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Friday 5 December 2014
New Orleans Man Admits to Stealing Nearly $250,000 from Two Federal AgenciesRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JAMES CONRAD, JR., age 49, of New Orleans, pled guilty yesterday to theft of government funds.
CONRAD admitted that from 1998 to 2013, he stole a total of $247,800 from the federal government. CONRAD jointly held a bank account with an individual who received Social Security Administration and Office of Personnel Management benefits. Entitlement to benefits terminated when the individual died in 1998, but the agencies, unaware of the death, continued wiring payments to the bank account until 2013. CONRAD knew that the payments did not belong to him. Instead of notifying the agencies of the improper payments, CONRAD spent them on himself.
CONRAD faces up to ten years’ incarceration and a fine of up to twice the theft amount. U.S. District Judge Nannette Jolivette Brown scheduled sentencing for April 10, 2015.
U.S. Attorney Polite praised the work of the Social Security Administration - Office of Inspector General and the Office of Personnel Management - Office of Inspector General in investigating this matter. Assistant U.S. Attorney Chandra Menon is in charge of this prosecution.
New Haven Man Involved in Crack Distribution Ring Sentenced to More Than 11 Years in Federal PrisonRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that VINCENT CLARK, also known as “Nu-Nu” and “Duke,” 33, of New Haven, was sentenced today by Senior U.S. District Judge Ellen Bree Burns in New Haven to 140 months of imprisonment, followed by five years of supervised release, for trafficking crack cocaine.
According to court documents and statements made in court, this matter stems from “Operation Bloodline,” a joint law enforcement investigation targeting narcotics trafficking and gang violence in the Dwight-Kensington and Fair Haven sections of New Haven. Led by the DEA New Haven Task Force and the New Haven and Hamden Police Departments, the year-long investigation included the use of court-authorized wiretaps on numerous telephones, extensive physical surveillance, controlled purchases of narcotics, execution of search warrants, and seizures of narcotics and firearms. More than 100 individuals were charged as a result of the investigation.
The investigation revealed that Kevin Wilson, also known as “Nature,” operated a large-scale drug trafficking operation in the greater New Haven area. CLARK served as Wilson’s “right-hand man,” assisting Wilson in the conversion of cocaine to crack cocaine, the delivery of crack to customers and the collection of drug proceeds.
On April 19, 2012, before he was indicted on federal charges, law enforcement officers attempted to arrest CLARK pursuant to an outstanding state arrest warrant, apprehended him after a foot chase and recovered multiple baggies of crack cocaine from his person. He has been detained since his arrest. On April 5, 2013, he pleaded guilty to one count of conspiracy to distribute, and to possess with intent to distribute, 280 grams or more of cocaine base (“crack”).
CLARK’s criminal history includes prior convictions for drug offenses and for acts of violence.
Wilson has pleaded guilty and awaits sentencing.
This matter has been investigated by the Drug Enforcement Administration’s New Haven Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Haven, Hamden, West Haven, North Haven, Branford, Ansonia and Meriden Police Departments. The United States Marshals Service, the Connecticut State Police, the Connecticut Department of Correction, Parole and Community Services and the Milford, Hartford, New Britain, North Branford and Stratford Police Departments have provided valuable assistance to the investigation.
This case is being prosecuted by Assistant U.S. Attorneys S. Dave Vatti and Marc Silverman.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Navy Engineer Arrested for Attempting to Send USS Gerald R. Ford Schematics to the Egyptian GovernmentRead the Press Release
Mostafa Ahmed Awwad, 35, of Yorktown, Virginia, was arrested today on charges of attempting to steal schematics of the Navy’s newest nuclear aircraft carrier, the USS Gerald R. Ford, and pass the schematics to whom he believed was an Egyptian government official.
Assistant Attorney General for National Security John Carlin, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, Special Agent in Charge Royce E. Curtin of the FBI’s Norfolk Field Office and Special Agent in Charge Susan Triesch of the Naval Criminal Investigative Service's Norfolk, Virginia, Field Office made the announcement.
Awwad is charged with two counts of attempting to export defense articles and technical data, and faces a statutory maximum sentence of 20 years in prison on each count if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors. Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
According to an FBI affidavit submitted to the court in support of search warrants, Awwad began working for the Department of Navy in February 2014 as a civilian general engineer in the Nuclear Engineering and Planning Department at Norfolk Naval Shipyard.
Based on joint investigation, an FBI undercover agent speaking in Arabic contacted Awwad by telephone on Sept. 18, 2014, and asked to meet him the following day. Without seeking additional information from the caller, Awwad agreed. The next day, Awwad met with the undercover FBI agent, who was posing as an Egyptian intelligence officer, in a park in Hampton, Virginia. During the meeting Awwad claimed it was his intention to utilize his position of trust with the U.S. Navy to obtain military technology for use by the Egyptian government, including but not limited to, the designs of the USS Gerald R. Ford nuclear aircraft carrier. Awwad agreed to conduct clandestine communications with the undercover FBI agent by email and unattributable telephones and to conduct “dead drops” in a concealed location in the park.
On Oct. 9, 2014, Awwad and the undercover FBI agent met at a hotel where Awwad described a detailed plan to circumvent U.S. Navy computer security by installing software on his restricted computer system that would enable him to copy documents without causing a security alert. At this time, Awwad also provided the undercover FBI agent four computer aided drawings of a U.S. nuclear aircraft carrier downloaded from the Navy Nuclear Propulsion Information system. These drawings were marked with warnings that foreign distribution could result in criminal prosecution. During the discussion, Awwad indicated his understanding that the drawings would be sent to and used in Egypt. Awwad also asked the undercover FBI agent for $1,500 to purchase a pinhole camera he would wear around the shipyard to photograph restricted material. At the conclusion of the meeting, Awwad agreed to provide the undercover FBI agent with passport photos which would be used to produce a fraudulent Egyptian passport so that Awwad could travel to Egypt without alerting U.S. government officials.
On Oct. 23, 2014, Awwad traveled to the pre-arranged dead drop site, situated on a secluded hiking trail in a park, and utilized a concealed container disguised in a hole in the ground. He retrieved $3,000 in cash before placing a one-terabyte external hard drive and two passport photos inside. The FBI later collected the contents of the dead drop container.
On Nov. 28, 2014, Awwad was observed entering his office at the Norfolk Naval Shipyard holding a cardboard tube about three feet long. Once in his office, Awwad opened the cardboard tube and took out several white sheets which appeared to be design schematics of an aircraft carrier. Awwad then placed the schematics on the floor of his office and photographed them. After approximately 45 minutes of viewing the schematics and taking photographs, Awwad placed all the schematics back in the cardboard tube and left his office.
Awwad made his initial appearance in federal court today, and is scheduled to appear for a detention hearing on Dec. 10, 2014, at 3:30 p.m. at the federal courthouse in Norfolk.
This case was investigated by the FBI’s Norfolk Field Office and the Naval Criminal Investigative Service, in cooperation with the Department of Navy. Prosecuting the case on behalf of the United States are Assistant U.S. Attorneys Benjamin L. Hatch and Joseph E. DePadilla for the Eastern District of Virginia and Department of Justice, Trial Attorney Heather M. Schmidt for the Justice Department’s National Security Division Counterespionage Section.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-163.
Navy Engineer Arrested for Attempting to Send USS Gerald R. Ford Schematics to the Egyptian GovernmentRead the Press Release
NORFOLK, Va. – Mostafa Ahmed Awwad, 35, of Yorktown, Virginia, was arrested today on charges of attempting to steal schematics of the Navy’s newest nuclear aircraft carrier, the USS Gerald R. Ford, and pass the schematics to whom he believed was an Egyptian government official.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; John Carlin, Assistant Attorney General for National Security; Royce E. Curtin, Special Agent in Charge of the FBI’s Norfolk Field Office; and Susan Triesch, Special Agent in Charge of the Naval Criminal Investigative Service's Norfolk Field Office, made the announcement. Awwad is charged with two counts of attempted exportation of defense articles and technical data, and faces a maximum penalty of 20 years in prison on each count if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors. Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
According to an FBI affidavit submitted to the court in support of search warrants, Awwad began working for the Department of Navy in February 2014 as a civilian general engineer in the Nuclear Engineering and Planning Department at Norfolk Naval Shipyard. Based on joint investigation, an FBI undercover agent speaking in Arabic contacted Awwad by telephone on September 18, 2014, and asked to meet him the following day. Without seeking additional information from the caller, Awwad agreed.The next day Awwad met with the undercover FBI agent, who was posing as an Egyptian intelligence officer, in a park in Hampton, Virginia. During the meeting Awwad claimed it was his intention to utilize his position of trust with the U.S. Navy to obtain military technology for use by the Egyptian government, including but not limited to, the designs of the USS Gerald R. Ford nuclear aircraft carrier. Awwad agreed to conduct clandestine communications with the undercover FBI agent by email and unattributable telephones and to conduct “dead drops” in a concealed location in the park.
On October 9, 2014, Awwad and the undercover FBI agent met at a hotel where Awwad described a detailed plan to circumvent U.S. Navy computer security by installing software on his restricted computer system that would enable him to copy documents without causing a security alert. At this time Awwad also provided the undercover FBI agent four Computer Aided Drawings of a U.S. nuclear aircraft carrier downloaded from the Navy Nuclear Propulsion Information system. These drawings were marked with warnings that foreign distribution could result in criminal prosecution. During the discussion, Awwad indicated his understanding that the drawings would be sent to and used in Egypt. Awwad also asked the undercover FBI agent for $1,500 to purchase a pinhole camera he would wear around the shipyard to photograph restricted material. At the conclusion of the meeting, Awwad agreed to provide the undercover FBI agent with passport photos which would be used to produce a fraudulent Egyptian passport so Awwad could travel to Egypt without alerting U.S. government officials.
On October 23, 2014, Awwad traveled to the pre-arranged dead drop site situated on a secluded hiking trail, and utilized a concealed container disguised in a hole in the ground. He retrieved $3,000 in cash before placing a one terabyte external hard drive and two passport photos inside. The FBI later collected the contents of the dead drop container.
On November 28, 2014, Awwad was observed entering his office at the Norfolk Naval Shipyard holding a cardboard tube about three feet long. Once in his office, Awwad opened the cardboard tube and took out several white sheets which appeared to be design schematics of an aircraft carrier. Awwad then placed the schematics on the floor of his office and photographed them. After approximately 45 minutes of viewing the schematics and taking photographs, Awwad placed all the schematics back in the cardboard tube and left his office.
Awwad made his initial appearance in federal court today, and is scheduled to appear for a detention hearing on December 10, 2014, at 3:30 p.m. at the federal courthouse in Norfolk, Virginia.
This case was investigated by the FBI’s Norfolk Field Office and the Naval Criminal Investigative Service, in cooperation with the Department of Navy. Prosecuting the case on behalf of the United States are Assistant U.S. Attorney’s Benjamin L. Hatch and Joseph E. DePadilla, and Department of Justice, National Security Division Counterespionage Trial Attorney Heather M. Schmidt.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-163.Musician Sentenced to Prison for Enticement of a MinorRead the Press Release
Follow @NDFLNewsGAINESVILLE, FLORIDA – Ryan David Burd, 29, has been sentenced to ten years in federal prison for inducing and enticing a minor to engage in sexual activity. The sentence, imposed on December 3, 2014, was announced by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
In February 2014, parents of the minor victim contacted law enforcement to report Burd=s inappropriate sexual advances to their 14-year-old daughter. Burd, a drummer for the Dallas Brass musical ensemble, had met the girl during a fundraising concert in Gainesville where Dallas Brass had performed and led a music clinic for high school and middle school students. They gave consent for investigators to access their daughter’s Facebook account and her phone. A few days later, Burd messaged the girl’s cell phone and made arrangements to have sex with her at her home. When he arrived at her house, he was arrested.
The defendant pled guilty earlier this year to one count of knowingly attempting to persuade, induce and entice a minor to engage in sexual activity.
The investigation was led by agencies with the North Florida Internet Crimes Against Children Task Force, including the Alachua County Sheriff’s Office. This case was brought as part of Project Safe Childhood, a nationwide initiative launched by the Department of Justice in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys= Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc
The case was prosecuted by Assistant United States Attorney Frank Williams.Moundsville Man Charged with Cocaine TraffickingRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistWHEELING, WEST VIRGINIA – Kenneth Smith, 25, of Moundsville, West Virginia was arrested today after a federal grand jury returned a five-count indictment charging him with cocaine trafficking, United States Attorney William J. Ihlenfeld, II announced.
An investigation by the Ohio Valley Drug and Violent Crime Task Force, a HIDTA-funded initiative, revealed that Smith repeatedly sold crack cocaine throughout late 2013 and early 2014. In November 2013, Smith was discovered selling crack cocaine near Madison Elementary School in Wheeling, West Virginia.
Smith is charged with:
• One count of “Distribution of Cocaine Base within 1,000 feet of a Protected Location.” He faces up to forty years in prison and a fine of up to $2,000,000.00.
