 2014. I am looking forward to their continuing success in the future.”
Greater Harrison County Drug Task Force investigations led to 41 arrests in 2014 for a variety of offenses, including prescription pill trafficking (16), heroin (10), methamphetamine (5), bath salts (4), crack cocaine (3) marijuana (2), and fraudulent prescriptions (1).
As a result of Task Force investigations, 36 individuals were sentenced to nearly 130 years in prison in 2014. Noteworthy prosecutions in 2014 included:
• Justin Zachary Rosa, 20, and Nichole Nikki Pierce, 22, both of Clarksburg, West Virginia, were sentenced in March 2014 for heroin trafficking. Rosa was sentenced to 125 months in prison. Pierce was sentenced to 71 months in prison. They were each also ordered to forfeit their interest in $4,822.46 in U.S. currency.
• William Murphy, 25, of Clarksburg, West Virginia, was sentenced to 120 months in prison for utilizing a firearm in furtherance of oxycodone trafficking.
• Casey Searcy, 33, of Salem, West Virginia, was sentenced to 110 months in prison for selling oxycodone near the Clarksburg City Park - North View.
• Leroy Douglas Rousseau, 26, of Washington, D.C., was sentenced to 84 months in prison for selling crack cocaine near the Pierpont Community & Technical College in Fairmont, West Virginia.
• Matthew Vanhorn, 28, and Megan Counts, 24 both of Stonewood, West Virginia, were convicted of selling heroin near the Stonewood City Park. Vanhorn was sentenced to 63 months in prison. Counts was sentenced to 46 months in prison.
• Amanda Lilly Daniels, 26, of Detroit, Michigan, and Jaunita Farnsworth, 31, of Clarksburg, West Virginia, were sentenced in November 2014 for their role in transporting prescription painkillers from Detroit, Michigan to Clarksburg, West Virginia for redistribution and sale. Daniels was sentenced to 41 months in prison. Farnsworth was sentenced to 37 months in prison. They were each also ordered to forfeit their interest in two firearms, nine rounds of ammunition, and $5,947.00 in U.S. currency.
• Dr. Edita Milan was convicted in December 2014 of operating a painkiller distribution ring from her Bridgeport, West Virginia medical practice. A sentencing hearing is scheduled for April 2015.
• Pharmacist Mario Blount, 51, of Bridgeport, West Virginia was convicted of prescription painkiller trafficking. A sentencing hearing is scheduled for February 2015.
• A federal grand jury returned an indictment charging Reginald Maurice Teasley, Jr., 38, of Philadelphia, PA with heroin trafficking. He faces up to 20 years in prison and a fine of up to $1,000,000.00."Area law enforcement and the Task Force have a responsibility to keep the community safe. This is our community, too,” said Clarksburg Police Chief Robert L. Hilliard. “We take it personal when illegal activity threatens the safety and well-being of the citizens in this area. The cooperative effort of coming together and working together to rid our community of illegal drugs has proven successful over and over again".
The Greater Harrison County Drug Task Force is comprised of representatives from the U.S. Attorney’s Office, the Drug Enforcement Administration, the West Virginia State Police, the United States Marshals Service, the United States Postal Inspection Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Internal Revenue Service-CI, the Clarksburg Police Department, and the Bridgeport Police Department.
Individuals with information on drug activity in the region are encouraged to call the Task Force hotline at 304-709-3784 or send an email message to [email protected]. Regular updates on the work of the Task Force are available at harrisondrugtaskforce.com and via the official Twitter feed of the United States Attorney’s Office, @NDWVnews.
Gonzales Man Sentenced to 15 Years for Receiving Child PornographyRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that Judge Shelly D. Dick sentenced JASON LOUIS OWENS, age 34, of Gonzales, Louisiana, to 15 years in prison, followed by 5 years of supervised release. The Court also ordered OWENS to pay $2,000 in restitution to one of his victims.
Following an online undercover investigation, on November 28, 2012, investigators from the U.S. Department of Homeland Security, Homeland Security Investigations (“HSI”) and the Cyber Crime Unit of the Louisiana Attorney General’s Office executed a search warrant at the defendant’s residence. Through forensic analysis, agents recovered hundreds of child pornography videos on the defendant’s computer and external hard drive. The defendant had obtained these child pornography videos through peer-to-peer file sharing services on the Internet.
This was the second time the defendant has been convicted on child pornography charges in federal court. In 2004, he was convicted for receiving child pornography and sentenced to 24 months in prison.
This case was brought as part of Project Safe Childhood, a nationwide initiative 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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “Resources” tab for information about Internet safety.
U.S. Attorney Walt Green stated: “My office, together with our federal, state, and local partners, will continue to aggressively prosecute those who actively seek out images of sexually exploited children. Such conduct encourages and supports a level of depravity that must be eradicated in any civil society. We will continue to work closely with our federal, state, and local law enforcement partners to protect the exploited children as part of this important national initiative.”
This matter was handled by the United States Attorney’s Office for the Middle District of Louisiana, the Louisiana Attorney General’s Office – Cyber Crime Unit, and the U.S. Department of Homeland Security - Homeland Security Investigations. The case is being prosecuted by Assistant United States Attorney Cam T. Le.
Georgia Real Estate Investors Plead Guilty to Bid Rigging and Fraud at Public Foreclosure AuctionsRead the Press Release
Two Georgia real estate investors pleaded guilty today for their roles in a conspiracy to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia, the Department of Justice announced.
Separate felony charges were filed against Mohammad Adeel Yoonas and Kevin Shin on Dec. 23, 2014, in the U.S. District Court for the Northern District of Georgia in Atlanta. According to court documents, from at least as early as April 2008 until at least March 2012, Yoonas conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Gwinnett County, Georgia. Yoonas was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire titles to selected Gwinnett County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders, homeowners and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.
Shin, according to court documents, conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Gwinnett County from at least as early as March 2009 until at least March 2012. Shin was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected Gwinnett County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders, homeowners and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.
“These six guilty pleas result from the Antitrust Division’s ongoing investigation into schemes to rig public real estate foreclosure auctions in Georgia,” said Assistant Attorney General Bill Baer for the Department of Justice’s Antitrust Division. “The division will continue working with its law enforcement partners to expose cartels that harm distressed homeowners and lenders.”
The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Gwinnett County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage, and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.
“The criminal actions of the defendants in this case provide a clear example of why enforcement of the Sherman Act remains necessary in maintaining a level and competitive field within commerce,” said Special Agent in Charge J. Britt Johnson for the FBI Atlanta Field Office. “The FBI will continue to work with the U.S. Department of Justice’s Antitrust Division in identifying such financial schemes that attempt to take unfair advantage, to include those targeting the foreclosure auction process.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine. A count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.
The investigation is being conducted by Antitrust Division’s Washington Criminal II Section and the FBI’s Atlanta Division, with the assistance of the Atlanta Field Office of the Housing and Urban Development Office of Inspector General and the U.S. Attorney’s Office for the Northern District of Georgia. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Georgia should contact Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, or visit www.justice.gov/atr/contact/newcase.htm.
Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. 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.
Fugitive Bank Robber, on the Run for Nearly 5 Years, Pleads Guilty to Federal ChargesRead the Press Release
A convicted bank robber who absconded from supervised release and committed crimes across two states pleaded guilty today in U.S. District Court in Seattle to escape, being a felon in possession of a firearm and interstate transportation of a stolen vehicle, announced Acting United States Attorney Annette L. Hayes. BRADLEY STEVEN ROBINETT, 46, will be sentenced by U. S. District Judge James L. Robart on May 4, 2015. ROBINETT was arrested in Hillsboro, Oregon, in June 2014, after being on the run for nearly five years. ROBINETT was arrested after police, using an automated license plate reader in a shopping mall parking lot, determined the car he was driving had been stolen in King County, Washington. The police officers waited for the driver to return to the vehicle and arrested ROBINETT without incident.
According to court filings, ROBINETT was convicted of bank robbery, and in 2004 was sentenced to seven years in prison. In August 2009 he was released from a federal prison in Arizona and put on a bus to Seattle with the requirement that he report to a specific halfway house within 48 hours. ROBINETT never reported to the halfway house and a warrant was issued for him for escape. In September 2009, police on Bainbridge Island, Washington attempted to stop a car that led them on a high speed chase. ROBINETT was driving the car, fled from it and got away. Inside the car officers found a Glock 9mm pistol and a ballistic vest. Both items were stolen from the Seattle Police Department several years earlier. The vehicle ROBINETT was driving was reported stolen in Oregon. Prior to his arrest in June, the last time law enforcement saw ROBINETT was in November of 2009, when Washington State Patrol detectives encountered ROBINETT at a Park & Ride facility in Bellevue. At the time, ROBINETT was operating a stolen vehicle. ROBINETT attempted to ram a WSP vehicle before fleeing the area. The WSP trooper driving the vehicle managed to avoid the collision, but ROBINETT was able to escape.
In addition to his bank robbery conviction, ROBINETT has prior felony convictions for possession of stolen property (King County and Clallam County), unlawful possession of a machine gun, car theft and burglary (King County).
In 2011, ROBINETT was featured on the programs Washington’s Most Wanted and America’s Most Wanted.
The investigation was a joint effort between the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), the FBI, the U.S. Marshals Service, the Washington State Patrol (WSP), the Bainbridge Island Police Department, and the Hillsboro, Oregon Police Department.
The case is being prosecuted by Assistant United States Attorney Mike Dion.
Four Men Sentenced to Federal Prison for St. Thomas Jewelry Store RobberyRead the Press Release
St. Thomas, USVI - District Court Judge Curtis V. Gomez today sentenced Shaquim Fredericks, 20, Warkim J. Gabriel, 19, and Chefton C. Newton, 26, to 108 months in federal prison for their role in last year’s armed robbery of Imperial Jewelry Store on Main Street, St. Thomas, United States Attorney Ronald W. Sharpe announced. Co-conspirator, Alvin M. Thomas, was sentenced to 85 months in prison.
After a jury trial in District Court in July, the jury found Fredericks, Gabriel, Newton and Thomas guilty of Conspiracy to Interfere with Commerce by Robbery, Interference with Commerce by Robbery and Conspiracy to Possess a Firearm in Furtherance of a Crime of Violence.
Evidence at the three-day trial revealed that at about 9:30 a.m. on March 15, 2014, Fredericks, Gabriel, Newton and Thomas, along with other conspirators, dressed in all black clothing, wearing ski masks and possessing at least three firearms, entered the store, pointed the handguns at the employees and patrons of the store, and proceeded to take several hundred pieces of jewelry with an overall value of $2 million dollars. The perpetrators jumped over counters, broke glass display cases, and placed the stolen jewelry in their backpacks. The patrons and employees were kept at bay by the perpetrators by threats of violence and firearms. The perpetrators then fled to the Catherineberg area where they were arrested. Some of the jewelry was recovered in close proximity to where the perpetrators were arrested shortly after the robbery. The three firearms were also recovered.
In addition to a prison term, each of the perpetrators was sentenced to three years of supervised release, a $300 special assessment, and ordered to pay restitution to the jewelry store’s insurance carrier.
The case was investigated by the Virgin Islands Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Federal Bureau of Investigation. It was prosecuted by former Assistant U.S. Attorney Kelly Lake.
Four Former Puerto Rico Police Officers Sentenced for Running Criminal Organization Out of Police DepartmentRead the Press Release
All 16 Former Officers Charged Have Now Been Sentenced
Four additional former Puerto Rico police officers have been sentenced for using their law enforcement affiliation and equipment to commit robbery and extortion, and to sell illegal narcotics and manipulate court records.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico and Special Agent in Charge Carlos Cases of the FBI’s San Juan Division made the announcement.
Jose Sanchez-Santiago, Miguel Perez-Rivera and Carlos Laureano-Cruz were each sentenced to 63 months in prison. Luis Suarez-Sanchez was sentenced to 87 months in prison. All four defendants were former officers from the Police of Puerto Rico, and all four pleaded guilty in January 2014 to conspiracy to violate RICO.
The officers admitted to being members of a criminal organization that sought to enrich its members through a pattern of illegal conduct. Over the course of the conspiracy, the officers worked together to conduct traffic stops and enter homes or buildings used by suspected criminals to steal money, property and narcotics. The officers also planted evidence to make false arrests, and then extorted money in exchange for their victims’ release from custody. In exchange for bribe payments, the officers gave false testimony, manipulated court records and failed to appear in court when required so that cases would be dismissed. Additionally, the officers sold and distributed wholesale quantities of narcotics.
