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16 January 2015
Individual Sentenced for Defrauding the US Department of Veterans AffairsRead the Press Release
SAN JUAN, P.R. – Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico, announced the sentencing of Pedro Rodríguez-Colondres to 18 months in prison by United States District Court Judge Francisco A. Besosa. Rodríguez-Colondres pled guilty to Theft of Government Funds in violation of 18 USC 641. As part of the sentencing the defendant was ordered to pay the US Department of Veteran’s Affairs $550,849.92 in restitution.
An investigation by Special Agents from the US Department of Veteran Affairs, Office of Inspector General (VA-OIG) and US Department of State, Bureau of Diplomatic Security (DSS), revealed the defendant was discharged upon his request from the US Army Reserve seven months after his enlistment and was informed he would be ineligible for reenlistment. Approximately three years later, on September 14, 1977, the defendant fraudulently enlisted using his cousin’s name Pedro Colondres-Rosa. The defendant was medically discharged for temporary disability on May 17, 1978, and five days after his discharge, the defendant requested disability benefits from Veterans Affairs. Over the last thirty years, the defendant fraudulently received in excess of $1.4 million dollars in compensation, education, and medical benefits from the Veterans Administration. Federal authorities became aware of the fraud after Rodríguez-Colondres attempted to obtain a U.S. Passport under the assumed identity of his cousin, Colondres-Rosa.
“This individual defrauded the US Department of Veteran’s Affairs for personal gain,” said United States Attorney, Rosa Emilia Rodríguez-Vélez. “We will continue to investigate and prosecute those who engage in corrupt acts which directly affect federal programs and the availability of these funds for its intended recipients. We commend the law enforcement agencies and our attorneys for their efforts in investigating this case and bringing this individual to justice.”
Individual Sentenced for Defrauding the US Department of Veterans AffairsRead the Press Release
SAN JUAN, P.R. – Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico, announced the sentencing of Pedro Rodríguez-Colondres to 18 months in prison by United States District Court Judge Francisco A. Besosa. Rodríguez-Colondres pled guilty to Theft of Government Funds in violation of 18 USC 641. As part of the sentencing the defendant was ordered to pay the US Department of Veteran’s Affairs $550,849.92 in restitution.
An investigation by Special Agents from the US Department of Veteran Affairs, Office of Inspector General (VA-OIG) and US Department of State, Bureau of Diplomatic Security (DSS), revealed the defendant was discharged upon his request from the US Army Reserve seven months after his enlistment and was informed he would be ineligible for reenlistment. Approximately three years later, on September 14, 1977, the defendant fraudulently enlisted using his cousin’s name Pedro Colondres-Rosa. The defendant was medically discharged for temporary disability on May 17, 1978, and five days after his discharge, the defendant requested disability benefits from Veterans Affairs. Over the last thirty years, the defendant fraudulently received in excess of $1.4 million dollars in compensation, education, and medical benefits from the Veterans Administration. Federal authorities became aware of the fraud after Rodríguez-Colondres attempted to obtain a U.S. Passport under the assumed identity of his cousin, Colondres-Rosa.
“This individual defrauded the US Department of Veteran’s Affairs for personal gain,” said United States Attorney, Rosa Emilia Rodríguez-Vélez. “We will continue to investigate and prosecute those who engage in corrupt acts which directly affect federal programs and the availability of these funds for its intended recipients. We commend the law enforcement agencies and our attorneys for their efforts in investigating this case and bringing this individual to justice.”
Illinois Woman Sentenced to Prison for Travelling Interstate to Promote Heroin TraffickingRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Mexican citizen residing in Illinois at the time of her arrest, was sentenced to 11 months in prison today in Scranton by United States District Court Judge Robert D. Mariani for interstate travel in aid of a drug trafficking conspiracy.
According to United States Attorney Peter Smith, the defendant, Maria Pina, age 44, previously admitted to transporting heroin from Illinois to Pennsylvania in February 2014.
Pina was charged in an Information filed in June 2014. The charge against Pina resulted from an investigation by the Drug Enforcement Administration, Homeland Security Investigators, the Pennsylvania State Police, and Berks County Detectives.
Immigration authorities have filed a detainer against Pina, who is subject to deportation proceedings and possible removal from the United States as a result of committing the felony offense.
The case was prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Howard County Bloods Gang Member Sentenced to 18 Years in Prison in Racketeering ConspiracyRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell III sentenced Giovanni Wright, a/k/a "G," age 22, of Elkridge, Maryland, today to 18 years in prison followed by five years of supervised release for conspiring to participate in a racketeering conspiracy, discharging a firearm in furtherance of a crime of violence and the unlawful transfer of firearms, in connection with his membership in the Bloods gang operating primarily out of Howard County, Maryland.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; Howard County Police Chief Gary L. Gardner; Baltimore Police Commissioner Anthony W. Batts; and Howard County State’s Attorney Dario Broccolino.
Wright was identified as a member of the Bloods as the result of a long term investigation conducted by ATF and the Howard County Police Department. The Bloods, a national criminal street gang with members operating in and around Howard County, Maryland, committed violent acts within the gang to maintain discipline, and against rival gangs.According to his plea agreement, Wright was a member of the Bloods since at least 2010. Wright supported fellow incarcerated gang members, participated in gang meetings and discussions regarding gang sanctions, and planned retaliation against gang members suspected of cooperation.
For example, on February 22, 2012, Wright and a co-defendant robbed a rival gang member at gunpoint. In January 2013, Wright fired a gun at a victim’s residence as he and another co-defendant drove by in a truck. Two innocent bystanders were outside and their car was damaged in the shooting. Wright also sold firearms with and to fellow gang members who were prohibited from possessing the firearms.
On May 8, 2013, law enforcement executed multiple search warrants and arrested approximately 20 individuals connected with the Bloods gang, including Wright. A search warrant was executed at Wright’s residence and firearms and ammunition were seized.
To date, 19 defendants have pleaded guilty to their roles in the racketeering and drug conspiracies. Most recently, co-defendant Ryan Gladden, a/k/a "Fats," age 27, of Wilkes Barre, Pennsylvania, was sentenced on January 7, 2015, to 92 months in prison. Gladden has been a member of the Bloods gang since 2006 and became a leader of the “Swann” set, a sub-group of the Bloods. Co-defendant Rouchell Chesson, a/k/a “Black,” age 31, of Washington, D.C., was sentenced on December 12, 2014 to 10 years in prison. Chesson was a leader in the “Tree Top Piru” or “TTP” set of the Bloods. Christopher Lloyd McGann, a/k/a “Toker,” age 23, of Columbia, Maryland, was sentenced on December 19, 2014, to eight years in prison.
Mr. Rosenstein commended the ATF, Howard County Police Department, Baltimore Police Department and Howard County State’s Attorney’s Office for their work in this investigation and prosecution. Mr. Rosenstein thanked Assistant U.S. Attorneys Rachel M. Yasser and Sandra Wilkinson, who prosecuted the case.Fourteen Charged in Connection with Lewiston Drug ArrestsRead the Press Release
Contact: David B. Joyce
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that a federal grand jury sitting in Portland indicted Tasheem Carter, 29, of Far Rockaway, New York and Lewiston, Maine, for possession with intent to distribute cocaine and oxycodone and
Christian Dent, 31, of Far Rockaway and Lewiston, for conspiracy to distribute 28 grams or more of cocaine base, possession with intent to distribute 28 grams or more of cocaine base and being a felon in possession of a firearm. Also charged were Sabree Branch, 23, of Philadelphia, Pennsylvania and Lewiston, for use of a firearm in furtherance of a drug trafficking crime, possession of cocaine base, and unlawful use of a communication facility; Michael Boney, 28, of Far Rockaway and Auburn, Maine, for possession with intent to distribute cocaine and cocaine base; Isar Coleman, 31, of Lewiston, for conspiracy to distribute cocaine base; Angela
Crabtree, 32, of Auburn, for possession with intent to distribute cocaine base; Katelynn
Dubois, 21, of Wales, Maine, for conspiracy to distribute oxycodone; Lee Eirby, 66, of
Lewiston, for maintaining a drug-involved premises; Isaac Fofie, 26, of New Sharon, Maine, for conspiracy to distribute heroin and distribution of heroin; Kourtney Francoeur, 21, of
Lewiston, for conspiracy to distribute cocaine base; Jamel Hamilton, of Far Rockaway, for conspiracy to distribute heroin; Willie Jackson, 32, of Lewiston, for possession with intent to distribute cocaine base; Rebecca Thompson, 33, of Lewiston, for conspiracy to distribute cocaine base; and Barney Whitfield, 33, of Lewiston, for possession with intent to distribute cocaine base and heroin.According to court records, the charges arise out of the distribution of cocaine and heroin in the greater Lewiston/Auburn area. This morning, federal, state and local agents arrested
Branch, Coleman, Crabtree, Dubois, Eirby, Fofie, Francoeur, Hamilton, Jackson, Thompson and
Whitfield while executing warrants. Carter, Dent and Boney were all previously arrested on criminal complaints. The defendants arrested today will make their initial appearances in the
U.S. District Court in Portland today.Dent faces between five and 40 years in prison, a $4,000,000 fine and supervised release for life on the drug charge or between 10 years and life and an $8,000,000 fine if he has a prior felony drug conviction. On the gun charge, Dent also faces up to 10 years in prison, a fine of up to $250,000 and three years of supervised release. Branch faces between five years and life, a fine of $250,000 and five years of supervised release on the gun charge, up to 1 year, a $100,000 fine and up to 1 year of supervised release on the possession charge and up to 4 years, a
$250,000 fine and supervised release of up to one year on the communication facility charge.
Eirby faces up to 20 years in prison, a $250,000 fine and three years of supervised release. The other defendants face up to 20 years in prison, a $1,000,000 fine and supervised release for life.The case was investigated by the Maine Drug Enforcement Agency; the Lewiston and
Auburn Police Departments; the Maine State Police; and the Southern Maine Gang Task Force comprised of agents and officers from the Federal Bureau of Investigation; the Bureau of
Alcohol, Tobacco, Firearms and Explosives; the U.S. Drug Enforcement Administration; U.S.
Immigration and Customs Enforcement’s Homeland Security Investigations; and the Portland and Biddeford Police Departments.An indictment or criminal complaint is merely an accusation and a defendant is presumed innocent unless proven guilty in a court of law.
Press Alert: On Tuesday, January 20, 2015, at 10:30a.m, U.S. Attorney Delahanty, Lewiston Police Chief Michael Bussiere and Androscoggin County District Attorney Andrew
Robinson will hold a press conference regarding these cases at the Lewiston Police Department, 171 Park Street, Lewiston, Maine. Media members should arrive by 10:20 a.m. and will be asked to provide identification credentials.Fourteen Charged in Connection with Lewiston Drug ArrestsRead the Press Release
A federal grand jury in sitting in Portland indicted Tasheem Carter, 29, of Far Rockaway, New York, and Lewiston, Maine, for possession with intent to distribute cocaine and oxycodone and Christian Dent, 31, of Far Rockaway and Lewiston, for conspiracy to distribute 28 grams or more of cocaine base, possession with intent to distribute 28 grams or more of cocaine base and being a felon in possession of a firearm, U.S. Attorney Thomas E. Delahanty II announced today.
Also charged were Sabree Branch, 23, of Philadelphia and Lewiston, for use of a firearm in furtherance of a drug trafficking crime, possession of cocaine base and unlawful use of a communication facility; Michael Boney, 28, of Far Rockaway and Auburn, Maine, for possession with intent to distribute cocaine and cocaine base; Isar Coleman, 31, of Lewiston, for conspiracy to distribute cocaine base; Angela Crabtree, 32, of Auburn, for possession with intent to distribute cocaine base; Katelynn Dubois, 21, of Wales, Maine, for conspiracy to distribute oxycodone; Lee Eirby, 66, of Lewiston, for maintaining a drug-involved premises; Isaac Fofie, 26, of New Sharon, Maine, for conspiracy to distribute heroin and distribution of heroin; Kourtney Francoeur, 21, of Lewiston, for conspiracy to distribute cocaine base; Jamel Hamilton, of Far Rockaway, for conspiracy to distribute heroin; Willie Jackson, 32, of Lewiston, for possession with intent to distribute cocaine base; Rebecca Thompson, 33, of Lewiston, for conspiracy to distribute cocaine base; and Barney Whitfield, 33, of Lewiston, for possession with intent to distribute cocaine base and heroin.
According to court records, the charges arise out of the distribution of cocaine and heroin in the greater Lewiston and Auburn area. This morning, federal, state and local agents arrested Branch, Coleman, Crabtree, Dubois, Eirby, Fofie, Francoeur, Hamilton, Jackson, Thompson and Whitfield while executing warrants. Carter, Dent and Boney were all previously arrested on criminal complaints. The defendants arrested today will make their initial appearances in the U.S. District Court in Portland today.
Dent faces between five and 40 years in prison, a $4 million fine and supervised release for life on the drug charge or between 10 years and life in prison and an $8 million fine if he has a prior felony drug conviction. On the gun charge, Dent also faces up to 10 years in prison, a fine of up to $250,000 and three years of supervised release. For the gun charge, Branch faces between five years and life in prison, a fine of $250,000 and five years of supervised release; for the possession charge, Branch faces up to one year in prison, a $100,000 fine and up to one year of supervised release; and for the communication facility charge, faces up to four years in prison, a $250,000 fine and supervised release of up to one year. Eirby faces up to 20 years in prison, a $250,000 fine and three years of supervised release for maintaining a drug-involved premises. The other defendants face up to 20 years in prison, a $1 million fine and supervised release for life.