• Three counts of “Distribution of Cocaine Base.” He faces up to twenty years in prison and fine of up to $1,000,000.00 on each count.
• One count of “Possession with Intent to Distribute Cocaine Base.” He faces up to twenty 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 David Perri is prosecuting the case on behalf of the government.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Member of Cherry Hill Group ‘UDH’ Sentenced to 10 Years in Prison for Conspiracy to Distribute Heroin and Crack CocaineRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell III sentenced William Simmons, a/k/a “Big Chew,” age 32, of Baltimore, today to 10 years in prison, followed by five years of supervised release, for conspiracy to distribute and possesses with the intent to distribute heroin and crack cocaine.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Gregg L. Bernstein.
According to his plea agreement, from 2002 through 2013, Simmons distributed crack cocaine and heroin in the Cherry Hill area of Baltimore. Simmons is a member of the UDH organization, which operates in the area of Cherry Hill known as “Up the Hill” or “Up da Hill.” UDH members and associates committed various crimes to include distribution of controlled dangerous substances, such as crack cocaine, heroin, cocaine and oxycodone. UDH members and associates used violence and intimidation to protect themselves, the organization, and their control of the drug trade in part of Cherry Hill.For several years Simmons assisted a fellow UDH member, helping him to run drug distribution shops in the UDH area of Cherry Hill. On November 22, 2013, after a confidential informant purchased heroin from Simmons, Simmons and another UDH member were stopped in a vehicle in Anne Arundel County. The vehicle was searched and officers recovered 59 gel caps of heroin, weighing approximately 17.06 grams and a bag of cocaine, weighing approximately 29.68 grams. Throughout the course of Simmons’s involvement in the UDH drug conspiracy, the conspirators distributed between 3 and 10 kilograms of heroin and between 840 grams and 2.8 kilograms of crack cocaine.
United States Attorney Rod J. Rosenstein praised the ATF, Baltimore Police Department, and Baltimore City State’s Attorney’s Office for their work in the investigation and thanked the FBI, Baltimore County Police Department, Anne Arundel County Police Department, and Baltimore City Sheriff’s Office for their assistance. Mr. Rosenstein thanked Assistant United States Attorneys Andrea L. Smith and Seema Mittal, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
Manhattan U.S. Attorney and FBI Assistant Director Announce Charges Against Brooklyn Man in Scheme to Defraud Elderly Victims Across the United StatesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a Complaint charging ALLAH JUSTICE MCQUEEN with conspiracy to commit wire fraud in connection with a scheme that targeted and victimized elderly people across the United States. As alleged, MCQUEEN and his co-conspirators tricked each victim, by phone, into believing that the victim’s grandchild had just been arrested on a narcotics offense and needed thousands of dollars in bail money immediately to avoid prison. The Complaint describes MCQUEEN’s victimization of 17 elderly individuals in New York and across the United States. MCQUEEN was arrested this morning and will be presented later today in federal court in Manhattan.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Allah Justice McQueen showed no justice to his elderly victims. Instead, he exploited the emotions of vulnerable grandparents by convincing them that those they loved were in trouble and needed money. Not only did he allegedly swindle grandparents out of thousands of dollars, he also caused them considerable emotional distress. We are seeing more and more fraud schemes that target vulnerable people, and we urge you to contact our Victim/Witness Unit if you believe you have been affected.”
FBI Assistant Director-in-Charge Venizelos said: “Courtesy and compassion are among the many traits valued by the elderly, making them attractive targets for criminals who seek to capitalize on their trusting nature. McQueen allegedly preyed upon some of society's most vulnerable citizens in a so-called grandparent scam that pinched more than pennies. In this and all cases, justice will certainly come to those who engage in crimes of this nature.”
According to the Complaint unsealed today in Manhattan federal court:
Beginning in approximately 2013, MCQUEEN and his co-conspirators perpetrated a scheme to defraud elderly victims around the United States by tricking them into believing their grandchildren had been imprisoned and needed immediate bail money. In particular, in each case, a member of the conspiracy contacted the victim by phone, purported to be a law enforcement official or attorney, and falsely claimed that the victim’s grandchild had been taken into custody for a narcotics offense and would not be released unless the victim paid thousands of dollars, and in some cases tens of thousands of dollars, in purported bail money. A member of the conspiracy also frequently posed on the call as the victim’s grandchild, typically crying and pleading with the elderly victim to send money to secure the grandchild’s release from jail, and asking the victim not to contact any other family members because the grandchild felt ashamed. In each case, in extreme distress, the victim sent thousands of dollars, at a minimum, as instructed, to certain individuals who, among other things, provided that money to MCQUEEN at his direction. In each case, after paying the “bail” money as directed, the victim directly contacted his or her grandchild and thereupon learned that the grandchild had not, in fact, been arrested, that the grandchild knew nothing about the claims made on the call to the victim, and that the call was fraudulent.
For example, among the 17 examples set forth in the complaint, one 79 year-old victim in New York received a phone call in August 2013 from an individual who identified himself as a police sergeant and claimed that the victim’s grandson had been arrested after drugs were discovered in a car in which the grandson was a passenger. The purported sergeant said the grandson would be released if the victim sent $6,000 in bail money as directed. The victim, who briefly heard, on the phone, an individual who sounded like the victim’s grandson, wired the money as directed. The victim subsequently spoke directly with the victim’s grandson, and learned that he had not been arrested, and knew nothing about the purported sergeant or the basis for his request for bail money. The victim never received any money back from the purported sergeant.
In fact, the victim’s money was wired to particular individuals working with MCQUEEN who collected the wired funds on MCQUEEN’s behalf and provided the money to MCQUEEN. As to a portion of the victim’s money, MCQUEEN appeared personally at a particular location in Brooklyn to arrange for the collection of the proceeds. MCQUEEN subsequently deposited another portion of the money sent by the victim directly into his personal bank account.
MCQUEEN, 33, of Brooklyn, New York, is charged with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the FBI.
If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact Wendy Olsen-Clancy, the Victim Witness Coordinator at the United States Attorney's Office for the Southern District of New York, at (866) 874-8900, or [email protected]. For additional information, go to: http://www.usdoj.gov/usao/nys/victimwitness.html.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Elisha Kobre is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Allah J. McQueen Complaint
Leader of Burglary Ring Sentenced to over Five Years in Prison for Dozens of Commercial Burglaries and for ArsonRead the Press Release
Robbed Businesses in Maryland, Virginia, West Virginia and Pennsylvania
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Carl Paschall, Sr., age 54, of Halethorpe, today to 66 months in prison, followed by three years of supervised release, for conspiring to commit bank burglary and arson of property used in interstate commerce. Judge Motz also ordered Paschall to forfeit $200,000.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Chief Gary Gardner of the Howard County Police Department; Chief James W. Johnson of the Baltimore County Police Department; Anne Arundel County Police Chief Kevin Davis; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Otis E. Harris, Jr., Special Agent in Charge, Coast Guard Investigative Service, Chesapeake Region; and Commissioner Anthony W. Batts of the Baltimore Police Department.
According to his plea agreement, from at least November 2010 until his arrest in July 2013, Carl Paschall, Sr. was the leader of a group that included his son, Carl Paschall Jr., Chad Paschall, Thomas Ellis, and Michael Johnson, who conspired to commit commercial burglaries in Maryland, Virginia, West Virginia, and Pennsylvania. Paschall, Sr. also conspired with defendants in a related case, David Paschall, Jr., Mark Johnson, Ronald Henderson and others, to commit the robberies. The conspirators stole cash, money orders, stamps, silver bars, jewelry, cigarettes, lottery tickets, prescription drugs, food, beverages, safes, laptop computers, cell phones, electronics, vehicles and other valuable items from gas stations, convenience stores, banks, credit unions and other commercial establishments during the night. The conspirators often stole or attempted to steal cash from ATMs.
The conspirators usually cut power lines, telephone lines, cables and other wires before entering a business. They used vise grips, sledgehammers, chop saws, grinders and blow torches to enter the business, and then often waited – for several minutes or sometimes up to several hours – before ransacking the business of its valuable items.
Carl Paschall, Sr. admitted that he committed, or attempted to commit, dozens of commercial burglaries and that the loss resulting from these burglaries exceeded $800,000.
On May 26, 2012, Carl Paschall, Sr. and his son, Carl Paschall, Jr. stole a white 2012 Ford E250 panel van from a rental car office in Martinsburg, West Virginia, which they used during three commercial burglaries committed on May 26th and 27th at businesses in West Virginia. On May 31, 2012, the conspirators drove the van to Newport Road in Woodbine, Maryland and parked the vehicle on the side of the road. The conspirators left some evidence of their crimes inside the stolen van, including stolen safes and lottery tickets. The applied an ignitable fluid inside the vehicle and set it on fire. Early in the morning on June 1, 2012, Howard County Fire and Rescue Department responded to the scene and encountered the van fully engulfed in flames. After extinguishing the fire, the remaining contents of the van were preserved for law enforcement.
Carl Paschall, Jr., age 32, of Baltimore, previously pleaded guilty and was sentenced to 66 months in prison and was ordered to pay restitution of $200,000. Chad Paschall, age 28, of Baltimore; David Paschall, Jr., age 55, of Catonsville, Maryland; Mark Johnson, age 51, of Baltimore; Ronald Henderson, age 52, of Pasadena, Maryland; Thomas Daniel Ellis, age 24, and Michael Johnson, age 25, both of Baltimore, also pleaded guilty to their participation in the conspiracy. All are awaiting sentencing except Henderson, Ellis and Michael Johnson, who were sentenced to, 30 months in prison, a year and a day in prison, and three years of probation, respectively.
United States Attorney Rod J. Rosenstein commended the DEA, Howard County Police Department, Baltimore County Police Department; Anne Arundel County Department, ATF, Coast Guard Investigative Service and Baltimore Police Department for their work in the investigation. Mr. Rosenstein also praised the many local and state agencies in Virginia, West Virginia and Pennsylvania for their assistance in the investigation.
Mr. Rosenstein thanked Assistant United States Attorneys David I. Sharfstein and Andrea L. Smith, who are prosecuting this case.
Leader of “River Otter Preppers” SentencedRead the Press Release
Tampa, Florida – U.S. District Judge Virginia M. Hernandez Covington has sentenced Martin Howard Winters (55, Valrico), the leader of the River Otter Preppers organization, to 30 months’ imprisonment for manufacturing and possessing destructive devices. He pleaded guilty on August 28, 2014.
On November 20, 2014, Winters’s co-defendant, Michael Keith Bonta (50, Valrico), was sentenced to 18 months in federal prison for making the destructive devices for Winters. He pleaded guilty on September 2, 2014.
According to testimony and court documents, Winters designed the destructive devices and directed Bonta to manufacture them according to Winters’s specifications. The devices have been described as booby traps operated with a tripwire that project pellets from a 12-gauge shotgun shell. Bonta admitted to having made approximately 20 of the devices for Winters.
This case was investigated by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the United States Marshals Service. It was prosecuted by Assistant United States Attorney Donald L. Hansen.
Latrobe Woman Sentenced to Two Years in Prison for Income Tax EvasionRead the Press Release
PITTSBURGH - A resident of Latrobe, Pa., has been sentenced in federal court to 24 months imprisonment on her conviction of income tax evasion, United States Attorney David J. Hickton announced today.
United States District Judge Arthur J. Schwab imposed the sentence on Debra J. Feather.
According to information presented to the court, during the years 2007 through 2010, the defendant’s joint federal tax returns were false since they failed to declare substantial income and thus resulted in substantial additional tax owing to the United States.
Prior to imposing sentence, Judge Schwab stated that like many tax evaders, she came before him with no criminal history. But this was a serious crime since Feather had failed to declare income she had embezzled during the last 12 years of her employment at a law firm where she worked for more than 40 years.
Assistant United States Attorney Leo M. Dillon prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Internal Revenue Service, Criminal Investigation for the investigation leading to the successful prosecution of Feather.
Lansing Sex Trafficker Convicted in Federal CourtRead the Press Release
GRAND RAPIDS, MICHIGAN – Patrick Miles, U.S. Attorney for the Western District of Michigan announced today that Christopher T. Bryant, 24, of Detroit was convicted on all five counts of a superseding indictment charging sex trafficking of minors; sex trafficking by force, fraud, or coercion; and interstate transportation for the purposes of prostitution. This was the second federal child sex trafficking case prosecuted by the U.S. Attorney’s Office for the Western District of Michigan. Eddie Jackson, the defendant in the first case prosecuted by this office, was convicted of child sex trafficking in April 2014.
U.S. Attorney Miles stated, “This U.S. Attorney’s Office and law enforcement are aggressively fighting child exploitation in its various forms in the Western District of Michigan. Predators who take advantage of the vulnerable and support the markets for child sex as well as human trafficking are going to face justice and answer for the harm they do to society.”
