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Monday 8 December 2014
Entertainment Promoter Extradited from Brazil to Face Charges in $300 Million Securities Fraud SchemeRead the Press Release
John P. (Jack) Utsick, who in 2005, according to Billboard Magazine, was the third-largest concert promoter and entertainment manager, made his initial appearance today. Utsick was extradited from Brazil to the United States as a result of his alleged involvement in a Ponzi scheme that defrauded investors out of approximately $300 million.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
In 2006, John P. (Jack) Utsick, 72, formerly of Miami Beach, fled South Florida to Brazil after the U.S. Securities and Exchange Commission (SEC) filed civil securities fraud charges against him, and after he became aware of a related FBI investigation.
According to a Superseding Indictment filed November 30, 2010, that was unsealed by court order on August 26, 2014, and documents filed in the SEC’s fraud case:
Utsick engaged in a scheme that defrauded more than 3,300 investors out of approximately $300 million. These investors believed that their monies were used to fund Utsick’s concert promotion business, Worldwide Entertainment, Inc. and The Entertainment Group Fund, Inc. (Worldwide), which Utsick operated from at least 1998 through late 2005. As alleged in court documents, Utsick promised investors fixed rates of return ranging from 15% to 25% and, in some instances, an additional percentage of the profits generated by Utsick and his companies related to specific concert events or tours of specific artists. Many investors were encouraged to roll over their principal and purported “profits” from project to project.
As alleged in court documents, most of the entertainment projects lost money and, as a result, Utsick paid earlier investors with funds raised from new investors. Utsick also used investor funds for other activities that were not disclosed to investors, including for his own personal stock and options trading, the purchase of two multimillion dollar condominiums in Miami Beach, a yacht, and to fund a motion picture, “National Lampoon’s Pledge This!,” starring Paris Hilton.
Utsick produced events and concert tours for numerous artists, including Coldplay, The Rolling Stones, Elton John, Aerosmith, Luis Miguel, and Juanes.
After the SEC filed its securities fraud action in 2006, and Utsick was made aware of the criminal investigation, he fled to Brazil. According to court filings in the SEC case, Utsick went to great lengths to avoid providing evidence to the SEC or accounting for the disappearance of millions of dollars that had been raised from investors.
After the U.S. Department of Justice initiated extradition proceedings in Brazil, Utsick challenged the validity of the indictment in the Brazilian courts. In August 2014, the Supreme Court of Brazil ordered that Utsick be extradited to the United States. Utsick was extradited from Brazil on December 6, 2014, and was taken into custody by the U.S. Marshal’s Service and transported to Miami. He made his initial appearance today before U.S. Magistrate Judge Jonathan Goodman.
Utsick is charged with eight counts of mail fraud, in violation of Title 18 United States Code, Section 1341. He faces a statutory maximum term of twenty years in prison as to each count. The case is assigned to U.S. District Judge Cecilia M. Altonaga for further proceedings.
Mr. Ferrer commended the investigative efforts of the FBI, the assistance provided by the SEC’s Miami Regional Office, and the efforts of the U.S. Marshal’s Service to assist with the arrest of the defendant. The matter is being prosecuted by Assistant U.S. Attorney Jerrob Duffy.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Drug Gang Operating in the Lackawanna Housing Project DismantledRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned two separate indictments charging a total of 20 defendants with engaging in narcotics trafficking in the Gates Housing Project, a housing facility owned and operated by the Lackawanna Municipal Housing Authority.
“Residents of a public housing neighborhood in Lackawanna deserve the same sense of security as residents of a private housing neighborhood in others parts of our community,” said U.S. Attorney Hochul. “As these defendants will soon learn, by attempting to turn a public housing project into their personal drug trafficking headquarters, they will face increased sentences if convicted.”
“Today’s arrests will have a resounding impact on the Gates housing community residents who already face daily struggles,” said Holly L. Hubert, Assistant Special Agent in Charge of the FBI’s Buffalo Office. “Our Safe Streets Task Force has joined with the Lackawanna Police Department to remove the ‘Project Boys’ gang that perpetrated acts of violence and conducted narcotics trafficking in the resident housing where vulnerable families live. After 10 months of dogged investigation, the citizens of Lackawanna are safer in their community.”
“The City of Lackawanna is a much safer place today because of the cooperative efforts of our officers and our law enforcement partners,” said Lackawanna Police Chief James Michel. “Most of these residents are fine upstanding people looking to live and raise their families in a safe environment. With today’s arrests, this should greatly curtail the distribution of drugs and the violence within this community.”
Charged in the two indictments are:
• Jeffrey Graham, 29, of Buffalo, NY
• Rueben Fears, 31, of Lackawanna, NY
• Craig Eldridge, 25, of Lackawanna, NY
• Terry Williams, 32, of Cheektowaga, NY
• Sharon Thompson, 22, of Lackawanna, NY
• Laron Thompson, 28, of Buffalo, NY
• James Sullivan, 26, of Buffalo, NY
• Charisma Royster, 24, of Buffalo, NY
• Shavon Royal, 20, of Lackawanna, NY
• Reginald Royal, Jr., 22, of Lackawanna, NY
• Charles Rose, 35, of Lackawanna, NY
• Derrick Patterson, 39, of Lackawanna, NY
• Waldemar Pabon, 27, of Buffalo, NY
• Theodore Hines, 29, of Lackawanna, NY
• Laferald Hines, 25, of Tonawanda, NY
• Tarrell Hendrix, 31, of Lackawanna NY
• Thomas Hakeem, 68, of Lackawanna, NY
• Edward Green, 28, of Lackawanna, NY
• Jeanette Knightner, 32, of Buffalo
• Reginald Royal, Sr., 43, of Kenmore, NY
Charges include conspiracy, possession with intent to distribute and distribution of crack cocaine within 1,000 feet of public housing property, and possession with intent to distribute and distribution of crack cocaine. The various charges have penalties that include a mandatory minimum of 10 years in prison and a maximum of life.
According to Assistant U.S. Attorney Edward H. White, who is handling the case, during the course of the drug trafficking operation, the defendants are alleged to have conducted open air drug sales in and around the public housing project including hand to hand transactions. This was done in close proximity to playgrounds and recreational areas where children living in the housing project would play.
The Government is also seeking the forfeiture of any property derived from the proceeds of narcotics trafficking.
The indictments are the culmination of an investigation by the Lackawanna Police Department, under the direction of Chief James Michel and the Federal Bureau of Investigation’s Safe Street’s Task Force, which includes the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge James S. Higgins, New York Field Division, Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero. U.S. Border Patrol, under the direction of Patrol Agent in Charge Tom Pocorobba, the New York State Police, under the direction of Major Michael Cerretto, the Cheektowaga Police Department, under the direction of Chief David Zack, the Erie County Sheriff’s Department, under the direction of Timothy Howard, the Hamburg Police Department, under the direction of Chief Michael Williams, the Amherst Police Department, under the direction of Chief John Askey, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, the Lancaster Police Department, under the direction of Chief Gerald Gill, the Niagara Frontier Transportation Authority Police, under the direction of Chief George Gast, and the New York State Department of Correctional Services, under the direction of Acting Commissioner Anthony J. Annucci. Additional assistance was provided by the U.S. Marshall Service, under the direction of Charles Salina and the Tonawanda Police Department, under the direction of Chief Anthony Palombo.
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.
Drilling Company Charged with Environmental and Maritime Crimes in AlaskaRead the Press Release
Noble Drilling (U.S.) LLC was charged with environmental and maritime crimes for operating the drill ship Noble Discoverer and the drilling unit Kulluk in violation of federal law in Alaska in 2012, the Department of Justice announced.
Under the terms of a plea agreement filed in federal court today, Noble will plead guilty to eight felony offenses, pay $12.2 million dollars in fines and community service payments, implement a comprehensive Environmental Compliance Plan, and will be placed on probation for four years. In addition, Noble’s parent corporation, Noble Corporation plc, headquartered in London, England, will implement an Environmental Management System for all Mobile Offshore Drilling Units (MODUs) owned or operated by Noble Corporation plc and its direct and indirect subsidiaries worldwide.
Noble Drilling (U.S.) LLC was charged in an eight-count Information with knowingly failing to maintain an accurate Oil Record Book and an accurate International Oil Pollution Prevention certificate, knowingly failing to maintain a ballast water record book, and knowingly and willfully failing to notify the U.S. Coast Guard of hazardous conditions aboard the drill ship Noble Discoverer. At the time of the offenses, the Noble Discoverer was operating under contract with Shell Offshore, Inc. and Shell Development, Ltd. for the purpose of drilling in the arctic in Alaska.
During the 2012 drilling season, Noble was the operator and bare boat charterer of the motor vessel Noble Discoverer and the drilling operator of the MODU Kulluk. The Kulluk was a conical-shaped vessel, weighing 27,968 gross tons, and measuring 265.7 feet in diameter. The Kulluk was not self-propelled, but rather had to be towed. The Noble Discoverer, a mobile drill ship, weighed approximately 15,296 gross tons, measured 572 feet long, and was propelled by a single main engine. In 2012, the Kulluk and the Noble Discoverer made several U.S. port calls in Washington and Alaska on their way to the Shell drilling site off the coast of Alaska. After leaving the drill site, the Kulluk ultimately ran aground off the coast of Unalaska when it broke free from its tow in bad weather, and the Noble Discoverer was dead-ship towed from Dutch Harbor to Seward due to failures with its main engine and other equipment.
Under the terms of the plea agreement, Noble admits that it knowingly made false entries and failed to record its collection, transfer, storage, and disposal of oil in the Noble Discoverer’s and the Kulluk’s oil record books in 2012. Oil record book entries falsely reflected that the Noble Discoverer’s Oil Water Separator (OWS) was used during periods of time when in fact the OWS was inoperable. Under the International MARPOL protocol and the Act to Prevent Pollution from Ships, all overboard discharges must pass through an operating OWS to insure that water pumped overboard does not contain more than 15ppm of oil.
Noble also admits that it failed to log numerous transfers and storage of machinery space bilge water and waste oil and failed to log that the Noble Discoverer’s oil content meter audible alarm was nonfunctional. Noble also made modifications to the Noble Discoverer’s new OWS system after the OWS system passed inspections by the Classification Society and the U.S. Coast Guard. Noble did not inform the U.S. Coast Guard or the Classification Society of the modifications and did not receive an International Oil Pollution Prevention certificate that documented the unapproved decanting system, the increased storage, or the new OWS piping arrangement.
Noble had problems managing the bilge and wastewater that was accumulating in the engine room spaces of the Noble Discoverer. This and other conditions led to a number of problems. Noble devised a makeshift barrel and pump system to discharge water that had entered the vessel’s engine room machinery spaces directly overboard from the Noble Discoverer without processing it through the required pollution prevention equipment as required by law. Noble failed to notify the Coast Guard about this system, and took steps to actively hide the fact that it was being used. These false and missing record entries and the use of the illegal overboard discharge system all violated the Act to Prevent Pollution from Ships.
In the factual basis of the plea agreement, Noble also admits that it negligently discharged machinery space bilge water from the Noble Discoverer into Broad Bay, Unalaska, on July 22, 2012. While anchored in Dutch Harbor, the Noble Discoverer’s bilge holding tank 27S overflowed and went overboard, creating a sheen in Broad Bay.
The Nonindigenous Aquatic Nuisance Prevention and Control Act requires vessels to maintain accurate ballast records reflecting the source of ballast water in the ballast water tanks, discharges from the tanks, and the total volume of ballast water onboard. By design, water ballast tanks should only contain uncontaminated seawater. Noble pumped oily skimmer tank fluids and deck water with a sheen into several ballast tanks on the Noble Discoverer. Noble then discharged those ballast tanks directly overboard instead of properly discharging the water through the OWS or transferring to a shore-side facility. Noble failed to record the transfers to the ballast tanks and the subsequent discharges in the ballast log.
The Ports and Waterways Safety Act regulations require that the owner, operator, or person in charge of a vessel must immediately notify the nearest Coast Guard office whenever there is a hazardous condition, either aboard a vessel or caused by the vessel or its operation. Noble knowingly and willfully failed on several occasions in 2012 to notify the U.S. Coast Guard of hazardous conditions aboard the Noble Discoverer. There were conditions aboard the Noble Discoverer that may have adversely affected the safety of the Noble Discoverer, other vessels, and the environmental quality of ports, harbors, and navigable waterways of the United States. During 2012, the Noble Discoverer experienced numerous problems with its main propulsion system, including its main engine and its propeller shaft, resulting in engine shut-downs, equipment failures, and unsafe conditions. At times, the condition of the Noble Discoverer’s main engine also created high levels of exhaust in the engine room, multiple sources of fuel and oil leaks, and backfires. Noble acknowledges that it failed to report any of these hazardous conditions to the U.S. Coast Guard.
The Noble Discoverer was initially detained in Seward by the Officer in Charge, Marine Inspection for the Western Alaska zone, following a Coast Guard Port State Control examination on November 29, 2012. This case was investigated by the U.S. Coast Guard Investigative Service and the U.S. Environmental Protection Agency Criminal Investigation Division and is being prosecuted by the Department of Justice’s Environmental Crimes Section and the United States Attorney’s Office for the District of Alaska.
Drilling Company Charged with Environmental and Maritime Crimes in AlaskaRead the Press Release
Anchorage, Alaska - Noble Drilling (U.S.) LLC was charged with environmental and maritime crimes for operating the drill ship Noble Discoverer and the drilling unit Kulluk in violation of federal law in Alaska in 2012, announced Karen L. Loeffler, U.S. Attorney for the District of Alaska, and Sam Hirsch, Acting Assistant Attorney General for the Environment and Natural Resources Division of the U.S. Department of Justice.
Under the terms of a plea agreement filed in federal court today, Noble will plead guilty to eight felony offenses, pay $12.2 million dollars in fines and community service payments, implement a comprehensive Environmental Compliance Plan, and will be placed on probation for four years. In addition, Noble’s parent corporation, Noble Corporation plc, headquartered in London, England, will implement an Environmental Management System for all Mobile Offshore Drilling Units (MODUs) owned or operated by Noble Corporation plc and its direct and indirect subsidiaries worldwide.
Noble Drilling (U.S.) LLC was charged in an eight-count Information with knowingly failing to maintain an accurate Oil Record Book and an accurate International Oil Pollution Prevention certificate, knowingly failing to maintain a ballast water record book, and knowingly and willfully failing to notify the U.S. Coast Guard of hazardous conditions aboard the drill ship Noble Discoverer. At the time of the offenses, the Noble Discoverer was operating under contract with Shell Offshore, Inc. and Shell Development, Ltd. for the purpose of drilling in the arctic in Alaska.
During the 2012 drilling season, Noble was the operator and bare boat charterer of the motor vessel Noble Discoverer and the drilling operator of the MODU Kulluk. The Kulluk was a conical-shaped vessel, weighing 27,968 gross tons, and measuring 265.7 feet in diameter. The Kulluk was not self-propelled, but rather had to be towed. The Noble Discoverer, a mobile drill ship, weighed approximately 15,296 gross tons, measured 572 feet long, and was propelled by a single main engine. In 2012, the Kulluk and the Noble Discoverer made several U.S. port calls in Washington and Alaska on their way to the Shell drilling site off the coast of Alaska. After leaving the drill site, the Kulluk ultimately ran aground off the coast of Unalaska when it broke free from its tow in bad weather, and the Noble Discoverer was dead-ship towed from Dutch Harbor to Seward due to failures with its main engine and other equipment.
Under the terms of the plea agreement, Noble admits that it knowingly made false entries and failed to record its collection, transfer, storage, and disposal of oil in the Noble Discoverer’s and the Kulluk’s Oil Record Books in 2012. Oil Record Book entries falsely reflected that the Noble Discoverer’s Oil Water Separator (OWS) was used during periods of time when in fact the OWS was inoperable. Under the International MARPOL protocol and the Act to Prevent Pollution from Ships, all overboard discharges must pass through an operating OWS to insure that water pumped overboard does not contain more than 15ppm of oil.
Noble also admits that it failed to log numerous transfers and storage of machinery space bilge water and waste oil and failed to log that the Noble Discoverer’s oil content meter audible alarm was nonfunctional. Noble also made modifications to the Noble Discoverer’s new OWS system after the OWS system passed inspections by the Classification Society and the U.S. Coast Guard. Noble did not inform the U.S. Coast Guard or the Classification Society of the modifications and did not receive an International Oil Pollution Prevention certificate that documented the unapproved decanting system, the increased storage, or the new OWS piping arrangement.