The case was investigated by the Maine Drug Enforcement Agency, the Lewiston and Auburn Police Departments, the Maine State Police, the Southern Maine Gang Task Force comprised of agents and officers from the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Drug Enforcement Administration, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Portland and Biddeford Police Departments.
An indictment or criminal complaint is merely an accusation and defendants are presumed innocent unless proven guilty in a court of law.
On Tuesday, Jan. 20, 2015, at 10:30 a.m, U.S. Attorney Delahanty, Chief Michael Bussiere for the Lewiston Police and District Attorney Andrew Robinson for Androscoggin County will hold a press conference regarding these cases at the Lewiston Police Department at 171 Park Street in Lewiston. Media members should arrive by 10:20 a.m., and will be asked to provide identification credentials.
Four Portland Residents Plead Guilty to $1 Million Tax Fraud SchemeRead the Press Release
WASHINGTON - Acting Deputy Assistant Attorney General Larry J. Wszalek for the Department of Justice's Tax Division, U.S. Attorney S. Amanda Marshall for the District of Oregon and Chief Richard Weber for the Internal Revenue Service-Criminal Investigation (IRS-CI) announced that Jheraun Dunlap, Ernest Bagsby, Jermaine Moore and Brandi McCall pleaded guilty today to a $1 million federal tax refund fraud scheme.
Dunlap admitted to filing 208 false federal income tax returns with false wages, false withholding and false refundable credits that claimed a total of more than $1 million in fraudulent refunds. Dunlap filed false tax returns using the names and social security numbers of other individuals obtained directly and through Bagsby, Moore and McCall. Dunlap filed a number of false tax returns using identities stolen by co-defendant Carolyn Gallagher, who previously pleaded guilty to identity theft. Dunlap also used addresses obtained by Bagsby, Moore and McCall to receive stored-value debit cards loaded with fraudulent income tax refunds.
On Jan. 12, all four defendants pleaded guilty before Senior District Judge Robert E. Jones in the District of Oregon. Dunlap pleaded guilty to conspiracy to defraud the government, wire fraud and aggravated identity theft. Bagsby and Moore pleaded guilty to conspiracy to defraud the government, theft of government funds and aggravated identity theft. McCall pleaded guilty to conspiracy to defraud the government. All four defendants have agreed to pay full restitution to the U.S. Treasury in the amount of $427,896.
This case was investigated by the IRS-CI's Stolen Identity Refund Fraud Task Force. Trial Attorneys Leslie A. Goemaat and Lori A. Hendrickson of the Tax Division are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division's website http://www.justice.gov/tax.
Four Members of ‘Dirty Block’ Atlantic City, New Jersey, Gang Convicted on Drug Conspiracy and Weapons ChargesRead the Press Release
CAMDEN, N.J. – Four members of a criminal street gang that used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City, New Jersey, were convicted at trial today on drug conspiracy and weapons charges, U.S. Attorney Paul J. Fishman announced.
The defendants – Kareem Bailey, 21, Terry Davis, 26, Lamar Macon, 26, and Dominique Venable, 24, all of Atlantic City – were each convicted of conspiracy to distribute one kilogram or more of heroin, possession of firearms in furtherance of a drug trafficking crime and brandishing and discharging firearms in furtherance of the conspiracy following a six-week trial before U.S. District Judge Joseph E. Irenas in Camden federal court. The jury deliberated approximately five hours before returning the verdicts.
According to documents filed in this case and the evidence presented at trial:
The four men are members of a gang known as “Dirty Block,” a/k/a “Crime Fam,” “3.6.6.12,” or “3.6,” which operated in a geographic area of Atlantic City that includes the public housing apartment complexes of Stanley Holmes Village Public Housing Complex, Renaissance Plaza and Schoolhouse Apartments.
The defendants participated in a violent street-level drug trafficking organization that controlled heroin sales through the possession of dozens of firearms and the use of gun violence, including at least one homicide and several non-fatal, drug-related shootings.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor James P. McClain; the Atlantic City Police Department, under the direction of Chief Henry White; and the South Jersey Safe Streets Violent Incident and Gang (Safe Streets) Task Force, with the investigation leading to today’s convictions.
He also thanked the N.J. State Police; the Atlantic County Sheriff’s Office; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Northfield Police Department; the Vineland Police Department; the Brigantine Police Department; the Millville Police Department; the Mullica Township Police Department; the South Jersey Transportation Authority; and the U.S. Secret Service for their contributions.
The government is represented by Assistant U.S. Attorneys Patrick Askin and Justin Danilewitz of the U.S. Attorney’s Office in Camden and Special Assistant U.S. Attorney Edmund Burgos of the Atlantic County Prosecutor’s Office.The charges and allegations against the other defendants arrested in this investigation are merely accusations and the defendants are considered innocent unless and until proven guilty.
15-021
Defense Counsel: Bailey: John Holliday Esq., Hamilton, N.J.
Davis: Gina Capuano Esq., Philadelphia
Macon: William Spade Esq., Philadelphia
Venable: James Murphy Esq., Princeton, N.J.Former United States Postal Service Employee IndictedRead the Press Release
GREENSBORO, N.C. – United States Attorney for the Middle District of North Carolina Ripley Rand announced today that a former United States Postal Service employee has been indicted by a federal grand jury for allegedly (1) committing Social Security fraud, (2) committing identity theft, and (3) committing the unauthorized use of an access device to obtain something of value.
The indictment alleges that Joyce Huskey Stanley, age 55, of Reidsville, N.C., falsely used Social Security numbers not assigned to her (two counts), unlawfully used the identification of another (two counts), and used an unauthorized access device with intent to defraud another (one count).
Ms. Stanley was released on a $50,000 unsecured bond.
The case is being investigated by the United States Postal Service – OIG, United States Secret Service and the Rockingham County Sheriff’s Office. The case is being prosecuted by Assistant United States Attorney Frank Chut.
An Indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former Owner of Gallup-Based Oil Distributor Pleads Guilty to Federal Bankruptcy Fraud ChargeRead the Press Release
Plea Agreement Requires $265,830.00 Restitution Payment
ALBUQUERQUE – Michael P. Mataya, 64, of Thoreau, N.M., pleaded guilty this morning to a bankruptcy fraud charge under a plea agreement with the U.S. Attorney’s Office. Under the terms of the plea agreement, the United States may recommend that Mataya be sentenced to a maximum term of 24 months of imprisonment. It also requires Mataya to pay restitution in the amount of $265,830.00 to the bankruptcy estate of his bankrupt company so that the funds may be used to pay creditors.
Mataya was the sole owner of Indian Capitol Distributing, Inc. (Indian Capitol), a Gallup-based oil and gas distributor, and Mataya’s Travel Plaza, a truck stop in Gallup, N.M. He was indicted on Feb. 26, 2014, and charged with three counts of bankruptcy fraud. Counts 1 and 2 of the indictment charged Mataya with making materially false statements under oath on May 5, 2009 and May 28, 2009, before the U.S. Bankruptcy Court in bankruptcy proceedings involving Indian Capitol. Count 3 charged Mataya with fraudulently transferring assets belonging to Indian Capitol to Mataya’s Travel Plaza.
Today Mataya pled guilty to Count 2 of the indictment. According to Mataya’s plea agreement, Indian Capitol filed for bankruptcy in April 2009. At the time, the company had dozens of creditors. After the bankruptcy court entered an order permitting Indian Capitol to use cash collateral during an emergency period on the condition that it not transfer assets to any entity owned by Mataya, Mataya provided false testimony before the court to conceal the fact that Indian Capitol was delivering fuel to Mataya’s Travel Plaza without payment in violation of the court’s order.
In entering his guilty plea, Mataya admitted falsely testifying because he knew that the court would not permit the transfer of fuel from Indian Capitol to Mataya’s Travel Plaza. He also admitted falsifying invoices and bills of lading to conceal this unlawful transfer of assets. He acknowledged that the total value of the fuel unlawfully transferred to Mataya’s Travel Plaza was $265,830.00.
Mataya remains on conditions of release and under pretrial supervision pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Albuquerque Division of the FBI and is being prosecuted by Assistant U.S. Attorney C. Paige Messec.
Former Investor Relations Executive Sentenced to Prison for Insider TradingRead the Press Release
HOUSTON - Stephen B. Gray, 57, of Houston, has been sentenced to federal prison following his conviction for securities fraud in an insider trading scheme, announced U.S. Attorney Kenneth Magidson. Gray pleaded guilty Sept. 26, 2014.
Today, U.S. District Judge Melinda Harmon, who accepted Gray’s plea, handed Gray a sentence of 46 months in federal prison and ordered him to pay a $7,500 fine. Gray collected at least $326,159 as a result of his illegal activity. Judge Harmon ordered Gray to forfeit that amount as part of his sentence.
From at least September 2009 through at least May 2012, Gray engaged in an insider trading scheme to use and trade upon material non-public information he acquired during his employment at an investor relations firm based in Houston. Specifically, Gray, as CEO, had access to press releases and confidential information used to prepare the releases by the firm for its clients prior to their issuance to the investing public. The press releases contained material, non-public information about business events and announcements relating to the businesses of the firm’s clients.
In violation of firm policies and in breach of his duties to the firm and its clients, Gray traded in the firm stock of clients and engaged in trades in options of the stock of firm clients before announcement of material information by these companies via press releases by the firm. Gray obtained advance knowledge of material information that would be detailed in press releases issued by firm clients. He then traded while in possession of such material information before the information became public and profited on the movement in the stock price.
Without access to non-public information, trades in options, particularly short- term options, can carry significant risk because the trader is betting that the common stock underlying the options will increase significantly (if buying call options) or decrease significantly (if buying put options), prior to expiration. If the stock does not meet the target price by the expiration date, the options expire out of the money and the trader loses all of the money he paid to purchase the option. The shorter the term of the option, the riskier it is, because the common stock has less time to reach the target price.
Gray knew the prices of client stock were likely to increase or decrease after the information in client company announcements became public and that he would therefore be able to buy or sell his options for a profit.
Gray did not disclose his trades of client securities to the firm or its clients and used the material non-public information he acquired as part of his employment with the firm to make profitable trades and trades to avoid losses, in his personal brokerage account at TD Ameritrade.
Gray traded in firm client securities despite the firm’s written policies, which strictly prohibited firm employees from trading in any security issued by a firm client. Gray drafted these policies and was personally responsible for ensuring firm employees received and signed copies of each.
Gray, who had previously been released on bond, was permitted to remain on bond but ordered to voluntarily surrender either to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation leading up to the arrest was conducted by the Houston office of the FBI with valuable assistance from the Securities Exchange Commission in Fort Worth. Assistant U.S. Attorney Belinda Beek prosecuted the case.
Former Finance VP Sentenced for Embezzlement SchemeRead the Press Release
The former Vice President of Finance for the NW Division of US Foodservice was sentenced today in U.S. District Court in Tacoma to 30 months in prison, three years of supervised release and $496,845 in restitution, announced Acting United States Attorney Annette L. Hayes. JASON A. GREEN, 37, of Puyallup, Washington, conspired with his friend, Jimmie Dillingham, to steal from GREEN’s employer, US Foodservice. GREEN pleaded guilty to mail fraud, resulting in a loss of nearly half a million dollars to US Foodservice, in November 2013. In November 2014 Dillingham pleaded guilty to mail fraud and will be sentenced later this year. At the sentencing hearing U.S. District Judge Ronald B. Leighton told GREEN, “This offense is serious, it tears at the fabric of society . . . [it is the type of offense that] has a corrosive effect on people who didn’t have your opportunity. You were blessed. I can’t see the motivation.”
According to records in the case, beginning in July 2009 and continuing until late 2010, GREEN and Dillingham made up phony invoices indicating that Dillingham’s company had done work for US Foodservice. GREEN abused his access to payment systems at the company to approve expenditures for work that was never done. GREEN changed computer codes in the accounting records to conceal the fraud. In one part of the scheme, the men invented a security company and submitted phony bills for work it allegedly did at a Clark County warehouse. GREEN used his access to US Foodservice accounts to cancel the contract with a legitimate company and instead steered the business to Dillingham’s company. The warehouse property was later sold. After the men submitted the invoices for payment, Dillingham would deposit the checks and share the funds with GREEN. Both men gambled significant amounts of the embezzled money at area casinos.
In December 2010, the company tried to untangle shortfalls in various accounts and GREEN quit his job when confronted about fraudulent entries in the books. The company notified law enforcement which began the financial investigation.
The case was investigated by the FBI and the U.S. Postal Inspection Service. The case was prosecuted by Assistant United States Attorney Arlen Storm.
Former Denver City Councilman Sentenced to Five Years in Federal Prison for Role in Midland-Based Heroin and Meth Distribution RingRead the Press Release
In Midland today, U.S. District Judge Robert A. Junell sentenced 50-year-old former Denver City (TX) councilman Joe Anthony Kay to five years in federal prison for his role in a Midland-based heroin and methamphetamine distribution ring, announced Acting United States Attorney Richard L. Durbin, Jr., Midland Police Chief Price Robinson and Texas Department of Public Safety Director Steve McCraw.
In addition to the prison term, Judge Junell ordered that Kay be placed under supervised release for a period of five years after completing his prison term.