Bryant sex trafficked three 16 and 17-year-old girls in Lansing from March through July 2014. Bryant also transported an adult woman from Michigan to Arizona in August 2012 for prostitution, and then used force, fraud, or coercion to cause her to engage in sex with customers in Phoenix in early September of that year. The victims testified and described the multiple instances when Bryant threatened, beat, or strangled them to force them into prostitution or when Bryant became irate when they were not complying with his orders to have sex for money. Bryant also controlled the victims with alcohol and drugs and told them they would get rich selling sex. However, Bryant, who has dollar signs tattooed across his face, kept all the money. The jury saw internet ads that Bryant posted selling the victims for sex, numerous pictures from social media of Bryant posing with large sums of cash in hotel rooms, and an online video of Bryant and others promoting themselves as pimps. After three days of testimony, it took the jury less than an hour to find Bryant guilty of all counts.
The trial was before Chief U.S. District Judge Paul L. Maloney. At sentencing, which is scheduled for April 20, 2015 at 1:30 p.m., Bryant will face a potential life sentence. The FBI (FBI) and Ingham County Sheriff’s Office investigated the case jointly. Assistant U.S. Attorneys Tessa Hessmiller and Russ Kavalhuna are prosecuting the case.
The case is part of Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. The U.S. Attorney’s Office, county prosecutor's offices; and federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov. Individuals with information or concerns about possible child exploitation should contact local law enforcement.
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KC Man Sentenced to 25 Years for Illegal Firearms, Sold Weapon used in MurderRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Kansas City, Mo., man has been sentenced in federal court for illegally possessing numerous firearms, including a handgun that was used to commit a murder.
Michael L. Bradford, also known as Derrick Lamont Brown, 30, of Kansas City, was sentenced by U.S. District Judge Greg Kays on Thursday, Dec. 4, 2014, to 25 years in federal prison without parole.
On May 2, 2014, Bradford pleaded guilty to two counts of being a felon in possession of firearms and one count of distributing PCP and marijuana.
Bradford admitted that he sold a Llama .38-caliber revolver, which had been used in a murder less than a week earlier, to undercover law enforcement officers on Nov. 5, 2012. ATF agents and Kansas City police officers were engaged in a nearly year-long undercover operation to address violent crime, illegal firearms trafficking and drug trafficking in the metropolitan area. They operated an undercover storefront resulting in the undercover purchase of many firearms.
Bradford told the undercover operators that the firearm was reported stolen but not used in a crime, however, there was no stolen firearm report located for this weapon. Testing performed after Bradford sold this pistol to the storefront determined it matched two of the three bullets recovered from the body of David Lablance, who had been shot to death on Oct. 30, 2012.
Bradford was one of the last persons to have contact with Lablance before his death. Bradford and Lablance also had been in the storefront together on Sept. 22, 2012, when Lablance sold a grenade, with the deal brokered by Bradford. The device they sold was initially thought to be a live functioning explosive device; however, upon further testing it was determined the explosive charge had been removed and the fuse had been “expended.”
During the storefront operation, Bradford personally sold eight handguns and three long guns. He assisted with the sale of an additional five long guns. Two of the handguns Bradford personally sold were stolen. One of the guns on which he assisted had an obliterated serial number.
Bradford also sold marijuana (8.6 grams) and PCP (10.6 grams and 1.5 grams) during the storefront operation. During each of these drug sales, he was also selling firearms he brought to the storefront. On two occasions when he was at the storefront to sell weapons, Bradford made it clear that he was personally armed, not just with the guns he was selling.
Bradford had also been the target of an earlier unrelated narcotics investigation. As police officers approached Bradford’s residence on Sept. 5, 2012, to execute a search warrant, Bradford was observed walking down the street. He was arrested and officers located a loaded Smith and Wesson .40-caliber pistol that Bradford had tossed nearby.
Bradford was arrested on Nov. 13, 2012, following a traffic stop in which he was the driver. A Smith and Wesson .38-caliber handgun was located behind the front seat and a bottle containing PCP was located on the front seat. There was also a small child in the backseat near the firearm and a female adult passenger.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Bradford has two prior felony convictions for armed criminal action, two prior felony convictions for robbery and one prior felony conviction for burglary.
This case was prosecuted by Assistant U.S. Attorney Bruce Rhoades. It was investigated by the Kansas City, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.Justice Department Investigating Sexual Assault Response by the University of New MexicoRead the Press Release
ALBUQUERQUE – The Department of Justice is investigating multiple complaints regarding the University of New Mexico’s handling of reported sexual assaults and sexual harassment of students at the University. As part of the review, the department will evaluate the University’s policies and practices for preventing sexual assault and sexual harassment, and for investigating and responding to student complaints of sexual violence, sexual harassment, and retaliation. The investigation is being conducted under Title IV of the Civil Rights Act of 1964 and Title IX of the Education Amendments of 1972, which both prohibit sex discrimination in education programs.
Attorneys from the Educational Opportunities Section of the Department of Justice’s Civil Rights Division and the U.S. Attorney’s Office for the District of New Mexico are conducting this investigation. Anyone with information related to sexual assaults or sexual harassment at the University of New Mexico is encouraged to contact the Department of Justice at (855) 856-2048 or [email protected].
The enforcement of Title IV and Title IX are top priorities of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt. Additional information about the U.S. Attorney’s Office for the District of New Mexico is available on its website at www.justice.gov/usao/nm. For more information about the Administration’s efforts on prevention and response to sexual assault and sexual harassment on college and university campuses, please visit www.notalone.gov.
Justice Department Announces Settlement with Virginia Bus Company to Ensure Accessibility for People with DisabilitiesRead the Press Release
The Justice Department announced today that it has entered into a settlement under the Americans with Disabilities Act (ADA) with DC Trails Inc., a bus transportation company in Lorton, Virginia, that ensures that their buses are accessible to people with disabilities, including individuals who use wheelchairs or other mobility aids. DC Trails is a covered large, fixed-route over-the-road bus operator under the ADA.
The settlement is the result of collaborative enforcement efforts between the Civil Rights Division at the Justice Department, the United States Attorney’s Office for the Eastern District of Virginia and the Federal Motor Carrier Safety Administration (FMCSA) of the U.S. Department of Transportation (DOT). The agreement remedies violations by DC Trails, including failing to provide accessible buses for all trips, failing to report the number of passengers with disabilities that used the lift to board, requiring individuals with disabilities to provide advance notice prior to a trip and failing to train its staff on accessibility requirements. The settlement agreement requires DC Trails to:
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Comply with all ADA requirements for accessible service, and not exclude persons with disabilities from their transportation services;
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Ensure that the company’s employees and contractors do not require or otherwise inform passengers with disabilities who use or seek to use DC Trails’ fixed route service that they must provide advance notice in order to use an accessible bus;
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Ensure that DC Trails only uses wheelchair-accessible buses for its fixed route service; and
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Train all employees and contractors on the requirements of the ADA for large, fixed-route over the road bus operators.
“Intercity bus service is a growing and effective means of affordable transportation across this country,” said Assistant Attorney General Vanita Gupta of the Civil Rights Division. “People with disabilities must be able to count on accessible bus service that is equal to the service provided to others.”
“This settlement agreement demonstrates the United States Attorney’s Office’s commitment to ensure that individuals with disabilities receive equal access to public accommodations, including transportation services that are operated out of Northern Virginia,” said U.S. Attorney Dana Boente for the Eastern District of Virginia.
This is the Justice Department’s 24th settlement with bus companies over the past several years to ensure compliance with accessibility obligations.
Title III of the ADA prohibits discrimination against people with disabilities by public accommodations, including large over-the-road bus companies. DOT’s regulations implementing the ADA require that these companies perform regular maintenance checks to ensure that wheelchair lifts work, provide prompt accessible service with an alternative carrier if the company does not have a lift-equipped bus, train their employees on accessibility requirements, and file annual accessibility reports with the FMCSA.
This matter was handled for the Department by Assistant United States Attorney Steven Gordon, Coordinator of the United States Attorney’s Office’s Civil Rights Enforcement Program, and David W. Knight of the Civil Rights Division.
People interested in finding out more about the ADA or this settlement can call the toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or access the ADA website at www.ada.gov.
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Jury Convicts Tennessee Sex Offender for Enticement of A Minor and Travel with Intent to Engage in Illicit Sexual ConductRead the Press Release
Urbana, Ill. – A jury deliberated for less than one hour yesterday before returning guilty verdicts against Joseph Cain Harrison, 37, of Nashville, Tenn., for enticement of a minor and two counts of travel with the intent to engage in illicit sexual conduct. The jury also found that Harrison was a convicted sex offender at the time he committed the offenses in Champaign County, Ill. Sentencing for Harrison is scheduled on April 6, 2015, before U.S. District Judge Sue E. Myerscough in Urbana.
During Harrison’s trial, which began on Tuesday, Dec. 2, 2014, the government presented evidence that between July 1, 2011, to Jan. 20, 2012, Harrison used the Internet and a cellular telephone to entice an individual whom he believed to be 13 years of age to engage in sexual activity. The jury also heard evidence that Harrison traveled from Nashville, Tenn., to Champaign, Ill., on two occasions, Jan. 13, 2012, and Jan. 17, 2012, for the purpose of engaging in any illicit sexual conduct with a minor.
Harrison was indicted by a grand jury in March 2012, following his arrest in the Middle District of Tennessee on January 20, 2012. Harrison has remained in the custody of the U.S. Marshals Service since his arrest.
Enticement of a minor carries a statutory penalty is no less than 10 years in prison and up to life in prison. For each count of travel with intent to engage in illicit sexual conduct, the penalty is up to 30 years in prison; however, if a defendant has a prior qualifying sex conviction, the maximum penalty for this offense is 60 years in prison. Because the jury found that Harrison was a registered sex offender at the time he committed the offenses, there is an enhanced penalty of 10 years in prison served consecutive to the enticement and travel counts. The offenses include terms of up to life supervised release following any term of imprisonment.
The charges are the result of an investigation by the U.S. Secret Service, Springfield, Ill., and Nashville, Tenn., divisions; the Champaign Police Department; and the Nashville Metropolitan Police Department Sex Crimes Unit. The case is being prosecuted by Assistant U.S. Attorney Elly Peirson with the cooperation of Champaign County State=s Attorney Julia Rietz.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Jacksonville Man Pleads Guilty to Federal Charge of Failing to Register as A Sex OffenderRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today that Anthony Vincent Burkitt, a/k/a “Vincent Thomas Wolfe,” (44, Jacksonville) has pleaded guilty to a federal charge of failing to register as a sex offender after traveling to Florida from Maryland. He faces a maximum of 10 years in federal prison, and a lifetime of supervision. Burkitt has been in custody since his arrest on April 13, 2014.
According to court documents, on or about June 24, 2002, Burkitt was convicted of attempted second degree rape in Baltimore County, Maryland. Subsequent to his conviction, and after being released from prison, he traveled from Maryland to Jacksonville, Florida, where he established residency in February 2013, but failed to register as a sex offender as required by the federal Sex Offender Registration and Notification Act. On April 13, 2014, a Jacksonville Sheriff’s Office deputy was dispatched to a Jacksonville residence, in reference to a domestic disturbance. At the time, Burkitt was living at the residence under the alias “Vincent Thomas Wolfe” and was arrested. Further investigation revealed that he was a sex offender, and that he had been living in Jacksonville since February 2013 without registering as required by law.
The Sex Offender Registration and Notification Act is part of the Adam Walsh Child Protection and Safety Act of 2006. The Adam Walsh Act also provides for the use of federal law enforcement resources, including the United States Marshals Service, to assist state and local authorities in locating and apprehending non-compliant sex offenders. This case was investigated by the Jacksonville Sheriff’s Office, the United States Marshals Service, and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.
Investment Broker Charged with Defrauding Investors of Their Retirement SavingsRead the Press Release
Fishers man swindled millions from unsuspecting investors.
INDIANAPOLIS - Josh J. Minkler, Acting United States Attorney announced today a Fishers man was charged by the grand jury with wire fraud, securities fraud and money laundering. John K. Marcum, 50, was arrested at his home and had his initial appearance yesterday.
“Defrauding people of their hard-earned retirement savings is criminal behavior,” said Minkler. “The indictment demonstrates that Marcum used investor’s retirement accounts as his own personal piggy bank to fund his lavish lifestyle. Anyone who does that will face the full force of federal criminal prosecution.”
In 2010, Marcum founded the investment firm Guaranty Reserves Trust, LLC (GRT) operating in the Indianapolis area. He allegedly promised investors that he would use their money to achieve significant returns by trading securities, stocks and bonds with no fees being charged. Marcum arranged for investors to deposit money into various accounts and self-directed IRA’s which allowed him to control the investors’ money.
From 2010 through 2013 Marcum solicited millions of dollars from 16 investors. Marcum represented himself and GRT to be worth millions of dollars with celebrity clients and traded very conservatively. He allegedly promised to earn high rates of return with no risk to the investors’ principle. In reality he failed to invest the money as promised and converted it for personal gain. Marcum commingled the funds to finance a personal line of credit, highly speculative start-up ventures, cars, vacations and other gifts.