Noble had problems managing the bilge and wastewater that was accumulating in the engine room spaces of the Noble Discoverer. This and other conditions led to a number of problems. Noble devised a makeshift barrel and pump system to discharge water that had entered the vessel’s engine room machinery spaces directly overboard from the Noble Discoverer without processing it through the required pollution prevention equipment as required by law. Noble failed to notify the Coast Guard about this system, and took steps to actively hide the fact that it was being used. These false and missing record entries and the use of the illegal overboard discharge system all violated the Act to Prevent Pollution from Ships.
In the factual basis of the plea agreement, Noble also admits that it negligently discharged machinery space bilge water from the Noble Discoverer into Broad Bay, Unalaska, on July 22, 2012. While anchored in Dutch Harbor, the Noble Discoverer’s bilge holding tank 27S overflowed and went overboard, creating a sheen in Broad Bay.
The Nonindigenous Aquatic Nuisance Prevention and Control Act requires vessels to maintain accurate ballast records reflecting the source of ballast water in the ballast water tanks, discharges from the tanks, and the total volume of ballast water onboard. By design, water ballast tanks should only contain uncontaminated seawater. Noble pumped oily skimmer tank fluids and deck water with a sheen into several ballast tanks on the Noble Discoverer. Noble then discharged those ballast tanks directly overboard instead of properly discharging the water through the OWS or transferring to a shore-side facility. Noble failed to record the transfers to the ballast tanks and the subsequent discharges in the ballast log.
The Ports and Waterways Safety Act regulations require that the owner, operator, or person in charge of a vessel must immediately notify the nearest Coast Guard office whenever there is a hazardous condition, either aboard a vessel or caused by the vessel or its operation. Noble knowingly and willfully failed on several occasions in 2012 to notify the U.S. Coast Guard of hazardous conditions aboard the Noble Discoverer. There were conditions aboard the Noble Discoverer that may have adversely affected the safety of the Noble Discoverer, other vessels, and the environmental quality of ports, harbors, and navigable waterways of the United States. During 2012, the Noble Discoverer experienced numerous problems with its main propulsion system, including its main engine and its propeller shaft, resulting in engine shut-downs, equipment failures, and unsafe conditions. At times, the condition of the Noble Discoverer’s main engine also created high levels of exhaust in the engine room, multiple sources of fuel and oil leaks, and backfires. Noble acknowledges that it failed to report any of these hazardous conditions to the U.S. Coast Guard.
The Noble Discoverer was initially detained in Seward by the Officer In Charge, Marine Inspection for the Western Alaska zone, following a Coast Guard Port State Control examination on November 29, 2012. This case was investigated by the U.S. Coast Guard Investigative Service and the U.S. Environmental Protection Agency Criminal Investigation Division and is being prosecuted by the Department of Justice’s Environmental Crimes Section and the United States Attorney’s Office for the District of Alaska.Documents and Resources from the December 8, 2014, OtisMed and Charlie Chi Press ConferenceRead the Press Release
Press Release
OtisMed News Release
Court Documents:OtisMed
OtisMed Information
OtisMed Plea Agreement with Attachments
Stryker Side Letter Agreement
OtisMed Civil Settlement Agreement
Charlie Chi
Charlie Chi Information
Charlie Chi Plea Agreement
Government Exhibits from OtisMed Sentencing:Exhibit 1
Exhibit 2
Exhibit 3 - Video with no audio. Video description: The bones of the diseased preoperative knee joint rotate on the left side of the screen. On the right, a progressive series of magnetic resonance imaging (MRI) images of the same knee are displayed. The MRI images are transformed into a computer-generated three dimensional model of the knee that rotates in the center of the screen. A computer-generated yellow grid is superimposed over the surfaces of the rotating computer model, illustrating the contours of the bone structure. As it rotates, the prosthetic knee implant appears, affixed to the articular surfaces of the bones. The screen then returns to the depiction of the diseased knee, and the OtisKnee cutting guide is affixed to the surface of the femoral condyles. A bone saw is inserted through the cutting guide and cuts through the bone. The guide and cut surface are removed to reveal the prepared femoral surface, following the completion of the femoral cuts. The metallic femoral knee prosthesis is affixed to the femur. The same cutting process is illustrated with regard to the tibia: the OtisKnee cutting guide is placed over the diseased tibial end, the bone saw is inserted through the slot in the cutting guide, removing the articular surface, and the tibial prosthetic implant is placed on the cut surface.
Doctor Sentenced to 57 Months in Prison for Selling Oxycodone Prescriptions to Addicts and Dealers for Cash and GiftsRead the Press Release
SAN DIEGO – Del Mar physician William Joseph Watson today became the first doctor in the Southern District of California in recent memory to be sentenced to federal prison for prescribing thousands of Oxycodone pills and other highly addictive painkillers without any legitimate medical purpose.
U.S. District Judge James M. Lorenz sentenced Watson to almost five years in custody at a hearing this morning in federal court. Watson pleaded guilty in August - the morning his trial was set to begin - to one count of conspiracy to distribute and dispense oxycodone, known by the brand name of OxyContin, without a legitimate medical purpose.
Watson admitted that he sold the prescriptions to addicts, who then used them recreationally or sold them on the street. According to court records, Watson accepted thousands of dollars in cash or luxury goods, such as designer handbags, jewelry and fine wines, in exchange for the Oxycodone prescriptions.
“This is a sentence that sends a very strong message to doctors,” said U.S. Attorney Laura Duffy. “If you disregard your sacred duty as a physician to do no harm, and you use your prescription pad to fuel the painkiller epidemic gripping this country, you do so at your own peril, with the very real prospect of going to prison.”
“The sentencing of former doctor Joseph Watson today demonstrates the seriousness of the crimes involving prescription drugs,” said San Diego DEA Special Agent in Charge William R. Sherman. “Mr. Watson went from being a physician to a drug dealer for the simple reason that any criminal resorts to drug trafficking: Greed. The diversion of prescription drugs from their intended use continues to be a serious issue and DEA is committed to investigating and arresting anyone who diverts prescription drugs for illegal use.”
At today’s sentencing hearing, Assistant U.S. Attorney Fred Sheppard urged the court to impose a significant sentence as a warning to other doctors. Sheppard noted that Watson’s actions contributed to the overdose death of one of his young patients.
“Let it ring from this court room: If you take that oath to do no harm and sell it for a couple hundred dollars, you're going to prison,” Sheppard said.
Watson was ordered to surrender on January 8, 2015, to begin serving his sentence. He was also sentenced to three years of supervised release.
DEFENDANTS Case Number: 13cr2988 William Joseph Watson Age: 59 Del Mar, California CHARGESTitle 21, United States Code, Sections 841(a)(1)
INVESTIGATING AGENCYU.S. Drug Enforcement Administration
Doctor Sentenced to 2 Years in Prison in Medicare Fraud SchemeRead the Press Release
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USDOJ: US Attorney's Office - CENTRAL DISTRICT OF CALIFORNIA - 159LOS ANGELES – A Los Angeles-area physician whose referrals led to more than $1.7 million in fraudulent Medicare billings was sentenced this afternoon to 24 months in federal prison for his role in a conspiracy to defraud Medicare related to medically unnecessary power wheelchairs and other durable medical equipment.
Charles Okoye, a 52-year-old Carson resident who formerly operated a medical clinic in South Los Angeles, was sentenced by United States District Court Judge Michael W. Fitzgerald, who also ordered the defendant to pay $931,118 in restitution.
Okoye pleaded guilty in August and admitted that he referred Medicare beneficiaries to a Gardena durable medical equipment supply company for power wheelchairs and other durable medical equipment (DME). These beneficiaries had been recruited by employees of Adelco Medical Distributors, Inc. and taken to see Okoye for a single, cursory examination, after which Okoye made the referrals to Adelco.
Adelco’s owner, Adeline Ekwebelem, paid Okoye an illegal kickback for every referral, and then billed Medicare more than $1.7 million for providing the DME, which the beneficiaries did not need or want and often never used. Medicare paid Adelco more than $820,000 on those claims. Ekwebelem was found guilty in September of conspiracy to commit health care fraud, health care fraud, and the payment of illegal kickbacks (see: http://www.justice.gov/usao/cac/Pressroom/2014/122.html). Judge Fitzgerald is scheduled to sentence Ekwebelem on January 15.
Okoye admitted that he engaged in a similar unlawful arrangement with another DME company, Esteem Medical Supply.
As a result of his guilty plea and conviction, Okoye’s medical license will likely be suspended for at least three years, and he will likely lose his ability to bill Medicare and Medi-Cal for patient services in the future.
The investigation into Okoye, Ekwebelem, and others involved with Adelco’s fraudulent scheme to defraud Medicare was conducted by the U.S. Department of Health and Human Services, Office of the Inspector General, and the Federal Bureau of Investigation.
Release No. 14-159
Detroit One Collaboration Leads to Convictions of Violent Drug Gang in Northwest DetroitRead the Press Release
The collaboration of local, state and federal law enforcement under the Detroit One program led to convictions of three individuals who were involved in a violent, armed drug gang located in northwest Detroit, United States Attorney Barbara L. McQuade announced.
Mohamed Faraj, Fouad Faraj, and Mohamed Ayoub, were convicted of a variety of charges after a six-week trial before U.S. District Judge Stephen J. Murphy, III. The drug crew had been distributing marijuana and prescription pills in the Warrendale neighborhood in Detroit from 2009 until their arrests in August 2013. The criminal enterprise led by the two Faraj brothers employed teenagers and young men to act as their street level distributors. These young workers regularly had access to firearms supplied by the leaders. The group committed arson to create stash houses and to further the enterprise=s narcotics distribution activities.
The investigation was coordinated by the Detroit One Initiative, through the lead efforts of the Comprehensive Violence Reduction Partnership, consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Detroit Police Department, Michigan State Police, Michigan Department of Corrections, and assisted by the Federal Bureau of Investigation, Homeland Security Investigations, and the Internal Revenue Service, Criminal Investigations. By sharing information and coordinating efforts, investigators were able to link suspects and incidents to uncover the scope of the organization and identify its members. Seven members of the group now stand convicted of federal charges.The three men convicted at trial were:
- Mohamed Faraj, 31, of Dearborn Heights, who was found guilty of continuing criminal enterprise, conspiracy to possess with intent to distribute controlled substances, and use of a telecommunications device in furtherance of narcotics trafficking;
- Fouad Faraj, 44, of Dearborn Heights, who was found guilty of continuing criminal enterprise and conspiracy to possess with intent to distribute controlled substances; and
- Mohamed Ayoub, 32, of Dearborn Heights, was found guilty of conspiracy to possess with intent to distribute controlled substances.
These convictions follow the guilty pleas of the following members of the crew:
- Mohammed Abdul Alhakami, 23, of Detroit, who pleaded guilty to possession of firearms in furtherance of narcotics trafficking;
- Ali Al-Hisnawi, 22, of Detroit, who pleaded guilty to conspiracy to possess with intent to distribute controlled substances; and
- Zaidon Al-Beheia, 26, of Dearborn, who pleaded guilty to conspiracy to possess with intent to distribute controlled substances; and
- Adnan Bazzi, 28, of Dearborn, who pleaded guilty to conspiracy to possess with intent to distribute controlled substances.
- Abed Faraj, 40, of Detroit was acquitted of the charges against him.
“The convictions of this drug trafficking organization is the direct result of the collaboration of the Detroit One effort, where we are sharing information and working together to connect the dots between federal, state and local investigations,” McQuade said. “This group caused significant damage to the Warrendale community, exploiting teenage boys to do their dirty work on the street as drug runners and burning homes to use as stash houses.”
Detroit One is a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit. By working collaboratively, local, state, and federal law enforcement is striving to maximize its ability to identify and arrest the persons and groups initiating the violence in Detroit.
Delaware Man Convicted of Heroin TraffickingRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – Clarksburg, West Virginia resident Antonio DeJesus, 28, originally of Delaware, was convicted today in federal court on heroin trafficking charges, United States Attorney William J. Ihlenfeld, II announced.
An investigation by the Clarksburg, West Virginia Police Department and the Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, revealed that DeJesus was involved in heroin trafficking throughout August and September 2014.
DeJesus pled guilty today to one count of “Conspiracy to Possess with Intent to Distribute and to Distribute Heroin.” He faces up to 20 years in prison and a fine of up to $1,000,000.00. 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 Shawn Morgan is prosecuting the case on behalf of the government.
U.S. Magistrate Judge John S. Kaull presided.
Defense Contractor Pleads Guilty to Major Fraud in Provision of Supplies to U.S. Troops in AfghanistanRead the Press Release
Supreme Foodservice GmbH, a privately held Swiss company, and Supreme Foodservice FZE, a privately-held United Arab Emirates (UAE) company, pleaded guilty today to major fraud against the United States and agreed to resolve civil violations of the False Claims Act, in connection with a contract to provide food and water to the U.S. troops serving in Afghanistan, the Justice Department announced today. The companies pleaded guilty in the Eastern District of Pennsylvania (EDPA) and paid $288.36 million in the criminal case, a sum that includes the maximum criminal fine allowed.
In addition, Supreme Group B.V. and several of its subsidiaries have agreed to pay an additional $146 million to resolve a related civil lawsuit, as well as two separate civil matters, alleging false billings to the Department of Defense (DoD) for fuel and transporting cargo to American soldiers in Afghanistan. The lawsuit was filed in the EDPA, and the fuel and transportation allegations were investigated by the Southern District of Illinois and the Eastern District of Virginia, respectively, along with the Department’s Civil Division.
“The civil resolutions and agreements reflect the Justice Department’s continuing efforts to hold accountable contractors that have engaged in war profiteering,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “The department will pursue contractors that knowingly seek taxpayer funds to which they are not entitled.”
“These companies chose to commit their fraud in connection with a contract to supply food and water to our nation’s fighting men and women serving in Afghanistan,” said U.S. Attorney Zane David Memeger for the Eastern District of Pennsylvania. “That kind of conduct is repugnant, and we will use every available resource to punish such illegal war profiteering.”
The Criminal Fraud
In 2005, Supreme Foodservice AG, now called Supreme Foodservice GmbH, entered into a contract with the Defense Supply Center of Philadelphia (DSCP, now called Defense Logistics Agency – Troop Support) to provide food and water for the U.S. forces serving in Afghanistan. According to court documents, between July 2005 and April 2009, Supreme Foodservice AG, together with Supreme Foodservice KG, now called Supreme Foodservice FZE, devised and implemented a scheme to overcharge the United States in order to make profits over and above those provided in the $8.8 billion subsistence prime vendor (SPV) contract. The companies fraudulently inflated the price charged for local market ready goods (LMR) and bottled water sold to the United States under the SPV contract. The Supreme companies did this by using a UAE company it controlled, Jamal Ahli Foods Co. LLC (JAFCO), as a middleman to mark up prices for fresh fruits and vegetables and other locally-produced products sold to the U.S. government, and to obscure the inflated price the Supreme companies were charging for bottled water. The fraud resulted in a loss to the government of $48 million.
Supreme AG, Supreme FZE and Supreme’s owners (referred to in court documents as Supreme Owners #1 and #2) made concentrated efforts to conceal Supreme’s true relationship with JAFCO, and to make JAFCO appear to be an independent company. They also took steps to make JAFCO’s mark-up on LMR look legitimate, and persisted in the fraudulent mark-ups even in the face of questions from DSCP about the pricing of LMR.
Even though the SPV contract stated that the Supreme food companies should charge the government the supplier’s price for the goods, emails between executives at the companies (referred to as Supreme Executive #1, #2, etc) reveal the companies’ deliberate decision to inflate the prices. Among other things, Supreme Owner #1 increased the mark-up that JAFCO would impose on non-alcoholic beer from 25 percent to 125 percent. On or about Feb. 16, 2006, during a discussion about supplying a new product to the U.S. government, one Supreme executive wrote to another, “I am very sure the best option is to buy it from Germany and mark up via [JAFCO], like [non-alcoholic] beer.”
In early March 2006, after a DSCP contracting officer told the Supreme food companies that she wanted to see a manufacturer’s invoice for specific frozen products, Supreme Foodservice GmbH lowered its prices for those products to prices that did not include a JAFCO mark-up. On March 14, 2006, instead of disclosing that the initial pricing had included a mark-up, a Supreme executive misled the DSCP representative by saying, “Based on more realistic quantities, we have been able to negotiate a better price,” to explain the change in pricing.
In June 2006, when a DSCP contracting officer raised questions about pricing focusing on four specific items, Supreme executives again misled the DSCP, claiming that the high prices were for a high quality of product, and offering to sell lower quality products for lower prices. Supreme Foodservice GmbH did this even after analyzing its JAFCO margin on the four items in question and finding its profit margins were between 41 and 56 percent.