On August 31, 2014, state and local authorities arrested Kay based on a federal grand jury indictment charging him with one count of conspiracy to possess with intent to distribute controlled substances. Kay pleaded guilty to the charge on September 16, 2014. By pleading guilty, Kay admitted that from June 2010 to April 2014, he conspired with others to distribute narcotics in the Midland, Odessa, and Denver City areas. According to court records, Kay conspired to distribute 20 kilograms of cocaine, 2 kilograms of heroin, 1 kilogram of methamphetamine, and 100 pounds of marijuana.
Kay is the last of seven defendants to be convicted and sentenced for their roles in this drug trafficking scheme. Yesterday, Judge Junell sentenced drug supplier Luis Jose Tarango Terrazas, age 51, of Fabens, TX, to 70 months imprisonment. Last month, Judge Junell sentenced 42–year-old Michael Alexander Lozano of Denver City, and 46–year-old William Ray Warren of Midland, each to ten years imprisonment; 30-year-old Cameron Edward Gee of Midland, to 71 months imprisonment; 31-year-old Quentin Zachery Bailey of Odessa, to 46 months imprisonment; and, 24-year-old Merin James McCulley of Seagraves, TX, to two years imprisonment.
This investigation was conducted by the Midland Police Department together with the Texas Department of Public Safety. Assistant United States Attorney Austin Berry prosecuted this case on behalf of the Government.
Former Crater Lake Chef Sentenced to 18 Months Prison for Fighting Park RangersRead the Press Release
MEDFORD, Ore. - On Tuesday, January 13, 2015, Senior U.S. District Judge Owen M. Panner sentenced John Charles Saubert, 47, to 18 months in federal prison for forcibly resisting federal officers. Saubert will be on three years of supervised release after he completes his prison term.
On September 23, 2014, Saubert was terminated as a cook with Xanterra Parks and Resorts at Crater Lake National Park due to excessive alcohol and performance issues. During a shuttle ride back to his dorm, Saubert was disturbing other riders and allegedly fondled a woman’s leg after being told to stop. Park rangers and the Xanterra manager contacted Saubert at his dorm room and warned that Saubert would be allowed to remain on the premises until the next day, but only if he remained in his dorm room.
Approximately 10 minutes later, the park rangers observed Saubert staggering outside and being very loud. When the rangers told Saubert he was under arrest, Saubert responded, “I’m not going without a fight.” Saubert jerked his hand away from a ranger’s grasp, hitting the ranger in the face, and shoved another ranger against the patrol car. Saubert was wrestled to the ground but continued to fight despite the officers’ commands to stop resisting. One ranger suffered bruised knees as a result of the fight. After rangers placed Saubert in a patrol car, Saubert continued screaming profanities, banging his head against the window, and threatening to kill the officers and their families.
At Saubert’s initial federal court appearance the next day, he was released from custody and required to re-appear a week later. Saubert failed to appear, and an arrest warrant was issued. The U.S. Marshal’s tracked Saubert to a luxury resort in southern Utah, where he began working as a chef. The U.S. Marshal’s arrested Saubert on October 5th and transported him back to Oregon.
This case was investigated by the Crater Lake Park Rangers and the U. S. Marshal’s Service, and was prosecuted by Assistant U.S. Attorney Douglas W. Fong.
Former Canaan Man Pleads Guilty to Cocaine and Oxycodone Distribution ConspiracyRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Frank
Curtis, 35, formerly of Canaan, Maine pleaded guilty today in U.S. District Court to conspiracy to possess with the intent to distribute and to distribute cocaine and oxycodone.According to court records, between January 2010 and March 2012, Curtis conspired with Maurice McCray, William Waters and others in Waterville, Maine and surrounding communities to obtain cocaine and oxycodone from out-of-state dealers, bring it to Central
Maine and distribute it.
The defendant faces up to 20 year in prison and a $1,000,000 fine. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The case was investigated by the U.S. Drug Enforcement Administration and the Maine
Drug Enforcement Agency with assistance from the Waterville Police Department.Forfeited Funds Returned to Beaumont ISDRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – Nearly $900,000 of forfeited funds have been paid towards financial losses suffered by the Beaumont Independent School District (BISD), announced U.S. Attorney John M. Bales today.
Devin Wayne McCraney, former Director of Finance for BISD, and Sharika Baksh Allison, former Comptroller for BISD, were sentenced on Sep. 18, 2014 for fraud and conspiracy to commit fraud upon programs receiving federal funds. McCraney and Allison surrendered to the Bureau of Prisons on Oct. 21, 2014.
As part of their sentences, McCraney and Allison were ordered to pay restitution in the amount of $4,041,705.27 to BISD. On Jan. 15, 2015, the U.S. District Clerk forwarded $896,915.33 in forfeiture funds to BISD as part of that restitution.
This case was prosecuted as part of the Joint Task Force established in March 2014 between the U.S. Attorney’s Office for the Eastern District of Texas and the Jefferson County District Attorney’s Office to investigate and prosecute major crimes involving abuse of the public trust in Jefferson County, Texas.
After McCraney and Allison were indicted in January 2014, more than $900,000 in assets, including cash and luxury vehicles, were seized pursuant to the Justice Department’s asset forfeiture procedures. The majority of those assets were forfeited to the federal government when McCraney was sentenced. Assets were also forfeited from Allison in the criminal case. Aside from those forfeited assets, McCraney and Allison had spent nearly all of the remaining money that they embezzled from BISD.
Because McCraney and Allison did not have enough other assets to pay anything towards the $4 million restitution judgment, the U.S. Attorney requested for the Justice Department’s Asset Forfeiture and Money Laundering Section (AFMLS) to approve application of the forfeited assets to the restitution debt so that the forfeited funds could be paid to BISD. AFMLS expedited the U.S. Attorney’s request and approved it in a matter of days.
“Returning forfeited assets to the victims of financial crime is an important priority of the Justice Department’s asset forfeiture program,” said U.S. Attorney Bales. “We endeavor to seek restitution to crime victims whenever possible in our cases. Unfortunately, criminals often spend all of the money that they steal, which ultimately leaves very little else for the victims. Asset forfeiture is a key law enforcement tool because it helps to restrain a criminal’s assets and preserve them for crime victims.”
“Given how these defendants spent their ill-gotten gains and had very little of value to show for it, we are fortunate that there was anything to forfeit at all,” said U.S. Attorney Bales. “Thanks to the efforts of the task force, we were able to find what assets of value they did have, seize them, forfeit them, and now have them paid to BISD.”This case was investigated by the Federal Bureau of Investigation and the U.S. Department of Education Office of Inspector General. This case was prosecuted by Assistant U.S. Attorneys Christopher T. Tortorice and Joseph R. Batte.
Federal Court Sentences Davenport Man for Conspiracy to Distribute Marijuana and False Statements to a Federal Grand JuryRead the Press Release
DAVENPORT, IA- On January 16, 2015, Harrison Sean Summers, age 23, of Davenport, Iowa, was sentenced by United States District Court Judge John A. Jarvey to two concurrent terms of 30 months imprisonment, after pleading guilty to conspiracy to distribute marijuana and false statements to a federal grand jury, announced United States Attorney Nicholas A. Klinefeldt. Summers was also ordered to serve two years of supervised release, and to pay $200 towards the Crime Victims Fund.
Beginning by at least May 2011, and continuing until approximately March 2013, Summers entered into an agreement to receive marijuana from co-defendant Jared Fromknecht to distribute to others. Summers was aware that Fromknecht was shipping marijuana via mail from Colorado to Iowa for re-distribution. As part of this agreement, Summers paid Fromknecht for marijuana received by depositing drug proceeds in a bank account. At sentencing, Summers admitted to being responsible for over 40 kilograms of marijuana.
As relates to the false statements charge, Summers appeared in front of a federal grand jury on or about March 20, 2013, and falsely testified under oath that he had not received marijuana from Fromknecht.
This case was investigated by the U.S. Drug Enforcement Administration, Iowa Department of Public Safety-Division of Narcotics Enforcement, the United States Postal Inspection Service, and the Davenport, Iowa, Police Department. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Federal Court Issues Preliminary Injunction Against South Dakota Medical laser ManufacturerRead the Press Release
A federal court has barred a Rapid City, South Dakota, company and its president from further manufacturing and distributing its laser devices, which they marketed to treat a variety of medical conditions and diseases, the Justice Department announced today.
U.S. District Court Chief Judge Jeffrey L. Viken for the District of South Dakota entered the preliminary injunction on Wednesday against Robert “Larry” Lytle and his businesses, QLasers PMA, 2035 PMA, and 2035 INC., in an action filed by the Justice Department to enforce provisions of the federal Food, Drug, and Cosmetic Act (FDCA). The court’s order prohibiting the manufacture and distribution of the QLaser devices also applies to Lytle’s business affiliates and franchisees.
Last October, the Justice Department and the U.S. Attorney’s Office for the District of South Dakota filed a civil complaint for injunctive relief against Lytle and his businesses, alleging that they have been violating the FDCA by nationally marketing Lytle’s laser devices for the treatment of more than 200 different diseases and medical disorders without clearance or approval from the U.S. Food and Drug Administration (FDA). The preliminary injunction entered on Wednesday takes effect immediately and will remain in force while the government’s case seeking a permanent injunction proceeds to final judgment.
Judge Viken found, based on what he called an “extensive and well developed record,” that Lytle and his various businesses “have shown no intent to discontinue their activities and voluntarily comply with the FDCA. “The injunction bars the defendants from continuing to market and distribute any medical devices until they receive written permission from the FDA to do so.
Lytle, whom the court noted was a dentist in Rapid City until his license to practice dentistry was permanently revoked by the South Dakota Board of Dentistry in 1998, markets the devices by soliciting purchasers to join his “private membership associations” or “PMAs” before purchasing his lasers. As the court explained, however, “Hiding behind a curtain of private membership associations, 2035 PMA and QLaser PMA, does not shield Mr. Lytle from the authority of the FDCA or the jurisdiction of the court.”
“With the entry of this preliminary injunction, we have taken another step toward ensuring that only medical devices that have been shown to be safe and effective are placed in the hands of the American consumer,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “Everyone who deals in products that affect people’s health must comply with the FDCA.”
According to court documents filed in the case, the defendants have been distributing the QLaser devices with labeling that contains false and misleading claims, touting their use in treating such serious conditions as cancer, HIV/AIDS, venereal disease and diabetes. Although two of his laser devices were FDA-cleared for providing temporary relief of pain associated with osteoarthritis of the hand, none of the devices has been cleared or approved to treat any other medical conditions. The government alleges that not only are there no published clinical studies to support the use of Lytle’s lasers to treat other serious medical conditions, but that in fact, using the devices according to the device’s labeling could be dangerous to health. The court’s order finds that the United States is substantially likely to succeed on the merits on this claim and the others within the government’s complaint.
“The preliminary injunction granted should provide consumers a renewed sense of confidence,” said U.S. Attorney Brendan V. Johnson for the District of South Dakota. “This action is crucial to prevent the company from continuing to operate on the periphery of the law, and potentially jeopardize the health and safety of its consumers.”
The FDA referred this enforcement action to the Department of Justice. The government’s case is being litigated by Trial Attorney Ross S. Goldstein of the Civil Division’s Consumer Protection Branch, with assistance from the U.S. Attorney’s Office for the District of South Dakota and the FDA’s Office of Chief Counsel.
Federal Authorities Arrest 65 Year-Old for Child PornographyRead the Press Release
SAN JUAN, Puerto Rico – United States Magistrate Judge Bruce McGiverin authorized a criminal complaint against Carlos Manuel Colón-Velàzquez, a 65-year old resident of Coamo for production of child pornography and attempted production of child pornography, following an investigation lead by U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), announced United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez.
The affidavit alleges that on January 2, 2015, Homeland Security Investigations (HSI), San Juan, Child Exploitation Investigations Group (CEIG) received information from Puerto Rico Police Department (PRPD), Coamo District, regarding a 14-year-old minor male. According to PRPD, a concerned mother of a 14-year old male minor, referred hereinafter as John Doe, discovered messages between John Doe and a Facebook user “Charlie Colon” who was later identified as Carlos Manuel Colón-Velàzquez. In those messages the defendant requested and received sexually explicit images from John Doe. Colón-Velàzquez also sent the minor a video of himself masturbating.
“Unfortunately, sexual abuse of children has become all too common in Puerto Rico,” said United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. “The USAO for the District of Puerto Rico is committed to taking full advantage of our investigative tools in order to protect our children from sexual predators.”
The case is being prosecuted by Assistant U.S. Attorney Elba Gorbea. If convicted, the defendant faces a mandatory minimum sentence of incarceration of fifteen years.
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 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.A criminal complaint contains only charges and is not evidence of guilt. Defendants are presumed to be innocent unless and until proven guilty.
# # #FDA Employee, Former New York City Corrections Officer and Former IRS Employee Charged in Multimillion Dollar Tax Refund ConspiracyRead the Press Release
Three New York residents were indicted in the Eastern District of New York for defrauding the U.S. government by filing false claims for millions in false tax refunds, the Justice Department and Internal Revenue Service (IRS) announced today.
Charged in a 20-count indictment are Rodney Chestnut, of Middle Island, New York, a retired New York City Department of Corrections officer; Clive Henry, a former IRS employee in the business of preparing tax returns and Nafeesah Hines, a former U.S. Food and Drug Administration (FDA) employee, both of Jamaica, New York. Chestnut and Henry were arrested on Jan. 15, and appeared in federal court in Brooklyn, New York.
The defendants are each charged with one count of conspiracy to defraud the United States, 11 counts of assisting preparation of false returns and four counts of filing false tax returns. Hines and Chestnut are each charged with one additional count of filing false tax returns. If convicted, the defendants each face a statutory maximum sentence of five years in prison for conspiracy and a statutory maximum sentence of three years in prison for each false return charged against them. All of the defendants are also subject to fines and mandatory restitution, if convicted.