This was a joint investigation with the Federal Bureau of Investigations and the Internal Revenue Service Criminal Investigations.
W. Jay Abbott, Special Agent in Charge, stated, “The FBI will aggressively pursue those who commit financial fraud. It is a priority to the Bureau to protect the American public from these types of crimes.”
IRS Criminal Investigation Special Agent in Charge James C. Lee stated, “IRS Criminal Investigation stands united with the FBI and the United States Attorney’s Office to bring justice to those who commit crimes against our society. We are committed to protecting the American taxpayers by following the money and holding individuals who violate the public’s trust accountable for their actions”.
According to Winfield D. Ong, Criminal Chief for the United States Attorney’s Office, who is prosecuting the case, Marcum faces up to 50 years in prison and fines of over $5 million if convicted.
An indictment is merely a charge and not proof of guilt. A defendant is presumed innocent and is entitled to a fair trial at which time the government must prove guilt beyond a reasonable doubt.
Indictment Unsealed Charging Four from El Reno with Conspiracy and Wire Fraud Related to Vehicle Cash Rebate SchemeRead the Press Release
Oklahoma City, Oklahoma – Today, a federal grand jury indictment was unsealed charging RICHARD M. ARNOLD, SR. (a/k/a/ "Rick Arnold"), 60, RICHARD M. ARNOLD, II, (a/k/a/ "Ricky Arnold"), 28, ROBERT W. ARNOLD, 25, and ROBYN R. ARNOLD, 55, all from El Reno, Oklahoma, with conspiracy to defraud new car purchasers out of cash rebates based on false representations that a charitable trust would make the victims’ monthly car payments, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
According to the indictment, from May of 2013 through April of 2014, the defendants informed their acquaintances, family members, and friends that they could become beneficiaries of a program operated by a charitable trust designed to help working people acquire new cars. The defendants claimed that "CECU Trust" financed the program, which was also called the "United Auto Buyers Co-op Association."
It is alleged that Rick, Ricky and Robert Arnold met car purchasers interested in the program at various car dealerships and arranged for purchases on credit that would include cash rebates to the buyers from $4,000 to $12,000 per car. The indictment alleges that in some instances, the defendants caused victims’ loan applications to include fraudulently inflated income. It is also alleged that these defendants told the car buyers that the rebate money would have to be given to the defendants for deposit into the trust, which would then pay the buyers’ car loans in their entirety.
After the car purchases were complete, it is alleged that one or more of the defendants met the car buyers in a public place, such as a coffee shop or a bank, to receive the proceeds of the cash-back finance transactions and deposited the money into bank accounts controlled by Robyn Arnold. It is further alleged that the defendants asked buyers to sign powers of attorney as well as proposed agreements advising the buyers that the association’s chances of success would increase relative to the buyers’ success in referring new participants to the program.
When the defendants failed to make the car loan payments as promised, various lenders notified buyers of potential defaults. When the buyers asked for explanations, it is alleged that Rick and Ricky Arnold assured the buyers that the payments would be made or that the trust would be unable to make further payments unless the buyers recruited additional participants.
The indictment charges all four defendants with conspiracy. Rick Arnold is charged with 9 counts of wire fraud, Ricky Arnold is charged with 8 counts of wire fraud, and Robert Arnold is charged with one count of wire fraud. The indictment also seeks forfeiture in the amount of the proceeds of the offenses. Each count of conspiracy and wire fraud carries up to 30 years in prison and a $1,000,000 fine, in addition to up to five years of supervised release. If convicted, the defendants will also be required to pay restitution to individual victims and financial institutions. Reference is made to the indictment and court record for further information. The public is reminded that each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
All four defendants were arrested before 7:00 a.m. today at their El Reno residences and were released on bonds after appearing before United States Magistrate Judge Gary Purcell this afternoon in Oklahoma City.
This case is the result of an investigation by the Federal Bureau of Investigation and the Public Protection Unit of the Oklahoma Attorney General’s Office. The case is being prosecuted by Assistant U.S. Attorneys Scott E. Williams and Kate Holey.
Indicted Chinese National Lands at Boston’s Logan Airport to Face Federal Prosecution for Supplying Iran with Nuclear Production PartsRead the Press Release
BOSTON – Sihai Cheng, a/k/a Chun Hai Cheng, a/k/a Alex Cheng, a citizen of the People’s Republic of China (PRC), arrived to face charges for conspiring to export pressure transducers to Iran which can be used in the production process of weapons-grade uranium. In February 2014, Cheng was arrested by British authorities on U.S. charges during a trip to the United Kingdom. He was detained in the United Kingdom pending extradition to the United States.
Cheng is charged in a ten-count indictment with Seyed Abolfazl Shahab Jamili, an Iranian national, and two Iranian companies, Nicaro Eng. Co., Ltd. (Nicaro) and Eyvaz Technic Manufacturing Company (Eyvaz). They are accused of conspiring to export, and exporting, highly sensitive U.S. manufactured goods with nuclear applications to Iran.
The indictment alleges that Cheng supplied thousands of parts that have nuclear applications, including U.S. origin goods, to Eyvaz, an Iranian company involved in the development and procurement of parts for Iran’s nuclear weapons program. Specifically, it alleges that in 2005, Cheng began doing business with Jamili, an Iranian national who worked for Eyvaz and ran his own importing business in Iran. Jamili remains a fugitive, but the U.S. government, through Interpol, has requested his arrest to face prosecution in the United States.
Since 2005, Cheng sold Jamili thousands of parts with nuclear applications, knowing that these parts were destined for Iran. Significantly, beginning in February 2009, Cheng and Jamili conspired with others in the PRC to illegally obtain hundreds of U.S. manufactured pressure transducers which were manufactured by MKS Instruments, Inc., a company headquartered in Massachusetts, on behalf of Eyvaz. As a result, hundreds of MKS pressure transducers were illegally exported from the United States to China. Upon receipt of these parts in China, Cheng caused the MKS pressure transducers to be exported to Eyvaz or Jamili in Tehran, Iran, in violation of U.S. export laws.
The indictment further alleges that by 2007, Iran was operating thousands of gas centrifuges at the Natanz uranium enrichment facility. Iran has sought and illicitly obtained MKS pressure transducers to use in its centrifuge plants. Those transducers can be seen in publicly available photographs of Natanz, an Iranian uranium nuclear enrichment facility, with then President Mahmoud Ahmadinejad, showing numerous transducers attached to Iran’s gas centrifuge cascades. Because pressure transducers can be used in gas centrifuges to convert natural uranium into a form that can be used in nuclear weapons, they are subject to export controls and cannot be shipped to China without an export license or to Iran at all.In 2011, the Council of the European Union designated Eyvaz as an entity “involved in [Iran’s] nuclear or ballistic missile activities” and imposed restrictive measures against it. In so doing, it found that Eyvaz had produced vacuum equipment, which it supplied to Natanz and Fordow, another of Iran’s uranium nuclear enrichment facilities, and that it also had supplied pressure transducers to Kalaye Electric Company, an Iranian company which has been designated by the United States and United Nations as a proliferator of weapons of mass destruction.
The charging statutes provide a sentence of no greater than 20 years in prison on the charges of conspiracy to commit export violations and illegal exports of goods to Iran; no greater than 10 years in prison on the charges of smuggling goods, and no greater than five years on the charge of conspiracy, in addition to five years of supervised release and a fine of $4 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; and John J. McKenna, Special Agent in Charge of the Department of Commerce, Office of Export Enforcement, Boston Field Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney B. Stephanie Siegmann of Ortiz’s Anti-Terrorism and National Security Unit.
The details contained in the indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Harrisburg Man Sentenced for Failure to Register as A Sex OffenderRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that yesterday Senior United States District Court Judge William W. Caldwell sentenced David Flores, age 48, Harrisburg to 15 months imprisonment and five years supervised release for failing to register as a sex offender.
According to United States Attorney Peter Smith, Flores was indicted by a federal grand jury in May 2014 for failing to register in Pennsylvania as a sex offender after he moved from New York to Pennsylvania.
Flores pled guilty to the charge on November 17, 2014.
The case was investigated by the United States Marshal’s Service. Assistant United States Attorney Eric Pfisterer
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Georgia Co-Conspirators Convicted of Conspiring to Distribute Cocaine and HeroinRead the Press Release
NORFOLK, Va. – Nicole Felicia Clark 36, of Ellenwood, GA and Steve Jacob Joseph 35, of Alpharetta, GA, were convicted yesterday evening after a three-day trial by a federal jury of conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine and one kilogram or more of heroin. Clark was also convicted of three counts of possession of heroin with intent to distribute.
Dana J. Boente, United States Attorney for the Eastern District of Virginia and Clark Settles, Special Agent in Charge of the Department of Homeland Security, Homeland Security Investigations made the announcement today after the verdicts were accepted by United States District Judge Mark S. Davis.
Clark and Joseph were indicted on January 9, 2014. They now face a maximum penalty of life in prison when they are both sentenced on March 20, 2015.
According to court records and evidence at trial, Clark and Joseph were members of a large-scale drug trafficking organization that transported cocaine and heroin to the Norfolk area from New York City and Atlanta, Georgia. Clark transported kilograms of cocaine and heroin from Georgia to Norfolk in a secret compartment in a 2007 GMC Yukon SUV. Clark transported hundreds of thousands of dollars in drug money from Norfolk to Atlanta. Joseph managed the drug operation in Atlanta. He loaded cocaine and heroin into the GMC Yukon for delivery by Clark to Virginia. Joseph handled the drug money generated by drug sales in Virginia and paid the group’s California supplier. On November 4, 2013, Clark was arrested by Officers with the Clayton County, GA Police Department following a traffic stop of the GMC Yukon in suburban Atlanta. During the stop, the investigating officer conducted a search of the Yukon, discovered the secret compartment with 2.5 kilograms of cocaine and 595 grams of heroin inside. Trial testimony indicated that Clark was in the process of transporting the seized drugs to Virginia. Joseph was arrested by the Clayton County PD later that evening in a car stereo installation shop named JMW Customs Auto in Rex, Georgia. Police seized approximately $10,000 in cash from Joseph. The police also seized from the shop a DVR security camera system on which were found videos depicting Joseph and Clark placing items in the secret compartment in the GMC Yukon.
This case was investigated by the Department of Homeland Security, Homeland Security Investigations. Assistant United States Attorney Darryl J. Mitchell is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-8.
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Futures Trader Indicted for Allegedly Stealing Computer-Stored Trade Secrets from His Former Chicago Trading FirmRead the Press Release
CHICAGO — A former futures trader at an unnamed trading firm in Chicago was indicted on federal charges for allegedly stealing trade secrets from the firm, including computer code for electronic trading and strategies and other intellectual property. The defendant, DAVID JACOB NEWMAN, was charged with three counts of theft of trade secrets in an indictment returned by a federal grand jury yesterday and made public today.
Newman, 32, of Chicago, began working at the trading firm as a clerk in 2004 and later as a trader until he left in March of this year, less than a week after he collected his 2013 bonus. Newman will be ordered to appear for arraignment on a date to be determined in U.S. District Court in Chicago.
According to the indictment, the trading firm’s trade secrets included custom-made software for pricing financial products, communicating and executing trades on public exchanges, and analyzing trading risk. They also included trading algorithms, trading profit and loss analysis, and the firm’s options modeling system. Most of the computer code the firm used for trading was custom-made by its employees or consultants, and the firm invested considerable time and money in developing its computer code and intellectual property. In 2011, Newman signed a document acknowledging that he understood the firm’s policies regarding protection of its trade secrets and proprietary information, and at no time was he authorized to copy or possess the firm’s trade secrets.
On Oct. 31, 2013, Newman allegedly accessed and copied computer files from a firm directory, containing trading algorithms, strategies, and analysis, onto a personal thumb drive. On Nov. 5, 2013, Newman accessed and copied additional files containing such information from four firm directories used by four specific traders onto a personal thumb drive, the indictment alleges. A week later, Newman established NTF LLC and was the sole owner and only member of the limited liability company.
On Feb. 24 of this year, Newman allegedly accessed and copied more than 400,000 computer files from the trading firm’s source code repositories onto a personal thumb drive. Three days later, Newman signed an agreement with the CME Group to allow NTF LLC to establish its own interface with CME online trading platforms.
A day after Newman resigned from the trading firm in March, he established an account enabling NTF LLC to trade speculatively in the futures markets, the indictment states.