In September 2007, after a fired Supreme executive threatened to tell the DSCP about the fraud, his former employer entered into negotiation of a “separation agreement” with that executive to induce that executive not to disclose the ways in which the Supreme food companies were overcharging the DSCP. The agreement stated that the executive would receive, among other things, a payment of 400,000 euros in September 2010, provided that the executive did not cause: a deterioration in the economic situation linked to the SPV contract; the termination of the SPV contract; or a decrease in the price levels for products, specifically including LMR and bottled water provided to the U.S. government.
Defendant Supreme GmbH pleaded guilty to major fraud against the United States, conspiracy to commit major fraud and wire fraud. Supreme FZE, which owns JAFCO, pleaded guilty to major fraud against the United States. The Supreme companies agreed to jointly pay $48 million in restitution and $10 million in criminal forfeiture. Each company also agreed to pay $96 million in criminal fines. In addition, as a result of the criminal investigation, the Supreme companies paid $38.3 million directly to the DSCP as a refund for separate overpayments on bottled water.
The Civil Settlements
In a related civil settlement, Supreme Group agreed to pay another $101 million to settle a whistleblower lawsuit, filed in the U.S. District Court for the EDPA by a former executive, which alleged that Supreme Group, and its food subsidiaries, violated the False Claims Act by knowingly overcharging for supplying food and water under the SPV contract. The payment also resolves claims that, from June 2005 to December 2010, the Supreme food companies failed to disclose and pass through to the government rebates and discounts it obtained from its suppliers, as required by its SPV contract with the United States.
“Today’s results are part of an ongoing effort by the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to protect the integrity of the Department of Defense's acquisition process from personal and corporate greed,” said Deputy Inspector General for Investigations James B. Burch for the U.S. Department of Defense’s Office of the Inspector General. “The Defense Criminal Investigative Service will continue to pursue allegations of fraud and corruption that puts the Warfighter at risk.”
“We are very pleased with this resolution, and are gratified that the public can now see what we've been aggressively investigating,” said Director Frank Robey of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit (MPFU). “Companies that do business with the government must comply with all of their obligations, and if they overcharge for supplying our men and women in uniform who are bravely serving this nation, they must be held accountable for their actions.”
Separately, Supreme Site Services GmbH, a Supreme Group subsidiary, agreed to pay $20 million to settle allegations that they overbilled for fuel purchased by the Defense Logistics Agency (DLA) for Kandahar Air Field (KAF) in Afghanistan under a NATO Basic Ordering Agreement. The government alleged that Supreme Site Services’ drivers were stealing fuel destined for KAF generators while en route for which the company falsely billed DLA.
“It is important that government contractors supporting conflicts abroad be held accountable for their billings to the government,” said U.S. Attorney Dana J. Boente for the Eastern District of Virginia. “The DoD investigating components are instrumental in protecting the interests of the government, and their efforts in this investigation are to be commended.”
Supreme Group’s subsidiary Supreme Logistics FZE also has agreed to pay $25 million to resolve alleged false billings by Supreme Logistics in connection with shipping contracts between the U.S. Transportation Command (USTRANSCOM), located at Scott Air Force Base in Illinois, and various shipping carriers to transport food to U.S. troops in Afghanistan during Operation Enduring Freedom. The shipping carriers transported cargo destined for U.S. troops from the United States to Latvia or other intermediate ports, and then arranged with logistics vendors, including Supreme Logistics, to carry the cargo the rest of the way to Afghanistan. The United States alleged that Supreme Logistics falsely billed USTRANSCOM for higher-priced refrigerated trucks when it actually used lower-priced non-refrigerated trucks to transport the cargo.
“The U.S. Attorney’s Office for the Southern District of Illinois is committed to protecting the integrity of all of the vital missions carried out at Scott Air Force Base, including the mission of the U.S. Transportation Command,” said U.S. Attorney Stephen R. Wigginton for the Southern District of Illinois. “These vital services carried out by the brave men and women of the armed forces of the United States deserve, and will receive, our full support, and this office will do everything possible to protect their missions.”
“These settlements are victories for American taxpayers,” said Special Inspector General John F. Sopko for Afghanistan Reconstruction. “It sends a clear signal that whether a case involves a mom and pop outfit or a major multinational corporation, we will work tirelessly with our investigative partners to pursue justice any time U.S. dollars supporting the mission in Afghanistan are misused.”
The EDPA lawsuit was initially filed under the qui tam or whistleblower provisions of the False Claims Act, by Michael Epp, Supreme GmbH’s former Director, Commercial Division and Supply Chain. The False Claims Act prohibits the submission of false claims for government money or property and allows the United States to recover treble damages and penalties for a violation. Under the Act’s whistleblower provisions, a private party may file suit on behalf of the United States and share in any recovery. The case remained under seal to permit the United States to investigate the allegations and decide whether to intervene and take over the case. Epp will receive $16.16 million as his share of the government’s settlement of the lawsuit.
The criminal and civil matters in the EDPA were the result of a coordinated effort by the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Pennsylvania, DCIS, U.S. Army’s Criminal Investigative Command’s MPFU and the FBI.
The investigation of Supreme Site Services ’ alleged false billings for fuel was conducted by the Civil Division and the U.S. Attorney’s Office for the Eastern District of Virginia, and the investigation of Supreme Logistics’ alleged false invoices for transportation was handled by the Civil Division and the U.S. Attorney’s Office for the Southern District of Illinois. Both matters were investigated by the Defense Contract Audit Agency Office of Investigative Support, the Army Audit Agency, the International Contract Corruption Task Force, the U.S. Army’s Criminal Investigative Command’s Major Procurement Fraud Unit, the DoD Office of Inspector General’s DCIS, the Special Inspector General for Afghan Reconstruction, the U.S. Air Force Office of Special Investigations and the Naval Criminal Investigative Service.
The claims resolved by the civil settlements are allegations only, except for the conduct for which the Supreme food companies have pleaded guilty.
Defense Contractor Pleads Guilty to Major Fraud in the Provision of Supplies to U.S. Troops in AfghanistanRead the Press Release
Supreme Foodservice Agrees To Pay $389 Million In Fines, Damages and Penalties
PHILADELPHIA – The United States announced today the resolution of criminal fraud and civil False Claims Act cases against Supreme Foodservice GmbH, a privately-held Swiss company, and Supreme Foodservice FZE, a privately-held United Arab Emirates (“UAE”) company, in connection with a contract to provide food and water to the U.S. troops serving in Afghanistan. The companies pleaded guilty to major fraud against the United States and paid $288.36 million in the criminal case, a sum which includes the maximum criminal fines allowed. In addition, Supreme Group B.V., a privately held Dutch corporation, and its subsidiaries, Supreme Foodservice GmbH and Supreme Foodservice FZE, have agreed to pay $101 million to resolve allegations in a whistleblower lawsuit that Supreme violated the False Claims Act. The plea and settlement were announced by United States Attorney Zane David Memeger.
The Criminal Fraud
In 2005, Supreme Foodservice AG (which is now called Supreme Foodservice GmbH) entered into a contract with the Defense Supply Center of Philadelphia (“DSCP,” now called Defense Logistics Agency – Troop Support), to provide food and water for the U.S. forces serving in Afghanistan. According to court documents, between July 2005 and April 2009, Supreme Foodservice AG together with Supreme Foodservice KG (which is now called Supreme Foodservice FZE) devised and implemented a scheme to overcharge the United States in order to make profits over and above those provided in the $8.8 billion Subsistence Prime Vendor Contract (“the SPV contract”). The companies fraudulently inflated the price charged for Local Market Ready goods (or LMR) and bottled water sold to the United States under the SPV contract. Supreme did this by using a UAE company it controlled, called Jamal Ahli Foods Co., LLC (“JAFCO”), as a middleman to mark up prices for fresh fruits and vegetables and other locally-produced products sold to the U.S. government, and to obscure the inflated price Supreme was charging for bottled water. The fraud resulted in a loss to the government of $48 million. In addition, as a result of the criminal investigation, Supreme paid $38.3 million directly to the DSCP as a refund for separate overpayments on bottled water.
Supreme AG, Supreme FZE, and Supreme’s owners (referred to in court documents as Supreme Owners #1 and #2) made concerted efforts to conceal Supreme’s true relationship with JAFCO, and to make JAFCO appear to be an independent company. They also took steps to make JAFCO’s mark-up on LMR look legitimate, and persisted in the fraudulent mark-ups even in the face of questions from DSCP about the pricing of LMR.
Even though the SPV contract stated that Supreme should charge the government the supplier’s price for the goods, emails between executives at Supreme (referred to as Supreme Executive #1, #2, etc) reveal Supreme’s deliberate decision to inflate the prices. For example, on or about August 22, 2005, a Supreme Executive sent an email to Supreme Owner#1 saying that the prices he proposed for certain items already included margins of “approximately 57-60%” over the price from the supplier. Another Supreme Executive sent a reply email recommending that Supreme not raise the prices further because “we would like to stay credible with the customer,” and would not want to invite a “challenge” from the DSCP. In September of 2005, Supreme Owner#1 specifically instructed other top management within Supreme that he would personally “review the LMR mark-up before [JAFCO] makes its first shipment.” Among other things, Supreme Owner#1 increased the markup that JAFCO would impose on non-alcoholic beer from 25 percent to 125 percent. On or about February 16, 2006, during a discussion about supplying a new product to the U.S. government, one Supreme Executive wrote to another: “I am very sure the best option is to buy it from Germany and Mark up via [JAFCO], like [non-alcoholic] beer.”
On or about March 18, 2006, in discussing whether they could inflate the price for ice cubes to be sold to the DSCP, a Supreme Executive wrote to Supreme Owner#1, among others: “I don’t think we can mark up through [JAFCO] since DSCP knows price from [the supplier].” That same day, Supreme Owner#1 forwarded that March 18, 2006 email to Supreme Owner#2, commenting “There are dozens of emails like that one.”
In early March 2006, after a DSCP contracting officer told Supreme that she wanted to see a manufacturer’s invoice for specific frozen products, Supreme lowered its prices for those products to prices that did not include a JAFCO mark-up. On March 14, 2006, instead of disclosing that the initial pricing had included a mark-up, a Supreme Executive misled the DSCP representative by explaining the change in pricing as follows: “Based on more realistic quantities, we have been able to negotiate a better price.”
In June 2006, when a DSCP contracting officer raised questions about pricing, focusing on four specific items, Supreme Executives again misled the DSCP, claiming that the high prices were for a high quality of product, and offering to sell lower quality products for lower prices. Supreme did this even after analyzing its JAFCO margin on the four items in question and finding its profit margins were between 41 and 56 percent.
In September 2007, after a fired Supreme Executive threatened to tell the DSCP about the fraud, Supreme entered into negotiation of a “Separation Agreement” with that executive to induce that executive not to disclose the ways in which Supreme was overcharging the DSCP. That agreement stated that the executive would receive, among other things, a payment of EUR 400,000 in September of 2010, provided that the executive did not cause: a deterioration in the economic situation linked to the SPV Contract; the termination of the SPV Contract; or a decrease in the price levels for products, specifically including both LMR and bottled water provided to the U.S. government.
Supreme’s overcharging was exposed in early March 2009, when a former Supreme employee notified the DSCP that Supreme owned and controlled JAFCO, and that JAFCO was adding a mark-up to the Delivered Price of goods. The DSCP contacted Supreme and ordered the mark-ups stopped. The mark-ups ceased as of April 1, 2009.
Defendant Supreme GmbH pleaded guilty to Major Fraud Against the United States, Conspiracy to Commit Major Fraud, and Wire Fraud. Defendant Supreme FZE, which owns JAFCO, pleaded guilty to Major Fraud Against the United States. The Supreme companies agreed to jointly pay $48 million in restitution, and $10 million in criminal forfeiture. Each company also agreed to pay $96 million in criminal fines. In addition, U.S. District Court Judge Gene E.K. Pratter ordered Supreme AG, as a condition of the five years’ probation she imposed, to hold an annual service event to honor or assist veterans and/or the families of veteran.The Civil Settlement
In a separate civil settlement agreement, Supreme agreed to pay another $101 million to settle a whistleblower lawsuit filed in the U.S. District Court for the Eastern District of Pennsylvania, before U.S. District Court Judge Mary McLaughlin. The suit was filed by a former executive alleging that Supreme violated the False Claims Act by knowingly overcharging for supplying food and water under the SPV contract. The payment also resolves claims that, from June 2005 to December 2010, Supreme failed to disclose and pass through to the government rebates and discounts it obtained from its suppliers, as required by its SPV contract with the United States.
“These companies chose to commit their fraud in connection with a contract to supply food and water to our Nation’s fighting men and women serving in the desert,” said Memeger. “That kind of conduct is repugnant, and we will use every available resource to punish such illegal war profiteering.”
“These cases demonstrate the continued commitment of the Defense Criminal Investigative Service (DCIS) and our partner agencies to protect the integrity of the Department of Defense's acquisition process from personal and corporate greed,” said Craig W. Rupert, Special Agent in Charge, DCIS Northeast Field Office. “Each dollar lost to fraud is a taxpayer dollar unavailable to protect our warfighters. Ensuring the proper use of U.S. taxpayers' dollars and preventing contract fraud is in our nations' security interest and remains a DCIS priority.”
“We are very pleased with this resolution, and are gratified that the public can now see what we've been aggressively investigating,” said Frank Robey, the Director of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit. “Companies that do business with the government must comply with all of their obligations, and if they overcharge for supplying our men and women in uniform who are bravely serving this nation, they must be held accountable for their actions.”
The criminal and civil matters were the result of a coordinated effort by the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the Civil Division of the United States Department of Justice, the Department of Defense Office of Inspector General’s Defense Criminal Investigative Service, U.S. Army’s Criminal Investigative Command’s Major Procurement Fraud Unit, and the Federal Bureau of Investigation.
The criminal matter is being handled by Assistant United States Attorney Bea L. Witzleben. The civil matter is being handled by Assistant United States Attorneys Colin M. Cherico and Joel Sweet, along with Art Coulter, Trial Attorney for the Civil Frauds Section of the Department of Justice.
The company's owners and assets are outside the reach of the United States.Click here to view the information.
Click here to view the settlement agreement.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Defendant Sentenced for Money Laundering Charge Involving Tax FraudRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Paula Reid, Special Agent in Charge, United States Secret Service (USSS), Miami Field Office, announce that Price Jules, 41, of Miami, was sentenced to 57 months in prison, to be followed by three years of supervised release. Jules previously pled guilty to one count of money laundering, in violation of Title 18, United States Code, Section 1957, for knowingly laundering the proceeds of tax fraud.
According to court documents, the IRS uncovered a pattern of approximately 1,285 attempted fraudulent tax claims seeking approximately $5.7 million in refunds. The IRS paid out $2.74 million in refunds to accounts controlled by another individual, but then approximately $2.3 million left these accounts and was deposited into accounts controlled by Jules and other individuals. There were approximately $629,942 in cash withdrawals and approximately $34,000 in ATM withdrawals from the bank accounts that Jules controlled.
Jules knew that the laundered money was the proceeds of tax fraud because he received approximately $180,000 of tax fraud directly into his personal E-Trade account and approximately $73,000 into his personal bank account. In addition, Jules spoke about engaging in tax fraud and offered to launder the proceeds of tax fraud for a fee.
None of the individuals or estates of individuals listed on the tax returns received any money.
Mr. Ferrer commended the investigative efforts of IRS-CI and the USSS. The case was prosecuted by Assistant U.S. Attorneys H. Ron Davidson and Susan Osborne.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Copley Man Charged for Role in $17 Million Investment FraudRead the Press Release
A Copley man was charged in federal court with defrauding about 70 investors out of approximately $17 million, law enforcement officials said.
Kenneth A. Grant, 66, was charged in a criminal information with one count of conspiracy to commit wire fraud and securities fraud and one count of money laundering.
The charges were announced by Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office, and Kathy Enstrom, Special Agent in Charge, IRS-Criminal Investigations, Cincinnati Field Office.
“This case is another sad reminder that so-called investment gurus who make promises of big guaranteed returns should send up red flags,” Dettelbach said. “If something seems too good to be true, it usually is.”
“Ken Grant callously preyed on the desires of many to make wise investments for a secure future and duped them out of their life savings,” Anthony said. “Fraudsters such as Mr. Grant remain a top priority of the FBI.”
“Mr. Grant overpromised and then stole his investors’ funds. Investment fraud is not a victimless crime,” Enstrom said. “IRS Criminal Investigation is proud to bring our forensic accounting skills to this joint venture and help put a stop to this and other types of white collar crime.”