According to the indictment, between 2008 and 2012, Hines, Chestnut and Henry recruited clients to a scheme using fake IRS Forms 1099-OID (Original Issue Discount) claiming fictitious tax withholdings and were attached to tax returns that falsely claimed refunds of taxes that were never paid to the IRS. Hines used an electronic system to transmit the false Forms 1099-OID to the IRS. The false refund claims listed in the indictment total more than $3.4 million.
According to the indictment, the defendants collected fees based on a percentage the false refunds that they claimed as part of the scheme. The indictment also charges the defendants with filing false income tax returns for themselves pursuant to the scheme.
In 2013, a federal court permanently barred Hines and Chestnut from promoting an alleged tax fraud scheme involving thousands of false tax returns and from preparing tax returns for anyone other than themselves.
The case was investigated by special agents of IRS-Criminal Investigation. Trial attorneys Mark Kotila, Jeffrey McLellan and Erin Pulice of the Justice Department’s Tax Division are prosecuting the case. An indictment is only an accusation and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Eureka Brothers Plead Guilty to Growing Marijuana in Shasta-Trinity National Forest and Destroying Public Lands and ResourcesRead the Press Release
SACRAMENTO, Calif. —Isidro Alcazar-Tapia, 25, and Arturo Alcazar-Tapia, 21, both of Eureka, pleaded guilty today to conspiracy to manufacture marijuana and depredation of public lands and resources, United States Attorney Benjamin B. Wagner announced.
According to court documents, Isidro and Arturo Alcazar-Tapia conspired to grow more than 20,000 marijuana plants at two sites in the Shasta-Trinity National Forest in Trinity County. The marijuana was packaged for distribution at a house in Eureka. On August 4, 2014, law enforcement executed a search warrant at the defendants’ home in Eureka and found 33 pounds of processed marijuana divided into one pound packages and more than $6,000 in cash. Agents located and destroyed approximately 7,980 marijuana plants at a cultivation site at Big French Creek, and located and destroyed approximately 13,642 marijuana plants at a site at Hobo Gulch Road. The marijuana cultivation caused significant damage to the land and natural resources of the forest that provides habitat for several threatened and endangered animal species.
At the Big French Creek site, agents observed hundreds of holes dug in the dirt containing soluble fertilizer, bags of trash, empty fertilizer bags, propane tanks, and water lines diverting water from a stream into the marijuana garden. Analysts estimate that cleaning the Big French Creek site will cost the U.S. Forest Service more than $4,000. Agents observed similar destruction at the Hobo Gulch Road site. Analysts estimate that cleaning the Hobo Gulch Road site will cost the U.S. Forest Service approximately $13,000.
This case is the product of an investigation by the United States Forest Service, the Humboldt County Drug Task Force, North State Marijuana Team, and the Trinity County Sheriff’s Office. Assistant United States Attorney Christiaan Highsmith is prosecuting the case.
Isidro and Arturo Alcazar-Tapia are scheduled to be sentenced by Judge Garland E. Burrell Jr. on April 3, 2015. They face a possible sentence of five to 40 years in prison and a $5 million fine for the conspiracy charge. The sentence for the manufacture of marijuana charge is up to 20 years in prison and a $1 million fine. The sentence for depredation of public lands and resources charge is up to 10 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.Eighth Oxycodone and Heroin Distribution Ring Member Sentenced in Federal CourtRead the Press Release
BOISE – Christopher Deleongurro Snyder, 24, of Boise, Idaho, Wednesday became the latest member of a Treasure Valley oxycodone and heroin distribution ring to be sentenced to federal prison, U.S. Attorney Wendy J. Olson announced. U.S. District Court Judge Edward J. Lodge sentenced Snyder on January 14, 2015, to 87 months in prison followed by five years of supervised release for conspiracy to distribute oxycodone. Judge Lodge also ordered Snyder to complete 200 hours of community service and forfeit $1,000,000 in cash proceeds. Judge Lodge found that Snyder was a manager and supervisor of an extensive criminal organization. Snyder was the eighth defendant sentenced as a result of the dismantling of a large-scale trafficking ring which distributed heroin and tens of thousands of oxycodone pills throughout Boise between 2012 and March of 2014. He pleaded guilty to the charge on September 10, 2014.
Others who have been sentenced are:
- Tyler Goodwin, 28, of Shelton, Washington, was sentenced on November 17, 2014, to 10 months in prison followed by three years of supervised release for distributing oxycodone. He was also ordered to forfeit $3,000 in cash proceeds.
- Jordan Grainger, 24, of Meridian, Idaho, was sentenced on November 24, 2014, to 48 months in prison followed by three years of supervised release for conspiracy to distribute oxycodone and heroin. He was also ordered to forfeit $100,000 in cash proceeds.
- Kevin Daniels, 19, of Boise, Idaho, was sentenced on November 25, 2014, to three years of probation for distributing oxycodone. He was also ordered to forfeit $7,500 in cash proceeds.
- Ellen McDaniel, 44, of Boise, Idaho, was sentenced on November 25, 2014, to 30 months in prison followed by three years of supervised release, and 80 hours of community service for conspiracy to distribute oxycodone. She was also ordered to forfeit $20,000 in cash proceeds.
- Jeffery Manchester Jr., 28, of Renton, Washington, was sentenced on December 18, 2014, to 37 months in prison followed by three years of supervised release, and 100 hours of community service for conspiracy to distribute oxycodone and heroin. He was also ordered to forfeit $32,000 in cash proceeds.
- Jared Hicks, 22, of Caldwell, Idaho, was sentenced on January 13, 2015, to 18 months in prison followed by three years of supervise release, and 100 hours of community service for conspiracy to distribute oxycodone. He was also ordered to forfeit $40,000 in cash proceeds.
- Kekai Wachi, 20, of Boise, Idaho, was sentenced on January 13, 2015, to 21 months in prison followed by three years of supervised release, and 100 hours of community service for conspiracy to distribute oxycodone. She was also ordered to forfeit $60,000 in cash proceeds.
“Prescription drug abuse is a growing and significant community health problem,” said Olson.“Where individuals choose to unlawfully distribute prescription medications and other illegal drugs, we will work closely with all of our law enforcement partners to investigate, prosecute and convict those responsible.”
Of the remaining indicted co-conspirators, Jordan Baptista, 19, of Boise, Idaho, is set for sentencing on March 9, 2015, for conspiracy to distribute oxycodone and heroin. Travis Fraser, 19, of Boise, Idaho, is set for sentencing on April 6, 2015, for conspiracy to distribute oxycodone. James Acarregui, 29, of Boise, Idaho, is set for a change of plea on January 21, 2015, on one count of conspiracy to distribute oxycodone. Austin Serb, 20, of Boise, Idaho, is set for a change of plea on January 27, 2015, on one count of conspiracy to distribute oxycodone. Andrew Colwell, 23, of Boise, Idaho, is set for jury trial on March 10, 2015. Ajellon Dedeaux, 26, of Rancho Cordova, California, is set for jury trial on March 24, 2015.
The case was investigated by the Drug Enforcement Administration and the Boise Police Department as an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation. OCDETF partners include the Federal Bureau of Investigation; Drug Enforcement Administration; Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Immigration and Customs Enforcement’s (ICE); Homeland Security Investigations (HSI); Internal Revenue Service-Criminal Investigation; and U.S. Marshals Service.
The case was initiated and investigated by the Boise Police Department, and the Drug Enforcement Administration (DEA) led Tactical Diversion Squad which is comprised of law enforcement personnel from the DEA, Ada County Sheriff’s Office, Boise Police Department, Idaho State Police, Meridian Police Department, Nampa Police Department and U.S. Department of Health and Human Services Office of Inspector General.
Dozens of Alleged Members of Sinaloa Cartel Charged; List Includes Kingpin “El Mayo,” His Sons and Other Top LeadersRead the Press Release
Distribution cells are dismantled in Chula Vista,
National City and OceansideCHARGING DOCUMENTS click HERE
SAN DIEGO – Sixty alleged members and associates of the Mexico-based Sinaloa Cartel - including the highest ranking leaders, lieutenants and operators of multiple distribution cells - are charged in 14 indictments unsealed today with trafficking huge quantities of methamphetamine, cocaine, heroin and marijuana to points around the United States.
The indictments mark the conclusion of the third phase of a three-year investigation that, in total, has resulted in charges against 117 people and has had a significant impact on the worldwide operations of the Sinaloa Cartel.
This investigation has also offered one of the most comprehensive views to date of the inner workings of one of the world’s most prolific, violent and powerful drug cartels. Cartel members and associates were targeted for three years in a massive probe involving multiple countries, scores of law enforcement agencies around the United States, a number of federal districts and over 200 court-authorized wiretaps in this district alone.
The primary indictment, unsealed in federal court in San Diego today, targets the alleged leader of the cartel, Ismael Zambada-Garcia, known as “El Mayo,” as well as two of his four sons - Ismael Zambada-Sicairos, known as “Mayito Flaco,” and Ismael Zambada-Imperial, known as “Mayito Gordo.” Zambada-Imperial was arrested by Mexican authorities in November 2014.
Also part of that indictment is Ivan Archivaldo Guzman-Salazar, known as “Chapito,” whose father Joaquín “El Chapo” Guzmàn Loera was the alleged leader of the Sinaloa Cartel along with Mayo and considered the world’s most powerful drug lord until his arrest in Mexico in February 2014.
This case began in late 2011 as an investigation of what was at first believed to be a small-scale drug distribution cell in National City and Chula Vista. The alleged leader of that cell – Jose Luis Iglesias, aka Jose Bautista Samano-Molina – and a number of his associates were indicted in 2012. Iglesias remains a fugitive, but most of his associates have been sentenced.
But it soon became evident that the drugs were being supplied by the Sinaloa Cartel, and the case morphed into a massive multi-national, multi-state probe that has resulted in scores of arrests and seizures from San Diego, Los Angeles, Riverside, San Bernardino and Imperial counties to the big cities of San Francisco, Chicago, New York City and Detroit; the states of Nevada, Texas, South Carolina, Delaware, Pennsylvania, Minnesota, Kentucky, Georgia; and the countries of Mexico, Canada, Colombia, Great Britain, the Philippines, Guatemala and China.
Law enforcement in San Diego has worked hand-in-hand with agents in Chicago to target the upper level leadership of the Sinaloa Cartel. This partnership resulted in the indictment of these leaders in San Diego as well as the indictment of numerous high-level Sinaloa Cartel leaders in Chicago, including Chapo and his son Jesus Alfredo Guzman-Salazar.
On the local front, one of the indictments unsealed today charges alleged members of an Oceanside distribution cell linked to the Sinaloa Cartel which is believed responsible for supplying about one-third of the methamphetamine to the streets of San Diego’s North County.
According to court records, the alleged leader of the cell, Miguel Iram Quiroz-Perez, was indicted along with 13 associates who were responsible for distribution to customers that included documented members of the Deep Valley Bloods and the Deep Valley Crips street gangs.
As part of this investigation, U.S. authorities previously arrested and prosecuted another son of Mayo - Serafin Zambada-Ortiz - who pleaded guilty in the Southern District of California in September 2014 to drug trafficking charges. Zambada Ortiz, a U.S. citizen born in San Diego, pleaded guilty to conspiring to buy more than 100 kilograms of cocaine and more than 1,000 kilograms of marijuana in Sinaloa, then import it into the United States. Zambada Ortiz faces 10 years to life in prison when sentenced on May 22, 2015.
José Rodrigo Aréchiga-Gamboa, commonly referred to by his alias "El Chino Ántrax,” was arrested in the Netherlands and extradited to the United States by Dutch authorities in July 2014. Arechiga-Gamboa is believed to have worked for the Sinaloa Cartel as the leader of a violent enforcement arm of the Sinaloa Cartel called “Los Antrax” and a key lieutenant of Mayo.
Two of the indictments unsealed today also target Alfonso Arzate-Garcia, aka “Aquiles,” the alleged Tijuana Plaza boss for the Sinaloa cartel, and his brother, Rene Arzate-Garcia, aka “La Rana,” alleged to be an enforcer for the cartel in Tijuana who is believed responsible for a significant amount of violence in the Tijuana plaza. Both men are fugitives.
Two alleged high-ranking cartel leaders - Alfonso Limon-Sanchez and Rafael Felix-Nunez - were arrested in separate incidents by Mexican authorities in November 2014.
Limon-Sanchez is alleged to be one of Mayo’s primary cocaine sources of supply. Felix-Nunez is alleged to have been one of Chino Antrax’s chief lieutenants in Los Antrax.
“This extraordinary case is this district’s most significant, comprehensive and large-scale cartel prosecution since the dismantling of the Arellano-Felix drug trafficking organization,” said U.S. Attorney Laura Duffy. “We are going after the Sinaloa Cartel with the same passion, knowing that the drugs and violence peddled by the cartel are destroying lives and tearing the fabric of our communities.”
“The culmination of this investigation is significant not only to the citizens of San Diego, but to citizens of our entire country,” said DEA San Diego Special Agent in Charge William R. Sherman. “DEA has long known that the reach of the Sinaloa Cartel extends beyond the US/Mexico border to locations throughout the world. This investigation targeted the highest ranking members of this powerful cartel, taking them out of commission, seriously impacting their operational structure. DEA and its law enforcement partners will continue to target and investigate this violent and dangerous cartel until its world-wide operations are completely dismantled.”
