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13 January 2015
Hartford Heroin Dealer Sentenced to 5 Years in Federal PrisonRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that ERIC COLON, 29, of Hartford, was sentenced yesterday by U.S. District Judge Stefan R. Underhill in Bridgeport to 60 months of imprisonment, followed by four years of supervised release, for conspiring to possess and distribute heroin, some of which he stole from his drug supplier.
According to court documents and statements made in court, in January 2013, the DEA’s Hartford Task Force began an investigation into the narcotics distribution activities of Luis Fernandez of East Hartford. The investigation, which included the use of court-authorized wiretaps and controlled purchases of narcotics, revealed that Fernandez’s family members and associates in southern California shipped heroin, cocaine and marijuana to Fernandez at various addresses in the Hartford area. Fernandez, who also was supplied with narcotics from individuals in New York, sold the drugs locally to other dealers and customers.
The investigation revealed that COLON acquired distribution quantities of heroin from co-defendant Jose Rivera-Baron on several occasions. During the course of the investigation, COLON, on behalf of co-defendant Joshua Saez, made arrangements to obtain approximately 140 grams of heroin from Rivera-Baron. On August 16, 2013, while under law enforcement surveillance, Rivera-Baron met with COLON and Saez in the parking lot of a restaurant on Franklin Avenue in Hartford. Following the meeting, COLON drove away at high rate of speed. Investigators believed that Rivera-Baron had been robbed and pursued COLON’s car. Saez exited the car and was taken into custody, but the chase of COLON was terminated for public safety reasons.
A search of Saez’s person revealed two handguns, as well as 138.1 grams of heroin that SAEZ and Colon had stolen from Rivera-Baron.
The quantity of heroin that Saez possessed would have produced nearly 7000 individual dosage bags and had a street value of approximately $35,000.
COLON was arrested on October 9, 2013. On October 20, 2014, he pleaded guilty to one count of conspiracy to possess with intent to distribute 100 grams or more of heroin.
More than 20 individuals have been charged with narcotics distribution and related offenses as a result of this investigation. Fernandez, Saez and Rivera-Baron have pleaded guilty and, on December 2, 2014, Saez was sentenced to 71 months of imprisonment. Fernandez and Rivera-Baron await sentencing.
This investigation has been led by the Drug Enforcement Administration’s Hartford Task Force, including personnel from the DEA Hartford Resident Office and the Bristol, Hartford, Manchester, New Britain, Newington, and Wethersfield Police Departments. Agencies assisting the investigation include the DEA in New Haven, Bridgeport, Los Angeles and Panama, Federal Bureau of Investigation, U.S. Marshals Service, U.S. Department of Homeland Security, U.S. Postal Inspection Service, Connecticut State Police, State of Connecticut Office of Adult Probation, and the Hartford, East Hartford and New Britain Police Departments.
The case is being prosecuted by Assistant U.S. Attorneys S. Dave Vatti and Assistant U.S. Attorney Gabriel J. Vidoni.
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(203) 821-3722 [email protected]Grants Pass Brothers Sentenced to Federal Prison for Drug TraffickingRead the Press Release
MEDFORD, Ore— On Monday, January 12, 2015, Senior U.S. District Judge Owen M. Panner sentenced Marco Antonio Gutierrez, 36, of Grants Pass, Oregon, to 14 years in federal prison, and his brother Samuel De La Cruz Gutierrez, 43, to 10 years federal prison, after they pled guilty to possession of methamphetamine and heroin with intent to distribute. Both will be on five years of supervised release after they complete their prison terms.
On January 21, 2014, the Rogue Area Drug Enforcement Team (RADE) executed a search warrant at the Gutierrez’ residence in Grants Pass, Oregon. The search warrant was based on information that the Gutierrez brothers were selling methamphetamine and heroin, possessed numerous firearms, and were frequently armed. Samuel and Marco Gutierrez were arrested just outside the front door. Samuel Gutierrez possessed $808 cash and several oxycodone pills. Marco Gutierrez possessed $4,982 cash and a user amount of methamphetamine. Inside the trailer officers found 116 grams actual methamphetamine, 870 grams of heroin, packaging materials, scales, and drug records. Officers also found several loaded firearms throughout the trailer, including a sawed-off shotgun, a stolen Colt .45 handgun, a .25 handgun, a .22 caliber revolver, a Smith and Wesson 9mm handgun, a Ruger .380 handgun, and a stolen Ruger Mini 14 assault rifle in a gun bag with three loaded high capacity magazines. Officers also found other stolen property, including a quad ATV and motorcycle.