Grant and another individual owned and operated KGTA Petroleum, Ltd. Grant and others marketed KGTA as a company that earned profits from buying and selling crude oil and refined fuel products. Grant and others represented to investors that they had relationships with third-party purchasers and investor funds would be used to purchase fuel products at a discount and then resold at substantial profit, according to the information.
KGTA issued investment agreements and promissory notes which offered guaranteed monthly payments up to 5 percent per month or annual payments of approximately 60 percent per year, according to the information. Grant and others – including three registered representatives with PrimeSolutions Securities Inc. in the Akron area – never filed documentation about KGTA with the Securities and Exchange Commission, according to the information.
Grant and others obtained approximately $31 million from about 70 investors between 2010 and 2014 through false and fraudulent pretenses. Grant and others knew KGTA did not have agreements in place to sell oil and fuel, and that investors would not earn 5 percent per month on their investments, according to the information.
Grant and others used investor money for personal expenditures and luxury items including a Mercedes Benz, a boat and mortgage payments on high-end residential property. As a result of the conspiracy, Grant and others defrauded the investors out of approximately $17 million, according to the information.
This case is being prosecuted by Assistant U.S. Attorney Mark S. Bennett and Special Assistant U.S. Attorney Derek Kleinmann following an investigation by the Federal Bureau of Investigation and Internal Revenue Service – Criminal Investigations.
If convicted, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
A criminal information 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.
Conspirator Pleads Guilty on Eve of Trial in Car Dealership Fraud SchemeRead the Press Release
Used Stolen Identities to Purchase Expensive Cars
Greenbelt, Maryland – Juan Carlos Willis, age 41, of Hyattsville, Maryland pleaded guilty today to conspiring to commit wire fraud and aggravated identity theft in connection with a scheme to use the stolen identity of others to purchase expensive cars. Willis was scheduled to begin trial tomorrow.The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kathy A. Michalko of the United States Secret Service B Washington Field Office; Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division; and Chief J. Thomas Manger of the Montgomery County Police Department.
According to his plea agreement, Willis, Flinton Newton and others obtained the identity information of credit-worthy individuals, created false identity documents in the names of those individuals, then posed as those individuals at automotive dealerships in order to apply for vehicle financing. Willis and his coconspirators filled out credit applications and obtained loans in the names of the identity theft victims to purchase, or attempt to purchase, expensive cars from dealers in Maryland and Virginia. They intended to either use the luxury vehicles themselves, or rent or sell them.
On July 19, 2012, Willis and Newton went to Capitol Cadillac in Greenbelt. Newton posed as another person whose identity he had fraudulently obtained, to apply for $80,663 in financing to purchase a 2013 Cadillac Escalade in the victim’s name. Willis used online access to an insurance policy written on a co-conspirator’s business to obtain proof of insurance in support of the vehicle purchase.
Later that evening, Willis and Newton drove to Mercedes-Benz of Silver Spring where Newton again posed as the victim. The men attempted to purchase a 2012 Mercedes-Benz CL550 and a 2009 Mercedez-Benz S550 for a total of $120,056. They filled out credit applications to finance the entire purchase price, again using the victim’s identity and credit. Willis again presented the auto insurance policy in a co-conspirator’s business name in support of the vehicle purchases.
The dealership manager saw that the victim’s credit had just been used to purchase the Cadillac Escalade, so he notified Montgomery County Police, who responded and arrested Willis and Newton. Willis acknowledged that his role in the scheme was to locate vehicles and provide insurance information.
The total attempted loss as a result of the fraudulent scheme was between $400,000 and $1 million.
Willis faces a maximum sentence of 30 years in prison for the conspiracy and a mandatory minimum of two years in prison consecutive to any other sentence for aggravated identity theft. U.S. District Judge Peter J. Messitte scheduled sentencing for April 8, 2015, at 9:30 a.m.
Flinton Newton, age 34, of Bartlett, Tennessee previously pleaded guilty and was sentenced to 42 months in prison in connection with the scheme.
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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.United States Attorney Rod J. Rosenstein praised the Secret Service, U.S. Postal Inspection Service and Montgomery County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Adam K. Ake and Special Assistant United States Attorney James Pearce, who are prosecuting the case.
Canton Man Charged with Transportation of Stolen Property, Wire Fraud, and Money LaunderingRead the Press Release
United States Attorney Brendan V. Johnson announced that a Canton, South Dakota, man has been indicted by a federal grand jury for Interstate Transportation of Stolen Property, Wire Fraud, and Money Laundering.
Kenneth Hunsucker, age 49, was indicted on December 2, 2014. He appeared before U.S. Magistrate Judge Veronica L. Duffy on December 4, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 20 years in custody and/or a $250,000 fine, 2 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges are merely accusations and Hunsucker is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Internal Revenue Service Criminal Investigation, and the Federal Bureau of Investigation. Assistant U.S. Attorney Jeffrey C. Clapper is prosecuting the case. Hunsucker was released on bond pending trial. A trial date has not been set.
Attorney General Holder, Secretary Duncan, Announce Guidance Package on Providing Quality Education Services to America's Confined YouthRead the Press Release
Attorney General Eric Holder and Secretary of Education Arne Duncan today announced a Correctional Education Guidance Package aimed at helping states and local agencies strengthen the quality of education services provided to America’s estimated 60,000 young people in confinement every day.
This guidance package builds on recommendations in the My Brother’s Keeper Task Force report released in May to “reform the juvenile and criminal justice systems to reduce unnecessary interactions for youth and to enforce the rights of incarcerated youth to a quality education.” Today’s guidance package is a roadmap that states and local agencies can use to improve the quality of educational services for confined youth.
“In this great country, all children deserve equal access to a high-quality public education - and this is no less true for children in the juvenile justice system,” said Attorney General Holder. “At the Department of Justice, we are working tirelessly to ensure that every young person who's involved in the system retains access to the quality education they need to rebuild their lives and reclaim their futures. We hope and expect this guidance will offer a roadmap for enhancing these young people's academic and social skills, and reducing the likelihood of recidivism.”
“Students in juvenile justice facilities need a world-class education and rigorous coursework to help them successfully transition out of facilities and back into the classroom or the workforce becoming productive members of society,” said Secretary Duncan. “Young people should not fall off track for life just because they come into contact with the justice system.”
“Today's announcement directly responds to the call to action made by President Obama's My Brother's Keeper Initiative,” said Broderick Johnson, White House Cabinet Secretary and Chair of the My Brother’s Keeper Task Force. “It is imperative that we ensure that incarcerated youth are receiving a quality education and provide them with the necessary tools for a second chance. I applaud Attorney General Eric Holder and Secretary Arne Duncan for highlighting this critical issue.”
The guidance package includes four components:
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A set of Guiding Principles for Providing High-Quality Education in Juvenile Justice Secure Care Settings, outlines five principles and supporting core activities to improve education practices, or implement new ones. Authored jointly by the U.S. Departments of Education and Justice, the guide is meant to help agencies and facilities serving youth in correctional education provide education services comparable to those available to students in community schools.
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A Dear Colleague Letter on the Individuals with Disabilities Education Act for Students with Disabilities in Correctional Facilities from Education’s Office of Special Education and Rehabilitative Services to clarify state and public agency obligations to ensure the provision of a free appropriate public education to eligible students with disabilities in correctional facilities.
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A Dear Colleague Letter on the Civil Rights of Students in Juvenile Justice Residential Facilities clarifying how the Federal civil rights laws that prohibit race, color, national origin, sex, religion and disability discrimination against students in traditional public schools also apply to educational services and supports provided to youth in juvenile justice residential facilities.
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A Dear Colleague Letter on Access to Federal Pell Grants for Students in Juvenile Justice Facilities explains the extent to which confined youth may be eligible for the Federal Pell Grant Program, and is accompanied by a fact sheet for students and a detailed set of questions and answers for institutions of higher education
“High-quality correctional education is thus one of the most effective crime-prevention tools we have,” Attorney General Holder and Secretary Duncan wrote in a dear colleague letter to chief state school officers and state attorneys general. “High-quality Correctional education – including postsecondary correctional education, which can be supported by Federal Pell Grants – has been shown to measurably reduce re-incarceration rates. Less crime means not only lower prison costs – it also means safer communities.”
The President has set a goal that, by 2020, our nation will have the highest proportion of college graduates in the world and that all Americans complete at least one year or more of college or career training. The Administration believes that even youth in correctional facilities can play their part in helping us achieve that vision.
Providing young people in confinement with access to the education they need is one of the most powerful and cost-effectives strategies for ensuring they become productive members of their communities. The average cost to confine a juvenile is $88,000 per year – and a recent study showed that about 55 percent of youth were rearrested within 12 months of release. Inmates of all ages are half as likely to go back to jail if they participate in higher education – even compared to inmates with similar histories.
This joint effort by the Departments of Education and Justice is one of a number of notable actions that they have taken to ensure that education programming in juvenile justice residential facilities is comparable to services provided in any school. The departments have been working together to help communities reduce the number of youth entering the justice system and to ensure that those in the system return to their communities with dignity, skills and viable education and employment opportunities including the following efforts this year:
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Justice and Education jointly released a School Climate and Discipline Guidance Package to provide schools with a roadmap to reduce the usage of exclusionary discipline practice and clarify schools’ civil rights obligation to not discriminate on the basis of race, color, or national origin in the administration of school discipline.
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Education released the results of the 2011-2012 Civil Rights Data Collection, which includes school discipline data from most every school in the country and certain juvenile justice facilities.
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Justice and Education filed a joint Statement of Interest in the G.F. v. Contra Costa County lawsuit in support of confined youth with disabilities who alleged that they were placed in solitary confinement for 22 hours or more per day, discriminated against on the basis of their disability, and denied their right to a free, appropriate public education.
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Attorney General Holder and Secretary Duncan met with leaders from 22 agencies for a Federal Interagency Reentry Council meeting to discuss actions to reduce reentry barriers to employment, health, housing and education for individuals who are transitioning from incarceration to community.
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Justice and Education engaged with various philanthropies to commission a School Discipline Consensus Project, led by the Council of State Governments, to bring together practitioners from the fields of education, juvenile justice, behavioral health and law enforcement to develop recommendations to address the school-to-prison pipeline, including recommendations for strengthening services to youth in confinement.
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Justice and Education coordinated and supported the National Leadership Summit on School Climate and Discipline in Washington, D.C. The summit focused on deepening partnerships between local and state education and justice officials, and community stakeholders.
All youth are deserving of an appropriate, high-quality education. This guidance package clarifies that obligation for confined youth, as well as advocating that they have a real chance at a second chance in their lives. A solid education that unleashes and expands their potential to contribute to their communities is a step in the right direction.
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Attorney General Holder Announces Federal Law Enforcement Agencies to Adopt Stricter Policies to Curb ProfilingRead the Press Release
WASHINGTON – U.S. Attorney General Eric Holder announced Monday that the Justice Department will take new steps to bar profiling by federal law enforcement agencies, building upon a 2003 policy that had previously only addressed the consideration of race and ethnicity in conducting federal investigations. The new policy will address the use of other characteristics as well—including national origin, gender, gender identity, religion, and sexual orientation—and applies a uniform standard to all law enforcement, national security, and intelligence activities conducted by the Department’s law enforcement components. The new guidance also applies to state and local law enforcement law officers who participate in federal law enforcement task forces.
The issuance of the new policy completes a thorough review first launched by the Attorney General shortly after taking office, and reaffirms the federal government’s deep commitment to ensuring that its law enforcement agencies conduct their activities in an unbiased manner.
In announcing the new policy, the Attorney General said that biased law enforcement practices not only perpetuate negative stereotypes and promote mistrust of law enforcement, but also are counterproductive to the goal of good policing.
“As Attorney General, I have repeatedly made clear that racial profiling by law enforcement is not only wrong, it is misguided and ineffective – because it can mistakenly focus investigative efforts, waste precious resources and, ultimately, undermine the public trust. Particularly in light of recent incidents we’ve seen at the local level – and the concerns about trust in the criminal justice process which so many have raised throughout the nation – it’s imperative that we take every possible action to institute sound, fair and strong policing practices.”
The Attorney General added: “With this new Guidance, we take a major and important step forward to ensure effective policing by federal law enforcement officials – as well as state and local law enforcement participating in federal task forces throughout the nation. This Guidance is the product of five years of scrupulous review. It codifies important new protections for those who come into contact with federal law enforcement agents and their partners. And it brings enhanced training, oversight, and accountability to federal law enforcement across the country, so that isolated acts do not tarnish the exemplary work that’s performed by the overwhelming majority of America’s hard-working law enforcement officials each and every day."
The new policy, which is spelled out in a memorandum circulated Monday, instructs that, in making routine or spontaneous law enforcement decisions, officers may not use race, ethnicity, gender, national origin, religion, sexual orientation, or gender identity to any degree, unless listed characteristics apply to a suspect description. Under the policy, federal law enforcement officers will be prohibited from acting on the belief that possession of a listed characteristic by itself signals a higher risk of criminality.
In all activities other than routine or spontaneous law enforcement, officers may consider the listed personal characteristics only to the extent there is trustworthy information, relevant to the locality or timeframe, that links individuals with a listed characteristic to a particular criminal incident, criminal scheme, organization, a threat to national or homeland security, a violation of federal immigration law or an authorized intelligence activity. In relying on any of the listed characteristics, an officer must also reasonably believe that the activity to be undertaken is merited under the totality of the circumstances.
A copy of the memorandum outlining the new policy is available here.
Armed Drug Trafficker Sentenced to 57 Years in Prison for Firearms and Narcotics OffensesRead the Press Release
An armed drug trafficker was sentenced today to serve 57 years in prison for his involvement in a decade-long cocaine-trafficking conspiracy in Newport News, Virginia.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Special Agent in Charge Royce E. Curtin of the FBI’s Norfolk Field Office and Chief Richard W. Myers of the Newport News Police Department made the announcement after U.S. District Judge Robert G. Doumar of the Eastern District of Virginia imposed the sentence.
Kelvin L. Brown, aka, “Doom,” 34, of Newport News, was convicted by a jury on July 30, 2014, of participating in a drug conspiracy, distribution of cocaine and crack cocaine, possession with intent to distribute cocaine and crack cocaine, two counts of possession of a firearm in furtherance of a drug trafficking crime, and being a felon in possession of a firearm. Evidence presented at trial detailed various drug sales by Brown and his coconspirators, the use of firearms by Brown and others to protect the drug-trafficking enterprise and its proceeds, and threats made by Brown against a cooperating witness to dissuade him from cooperating with police. In one incident, on Sept. 13, 2013, Newport News Police Department officers entered Brown’s apartment after he barricaded himself inside, and seized a firearm, scale and cocaine.
This investigation was led by the FBI Safe Streets Task Force, Newport News Police Department and Virginia State Police, and was prosecuted by Trial Attorney Joseph K. Wheatley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Howard J. Zlotnick of the Eastern District of Virginia.
Armed Drug Trafficker Sentenced to 57 Years in Prison for Firearms and Narcotics OffensesRead the Press Release
WASHINGTON – An armed drug trafficker was sentenced today to serve 57 years in prison for his involvement in a decade-long cocaine-trafficking conspiracy in Newport News, Virginia.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Special Agent in Charge Royce E. Curtin of the FBI’s Norfolk Field Office and Chief Richard W. Myers of the Newport News Police Department made the announcement after U.S. District Judge Robert G. Doumar of the Eastern District of Virginia imposed the sentence.
Kelvin L. Brown, aka, “Doom,” 34, of Newport News, was convicted by a jury on July 30, 2014, of participating in a drug conspiracy, distribution of cocaine and crack cocaine, possession with intent to distribute cocaine and crack cocaine, two counts of possession of a firearm in furtherance of a drug trafficking crime, and being a felon in possession of a firearm. Evidence presented at trial detailed various drug sales by Brown and his coconspirators, the use of firearms by Brown and others to protect the drug-trafficking enterprise and its proceeds, and threats made by Brown against a cooperating witness to dissuade him from cooperating with police. In one incident, on Sept. 13, 2013, Newport News Police Department officers entered Brown’s apartment after he barricaded himself inside, and seized a firearm, scale and cocaine.
This investigation was led by the FBI Safe Streets Task Force, Newport News Police Department and Virginia State Police, and was prosecuted by Trial Attorney Joseph K. Wheatley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Howard J. Zlotnick of the Eastern District of Virginia.
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Akron Man Sentenced to Nearly 22 Years in Prison for Child EnticementRead the Press Release
An Akron man was sentenced to nearly 22 years in prison for attempting to lure a 12-year-old into having sex with him, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI's Cleveland Office.