“San Diego is at the forefront of narco-dollar money laundering, with couriers using bulk cash smuggling, structured bank deposits, and high-end luxury vehicles and airplanes to move their illicit drug proceeds,” said IRS Criminal Investigation’s Special Agent in Charge Erick Martinez. “Seizing the dirty cash and assets of these illegal organizations will hit the criminals where it hurts the most--it will deprive them of their profits."
In all, with the conclusion of this third phase, the government has seized more than 652 kilograms of methamphetamine, 1,343 kilograms of cocaine, 12.2 tons of marijuana, 53 kilograms of heroin, 5,500 oxycodone pills and $14.1 million in narcotics proceeds.
According to the main indictment, the alleged leaders of the cartel imported large quantities of cocaine, methamphetamine and other drugs, as well as the chemicals to manufacture methamphetamine, into Mexico from Asia and Central and South American countries including Colombia, Ecuador, Venezuela, Peru, Panama, Costa Rica, Honduras and Guatemala. The traffickers used various methods to move the drugs, including cargo aircraft, private aircraft, submarines and other submersible and semi-submersible vessels, container ships, supply vessels, go-fast boats, fishing vessels, buses, rail cars, tractor trailers, trucks, automobiles, and private and commercial interstate and foreign carriers, the indictment said.
The indictment alleges that the large quantities of drugs were then smuggled across the international border to San Diego via automobiles, tractor trailers, trucks, fishing vessels and tunnels and stored at various stash houses, safe houses and warehouses in San Diego County. The cocaine, methamphetamine and marijuana were transported and distributed from there to locations throughout the U.S.
According to the indictment, trafficking proceeds were laundered through bulk cash smuggling; structured bank deposits; wire transfers; currency exchange transfers; alternative credit-based systems used to transfer money without the use of wires or other traditional means; goods-based systems in which items, including high end luxury vehicles and airplanes, were purchased in one location and transferred to another location; and other methods by shared networks of money couriers and money launderers associated with the Sinaloa Cartel.
According to the indictment, the government is seeking criminal forfeiture of a number of possessions, including a 1982 Cessna Turbo 210 aircraft, a Lamborghini Murceilago luxury vehicle, and other vehicles and property.
In order to protect their drug distribution activities and evade law enforcement, the traffickers took a number of steps. They obtained guns and other weapons and used intimidation, violence and threats of violence against members of law enforcement, rival drug traffickers and members of their own drug trafficking organization, the indictment said.
DEFENDANTS Case Number: 14CR0658-DMS Ismael Zambada-Garcia, aka Mayo Age: 64Culiacan, Mexico
Ismael Zambada-Imperial aka Mayito Gordo Age: 30Culiacan, Mexico
Ismael Zambada-Sicairos, aka Mayito Flaco Age: 32Culiacan, Mexico
Ivan Archivaldo Guzman-Salazar Age: 31Culiacan, Mexico
FULL LIST OF DEFENDANTS Click HERE
CHARGESContinuing Criminal Enterprise, in violation of Title 21 U.S.C. §§ 848(a) and (b)
Term of custody including a mandatory minimum 20 years and up to life imprisonment, $2 million fine and 5 years supervised release.Ismael Zambada-Garcia is charged as the principal administrator, organizer or leader of the enterprise or is one of several such principal administrators, organizers, or leaders; and the violation involved 300 times the quantity of a substance described in subsection 841(b)(1)(B) (100 grams of heroin, 500 grams of cocaine, 100 kilograms of marijuana or 50 grams of Methamphetamine mixture), which is mandatory life imprisonment.
Conspiracy to Distribute Controlled Substances for Purpose of Unlawful Importation, in violation of Title 21 U.S.C. §§ 959, 960 and 963; Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release.
Conspiracy to Import Controlled Substances, in violation of Title 21 U.S.C. §§ 952, 960 and 963. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release.
Conspiracy to Distribute Controlled Substances, in violation of Title 21 U.S.C. §§ 841 and 846
Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release.Conspiracy to Commit Money Laundering, in violation of Title 18 U.S.C. §§ 1956 (a)(2)(A) and (h)
Term of custody up to 20 years imprisonment, a fine of the greater of $500,000 or twice the value of the monetary instrument or funds involved and 5 years supervised release. INVESTIGATING AGENCIESDrug Enforcement Administration
Customs and Border Protection Office of Field Operations
Customs and Border Protection Office of Border Patrol
Internal Revenue Service
Federal Bureau of Investigation
Homeland Security Investigations
United States Attorney’s Office, Northern District of Illinois
Department of Treasury, Office of Foreign Asset Control
Oceanside Police Department
San Bernardino County Sheriff’s Department
National City Police Department
Chula Vista Police Department
San Diego Police Department
San Diego County District Attorney’s Office
San Diego Law Enforcement Coordination Center
Interpol*An indictment or complaint itself is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
Delaware County Defense Contractor Sentenced to 37 Months in Prison for Fraud and ObstructionRead the Press Release
PHILADELPHIA – Kenneth Narzikul, 60, of Media, PA, was sentenced today to 37 months in prison for committing major fraud against the United States, obstructing a federal audit, and making false claims to the government, in connection with defense contracts to manufacture components for military helicopters. U.S. District Court Judge L. Felipe Restrepo also ordered restitution in the amount of $1.2 million, a fine of $7,500, and three years of supervised release to follow the prison term.
The defendant was President and 85% owner of NP Precision, Inc. (NP), a machine tool business located in Folcroft, PA, which is now defunct. NP contracted with Department of Defense component agencies to produce critical hardware components used in military helicopters and other aircraft. At his guilty plea hearing on August 25, 2014, Narzikul admitted that he schemed to fraudulently divert and steal approximately $1.2 million in progress payments that the United States paid NP under two contracts to produce drive shaft couplings for a U.S. Army helicopter Model CH-47, commonly known as the Chinook helicopter. Narzikul further admitted that he made false claims to the government so that NP could continue to receive progress payments on those contracts, when he knew that NP had not earned the progress payments. In addition, Narzikul admitted that he tried to cover up his fraud by lying to government auditors and submitting false documents to them, and directing employees at NP to do the same. Narzikul admitted further that he used the diverted progress payments to pay outstanding obligations on other contracts and pay other personal and business expenses for himself and his family.
The case was investigated by the Major Procurement Fraud Unit (MPFU) of the United States Army Criminal Investigative Command (Army CID), the Defense Criminal Investigative Service (DCIS), and the United States Air Force Office of Special Inspection (Air Force OSI). It was prosecuted by Assistant United States Attorney Mary E. Crawley.
Defendant Sentenced for his Role in $25 Million Tax Fraud and Drug ConspiracyRead the Press Release
Anchorage, Alaska – Acting U.S. Attorney Kevin Feldis announced today that Samuel Peguero, aka “Niño”, a citizen of the Dominican Republic residing in Alaska, was sentenced to 13 months imprisonment, followed by one year of supervised release, for his role in a $25 million tax fraud and drug conspiracy. In addition to his prison sentence, Peguero was ordered to pay restitution of $19,090.92. Peguero pled guilty to conspiracy to six counts of aiding and abetting false claims of United States citizenship on October 10, 2014.
According to court documents, from 2008 through 2012, Peguero participated in an extensive criminal enterprise led by Joel Santana-Pierna. Joel Santana-Pierna together with his brother Abel Santana-Pierna conspired with others in an effort to import over two kilograms of cocaine into Alaska for distribution. In addition to their cocaine smuggling scheme, the organization conspired to use stolen Puerto Rican identities to file false income tax returns to obtain fraudulent income tax refunds.
Conspirators in the income tax fraud scheme obtained the stolen identities of more than 3,000 individuals, including people’s names and Social Security Numbers. Most of these stolen identities were from citizens of Puerto Rico. The conspirators also stole mail in and around the Anchorage area. The conspirators stored the stolen identities and addresses on laptop computers and paper lists. Using this stolen information, the brothers completed false returns and submitted them to the IRS. Altogether, the United States estimates that the total loss intended by members of the conspiracy exceeded $25 million.
Peguero acted as an interpreter for the conspirators. Peguero aided the Santana-Pierna brothers to submit false applications with the Alaska DMV to obtain fraudulent identification documents. He also helped the conspirators negotiate U.S. Treasury checks at local banks, knowing that the checks bore the forged endorsements of the conspirators.
“This conspiracy to defraud the United States government is the largest in Alaska state history,” according to Special Agent in Charge Teri Alexander of IRS Criminal Investigation. “While Peguero may have played a small role in a big picture, this sentencing today is a stark warning to anyone that would endeavor to provide aid and assistance to criminals.”
“Tax fraud and identity theft are serious crimes that cheat us all. Anyone who commits the crimes, or helps others to commit the crimes, should expect to be arrested and sent to jail,” stated Acting U.S. Attorney Kevin Feldis.
Misael Polanco-Villa, Nicolas Jimenez-Sanchez, Isaac Amparo-Vazquez, Randin Paredes Henriquez, John Doe, a/k/a Japhet Soto Santiago, a/k/a Luis Angel, Wedys Ramirez-Javier, Fatima Aguilar Martinez, Melissa Duran-Muniz, and Hilda Josephine Hernandez McMullen were also indicted as conspirators in Joel Santana-Pierna’s scheme.
The case was jointly prosecuted by Assistant U.S. Attorneys Thomas C. Bradley, James Barkeley, and Stephanie C. Courter of the U. S. Attorney’s Office for the District of Alaska. The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI), U.S. Immigration and Customs Enforcement (ICE), which oversees Homeland Security Investigations (HSI), the U.S. Postal Inspection Service (USPIS), the U.S. State Department’s Diplomatic Security Service, and the Drug Enforcement Administration (DEA). Additional assistance was provided by the Tax Division of the United States Department of Justice as well as the U.S. Attorney’s Offices for the District of New Jersey, the Eastern District of Pennsylvania, and the Southern District of New York.Couple Pleads Guilty to Mortgage Fraud SchemeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. — U.S. Attorney William J. Hochul, Jr. announced today that Timothy McCabe, 50, and Theresa Morales, 50, of Florida (formerly of Buffalo), pleaded guilty before U.S. District Court Judge Richard J. Arcara, to bank fraud. The charge carries a maximum penalty of 30 years in prison, a fine of $1,000,000, or both.
Assistant U.S. Attorney Maura K. O’Donnell, who is handling the case, stated that the defendants executed a scheme to obtain mortgages, re-financing, and home equity credit lines, totaling $2,580,000, from various financial institutions. In furtherance of the scheme, McCabe and Morales put together loan applications, which contained materially false information as to defendant Morales’ employment and income, and as to the couple’s intent to reside at the properties as owner/occupants. The loan applications were then submitted to the financial institutions, either directly by the defendants, or through Nickel City Funding, a Western New York mortgage broker.
Relying on the representations in the loan applications, as well as false verifications provided by defendant McCabe, the financial institutions granted the loans, which totaled $2,580,000. The defendants made only minimal payments on the loans, causing the properties to go into foreclosure, and resulting in a loss to the financial institutions in excess of $1,000,000.
The plea is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, and Special Agents of the United States Secret Service , under the direction of Special Agent in Charge C. Todd Laster.
Sentencing is scheduled for April 17, 2015, at 12:30 p.m. before Judge Arcara.
Coos Bay Man Sentenced for StructuringRead the Press Release
EUGENE, Ore. – Roger Paul Villeneuve, 72, of Coos Bay, Oregon was sentenced on Wednesday, January 14, 2015, to thirteen months in prison after pleading guilty to structuring a currency transaction. Villeneuve was given 45 days to self-surrender.
Federal regulations require banks to report currency transactions over $10,000, and willfully structuring a transaction to avoid a currency transaction report is a federal offense punishable by up to five years in prison and a $250,000 fine.
For the past 40 years, Villeneuve has worked as a private consultant and solicited investments for various gold and nickel mining claims located in the United States and Canada. When Villeneuve entered his guilty plea last September, he admitted to Chief U. S. District Court Judge Ann Aiken that in October 2012 he had advised an acquaintance to withdraw $9,950 in the form of a cashier’s check from Northwest Community Credit Union and told the acquaintance to keep the amount under $10,000 to prevent a currency transaction report.
The offense occurred while Villeneuve was serving a probationary sentence from a previous structuring conviction in 2011. In the previous case, he received a sentence of five years of probation. This time, he received prison sentences of seven months for the new offense and six months for the related probation violation, with the sentences to run consecutively.
This case was investigated by the FBI, Internal Revenue Service Criminal Investigation and the Oregon Division of Finance and Corporate Securities. Assistant U.S. Attorney William “Bud” Fitzgerald prosecuted the case.
Cooper Landing Man Living in Illegal Cabin on Forest Service Land Sentenced to 12 Months in Jail for being a Felon in Possession of FirearmsRead the Press Release
Anchorage, Alaska – Acting U.S. Attorney Kevin Feldis announced today that a Cooper Landing man was sentenced in federal court in Anchorage for being a felon in possession of firearms.
John J. Soper, 57, of Cooper Landing, was sentenced today by United States District Court Judge Timothy M. Burgess, to 12 months in prison.
According to Assistant U.S. Attorney Aunnie Steward, Alaska State Troopers were investigating a series of burglaries and thefts in the Cooper Landing area when they received information that the suspect was an individual living in an illegal cabin built on U.S. Forest Service land outside of Cooper Landing. Following up on the information, a trooper and a Forest Service Ranger found Soper, a convicted felon, living in a cabin he had built illegally on Forest Service land. They also found that he had four firearms in his possession, which he is prohibited from possessing as a felon.