Each count of theft of trade secrets carries a maximum penalty of 10 years in prison and a $250,000 million fine. If convicted, restitution is mandatory and the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is being represented by Assistant U.S. Attorney Clifford C. Histed, deputy chief of the Securities and Commodities Fraud Section of the U.S. Attorney’s Office.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Ft. Campbell Military Base Resident Sentenced to 41 Months for Wantonly Abusing A Child Under the Age of 12Read the Press Release
– Child was malnourished and in need of medical care for burns
PADUCAH, Ky. – A Ft. Campbell military base resident was sentenced in U.S. District Court today by Senior Judge Thomas B. Russell to forty-one months imprisonment, followed by a three-year term of supervised release, for wantonly abusing her child, who at the time was under the age of 12, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Shanika D’June Pickens, a/k/a Shanika Campbell, age 28, previously pleaded guilty to a two count Indictment charging that she wantonly abused the child by failing to provide the child professional medical attention for burns and for failing to provide the child adequate food and nutrition that resulted in his medical diagnosis of malnutrition.
Campbell had custody of her 3 children, including the victim in this case, known as K.V.P., who was under 12 years of age, while living on Ft. Campbell, Kentucky military base, located in Christian County, Kentucky. Between January 1, 2011 and September 30, 2011, the victim received burns to his right side and back areas. At that time, Campbell was aware of the burns and did not seek professional medical attention that was available on Ft. Campbell military base for her family. Campbell admitted that her failure to seek medical attention for the burns was wanton because she was aware of and consciously disregarded a substantial and unjustifiable risk that the child would suffer a serious bodily condition and ultimately experienced more pain and scarring to his back and right side areas than he would have experienced had he received timely and competent medical attention. The risk of that harm to K.V.P. was of such a nature and degree that the disregard of that risk constituted a gross deviation from the standard of conduct that a reasonable person would observe in the situation.
Further, between October 1, 2011 and January 30, 2012, Campbell failed to provide adequate food and nutrition to K.V.P. That condition resulted in his hospitalization at Vanderbilt University Hospital in Nashville, Tennessee, between January 28, 2012 and February 6, 2012. During that time, the minor victim was diagnosed with, among other conditions, malnutrition. Campbell admitted that her failure to provide adequate food and nutrition to K.V.P was wanton because she was aware of and consciously disregarded a substantial and unjustifiable risk that constitutes a gross deviation from the standard of conduct that a reasonable person would observe in the situation.
If convicted at trial, Campbell faced a sentence of no more than 10 years in prison, a fine of $500,000 and a three year period of supervised release.
This case was prosecuted by Assistant United States Attorney David Sparks and was investigated by the Federal Bureau of Investigation (FBI) and Ft. Campbell, Kentucky, 502nd Military Police Battalion (CID).
Four Sentenced on Drug Trafficking ChargesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – Four West Virginia residents were sentenced today on drug trafficking charges, United States Attorney William J. Ihlenfeld, II, announced.
Ondrea K. Counts, 42, of Reynoldsville, West Virginia, was sentenced today to 18 months in prison for selling ecstasy near the Oakmound Apartments, a public housing authority facility in Clarksburg, West Virginia. She pled guilty in January 2014 to one count of “Distribution of MDMA within 1000’ of Protected Location – Aiding and Abetting.”
George Powers, 35, of Clarksburg, West Virginia, was sentenced today to 15 months in prison after he was discovered in possession of oxycodone pills in March 2014. He pled guilty in July 2014 to one count of “Possession with Intent to Distribute Oxycodone – Aiding and Abetting.”
Aaron Jones, 36, of Fairmont, West Virginia, was sentenced today to 12 months and one day in prison for selling cocaine near Unity Terrace, a public housing authority facility in Fairmont, West Virginia. Jones will receive credit for time served since June 2014. He pled guilty in July 2014 to one count of “Distribution of Cocaine Base within 1,000 feet of a Protected Location.”
Justin Charles Cole, 32, of Clarksburg, West Virginia, was sentenced today to time already served. Cole was discovered selling oxycodone in January 2013 in Anmoore, West Virginia. He pled guilty in August 2014 to one count of “Distribution of Oxycodone.”
Assistant U.S. Attorney Shawn Morgan prosecuted Counts and Powers, Assistant U.S. Attorney Michael Stein prosecuted Cole, and Assistant U.S. Attorney prosecuted Jones on behalf of the government. The Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated Counts, Powers, and Cole. The Three Rivers Drug and Violent Crime Task Force investigated Jones.
U.S. District Judge Irene M. Keeley presided.
Fort Myers Man Convicted of Possessing Child PornographyRead the Press Release
Fort Myers, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury has found Brian Robert Harling (57, Fort Myers) guilty of possessing child pornography. He faces a maximum penalty of 20 years in federal prison. His sentencing hearing is scheduled for March 2, 2015.
According to testimony presented at trial, on July 4, 2013, a tenant living in a residence owned and previously occupied by Harling found three thumb drives that had fallen from the top of the molding inside a closet. Harling had moved out three days earlier. The tenant and her mother contacted the police after they discovered that the thumb drives contained child pornography. An officer from the Fort Myers Police Department then met with the tenant to retrieve the thumb drives. The officer also located two additional thumb drives that had been concealed on the ledge of the molding inside the closet. Approximately 3,000 images and 35 videos depicting child pornography were found on the thumb drives.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Fort Myers Police Department, with assistance from the Florida Department of Law Enforcement and the Cape Coral Police Department. It is being prosecuted by Assistant United States Attorney Yolande G. Viacava.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Former Panhandle Business Owner Sentenced for Tax FraudRead the Press Release
Follow @NDFLNewsPENSACOLA, FLORIDA – Patrick Alfred Anderson, 62, of Laughlin, Nevada, was sentenced yesterday to 24 months in federal prison for income tax fraud. The sentence was announced by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
Anderson pled guilty earlier this year to three counts of filing fraudulent tax returns. Between 2010 and 2011, Anderson sold synthetic drugs, commonly known as “spice” and “bath salts,” from retail stores he operated in northwest Florida. These include Haight Ashbury LLC, Woodstock Navarre, Woodstock NV, Woodstock Fort Walton Beach, Woodstock Mary Esther, and Groovy Gifts. Anderson derived more than $700,000 in income from the sale of these drugs. He failed to report this income on his tax returns, resulting in a net tax loss of $173,549.
In addition to the 24-month sentence, Anderson was ordered to pay $173,549 in restitution to the Internal Revenue Service. In related civil and administrative forfeiture actions, Anderson was required to forfeit approximately $900,000 in property as proceeds from his sale of the synthetic drugs, including cash, two pieces of real property, and eight vehicles.
This case was prosecuted by Assistant U.S. Attorney Tiffany H. Eggers and was investigated by the Internal Revenue Service–Criminal Investigation and the Okaloosa Multi-Agency Drug Task Force.
Former Maryland Veterans Affairs Official Sentenced to Prison for Fraudulently Obtaining over $1.4 Million in BenefitsRead the Press Release
Eight Other Veterans Convicted of Paying U.S. Army Veteran David Clark
Cash to Fraudulently Obtain Veteran Benefits
Baltimore, Maryland – Chief U.S. District Judge Catherine C. Blake sentenced U.S. Army veteran David Clark, age 68, of Hydes, Maryland, the former Deputy Chief of Veterans Claims in the Maryland Department of Veterans Affairs, today to a year and a day in prison followed by two years of supervised release for extortion in connection with a scheme to fraudulently obtain over $1.4 million in veterans benefits. Chief Judge Blake also entered an order that Clark forfeit $1,406,774 and pay restitution of $1,284,399.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kim R. Lampkins of the Department of Veterans Affairs Office of Inspector General.
In January 2011, Clark retired from the Maryland Department of Veterans Affairs (MDVA) as the deputy chief for Veterans Claims. Clark’s duties included submitting claims and documentation on behalf of veterans in Maryland who appointed the MDVA to represent them in obtaining federal benefits from the Department of Veterans Affairs (VA). Clark also submitted documents to the Maryland State Department of Assessments and Taxation (SDAT) in support of veterans’ applications for property tax waivers.
According to his plea agreement, while serving as deputy chief of claims, Clark fraudulently obtained VA compensation for himself and at least 17 others, by submitting false documents to the VA purporting to show that the claimants had been diagnosed with diabetes, and in some cases that the claimanst had served in Vietnam when they had not. The claimants paid Clark half of the retroactive lump sum payment they received in cash, or some other amount of cash. These payments to Clark were made in unmarked envelopes at MDVA offices in Bel Air, Maryland; the Fallon Federal Building in Baltimore; and other locations.
In support of these claims, Clark submitted fake letters from doctors purportedly treating the veterans, which falsely stated that the claimants suffered from Type II diabetes. Clark used the names and addresses of real doctors who were unaware of his conduct. Each letter stated that the diagnosis of Type II diabetes had been made a year or more prior to the date of the letter, which entitled each claimant to a retroactive lump-sum payment. The letters also stated that the claimants were currently taking insulin, which increased the amount of compensation the VA paid the claimant.
Clark created counterfeit versions of a Defense Department form for himself and five others, which falsely stated that each had served in Vietnam. These forms also falsely stated that these individuals had received various awards and decorations for the Vietnam service, including that Clark himself had been awarded the Purple Heart Medal. These documents were submitted to the VA to provide false evidence that they qualified for compensation benefits for diabetes.
Clark also submitted false certifications to the SDAT on behalf of claimants that owned homes in Maryland, claiming that the filers were entitled to a property tax waiver due to a service-connected disability.
The total loss to the government caused by false submissions to the VA is $1,151,219 and the loss from the property tax evasion is $255,555, for a total loss of $1,406,774.
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 thanked the VA Office of Inspector General for its work in the investigation and praised Assistant U.S. Attorney Leo J. Wise, who prosecuted the case.
Former Illinois State Rep. Keith Farnham Pleads Guilty to Transporting Child PornogrphyRead the Press Release
CHICAGO — Former Illinois State Rep. KEITH FARNHAM pleaded guilty today to a federal charge of transporting child pornography via computers in his office and residence in Elgin last year. Farnham resigned his seat in the Illinois General Assembly in March of this year, less than a week after federal agents seized computers from his home and office.
Farnham, 67, of Elgin, remains on restrictive conditions of bond, including home incarceration with electronic monitoring, while awaiting sentencing, which U.S. District Judge Edmond E. Chang scheduled for March 19, 2015, in Federal Court.
Farnham, who must register as a convicted sex offender, faces a mandatory minimum sentence of five years and a maximum of 20 years in prison and a maximum fine of $250,000. His plea agreement states that the government anticipates a United States Sentencing Guidelines range of at least 151 to 188 months in prison. Federal inmates must serve at least 85 percent of their sentence and there is no parole in the federal prison system.
In pleading guilty, Farnham admitted that on Nov. 25, 2013, he sent an email from a computer in his Elgin office with the following message: “do you trade. This is what I lik.” Farnham attached two files to the email that he knew contained child pornography. In addition, he possessed images and videos depicting child pornography on computers and electronic storage devices in his residence, car and offices.
On March 13 of this year, agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) executed federal search warrants at Farnham’s state office and residence in Elgin and seized computers and electronic storage devices. On that day, Farnham possessed no fewer than 2,765 images of real minors engaged in sexually explicit acts, including sexual intercourse, with prepubescent children. Some of the images involved sadistic or masochistic conduct and depictions of violence, according to Farnham’s guilty plea.
According to the court documents, HSI agents were investigating information received from the HSI Cyber Crimes Center that an email address, later linked to Farnham, was being used to trade child pornography on the Internet.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Gary Hartwig, Special Agent-in-Charge of HSI in Chicago.
The government is being represented by Assistant U.S. Attorneys Timothy Storino and Michelle Petersen.
Plea Agreement
Former District of Columbia Schools Compliance Officer Sentenced on Wire Fraud and Conflict-of-Interest ChargesDefendant’s Private Transportation Company Collected More Than $460,000 in Fraudulent PaymentsRead the Press Release
WASHINGTON – Donnie Dukes, a former compliance officer for the District of Columbia Public Schools, was sentenced today to a month in jail, to be followed by six months of home confinement, for carrying out a scheme involving more than $460,000 in fraudulent payments to a private transportation company that he owned and controlled.
The sentence was announced by U.S. Attorney Ronald C. Machen Jr.; Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office; Daniel W. Lucas, District of Columbia Inspector General, and Christopher Cooper, Assistant Special Agent in Charge of the U.S. Department of Education Office of Inspector General's Mid-Atlantic Regional Office.
Dukes, 41, of Hyattsville, Md., pled guilty on Jan. 22, 2014, in the U.S. District Court for the District of Columbia, to wire fraud and conflict-of-interest charges. He was sentenced by the Honorable Ketanji Brown Jackson. Following his home detention, Dukes will be placed on three years of probation. He also must pay $463,621 in restitution to the District of Columbia.
According to the government’s evidence, Dukes worked from October 2008 until October 2010 as a compliance officer for the District of Columbia Public Schools (DCPS). His duties included making arrangements for transportation for the special needs students who received education services outside of the District of Columbia.
At the same time, however, Dukes owned and controlled a private company that provided, among other services, transportation to students who needed to travel from the District of Columbia to education centers outside of the District of Columbia for special services.