Nicholas B. Bowers, 31, was previously found guilty of one count each of enticement and receipt or distribution of visual depictions of minors engaged in sexually explicit conduct.
"This defendant sent obscene images of himself to a pre-teen girl in an effort to get her to meet with him," Dettelbach said. "We will continue to do all we can to protect our children from online predators."
“Attentive parents and swift law enforcement action has ensured that Mr. Bowers will not be trolling for minors on the Internet,” Anthony said. “This international collaborative law enforcement effort demonstrates that preying on our most precious commodity, our children, will not be tolerated.”
“The Springfield Township Police Department is confident that countless children have been saved from the predatory behavior exhibited by Mr. Bowers. This would have never been possible without the collaborative efforts of the FBI, the Toronto Police Department, and our Detective Bureau,” said Sgt. Eric East, Springfield Township Police Spokesperson.
From 2011 through 2014, Bowers knowingly received and distributed in interstate and foreign commerce, by computer, numerous computer files, which files contained visual depictions of real minors engaged in sexually explicit conduct. He also knowingly used a device connected to the Internet, to attempt to persuade, induce, entice and coerce a 12-year-old girl to engage in illegal sexual activity with him.
The investigation began in Toronto, Canada, on January 9, 2014. The parent of a minor female contacted the Toronto Police Service regarding sexually explicit chats and e-mail messages his daughter was receiving. It was determined that the individual resided near Akron. Chats and e-mail exchanges continued with the Toronto Police Service portraying themselves as the minor female. Toronto Police Service contacted the local authorities in Ohio, more specifically, the Springfield Township Police Department, which has jurisdiction over the area where Bowers resided.
The Springfield Township Police Department and the FBI continued the investigation, resulting in a local search warrant being obtained and executed on January 14, 2014, at the location where Bowers resided. During the execution of this search warrant, USB storage devices and CDs were among the items seized. These specific items were labeled with file names suggesting minor ages and the words “child porn pics.”
This case was prosecuted by Assistant United States Attorney Michael A. Sullivan. The case was investigated by the Akron Office of the Federal Bureau of Investigation, the Springfield Township Police Department, and the Toronto Police Service.
8-Year Prison Term for Stanislaus County Man Convicted of Child Pornography OffenseRead the Press Release
FRESNO, Calif. — United States District Judge Lawrence J. O’Neill today sentenced Kevin Ray Adams, 25, of Riverbank, to eight years and one month in prison, to be followed by 15 years of supervised release, for receiving and distributing child pornography, United States Attorney Benjamin B. Wagner announced.
According to the plea agreement, between August 3, 2012, and February 9, 2014, Adams received and distributed images of child pornography over the Internet. The defendant transmitted more than 600 images of child pornography, some of the images depicted prepubescent minors, and some were of violence or sadistic or masochistic conduct. He has been detained as a danger to the community and a flight risk since his initial court appearance on July 7, 2014.
The case was the product of an investigation by the Federal Bureau of Investigation with assistance from the Riverbank and Ceres Police Departments. Assistant United States Attorney David Gappa prosecuted the case.
The case is 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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. Click on the “resources” tab for information about Internet safety education.
Friday 5 December 2014
Woonsocket Drug Trafficker Sentenced to 4 Years in Federal PrisonRead the Press Release
PROVIDENCE, R.I. – – Juan Carlos Renta, 39, of Woonsocket, was sentenced today to 48 months in federal prison for being in possession of crack cocaine with the intent to distribute, announced United States Attorney Peter F. Neronha and Woonsocket Police Chief Thomas S. Carey.
At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Renta to serve 3 years’ supervised release, the first six months in home confinement with electronic monitoring, following completion of his prison term. Renta pleaded guilty on September 15, 2014, to one count of possession of cocaine base with the intent to distribute.
According to court documents and information presented to the court, based on information developed by Woonsocket Police into the drug trafficking activities by Renta, Woonsocket Police sought and executed a court authorized search warrant at Renta’s residence on May 17, 2013. During the search, Woonsocket Police seized nearly 8 grams of cocaine and 41 grams of crack cocaine. Additionally, detectives seized $1,600 in cash and various items used in the packaging and distribution of cocaine and crack cocaine.
Renta has been detained since his arrest on May 17, 2013.
The case was prosecuted by Assistant U.S. Attorney Gerard B. Sullivan and First Assistant U.S. Attorney Stephen G. Dambruch.
The FBI assisted Woonsocket Police in the investigation of this matter.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Wheeling Businessman Charged with Defrauding Mortgage CustomersRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistWHEELING, WEST VIRGINIA – A Wheeling, West Virginia businessman is facing federal charges that he defrauded the customers of his mortgage brokerage business, United States Attorney William J. Ihlenfeld, II announced today.
Mark C. Busack, 51, was charged this morning in U.S. District Court in Wheeling with four counts of “Use of an Unauthorized Access Device” and one count of “Filing a False S Corporation Income Tax Return.” Busack is alleged to have made hundreds of thousands of dollars in unauthorized charges to the credit and debit accounts of the customers of his mortgage company, Major Savings, Inc., also known as ‘A Plus Family Home Mortgage.’ He is also alleged to have understated his gross income in 2012 by more than $300,000.00.
The investigation began in 2013 when customers of Busack voiced concerns about his financial practices. Various federal and local law enforcement agencies then investigated the matter, including the Federal Bureau of Investigation, the Ohio County Sheriff’s Department, the Internal Revenue Service-Criminal Investigation Section, and the Wheeling Police Department. Authorities discovered that Busack had engaged in a practice of repeatedly making unauthorized charges to the credit card accounts of his mortgage customers, and that he failed to report his true income to the IRS.
“Busack was not satisfied with the credit card fraud he committed, deciding to also defraud the American taxpayer by submitting a false corporate tax return. Our tax system is based on each taxpayer paying his or her fair share and Busack intentionally chose not to do so,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office. “Today’s charges reinforce the commitment by law enforcement and the United States Attorney’s Office to hold individuals who commit these types of crimes accountable.”
The West Virginia Attorney General’s Office also became involved in the investigation after being contacted by customers of Busack. The Attorney General’s Office took its own, separate action this week by filing a lawsuit in the Circuit Court of Ohio County, West Virginia.
“As part of our ongoing efforts to protect West Virginia consumers against scammers, our Office has worked closely and collaboratively with law enforcement, including the U.S. Attorney’s Office. Today’s announcement is a reflection of that partnership and our shared goal of protecting West Virginia citizens from anyone who may wish to take advantage of them,” said West Virginia Attorney General Patrick Morrisey. “In addition to the Information filed today, our Office has filed a civil action against Busack and his businesses.”
Busack was charged by Information and faces up to ten years in prison and fine of up to $250,000.00 on each of the four access device counts and up to three years in prison and fine of up to $100,000.00 on the tax charge. 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.
United States Attorney Ihlenfeld and Assistant U.S. Attorney Jarod J. Douglas are prosecuting the criminal case on behalf of the federal government.
An Information is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Week in Review – South BendRead the Press Release
South Bend, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS
- Jared Marshall, 36, of La Porte, Indiana pled guilty to the felony offense of knowingly distributing heroin. The magistrate judge is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by Drug Enforcement Administration. Sentencing has been set for March 12, 2015. This case is being prosecuted by Assistant United States Attorney Frank Schaffer.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS
- Aaron Mendoza, 34, of South Bend, Indiana was sentenced to 37 months imprisonment after pleading guilty to the felony offense of being an illegal alien in possession of a firearm. According to documents filed in this case, on March 4, 2014, Menodza possessed a SCCY 9mmhandgun in his home in St. Joseph County, Indiana. It is undisputed that Mendoza is illegally in the United States and that this firearm had traveled through interstate or foreign commerce. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Frank Schaffer.
- Santiago R. Ortiz-Ruvalcaba, 19, of South Bend, Indiana was sentenced to 16 months imprisonment with 2 years supervised release after pleading guilty to the felony offense of possession of a firearm while under indictment. According to documents filed in this case, on April 2, 2014, the defendant was driving when he was pulled over for not stopping at a stop sign. The defendant fled from police and during the pursuit the defendant jumped out of his vehicle, without putting the car in park, and the car collided with a parked school bus that was dropping off kids. When stopped by police, officers found marijuana on the defendant and a short distance away also found a loaded black semi-automatic handgun with the hammer cocked next to the defendant’s hat. When the defendant was patted down, he had a loaded black gun magazine with live rounds wrapped in a yellow bandana. The defendant admitted he was fleeing from police while he held the loaded weapon he used for protection. This case was the result of an investigation by the South Bend Police Department and Bureau of Alcohol, Tobacco and Explosives. This case was prosecuted by Assistant United States Attorney Frank Schaffer.
- Ryan Dean Smith, 28, of Peru, Indiana was sentenced to 34 months imprisonment with 2 years supervised release after pleading guilty to the felony offense of being a convicted felon in possession of a firearm. According to documents filed in this case, on August 3, 2013, the Wabash Police conducted a traffic stop on a vehicle driven by defendant Ryan Smith. Smith was stopped for exceeding the speed limit and for traveling down a section of roadway that was marked as a closed road. Smith, the sole occupant of the vehicle, was found to a have a shotgun lying on the front passenger seat of the vehicle. The shotgun, and other contents of the truck, belonged to Smith. The officer who stopped Smith asked him if he was a felon. Smith told the officer he had convictions for burglary and theft. Smith was given a ticketed, released at the scene but his vehicle was impounded. During an inventory search of the vehicle prior to it being impounded, officers also found a baggie containing 35 Nucyntra pills, a Schedule II narcotic, in the area of the seat between the front passenger and drivers’ seat. The narcotic pills, plastic baggies, and the shotgun were all collected as evidence by the police. Mr. Smith has prior felony convictions for receiving stolen property (2006), burglary (2006), and residential entry (2014). This case was the result of an investigation by the Bureau of Alcohol, Tobacco and Explosives. This case was prosecuted by Assistant United States Attorney Donald Schmid.
Week in Review – HammondRead the Press Release
Hammond, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITIONS
- Kaled Mohammad, 29, of Cicero was sentenced to 13 months imprisonment with 1 year supervised release and ordered to pay $127,319.85 in restitution after pleading guilty to two felony offenses of wire fraud. The guilty plea involved wire fraud related to the fraudulent redemption of SNAP (supplemental nutrition assistance program) benefits at Mohammad’s store, Kay Mart, Inc. in Gary, Indiana. This case was the result of an investigation by the Federal Bureau of Investigation and the US Department of Agriculture. This case was prosecuted by Assistant United States Attorney Diane Berkowitz.
Week in Review – Fort WayneRead the Press Release
Fort Wayne, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEA
- Ashley Taylor, 26, of Fort Wayne, Indiana, pled guilty to a felony Information (filed on November 19, 2014) which charged her with theft or receipt of stolen mail. The magistrate judge is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the United States Postal Inspection Service and the Allen County Police Department. Sentencing has not been set. This case has been assigned to and will be prosecuted by Assistant United States Attorneys Tina L. Nommay and Nathaniel C. Henson.
- James Thomas, 67, of Dayton, Ohio pled guilty to the felony offense of knowingly or intentionally possessing with the intent to distribute cocaine. The magistrate judge is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Federal Bureau of Investigation, Fort Wayne Safe Streets Task Force, Indiana State Police, Fort Wayne Police Department, Allen County Police Department, Allen County Drug Task Force and the New Haven Police Department. Sentencing has not been set. This case is being prosecuted by Assistant United States Attorney Anthony W. Geller.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS
- Brenton Ennis, 20, of Fort Wayne, Indiana, was sentenced to 166 months imprisonment, 2 years supervised release, a $100 special assessment and ordered to pay $23,672.14 in restitution after pleading guilty to the felony offenses of committing a “Hobbs Act” robbery (i.e. a robbery that affects interstate commerce), and using of a firearm during and in relation to a crime of violence. According to documents filed in this case, on November 13, 2012, Ennis, and a codefendant, committed an armed robbery of a federally-licensed firearms dealer. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Fort Wayne Police Department, Allen County Police Department and the New Haven Police Department. This case was prosecuted by Assistant United States Attorney Tina L. Nommay.
Vallejo Drug Dealer Sentenced to 14 Years in PrisonRead the Press Release
SACRAMENTO, Calif. —Michael Lott, 39, of Vallejo, was sentenced to 14 years in prison yesterday after entering guilty pleas to drug trafficking charges in a wide-ranging conspiracy to distribute MDMA and crack cocaine, United States Attorney Benjamin B. Wagner announced. In imposing sentence, Chief United States District Judge Morrison C. England, Jr. said the defendant was at the center of a massive drug conspiracy and his conduct warranted a significant sentence.
Lott’s prosecution was part of a major federal investigation into drug trafficking throughout the United States by Vallejo-based rappers and associates of an entertainment label known as “Thizz Entertainment.” In April 2012, as a result of the collaborative law enforcement effort, agents arrested a total of 25 individuals in Vallejo, Stockton, Fairfield, Oakland, Los Angeles, New York, and Oklahoma City. During the investigation, agents seized approximately 45,000 MDMA pills, 4 pounds of crack cocaine, 2 pounds of heroin, and $200,000 in suspected drug proceeds. Fourteen defendants have pleaded guilty, four have been sentenced and the rest are still pending completion.
According to court documents, the DEA-led investigation uncovered a network of drug distributors working in the “Crest” neighborhood of Vallejo, California, along with individuals transporting large quantities of drugs outside of California to realize a larger profit. A number of the participants, including defendants Norton and Franklin, performed as rappers under the entertainment label known as “Thizz Entertainment.” Many songs by artists on the Thizz Entertainment label include lyrics glorifying and promoting the use and distribution of MDMA pills.
This case is the product of an extensive investigation by the DEA Sacramento District Office, the Vallejo Police Department, the El Dorado County Sheriff’s Department, and the Sacramento FBI Safe Streets Task Force. Assistant United States Attorney Jason Hitt is prosecuting the case. It was part of an Organized Crime Drug Enforcement Task Force (“OCDETF”). The OCDETF Program was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
U.S. Attorney's Office, Western District of Louisiana, Joins TwitterRead the Press Release
Information on case verdicts, pleads and other news being tweeted
SHREVEPORT/LAFAYETTE/ALEXANDRIA/MONROE/LAKE CHARLES, La.: United States Attorney Stephanie A. Finley announced today that the U.S. Attorney’s Office has joined Twitter to assist in providing news, announcements and other information to the public. The office will provide information regarding office events, links to press releases, photos and media advisories.
“Twitter is another avenue to provide information to the public,” Finley stated. “Those who follow us on Twitter will receive our Tweets on their mobile devices, desktop computers, electronic tablets and other internet capable devices. We are excited to offer this online service.”
To follow us on Twitter, go to https://twitter.com/USAO_WDLA, or add our Twitter address, @USAO_WDLA, to the Twitter app on your electronic device. In addition to Twitter, the U.S. Attorney’s Office also maintains a website (www.justice.gov/usao/law), which is the primary source of information relating to functions of the office.
Two Tampa Corporations and Four Tampa Residents Sentenced in Connection with Scheme to Unlawfully Sell an Unregistered Pesticide and Obstruct JusticeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Maureen O’Mara, Special Agent in Charge, United States Environmental Protection Agency, Criminal Investigation Division (EPA-CID), Michael A. Hill, Special Agent in Charge, United States Environmental Protection Agency, Office of Inspector General (EPA-OIG), Atlanta Field Office, and Colonel/Director Calvin Adams, Florida Fish and Wildlife Conservation Commission, Division of Law Enforcement (FWCC), announce that New Nautical Coatings, Inc., d/b/a “Sea Hawk Paints,” Sea Hawk Refinish Line, Inc., d/b/a “Refinish Line Auto Supplies,” of Clearwater, Florida, and Hillsborough County residents Erik Norrie, 42, David Norrie, 46, Jason Revie, 44, and Tommy Craft, 46, were sentenced today before U.S. District Judge Ursula Ungaro in Miami, Florida.
New Nautical Coatings, Inc. (New Nautical), which pled guilty to willfully conspiring to obstruct the Environmental Protection Agency, was sentenced to pay a fine of $1,235,315.00, that constituted a disgorgement of the unlawful gains the company derived from the offense. New Nautical was also sentenced to a three year period of probation, which requires the company to complete an Environmental Compliance Program during that period of time. David Norrie, who also pled guilty to willfully conspiring to obstruct the Environmental Protection Agency, was sentenced to five months in prison and six months of home confinement. Erik Norrie, who pled guilty to willfully conspiring to knowingly distribute and sell an unregistered pesticide, was sentenced to 3 months in prison. Sea Hawk Refinish Line, Inc., who pled guilty to the same conspiracy, was sentenced to probation for one year. Jason Revie and Tommy Craft previously pled guilty to knowingly distributing and selling an unregistered pesticide and were each sentenced to a one year period of probation.