Marco Gutierrez’s previous felony convictions include sale or transportation of marijuana in 1996, inflicting corporal injury on spouse in 2008, and transportation of a controlled substance in 2008. Marco Gutierrez also had a pending California charge from September 2013 in which multiple firearms and several rounds of ammunition were discovered in his vehicle during a traffic stop. Samuel Gutierrez has no prior criminal history.
This case was investigated jointly by the Rogue Area Drug Enforcement Team, the U.S. Drug Enforcement Administration (DEA), Bureau of Alcohol, Tobacco, and Firearms (ATF), Immigration and Customs Enforcement (ICE), and was prosecuted by Assistant U.S. Attorney Douglas W. Fong.
Golden Grove Prisoner Sentenced to Four Months in Prison for Cell Phone PossessionRead the Press Release
St. Croix, USVI - District Court Judge Raymond Finch, on December 22, 2014, sentenced Golden Grove Prisoner Avery Monsanto, age 51, to four months in prison for Possession of Prison Contraband, United States Attorney Ronald W. Sharpe and U.S. Drug Enforcement Administration (DEA) Special Agent-in-Charge Vito S. Guarino announced. The sentence must be served consecutively to the sentence Monsanto was serving at the time of the offense. The Court also sentenced Monsanto to one year of supervised release.
Monsanto entered a guilty plea to Possession of Prison Contraband on August 6, 2014. The offense stemmed from a search of Monsanto’s prison cell while he was an inmate at Golden Grove Adult Correctional Facility located on St. Croix on April 7, 2014. Law enforcement officers discovered and seized three cellular telephones in a cell solely occupied by Monsanto. Cellular telephones are prohibited contraband in correctional facilities because they are known to be used by prisoners to intimidate witnesses, orchestrate narcotics transactions, and to facilitate other criminal activity including murders.
The case was investigated by the V.I. Bureau of Corrections Gang Intelligence Search Team and the DEA. This case was prosecuted by Assistant United States Attorneys Everard Potter and Rami Badawy.
Former Princeton, N.J. Youth Soccer Coach Sentenced to Three Years in Prison for Possessing Images of Sexually Exploited ChildrenRead the Press Release
TRENTON, N.J. – A former Princeton, New Jersey, youth soccer coach was sentenced today to 36 months in prison for possessing images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
Jorge A. Roman, 50, previously pleaded guilty before U.S. District Judge Joel A. Pisano to an information charging him with one count of possession of child pornography. Judge Pisano imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:On May 16, 2013, Roman possessed 600 or more images of child sexual abuse on various DVDs, computers or other digital media at his residence in Princeton. Some of the images in Roman’s possession were images of prepubescent minors engaged in sexually explicit conduct.
In addition to the prison term, Judge Pisano sentenced Roman to serve five years of supervised release.U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office in Trenton.
15-010
Defense counsel: Lisa Van Hoeck Esq., Assistant Federal Public Defender, TrentonFormer Immigration Consultant Pleads Guilty to Filing False Tax ReturnsRead the Press Release
SAN JOSE – Evelyn Sineneng-Smith pleaded guilty in federal court in San Jose yesterday to filing a false tax return, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez.
In pleading guilty, Sineneng-Smith admitted that she operated an immigration consultation business and most of the income listed on her tax returns came from payments from her clients. She admitted that she filed false individual income tax returns for the 2002 and 2003 tax years by only providing her accountant with some of the financial records from her business, and these records materially understated her gross business income for each tax year. She further admitted that when she mailed the returns to the Internal Revenue Service, she knew that each return was not true and correct as to the amount of the gross receipts reports on the returns and would be paying less income taxes than she actually owed.
Sineneng-Smith, 67, of San Jose, Calif., was indicted by a federal Grand Jury on July 14, 2010. She was charged with two counts of willfully subscribing to a false tax return, in violation of 26 U.S.C. § 7206(1), three counts of encouraging and inducing illegal immigration for private financial gain, in violation of 8 U.S.C. §§ 1324(a)(1)(A)(iv) and (B)(i), and three counts of mail fraud, in violation of 18 U.S.C. § 1341. The tax counts were severed from the immigration and mail fraud counts. On July 30, 2013, a jury convicted Sineneng-Smith of three counts of encouraging and inducing illegal immigration for private financial gain, in violation of 8 U.S.C. §§ 1324(a)(1)(A)(iv) and (B)(i), and three counts of mail fraud, in violation of 18 U.S.C. § 1341.