The officers frequently shared the proceeds they illegally obtained and used their power, authority and official positions as police officers to promote and protect their illegal activity. Among other things, the officers used their police firearms, badges, patrol cars, tools, uniforms and other equipment to commit the crimes, and concealed their illegal activity with fraudulently obtained court documents and falsified police paperwork to make it appear that they were engaged in legitimate police work.
The other 12 defendants charged in this case were sentenced in December 2014. All defendants were sentenced by Senior U.S. District Judge Daniel R. Dominguez of the District of Puerto Rico.
The case was investigated by the FBI’s San Juan Division and prosecuted by Trial Attorneys Brian K. Kidd, Emily Rae Woods and Menaka Kalaskar of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Mariana E. Bauzá of the District of Puerto Rico.
Four Foreign Nationals Sentenced to Illegal Reentry into the U.S. After Deportation and Removal ProceedingsRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announced that Nery Benito Sontay-Pelico, Gamaliel Cruz-Velasco, Emilio Velasco-Rojas and Kevin Adonai Cortez-Ordonez were sentenced today in front of the honorable United States District Court Judge Callie V.S. Granade to Illegal Reentry into the U.S. after Deportation and Removal Proceedings. These four individuals were in a van stopped in Baldwin County on December 3, 2014. Three other passengers in the van were previously sentenced to illegal entry into the United States without inspection and deported.
All four defendants received a custody sentence of the time served pending sentencing. The court ordered the defendants turned over to the appropriate authorities for deportation proceedings. This case was investigated by Homeland Security and Investigations and prosecuted by the United States Attorney’s Office.
Four Florida Residents Sentenced to Federal Prison for Roles in $6 Million Miami Home Health Care Fraud SchemeRead the Press Release
Four South Florida residents were sentenced today in connection with a long-running $6.2 million Medicare fraud scheme involving Professional Medical Home Health LLC (Professional Home Health), a Miami home health care agency that purported to provide home health and therapy services. Two of the defendants were also sentenced in connection with their conduct in similar schemes at other Miami home health care agencies.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement. Chief U.S. District Judge K. Michael Moore of the Southern District of Florida imposed the sentences.
Dennis Hernandez, 32, of Miami, was sentenced to serve 120 months in prison and ordered to pay $1,438,186 in restitution. Jose Alvarez, 48, of Miami, was sentenced to serve 120 months in prison and ordered to pay $2,972,570 in restitution. Joel San Pedro, 45, of Miami, was sentenced to serve 97 months in prison and ordered to pay $4,938,432 in restitution. Alina Hernandez, 38, of West Palm Beach, was sentenced to serve 24 months in prison and ordered to pay $204,526.05 in restitution.
Dennis Hernandez, Alvarez, San Pedro and Alina Hernandez each pleaded guilty to one count of conspiracy to commit health care fraud in November 2014.
In connection with their guilty pleas, each of the defendants admitted that Professional Home Health was actually operated for the purpose of billing the Medicare program for expensive physical therapy and home health services that were not medically necessary or not provided. Dennis Hernandez, San Pedro and Alvarez admitted to being managers, supervisors, owners and operators at Professional Home Health. In those capacities, they coordinated and oversaw the submission of fraudulent claims at Professional Home Health, and falsified patient documentation to make it appear that Medicare beneficiaries qualified for and received home health services that were, in fact, not medically necessary or not provided. Dennis Hernandez and Alvarez also admitted to partaking in similar schemes at additional Miami-area home health agencies.
Additionally, all four defendants admitted to acting as patient recruiters for Professional Home Health. In this role, they solicited and received kickbacks and bribes from other co-conspirators at Professional Home Health in exchange for recruiting beneficiaries who neither needed, nor, in some cases, received services.
From December 2008 through February 2014, Medicare paid Professional Home Health more than $6.2 million for fraudulent home health claims.
Earlier this year, two other individuals pleaded guilty and were sentenced in connection with the same scheme. Annarella Garcia, an owner of Professional Home Health, was sentenced to 70 months in prison. Annilet Dominguez, an administrator of Professional Home Health, was sentenced to 68 months in prison. Both were also ordered to pay $6,257,142 in restitution. A sentencing hearing for Ernesto Fernandez and Juan Valdes, co-defendants in the case, is scheduled for Feb. 3, 2015.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Trial Attorney Anne P. McNamara of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Four Cuban Citizens Charged with Credit Card FraudRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Eduardo Hernandez Quinones, 46, Yasser Carrillo Chartrand, 23, Claudia Diaz Diaz, 21, and Yaily Santurio, 31, all citizens of Cuba legally present in the United States, were arrested and charged in two criminal complaints with conspiracy to commit bank fraud, access device fraud and aggravated identity theft. The charges carry a mandatory minimum penalty of two years in prison, a maximum of 30 years, and a fine of $1,000,000.Assistant U.S. Attorney Russell T. Ippolito, Jr., who is handling the case, stated that defendants Hernandez Quinones and Carrillo Chartrand are charged in one complaint as co-conspirators, and Diaz Diaz and Santuro are charged in a separate complaint as co-conspirators.
According to the complaints, the defendants are accused of fraudulently obtaining the actual credit/debit card numbers of actual people and then encoding counterfeit cards with the information illegally obtained. The defendants used the counterfeit cards to purchase merchandise at retail stores throughout Western New York. In addition, the defendants used the counterfeit cards to purchase gasoline from area gas stations and then re-sold the gasoline for cash.
The four defendants made initial appearances today before U.S. Magistrate Judge Hugh B. Scott. They are being detained. The defendants were arrested in DeWitt, New York and are facing state fraud charges for similar conduct.
The criminal complaints are the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, the U.S. Secret Service, under the direction of Special Agent in Charge C. Todd Laster, and the New York State Police, under the direction of Major Michael Cerretto.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Fort Worth Man Sentenced to 78 Months in Federal Prison for Running Oil and Gas Ponzi SchemeRead the Press Release
FORT WORTH, Texas — A Fort Worth man convicted for running a fraudulent oil and gas Ponzi scheme was sentenced today, announced Acting U.S. Attorney John Parker of the Northern District of Texas.
Jeffrey Watts, a/k/a “Jeff Watts,” 41, was sentenced by U.S. District Judge Terry R. Means to 78 months in federal prison and ordered to pay $4,636,643 in restitution. Watts has been in custody since his arrest in May 2014 in Eugene, Oregon, where he fled when his scheme began to unravel.
According to documents filed in the case, beginning in fall 2011 and continuing to December 2013, Watts engaged in a scheme to defraud involving oil and gas investments. He presented himself as the founder and principal of Blue Alpha Energy, falsely representing to investors that the company had invested in oil and gas well in Texas and was owned and/or operated by Arrowhead Productions, a legitimate, but unrelated company based in Fort Worth.
Watts established Blue Alpha Energy and a group of related sham entities to perpetrate his fraud scheme by leading investors to believe they were investing in oil and gas wells owned and/or operated by Arrowhead Productions. For example, Watts represented to investors that Arrowhead LG, LLC was an assumed name or “d/b/a” of Arrowhead Productions, and he possessed documents that bore the purported signature of the actual president of Arrowhead Productions, as the President of Arrowhead LG, LLC.
Watts falsely portrayed these sham entities as legitimate, third party lenders or investors in his alleged oil and gas interests, and he transferred investor funds between these accounts and the accounts of Blue Alpha Energy.
Watts falsely represented to investors that they would receive monthly distributions according to their ownership percentage in oil and gas wells owned and/or operated by Arrowhead Productions. He also duped his business partners and employees into believing his fraudulent representations, causing them to disseminate printed investment information that conveyed his misrepresentations. To further the scheme, Watts made monthly payments to investors in Blue Alpha Energy, using investor funds transferred between bank account of the sham entities he controlled.
Between 2011 and 2013, approximately $5.8 million in investments was raised from approximately 45 investors. However, in December 2013, several investors in Blue Alpha Energy learned Watts never had investment agreements with Arrowhead Productions and, in fact, funneled the investor funds into the sham business entities he controlled.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it 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. For more information on the task force, visit www.stopfraud.gov.
The FBI investigated the case.
Fort Thompson Man Sentenced for AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a Fort Thompson, South Dakota, man convicted of Assault Resulting in Substantial Bodily Injury to an Intimate Partner and Assault Resulting in Serious Bodily Injury was sentenced on January 26, 2015, by U.S. District Judge Roberto A. Lange.
Calvin Bagola, age 27, was sentenced to 55 months in custody on each count, with the sentences to be served concurrently. Bagola also received 2 years of supervised release, and a $200 special assessment to the Federal Crime Victims Fund.
The first conviction stems from an incident on or about February 13, 2014, when Bagola, who had been an intimate dating relationship with the victim since September of 2013, began to assault her with a closed fist at his mother’s house. Bagola also kicked the victim a couple of times. The victim received medical treatment at the hospital in Chamberlain, where it was determined she had a mildly depressed medical orbital wall fracture and a non-displaced fracture involving the superolateral aspect of the right maxillary sinus. Both of her eyes were swollen shut and she had bruising to her face and body.
Bagola’s second conviction stems from an incident on March 27, 2014, when law enforcement was called for an assault involving Bagola and the same victim from the first conviction. Bagola began assaulting the victim when a second victim attempted to intervene and protect her. Bagola assaulted the second victim with a closed fist, punching her several times and knocking her to the ground unconscious. She received medical treatment at the hospital in Chamberlain, where it was determined she had fractures of the mandible both anteriorly and involving the left ramus. She was seen by a specialist in Sioux Falls and required surgery to repair, including her mouth being wired shut for several weeks.
This case was investigated by the Bureau of Indian Affairs, Crow Creek Agency. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
Bagola was immediately turned over to the custody of the U.S. Marshals Service.
Former KC Man Sentenced for Producing Child Porn, Possessing Thousands of ImagesRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former Kansas City, Mo., man who owned a massive collection of child pornography and who victimized one child whose images of sexual assault were shared online and have been identified in thousands of other child pornography cases across the country was sentenced in federal court today.
Paul Leslie Kannarr, 59, formerly of Kansas City, was sentenced by U.S. District Judge Dean Whipple to 10 years in federal prison without parole. The court ordered the federal sentence to be served concurrently with Kannarr’s state sentences for two child pornography convictions.
On June 4, 2014, Kannarr pleaded guilty to six counts of producing child pornography, two counts of posting a notice online that offers to display or distribute child pornography, one count of transporting child pornography over the Internet and one count of possessing child pornography.
Kannarr admitted that he used a minor, identified as “Jane Doe,” to produce child pornography on six separate occasions between Dec. 19, 1999 and Sept. 23, 2000. Kannarr advertised the availability of some of those images in Internet newsgroups and distributed images of the victim over the Internet. The National Center for Missing and Exploited Children (NCMEC) confirmed that, as of June 2014, more than 55,000 images of Kannarr’s principle victim have been detected in almost 7,000 cases reported to NCMEC. Those photos are still being distributed on the Internet more than a decade after their production.
Kannarr also possessed thousands of pornographic images and videos of a multitude of additional child victims. The FBI forensic examination of Kannarr’s electronic media yielded approximately 65,000 images of child pornography unrelated to the principle victim.
According to court documents, Kannarr also admitted he had sexually exploited the principle minor victim when the child was 6 through 13 years of age. Kannarr apparently was preparing to use hypnosis to continue to persuade his victim to expose herself in photographs for him and to possibly engage in more intimate sexual contact. There was evidence that he considered programming his son and the son’s adolescent friends to engage in sexual activity for Kannarr’s photographic exploitation. Court documents also report that Kannarr secretly filmed another minor girl and her friend in the shower.
Missouri Cases: 01CR82152-01 and 7CR101000603
Kannarr is currently serving a 30-year sentence in state prison for two child pornography convictions.
On Jan. 24, 2001, Kannarr was discovered to have taken a small number of sexually explicit Polaroids of the same victim as in the federal case while residing in Platte County and in Clay County, Mo. A subsequent search of Kannarr’s living quarters resulted in the recovery of multiple electronic media containing additional images. On Feb. 21, 2001, Kannarr was charged by Clay County with production of several of the images of the principle victim taken in its jurisdiction. A month after that, Platte County charged Kannarr with the production of the Polaroid images of the principle victim taken in its jurisdiction.