According to the Superseding Indictment and other court documents, New Nautical manufactured an antifouling coating called Biocop, which contained tributyltin methacrylate, also known as “TBT,” a chemical compound which was found to have significant harmful effects on marine life. TBT based paints such as Biocop are pesticides subject to registration with the EPA. On or about March 30, 2005, the EPA cancelled New Nautical’s registration for Biocop, making it unlawful for the company to manufacture Biocop for sale in the United States after December 1, 2005, or sell Biocop in the United States after December 31, 2005.
Despite the cancellation order, New Nautical continued to produce Biocop for sale in the United States from 2006 through 2009. In order to conceal this post-cancellation production of Biocop, New Nautical employees were directed to change the batch numbers on cans of Biocop, which previously referenced the date of production, to a series of numbers ending in “9999.” During this time period, New Nautical used its sales team and staff, including David Norrie, Erik Norrie, Jason Revie and Tommy Craft, to sell and distribute unregistered Biocop in the Southern District of Florida and elsewhere in the United States, but invoiced those sales through its sister company, Refinish Line. On May 22, 2009, after David Norrie sold 60 gallons of Biocop to a customer in Broward County, Norrie directed the customer to tell EPA investigators that the customer did not have Biocop, and that New Nautical did not sell Biocop. Roughly six months later, in November 2009, EPA and Florida Fish and Wildlife agents and investigators executed a search warrant on New Nautical’s premises, and seized evidence which led to the indictment and conviction of the defendants.
Mr. Ferrer commended the investigative efforts of EPA-CID, EPA-OIG, and FWCC. The case was prosecuted by Assistant U.S. Attorneys Alejandro O. Soto and Maria Medetis.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Sentenced for Participating in Drug Trafficking ActivitiesRead the Press Release
PITTSBURGH – Two western Pennsylvania men have been sentenced in federal court on their convictions of violating federal drug trafficking laws, United States Attorney David J. Hickton announced today.
United States District Judge Terence F. McVerry sentenced Terrell Williams a/k/a Rel, 35, of McKeesport, Pa., to 72 months imprisonment followed by five years supervised release. Josh Williams (no relation to Terrell Williams), 33, of Aliquippa, Pa., was sentenced to 70 months imprisonment followed by five years supervised release.
According to information presented to the court, from in and around January 2011 and continuing thereafter to in and around June 2012, Terrell Williams and Josh Williams conspired with others to distribute and possess with intent to distribute cocaine. Additionally, from in and around June 2011 and continuing thereafter to in and around May 2012, Terrell Williams also conspired with others to distribute and possess with intent to distribute heroin.
The prosecution of Terrell Williams and JoshWilliams was the result of a long-term investigation that involved wiretaps on cell phones utilized by several members of the conspiracy. At the conclusion of the investigation, twenty defendants (including Terrell and JoshWilliams) were charged in a large-scale cocaine conspiracy that operated between Warren, Ohio, and Washington, Pa. All 20 defendants have since pleaded guilty. The same investigation also resulted in the prosecution of 10 defendants (including Terrell Williams) charged in a large-scale heroin conspiracy that operated between Detroit, Mich., and Washington, Pa. All 10 defendants have likewise pleaded guilty.
Assistant United States Attorneys Charles A. Eberle and Barbara K. Doolittle prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation and the Pennsylvania State Police for the investigation leading to the successful prosecution of Terrell Williams and Josh Williams.
Two San Francisco Police Officers Convicted of Violations of Civil Rights, Theft, and FraudRead the Press Release
SAN FRANCISCO – Ian Furminger, 47, of Pleasant Hill and Edmond Robles, 46, of Danville, both San Francisco Police Department (SFPD) officers, were convicted today by a federal jury of conspiracy to violate civil rights, conspiracy to steal from a federally funded program, and devising a scheme to defraud and obtain money and property through wire fraud. Robles was also convicted of theft from a federally funded program.
The jury found the defendants, who worked in the plain clothes unit of SFPD’s Mission Station, conspired to use their official positions to enrich themselves by stealing money and other valuable items, such as computers, electronic devices, and gift cards that were seized on behalf of the City of San Francisco, and to deprive suspects of due process of law by taking these items without booking them into evidence or including them in their police reports.
The defendants were also convicted of defrauding the City and County of San Francisco by concealing their illegal activities by filing false police reports. Robles was convicted of theft from a federally funded program (the jury was unable to reach a unanimous decision as to Furminger’s participation in this offense). The defendants were acquitted of honest services wire fraud and one count of conspiring to distribute controlled substances. Furminger also was acquitted of extortion. The verdicts followed a nine-day jury trial before the Honorable Charles R. Breyer, United States District Court Judge.
“Constitutional protections extend to each and every person,” said United States Attorney Melinda Haag, “These men victimized those they swore an oath to protect, ruined their own careers, and tarnished the star worn so proudly by other men and women of the San Francisco Police Department. With these convictions, we reaffirm our commitment to prosecuting police officers who choose to violate the civil rights of the people of the Bay Area.”
FBI Special Agent in Charge David J. Johnson said, “Preservation of the rule of law demands that police officers who betray the public trust and violate their oaths be held accountable for their actions. Corruption—with or without a badge—is unacceptable, and today’s verdicts are a reminder that no one is above the law.”
San Francisco Police Department Chief Greg Suhr remarked, “As I said on the day I was sworn in as Chief of Police, and repeated on the day these officers were arrested when asked about his ongoing investigation, ‘There is no place in the San Francisco Police Department and shouldn’t be in any police department for a dishonest cop.’ I meant what I said. I am seeking the immediate termination of these officers and expect that the Police Commission will act expeditiously in making that happen.”
The defendants are currently released on bail pending their sentencing hearings. They have been suspended by SFPD without pay pending further proceedings before the Police Commission. The defendants’ sentencing hearings are scheduled for Feb. 23, 2014, at 10:00 a.m. before Judge Breyer in San Francisco. The maximum statutory penalties for each count of conviction are:
- Wire fraud (Counts 1 and 2), 18 U.S.C. § 1343 – 20 years in prison; $250,000 fine.
- Civil rights conspiracy (Count 5), 18 U.S.C. § 241 – 10 years in prison; $250,000 fine.
- Federal program theft conspiracy (Count 6), 18 U.S.C. §§ 371 and 666(a)(1)(A) – 5 years in prison & $250,000 fine.
- Federal program theft conspiracy (Count 7 – Robles only), 18 U.S.C. § 666(a)(1)(A) – 10 years in prison & $250,000 fine.
Sentence will 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.
This case is being prosecuted by Assistant U.S. Attorneys in the Special Prosecutions and National Security Unit of the United States Attorney’s Office. The prosecution is the result of an investigation by agents of the Federal Bureau of Investigation, with assistance from the San Francisco Police Department.
Two More Las Cruces Residents Plead Guilty to Trafficking Heroin in Dona Ana CountyRead the Press Release
Nineteen of Twenty-One Defendants Charged Have Entered Guilty Pleas as a
Result of Cases Generated by Multi-Agency Investigation in 2013ALBUQUERQUE – Two more residents of Las Cruces, N.M., have entered guilty pleas in Las Cruces federal court to heroin trafficking charges in five cases filed in 2013 as the result of a multi-agency investigation into drug trafficking in Doña Ana County, N.M.
Esther Soliz, 50, pled guilty in Las Cruces federal court this morning to participating in a heroin trafficking conspiracy under a plea agreement that requires the imposition of a ten year federal prison sentence. She remains in custody pending her sentencing hearing, which has yet to be scheduled. Angel Ortega, 19, entered a guilty plea yesterday to a heroin trafficking conspiracy charge that exposes her to a sentence of not less than five years and not more than 40 years in prison. She too remains in custody pending her sentencing hearing.Soliz and Ortega, together with a Mexican national and 18 other Las Cruces residents, were charged with heroin trafficking offenses in five indictments filed in Nov. 2013, as a result of a multi-agency investigation led by the FBI that targeted the heroin trafficking activities of Jovita Belmonte-Gonzalez in Doña Ana County. Belmonte-Gonzales, 43, a Mexican national from Ciudad Juarez, Chihuahua, Mexico, was named as the lead defendant in four of five indictments which charged her with supplying heroin to five drug trafficking organizations that distributed heroin in Doña Ana County. To date, 19 of the 21 defendants charged as a result of the investigation have entered guilty pleas.
The lead defendant, Belmonte-Gonzalez, pled guilty to heroin trafficking charges in four of the five cases in June 2014, and admitted conducting frequent heroin transactions with her co-defendants between June 2013 and Oct. 2013. Court records reflect that Belmonte-Gonzalez typically negotiated heroin sales by telephone from Juarez and her co-defendants traveled from Doña Ana County to Juarez where they purchased the heroin from her and later distributed the drugs in Doña Ana County. Belmonte-Gonzales faces a mandatory minimum of ten years in prison and a maximum of life in prison, and will be deported after she completes her prison sentence. She remains in federal custody pending her sentencing hearing, which has yet to be scheduled.
The following defendants also have entered guilty pleas in the cases generated as a result of the multi-agency investigation:
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Nathan Andrew Maestas, 31, entered guilty pleas on June 16, 2014, to heroin trafficking and firearms charges. Under the terms of his plea agreement, Maestas will be sentenced to 72 months in federal prison.
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Aprile Cardon, 36, pled guilty on June 18, 2014 to a misdemeanor information charging her with simple possession of heroin, and was sentenced to time served (48 days).
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Deva Blunt, 20, pled guilty on July 16, 2014, to simple possession of heroin. She faces a maximum statutory penalty of a year in prison.
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Isaac Garces, 29, pled guilty on Aug. 11, 2014, to participating in a heroin distribution conspiracy and to being a felon in possession of a firearm. Garces faces a mandatory minimum of ten years in prison and a maximum of life in prison when he is sentenced.
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Adriana Antillon, 23, pled guilty on Aug. 25, 2014 to participating in a heroin trafficking conspiracy. Antillon faces a mandatory minimum of ten years in prison and a maximum of life in prison when she is sentenced.
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Antonio Dominguez, 20, pled guilty on Aug. 25, 2014, to participating in a heroin trafficking conspiracy. Dominguez faces a statutory maximum penalty of 20 years in prison when he is sentenced.
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Valerie Madrid, 41, pled guilty on Sept. 18, 2014, to participating in a heroin distribution conspiracy. Madrid faces a statutory maximum penalty of 20 years in prison when she is sentenced.
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Crystal Marie Delgado, 28, pled guilty on Sept. 23, 2014, to a heroin distribution conspiracy charge. Delgado faces a statutory maximum penalty of 20 years in prison when she is sentenced.
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Kathye Young, 44, pled guilty on Oct. 7, 2014, to participating in a heroin trafficking conspiracy and possession of heroin with intent to distribute. Young faces a mandatory minimum of five years and a maximum of 40 years in prison when she is sentenced.
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Angel Linares, 20, pled guilty on Oct. 7, 2014, to participating in a heroin trafficking conspiracy. Linares faces a mandatory minimum of five years and a maximum of 40 years in prison when he is sentenced.
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Darlene Gonzalez, 32, pled guilty on Oct. 8, 2014 to participating in a heroin trafficking conspiracy. Gonzalez faces a maximum of 20 years in prison when she is sentenced. She remains in custody.
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Jorge Carrillo, 58, pled guilty to participating in a heroin trafficking conspiracy and being a felon in possession of firearms on Oct. 7, 2014. Carrillo faces a mandatory minimum of five years and a maximum of 40 years in prison when he is sentenced.
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Jeremy Sparks, 23, pled guilty on Oct. 15, 2014, to participating in a heroin trafficking conspiracy. Sparks faces a statutory maximum penalty of 20 years in prison when he is sentenced.
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Michelle Antillon, 20, pled guilty on Nov. 12, 2014, to participating in a heroin trafficking conspiracy. Antillon faces a mandatory minimum of ten years in prison and a maximum of life in prison when she is sentenced.
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Alysha Vargas, 22, pled guilty on Nov. 19, 2014, to participating in a heroin trafficking conspiracy and possession of heroin with intent to distribute. Vargas faces a mandatory minimum of five years and a maximum of 40 years in prison when she is sentenced.
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Andy Nunez, 21, pled guilty on Nov. 19, 2014, to participating in a heroin trafficking conspiracy. Nunez faces a mandatory minimum of five years and a maximum of 40 years in prison when he is sentenced.
Patrick Gonzalez, 39, and Celena Marquez, 26, have entered not guilty pleas. Gonzalez is scheduled for trial on Jan. 20, 2015, and Marquez is scheduled for a change of hearing on Dec. 11, 2014. Charges in indictments are merely accusations and criminal defendants are presumed innocent unless found guilty in a court of law.
These cases are being prosecuted by Assistant U.S. Attorney E. Garreth Winstead, III, of the U.S. Attorney’s Las Cruces Branch Office. The investigation leading to the charges in the four cases was led by the Las Cruces office of the FBI in collaboration with U.S. Customs and Border Protection, the U.S. Border Patrol, the Las Cruces office of the DEA, the U.S. Marshals Service, the Las Cruces Police Department and the Doña Ana County Sheriff’s Office.
The investigation was designated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program, a nationwide Department of Justice program that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.
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Three Receive Lengthy Sentences for Roles in Cocaine Distribution ConspiracyRead the Press Release
DALLAS — Following their guilty pleas earlier this year, three members of a cocaine distribution conspiracy have been sentenced to lengthy federal prison sentences, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Today, U.S. District Judge John McBryde sentenced Sergio Castillo-Guerra, 28, and Juan Rangel, 44, to 210 months and 240 months, respectively, in federal prison. Last week, Judge McBryde sentenced the other defendant convicted in the case, Mario Morones-Ramirez, 29, to 168 months in federal prison. Each defendant pleaded guilty to one count of conspiracy to possess and distribute cocaine, a Schedule II controlled substance.
According to documents filed in the case, law enforcement learned that Sergio Castillo-Guerra would be traveling from Mexico to the Fort Worth area in May 2014, and that he already had eight kilograms of cocaine for sale that was stashed in a ranch house in the area. On May 21, 2014, law enforcement established surveillance at a restaurant in Fort Worth and observed Castillo-Guerra, travelling with two other men, arrive in a van bearing Coahuila, Mexico, handicap license plates. Castillo-Guerra called co-conspirator Rangel, who agreed to deliver kilograms of cocaine to the restaurant for delivery. Rangel called co-conspirator Morones-Ramirez and instructed him to deliver the eight kilograms of cocaine to the restaurant.
A short time later, Morones-Ramirez arrived at the restaurant in a red Ford pick-up truck. He, Castillo-Guerra, Rangel, and a witness met at the back of truck and discussed the sale. The witness was shown eight kilograms of cocaine contained in a black trash bag in the bed of the truck. Shortly thereafter, special agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) arrested the three defendants and the cocaine was seized.
Rangel advised agents that he rented a “ranchito” near Alvarado, Texas, that was used as a stash house for his boss who resided in Muzquiz, Coahuila, Mexico. Special agents searched the “ranchito,” in Venus, Texas and found an additional nine kilograms of cocaine, more than $300,000 in cash, a loaded pistol with an additional loaded magazine, drug distribution ledgers and a money-counting machine.
ATF investigated. Assistant U.S. Attorney J. Michael Worley prosecuted.
Three Perpetrators of $49.6 Million Mortgage Fraud Scheme SentencedRead the Press Release
The final three individuals involved in the $49.6 million Hampton Springs mortgage fraud scheme, which was organized and led by Miami resident Domenico “Dom” Rabuffo, were sentenced yesterday. Rabuffo’s ex-wife was sentenced to 14 years in prison, and the other two individuals who acted as recruiters for the scheme were sentenced to 20 years in prison.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Jason T. Moran, Special Agent in Charge, Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG), Atlanta Regional Office, made the announcement.
Chief United States District Judge K. Michael Moore sentenced Mae Rabuffo, 75, of New York, to 14 years in prison, and sentenced Raymond E. “Ray” Olivier, 53, of Land O’ Lakes, Florida, and Curtis Allen Davis, 52, of Tampa, Florida, each to 20 years in prison for their roles in the fraud. Dom Rabuffo, 78, of Miami, Florida, was previously sentenced to 27 years and three months in prison. All four defendants were convicted by a federal jury in Miami, in July, 2014, following an 11-day trial.