U.S. Attorney Karen L. Loeffler commends the U.S. Forest Service Law Enforcement, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Alaska State Troopers for the investigation of this case.
Convicted felon pleads guilty to unlawful possession of firearmsRead the Press Release
WHEELING, WEST VIRGINIA – Zachary M. Foster, 22, of Triadelphia, West Virginia, was convicted in federal court today for unlawful possession of firearms, United States Attorney William J. Ihlenfeld, II, announced today.Foster was convicted in 2011 of the felony offense of “Attempted Burglary” in the Circuit Court of Ohio County, West Virginia. As a result of that conviction, Foster was prohibited from possessing a firearm. In August 2014, officers from the Wheeling Police Department responded to reports of a gunshot fired and discovered Foster in possession of a .38 caliber revolver and a .22 caliber revolver.
Foster pled guilty today to one count of “Prohibited Person in Possession of a Firearm.” He faces up to 10 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 Stephen Vogrin is prosecuting the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives assisted in the investigation.
U.S. Magistrate Judge James E. Seibert presided.
Connecticut Man Sentenced to over 22 Years for Oxycodone ConspiracyRead the Press Release
Contact: David B. Joyce
Assistant United States Attorney
Tel: (207) 780-3257Bangor, Maine: United States Attorney Thomas E. Delahanty II announced today that
Barry Diaz, 32, of Stamford, Connecticut, was sentenced yesterday in U.S. District Court by
Judge John A. Woodcock, to 22½ years in prison to be followed by 6 years of supervised release for conspiracy to distribute oxycodone and unlawful use of a telephone. Diaz pleaded guilty to the charges on December 20, 2013.According to Court documents, Diaz and others acquired oxycodone pills outside of
Maine. Some of these pills were obtained from people in Connecticut who diverted lawfully issued oxycodone prescriptions. Others were obtained in bulk from California and elsewhere.
The pills were transported to Maine by Diaz or other conspirators working with him and were given to street level dealers for distribution in Kennebec County and elsewhere. During the investigation, law enforcement officers seized more than 600 30-mg oxycodone pills from members of the conspiracy.
According to the evidence presented at the trial of Diaz’s co-defendant, Mark Razo, Diaz and Razo operated the interstate drug conspiracy while Razo was serving a drug sentence in a
California state prison. Razo used contraband cellular telephones from inside the prison to arrange transactions, recruit couriers and cause the transport of drugs across the United
States. Diaz was Razo’s point person for distribution of drugs across the country. A four pound methamphetamine shipment that was seized in Iowa was among the drug shipments orchestrated by Diaz and Razo.This case was investigated by the U.S. Drug Enforcement Administration, with assistance from U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the
Kennebec County Sheriff’s Office, the Southeast Iowa Drug Task Force, the Wapello County
(Iowa) Sheriff’s Office, investigators from the California Department of Corrections and
Rehabilitation, the Stamford (Connecticut) Police Department, the Augusta (Maine) Police
Department, and the Maine Drug Enforcement Agency. The investigation was part of the ongoing effort of the Organized Crime Drug Enforcement Task Forces (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the
OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.Commonwealth of Pennsylvania to Pay $48.8 Million to Resolve Federal Government's Claims that it Provided Benefits to Ineligible AliensRead the Press Release
The commonwealth of Pennsylvania will pay $48.8 million to resolve the federal government’s claims that it provided benefits to ineligible aliens in violation of federal law, the Justice Department announced today. The benefits at issue were provided under three programs: Medicaid, Temporary Assistance for Needy Families (TANF) and the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps.
“The Department of Justice will continue to ensure that everyone, including the states, follows the law, but also recognizes the importance of these programs administered by the state that are essential for lower income individuals,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “This settlement demonstrates our commitment to protect taxpayer funds and ensure they are used for their intended purposes.”
Under the Personal Responsibility Work Opportunity Act, enacted in 1996, only documented aliens who meet certain low-income requirements and who have been in the country for more than five years may receive non-emergency Medicaid, TANF or SNAP benefits. The law also requires states to verify recipients’ eligibility before providing these means-tested benefits. The United States alleged that, between 2004 and 2010, the commonwealth of Pennsylvania provided Medicaid, TANF and SNAP benefits to ineligible aliens in violation of these restrictions.
“The staff of the civil division in our office has worked closely and diligently with our sister federal agencies, the Pennsylvania Department of Human Services and the Governor’s office to make needed corrections to the operation of programs that are vital to low income families,” said U.S. Attorney Peter J. Smith for the Middle District of Pennsylvania. “At the same time, after lengthy negotiations, a fair and reasonable settlement has been achieved in the best interest of Pennsylvania tax payers.”
“Our agency will continue to work hard to ensure taxpayer-funded benefits are provided only to those eligible to receive them,” said Special Agent in Charge Nick DiGiulio for the Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Philadelphia Regional Office.
“We are pleased that this issue has been resolved,” said Administrator Audrey Rowe of the U.S. Department of Agriculture (USDA)’s Food and Nutrition Service. “We will continue to work with Pennsylvania to ensure that the SNAP program is administered appropriately to benefit only those who are eligible.”
Acting Assistant Attorney General Branda thanked HHS-OIG, USDA’s Office of Inspector General and Food and Nutrition Service, the U.S. Attorney’s Office for the Middle District of Pennsylvania and the Civil Division’s Commercial Litigation Branch, for the collaboration that resulted in the settlement.
The claims settled by this agreement are allegations only, and there has been no determination of liability.
Commonwealth of Pennsylvania to Pay $48.8 Million to Resolve Federal Government's Claims That It Provided Benefits to Ineligible AliensRead the Press Release
WASHINGTON – The commonwealth of Pennsylvania will pay $48.8 million to resolve the federal government’s claims that it provided benefits to ineligible aliens in violation of federal law, the Justice Department announced today. The benefits at issue were provided under three programs: Medicaid, Temporary Assistance for Needy Families (TANF) and the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps.
“The Department of Justice will continue to ensure that everyone, including the states, follows the law, but also recognizes the importance of these programs administered by the state that are essential for lower income individuals,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “This settlement demonstrates our commitment to protect taxpayer funds and ensure they are used for their intended purposes.”
Under the Personal Responsibility Work Opportunity Act, enacted in 1996, only documented aliens who meet certain low-income requirements and who have been in the country for more than five years may receive non-emergency Medicaid, TANF or SNAP benefits. The law also requires states to verify recipients’ eligibility before providing these means-tested benefits. The United States alleged that, between 2004 and 2010, the commonwealth of Pennsylvania provided Medicaid, TANF and SNAP benefits to ineligible aliens in violation of these restrictions.
“The staff of the civil division in our office has worked closely and diligently with our sister federal agencies, the Pennsylvania Department of Human Services and the Governor’s office to make needed corrections to the operation of programs that are vital to low income families,” said U.S. Attorney Peter J. Smith for the Middle District of Pennsylvania. “At the same time, after lengthy negotiations, a fair and reasonable settlement has been achieved in the best interest of Pennsylvania tax payers.”
“Our agency will continue to work hard to ensure taxpayer-funded benefits are provided only to those eligible to receive them,” said Special Agent in Charge Nick DiGiulio for the Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Philadelphia Regional Office.
We are pleased that this issue has been resolved,” said Administrator Audrey Rowe of the U.S. Department of Agriculture (USDA)’s Food and Nutrition Service. “We will continue to work with Pennsylvania to ensure that the SNAP program is administered appropriately to benefit only those who are eligible.”Acting Assistant Attorney General Branda thanked HHS-OIG, USDA’s Office of Inspector General and Food and Nutrition Service, the U.S. Attorney’s Office for the Middle District of Pennsylvania and the Civil Division’s Commercial Litigation Branch, for the collaboration that resulted in the settlement.
The claims settled by this agreement are allegations only, and there has been no determination of liability.
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Clarkston Man Sentenced to Ten Years in Federal Prison for Possession of Child Pornography ImagesRead the Press Release
SPOKANE – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that George Edward Cupp, age 51, of Clarkson, Washington, was sentenced after having previously pleaded guilty on October 7, 2014 to Possession of Child Pornography Images. United States District Court Judge Stanley Allen Bastian sentenced Cupp to a ten year term of imprisonment and a life term of court supervision after he is released from Federal prison. In addition, Cupp will be required to register as a sex offender.
According to court records, in December of 2013, the National Center for Missing and Exploited Children generated a CyberTipline report indicating that an individual, using a screen/user name of “georgecupp2013” had uploaded images of what appeared to be child pornography to the website Photobucket. Further investigation by the Asotin County Sherriff’s Office and Department of Homeland Security resulted in the execution of a search warrant for Cupp’s desktop computer and cellular phone. A forensic examination of Cupp’s digital devices discovered over 4,000 sexually explicit images, with children ranging from approximately six months of age to 16 years of age.
Michael C. Ormsby said, “I commend the Department of Homeland Security and Asotin County Sherriff’s Office for their outstanding investigation in this case. Prosecuting offenders who are distributing child pornography is a priority of the United States Attorney’s Office in the Eastern District of Washington. This Office, together with its Federal and state law enforcement partners, is and will continue to be committed to prosecuting aggressively and seeking appropriate punishment for child pornography crimes.”
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the United States 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. The Project Safe Childhood Initiative (“PSC”) has five major components:
- Integrated federal, state, and local efforts to investigate and prosecute child exploitation cases, and to identify and rescue children;
- Participation of PSC partners in coordinated national initiatives;
- Increased federal enforcement in child pornography and enticement cases;
- Training of federal, state, and local law enforcement agents; and
- Community awareness and educational programs.
For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
This investigation was conducted by the Department of Homeland Security and Asotin County Sherriff’s Office. The case was prosecuted by Stephanie J. Lister, an Assistant United States Attorney and PSC Coordinator for the Eastern District of Washington.CR-14-0089-SAB-1
Canada Extradites Drug Trafficking Defendant to Colorado for ProsecutionRead the Press Release
DENVER – Hector Armondo Chavez, age 28, who was until today in Canada, was extradited from Canada to Denver, Colorado so he can face drug trafficking charges, U.S. Attorney John Walsh and Drug Enforcement Administration (DEA) Denver Division Special Agent in Charge Barbra Roach announced. Chavez was indicted, along with six others, in 2010 for the importation of cocaine from Mexico. The cocaine was brought to Colorado, where it was then later sent to Canada. The defendant is scheduled to make his initial appearance this afternoon at 2:30 p.m. before U.S. Magistrate Judge Craig B. Shaffer, located on the 4th Floor of the Arraj Federal Courthouse, 901 19th Street.
According to the indictment, Chavez, along with others, conspired to import into the United States from Mexico, and then export from the United States into Canada, cocaine, a Schedule II Controlled Substance. The defendant also faces two counts of using a telephone to facilitate the commission of a drug trafficking felony. If convicted of conspiracy, Chavez faces not less than 10 years, and up to life in federal prison, as well as up to a $4,000,000 fine. If convicted of using a telephone for drug trafficking, Chavez faces not more than 4 years imprisonment, and up to a $250,000 fine, per count, for each of the two counts.
The investigation dates back to when a co-defendant, Calvin Wayne Skidmore, was arrested in 2010 at the Del Bonita Port of Entry by U.S. Customs and Border Protection officers. A search of his vehicle yielded 46 packages of cocaine, equating to 16.5 kilograms, concealed in hidden compartments.
In addition to Chavez, two others named in the indictment remain fugitives. Defendant Javier Batista Cervantes is a Mexican National living in Canada and is pending extradition. Defendant Hernandez-Renteria is deceased. Dionisio Salgado, a U.S. citizen, pled guilty in a related case in federal court in Colorado and was sentenced to serve 10 years in prison. Canadian citizen Calvin Wayne Skidmore pled guilty in a related case in the District of Montana and was also sentenced to 10 years in prison.
“When you face federal drug trafficking charges, you can run to another country, but you can’t hide there forever,” said U.S. Attorney John Walsh. “U.S. law enforcement, working with our international partners, can locate a defendant, as was the case with Defendant Chavez, and file extradition papers, which ultimately results in the person returning to the U.S. to resolve the indictment.”
“The extradition of Hector Armondo Chavez to the United States is an example of a commitment to international cooperation,” said DEA Denver Special Agent in Charge Barbra Roach. “The Drug Enforcement Administration thanks the Alberta Law Enforcement Response Teams (ALERT), Lethbridge Regional Police Service and the Royal Canadian Mounted Police for their assistance in this extradition.”
This case was investigated by the DEA. The Lethbridge Regional Police Service, a part of the Alberta Law Enforcement Response Teams in Canada as well as the Royal Canadian Mounted Police assisted U.S. government authorities. The U.S. Marshals Service assisted in the transportation of Chavez from Canada to Colorado. The Department of Justice’s Office of International Affairs provided assistance in this matter. The case is being prosecuted by Assistant U.S. Attorney Michele Korver of the U.S. Attorney’s Office, District of Colorado.
The charges contained in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
California Man Sentenced for Insurance Fraud ScamRead the Press Release
RICHMOND, Va. – Joseph Giovanni Santiago, 50, of Los Angeles, California, was sentenced today to 78 months in prison, followed by 3 years of supervised release for engaging in a life insurance scheme involving nearly 1,000 individuals across the country. Santiago was also ordered to pay $1,313,749.07 in restitution to two separate insurance companies.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Gary Barksdale, Inspector in Charge of the Washington Division of the United States Postal Inspection Service; and Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement after sentencing by U.S. District Judge Henry E. Hudson.