Sineneng-Smith’s sentencing hearing is scheduled for May 18, 2015, before the Honorable Ronald M. Whyte, U.S. District Court Judge, in San Jose. The maximum statutory penalty for each count in violation of 26 U.S.C. § 7206(1) is three years in prison and a fine of $100,000, plus restitution. The maximum statutory penalty for each count in violation of 8 U.S.C. §§ 1324(a)(1)(A)(iv) and (B)(i) is 10 years in prison and a fine of $250,000, plus restitution. The maximum statutory penalty for each count in violation of 18 U.S.C. § 1341 is 20 years in prison and a fine of $250,000 fine, plus restitution. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Susan Knight and Philip Guentert are the Assistant U.S. Attorney who is prosecuting the case with the assistance of Tracey Andersen and Nina Burney. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Five Defendants Plead Guilty in Stolen Identity Tax Refund Fraud Scheme Involving Student Financial Services AccountsRead the Press Release
Five Miami Dade College students, three of whom were employees of Target, pled guilty for their role in stolen identity tax refund fraud.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Ronald J. Verrochio, Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Division, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), made the announcement.
Andy Lamour, 22, Tamica Smith, 26, Marie Joseph, 25, Gerrey Cherrelus, 22, and Sandy Jean-Louis, 21, all of Miami, each pled guilty to one count of conspiracy to commit an offense against the United States and to one count of theft of government property or money. As part of their plea agreements, Lamour, Smith, Joseph, Cherrelus and Jean-Louis agreed to pay restitution in the amounts of $26,172.00, $17,395.00, $22.399.00, $13,242.00, and $28,561.63, respectively.
According to court documents, Lamour, Cherrelus and Jean-Louis were students at Miami Dade College; Lamour, Smith and Joseph were employees of Target. From April 17, 2012 to January 24, 2013, the defendants participated in a tax fraud scheme with co-defendant Emmanuel Avrilien, 22, of Miami, where the defendants received fraudulently obtained tax refunds in their personal Higher One, Inc. and Citibank accounts. Defendant Avrilien paid the other defendants for allowing their accounts to receive the stolen tax refunds, and paid Lamour for recruiting Joseph and other individuals to participate in the scheme.
Court documents also state that defendant Avrilien and unknown co-conspirators filed a total of 139 fraudulent tax returns which directed the tax refunds to be deposited into one of the other defendant's accounts. After the tax refunds were deposited into a defendant’s account, that defendant withdrew the money from the account at ATMs or through counter withdrawals.
Sentencing for the defendants is scheduled for March 26, 2015. At sentencing, the defendants face up to five years in prison for the conspiracy charge, and up to ten years in prison for the theft of government property charge.
Avrilien is scheduled to commence trial on May 4, 2015.
Mr. Ferrer commended the investigative efforts of the Identity Theft Tax Refund Strike Force, with special commendation to USPIS, IRS-CI, FBI, and ICE-HSI. The case is being prosecuted by Assistant U.S. Attorney Gera Peoples.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Fifteen Charged in White Plains Federal Court with Narcotics Trafficking in and Around Westchester CountyRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, George Venizelos, the Assistant Director-In-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and George N. Longworth, the Commissioner of the Westchester County Department of Public Safety, on behalf of the Westchester County Northern Narcotics Initiative, announced the unsealing of an Indictment charging 15 defendants with conspiring to distribute heroin, crack cocaine, and powder cocaine in and around Westchester County from at least in or about January 2014 up to and including in or about January 2015.
Manhattan U.S. Attorney Bharara stated: “Illegal, damaging drugs such as heroin, crack and cocaine continue to be scourges of many communities north of New York City. We and our federal and local law enforcement partners are determined to prevent drug organizations from taking root in our communities, as evidenced by today’s charges and arrests.”
FBI Assistant Director-in-Charge Venizelos stated: “With the scourge of drugs often comes addiction and violence that can cripple a community. We will continue to dismantle the infrastructure for distributing heroin and cocaine, wherever we find it.”
Commissioner Longworth stated: “I am grateful to the FBI and the local chiefs of police who committed resources and personnel to this year-long, multi-agency investigation. I would also like to thank the U.S. Attorney’s Office and the Westchester District Attorney’s Office for partnering with us to combat the scourge of heroin in our communities.”
According to allegations in the Indictment unsealed today in White Plains federal court:
The Indictment charges 15 defendants and contains three counts. Count One charges LAKUAN RHYNE, a/k/a “Rico,” 22, JESSE DABBS, 24, DAIVON PRYOR, 19, JONATHAN THORNTON, a/k/a “Staxx,” 29, JOHNSON VANIYAPURAKAL, 26, and ALLEN WRIGHT, 24, with conspiring to distribute, and possess with intent to distribute, one kilogram or more of heroin in and around Westchester County, in violation of Title 21, United States Code, Sections 846, 841(a)(1), and 841(b)(1)(A).