While working at DCPS, Dukes personally referred, or caused colleagues of his at DCPS to refer, 86 out-of-state student transports to his company, resulting in the firm receiving $325,000 in payments from the District of Columbia Office of the State Superintendent of Education. Of this, the government’s evidence showed, $163,621 involved illegitimate expenses.
Dukes was terminated from DCPS in October 2010 as part of an overall reduction in the workforce. He then schemed to obtain non-public lists of students needing transportation services from his former colleagues at DCPS. Dukes later used these lists to create false invoices and supporting documentation for payments to his company in the names of the students. Dukes created 60 false invoices and supporting documentation through this scheme, causing the District of Columbia Office of the State Superintendent of Education to pay his company $300,000 for transportation services that never were provided.
In announcing the sentence, U.S. Attorney Machen, Assistant Director in Charge McCabe, Inspector General Lucas, and Assistant Special Agent in Charge Cooper commended the work of those who investigated the case from the FBI’s Washington Field Office, the District of Columbia Office of Inspector General, and the U.S. Department of Education’s Office of Inspector General. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including former Legal Assistant Nicole Wattelet and Assistant U.S. Attorney Seth B. Waxman, who prosecuted the case.
14-270Former Director of Anesthesiology School Sent to Prison for EmbezzlementRead the Press Release
The former director of the Cleveland Clinic Foundation Nursing Anesthesiology School was sentenced to two years in prison for embezzling $215,760 from the school, said U.S. Attorney Steven M. Dettelbach.
Paul Blakeley, 59, of Concord Township, was also ordered to pay restitution in the same amount to the Cleveland Clinic Foundation by U.S. District Judge Sara Lioi.
Blakely pleaded guilty to a one-count information in September.
From 2007 to 2013, Blakeley issued approximately 110 checks drawn on accounts maintained by the Cleveland Clinic Foundation Nursing Anesthesiology School without authorization, and made them payable to his spouse, and various merchants and credit card issuers. On approximately 50 of the unauthorized checks, Blakeley forged the payee’s endorsement before depositing them into his personal bank account, according to court documents.
The case was being prosecuted by Assistant United States Attorneys Robert W. Kern and Miranda Dugi following an investigation by the Cleveland Clinic Protective Operations and the United States Secret Service.
Former Arrow Trucking Executives Charged in Multi-Million Dollar Bank Fraud and Tax FraudRead the Press Release
TULSA, Okla. – James Douglas Pielsticker, former Chief Executive Officer and President of Arrow Trucking Company, was arraigned today in U.S. District Court in Dallas, Texas, on bank fraud and tax fraud charges stemming from an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigations. Jonathan Leland Moore, former Chief Financial Officer of Arrow Trucking Company, previously waived indictment and pleaded guilty on December 4, 2014, to an one-count information charging him with conspiring to commit both bank fraud and tax fraud.
United States Attorney Danny C. Williams Sr. of the Northern District of Oklahoma; Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department’s Tax Division; Special Agent in Charge James E. Finch of the FBI’s Oklahoma City Division Office; and Special Agent in Charge Damon Rowe of the IRS-CI’s Dallas Division Office made the announcement.
James Douglas Pielsticker, 46, of Dallas, Texas, formerly of Tulsa, Oklahoma, was indicted by a grand jury in a 23-count superseding indictment on December 1, 2014, which was unsealed today. The superseding indictment charges Pielsticker with one-count of conspiring to commit bank fraud, 15-counts of bank fraud, one-count of conspiring to defraud the Internal Revenue Service, three-counts of tax evasion, and three-counts of failing to account for and pay over payroll taxes.
According to the indictment and information, from May 2009 to December 2009, Pielsticker and co-conspirators provided Transportation Alliance Bank (TAB), a financial institution located in Ogden, Utah, with fraudulent and misleading invoice data consisting of inflated amounts due to Arrow Trucking. As a result of this false information, the TAB paid Arrow Trucking more money than Arrow Trucking was entitled to under the companies’ agreement.
As alleged in the indictment and information, Arrow Trucking withheld payroll taxes from employees’ wages. Beginning in 2009, Pielsticker and others conspired to defraud the United States by failing to account for and pay over Arrow Trucking employees’ payroll taxes and with respect to Pielsticker’s own income taxes. Arrow Trucking failed to pay over approximately $5,000,000 in payroll taxes consisting of federal income taxes, Medicare taxes, and Social Security taxes. Also, Pielsticker attempted to evade his individual income taxes due and owed to the United States for the years 2007, 2008, and 2009.
It is further alleged, Pielsticker caused Arrow Trucking to spend thousands of dollars on various personal expenses, include payments related to Bruce Webber, Pielsticker’s wedding, and Bentley and Maserati automobiles.
If convicted, Pielsticker faces the statutory maximum penalty of not more than 30 years in prison and a fine of $1,000,000 for each of the bank fraud related counts; and not more than five years in prison and a fine of $250,000 for each count of tax related counts.
In addition, upon conviction, Pielsticker faces entry of a money judgment in the amount of $15,000,841.32 based upon proceeds he obtained as a result of the bank fraud conspiracy and the bank fraud scheme.
The case was investigated by the FBI and IRS-CI. The case is being prosecuted by Trial Attorney Charles O’Reilly of the Tax Division and Assistant U.S. Attorneys Jeff Gallant and Catherine Depew of the U.S. Attorney’s Office for the Northern District of Oklahoma.
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U.S. v. James Douglas Pielsticker
Former Apple Executive Sentenced to One Year in Prison for Defrauding Apple in Kickback Scheme and Laundering the Proceeds of the FraudRead the Press Release
SAN JOSE – Paul S. Devine was sentenced on Dec. 1, 2014, to 12 months and one day in prison, and ordered to pay $4,464,664 in restitution for wire fraud, conspiracy, money laundering, and engaging in transactions in criminally-derived property, announced United States Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Thomas McMahon.
According to the plea agreement, Devine admitted that, beginning in approximately February 2007, he engaged in a scheme to defraud Apple of money or property as well as to defraud Apple of its right to his honest services. He also admitted to engaging in a conspiracy with co-defendant Andrew Ang in which they agreed to the fraud against Apple.
Devine had been a Global Supply Manager at Apple from 2005 until he was terminated at the time of his arrest in August 2010. Devine’s job gave him access to confidential internal Apple information. In the course of the scheme, Devine transmitted confidential information, such as product forecasts, pricing targets, and product specifications, to suppliers and manufacturers of Apple parts, including Ang. Ang worked for several Apple suppliers located in Singapore. In return, the suppliers and manufacturers paid Devine kickbacks, including payments determined as a percentage of their Apple contracts. Devine shared the kickbacks with Ang.
In his plea agreement, Devine acknowledged that this scheme deprived Apple of its property right in the confidentiality of its information, its money, and its property, as well as its right to his honest services. The scheme enabled the suppliers and manufacturers to, among other things, negotiate more favorable contracts with Apple than they would have been able to obtain without the confidential information.
Devine admitted to receiving kickbacks as wire transfers into bank accounts that he opened for that purpose in the U.S. and South Korea, including accounts in the name of a shell corporation, “CPK Engineering.”
Devine also admitted that he knowingly transferred the proceeds of the wire fraud between his various accounts, including CPK Engineering accounts, in order to conceal and disguise the nature, location, source, ownership, and control of the proceeds. He specifically admitted to a May 18, 2010, transfer of $536,748.88 in funds derived from the wire fraud scheme.
Devine agreed that the loss attributable to the fraudulent scheme was approximately $2,409,000, which represented the amount he received in kickback payments. He agreed to forfeit $951,552 in proceeds of the fraud and a vehicle, all of which were seized by the FBI and IRS at the time of his arrest. Devine also agreed to forfeit $612,407 in proceeds of the fraud, which he transferred from overseas bank accounts and deposited with the clerk of the District Court following his arrest.
Devine, 41, of Sunnyvale, was indicted by a federal grand jury on Aug. 11, 2014. The indictment charged him with twenty-three counts related to engaging in the wire fraud scheme, conspiring to commit wire fraud with Andrew Ang, laundering the proceeds of the scheme, and engaging in transactions in funds derived from the scheme.
In a related case, Chua Kim Guan (a/k/a Jacky Chua), an executive at Jin Li Mould of Singapore, was charged by Singaporean authorities with corruptly giving gratifications to Devine. The U.S. indictment against Devine’s co-defendant, Andrew Ang, remain pending.
Devine pleaded guilty on Feb. 28, 2011, to one count of violating of 18 U.S.C. § 1343 (wire fraud), one count of violating 18 U.S.C. § 1349 (conspiracy to commit wire fraud), one count of violating 18 U.S.C. § 1956(a)(1)(B) (money laundering), and one count of violating 18 U.S.C. § 1957 (engaging in transactions with criminally-derived property).
Devine’s sentence was handed down by the Honorable Edward J. Davila, United States District Court Judge. Judge Davila also sentenced Devine to a three-year period of supervised release. Devine will begin serving the sentence on Feb. 19, 2015.
Michelle J. Kane is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Melissa Dorton and Elise Etter. The prosecution is the result of an investigation by the FBI and the IRS, Criminal Investigation.
Edmond Pharmacy to Pay $43,000 to Settle Claims Involving Violations of the Controlled Substances ActRead the Press Release
Oklahoma City, Oklahoma – SHERRY’S DRUG, which operates a retail pharmacy in Edmond, Oklahoma, has paid $43,000 in civil penalties to the United States to settle claims stemming from alleged violations of the Controlled Substances Act, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
The Controlled Substances Act, 21 U.S.C. Sections 801 et seq. ("CSA"), was passed by Congress to combat the illegal distribution and abuse of controlled substances, including prescription medications. The CSA is enforced by the Drug Enforcement Administration's (DEA) Office of Diversion Control, whose mission is to prevent, detect, and investigate the diversion of controlled pharmaceuticals and listed chemicals from legitimate sources while ensuring an adequate and uninterrupted supply for legitimate medical, commercial, and scientific needs. Under the CSA, entities registered with the DEA who purchase, distribute, dispense, transfer, or sell controlled substances must comply with inventory and documentation requirements. Regulations promulgated under the CSA require that each DEA registrant, including pharmacies, maintain complete and accurate records of each substance manufactured, received, sold, delivered, dispensed or otherwise disposed of by the registrant for two years. These requirements play a vital role in ensuring the appropriate handling, accounting, and distribution of controlled substances.
Sherry’s Drug ("Sherry’s") is an Oklahoma corporation with its primary business located in Edmond, Oklahoma. The United States alleged that between February 3, 2010, and January 6, 2014, Sherry’s improperly filled prescriptions for controlled substances that did not contain the prescriber’s DEA number, substituted Sherry’s DEA registration number for the prescriber’s DEA number, and filled prescriptions for controlled substances under a non-valid DEA registration number.
In order to resolve the claims by the United States, Sherry’s paid $43,000 in civil penalties to the government. In reaching this settlement, Sherry’s did not admit liability and the government did not make any concession regarding the legitimacy of its claims. The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.
This case was investigated by the Drug Enforcement Administration's Office of Diversion Control, Oklahoma City District Office Diversion Group, and was prosecuted by Assistant United States Attorney Ronald R. Gallegos.
- Edcouch Woman Pleads Guilty to Enticing
Dandridge Moonshiner James Carrol Hickman ConvictedRead the Press Release
GREENEVILLE, Tenn. – James Carrol Hickman, 41, of Dandridge, Tenn., was convicted of aiding and abetting in the illegal production of distilled spirits by a person who was not an authorized distiller (illegal production of “moonshine”). Hickman was convicted on Dec. 5, 2014, following a two-day jury trial, and is scheduled for sentencing on Mar. 17, 2015. He faces a possible sentence of up to five years in federal prison and up to $10,000 in fines.
Evidence presented at trial showed Hickman worked for co-defendant Jack Mayfield, Jr., at a large-scale illegal moonshine production operation in the Carson Springs area of Cocke County, Tenn. Hickman’s role at the operation included transporting supplies and distributing moonshine. According to the testimony of a TBI agent, Hickman also admitted that he “cooked” moonshine. Testimony from an additional witness also demonstrated that Hickman was involved in the production of moonshine. The evidence further showed that the operation consisted of 18 stills, each with a capacity of 400 gallons.
Two others have already been convicted in this case and are awaiting sentencing. Michael Steve Reece was convicted on Nov. 7, 2013, and is scheduled for sentencing on Mar. 10, 2015. Jack Mayfield, Jr., was convicted on Oct. 9, 2014, and is scheduled for sentencing on Feb. 12, 2015.
This investigation was a joint effort of the Tennessee Bureau of Investigation, Tennessee Alcoholic Beverage Commission, Tennessee Highway Patrol, and Cocke County Sheriff’s Department. Assistant U.S. Attorneys Suzanne Kerney-Quillen and J. Christian Lampe represent the United States.