Santiago pleaded guilty on October 14, 2014 to conspiracy to commit mail fraud. According to court documents, he was the founder of an entity known as Premier Debt Solutions (or “PDS”), which purported to provide faith-based debt restructuring and other services to churches across the country. Santiago also was the founder of 4Him Ministries, which purported to be a non-profit, religious organization.
In pleading guilty, Santiago admitted that he and his conspirators misled insurance companies by falsely representing that PDS employed hundreds of independent contractors for whom PDS intended to obtain employer-funded whole life insurance policies. In fact, none of these individuals were employed by PDS. Rather, Santiago and his conspirators recruited individuals to make false applications for life insurance, posing as PDS employees, so that Santiago and his conspirators could collect the advanced commissions paid for the sale of the policies. In addition, Santiago and his conspirators convinced the policy holders to assign their rights in those policies to 4Him Ministries. The initial plan was to use the advanced commissions from the initial sale of the life insurance policies to make premium payments until they could monetize the policies by selling the policies or securitized interests in the policies to investors.
As a result of this conspiracy, insurance companies ING and Unum Group issued over 800 life insurance policies, each with a face value of $100,000, to supposed PDS employees. The insurance companies mailed these policies to individuals across the country, including individuals within the Eastern District of Virginia. ING and Unum Group also paid these conspirators more than $1.4 million in advance commissions for the sale of these life insurance policies. Ultimately, both insurance companies cancelled all the insurance policies issued to PDS members.
Santiago’s co-conspirator Mark Wayne George pleaded guilty on August 24, 2014 to conspiracy to commit mail fraud, and is scheduled to be sentenced before Judge Hudson on January 29, 2015.
This case was investigated by United States Postal Inspection Service and the Federal Bureau of Investigation. Assistant U.S. Attorney Katherine Lee Martin 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. 3:14cr90.California Man Convicted of Running Multi-Million Dollar Fraud Scheme in KentuckyRead the Press Release
FRANKFORT, KY - Today, a federal jury convicted a California man of running a bogus oil production enterprise in Kentucky that defrauded investors, nationwide, out of millions of dollars.
The jury convicted John G. Westine, Jr., 69, for 26 counts of mail fraud and one count each of conspiracy to launder funds and securities fraud. Westine was acquitted on one mail fraud count. The jury reached its verdict after six and a half hours of deliberations, following nine days of trial.
According to testimony at trial, Westine and others lured money from investors by making false statements regarding an oil production business. The false statements led investors to believe that oil was being produced, when in fact it was not, and led them to believe that the oil companies had been in the oil production business for decades, when in reality they had only been in existence for less than a year.
Additionally, evidence at trial established that Westine had concealed from investors that he had served more than 22 years in federal prison, for a 1992 conviction for a similar fraud scheme in Ohio, and that he was on parole.
According to voluminous testimony and documents presented by prosecutors, Westine and others used aliases and fictitious company names to conceal their true identity from investors and authorities.
In total, Westine and others defrauded approximately 200 investors out of more than $3,000,000.
Westine’s co-defendant and half-brother, Michael Hicks, pleaded guilty to similar charges and testified for the government at trial.
The investigation started when investors submitted complaints to the Kentucky Department of Financial Institutions, Division of Securities.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Dugan Wong, Inspector in Charge of the U. S. Postal Inspection Service; and Charles Vice, Commissioner of the Kentucky Department of Financial Institutions, jointly announced the verdict.
The investigation was conducted by the U.S. Postal Inspection Service and the Kentucky Department of Financial Institutions,Division of Securities.
Assistant U.S. Attorneys Ken Taylor and Neeraj Gupta are prosecuting this case on behalf of the federal government.
Westine faces a maximum prison sentence of 20 years on each mail fraud count and 20 years for both the securities fraud and money laundering offenses. Under federal law, Westine will have to serve at least 85 percent of his prison sentence. The Court will impose a sentence after carefully considering the U.S Sentencing Guidelines and the federal statutes.
California Firm Agrees to Stop Production of Adulterated and Misbranded Dietary Supplements and Unapproved New DrugsRead the Press Release
As a result of a lawsuit filed by the United States, a federal court in California has issued an injunction shutting down Health One Pharmaceuticals Inc., a City of Industry, California, based manufacturer of dietary supplements and unapproved new drugs. The firm and its president, Richard S. Yeh, agreed to shut down and resolve the lawsuit as part of a consent decree. The Justice Department filed the injunction action in the Central District of California at the request of the U.S. Food and Drug Administration (FDA).
The consent decree forbids the company from operating unless and until it takes a number of steps to improve its compliance with federal law. The defendants have represented to the court that they have already ceased operations.
“Protecting the health of American consumers is some of the most important work we do,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “We have an unwavering commitment to ensuring that the dietary supplements in this country are safe and have been manufactured in accordance with federal law.”
Based on the results of FDA inspections, the complaint alleged that the defendants violated the Federal Food, Drug and Cosmetic Act by delivering, or causing to be delivered for introduction into interstate commerce, dietary supplements that have been prepared, packed or held under conditions that do not meet current good manufacturing practice regulations. Among other things, the complaint alleged that the defendants failed to meet current good manufacturing practices for dietary supplements by failing to conduct at least one appropriate test or examination to verify the identity of every dietary ingredient prior to using the ingredient. Furthermore, the complaint alleged that the defendants’ dietary supplements were misbranded because their labels do not include all the information required by federal law.
The complaint further alleged that some of the defendants’ products were unapproved new drugs—and therefore cannot be lawfully distributed under federal law—because they were articles intended for use in the cure, mitigation, treatment or prevention of disease and, among other things, are not generally recognized as safe and effective for their intended uses and were not the subjects of new drug applications approved by FDA. Furthermore, the complaint alleged that these drugs were misbranded because it is impossible to provide “adequate directions for use” for an unapproved new drug.
The FDA referred this matter to the Department of Justice. The Civil Division’s Consumer Protection Branch, together with the U.S. Attorney’s Office for the Central District of California, filed this case on behalf of the United States.
The claims alleged in the complaint are allegations only and there has been no determination of liability.
Box Elder Man Charged with LarcenyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Box Elder, South Dakota, man has been indicted by a federal grand jury for Larceny.
Juan Crawford, age 24, was indicted on October 21, 2014. He appeared before U.S. Magistrate Judge Veronica L. Duffy on January 9, 2015, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to one year in custody and/or a $100,000 fine, one year of supervised release, and $25 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to Crawford stealing wallets, cash, personal items, and debit and credit cards from unlocked lockers at the men’s gym on Ellsworth Air Force Base on December 9, 2013.
The charge is merely an accusation and Crawford is presumed innocent until and unless proven guilty.
The investigation is being conducted by the United States Air Force Security Police. Assistant U.S. Attorney Eric Kelderman is prosecuting the case.Crawford was released on bond pending trial. A trial date has not been set.
Attorney General Prohibits Federal Agency Adoptions of Assets Seized by State and Local Law Enforcement Agencies Except Where Needed to Protect Public SafetyRead the Press Release
Today, Attorney General Eric Holder issued an order setting forth a new policy prohibiting federal agency forfeiture, or “adoptions,” of assets seized by state and local law enforcement agencies, with a limited public safety exception. A federally adopted forfeiture – or “adoption” for short – occurs when a state or local law enforcement agency seizes property pursuant to state law and requests that a federal agency take the seized asset and forfeit it under federal law. The U.S. Department of the Treasury, which has its own forfeiture program, is issuing a policy consistent with the Attorney General’s order and that policy will apply to all participants of the Treasury forfeiture program, administered by the Treasury Executive Office for Asset Forfeiture.
“With this new policy, effective immediately, the Justice Department is taking an important step to prohibit federal agency adoptions of state and local seizures, except for public safety reasons,” said Attorney General Holder. “This is the first step in a comprehensive review that we have launched of the federal asset forfeiture program. Asset forfeiture remains a critical law enforcement tool when used appropriately – providing unique means to go after criminal and even terrorist organizations. This new policy will ensure that these authorities can continue to be used to take the profit out of crime and return assets to victims, while safeguarding civil liberties.”
The Attorney General ordered that federal agency adoption of property seized by state or local law enforcement under state law be prohibited, except for property that directly relates to public safety concerns, including firearms, ammunition, explosives and property associated with child pornography. The prohibition on federal agency adoption includes, but is not limited to, seizures by state or local law enforcement of vehicles, valuables, cash and other monetary instruments. This order is effective immediately and applies to all Justice Department attorneys and components, and all participants in the Department of Justice Asset Forfeiture Program. The new policy will ensure that adoption is employed only to protect public safety, and does not extend to seizures where state and local jurisdictions can more appropriately act under their own laws.
Both the Justice and Treasury Departments regularly review their asset forfeiture programs to ensure that federal asset forfeiture authorities are used carefully and effectively to take the profit out of crime, combat organized crime groups, and enable victim compensation, while ensuring that laws are followed, civil liberties are protected, and our constitutional system is strengthened. Since 2000, the Justice Department has returned approximately $4 billion in forfeited funds to victims of federal crime. Both departments will be part of the Law Enforcement Equipment Working Group, which will provide recommendations to the President regarding actions that can be taken to improve programs, like asset forfeiture, that help local law enforcement obtain equipment.
The Justice Department’s policy permitting federal agencies to adopt seizures dates from the inception of the Asset Forfeiture Program in the 1980s. The Treasury Department’s adoption policy has been part of its Asset Forfeiture Program since its inception in 1993. At the time that these policies were implemented, few states had forfeiture statutes analogous to the federal asset forfeiture laws. Consequently, when state and local law enforcement agencies seized criminal proceeds and property used to commit crimes, they often lacked the legal authority to forfeit the seized items. Turning seized assets over to federal law enforcement agencies for adoption was a way to keep those assets from being returned to criminals. Today, however, every state has either criminal or civil forfeiture laws, making the federal adoption process less necessary. Indeed, adoptions currently constitute a very small slice of the federal asset forfeiture program. Over the last six years, adoptions accounted for roughly three percent of the value of forfeitures in the Department of Justice Asset Forfeiture Program.
The new policy applies only to adoptions, not to seizures resulting from joint operations involving both federal and state authorities, or to seizures pursuant to warrants issued by federal courts. The policy does not limit the ability of state and local agencies to pursue the forfeiture of assets pursuant to their respective state laws. Law enforcement agencies working on joint task forces are required to follow the 2015 Guidance for Federal Law Enforcement Agencies Regarding the Use of Race, Ethnicity, Gender, National Origin, Religion, Sexual Orientation or Gender Identity.
Attorney General Holder Statement on Supreme Court Decision to Hear Same-Sex Marriage CasesRead the Press Release
Attorney General Eric Holder released the following statement after the U.S. Supreme Court agreed to hear four cases on same-sex marriage equality:
“After the Justice Department's decision not to defend the constitutionality of Section 3 of the Defense of Marriage Act, the Supreme Court sent a powerful message that Americans in same-sex marriages are entitled to equal protection and equal treatment under the law. This landmark decision marked a historic step toward equality for all American families.
“The Supreme Court has announced that it will soon hear several cases raising core questions concerning the constitutionality of same-sex marriages. As these cases proceed, the Department of Justice will remain committed to ensuring that the benefits of marriage are available as broadly as possible. And we will keep striving to secure equal treatment for all members of society—regardless of sexual orientation.
“As such, we expect to file a ‘friend of the court’ brief in these cases that will urge the Supreme Court to make marriage equality a reality for all Americans. It is time for our nation to take another critical step forward to ensure the fundamental equality of all Americans—no matter who they are, where they come from, or whom they love.”
Arlington Man Pleads Guilty to Production and Possession of Child PornographyRead the Press Release
Produced and possessed images of minors met on the Internet
ALEXANDRIA, Va. – Patrick Joseph Friedel, 29, of Arlington, Virginia, pleaded guilty today to production and possession of child pornography.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Washington, D.C.; and Edwin C. Roessler, Jr., Chief of Police, Fairfax County Police Department made the announcement after the plea was accepted by U.S. District Judge T.S. Ellis, III.
Friedel was originally indicted by a federal grand jury on November 20, 2014. Friedel faces a mandatory minimum of 15 years in prison and a maximum penalty of 30 years in prison when he is sentenced on April 24, 2015. The maximum statutory sentence is prescribed by Congress. It is provided here for informational purposes. The sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
In a statement of facts filed with the plea agreement, Friedel acknowledged meeting five underage teenagers over the Internet and exchanging sexually explicit images with them. In this pattern of activity, Friedel used persuasion, including sending depictions of minors engaged in sexually explicit conduct, and coercion, including threats to post images online and tell parents. On three occasions, Friedel picked up one of the minors and engaged in sexual activity with her. He took pictures and videos of this activity, which according to the plea agreement, included sadistic or masochistic conduct or other depictions of violence.
This case was investigated by Homeland Security Investigations and the Fairfax County Police Department with the assistance of the Northern Virginia/DC Internet Crimes Against Children Task Force. Assistant U.S. Attorneys Matthew Gardner and Tracy Doherty-McCormick are 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. 1:14-cr-383.
Alleged Fraud Scheme Aimed to Secure Bailout FundsRead the Press Release
PHILADELPHIA - An indictment was unsealedFriday charging Brian Hartline, 50, of Collegeville, Pennsylvania, and Barry Bekkedam, 47, of Hobe Sound, Florida, in a fraud conspiracy involving NOVA Bank,where Hartline served as President and Chief Executive Officer and Bekkedam had served as Board Chairman. The alleged scheme involved the Troubled Asset Relief Program (TARP) and was devised in an attempt to defraud the government of more than $13 million. The defendants are each charged with conspiracy to defraud the United States, TARP fraud, two counts of false statements to the federal government, and bank fraud. Bekkedam is additionally charged with two counts of wire fraud.