On May 9, 2001, Kannarr pleaded guilty in Clay County to the production of two child pornography images taken in 1995. On June 21, Kannarr was sentenced to 14 years for these offenses. A few days later, on June 23, 2001, Kannarr pleaded guilty to the photos taken of his victim in 1998 in Platte County, and was sentenced on the same day to 30 years’ incarceration.
The Platte County sentence ran concurrently with the Clay County sentence; Kannarr thus received a total sentence of 30 years for two separate state cases in 2001. Kannarr had a state parole hearing in November 2008 (after serving less than one-fourth of his sentence) and another state parole hearing (which wasn’t held due to the federal case) scheduled for November 2014 (after having served less than half of his sentence).
The FBI’s investigation of all of the electronic media recovered from Kannarr’s residence began after Kannarr had been sentenced on his state cases.
This case was prosecuted by Assistant U.S. Attorney Katharine Fincham. It was investigated by the Kansas City, Mo., Police Department and the FBI Cyber Crimes Task Force.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Former Gadsen County Sheriff's Captain Convicted of Civil Rights ViolationRead the Press Release
TALLAHASSEE – James Corder, 54, a former captain with the Gadsden County Sheriff’s Office, has been convicted on charges of violating the civil rights of an arrestee, obstruction of justice, and making false statements in a federal investigation. The convictions were announced by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
Evidence presented at the four-day trial showed that on July 25, 2013, Corder deprived an arrestee of his constitutional right to due process of law by stealing approximately $1,785 belonging to the arrestee. Thereafter, Corder made false and misleading statements to the FBI and FDLE agents investigating the theft. Sentencing is scheduled for April 8, 2015, before United States District Judge Mark E. Walker.
The case was investigated by the Federal Bureau of Investigation and the Florida Department of Law Enforcement, with assistance from the Gadsden County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Karen Rhew-Miller.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access available public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Former Federal Bureau of Prisons employee pleads guilty to sex chargeRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced today that Richard Canterbury, 50, of Lewisburg, West Virginia, pleaded guilty to abusive sexual contact involving a ward.
Canterbury, a former Federal Bureau of Prisons employee, admitted that while he was working as a supervisor in the garage at the Federal Prison Camp in Alderson, West Virginia, he intentionally touched the breasts of a female inmate on one occasion in early 2014.
Canterbury faces up to two years in prison, and a fine of $250,000. He is scheduled to be sentenced on May 13, 2015.
United States District Judge Irene C. Berger presided over the plea hearing.
This case is being investigated by the Federal Bureau of Prisons and the Federal Bureau of Investigation. Assistant United States Attorney John File is in charge of the prosecution.
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Former Executives of Marketing Agency Plead Guilty in Manhattan Federal Court to Filing False Tax ReturnsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MICHAEL J. MITROW, Jr., pled guilty today to conspiracy to commit wire fraud for defrauding his former employer, a New Jersey-based pharmaceutical marketing agency (the “Marketing Agency”), and co-defendant MATTHEW J. MITROW pled guilty on Monday to filing a false tax return that failed to report more than $90,000 in income. MICHAEL MITROW submitted false invoices to the Marketing Agency and used the proceeds to pay for more than $600,000 in private jet travel. MICHAEL MITROW also pled guilty to tax evasion for failing to report those proceeds to the IRS, as well as approximately $1 million of additional income he received from a co-defendant. Co-defendant MATTHEW MITROW failed to report to the IRS payments received from Creative Press that he used for home renovations, private jet travel, and other personal expenses. Both defendants pled guilty before U.S. District Judge Paul A. Engelmayer.
According to the Indictment and Superseding Information previously filed in Manhattan federal court, as well as statements made at plea proceedings Monday and today and in other court proceedings:
MICHAEL J. MITROW, Jr., was the former CEO and President of the Marketing Agency from 1998 through approximately 2009. From 2008 through 2009, MICHAEL MITROW defrauded the Marketing Agency by submitting fraudulent invoices for consulting services that were purportedly provided to the Marketing Agency. In truth, however, no such consulting services had been provided. Instead, MICHAEL MITROW used the proceeds from those invoices to fund more than $600,000 in private jet travel.
MICHAEL MITROW also failed to report more than $1.6 million in income he received during the 2008 tax year, including payments he received from two companies owned by Robert Madison, as well as personal purchases MICHAEL MITROW made with his corporate credit card that he fraudulently coded as business expenses of the Marketing Agency.
MATTHEW J. MITROW was the Executive Vice-President of the Marketing Agency. During the 2008 tax year, MATTHEW MITROW received approximately $91,000 in payments from Creative Press, a printing and direct mail marketing company located in Phoenix, Arizona, that provided printing and direct mailing services to the “Marketing Agency”. The payments MATTHEW MITROW received from Madison and Creative Press included approximately $39,000 in home renovations, $30,000 in payments to MATTHEW MITROW’s personal credit cards, and more than $21,000 for private jet travel. MATTHEW MITROW willfully failed to include those payments as income on his 2008 tax return. In 2009, Creative Press also paid a $19,000 debt at a New York City “Gentlemen’s Club,” which he also failed to report on his tax returns.
MICHAEL J. MITROW, Jr., 47, of Whitehouse Station, New Jersey, pled guilty today to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, and one count of tax evasion, which carries a maximum sentence of five years in prison. MICHAEL MITROW also agreed to pay restitution in an amount to be determined by the Court. MICHAEL MITROW’s sentencing is scheduled for June 25, 2015, at 9:30 a.m., before Judge Engelmayer.
MATTHEW J. MITROW, 40, of Westfield, New Jersey, pled guilty on Monday, January 26, 2015, to one count of filing a false tax return, which carries a maximum sentence of five years in prison. MATTHEW MITROW’s sentencing is scheduled for June 4, 2015, at 11:00 a.m., before Judge Engelmayer.
The maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the Judge.
Mr. Bharara thanked the Internal Revenue Service, Criminal Investigations, and the United States Postal Inspection Service for their outstanding investigative work in this case. Mr. Bharara also thanked the U.S. Department of Justice’s Tax Division for its assistance.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Special Assistant United States Attorney Andrew Young and Department of Justice Tax Division Senior Litigation Counsel Nanette L. Davis are in charge of the prosecution.
Former Controller of Greenwich Hedge Fund Admits Embezzling More Than $9 MillionRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that LAWRENCE J. HERZING, 45, of Greenwich, pleaded guilty today before U.S. District Judge Jeffrey Alker Meyer in Bridgeport to one count of wire fraud stemming from his theft of more than $9 million from the hedge fund where he was employed.
According to court documents and statements made in court, HERZING was recently employed as the controller of Greenwich-based Contrarian Capital Management, L.L.C. On 32 occasions between 2004 and 2013, HERZING used his position to wire $9,202,417.54 from his employer to accounts that he controlled.
HERZING was arrested on October 29, 2014, and currently is released on a $5.6 million bond.
Judge Meyer scheduled sentencing for April 24, 2015, at which time HERZING faces a maximum term of imprisonment of 20 years, a fine and an order of restitution. HERZING also has agreed to forfeit his residence and approximately $1.8 million.
This matter is being investigated by the Federal Bureau of Investigation, with the assistance of the Greenwich Police Department. The case is being prosecuted by Assistant U.S. Attorneys Jonathan Francis and Heather Cherry.
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(203) 821-3722 [email protected]Foreign National Pleads Guilty to Firearm Offense, Growing Marijuana in Mendocino National Forest, and Destruction of National Lands and ResourcesRead the Press Release
SACRAMENTO, Calif. — Ivan Espinoza Villafana, 25, a Mexican national, pleaded guilty today to possession of a firearm by an illegal alien, cultivation of marijuana, and depredation of public lands and resources, United States Attorney Benjamin B. Wagner announced.
According to court documents, on August 19, 2014, law enforcement officers entered a marijuana cultivation site near Ice Springs in the Mendocino National Forest in Glenn County where 732 marijuana plants were growing. Villafana was arrested at the site and had a Smith & Wesson revolver in his possession. Officers also found a rifle in the camp area of the site. Significant natural resource damage was observed at the site. Vegetation and trees had been cut and removed to improve growing conditions for the marijuana plants, water was diverted from a nearby stream to water the plants, and fertilizers and pesticides were found at the site which, based on the terrain, would likely have drained into waterways in the National Forest. It is estimated that repairing and rehabilitating the marijuana cultivation site at Ice Springs would cost at least $14,400.
This case is the product of an investigation by the United States Forest Service, Glenn County Sheriff’s Office, and California Department of Fish and Wildlife. Assistant United States Attorney Christiaan Highsmith is prosecuting the case.
Villafana is in custody and is scheduled to be sentenced by United States District Judge Troy L. Nunley on April 16, 2015. Villafana faces a maximum statutory penalty of 20 years in prison and a $1 million fine for the marijuana cultivation charge; 10 years in prison and a $250,000 fine for the possession of a firearm by an illegal alien charge; and 10 years in prison and a $250,000 fine for the depredation of public lands and resources charge. Any sentence, however, would 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.
Five Defendants Sentenced for Their Role in Federal Racketeering ConspiracyRead the Press Release
Defendants among 91 Charged in Operation Wax House
CHARLOTTE, N.C. – Matthew Newland, 41, of Iowa, was sentenced on Tuesday, January 27, 2015, by Senior U.S. District Judge Graham C. Mullen to serve 13 months in prison followed by one year of supervised release on federal racketeering charges, announced the U.S. Attorney’s Office for the Western District of North Carolina. Four other defendants were sentenced earlier this month.
The U.S. Attorney’s Office is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).
These convictions are the latest in Operation Wax House, an investigation which began in 2007. Of the 91 individuals charged, eighty-nine defendants have either pleaded guilty or have been convicted following trial. The two remaining defendants are international fugitives.
According to court records and Tuesday’s sentencing hearing, Newland operated as a promoter in the conspiracy and received more than $400,000 in kickbacks for his role. Newland also served as a seller in one transaction, letting approximately $240,000 in kickbacks be paid out of the loan proceeds to his co-conspirators. Newland pled guilty to RICO conspiracy to commit bank fraud in June 2013.
The other five defendants sentenced this month are:
• On January 27, 2015, Lorie Dooley, 50, of Charlotte, N.C., was sentenced to 46 months in prison, followed by three years of supervised release. Dooley was also a promoter in the enterprise’s mortgage fraud operations and received approximately $25,000 in kickbacks for her role. In addition to the mortgage fraud, Dooley engaged in a bank bribery scheme, in which she received $63,000 from a co-conspirator and paid a bank employee $55,000 to provide a bogus letter of credit. Also, when Dooley learned that the bank employee had pleaded guilty, Dooley obstructed justice, attempting to threaten and intimidate that employee. Dooley pleaded guilty to RICO conspiracy to commit bank fraud, wire fraud, and money laundering conspiracy in January 2014. She has been in custody since her arrest on these charges in May 2013.
• On January 20, 2015, Travis Bumpers, 38, of Charlotte, was sentenced to 66 months in prison and three years of supervised release. Bumpers was a promoter in both the enterprise’s mortgage fraud and investment fraud operations. Bumpers engaged in multiple mortgage fraud transactions, arranging for a straw buyer, providing down payment money, and receiving more than $800,000 in kickback money through a sham corporation. Bumpers also engaged in extensive investment fraud, defrauding approximately 70 victims out of more than $4.6 million. Bumpers pleaded guilty to RICO conspiracy to commit securities fraud, bank fraud, wire fraud and money laundering conspiracy in March 2013. He has been in custody since his arrest on these charges in November 2012.
• On January 8, 2015, Ralph Johnson, 37, of Charlotte, was sentenced to 27 months in prison and two years of supervised release. Johnson was a promoter in the enterprise’s mortgage fraud operations, helping arrange multiple fraudulent transactions and provide straw buyers in exchange for approximately $360,000 in kickbacks. Johnson pleaded guilty to RICO conspiracy to commit bank fraud, wire fraud, and money laundering conspiracy in June 2013. He has been in custody since his arrest on these charges in April 2013.
• Also on January 8, 2015, Benjamin Clarke, 41, of Atlanta, Ga. was sentenced to an eight month split sentence, followed by two years of supervised release. Clarke served the enterprise as a buyer for two properties purchased as part of its mortgage fraud operations and received approximately $200,000 in kickbacks. Clarke pleaded guilty to bank fraud in June 2013. Of the 26 six defendants charged in this indictment, 18 await sentencing, including three of the scheme’s leaders. The fourth leader, Ramin Amini, 46, last known address Tehran, Iran, is one of two international fugitives. Operation Wax House in the Western District of North Carolina is being handled by the Charlotte Division of the FBI and the Criminal Division of the IRS for the Financial Fraud Enforcement Task Force, along with the Securities Division of the North Carolina Secretary of State with respect to a separate prosecution. The Operation Wax House prosecution is being handled for the government by Assistant United States Attorney Maria K. Vento.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The names and case numbers of the all the defendants charged to date in Operation Wax House are listed below, organized by their alleged role in the scheme.