According to the indictment and evidence at trial, from 2003 to 2008, Dom Rabuffo and his co-defendants conspired to perpetrate a complex $49.6 million mortgage fraud scheme against various FDIC-insured lenders, including Bank of America, Regions Bank, SunTrust Bank, and Wachovia Bank. Dom Rabuffo and his ex-wife Mae Rabuffo used shell companies to acquire ownership and control of a purported residential property development known as Hampton Springs, located in Cashiers, North Carolina.
Then, Dom Rabuffo, Olivier, and Davis recruited numerous straw borrowers to purchase building lots in the development. Several of the straw borrowers testified at the trial. According to their testimony and other evidence, Dom Rabuffo paid the borrowers to obtain lot purchase loans and construction loans for building lots in Hampton Springs. To obtain the loans, Domenico Rabuffo, Mae Rabuffo, Olivier, Davis, and other conspirators, submitted fraudulent loan applications and related documents to the lenders and the lenders’ closing agents.
Among other things, the loan applications and settlement statements for the lot loans contained fraudulent statements that the borrowers paid earnest money deposits and cash due at the closing. In fact, the deposits and cash-to-close were paid by Dom Rabuffo and Mae Rabuffo using recycled proceeds from the fraudulent scheme. Further, Dom Rabuffo and Mae Rabuffo sent fraudulent correspondence to the closing agents, including letters bearing the forged signatures of borrowers, to create the false impression that the deposits and cash due at closing had been supplied by the borrowers from their own funds.
Olivier and Davis recruited straw borrowers for the fraud scheme and submitted fraudulent loan applications to the lenders. Further, Olivier and Davis caused their private companies to be disclosed as the employers of straw borrowers whose actual employment was inconsistent with the inflated income stated on their loan applications. Then, when contacted by lenders, Olivier and Davis provided fraudulent verifications of employment for those borrowers.
Three other defendants, Diane M. Hayduk, 65, and Victor Miguel Vidal, 49, each of Miami, Florida, and Lazaro Jesus Perez, 44, of Miami Springs, Florida, pled guilty to the charged conspiracy and agreed to assist the United States. Hayduk assisted the Rabuffos with the misappropriation of loan proceeds and the transmission of fraudulent correspondence to the lenders and the closing agents. Vidal served as a loan officer at SunTrust Mortgage, where he sponsored fraudulent loan applications for lots in Hampton Springs, including fraudulent applications for $33 million in construction loans. Perez furnished fictitious accountant letters to Vidal, in support of fraudulent loan applications submitted to SunTrust Mortgage. Hayduk, Vidal, and Perez were sentenced in September, 2014. Hayduk was sentenced to 40 months in prison, Vidal was sentenced to 64 months in prison, and Perez was sentenced to 30 months’ in prison.
Mr. Ferrer commended the investigative efforts of the FBI and FDIC-OIG. The case was prosecuted by Assistant United States Attorneys Dwayne E. Williams and Jerrob Duffy.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Three Convicted in Methamphetamine OperationRead the Press Release
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(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA – Three Romney, West Virginia residents were convicted today for their role in the production and distribution of methamphetamine, United States Attorney William J. Ihlenfeld, II, announced.
An investigation by the Potomac Highlands Drug and Violent Crime Task Force revealed that Sherry Lynn Woodson, 50, Kelly Christine Gross, 46, and Amanda Marie Matthews, 36, were involved in a methamphetamine production operation.
Woodson was discovered in January 2013 in possession of medication containing pseudoephedrine. She pled guilty today to one count of “Possession of Pseudoephedrine to be used in Manufacture of Methamphetamine.” She faces up to 20 years in prison and a fine of up to $250,000.00.
Gross was discovered in January 2013 in possession of medication containing pseudoephedrine. She pled guilty today to one count of “Possession of Pseudoephedrine to be used in Manufacture of Methamphetamine.” She faces up to 20 years in prison and a fine of up to $250,000.00.
Matthews admitted to her involvement in the production of methamphetamine throughout late 2013 and early 2014. She pled guilty today to one count of “Conspiracy to Manufacture Methamphetamine.” She faces up to 20 years in prison and a fine of up to $1,000,000.00.
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 Jarod Douglas is prosecuting the cases on behalf of the government.
U.S. Magistrate Judge Robert W. Trumble presided.
Stroudsburg Man Sentenced for Passing Counterfeit Federal Reserve NotesRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that United States District Court Judge Malachy E. Mannion sentenced Calmen Stewart, Jr., age 23, of Stroudsburg, Pennsylvania, yesterday to a term of imprisonment of time served, approximately 2 months, followed by 2 years of supervised release. Judge Mannion ordered that the first 6 months of supervised released be served on home detention with electronic monitoring. Restitution in the amount of $1,700 was also ordered.
According to the United States Attorney Peter Smith, Stewart previously plead guilty to conspiracy to pass counterfeit federal reserve notes at various locations throughout the Middle District of Pennsylvania and elsewhere.
The case was jointly investigated the United States Secret Service and the Dickson City Police Department. Assistant United States Attorney Michelle Olshefski prosecuted the case.
St. Kitts National Indicted on Illegal Reentry and Related ChargesRead the Press Release
St. Thomas, USVI – A federal grand jury on St. Thomas has returned a four-count indictment charging Terrance L. Hanley, 44, also known as Robert A. Jenkins, with illegal reentry into the United States, identity theft, making false statements, and making false claims to citizenship, United States Attorney Ronald W. Sharpe announced today.
According to the indictment, which was returned on Thursday, Hanley presented a false Florida driver’s license to U.S. Customs and Border Protection officers on November 16, 2014 at the Cyril E. King Airport on St. Thomas bearing the name Robert A. Jenkins, and told agents that he was a citizen of the United States. Further inquiries at the secondary inspection checkpoint determined that the defendant’s true name is Terrance L. Hanley, and that he is a convicted felon and national of St. Kitts and Nevis, who was deported from the United States on June 18, 2014. If convicted of the illegal reentry offense as alleged in Count One of the indictment, Hanley faces up to 20 years in federal prison.
United States Attorney Sharpe reminds the public that an indictment is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless found guilty.
The case is being investigated by the U.S. Department of Homeland Security, Homeland Investigations and prosecuted by Assistant United States Attorneys Everard E. Potter.
Shelton Tax Preparer Pleads Guilty to Preparing and Filing False Tax ReturnsRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that BELLARMIN NAMEGABE, 46, of Shelton, waived his right to indictment and pleaded guilty yesterday in Bridgeport federal court to preparing false tax returns.
According to court documents and statements made in court, NAMEGABE, while operating a tax preparation business based in Shelton, falsely reported expenses, deductions and credits on numerous clients’ tax returns without his clients’ knowledge or consent. The false returns included fabricated Schedule A’s, Schedule C’s, number of dependents, fuel tax credits and other items.
As part of the investigation, special agents with the Internal Revenue Service – Criminal Investigation Division interviewed 11 of NAMEGABE’s clients who stated that NAMEGABE had falsified their returns. In addition, as part of an undercover operation, an agent simply dropped off his Form W-2 at NAMEGABE’s business, provided his name and some identifying information, such as his Social Security Number, and left. With the information provided, the undercover agent was only entitled to a refund of $632. Approximately two weeks later, the undercover agent’s return was posted to the IRS database. The return was prepared falsely and generated a refund of $3,235.
NAMEGABE pleaded guilty to one count of aiding and assisting the filing of a false tax return, a charge that carries a maximum term of imprisonment of three years. He is scheduled to be sentenced by Senior U.S. District Judge Warren W. Eginton on February 26, 2014.
NAMEGABE also has agreed to pay back taxes, penalties and interest related to the false tax returns he prepared during the 2007 through 2011 tax years for the 11 individuals who were interviewed as part of the investigation. The tax loss attributed to those false returns is approximately $240,196.
This matter is being investigated by the Internal Revenue Service – Criminal Investigation Division and is being prosecuted by Assistant U.S. Attorney Douglas P. Morabito.
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[email protected]Sacramento Woman Pleads Guilty to Stealing over $600,000 from Concord CompanyRead the Press Release
OAKLAND – Consuelo “Connie” Puente pleaded guilty to wire fraud and aggravated identity theft yesterday, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Thomas McMahon.
According to court documents, from May 19, 2008 to June 18, 2013, Puente was employed by a company in Concord, Calif. In January 2009, Puente was assigned to the payroll department and was the only employee responsible for handing payroll for her employer. From June 2009 through June 2013, Puente admitted she devised a scheme to defraud her employer by receiving wages paid in the names of former employees. Puente obtained three employees’ personal identifying information from the company’s personnel files. She changed their status to current employees so that her employer would pay wages in their names. Puente listed her bank account information as the bank account to receive the wages. As a result, between 2009 and 2013, her employer erroneously transferred net wages of $543,545.08 into Puente’s bank accounts. The company also paid withholdings of $84,362.45 for a total of $627,907.53 in gross wages. To account for the wages paid in the names of the former employees, Puente prepared IRS Forms W-2 for each of the former employees. Puente also admitted that she filed false tax returns for 2009 through 2013 that omitted the $543,545.08 she stole from the company, resulting in $151,987 in tax liabilities.
Puente, 44, of Sacramento, was indicted on March 18, 2014, and charged with three counts of wire fraud and three counts of aggravated identity theft. She pleaded guilty to one count of each. Puente’s sentencing hearing is scheduled for Feb. 26, 2015, before the Honorable Yvonne Gonzales Rogers, United States District Court Judge, in San Francisco.
The maximum penalty for each count of wire fraud, in violation of Title 18, U.S.C. § 1343, is 20 years in prison and a fine of $250,000. The maximum penalty for aggravated identity theft, in violation of Title 18, U.S.C. § 1028A, is two years in prison and a fine of $250,000.
Assistant US Attorney Thomas Moore is prosecuting the case. The prosecution is the result of an investigation by the IRS, Criminal Investigation and the Concord Police Department.
Romanian National Sentenced for Unlawful Procurement of United States CitizenshipRead the Press Release
BOISE — Adrian Briciu, 32, a Romanian national residing in Sun Valley, Idaho, was sentenced yesterday to three years of probation and a $1,000 fine for unlawful procurement of United States citizenship, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also entered an order revoking Briciu’s fraudulently obtained naturalization and United States citizenship. Brici pleaded guilty to the charge on September 25, 2014.
According to court documents, a group of Romanians and citizens of other foreign countries living in the Sun Valley area entered into sham marriages with U.S. citizens in order to falsely obtain U.S. citizenship. Briciu married a U.S. citizen and then applied for U.S. citizenship based upon that marriage. In applying for naturalization, and ultimately citizenship, Briciu lied to Federal authorities about his place of residence and with whom he was living. Shortly after being granted U.S. citizenship, Briciu and his U.S. citizen wife divorced.
“The U.S. Attorney’s Office and its law enforcement partners are committed to vigorously pursuing this kind of fraud,” said Olson. “We are committed to protecting the integrity of the United States immigration system and those who lawfully seek citizenship.”
The case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
Rochester Man Pleads Guilty to Racketeering in Long Running Theft Ring Which Led to the Death of an Elderly Medina ManRead 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 Rico J. Vendetti, 44, of Rochester, NY, pleaded guilty to Racketeering Influenced Corrupt Organization (RICO) Conspiracy, before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.
“Similar to the storyline of a well known Charles Dickens novel, this defendant operated a sophisticated theft ring which utilized a gang of thieves to steal from numerous stores in Western New York,” said U.S. Attorney Hochul. “Unlike the fictional version, however, Vendetti relied upon adults to commit innumerable instances of shoplifting, and then turned to the internet to dispose of the merchandise. The defendant’s operation also led to the death of an elderly man who owned a comic book collection targeted for theft by Vendetti. As this prosecution demonstrates, the Office will use the full extent of federal law to bring all organized crime rings to justice.”
Assistant U.S. Attorneys Anthony M. Bruce Scott S. Allen, who are handling the case, stated that beginning in 2004 or 2005, the defendant began dealing with a number of shoplifters or “boosters” who stole hundreds of thousands of dollars in merchandise from stores such as Walmart, Sears, Home Depot, JoAnn Fabrics, Tops and Wegmans. The merchandise was sold to Vendetti for 25¢ on the dollar. The defendant then sold the merchandise on eBay for about half of its retail value, primarily to out-of-state customers.
Prior to July 5, 2010, the defendant learned of 78 year old Homer Marciniak’s comic book collection, with an estimated value of $30,000, and began to plan and carry out a home invasion robbery. On July 5, 2010, Albert Parsons, Donald Griffin, and a third individual entered Marciniak’s Medina home. During the robbery, Marciniak=s valuable collection of collectible comic books was stolen and Marciniak was beaten. Several hours after being treated for bruises and lacerations suffered during the robbery and released from the hospital, Marciniak was readmitted to the hospital where he died of a heart attack.
Charges are pending against defendants Parsons, Griffin and Arlene Combs. 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.
Terry Stewart was convicted of engaging in a racketeering conspiracy in connection with the case and is awaiting sentencing. Brandon Meade was convicted of conspiring to transport and transfer stolen property with an aggregate value of $5000 in interstate commerce and is also awaiting sentencing.
The plea is the result of an investigation on the part of Special Agents from the Federal Bureau of Investigation, Troopers from the Troop A Major Crimes Unit of the New York State Police Bureau of Criminal Investigation in Batavia, under the direction of Captain George Brown, Detectives from the Orleans County Sheriff’s Office under the direction of Sheriff Scott Hess, Detectives from the Monroe County Sheriff’s Office under the direction of Sheriff Patrick O’Flynn, Officers from the Medina Police Department, under the direction of Chief Jose Avila and Officers from the Rochester Police Department, under the direction of Chief Michael Ciminelli.
U.S. Attorney Hochul also praised the work of Orleans County District Attorney Joseph Cardone who brought this case to the attention of the U.S. Attorney’s Office.
Sentencing is scheduled for March 6, 2014 at 12:30 p.m. before Judge Arcara.
Rochester Man Pleads Guilty to Gambling, Extortion and Money Laundring ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Joseph Ruff, 32, of Rochester, NY, pleaded guilty before U.S. District Judge Frank P. Geraci, Jr., to conducting an illegal gambling business, conspiracy to collect an extension of credit by extortion, and conspiracy to commit money laundering. The charges carry a maximum possible penalty of 20 years in prison, a fine of $500,000 or both, with the sentence expected to be 41 months in prison.
Under the terms of the plea agreement, Ruff will also forfeit over $100,000 consisting of approximately $20,489 in funds on deposit in certain bank accounts; the real property at 360 Edgemere Drive in Rochester, $30,000 in lieu of a second piece of real property and any interest in approximately $60,886 seized as part of the case.
Assistant U.S. Attorney Robert A. Marangola, who is handling the prosecution of the case, stated that Joseph Ruff admitted conducting an illegal gambling business with his brother Mark Ruff, 40, of Connecticut and Paul Borrelli, 66, of Rochester. The gambling operation involved sports betting through multiple offshore internet gambling websites. It’s estimated the illegal gambling business involved $76,000,000 in total gross wagers.
Joseph Ruff also admitted his role in an extortion scheme. In one instance, he induced a bettor to make repayment on the extension of credit by telling the bettor that a third person had threatened to physically harm him (the defendant) if the bettor did not make repayment on the extension of credit. Thereafter, the bettor endorsed and delivered to Joseph Ruff a check for $230,000, the money referenced above, as a repayment of the extension of credit for the bettor’s past gambling debt from sports wagers the bettor had placed with the him in connection with the illegal internet gambling business
Joseph Ruff also pleaded guilty to conspiring with Mark Ruff and others to launder $230,000 in illegal gambling proceeds. The defendant delivered and deposited cash and check payments from bettors into his personal bank accounts and/or business accounts of co-conspirators. Joseph Ruff also made cash withdrawals from these bank accounts and wrote checks to third party payees from these and other bank accounts.
On June 24, 2014, defendants Joseph Ruff, Mark Ruff, and Borrelli were indicted by a federal grand jury in Rochester on illegal gambling charges. The indictment also charged Borrelli with 12 counts of money laundering. Mark Ruff pleaded guilty to money laundering and gambling charges and agreed to a nine year sentence and forfeiture of $230,000. The case against Paul Borrelli remains pending. 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.