Child Sex Trafficker Sentenced to 17.5 Years in Federal PrisonRead the Press Release
(Saipan, MP), ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that ANNETTE NAKATSUKASA BASA, was sentenced today, December 5, 2014, in the U.S. District Court of the Northern Mariana Islands by Chief Judge Ramona V. Manglona, for sex trafficking of children. Defendant BASA received a sentence of 17.5 years incarceration with credit for time served, five years supervised release upon release from prison, 500 hours of community service, $100 special assessment fee and was ordered to pay restitution in the amount of $9,102.39. She was further ordered to undergo a mental health assessment and receive any corresponding treatment that may be appropriate while in the Bureau of Prisons custody. Defendant Basa is not to unlawfully use controlled substances or alcohol. Basa will also have to register as a sex offender under the SORNA program.
Defendant BASA pled guilty on February 20, 2014, to one count of sex trafficking of children, in violation of Title 18 U.S.C. Section 1591(a)(1). Defendant BASA took in minor runaways, allowed them to live with her, gave them methamphetamine and then demanded they perform sexual acts for money.
U.S. Attorney Limtiaco stated, “The sexual exploitation and abuse of vulnerable individuals is an affront to fundamental human rights and will not be tolerated. The defendant preyed on these young victims, manipulating and sexually exploiting them. Today’s sentence sends the critical message that human trafficking is a crime that violates the very core and dignity of a human being and traffickers face severe punishment. The Department of Justice and U.S. Attorney’s Office remain committed to vigorously prosecuting and holding accountable those who perpetrate these heinous crimes."
U.S. Attorney Limtiaco additionally reminds defendants who have committed sexual abuse of children, that under federal and local law, all sex offenders have a duty to register and keep their registration current with the Sex Offender Registry in their jurisdiction. Sex offenders who travel to the CNMI and who reside in the CNMI must inform the CNMI DPS Sex Offender Registry where they reside, work, or attend school - they must also periodically update their registration information. The U.S. Attorney notes that the sex offender registry was created in order to protect the public by protecting victims, preventing further victimization and informing the public of the whereabouts of sex offenders. CNMI’s Sex Offender Registry can be found online at http://cnmi.nsopw.gov/.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood (PSC) Initiative, a nationwide commitment to aggressively prosecute defendants who engage in the sexual victimization of children and adults, possess or receive child pornography, and sex offenders who fail to register with the jurisdiction’s Sex Offender Registry. The investigation was conducted by the Federal Bureau of Investigations. The case was handled by Assistant U.S. Attorneys Rami Badawy and Ross Naughton.
Chelsea Man Indicted on Child Exploitation ChargesRead the Press Release
BOSTON – Elmer Reyes, 32, of Chelsea, was indicted yesterday on charges that he sexually exploited a child. A federal grand jury handed down a two count indictment charging Reyes with producing a pornographic image of a child and possession of child pornography. The indictment alleges that the conduct occurred on October 1, 2014.
The charging statutes provide a mandatory minimum sentence of 15 years and a maximum sentence of 30 years in prison on the child exploitation charge, and no greater than 10 years in prison on the possession of child pornography charge. The charging statutes also provide a mandatory minimum of five years and a maximum of a lifetime of supervised release, and a fine of $250,000 on each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, made the announcement. The case was investigated by the Chelsea Police Department and the Federal Bureau of Investigation’s Boston Child Exploitation Task Force, which is comprised of members from the FBI, the Arlington, Boston, and Malden Police Departments, the Massachusetts State Police, and Department of Correction. The case is being prosecuted by Eve A. Piemonte Stacey and David G. Tobin of Ortiz’s Major Crimes Unit.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys= Offices and the Criminal Division=s CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Centralia Resident Charged in Federal Court for Burglarizing Gun Dealer and Attempting to Sell 39 Stolen FirearmsRead the Press Release
Follow @SDILNewsA Centralia resident was charged in federal district court on December 3, 2014, for burglarizing a federal firearms licensee and attempting to sell the guns, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Dakota R. Moss, 19, was charged in a criminal complaint which alleged that Ferguson, Missouri was a potential destination for the cache of weapons, which included semi-automatic handguns and AR-15 assault rifles.
The complaint affidavit stated that on November 29, 2014, the Buchheit of Centralia farm and home supply store was burglarized and thirty nine (39) firearms were stolen, along with at least one thousand rounds of ammunition. The burglary was accomplished using a full size pickup truck, which was stolen from Centraila High School. The suspects utilized the stolen truck to ram the locked security gate to make entry onto Buchheit’s parking lot, where the suspects then broke out store windows to make entry into the store. The surveillance video established that the initial burglary occurred at approximately 2:40 am. However, the video evidence revealed that the two suspects left the scene and returned to steal additional firearms and ammunition on two occasions - thereby making a total of three separate entries into the store between 2:40 am and 4:00 am.
Evidence filed in court established that Moss and his juvenile accomplice were armed while inside of Buchheit’s and intended to shoot anyone who interrupted the burglary – including police. The complaint alleges that Moss and his accomplice stole the firearms in order to sell the guns; and that Ferguson, Missouri was among the planned destinations for the weapons. The charges also state that the two planned on participating in the looting of businesses in the Ferguson, Missouri area, however the plan did not materialize. Centralia Police and agents from the ATF identified the suspects soon after the burglary and have recovered 35 of the 39 stolen guns as of this date. Anyone with knowledge of the remaining stolen firearms or the ammunition is encouraged to call law enforcement.
US Attorney Stephen R. Wigginton said, “I commend the members of law enforcement who quickly and professionally interrupted this incredibly dangerous crime before lives were lost. Firearms trafficking is always a very serious crime. But, it is even worse that these two considered profiteering from the lawlessness in Ferguson by planning to sell arms to rioters and looters.”
The complaint charges Moss with stealing firearms from a federal firearms licensee, possession of stolen firearms, being a felon in possession of firearms, and with carry and use of a firearm during a crime of violence. The first three charges are all punishable by not more than 10 years in federal prison, a $250,000 fine, and not more than 5 years supervised release. Carry and use of a firearm during a crime of violence carries an additional mandatory consecutive sentence of not less than 5 years. However, the United States Sentencing Guidelines must be applied to the case and considered by the Court during sentencing. Moss will be arraigned in US District Court on December 10, 2014.
The investigation is being conducted by agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Centralia Police Department. The case is being prosecuted by Assistant United States Attorney Steven D. Weinhoeft.
A complaint is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
Cedar Rapids Businesses and Corporate Officers IndicatedRead the Press Release
Midamar Corporation and Islamic Services of America, of Cedar Rapids, Iowa, and corporate officers of the businesses, Jalel Aossey, age 40, and William “Yahya” Aossey, age 44, also of Cedar Rapids, Iowa, have been charged in a ninety-two count indictment filed this afternoon in United States District Court in Cedar Rapids. The indictment charges each business and person with one count of conspiracy to: make and use materially false statements and documents; sell misbranded meat; and commit wire fraud. The indictment also charges each defendant with three counts of making false statements on export applications; forty-three counts of wire fraud; forty-four counts of money laundering; and one count of conspiring to commit money laundering. The indictment also contains two forfeiture allegations, seeking proceeds and property involved in certain offenses.
The conspiracy charge is punishable by up to five years imprisonment. Each count of making a false statement on an export application is punishable by up to three years imprisonment. Each count of wire fraud is punishable by up to twenty years imprisonment. Each count of money laundering, including the money laundering conspiracy count, is punishable by up to twenty years imprisonment. A fine of up to $250,000 may also be imposed on each count, along with a term of supervised release following any imprisonment.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.The case is being prosecuted by Assistant United States Attorney Richard L. Murphy and was investigated by the Department of Agriculture Office of Inspector General, and the Internal Revenue Service.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-CR-00138-LRR.
Attorney Sentenced to 17 Years in Prison for Multi-Million Dollar Stock FraudRead the Press Release
A California attorney was sentenced to serve 17 years in prison today in the Southern District of Florida for operating a five-year, multi-million dollar market manipulation and fraud scheme, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.
Mitchell J. Stein, 53, of Hidden Hills, California, was convicted by a jury on May 20, 2013, of conspiracy to commit mail and wire fraud, three counts of wire fraud, three counts of securities fraud, three counts of money laundering, and one count of conspiracy to obstruct justice. In addition to the prison sentence, U.S. District Judge Kenneth A. Marra of the Southern District of Florida ordered Stein to forfeit $5.3 million. Restitution will be determined at a later date.
“Lawyers for companies are supposed to guide their clients through the important reporting and regulatory requirements that ensure the integrity of our financial markets,” said Assistant Attorney General Caldwell. “Stein abdicated his responsibility, and instead abused his position of trust to defraud a public company, its shareholders, and the investing public of millions of dollars.”
“The ‘pump and dump’ scheme orchestrated by Stein and his co-conspirators was extremely elaborate,” said U.S. Attorney Ferrer. “In an effort to conceal his fraudulent financial scheme, Stein falsely testified before the SEC and used his position of trust to arrange for others to do the same. The sentencing announced today underscores the department's commitment to hold liable those individuals who profit from manipulating the financial markets and violating securities and other laws that are intended to protect investors and markets.”
According to evidence presented at trial, Stein’s wife held a controlling majority interest in Signalife Inc., a publicly-traded company currently known as Heart Tronics that purportedly sold electronic heart monitoring devices. While acting as Signalife’s outside legal counsel, Stein engaged in a scheme to artificially inflate the price of Signalife stock by creating the false impression of sales activity at the company. Specifically, the evidence at trial showed that Stein and his co-conspirators created fake purchase orders and related documents from fictitious customers, then caused Signalife to issue press releases and file documents with the Securities and Exchange Commission (SEC) trumpeting these fictitious sales. Evidence at trial also proved that in a further effort to create the false appearance of sales activity, Stein arranged to have Signalife products shipped to and temporarily stored with an individual who had not purchased any products.
Evidence at trial further proved that Stein disguised his selling of Signalife stock at artificially inflated prices by placing shares in purportedly blind trusts, and having a co-conspirator sell the shares after Stein caused the false sales information to be disseminated to the public. Stein also caused Signalife to issue shares to third parties so that those third parties could sell the shares and remit the proceeds to Stein. From one co-conspirator alone, Stein received illicit gains of over $1.8 million from those sales.
In addition, evidence at trial proved that Stein conspired to obstruct the SEC investigation into Heart Tronics by testifying falsely and arranging for others to testify falsely in an effort to conceal the fraud scheme.
This case was investigated by the U.S. Postal Inspection Service, with assistance from the Office of the Special Inspector General for the Troubled Asset Relief Program. The SEC referred this matter to the Justice Department, conducted a parallel investigation resulting in a civil enforcement action against Stein and others, and provided substantial assistance in this investigation. The Financial Industry Regulatory Authority’s Criminal Prosecution Assistance Group likewise provided substantial assistance in this matter.
This case was prosecuted by Assistant Chief Albert B. Stieglitz Jr., Assistant Chief Kevin B. Muhlendorf, and Trial Attorney Andrew H. Warren of the Criminal Division’s Fraud Section and Assistant Chief Darrin McCullough of the Criminal Division’s Asset Forfeiture and Money Laundering Section.
Attorney Sentenced to 17 Years in Prison for Multi-Million Dollar Stock FraudRead the Press Release
A California attorney was sentenced to serve 17 years in prison today in the Southern District of Florida for operating a five-year, multi-million dollar market manipulation and fraud scheme, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.
Mitchell J. Stein, 53, of Hidden Hills, California, was convicted by a jury on May 20, 2013, of conspiracy to commit mail and wire fraud, three counts of wire fraud, three counts of securities fraud, three counts of money laundering, and one count of conspiracy to obstruct justice. In addition to the prison sentence, U.S. District Judge Kenneth A. Marra of the Southern District of Florida ordered Stein to forfeit $5.3 million. Restitution will be determined at a later date.
“The ‘pump and dump’ scheme orchestrated by Stein and his co-conspirators was extremely elaborate,” said U.S. Attorney Ferrer. “In an effort to conceal his fraudulent financial scheme, Stein falsely testified before the SEC and used his position of trust to arrange for others to do the same. The sentencing announced today underscores the department's commitment to hold liable those individuals who profit from manipulating the financial markets and violating securities and other laws that are intended to protect investors and markets.”
“Lawyers for companies are supposed to guide their clients through the important reporting and regulatory requirements that ensure the integrity of our financial markets,” said Assistant Attorney General Caldwell. “Stein abdicated his responsibility, and instead abused his position of trust to defraud a public company, its shareholders, and the investing public of millions of dollars.”
According to evidence presented at trial, Stein’s wife held a controlling majority interest in Signalife Inc., a publicly-traded company currently known as Heart Tronics that purportedly sold electronic heart monitoring devices. While acting as Signalife’s outside legal counsel, Stein engaged in a scheme to artificially inflate the price of Signalife stock by creating the false impression of sales activity at the company. Specifically, the evidence at trial showed that Stein and his co-conspirators created fake purchase orders and related documents from fictitious customers, then caused Signalife to issue press releases and file documents with the Securities and Exchange Commission (SEC) trumpeting these fictitious sales. Evidence at trial also proved that in a further effort to create the false appearance of sales activity, Stein arranged to have Signalife products shipped to and temporarily stored with an individual who had not purchased any products.