Final Two Defendants Plead Guilty to Theft from Federally Licensed Firearms DealerRead the Press Release
The Defendants Stole 26 Firearms from U.S. Lumber Company in Battle Creek
GRAND RAPIDS, MICHIGAN – Matthew Cameron Day Bolden, 24, and William Henry Watson, 22, both of Battle Creek, Michigan, pled guilty on January 28 in the U.S. District Court for the Western District of Michigan to one count of theft of firearms from a federally licensed dealer as detailed in an indictment returned on October 16, 2014, U.S. Attorney Patrick Miles announced today. James Maurice Lucas, 19, also of Battle Creek, previously pled guilty to the theft on November 14, 2014.
Late in the evening on September 6, 2014, the three men, armed with two semiautomatic pistols, broke into U.S. Lumber Company in Battle Creek, which was closed for the day. They shattered display cases containing semiautomatic pistols and revolvers, and fled the store with 26 firearms. Officers from the Battle Creek Police Department, responding to an alarm, apprehended Bolden and Watson at the scene. Lucas was arrested at a later date. Twenty-four of the firearms have been recovered.
“Stealing firearms from a federally licensed dealer is not only a dangerous crime in and of itself, but those stolen firearms can later pose a deadly threat to the public,” said U.S. Attorney Miles. “This office continues to protect the public by enforcing federal firearms law.”
“Anytime guns are stolen, the community is placed at risk,” said ATF Special Agent in Charge Steven Bogdalek. “Theft of firearms from a federally licensed firearms dealer is one of the most serious federal crimes as the guns typically end up in the hands of violent criminals. ATF, along with our local, state and federal partners remain committed to aggressively investigating these crimes.”
Chief of Police Jim Blocker of the Battle Creek Police Department said, “This incident once again validates the importance of open and joint investigations with our Federal and State law enforcement agencies. The Battle Creek Police Department has retained a long-time position on the ATF Task Force, and this case demonstrates why this remains so vital to our mission. As a local department, we naturally operate with limited resources, and we remain grateful that our Federal and State partners are so willing to assist the Battle Creek Police Department.”
Bolden and Watson will be sentenced in June and Lucas will be sentenced in March. Each faces up to 10 years’ imprisonment and a fine of up to $250,000.00.
The Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) conducted the investigation along with the Battle Creek Police Department. Assistant U.S. Attorney Justin M. Presant is prosecuting the case. The prosecution was coordinated with the Calhoun County Prosecuting Attorney.
Final Two Defendants Plead Guilty to Theft from Federally Licensed Firearms DealerRead the Press Release
The Defendants Stole 26 Firearms from U.S. Lumber Company in Battle Creek
GRAND RAPIDS, MICHIGAN – Matthew Cameron Day Bolden, 24, and William Henry Watson, 22, both of Battle Creek, Michigan, pled guilty on January 28 in the U.S. District Court for the Western District of Michigan to one count of theft of firearms from a federally licensed dealer as detailed in an indictment returned on October 16, 2014, U.S. Attorney Patrick Miles announced today. James Maurice Lucas, 19, also of Battle Creek, previously pled guilty to the theft on November 14, 2014.
Late in the evening on September 6, 2014, the three men, armed with two semiautomatic pistols, broke into U.S. Lumber Company in Battle Creek, which was closed for the day. They shattered display cases containing semiautomatic pistols and revolvers, and fled the store with 26 firearms. Officers from the Battle Creek Police Department, responding to an alarm, apprehended Bolden and Watson at the scene. Lucas was arrested at a later date. Twenty-four of the firearms have been recovered.
“Stealing firearms from a federally licensed dealer is not only a dangerous crime in and of itself, but those stolen firearms can later pose a deadly threat to the public,” said U.S. Attorney Miles. “This office continues to protect the public by enforcing federal firearms law.”
“Anytime guns are stolen, the community is placed at risk,” said ATF Special Agent in Charge Steven Bogdalek. “Theft of firearms from a federally licensed firearms dealer is one of the most serious federal crimes as the guns typically end up in the hands of violent criminals. ATF, along with our local, state and federal partners remain committed to aggressively investigating these crimes.”
Chief of Police Jim Blocker of the Battle Creek Police Department said, “This incident once again validates the importance of open and joint investigations with our Federal and State law enforcement agencies. The Battle Creek Police Department has retained a long-time position on the ATF Task Force, and this case demonstrates why this remains so vital to our mission. As a local department, we naturally operate with limited resources, and we remain grateful that our Federal and State partners are so willing to assist the Battle Creek Police Department.”
Bolden and Watson will be sentenced in June and Lucas will be sentenced in March. Each faces up to 10 years’ imprisonment and a fine of up to $250,000.00.
The Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) conducted the investigation along with the Battle Creek Police Department. Assistant U.S. Attorney Justin M. Presant is prosecuting the case. The prosecution was coordinated with the Calhoun County Prosecuting Attorney.
Final Defendant Sentenced in Odessa Credit Union ATM Theft CaseRead the Press Release
In Midland today, U.S. District Judge Robert A. Junell sentenced 25–year-old Jordan Reese Brashear of Odessa, to 33 months in federal prison for robbing a local credit union ATM announced Acting United States Attorney Richard L. Durbin, Jr., and Federal Bureau of Investigation (FBI) Special Agent in Charge Douglas E. Lindquist, El Paso Division.
In addition to the prison term, Judge Junell ordered that Brashear pay, jointly and severally with co-defendants, $30,262.60 restitution and be placed on supervised release for a period of three years after completing his prison term. Brashear’s co-defendants, 35-year-old Kelly Lee Harjo and 48–year-old Steven Lee Holstead, received two-year federal prison terms for their roles in the ATM theft. All three pleaded guilty to a charge of theft of credit union property.
According to court records, the three defendants used a forklift to steal an ATM from the Complex Community Credit Union on March 5, 2014. The defendants managed to steal over $30,000 from inside the ATM.
This case was investigated by the Federal Bureau of Investigation (FBI) together with the Odessa Police Department. Assistant United States Attorney John Klassen prosecuted this case on behalf of the Government.
Federal and State Authorities Arrest 23 Individuals Today in Relation to Cocaine and Methamphetamine Distribution Operations in Permian BasinRead the Press Release
In Midland and Odessa this morning, authorities arrested 23 individuals on federal drug and firearms charges announced Acting United States Attorney Richard L. Durbin, Jr., Drug Enforcement Administration Special Agent in Charge Will Glaspy, El Paso Division, and Midland Police Chief Price Robinson.
Federal grand jury indictments returned yesterday charge 21 of those arrested, as well as five other individuals who were already in custody prior to today and seven who are still at large, for alleged drug trafficking offenses or federal firearms violations stemming from two separate investigations. Two arrested today were charged by federal criminal complaints filed this morning. A complete list of defendants is below.
In the Cortez investigation, authorities arrested 14 individuals, including 30–year-old ringleader Andrew Cortez of Midland. Cortez is a partial owner and operator of a family business called “Alfredo’s Paleteria” with stores in Midland, Odessa, San Angelo and Fort Stockton. Authorities allege that Cortez, along with his 32-year-old brother, Albert Cortez, used the business operation as fronts for cocaine distribution. According to court records, the defendants allegedly conspired since February 2014 to possess with intent to distribute more than five kilograms of cocaine.
In the Derington investigation, authorities arrested a total of nine individuals on federal drug charges, including ringleader 33-year-old Brandon Derington of Midland. Authorities allege that Derington and the other defendants conspired since February 2014 to possess methamphetamine with intent to distribute it throughout the Permian Basin area. Ruben Long, a 35-year-old Midland resident who was also arrested today, is charged by federal indictment with being a convicted felon in possession of a firearm. Tiffany Thetford, age 26 of Odessa, and Michael Johnson, age 58 of Odessa were two non-indicted individuals arrested this morning in connection with the Derington investigation. Both have been charged by federal criminal complaints following their arrests. Thetford is charged with being a felon in possession of a firearm; Johnson, possession with intent to distribute methamphetamine.
During these investigations, authorities have seized 1.5 kilograms of cocaine, 1.5 kilograms of methamphetamine, 12 firearms, approximately $127,000 in U.S. Currency as well as two additional money seizures of unknown quantity.
“Today’s enforcement operations dismantled two separate but significant drug trafficking organizations involved in the distribution and trafficking of cocaine and methamphetamine in the Permian Basin. Jointly, through the hard work and dedication of our agents along with our federal, state and local law enforcement partners, these criminal organizations will now face west Texas justice,” stated DEA Special Agent in Charge Will Glaspy, El Paso Division.
Upon conviction, the defendants face sentences of between ten years and life in federal prison; between five and 40 years in federal prison; or, up to 20 years in federal prison depending on the amount of controlled substances involved. Thetford and Long each face ten years in federal prison upon conviction of the felon in possession charge. All of the defendants remain in federal custody. Detention hearings are scheduled for February 3, 2015, and February 9, 2015, in Midland before United States Magistrate Judge David Counts.
These federal charges and arrests resulted from investigations conducted by the Drug Enforcement Administration (DEA), Midland Police Department and the Ector County Sheriff’s Office together with the Federal Bureau of Investigation (FBI), Homeland Security Investigations (HSI) and the Midland County Sheriff’s Office. The United States Marshals Service and the Texas Department of Public Safety (DPS) Air Support Unit assisted in making today’s arrests. These matters are being prosecuted by Assistant United States Attorney Brandi Young.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Cortez investigation defendants
Name Age Residence Charge Exposure
*Andrew Cortez 30 Odessa Conspiracy to PWITD Cocaine 10 years to life
*Jose Dominguez 37 Midland Conspiracy to PWITD Cocaine 5 to 40 years
*Daniel Yearicks 32 Midland Conspiracy to PWITD Cocaine up to 20 years
*Guillermo Borunda 19 Midland Conspiracy to PWITD Cocaine up to 20 years
*Manuel Valensuela 43 Odessa Conspiracy to PWITD Cocaine up to 20 years
*Albert Cortez 32 Odessa Conspiracy to PWITD Cocaine up to 20 years
*Fidel Segura 23 Midland Conspiracy to PWITD Cocaine up to 20 years
*Benito Sanchez 44 Midland Conspiracy to PWITD Cocaine up to 20 years
*Ramiro Castillo 56 Midland Conspiracy to PWITD Cocaine up to 20 years
*Jose Valenzuela 39 Odessa Conspiracy to PWITD Cocaine up to 20 years
*Curtis White 28 Midland Conspiracy to PWITD Cocaine up to 20 years
*Raul Saldana 22 Odessa Conspiracy to PWITD Cocaine 10 years to life
*Jose Gardea 25 Odessa Conspiracy to PWITD Cocaine 10 years to life
*Miriam Saenz 30 Odessa Conspiracy to PWITD Cocaine up to 20 years
**Avelardo Castillo 25 Stanton, TX Conspiracy to PWITD Cocaine up to 20 years
***Alejandro Esquivel 40 Odessa Conspiracy to PWITD Cocaine 10 years to life
***Gabriel Miller 30 Denver City Conspiracy to PWITD Cocaine 5 to 40 years
***Paul Hicks 34 Midland Conspiracy to PWITD Cocaine 10 years to lifeDerington investigation defendants
Name Age Residence Charge Exposure
*Brandon Derington 33 Odessa Conspiracy to PWITD Meth 10 years to life
*Chris Wayne Grimes 41 Odessa Conspiracy to PWITD Meth 10 years to life
*Steven Egge 45 Odessa Possess w/Intent To Distribute Meth up to 20 years
*John Steven Renfro 48 Big Spring, TX Conspiracy to PWITD Meth up to 20 years
*Jeffrey Lynn Lane 52 Odessa Conspiracy to PWITD Meth up to 20 years
*Lacy Brooks 32 Odessa Conspiracy to PWITD Meth up to 20 years
*Ruben Long 35 Odessa Felon in possession of firearm 10 years
*Michael Johnson 58 Odessa Possess w/Intent To Distribute Meth up to 20 years
*Tiffany Thetford 26 Odessa Felon in possession of firearm 10 years
**Sherry Ledford 44 Midland Conspiracy to PWITD Meth up to 20 years
**Olivia Ramon 18 Odessa Conspiracy to PWITD Meth 10 years to life
**Juan Martin Arteaga 44 Odessa Conspiracy to PWITD Meth 10 years to life
**Eddie Herbert Alviso 62 Riverside, CA Conspiracy to PWITD Meth 10 years to life
***Bryant Douglas Black 50 California Conspiracy to PWITD Meth 10 years to life
***Danny Ray Blakely 28 Odessa Conspiracy to PWITD Meth up to 20 years
***Wesley Williford 41 Odessa Conspiracy to PWITD Meth up to 20 years
***Ruben Mancha 53 Andrews, TX Possess w/Intent To Distribute Meth up to 20 years* Arrested today
** Already in custody prior to today
*** FugitiveFederal Jury Convicts Former Finance Manager of the Rocky Boy Health ClinicRead the Press Release
GREAT FALLS – The former Finance Manager of the Rocky Boy Health Board Clinic in Box Elder, Theodora Ann Morsette, 60, was convicted of three felony counts of embezzlement and theft for taking over $156,000 in federal monies provided to the tribe for the operation and services of the Clinic. Judge Brian Morris of Great Falls set sentencing for April 20, 2015.