The charges were announced today by United States Attorney Zane David Memeger, FBI Special Agent-in-Charge Edward J. Hanko, Special Inspector General for the Troubled Asset Relief Program Christy Romero, and Pennsylvania Department of Banking Secretary of Banking and Securities Glenn E. Moyer.
Bekkedam and Hartline, with others, formed NOVA Bank in 2002. Bekkedam also owned and operated a financial advisory company, Ballamor Capital Management, and allegedly advised Ballamor clients to invest in NOVA. But in 2008, NOVA faced risk of failure because of bad loans and investments. Its investors were at risk of losing their investments. In October 2008, NOVA Financial Holdings, Inc., of Berwyn, Penn., the parent company of NOVA Bank, applied for approximately $13.5 million in taxpayer bank bailout funds through the U.S. Department of the Treasury TARP. In June 2009, NOVA Bank was approved to receive the TARP funds on the condition that the bank raise $15 million in additional, private capital. The bank was ultimately unable to raiseprivate capital, did not receive TARP funds, and in October 2012, the bank failed and was closed by state and federal banking regulators.
According to the indictment, Bekkedam and Hartline devised a scheme in which NOVA would loan money to G.L., a Florida businessman, for G.L. to transfer to NOVA’s parent company so it would appear as though the bank had new capital from an outside investor. On June 30, 2009, NOVA wired $5 million to G.L.’s bank account in Florida and, approximately two hours later, G.L. wired $5 million to an account used for investments in NOVA Financial Holdings, Inc. It is further alleged that in October and December 2009, Bekkedam and Hartline convinced two others to make similar “investments” using loans from NOVA, in efforts to make NOVA appear more financially sound than it actually was. The defendants also allegedlytold and directed employees to tell the U.S. Department of Treasury that NOVA had raised new capital when it had not. According to the indictment, the defendants concealed the true purpose of the loan to G.L. and falsely stated the purposes of the other two loans.
If convicted, defendant Bekkedam faces a statutory maximum sentence of 115 years imprisonment, a $4,750,000 fine, five years supervised release, and a $700 special assessment. Hartline faces a statutory maximum sentence of 55 years imprisonment, a $2,750,000 fine, five years supervised release, and a $500 special assessment.
The case was investigated by the Federal Bureau of Investigation, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), Internal Revenue Service Criminal Inestigaton, the Federal Deposit Insurance Corporation Office of Inspector General, the Office of Inspector General of the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau. It is being prosecuted by Assistant United States Attorney David Ignall.
In October 2008, NOVA Financial Holdings, Inc., of Berwyn, Penn., the parent company of NOVA Bank, applied for approximately $13.5 million in taxpayer bank bailout funds through the U.S. Department of the Treasury Troubled Asset Relief Program (TARP). In June 2009, NOVA Bank was approved to receive the TARP funds on the condition that the bank raise $15 million in additional, private capital. The bank was ultimately unable to raise private capital, did not receive TARP funds, and in October 2012, the bank failed and was closed by state and federal banking regulators.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Albion Man Sentenced to 12 Months in Prison for Defrauding the Social Security Administration of more than $48,000Read the Press Release
Roger Dale Young Lied About His Income and Resources
So That He Would Receive a Larger Disability Check Each MonthGRAND RAPIDS, MICHIGAN – Roger Dale Young, 55, of Albion, Michigan, was sentenced to 12 months in federal prison today for committing Social Security fraud. He was also ordered to pay restitution to the Social Security Administration. U.S. District Judge Janet T. Neff imposed the sentence.
Young, who had been receiving Supplemental Security Income disability benefits, pled guilty in September 2014 to lying about his assets and other financial resources in order to increase the amount of his monthly disability check. Young’s fraud occurred over the course of nearly 11 years and cost taxpayers more than $48,000.U.S. Attorney Patrick A. Miles, Jr., said, “Protecting taxpayers is one of our primary missions. We will continue to vigorously prosecute those who defraud federal agencies like the Social Security Administration.”
The case was investigated by the Social Security Administration’s Office of Inspector General, the Albion, Michigan Police Department, and the Calhoun County Sheriff’s Department. It was prosecuted by Assistant United States Attorney Clay Stiffler.
Albion Man Sentenced to 12 Months in Prison for Defrauding the Social Security Administration of More than $48,000Read the Press Release
Roger Dale Young Lied About His Income and Resources So That He Would Receive a Larger Disability Check Each Month
GRAND RAPIDS, MICHIGAN – Roger Dale Young, 55, of Albion, Michigan, was sentenced to 12 months in federal prison today for committing Social Security fraud. He was also ordered to pay restitution to the Social Security Administration. U.S. District Judge Janet T. Neff imposed the sentence.
Young, who had been receiving Supplemental Security Income disability benefits, pled guilty in September 2014 to lying about his assets and other financial resources in order to increase the amount of his monthly disability check. Young’s fraud occurred over the course of nearly 11 years and cost taxpayers more than $48,000.
U.S. Attorney Patrick A. Miles, Jr., said, “Protecting taxpayers is one of our primary missions. We will continue to vigorously prosecute those who defraud federal agencies like the Social Security Administration.”
The case was investigated by the Social Security Administration’s Office of Inspector General, the Albion, Michigan Police Department, and the Calhoun County Sheriff’s Department. It was prosecuted by Assistant United States Attorney Clay Stiffler.
15 January 2015
Yah-Ta-Hay Man Sentenced to Sixty-Six Months in Federal Prison for Voluntary Manslaughter ConvictionRead the Press Release
ALBUQUERQUE – Allen Harragarra, 34, a member of the Navajo Nation who resides in Yah-Ta-Hay, N.M., was sentenced today to 66 months in federal prison for his voluntary manslaughter conviction. Harragarra will be on supervised release for three years after completing his prison sentence. He also was ordered to pay $2,689.41 in restitution to cover the victim’s funeral expenses.
Harragarra was arrested in Dec. 2013, on a complaint alleging that he killed a Navajo man on Dec. 2, 2013, on the grounds of a school in Tohatchi, N.M., which is located within the Navajo Indian Reservation. According to the complaint, Harragarra stabbed the victim in the neck during a physical altercation.
On July 22, 2014, Harragarra pled guilty to a voluntary manslaughter charge and admitted killing the victim on Dec. 2, 2013, by stabbing him in the neck. In his plea agreement, Harragarra admitted stabbing the victim once in the neck while acting out of fear and in the heat of passion. He acknowledged that his actions resulted in the unlawful death of the victim.
The case was investigated by the Albuquerque and Gallup offices of the FBI and the Crownpoint office of the Navajo Nation Division of Public Safety, and was prosecuted by Assistant U.S. Attorney David Adams.
Wyoming Man Sentenced to 3 Years in Prison for Stealing Forest Service ExplosivesRead the Press Release
BILLINGS – A Wheatland, Wyoming man who stole 688 pounds of explosives from the U.S. Forest Service has been sentenced to 36 months in prison followed by 3 years supervised release. Budd Nesius, 33, was sentenced by U.S. District Judge Susan Waters after pleading guilty to possession of stolen explosives. In addition, Nesius was ordered to pay restitution to the U.S. Forest Service in the amount of $1,234.65.
In an Offer of Proof filed by Assistant U.S. Attorney Bryan Whittaker, the government told the court that in April 2013 in Red Lodge, the defendant knowingly possessed approximately 500 pounds of stolen explosive materials. While looking for a place to camp, Nesius drove down a dirt road and arrived in the area of a U.S. Forest Service (“USFS”) bunker which contained explosives. This explosives magazine/bunker is located several miles west of Red Lodge on USFS property. Nesius saw signs in the immediate vicinity warning of the explosives.
Shortly before dark, Nesius cut the locks with a pair of bolt cutters and loaded approximately 10 boxes of explosives into the back of his truck. This amounted to more than 500 pounds of explosives. The following morning Nesius transported the stolen explosives from Red Lodge to his hometown of Wheatland, Wyoming.
The investigation led agents to find boxes of explosives marked with USFS stickers abandoned by Wheatland reservoir. . An examination of the serial numbers on the recovered explosives determined that these were in fact the same stolen explosives taken from the USFS in Red Lodge, Montana.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Woodbury County Felon Involved with Drugs and Guns Gets Sentence of Eleven Years in Federal PrisonRead the Press Release
Contact: Steve Young
A Sioux City man was sentenced January 13, 2015, to more than eleven years in federal prison for conspiring to distribute methamphetamine, and for illegal possession of a firearm.
Nicholas Howard Juarez, age 31, from Sioux City, received his prison term after a May 21, 2014, guilty plea to conspiracy to distribute methamphetamine, and to being a felon in possession of a firearm. Juarez was convicted in 2004 in Dakota County Nebraska District Court for a felony offense, which precluded him from lawfully possessing firearms.
Information provided by the United States at the sentencing and change of plea hearing showed Juarez’s involvement during the Spring of 2013 through January 14, 2014 in a conspiracy that distributed at least 35 grams of actual (pure) methamphetamine. Juarez possessed multiple pounds of marijuana and methamphetamine as well as several firearms. On January 18, 2014, officers arrested Juarez, and during the arrest, seized three small baggies of methamphetamine from the defendant’s shirt pocket. That same day, a search warrant was executed at the defendant’s residence, and a stolen shotgun and several other firearms and ammunition were seized.
Juarez was sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Juarez was sentenced to 135 months’ imprisonment. A special assessment of $200 was imposed. He must also serve a 4-year term of supervised release after the prison term. There is no parole in the federal system.
Juarez is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Jack Lammers and investigated by the Tri-State Drug Task Force based in Sioux City, Iowa, which consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa Police Department; Bureau of Immigration and Customs Enforcement; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and the Woodbury County Attorney’s Office..
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-4008.
Winter Garden Man Pleads Guilty to Defrauding FEMARead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that Keith A. Greenwood (49, Winter Garden) today pleaded guilty to wire fraud. He faces a maximum penalty of 30 years in federal prison. The sentencing hearing is scheduled for April 20, 2015.
According to the plea agreement, in the aftermath of Hurricane Sandy, the Federal Emergency Management Agency (FEMA) began providing disaster assistance to individuals whose primary residences had been damaged by the hurricane. In November 2012, days after Hurricane Sandy struck New York City, Greenwood submitted an application for disaster assistance. In his paperwork, he falsely represented to FEMA that a property in Brooklyn, New York was his primary residence. The Brooklyn property was a building that Greenwood owned and rented to tenants. His true primary residence was in Winter Garden, Florida. Because his primary residence was not impacted by the hurricane, Greenwood was not entitled to the $17,385.73 in disaster assistance payments that FEMA awarded him based on his misrepresentations. On January 10, 2013, as part of an attempt to obtain another $5,000 in disaster assistance from FEMA, Greenwood faxed fake work receipts to FEMA that purported to be for repair work performed on the Brooklyn property. Ultimately, Greenwood admitted to investigators that he intentionally had told FEMA that the Brooklyn property was his primary residence, when he knew that his primary residence was in Florida.
This case was investigated by the U.S. Department of Homeland Security, Office of Inspector General, with assistance from the FEMA Fraud Prevention and Investigation Branch. It is being prosecuted by Assistant United States Attorney Andrew C. Searle.
Wilkes-barre Man Sentenced to 5 Years in Federal Prison for Possessing Firearm in Connection with Drug TraffickingRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 31-year-old Wilkes-Barre man was sentenced to five years in prison today by Senior U.S. District Court Judge Edwin M. Kosik for possessing a firearm in furtherance of a drug trafficking felony.
According to United States Attorney Peter Smith, the defendant, Tristan Somers, previously pleaded guilty to committing the crime in Wilkes-Barre during May 2014.
Somers was indicted by a federal grand jury on June 3, 2014, following an investigation by special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Wilkes-Barre Police, and Kingston Police.
Judge Kosik ordered Somers to be placed on two years of supervised release following his prison sentence, and pay a $100 special assessment.
The case was prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Wellpinit Man Sentenced to Federal Prison for Violent Domestic AssaultRead the Press Release
SPOKANE – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Gabriel Joseph Andrew, age 28, of Wellpinit, Washington, was sentenced today after having previously pleaded guilty on September 4, 2014 to one count of Assault Resulting in Substantial Bodily Injury to a Spouse, Intimate Partner, or Dating Partner in Indian Country. United States District Court Judge Stanley A. Bastian sentenced Andrew to a 39-month term of imprisonment, to be followed by three years of court supervision after he is released from Federal prison.
According to information disclosed during the court proceedings, on March 18, 2014, Andrew assaulted his long-time girlfriend. The victim was punched and kicked by Andrew, resulting in numerous injuries including a large gash on the victim’s forehead.
Michael C. Ormsby stated, “Domestic violence continues to be a problem around the country. I commend the Spokane Tribal Police Department and the FBI for their leadership in addressing this problem and for their outstanding professional partnership exemplified by the successful investigation and prosecution of this matter. The United States Attorney’s Office for the Eastern District of Washington is, and will continue to be, committed to aggressively prosecuting domestic violence assaults that occur within areas under federal jurisdiction, including the Indian reservations in the District.
This investigation was conducted by the Spokane Tribal Police Department and the FBI. The case was prosecuted by Rudy J. Verschoor, an Assistant United States Attorney for the Eastern District of Washington.
CR-14-0085-SAB