Evidence at trial further proved that Stein disguised his selling of Signalife stock at artificially inflated prices by placing shares in purportedly blind trusts, and having a co-conspirator sell the shares after Stein caused the false sales information to be disseminated to the public. Stein also caused Signalife to issue shares to third parties so that those third parties could sell the shares and remit the proceeds to Stein. From one co-conspirator alone, Stein received illicit gains of over $1.8 million from those sales.
In addition, evidence at trial proved that Stein conspired to obstruct the SEC investigation into Heart Tronics by testifying falsely and arranging for others to testify falsely in an effort to conceal the fraud scheme.
This case was investigated by the U.S. Postal Inspection Service, with assistance from the Office of the Special Inspector General for the Troubled Asset Relief Program. The SEC referred this matter to the Justice Department, conducted a parallel investigation resulting in a civil enforcement action against Stein and others, and provided substantial assistance in this investigation. The Financial Industry Regulatory Authority’s Criminal Prosecution Assistance Group likewise provided substantial assistance in this matter.
This case was prosecuted by Assistant Chief Albert B. Stieglitz Jr., Assistant Chief Kevin B. Muhlendorf, and Trial Attorney Andrew H. Warren of the Criminal Division’s Fraud Section and Assistant Chief Darrin McCullough of the Criminal Division’s Asset Forfeiture and Money Laundering Section.
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.
Armed Career Criminal Guilty in String of Armed RobberiesRead the Press Release
– Federal charges result from “Project Recoil”
LOUISVILLE, Ky. – A convicted felon from Georgia pleaded guilty in United States District Court today before United States Magistrate Judge Dave Whalin announced David J. Hale, United States Attorney for the Western District of Kentucky. The federal charges stemmed from “Project Recoil,” the on-going partnership of multiple Jefferson County, Kentucky law enforcement agencies, developed by U.S. Attorney Hale, to maximize penalties for the most violent offenders and to reduce violent crime in our community.
Xavier Demetrius Porter, 40, pleaded guilty to nine counts of obstructing interstate commerce through robbery, one count of brandishing a firearm during a robbery, and one count of being a felon in possession of a firearm. In 1996, Porter was convicted of three counts of armed robbery, in case number 96-R-398 in Dougherty County (Georgia) Superior Court. During those robberies, he used a sawed-off shotgun.
Porter admitted to robbing Spinelli’s Pizza located at 2905 Goose Creek Road on March 5, 2013, the Subway located at 3503 South Hurstbourne Parkway on March 7, 2013, the Subway located at 8056 New LaGrange Road on March 17, 2013, Circle K located at 4600 Wattbourne Lane on April 15, 2013, the White Castle located at 3705 Bardstown Road on April 16, 2013, the Thornton’s located at 3909 Taylorsville Road on April 17, 2013, the Subway located on Bishop Lane on April 17, 2013, JC=s Cigarette Outlet located on Six Mile Lane on April 18, 2013, and the Adam and Eve store on South Hurstbourne Parkway on April 18, 2013. The federal robbery charges are brought pursuant to the Hobb’s Act, which criminalizes robberies that affect interstate commerce. During eight of the robberies, Porter brandished a firearm. During the first two robberies, he used a small black handgun. During the last five robberies, he used a pistol-grip 12 gauge shotgun. At the time of his arrest, Porter was clutching the money he stole from Adam & Eve in his hand.
Under the terms of his plea agreement, Porter faces 30 years in prison followed by 5 years of Supervised Release . There is no parole in the federal system. Porter also faces a possible fine of $4,500,000. Senior Judge Thomas B. Russell will set the case for sentencing at a later date.
Assistant United States Attorney Jo E. Lawless prosecuted the case. The Louisville Metro Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) conducted the investigation.
Additional Child Exploitation Charges Filed Against Maine ResidentRead the Press Release
BOSTON – A federal grand jury returned a superseding indictment yesterday adding three additional charges against a Saco, Maine man.
Dillan Letellier, 30, was charged in a seven-count superseding indictment with two counts of coercion and enticement of a minor involving two minor victims, one count of attempted coercion and enticement of a minor, three counts of travel with intent to engage in illicit sexual conduct, and one count of possession of child pornography. In October 2013, Letellier was originally indicted on coercion and travel relating to one minor victim.
The indictment alleges that Letellier met the minor victims on the Internet and thereafter persuaded each minor to meet with him in person. On two separate occasions, Letellier traveled from Maine to one of the minor’s town in Massachusetts where he engaged in sexual intercourse with the minor. On another occasion, Letellier traveled from Maine to a second minor’s town to engage in sexual intercourse with the minor. On Oct. 3, 2013, Letellier was arrested on federal charges. A search warrant was executed at his residence in Maine that day and officers located child pornography on computers. Letellier has remained in federal custody since his arrest in October, 2013.
The charging statutes provide a sentence of no greater than life in prison and a 10 year mandatory minimum in addition to a mandatory minimum of five years of supervised release and a maximum of a lifetime of supervised release, and a fine of $250,000 for each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based on the United States Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Shelly Binkowski, Special Agent in Charge of the U.S. Postal Inspection Service; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police, made the announcement today. The case was also investigated the police department in the town(s) in which the minor victims reside. The case is being prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys= Offices and the Criminal Division=s CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Thursday 4 December 2014
Wheeling Man Sentenced in Painkiller Distribution RingRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistWHEELING, WEST VIRGINIA – Steven L. Namack, 65, of Wheeling, West Virginia, was sentenced today to 18 months in prison for selling oxycodone as part of a prescription painkiller and cocaine distribution operation, United States Attorney William J. Ihlenfeld, II announced.
During an investigation by the U.S. Drug Enforcement Administration and the Ohio Valley Drug and Violent Crime Task Force, a HIDTA-funded initiative, Namack was discovered in May 2013 selling oxycodone pills. He pled guilty in September 2014 to one count of “Distribution of Oxycodone.”
Assistant U.S. Attorney John Parr prosecuted the case on behalf of the government.
Senior U.S. District Judge Frederick P. Stamp presided.
Wheeling Man Convicted of Unlawful Possession of FirearmsRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistWHEELING, WEST VIRGINIA – Melvin B. Neff, 56, of Wheeling, West Virginia, was convicted today for unlawful possession of firearms, United States Attorney William J. Ihlenfeld, II announced.
Neff was convicted in 1993 in the Court of Common Pleas of Washington County, Pennsylvania of the felony offense of “Violation of the Controlled Substance, Drug Device and Cosmetic Act.” As a result of the conviction, Neff was prohibited from possessing a firearm.
In June 2014, Neff was discovered in possession of eight firearms including five rifles, two shotguns, and a .45 caliber pistol. Neff admitted to unlawful possession of the firearms when he pled guilty today to one count of “Prohibited Person in Possession of a Firearm.”
Neff faces up to ten years in prison and fine of up to $250,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Steve Vogrin is prosecuting the case on behalf of the government. The Wheeling, West Virginia Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
Senior U.S. District Judge Frederick P. Stamp presided.
Wheeling Man Convicted of Unlawful Possession of FirearmsRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistWHEELING, WEST VIRGINIA – Melvin B. Neff, 56, of Wheeling, West Virginia, was convicted today for unlawful possession of firearms, United States Attorney William J. Ihlenfeld, II announced.
Neff was convicted in 1993 in the Court of Common Pleas of Washington County, Pennsylvania of the felony offense of “Violation of the Controlled Substance, Drug Device and Cosmetic Act.” As a result of the conviction, Neff was prohibited from possessing a firearm.
In June 2014, Neff was discovered in possession of eight firearms including five rifles, two shotguns, and a .45 caliber pistol. Neff admitted to unlawful possession of the firearms when he pled guilty today to one count of “Prohibited Person in Possession of a Firearm.”
Neff faces up to ten years in prison and fine of up to $250,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Steve Vogrin is prosecuting the case on behalf of the government. The Wheeling, West Virginia Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
Senior U.S. District Judge Frederick P. Stamp presided.
West Milford Township, New Jersey, Man Charged with Distributing Sexually Explicit Images of ChildrenRead the Press Release
NEWARK, N.J. – A Passaic County, New Jersey, man was arrested at his home today by special agents of the FBI and officers of the Passaic County Sheriff’s Office and West Milford Police Department on a charge that he distributed sexually explicit images of children from his computer, U.S. Attorney Paul J. Fishman announced.
Thomas Bachalis, 30, of West Milford Township, New Jersey, is charged by complaint with one count of distributing images of child pornography over the Internet. He is scheduled to make his initial court appearance this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.
According to the complaint:
On Aug. 15, 2013, Bachalis allegedly distributed images depicting child sexual abuse on the Internet via peer-to-peer file sharing software. In September 2013, officers of the Passaic County Sheriff’s Office executed a search warrant at Bachalis’ residence and seized digital evidence that contained images depicting child sexual abuse—including material involving prepubescent minors.
The distribution count carries a minimum penalty of five years in prison and a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Passaic County Sheriff’s Office, under the direction of Sheriff Richard H. Berdnik; and the West Milford Police Department, under the direction of Chief Timothy Storbeck, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Courtney A. Howard of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
14-424
Bachalis, Thomas Complaint
Waterbury Man Sentenced to Federal Prison for Trafficking Cocaine Stolen from the U.S. MailRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JUSTIN HOGAN, 34, of Waterbury, was sentenced today by Senior U.S. District Judge Ellen Bree Burns in New Haven to 24 months of imprisonment, followed by four years of supervised release, for trafficking cocaine stolen from the U.S. Mail.
This matter stems from a federal investigation into the use of the mails to transport narcotics from Puerto Rico to the greater Waterbury area.
According to court documents and statements made in court, Justin Hogan’s brother, Edward Hogan, was employed by the U.S. Postal Service as a supervisor of customer service assigned to the Plaza Station Post Office in Waterbury. From approximately January 2012 to August 2013, Edward Hogan used his position with the U.S. Postal Service to profile packages that he believed contained illegal drugs by making note of the originating address, destination address, size of the package and value of the postage. Upon identifying a package that likely contained narcotics, Edward Hogan would steal the package from the mail and bring it to his or Justin Hogan’s residence where they would open the package and extract the drugs. Edward Hogan would then reseal the empty package and deliver it to the destination.
The brothers distributed the stolen drugs to third parties for profit.
Through this scheme, Edward and Justin Hogan stole and then sold more than 100 pounds of marijuana and two kilograms of cocaine.
On November 9, 2013, law enforcement surveilled Edward Hogan as he intercepted a package containing approximately two kilograms of cocaine that was delivered to the Waterbury Main Post Office on Grand Street. He then transported the parcel to his residence. Justin Hogan arrived at the residence a short time later and opened the package in Edward Hogan’s presence.
On August 7, 2014, Justin Hogan pleaded guilty to one count of conspiracy to possess with intent to distribute 500 grams or more of cocaine, and one count of receipt of stolen mail matter. On the same date, Edward Hogan pleaded guilty to one count of conspiracy to possess with intent to distribute 500 grams or more of cocaine, and one count of embezzlement of mail by a U.S. Postal Employee.
Edward Hogan is scheduled to be sentenced on December 11.
This case has been investigated by the Federal Bureau of Investigation, the U.S. Postal Inspection Service and the U.S. Postal Service – Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorney Christopher M. Mattei.
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[email protected]Venice Escrow Agent Sentenced for Role in Wire Fraud Investment SchemeRead the Press Release
Tampa, Florida – Senior U.S. District Judge Susan C. Bucklew has sentenced Stephen J. Cormier (42, Nokomis) to three years and five months in federal prison for his role in a conspiracy to commit wire fraud. As part of his sentence, the Court also entered a money judgment in the amount of $4.7 million, the proceeds of the fraudulent scheme. He pleaded guilty on March 5, 2013.
According to court documents, Cormier was the sole owner of a title insurance company, A Clear Title and Escrow Exchange (ACTEE), located in Venice, Florida. Part of the business of ACTEE was to write title insurance policies and hold escrow monies in connection with real estate and business transactions. In his capacity as a licensed escrow agent, Cormier received funds from various individuals that were the proceeds of fraudulent activity, including investments that had been made by numerous investor-victims related to “synthetic” financial transactions. These transactions generally involved promises of high rates of return within a short time period, and have been publicly labelled as fraudulent by the Securities and Exchange Commission and other financial authorities. Cormier also disbursed those funds at the request and direction of other co-conspirators. As an escrow agent, he made false representations to the victims as to the status and amount of their deposited funds. The total amount of investor funds Cormier handled was approximately $4.7 million.
This case was investigated by the Federal Bureau of Investigation with assistance from the Sarasota County Sherriff’s Office. It was prosecuted by Assistant United States Attorneys Jay L. Hoffer and Cherie Krigsman.