Morsette had worked in the Finance Office of the Clinic since 1994. The prosecution presented evidence that between 2010 and 2013, Morsette regularly accessed tribal coffers for payments over and above her $90,000 per year salary and authorized supplemental compensation package with the Chippewa Cree Tribe. Morsette received a base pay of $82,000 per year plus a retirement benefit of 11.5% plus a negotiated supplemental pay stipend from the tribe. Over the four year period reviewed by investigators, Morsette obtained an additional $156,493 in unauthorized overtime, double pay, severance pay [although she never severed her government service], unauthorized supplemental pay, and retirement advances. Morsette testified that she believed that she was entitled to the additional payments because she worked hard and the over-payments had been approved by her supervisor, Clinic CEO Fawn Tadios.
Tadios was indicted and convicted of embezzling tribal funds in June of 2014. Judge Morris sentenced Tadios to a year in prison on October 22, 2014. She has appealed her conviction and was released pending appeal by the Ninth Circuit Court of Appeals. Morsette has been released pending sentencing.
Prior to working at the Health Clinic’s Finance Office, Morsette had been a Bureau of Indian Affairs loan officer. She was indicted and convicted of embezzling $6,453 in 1994 and given a three year sentence of probation.
The guilty verdict is the latest in a series of prosecutions and convictions relating to public corruption, fraud, and theft in federal grants, contracts and programs in Indian Country brought by the investigators and prosecutors of the U.S. Attorney’s Guardians Project, an anti-corruption strike force created in 2011. The primary investigators in the Morsette case were the agents of the Department of Health and Human Services’ Office of Inspector General (HHS OIG), aided and supported by the HHS OIG’s Office of Audit Services, and agents of the Offices of Inspector General for Interior and the Environmental Protection Agency.
Special Agent in Charge Gerald T. Roy, U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations, Kansas City Regional Office, stated “Our office will continue to bring those individuals to justice who defraud our programs for personal benefit and at the expense of those in need of assistance.”
Fairfield Man Who Possessed Assault Weapon on Unh Campus Is SentencedRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that WILLIAM DONG, 23, of Fairfield, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to five years of probation for transporting an assault weapon into Connecticut in violation of federal law.
According to court documents and statements made in court, in September 2013, DONG traveled to Pennsylvania, purchased a Bushmaster model XM-15-E2S, .223 caliber semi-automatic rifle and transported the rifle back to Connecticut. This firearm is considered a prohibited assault weapon under Connecticut state law.On December 3, 2013, West Haven Police arrested DONG in the vicinity of the University of New Haven (UNH) after he was found in possession of two handguns on his person, and the Bushmaster rifle, which was seized from his nearby car. DONG, a UNH student, told police that he had purchased the rifle from a seller in Pennsylvania in September 2013 through an advertisement placed on www.armslist.com.
Although it is not unlawful under federal law for an individual, who is not a prohibited person, to possess this Bushmaster firearm, it is a federal violation for an individual to purchase this firearm outside of Connecticut and travel into the state with it, since it is a prohibited firearm under Connecticut state law.
DONG has been detained since his arrest. He has stated that he possessed the firearms out of concern for his safety and the safety of his fellow UNH students.
DONG pleaded guilty to the federal charge on November 6, 2014. He also previously pleaded guilty in Milford Superior Court to state firearms offenses related to the December 2013 incident in West Haven, and has been sentenced to eight years of incarceration, execution suspended after two years, and five years of probation.
In the federal case, DONG faced a sentencing guideline range of six to 12 months of imprisonment. Instead of imposing a sentence of incarceration, and which would be followed by a term of supervised of up to three years, Judge Chatigny imposed a five-year term of probation, the maximum allowed under the law. Judge Chatigny agreed with the government’s position that DONG’s state term of incarceration is sufficient, but that a longer period of federal supervision is necessary to insure the safety of the community.
As special conditions of probation, Judge Chatigny ordered that DONG cannot possess any firearms or ammunition, associate with individuals in possession of firearms or go to any shooting ranges. He also must submit to mental health counseling.
“A sentence of five years of probation with mental health counseling is an appropriate resolution to this case, as it will provide Mr. Dong with needed federal supervision,” stated U.S. Attorney Daly. “We want to thank the conscientious citizen who first alerted law enforcement that an individual was in possession of a powerful and potentially dangerous firearm. We also want to acknowledge the rapid response of the West Haven Police and University of New Haven Police, which quickly resolved this unsettling situation.”
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, West Haven Police Department, University of New Haven Police Department and Connecticut State Police. The case was prosecuted by Assistant U.S. Attorney Robert M. Spector.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
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(203) 821-3722 [email protected]El Salvador National Pleads Guilty and Sentenced for Illegally ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that LISANDRO HUMBERTO BAIRES-GOMEZ, age 20, a citizen of El Salvador, pled guilty on Tuesday, January 27, 2015, to a one-count Indictment for illegal reentry of removed alien.
According to the Indictment, on or about November 17, 2014, BAIRES-GOMEZ was found in the United States after having been officially deported and removed on or about June 13, 2013.
After accepting his guilty plea, U.S. District Judge Jay C. Zainey sentenced BAIRES-GOMEZ to time served, ordered him to serve one year of supervised release, and pay a special assessment of $100. BAIRES-GOMEZ will be surrendered to the custody of the U.S. Immigration & Customs Enforcement for removal proceedings.
U.S. Attorney Polite praised the work of the United States Department of Homeland Security, U.S. Border Patrol in investigating this matter. Assistant United States Attorney Spiro G. Latsis was in charge of the prosecution.
Eagle Butte Man Sentenced for Possession of A Firearm by Prohibited PersonRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota, man convicted of Possession of a Firearm by a Prohibited Person was sentenced on January 26, 2015, by U.S. District Judge Roberto A. Lange.
Philip Nordvold, age 36, was sentenced to 16 months in custody, 2 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Nordvold was indicted for Possession of a Firearm by a Prohibited Person by a federal grand jury on August 19, 2014. He pled guilty to the charge on October 21, 2014.
The conviction arose from an incident in February 2014, when Cheyenne River Sioux Tribe law enforcement officers found Nordvold asleep in a parked vehicle. The officers knocked on the window of the vehicle to awaken Nordvold, and one of the officers observed a handgun on the seat by Nordvold’s hand. The vehicle was then searched and a 9mm semi-automatic pistol was located under the driver’s seat. Nordvold had previously been convicted of a crime punishable by imprisonment for more than one year, and was therefore a person prohibited from possessing a firearm.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Division and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Mikal Hanson prosecuted the case.
Nordvold was immediately turned over to the custody of the U.S. Marshals Service to begin serving his sentence.
D’iberville Man Sentenced to Prison for Oil Spill Fraud ConspiracyRead the Press Release
Gulfport, Miss. – Jason Richard Woodcock, 34, of D’Iberville, was sentenced on January 26, 2015 by U.S. District Judge Sul Ozerden to 120 months in federal prison followed by three years of supervised release for conspiracy to commit mail and wire fraud, U.S. Attorney Gregory K. Davis announced. Woodcock was also ordered to pay restitution to the Gulf Coast Claims Facility (GCCF) in the amount of $105,383.76 and to the Mississippi Department of Employment Security (MDES) in the amount of $17,092.00.
The investigation revealed that Woodcock and co-conspirators filed fraudulent oil spill claims with the GCCF in support of Woodcock and other individuals’ fraudulent claims scheme for alleged lost earnings and profits as a result of the oil spill in the Gulf of Mexico on or about April 20, 2010. Woodcock alleged loss of employment as a marketing representative at JW Consulting LLC in Gulfport and he conspired to submit other oil spill claims for other individuals from another non-existent company known as "Gulf South Seafood". Through mailings and wire transactions, the conspiracy resulted in the actual loss of $105,383.76, with the total intended loss to the GCCF being $420,816.88.
This case was investigated by special agents of the United States Secret Service and the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations. It was prosecuted by Assistant U.S. Attorney Andrea Jones.
This case was also brought as part of this District’s partnership with the National Center for Disaster Fraud (NCDF), a nationwide initiative to protect available funds and assistance for those victims of both natural and man-made disasters such as hurricanes, floods, tornadoes and the recent Gulf oil spill. If you have knowledge of fraud, waste, abuse, or allegations of mismanagement involving disaster relief operations, you can contact the NCDF by either calling the hotline at
(866) 720-5721, faxing (225) 334-4707, emailing at [email protected] or in writing to National Center for Disaster Fraud, Baton Rouge, LA 70821-4909.
Doctor Sentenced to 16 Months in Prison for Taking Bribes in Test-Referral Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – An internist with a practice in Montclair, New Jersey, was sentenced today to 16 months in prison for accepting bribes in exchange for test referrals as part of a long-running scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Charles Goldberg, 61, of West Orange, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of accepting bribes. Judge Goldberg imposed the sentence today in in Newark federal court.
Including Goldberg, 34 people – 23 of them physicians– have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies.According to documents filed in these and related cases and statements made in court: Goldberg admitted accepting bribes of $1,800 per month through a sham lease agreement with BLS, which identified the waiting room, bathroom and one examination room in Goldberg’s office as being leased.
In addition to the prison term, Judge Chesler sentenced Goldberg to one year of supervised release and fined him $50,000. As part of his guilty plea, Goldberg must forfeit $58,000, representing the bribes he received from BLS.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s sentencing.
The government is represented by Senior Litigation Counsel Andrew Leven, Assistant U.S. Attorney Joseph Minish, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
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.
Defense counsel: A. Ross Pearlson Esq., West Orange
15-036Doctor Admits Taking Bribes in Test-Referral Scheme New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A Monmouth County doctor with practices in Colts Neck, New Jersey, and Staten Island, New York, today admitted accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Ralph Messo, 53, of Colts Neck, New Jersey, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with one count of accepting bribes.
Including Messo, 34 people – 23 of them doctors – have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. The investigation has so far recovered more than $10.5 million to date through forfeiture.According to documents filed in this and related cases and statements made in court:
Messo admitted he accepted bribes in return for referring patient blood specimens to BLS and was paid approximately $3,000 per month. Messo’s referrals generated at least $828,000 in lab business for BLS.
On April 9, 2013, federal agents arrested David Nicoll, 40, of Mountain Lakes, New Jersey, Scott Nicoll, 33, of Wayne, New Jersey, a senior BLS employee and David Nicoll’s brother, and Craig Nordman, 35, of Whippany, New Jersey, a BLS employee and the CEO of Advantech Sales LLC – one of several entities used by BLS to make illegal payments. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and Frank Santangelo, 44, of Boonton, New Jersey. In June 2013, David and Scott Nicoll, Nordman and four other associates of BLS pleaded guilty to charges related to their involvement. Santangelo, a doctor, pleaded guilty in August 2013 to charges relating to his role in the scheme
The bribery count to which Messo pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for May 12, 2015. As part of his guilty plea, Messo must forfeit $82,500, representing the total bribe monies received from BLS.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; IRS– Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s guilty pleas.
The government is represented by Assistant U.S. Attorney Joseph Minish, Senior Litigation Counsel Andrew Leven, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
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.