The plea is the culmination of an investigation conducted by the Organized Crime Drug Enforcement Task Force, which included the Federal Bureau of Investigation, Internal Revenue Service, under the direction of Shantelle P. Kitchen, Acting Special Agent in Charge, New York Field Office, Rochester Police Department, under the direction of Chief Michael Ciminelli, Drug Enforcement Administration, under the direction of Acting Special Agent in Charge James J. Hunt, New York Field Division, Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon, New York Field Division, Greece Police Department, under the direction of Chief Patrick Phelan, the Webster Police Department, under the direction of Chief Gerald Pickering, and Monroe County District Attorney’s Office, under the direction of District Attorney Sandra Doorley.
Sentencing is scheduled for March 30, 2015 at 3:00 p.m. before Judge Geraci.
Rhode Island Man Pleads Guilty to Attempted Child Sex TraffickingRead the Press Release
Human Trafficking Rescue Project
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Rhode Island man pleaded guilty in federal court today to the attempted sex trafficking of a child.
Thomas O’Brien, 54, of Rhode Island, pleaded guilty before U.S. District Judge Howard F. Sachs to the charge contained in a Dec. 11, 2013, federal indictment.
By pleading guilty today, O’Brien admitted that he was involved in the sex trafficking of a victim who was under the age of 18 from June 15, 2005, to Aug. 4, 2007. O’Brien also admitted that he compensated two child victims for activities involving numerous sexually explicit webcam sessions.
O’Brien traveled to Kansas City, Mo., in the summer of 2007 to engage in sexual activity with one of the child victims. During that trip, he spent more than $10,000 on various gifts and entertainment for the two child victims and a co-defendant. O’Brien admitted that he engaged in sexual activity with one of the child victims during this trip.
Between 2005 and 2008, O’Brien spent approximately $200,000 in gifts and various cash payments to the two child victims. O’Brien also assisted a co-defendant in rendering sexually explicit high-definition videos into a more Internet-friendly format.
Under the terms of today’s plea agreement, the parties have recommended that O’Brien’s sentence for this offense will run concurrently to a six-year sentence that he is currently serving for a separate federal conviction in the District of Rhode Island.
This case is being prosecuted by Assistant U.S. Attorney Patrick D. Daly. It was investigated principally by the FBI and the Human Trafficking Rescue Project.
Additional assistance was provided by the following agencies: The Western Missouri Cyber Crimes Task Force, the Clay County, Mo., Sheriff’s Department, the Platte County, Mo., Sheriff’s Department, the Naval Criminal Investigative Service, the Newport, R.I., Police Department, the Rhode Island State Police, the Winnipeg, Manitoba Police Service in Canada, the Royal Canadian Mounted Police, the Crown’s Attorney’s Office in Canada and the Child Exploitation and Online Protection Centre in the United Kingdom.
Providence Pair Sentenced to Federal Prison in Identity Theft, $1.85 Million Dollar Fraudulent Tax Return SchemeRead the Press Release
PROVIDENCE, R.I. – Richard Lara, 23, of Providence, R.I., was sentenced to 60 months in federal prison on Thursday for his role in a scheme in which personal identifying information of more than 1,200 individuals was stolen, many of which were used to file fraudulent tax returns with the IRS totaling more than $1.85 million dollars. Julian Balbi, 23, of Providence, a co-defendant in this matter, was sentenced today to 30 months in federal prison for his participation in the scheme.
Lara and Balbi were also ordered to serve three years’ supervised release upon completion of their prison terms and to pays fines of $1,000. Lara and Balbi previously pleaded guilty to four counts of aggravated identity theft and one count each of conspiracy and theft of government property.
The sentences, imposed by U.S. District Court Judge Mary M. Lisi, are announced by United States Attorney Peter F. Neronha; Colonel Steven G. O’DonnellSuperintendent of the Rhode Island State Police; William P. Offord, Special Agent in Charge of IRS Criminal Investigation; and Ted A. Arruda, Resident Agent in Charge of the Providence Office of the U.S. Secret Service.
According to court records and information presented to the court, Lara and Balbi were arrested by Rhode Island State Police on January 2, 2012, on an unrelated matter during a routine traffic stop. During a court authorized search of the vehicle which was owned by Balbi, State Police discovered 87 U.S. Treasury checks made out to third parties totaling $596,646.46. The investigation revealed that the checks were generated by the submission of fraudulent tax returns. Also seized were several ledgers and notebooks containing personal identifying information, including Social Security numbers and dates of birth, of hundreds of individuals; ledgers containing employer information such as Employee Identification Numbers and addresses; and a USB flash drive containing numerous spreadsheets detailing taxpayer information and fraudulent tax returns that had been filed with the IRS.
Rhode Island State Police executed a court authorized search of Balbi’s Providence residence where they seized numerous computers and USB flash drives. A forensic examination of the computers and flash drives revealed numerous spreadsheets containing ledgers identical to those on the flash drive seized from the vehicle. A court authorized search of Lara’s residence resulted in the seizure of an additional ledger which contained personal identity information which matched information contained on the flash drive seized from Balbi’s vehicle.
Internal Revenue Service and U.S. Secret Service agents interviewed numerous individuals listed as payees on the treasury checks seized from Balbi’s vehicle. All of the individuals stated they did not file the tax return in question and that they did not know Balbi or Lara. The IRS conducted an analysis of all of the information associated with the 1,258 individuals listed on the various ledgers and computers seized from Balbi and Lara. The investigation revealed that between April 2011 and January 2012, 823 fraudulent tax returns seeking refunds totaling $1,854,438.46 were filed with the IRS.
The case was prosecuted by Assistant U.S. Attorney John P. McAdams.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Point Richmond Resident Charged with Tax EvasionRead the Press Release
OAKLAND – A Superseding Indictment from a federal grand jury in San Francisco was unsealed in district court today charging Richard Thomas Grant with tax evasion, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Thomas McMahon.
According to the indictment, Grant, of Point Richmond, is alleged to have failed to pay taxes owed for calendar years 2005 through 2009 by, among other things, concealing assets and income from the IRS. For the years 2005 through 2007, Grant concealed the nature, extent, and location of his assets by using a warehouse bank, prepaid debit cards, cashier’s checks, and postal money orders. For 2008 and 2009, Grant received taxable income of $310,129 and $327,729, respectively and failed to make individual income tax returns and pay income tax to the IRS. During 2008 and 2009, Grant attempted to conceal from the IRS his share of partnership income from Grant Engineering by not filing partnership tax returns and schedules, and concealing his income and assets using cashier’s checks and postal money orders.
Grant was arrested on Friday, Dec. 5, 2014, at his home in Point Richmond, Calif. and made his initial appearance in federal court in Oakland on the same day. Grant was release on a $100,000 unsecured bond. Grant’s next scheduled appearance is at 9:30 a.m. on Dec. 9, 2014, for identification of counsel before the Honorable Kandis A. Westmore, United States District Court Judge.
The maximum statutory sentence for tax evasion, in violation of Title 26 U.S.C. § 7201, is five years in prison and a fine of $250,000 or twice the intended gain or loss, whichever is greater. 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.
Colin Sampson is the Assistant U.S. Attorney who is prosecuting the case. The prosecution is the result of an investigation by the IRS, Criminal Investigation.
Please note that an indictment contains only allegations. As with all defendants, Richard Thomas Grant must be presumed innocent unless and until he is proven guilty.
Plant City Man Sentenced to More Than 11 Years for Armed RobberyRead the Press Release
Tampa, Florida – U.S. District Judge Virginia M. Hernandez Covington has sentenced Reginald Lynn Gaines (24, Plant City) to 11 years and 9 months in federal prison for robbing a convenience store, and using, carrying, and brandishing a firearm during that robbery. The court also ordered Gaines to pay $1,000 in restitution, which was the amount taken during the robbery. Gaines pleaded guilty on September 2, 2014.
According to testimony and court documents, on November 4, 2013, Gaines and others entered the Food Mart on Lock Street in Dade City carrying firearms. Gaines was armed with a shotgun, while the others had handguns. When they demanded money, the store clerk did not immediately open the register. Gaines then struck the clerk with the butt of his shotgun. He was apprehended the next day.
This case was investigated by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Pasco County Sheriff’s Office, and the Dade City Police Department. It was prosecuted by Assistant United States Attorney Adam M. Saltzman.
Owner of a Reisterstown Business Sentenced to Two Years in Prison for Tax EvasionRead the Press Release
Failed to Pay Over $238,000 in Taxes on Over $900,000 Embezzled From his Company
Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced Ramon Anthony Jadra, age 47, of Westminster, Maryland, today to two years in prison, followed by two years of supervised release, for tax evasion in connection with a scheme to defraud his family-owned business of more than $900,000 over a four-year period. Jadra owned 54% of the company and other family members owned the remaining 46%. Jadra also paid restitution of $283,481, as required by his plea agreement.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.“Jadra perpetuated a scheme that was driven by greed and self-interest,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office. “He cheated both his own company by illegally diverting corporate funds to himself and the American taxpayer by evading paying taxes on the substantial income he earned from these actions. Today's sentencing should serve as a stark reminder to others that you can’t plunder a business and not expect to pay a price. In Jadra’s case, the price includes prison time.”
According to his plea agreement, Jadra was the president and majority shareholder of a family-owned business located in Reisterstown, Maryland, that manufactures parts for the defense and aerospace industries. Beginning in 2008, Jadra fraudulently diverted company funds to himself.
Jadra carried out his scheme by causing checks to be written on the company’s bank account in the names of actual businesses with which Jadra or his company had dealings in the past, but which were not owed the amounts shown on the checks. These checks totaled $495,950 between 2008 and 2011. To avoid triggering the requirement that banks file a currency transaction report in connection with financial transactions involving more than $10,000 in cash, Jadra caused all of the checks to be issued in amounts of $9,500 or less.
As part of this scheme, Jadra established a check cashing account at a liquor store in Reisterstown, where he cashed fraudulently obtained checks totaling $368,350. Jadra then deposited $316,585 of these funds, again in amounts less than $10,000, in a checking account he had established in the name of DIA Solutions, a shell company that did not actually conduct any business.
In the spring of 2010, Jadra implemented a new aspect of his scheme. Jadra falsely advised his father and his company’s controller that DIA Solutions, an independent consulting firm, was entitled to receive 5% of the payments the company received on a contract worth over $6 million, that DIA Solutions had helped it obtain. Jadra instructed the company’s controller to issue a check to DIA Solutions for 5% of every payment that the company received on this contract. DIA Solutions had not in fact provided any goods or services, nor played any role in obtaining the contract in question. Once Jadra received these checks, totaling $313,218.02, he deposited them into the DIA Solutions bank account and then converted the money to his personal use.
Finally, in 2010 and 2011, Jadra implemented a third aspect of his fraudulent scheme. The manufacturing processes of Jadra’s company generated quantities of scrap metal, which it sold to two other companies. However, Jadra withheld this information from the company’s controller, who believed the company had to pay to have the scrap metal hauled away from the plant. This enabled Jadra to intercept checks from the two businesses that were tendered to Jadra’s company to pay for scrap metal it had sold, deposit the funds in the DIA Solutions bank account, and convert these funds to his own use. In all, Jadra derived $91,249.75 from this aspect of his scheme.
As a result of the schemes, from 2008 to 2011, Jadra fraudulently converted $900,418 from the company, and failed to pay $283,481 in taxes on this fraudulently obtained money. According to court documents Jadra’s reported income during that same time period was more than $4 million. Jadra used the majority of the embezzled funds for largely unsuccessful on-line stock trading. Other embezzled funds were used as follows: $50,000 down payment on a new 2012 BMW 535i costing $73,775.70; $14,512.58 for home renovations; $7,500 to buy a boat trailer; $31,295 to buy a watercraft; and a $15,929 down payment on a new Harley Davidson MC Screamin’ motorcycle costing $48,416.82.
United States Attorney Rod J. Rosenstein praised the IRS- Criminal Investigation for its work in the investigation and thanked Assistant U.S. Attorney Jefferson M. Gray, who prosecuted the case.
Ohio Man Sentenced for Threatening OfficersRead the Press Release
ABINGDON, VIRGINIA – A Crooksville, Ohio man, who threatened to shoot officers of the Lee County, Virginia Sherriff’s Office, was sentenced yesterday in the United States District Court for the Western District of Virginia in Abingdon.
Jeffrey Allen Hinkle, Jr., 31, of Crooksville, Ohio, previously pled guilty to one count of transmitting in interstate commerce a threat to injure another person. At his plea hearing, Hinkle admitted that on May 21, 2014, he called the Lee County, Virginia Sherriff’s Office and threated to “pull-up beside every cruiser . . .with [a] county deputy and shoot the officer in his face” if the Sheriff’s Office did not intervene in a civil dispute Hinkle’s relatives were having with a neighbor in Lee County, Virginia. Yesterday in District Court, Hinkle was sentenced to 30 months of federal incarceration.
“United States Attorney Timothy J. Heaphy praised the swift action of the Federal Bureau of Investigation and United States Marshal’s Service in responding to the threat and ensuring that Mr. Hinkle was promptly taken into custody, stating “Those who threaten law enforcement officers will always be vigorously prosecuted by our office.”
The investigation of the case was led by the Federal Bureau of Investigation with the assistance of the Lee County, Virginia Sheriff’s Office. The United States Marshals Service led the execution of the arrest warrant in Ohio. Special Assistant United States Attorney Kevin L. Jayne prosecuted the case for the United States.
New York Resident Sentenced to Federal Prison for Aggravated Identity Theft, Credit Card Fraud in Rhode IslandRead the Press Release
PROVIDENCE, R.I. – – Yvener Jean-Baptiste, 27, of Brooklyn, was sentenced today to 24 months in federal prison and ordered to pay more than $150,000 in restitution for using counterfeit credit cards with account numbers belonging to actual credit card owners to purchase Target and Wal-Mart store gift cards from stores in Rhode Island in November 2013, announced United States Attorney Peter F. Neronha; Ted A. Arruda, Resident Agent in Charge of the Providence Office of the U.S. Secret Service; and Lincoln Police Chief Brian W. Sullivan.
At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Jean-Baptiste to serve 3 years’ supervised release upon completion of his prison term and to pay restitution to the retailers in the amount of $158,576. Jean-Baptiste pleaded guilty on September 15, 2014, to one count each of credit card fraud and aggravated identity theft
At the time of his guilty plea, Jean-Baptiste admitted to the court that on five occasions between November 1 and November 30, 2013, he and others purchased gift cards totaling $172,661.09 at Target stores in Lincoln, at the Warwick Mall and on Bald Hill Road, and at a Wal-Mart store in Warwick using counterfeit credit cards with actual account numbers belonging to other individuals. The owners of those account numbers were unaware that their personal identifying information was used to produce counterfeit credit cards.
Jean-Baptiste admitted to the court that he provided the purchased gift cards to an individual in New York and that he typically received $200 for every $800 fraudulent transaction he conducted. The investigation revealed that the gift cards were redeemed at stores in New York the same day or the day after being purchased in Rhode Island.
According to information presented to the court, Jean-Baptiste returned to the Target store in Lincoln on November 30, 2013, one day after he and another person purchased $75,894.01 worth of Target gift cards using six counterfeit credit cards. He returned to the store in a vehicle previously identified by a Target employee as being driven by the individuals who committed credit card fraud the previous day. The vehicle was stopped by Lincoln Police and Jean-Baptiste was arrested after Lincoln Police discovered ten counterfeit credit cards, a counterfeit driver’s license and multiple Target gift cards inside the vehicle.
The case was prosecuted by Assistant U.S. Attorney Lee H. Vilker.
The matter was investigated by the Lincoln Police Department and the U.S. Secret Service.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]New Orleans Man Sentenced to 30 Years in Drug-Related MurderRead the Press Release
U.S. Attorney Kenneth A. Polite announced that EVANS LEWIS, age 23, of New Orleans, was sentenced today for his role in the shooting death of a New Orleans man. On February 26, 2014, LEWIS pled guilty to murdering an unarmed New Orleans man, Gregory Keys, and shooting another individual, Kendrick Smothers, during the course of a drug trafficking crime.
LEWIS was sentenced to 30 years imprisonment, 5 years of supervised release, and was ordered to pay a special assessment of $100 by U.S. District Judge Nannette Jolivette Brown.
“For killing a New Orleans resident and shooting another, Evan Lewis will now spend the next three decades in prison,” stated U.S. Attorney Polite. “This lengthy sentence reflects the commitment of our federal, state, and local partners in using all necessary resources to remove the most violent offenders from our streets for as long as possible.”
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation, the Bureau of Alcohol Tobacco and Firearms, the New Orleans Police Department, Jefferson Parish Sheriff=s Office and St. Tammany Parish Sheriff=s Office in investigating this matter. Assistant U.S. Attorneys Sharan Lieberman, Maurice Landrieu, Jr., and Matthew Payne were in charge of the prosecution.