15-038Defense counsel: Joseph R. Benfante Esq., New York
Couple Sentenced for Stealing Mail in Roanoke, Southlake, and Keller, TexasRead the Press Release
DALLAS — A couple who admitted stealing mail from residential mailboxes in and around Roanoke, Southlake, and Keller, Texas, were sentenced this week, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
William Lee Maglicco, 28, was sentenced by U.S. District Judge Reed C. O’Connor to 30 months in federal prison. Erica Michele Gibson, 26, was sentenced to 41 months in federal prison. Each pleaded guilty in October 2014 to an indictment charging one count of possession of stolen mail. Each has been in custody since their arrest in August 2014 on charges outlined in a related criminal complaint.
According to documents filed in the case, in early 2014, individuals from Roanoke, Southlake, and Keller complained that mail was stolen from their residential mailboxes. One of the victims stated that an American Express card was mailed to him/her at his/her Southlake address, but it was never received. U.S. Postal Inspectors investigated and discovered that Maglicco and Gibson used this individual’s credit card at a Walmart store in Grapevine, Texas, in March 2014.
On April 11, 2014, law enforcement executed a search warrant at Maglicco’s residence in Watauga, Texas, and discovered hundreds of pieces of stolen mail, including credit/debit cards, bank statements, passports and tax information. Law enforcement also found mail at the location addressed to the above-reference victim.
Both Maglicco and Gibson confessed to stealing mail from residential mailboxes in and around Roanoke, Southlake, and Keller, and using the stolen credit/debit cards to purchase items. According to the affidavit filed with the complaint, Maglicco admitted he stole mail approximately two to three times per week with his girlfriend, Gibson. He stated he stole mail to fuel his and Gibson’s drug habit.
The U.S. Postal Inspection Service and the Roanoke, Southlake, and Keller Police Departments investigated. Assistant U.S. Attorney Chris Wolfe prosecuted.
Corporation and Two Owners Sentenced for Scheme to Illegally Dispose of Industrial WastewaterRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that Senior U.S. District Judge James J. Brady has sentenced RAM ENVIRONMENTAL SERVICES, LLC, RAYMOND MARCEL, JR., and CYRIL D. ROBICHEAUX, for their roles in a criminal scheme to violate the federal environmental laws.
In June 2013, the three defendants pled guilty to bills of information charging them with a conspiracy to defraud the U.S. Environmental Protection Agency and to violate the Safe Drinking Water Act. In connection with their convictions, the defendants had admitted that, in 2011 and 2012, they conspired with themselves and others to illegally discharge industrial wastewater at locations in Belle River, Louisiana, and Baton Rouge, Louisiana, and to otherwise obstruct the enforcement of the federal environmental laws through kickbacks, the creation and use of false documents, and other fraudulent means.
RAM ENVIRONMENTAL SERVICES, LLC, an entity incorporated in the State of Louisiana and doing business in Morgan City, Louisiana, was sentenced today to make restitution in the amount of $114,969.13 to FAS Environmental Services (“FAS”), based in Belle River, Louisiana, a transportation and disposal company that is primarily in the business of transporting industrial wastewater using a fleet of tanker trucks. RAM was also sentenced to pay a $50,000 fine and a $400 special assessment. RAM was also placed on federal probation for a term of two (2) years.
MARCEL, age 62, of Berwick, Louisiana, was sentenced to a 2-year term of probation, a $1,500 fine, restitution in the amount of $114,969.13 to FAS, and a $100 special assessment. ROBICHEAUX, age 53, of Morgan City, Louisiana, was also sentenced to a 2-year term of probation, a $5,000 fine, full restitution to FAS, and a special assessment.
Today’s sentencing hearings were preceded by the sentencing of Michael J. Vaughn, who was sentenced in October 2013 to twelve (12) months of incarceration at a federal half-way house, a 5-year term of probation, forfeiture of approximately $23,000, and restitution to FAS. In a related case, Roger J. Dies of Zachary, Louisiana is awaiting sentencing as a result of his convictions for failing to report third party wastewater discharges in violation of the Clean Water Act, and obstruction of justice.
U.S. Attorney Green stated, “We will continue to pursue those who commit criminal violations of the federal environmental laws and devote the necessary resources to successfully handle such complex matters. Violators in this district should expect to become convicted felons facing stiff penalties.”
“The defendants admitted they conspired to illegally dispose of huge quantities of industrial wastewaters,” said Daniel Pflaster, Assistant Special Agent-in-Charge of EPA’s criminal enforcement program in Louisiana. “Today’s sentence shows that when businesses and their owners break environmental laws and defraud honest businesses who pay to have their wastes disposed of legally, they will be prosecuted.”
“The sentencing today is a testament to the hard work and dedication amongst our agency and our federal, state and local law enforcement partners, who work together to bring violators to justice,” said DEQ Secretary Peggy Hatch. “The legal handling, treatment and disposal of wastewater are very serious matters, as violations have a negative, direct impact to our health and environment. We will continue to aggressively prosecute individuals and businesses found to be in violation of environmental laws through illegal disposal methods. Anyone with information on illegal activity is asked to contact DEQ and local law enforcement so that we may initiate an investigation as soon as possible.”
U.S. Attorney Green emphasized that FAS ownership was unaware of the defendants’ scheme. FAS terminated the employment of Vaughn, its former operations manager, upon learning of the scheme and cooperated fully.
The matter is being conducted by the United States Attorney’s Office, the Criminal Investigation Division of the U.S. Environmental Protection Agency, and the Criminal Investigation Division of the Louisiana Department of Environmental Quality. The matter is being prosecuted by First Assistant U.S. Attorney Corey R. Amundson, who serves as Chief of the Criminal Division, and Assistant U.S. Attorney Alan A. Stevens, who serves as a Deputy Chief.
Connecticut Hedge Fund Adviser Sentenced to 13 Years in Federal Prison for Running Massive Ponzi SchemeRead the Press Release
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FRANCISCO ILLARRAMENDI, 45, formerly of New Canaan, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to 156 months of imprisonment, followed by three years of supervised release, for orchestrating a Ponzi scheme that defrauded investors and creditors of hedge funds he managed out of hundreds of millions of dollars, and for obstructing the ensuing investigation of his conduct.
“For more than five years, Francisco Illarramendi’s severely misguided attempt to conceal an initial loss of $5 million ballooned into an elaborate fraud scheme that caused investors and creditors to lose hundreds of millions of dollars,” stated First Assistant U.S. Attorney Michael J. Gustafson. “Through it all, he still managed to live well, receiving more than $20 million in personal benefits. I want to thank our partners at the FBI and SEC for unravelling this complex scheme, and acknowledge the efforts of the court-appointed receiver who has recovered more than $300 million that will be distributed to the victims.”
“Mr. Illarramendi violated his fiduciary duties by swindling millions from investors,” stated Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation. “This case sends a clear message that no one is above the law, least of all those in the securities industry.”
On March 7, 2011, ILLARRAMENDI pleaded guilty to two counts of wire fraud, one count of securities fraud, one count of investment advisor fraud, and one count of conspiracy to obstruct justice, to obstruct an official proceeding and to defraud the U.S. Securities and Exchange Commission (SEC).
According to court documents and statements made in court, in 2005, ILLARRAMENDI founded and became a partner in Highview Point Partners (“HVP”) and began acting as an investment adviser to certain hedge funds. HVP was registered with the SEC as an investment advisor and eventually relocated from New York City to Stamford. In 2006, ILLARRAMENDI founded, and became a partner in, Michael Kenwood (“MK”), which was also located in Stamford, but was not registered with the SEC. In late 2005, one hedge fund he advised lost approximately $5 million of the money he was charged with investing. Rather than disclose to his investors the truth about the losses incurred, ILLARRAMENDI concealed this information by engaging in a scheme to defraud and mislead his investors and creditors. As a result of the scheme, the hedge funds and related entities managed and advised by ILLARRAMENDI had outstanding liabilities that greatly exceed the true value of their assets, causing the funds’ investors, creditors and service providers to lose more than $700 million.
As part of the scheme to defraud investors, creditors and, ultimately, the SEC, ILLARRAMENDI created fraudulent documents, including a bogus debt instrument and a phony letter purporting to have been issued by an investment bank, as well as a fictitious asset verification letter falsely representing that one of the hedge funds, the Short Term Liquidity Fund (“STLF”), had at least $275 million in credits as a result of outstanding loans, when ILLARRAMENDI and others knew it did not have any such credits. In addition, ILLARRAMENDI misled investors, creditors and the SEC about the true performance of the funds, the assets under management by the funds and the transactions being conducted by the funds and related entities. At times, ILLARRAMENDI used money provided by new investors to the funds to pay out the returns he promised to earlier investors, made false representations to his investors and creditors in an effort to obtain new investments from them and to prevent them from seeking to liquidate their investments, improperly commingled the investments in each individual hedge fund with investments in the other hedge funds, and engaged in transactions that were not in the best interests of the funds.
In order to keep his fraud hidden, and to secure an investment of approximately $100 million, ILLARRAMENDI paid $3.4 million in bribes to two officials of the Venezuelan state-owned oil company, Petroleos de Venezuela, S.A. (“PDVSA”). ILLARRAMENDI also paid a Venezuelan accountant, Juan Carlos Guillen Zerpa, and a purported Florida businessman, Juan Carlos Horna Napolitano, $1.25 million to assist him in the creation of the fictitious asset verification letter that falsely represented that STLF had at least $275 million in credits as a result of outstanding loans. ILLARRAMENDI used the letter in an attempt to mislead and deceive the SEC regarding whether there was sufficient capital and credit to protect the investors of STLF.
ILLARRMENDI personally obtained more than $20 million during the course of the scheme, and used approximately $5 million of the funds to construct a home in New Canaan.
On January 14, 2011, the SEC filed a civil action seeking, among other things, to enjoin ILLARRAMENDI and MK-related entities from violating the federal securities laws and to submit an accounting of investor funds. Subsequent to the filing of the SEC civil action, U.S. District Judge Janet Bond Arterton appointed, and sought input from, business advisers and a court-appointed receiver to ascertain the assets and liabilities of the hedge funds affiliated with MK, among other tasks.
To date, the court-appointed receiver has recovered more than $300 million of the funds that were lost, including the vast majority of the bribe payments. The receiver also has sold ILLARRAMENDI’s New Canaan residence for approximately $3 million.
Judge Underhill will issue a restitution order after further court proceedings.
ILLARRAMENDI has been detained since January 25, 2013, after his bond was revoked, in part because he had failed to disclose to the Court that he had received and spent a Connecticut state tax refund of more than $630,000 while he was awaiting sentencing.
Guillen and Horna both pleaded guilty to conspiring to obstruct an SEC proceeding, received prison terms of 14 months and forfeited the $1.25 million they received from ILLARRAMENDI.
This matter was investigated by the Federal Bureau of Investigation with the assistance of the U.S. Securities and Exchange Commission, Boston Regional Office, and Internal Revenue Service – Criminal Investigation Division.
The case was prosecuted by Senior Litigation Counsel Richard J. Schechter and Assistant U.S. Attorney Paul A. Murphy, with the assistance of the U.S. Attorney’s Office for the District of Massachusetts.
Citizens are encouraged to report any financial fraud schemes by calling, toll free, 855-236-9740, or by sending an email to [email protected].
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U.S. ATTORNEY'S OFFICE
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(203) 821-3722 [email protected]Columbian National Pleads Guilty to Illegally ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ANTONIO CAICEO-VALENCIA, age 42, a citizen of Columbia, pled guilty yesterday to a one-count Indictment for illegal reentry of removed alien.
According to the Indictment, on or about November 20, 2014, CAICEO-VALENCIA was found in the United States after having been officially deported and removed on or about December 27, 2010.
CAICEO-VALENCIA faces an enhanced maximum term of imprisonment of twenty years, a fine of $250,000, three years supervised release after imprisonment, and a $100 special assessment. U.S. District Judge Helen G. Berrigan set sentencing for May 6, 2015.
U.S. Attorney Polite praised the work of the United States Department of Homeland Security, Immigration and Customs Enforcement and Removal Operations in investigating this matter. Assistant United States Attorney Spiro G. Latsis is in charge of the prosecution.
Columbia Woman Sentenced for $576,000 Mortgage Fraud, Embezzlement SchemesRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that the former branch manager of a Fulton, Mo., company has abeen sentenced in federal court for a $576,000 mortgage fraud and embezzlement scheme at the title company where she was employed.
Terri Lynn Johnson, 50, of Columbia, was sentenced by U.S. District Judge Brian C. Wimes on Wednesday, Jan. 28, 2015, to two years and six months in federal prison without parole. The court also ordered Johnson to pay $405,653 in restitution.
Johnson was hired for a clerical position with Guaranty Land Title Company in 2001, and was eventually promoted to become the branch manager of the Fulton, office after the company was acquired by Landchoice Company, LLC. She remained in that position until her termination on Dec. 4, 2008.
On July 11, 2013, Johnson pleaded guilty to bank fraud and money laundering. Johnson admitted that she engaged in a $300,000 mortgage fraud scheme while she was employed as the Fulton branch manager. Johnson refinanced the mortgage on her residence twice. As a result of the false and fraudulent information provided by Johnson, two banks approved mortgage loans for $175,000 in 2007 and for $125,000 in 2008. The combination of those two loans clearly exceeded the appraised value of Johnson’s residence, which was used to secure both loans.
Johnson also admitted that she embezzled $276,173 from Landchoice. Johnson diverted income checks from Landchoice into a bank account that had been opened for Guaranty Land Title Company and which her employer didn’t know existed. She also diverted escrow funds which had been obtained by Landchoice for loan closings into that account.
Johnson then wrote checks to herself which she deposited into her personal checking account. Johnson wrote checks totaling approximately $59,465 payable to herself or to cash. Johnson also wrote checks to Johnson Gardens (her personal business) totaling approximately $12,500. Johnson also wrote checks believed to be for her personal use totaling approximately $19,916. In addition, Johnson utilized a debit card issued for the account, which she used to access $184,292 from that account for her personal benefit. The total personal benefit realized by Johnson from this embezzlement scheme is estimated to be approximately $276,173.
This case was prosecuted by Supervisory Assistant U.S. Attorney Lawrence E. Miller. It was investigated by the FBI, IRS-Criminal Investigation, the Fulton, Mo., Police Department, the Missouri State Highway Patrol and the Missouri Department of Insurance.
Cleveland Man Indicted for EscapeRead the Press Release
A grand jury returned a one-count indictment charging Kison Robertson, 23, of Cleveland, with escape from Oriana Halfway House, 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 a review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney Brian M. McDonough following an investigation by agents of the United States Marshals Service.
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.
Cleveland Man Charged with Aggravated Identity TheftRead the Press Release
An indictment was filed today charging Najee Muhammad, aka Paul Cook, age 50, of Cleveland, with three counts of aggravated identity theft, and one count of access device fraud, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment charges that Muhammad stole and used the identities of three separate individuals in 2013 and 2014. The indictment further charges that Muhammad knowingly and with the intent to defraud, traffic in and use one or more unauthorized access devices, obtained approximately $31,762 by fraudulently charging merchandise and services on various credit accounts, including Capital One, Dell, Galls Police Equipment, AT&T, CitiBank, Target, Safe Home Security, and Dish Network.If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to the case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant United States Attorneys Chelsea Rice and Adam Hollingsworth after an investigation by the Federal Bureau of Investigation.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.
Chicago Woman Pleads Guilty to Making Hoax Distress Call, Causing U.S. Coast Guard to Launch $13,000 Rescue EffortRead the Press Release
CHICAGO — A Chicago woman pleaded guilty today to a federal crime for making a false report two years ago that a person had fallen into Lake Michigan and was in distress, causing the United States Coast Guard and other first responders to launch a dangerous search and rescue operation that cost the Coast Guard $13,613.
LEONA CHEWNING, 24, was charged earlier this month with one count of communicating a false distress message to the Coast Guard. She pleaded guilty today at her arraignment before U.S. District Judge Charles Norgle in Federal Court in Chicago.
In pleading guilty, Chewning admitted that she knowingly and willfully communicated a false distress message to the Coast Guard resulting in a life-saving attempt when no help was needed.
“Hoax rescue calls are costly and risky for the responding agencies and personnel who put their own lives on the line in an effort to save others,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “We will prosecute those who needlessly make false rescue reports and hold them accountable for their crime,” Mr. Fardon said.
“False distress calls like this one tie up valuable assets and put our crews at risk since we take every distress call seriously,” said Capt. Nicholas Bartolotta, chief of response for the Ninth Coast Guard District. “They impede the ability of first responders like the Coast Guard and our partners to respond to real distress where lives may be on the line. We want to make sure people know the dangers and consequences of knowingly making a hoax call.”
According to Chewning’s plea agreement, about 9:10 p.m. on Feb. 4, 2013, she made an emergency 911 call and reported a person was in distress in the lake near Roger’s Park Beach. The 911 call center transferred the call to the Coast Guard at Calumet Harbor. Chewning related her claim and provided a description of the person whom she reported fell into Lake Michigan. Chewning admitted that at the time she made the call, she knew her report was false.
In response to her call, the Coast Guard and federal and state law enforcement officers responded to Roger’s Park Beach. The Coast Guard initiated a search and rescue team, including launching a government vehicle with an ice and rescue team from the Wilmette Harbor station and a helicopter from the Traverse City, Mich., air station. A diver with the Chicago Fire Department entered the water, near where Chewning claimed a person fell in, to locate the alleged victim, but did not locate any person in the water.
Chewning is free on her own recognizance while awaiting sentencing, which was scheduled for 11:30 a.m. on April 22. She faces a maximum sentence of six years in prison and a $250,000 fine, as well as a civil penalty of $5,000 and mandatory restitution of $13,613. Her plea agreement anticipates an advisory United States Sentencing Guidelines range of 4 to 10 months’ incarceration, and the Court must impose a reasonable sentence.
The government is being represented by Assistant U.S. Attorney Timothy J. Storino.
Plea Agreement
Businessman Sentenced in El Paso for Small Business Administration Contract Fraud SchemeRead the Press Release
In El Paso today, U.S. District Judge Philip R. Martinez sentenced Thomas Gregory Harris of Friendswood, TX, to two years in federal prison for his scheme to defraud the Small Business Administration (SBA) with respect to “Section 8(a) program” contracts announced Acting United States Attorney Richard L. Durbin, Jr., and Federal Bureau of Investigation (FBI) Special Agent in Charge Douglas E. Lindquist, El Paso Division.
In addition to the prison term, Judge Martinez ordered that the former Sr. Vice President for Luster National Inc., pay a $25,000 fine and a $1,600 special assessment. Judge Martinez also ordered that Harris be placed on supervised release for a period of three years after completing his prison term. Harris must surrender by March 3, 2015, to begin serving his prison term.
The SBA administers a program pursuant to the Small Business Act called the “Section 8(a) program” that is intended to promote the business development of companies owned and operated by “socially and economically disadvantaged individuals.” In that program, certain government contracts are sometimes set aside for performance by so-called “8(a) concerns,” that is, business entities whose owners/operators the SBA has determined meet the criteria for being "socially and economically disadvantaged."
In July 2010, the SBA approved a joint venture, called Tropical Luster Joint Venture ("TLJV"), between two business entities: Tropical Contracting, LLC ("Tropical"), which is based in San Antonio, and Luster National, Inc. ("Luster"), which has offices in Houston and California. The SBA had approved Tropical as an 8(a) concern in 2009. Luster was not a qualifying 8(a) concern.
Evidence presented during trial revealed that in 2010 and 2011, Harris, unbeknownst to the SBA, used Tropical’s qualifying 8(a) status to obtain three restricted contracts awarded by the SBA.
In 2011, the SBA awarded Harris and TLJV the “Net Zero contract” at Fort Bliss in El Paso to design and implement a written plan to reduce energy consumption at the base. In January 2012, the U.S. Army paid TLJV approximately $492,000 as compensation for work on the Net Zero contract.
In 2010 and 2011, the SBA awarded Harris and TLJV two separate contracts with the U.S. Army Corps of Engineers (USACE) in Galveston, TX for project management duties as assigned by USACE. From 2010 to 2012, USACE paid TLJV approximately $895,000 as compensation for work on USACE projects.
In all three matters, Tropical, the 8(a) concern, did not manage and control TLJV's performance of the contracts as required by law. In fact, personnel associated with Tropical did no work whatsoever on the contracts. Harris managed and controlled TLJV's entire performance of the contracts. Luster personnel, or subcontractors Luster retained, did all of the work. Had the SBA known that Tropical was not managing and controlling TLJV's work on any of the contracts, it would have disqualified TLJV as an approved 8(a) joint venture, which would have rendered it ineligible for the contracts to perform the work at Fort Bliss or USACE in Galveston.
On September 17, 2014, a federal jury in El Paso convicted Harris of 16 counts of wire fraud.
“Today’s sentencing of Mr. Harris demonstrates the FBI’s dedication and unwavering commitment to investigate and bring to justice those individuals involved in corruption within our community. The FBI will continue to hold accountable vendors and public servants who illegally and unfairly obtain public contracts for their own interests, depriving their constituents of honest services,” stated FBI Special Agent in Charge Douglas E. Lindquist.
This case was investigated by the Federal Bureau of Investigation (FBI) together with the United States Army Criminal Investigation Command, Major Procurement Fraud Unit. Assistant United States Attorneys John Klassen and Gregory McDonald prosecuted this case on behalf of the Government.
Burlington, WV sex offender convicted of failure to update registrationRead the Press Release
MARTINSBURG, WEST VIRGINIA – Donald W. Patterson, 41, of Burlington, West Virginia, was convicted in federal court today of failing to update his sex offender registration when he moved from West Virginia to Maryland, United States Attorney William J. Ihlenfeld, II, announced.In 1993, Patterson was convicted of “Statutory Rape” in Tennessee. As a result of that conviction, Patterson is required to register as a sex offender. An investigation by the United States Marshals Service and the West Virginia State Police revealed that in the fall of 2013, Patterson moved across state lines to Maryland without updating his sex offender registration status.
He pled guilty today to one count of “Failure to Register and Update Registration as a Sex Offender – SORNA.” He faces up to 10 years in prison and a fine of up to $250,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen Vogrin is prosecuting the case on behalf of the government.
U.S. Magistrate Judge Robert W. Trumble presided.
Burlington County, New Jersey, Man Sentenced to Nine Years in Prison for Downloading Images of Child Sexual AbuseRead the Press Release
CAMDEN, N.J. – A Palmyra, New Jersey, man was sentenced today to 108 months in prison for using a computer in his home to distribute images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
Donald Kivel, 38, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of receiving child pornography. Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Kivel admitted downloading images of child pornography that were available for distribution using peer-to-peer sharing software using a computer in his residence in June and July 2011. He also admitted to possessing more than 600 images of child pornography on his computer, which was seized from his residence July 15, 2011. Kivel acknowledged that among the images he possessed and distributed were images which depicted minors posing in a sexually explicit manner, images of child pornography involving children under the age of 12, and images that portrayed sadistic and/or masochistic conduct or other images of violence.
In addition to the prison term, Judge Rodriguez sentenced Kivel to serve 10 years of supervised release and ordered him to pay restitution of $19,980.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s sentencing.The government is represented by Attorney in Charge R. Stephen Stigall of the U.S. Attorney’s Office Criminal Division in Camden.
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Defense counsel: Maggie Moy Esq., Assistant Federal Public Defender, Camden
Brothers Plead Guilty to Conspiracy to Distribute over $6.6 Million in Contraband CigarettesRead the Press Release
Baltimore, Maryland - Elmar Rakhamimov, a/k/a “Eric Rakhamimov,” age 42, of Owings Mills, Maryland, and his brother, Salim Yusufov, age 43, of Reisterstown, Maryland, pleaded guilty today to a conspiracy to traffic over $6.6 million in contraband cigarettes. Rakhamimov also pleaded guilty to trafficking in contraband cigarettes and distribution of oxycodone. Yusufov also pleaded guilty to health care fraud and to receipt and delivery of misbranded drugs.
The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; Special Agent in Charge Antoinette V. Henry of the U.S. Food & Drug Administration, Office of Criminal Investigations; and Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services.
According to their guilty pleas, Elmar Rakhamimov, and his brother, Salim Yusufov, conspired with other family members and associates to receive, possess, sell and distribute contraband cigarettes, that is, cigarettes on which the applicable state taxes have not been paid. Rakhamimov, who was the leader and organizer of the scheme, purchased contraband cigarettes on 18 occasions between December of 2011 and November of 2013 from an undercover FBI agent operating in the Baltimore County, Maryland area. Salim Yusufov, who owned Health Way Pharmacy, received more than $81,000 in kickbacks for brokering the contraband cigarette transactions with the undercover FBI agent. These transactions included thousands of cartons of contraband cigarettes. The cigarettes were sold and distributed in quantities of 10,000 cigarettes or more, and bore no evidence of the payment of applicable state sales taxes. At the time of the indictment the cigarette tax in Maryland was $2.00 per package of cigarettes ($20 per carton of cigarettes) and the cigarette tax in New York was $4.35 per package of cigarettes ($43.50 per carton of cigarettes). The total tax evaded was more than $1 million.
As part of the criminal scheme, Rakhamimov also distributed pills containing oxycodone, with a total weight of 96.45 grams. The oxycodone and other drugs were distributed to the undercover FBI agent as partial payment for contraband cigarettes and in exchange for cash. During the drug transactions, Rakhamimov received $356,123 in cash in exchange for the various drugs.
According to his plea agreement, Rakhamimov and a co-conspirator laundered the proceeds of the contraband cigarette sales through an international money laundering operation that wired funds from banks located in Latvia, Cyprus, and Estonia, to a bank in New York, disguising the money as legitimate business payments for medical equipment or supplies. From December 27, 2012 through September 5, 2013, Rakhamimov and his co-conspirator wired a total of $681,450 through 12 such transactions. Rakhamimov and his co-conspirator received a fee of approximately 8% for the money laundering transactions.
Rakhamimov used his residence and his restaurant, Europe, to conduct the illegal transactions of contraband cigarettes and drugs, and the money laundering.
According to his plea agreement, Adam Azerman transported contraband cigarettes from Maryland to Brooklyn, using a van registered in his name. Azerman picked up the cigarettes from Rakhamimov’s residence and other locations, then drove his van to Brooklyn, New York, where he met Shamil Novakhov and provided him with the keys to the van. Novakhov admitted that he would take the van and return a few hours later, after he unloaded the contraband cigarettes into a nearby warehouse. Novakhov’s nephew, Ruslan Ykiew, admitted that he would also travel from New York to Maryland to obtain contraband cigarettes and transport them to his uncle in New York. Ykiew initially stored the cigarettes in a restaurant he owned. At Novakhov’s request, in 2012 Ykiew rented a warehouse for the storage of the contraband cigarettes.
Salim Yusufov also admitted that he illegally provided unapproved prescription drugs from Germany and Eastern Europe and sold them to customers. Corvalol, also referred to Corvalolum, and Valocordin, is not approved by the FDA for distribution in the United States, although it is sold in Eastern European countries, where it is used to treat elevated blood pressure and as a tranquilizer and sedative. Valocordin and Corvalol contain large amounts of phenobarbital, a prescription drug regulated by the FDA. According to his plea agreement, from July 23, 2010 through July 14, 2011, Yusufov , who is not a licensed pharmacist, imported and distributed Valocordin, dispensing the drug without a prescription.
In addition, Yusufov admitted to defrauding Medicare and Medicaid by causing Health Way Pharmacy to bill for prescriptions and/or prescription refills that the pharmacy did not provide to customers. One of the ways Yusafov did this was by intentionally failing to reverse claims for payment submitted to Medicare when customers did not pick up or otherwise receive refills. A second way that Yusufov defrauded Medicare and Medicaid was by providing drugs other than those prescribed, while still invoicing Medicare or Medicaid for the prescribed medication.
Rakhamimov and Yusufov face a maximum sentence of five years in prison for conspiracy to traffic in contraband cigarettes. Elmar Rakhamimov also faces a maximum of 20 years in prison for distribution of oxycodone, and five years in prison for trafficking in contraband cigarettes. Salim Yusufov also faces a maximum of 10 years in prison for health care fraud, and one year in prison for receipt and delivery of misbranded drugs. U.S. District Judge William D. Quarles, Jr. has scheduled sentencing for Rakhamimov and Yusufov for April 28 and April 30, 2015, respectively, each at 1:00 p.m.
Adam Azerman, age 59, of Pikesville, Maryland, and Shamil Novakhov, age 58, and Ruslan Ykiew, age 39, both of Brooklyn, New York, previously pleaded guilty today to conspiracy to traffic in contraband cigarettes and are awaiting sentencing.
United States Attorney Rod J. Rosenstein praised the FBI, Baltimore County Police Department, U.S. Food & Drug Administration, Office of Criminal Investigations and Office of Inspector General of the Department of Health and Human Services – Office of Investigations for their work in the investigation and the Medicaid Fraud Control Unit of the Maryland Attorney General’s Office for its assistance in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Paul E. Budlow and John W. Sippel, Jr., who are prosecuting the case.
Beckley area man pleads guilty to oxycodone distributionRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced today that Boyd Wendell Clark, 31, of Daniels, West Virginia, pleaded guilty in federal court to distribution of oxycodone.
Clark admitted that on Oct. 1, 2014, he sold oxycodone to a confidential informant at Pine Grove Circle in Daniels.
Clark faces up to 20 years in federal prison, and a $1 million fine. He is scheduled to be sentenced May 13, 2015.
United States District Judge Irene C. Berger presided over the hearing.
The case is being investigated by the Beckley/Raleigh County Drug and Violent Crime Unit.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and opiates. The United States Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Bay Area CEO and Company Indicted for Import Wire Fraud SchemeRead the Press Release
OAKLAND – A federal grand jury in Oakland has indicted David Tung and Concord Farms, Inc. for conspiracy to commit wire fraud and wire fraud, announced United States Attorney Melinda Haag and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Acting Special Agent in Charge Tatum King.
According to the indictment, Tung, then of Hillsborough, CA, through his operation of Concord Farms as the Chief Executive Officer, is alleged to have engaged in a scheme to defraud the United States out of duties owed on imported items, namely produce items such as gourmet mushrooms. Concord Farms claimed to be one of the largest importers and growers of gourmet mushrooms in the United States, with multiple business locations including operations in California and New York.
Duties are taxes assessed on the value of imported items. The duties accrue when the items arrive at a United States port of entry. According to the indictment, Tung carried out his scheme by creating fraudulent invoices that undervalued Concord Farms’ imports and then caused those fraudulent invoices to be transmitted to the U.S. Customs and Border Protection (CBP), who relied on the invoices in assessing the amount of import duties owed by the defendants. Tung and others used computer file templates and photocopy machines to create some of the fraudulent undervalued invoices that were transmitted to CBP. Through the scheme, Tung and Concord Farms were able to avoid the full payment of duties actually owed on the imported items.
Tung made his initial appearance today in Oakland. Tung was released on a bond in the amount of $250,000. Tung’s next scheduled appearance is at 9:30 a.m. on March 6, 2015 before the Honorable Jon S. Tigar, U.S. District Court Judge.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the Tung faces a maximum sentence of 20 years in prison, and a fine of $250,000, plus restitution for the alleged violation of 18 U.S.C. § 1349 (conspiracy to commit wire fraud) and for each alleged violation of 18 U.S.C. § 1343 (wire fraud). Concord Farms faces a fine of $500,000 and five years of probation for each alleged violation. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Wade M. Rhyne is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Janice Pagsanjan and Noble Hughes. The prosecution is the result of an investigation by the Department of Homeland Security, Homeland Security Investigations.
Baltimore Bank Robber Exiled to over 9 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge Ellen L. Hollander, sentenced Tony Derrell Bunch, age 32, of Baltimore, today to 110 months in prison followed by three years of supervised release for bank robbery.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Commissioner Anthony W. Batts of the Baltimore Police Department; Anne Arundel County Police Chief Tim Altomare; Chief Gary Gardner of the Howard County Police Department; and Baltimore City State’s Attorney Marilyn J. Mosby.
According to Bunch’s plea agreement, between late March and mid-April 2014, Bunch engaged in a string of bank robberies in the Baltimore area. In each robbery, Bunch presented the teller with a note stating that he had a gun and threatening to shoot if the teller did not comply with his demands for money.
Specifically, Bunch admitted that he robbed: the Wells Fargo Bank in the 6300 Block of York Road in Baltimore, on March 25, 2014, stealing $4,029.01; the Bay Bank in the 2600 block of Annapolis Road in Hanover, Maryland, on April 4, 2014, stealing $2,000; and the Wells Fargo Bank in the 4800 block of Eastern Avenue in Baltimore, on April 14, 2014, stealing $3,333.
After the robbery on April 4, 2014, Bunch left the demand note at the bank and forensic examiners were able to obtain a fingerprint. The forensic examiners were able to match the print obtained from the note with a known print of Bunch.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department, Anne Arundel County Police Department; Howard County Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney P. Michael Cunningham, who prosecuted the case.
Armed Home Invader/Carjacker Sentenced to 15 Years in Federal PrisonRead the Press Release
DALLAS — A Dallas man who admitted to his role in an armed home invasion and carjacking conspiracy was sentenced today, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Michael Wafer, 26, was sentenced this afternoon by U.S. District Judge Jane J. Boyle to serve a total of 15 years in federal prison. Wafer pleaded guilty in May 2013 to an indictment charging one count each of conspiracy to commit carjacking; using, carrying, and brandishing a firearm during and in relation to a crime of violence; and carjacking.
Wafer’s four co-conspirators, Blake Robertson, 22; Jeremiah Walker, 22; Christopher Staton, 20; and Ladavid Sims, 20; have each pleaded guilty to the same offenses as Wafer and are scheduled to be sentenced by Judge Boyle within the next few months. Statutorily, the conspiracy count carries a maximum penalty of five years in federal prison; the firearm offense carries a penalty of not less than seven and up to life in federal prison; and the carjacking offense carries a maximum penalty of 15 years in federal prison. Each count also carries a maximum statutory fine of $250,000.
On December 30, 2013, the five defendants discussed, planned, and agreed to rob an individual, “M.J.,” who was an acquaintance of Walker’s, at M.J.’s house in Dallas, and then steal his vehicle. Officers with the Dallas Police Department identified these five defendants as suspects in the armed home invasion and carjacking of M.J. during the early morning hours of December 31, 2013. Just prior to that, they had attempted another armed robbery in North Dallas, during which the victim was shot.
When the five conspirators entered M.J’s house, they were carrying firearms and were willing to inflict serious injury upon M.J. if he failed to comply with their demands. The conspirators demanded money and jewelry from M.J., at gunpoint, and M.J. was struck in the head several times with a weapon. The conspirators also took the keys to M.J.’s vehicle and all five conspirators fled in that vehicle.
The Dallas Police Department and the FBI investigated. Assistant U.S. Attorney Lisa J. Miller is prosecuting.
Allentown Man Sentenced to 10 Years for Drug Trafficking SchemeRead the Press Release
ALLENTOWN – Melvin Aviles, 34, of Allentown, PA, was sentenced today to 10 years in prison for running a cocaine trafficking operation. Aviles pleaded guilty on April 8, 2014 to conspiracy to distribute 500 grams or more of cocaine, four counts of distributing and aiding and abetting the distribution of cocaine, one count of distributing and aiding and abetting the distribution of cocaine within 1,000 feet of a public school, five counts of distribution of cocaine, and one count of attempted possession with intent to distribute.
Between October 2012 and April 2013, Aviles operated a cocaine trafficking business, obtaining cocaine from sources in Puerto Rico and other locations for resale in the Allentown area. Aviles arranged to have parcels shipped via the United States Postal Service from Puerto Rico to various addresses in Allentown. Once the cocaine was delivered, Aviles would transport the cocaine to his Allentown residence, weigh it, and repackage it for further distribution in and around the Allentown area. Some of the cocaine sales were conducted within 1,000 feet of schools.
In addition to the prison term, U.S. District Court Judge James Knoll Gardner ordered 12 years of supervised release and a $1,100 special assessment.
“The successful result of this prosecution is due, in large part, to the outstanding collaboration of local, state, and federal law enforcement,” said Memeger. “The tireless efforts and diligent work of the officers and agents investigating this case, made it possible to get this drug trafficker off the streets of Allentown.”
“This case represents just the most recent success derived from the close working relationship that exists between the Pennsylvania State Police and our federal and local law enforcement partners,” said Pennsylvania State Police Captain Brian Tobin. “We will continue to put forth our combined resources in order to protect the citizens of this Commonwealth and ensure those who choose to commit crimes are brought to justice.”
The case was investigated by the Federal Bureau of Investigation, the Pennsylvania State Police, and the Allentown Police Department with assistance by the Office of the Lehigh County District Attorney. It was prosecuted by Assistant United States Attorney Sherri A. Stephan.