Count Two charges RHYNE, DABBS, MICHAEL DOUSE, 38, MICHAEL GRAY, 48, ANGELO HARRIS, 34, KEVIN HERBIN, 23, KEVIN MALLORY, 43, ROBERT MILLER, 35, DWAYNE MOUNTAIN, 27, and THORNTON with conspiring to distribute, and possess with intent to distribute, 280 grams or more of crack cocaine in and around Westchester County, in violation of Title 21, United States Code, Sections 846, 841(a)(1), and 841(b)(1)(A).
Count Three charges RHYNE, DABBS, CURTIS DIMMIE, 47, DOUSE, GRAY, MICHAEL HARRINGTON, 34, MALLORY, MILLER, THORNTON, and VANIYAPURAKAL with conspiring to distribute, and possess with intent to distribute, 500 grams or more of cocaine in and around Westchester County, in violation of Title 21, United States Code, Sections 846, 841(a)(1), and 841(b)(1)(B).
The charges against each defendant and the corresponding maximum potential penalties are outlined in the chart attached to this press release.
Twelve of the 15 defendants charged in the Indictment unsealed today were arrested today or had previously been taken into custody. Those defendants were presented in White Plains federal court this afternoon before U.S. Magistrate Judge Judith C. McCarthy. RHYNE was previously taken into custody by Arkansas state authorities, and will be presented in White Plains federal court on a future date.
Mr. Bharara praised the outstanding investigative work of the FBI, the Westchester County Northern Narcotics Initiative, comprised of the Westchester County Department of Public Safety and the police departments of Peekskill, Croton-on-Hudson, Buchanan, Bedford, Yorktown, Mount Kisco, and Ossining, as well as the FBI Violent Crimes Task Force. He also thanked the Westchester County District Attorney’s Office for its participation.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys George Turner and Michael Gerber are in charge of the prosecution. Assistant U.S. Attorney Margaret Graham is responsible for the forfeiture aspects of the case.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Rhyne, Lakuan, et al. Indictment 15 Cr 005
Federal Judge Sentences Three Women to Prison for Tax FraudRead the Press Release
BIRMINGHAM -- A federal judge on Monday sentenced three members of a Birmingham-area tax-fraud ring to years in prison for filing false tax returns in other people's names, announced U.S. Attorney Joyce White Vance and Internal Revenue Service-Criminal Investigation Division Special Agent in Charge Veronica Hyman-Pillot.Chief U.S. District Judge Karon O. Bowdre sentenced LATOSHIA SHEVELL HOLLIS, 39, to eight years and four months in prison; ANGELA GERNIAL BENNETT, 52, to five years and three months in prison; and KENNETHEA LASHELLE PARKS, 33, to two years in prison. The three Birmingham women all pleaded guilty last year to one count of conspiracy to defraud the government by filing false income tax returns. Together, they must pay $234,202 in restitution to the government.
During the sentencing hearings, the judge noted that it had become a popular "get rich quick scheme" in some criminal quarters to file fake tax returns in order to get the IRS to unwittingly send refund money to the criminals.
The group in which Hollis, Bennett and Parks participated sought nearly $900,000 in stolen tax-refund money over two years, and successfully received about $234,000. The conspiracy gathered personally identifying information on other people and used it to file false federal income tax returns in the names of at least 30 individuals for the 2008 tax year and at least 118 individuals for the 2009 tax year.
Hollis and Parks had extensive criminal histories, the judge noted, and said it is "time the community realizes that these crimes do not pay in the long run.""People who engage in tax fraud steal from each of us who pay our taxes as required," Vance said. "Monday's sentences punish these criminals for their fraud and theft and send the message to others who might think about participating in similar misdeeds that prison is the price they could pay," Vance said.
"Internal Revenue Service Criminal Investigation continues to make identity theft and refund fraud a top priority," Hyman-Pillot said. "Angela Bennett, Latoshia Hollis and Kennethea Parks stole from the United States Treasury and had no regard for the victims of their schemes. Our agency has a zero-tolerance policy for this type of criminal behavior," she said. "Monday's sentencing comes on the brink of tax-filing season, and I hope it serves as a warning to those who are considering similar criminal activities."
IRS-CID investigated the case, which Assistant U.S. Attorney Melissa K. Atwood prosecuted.
Federal Grand Jury IndcitmentsRead the Press Release
Contact Person: Beth Drake (803) 929-3000
Columbia, South Carolina ---- United States Attorney Bill Nettles stated today that a Federal Grand Jury in Greenville, South Carolina, returned Indictment(s) against the following: Anderson County Resident Indicted for Possession of Child Pornograph
David D. Survilas, age 46, of Walhalla, South Carolina, was charged in a 1-count Indictment with possession of child pornography. The maximum penalty Survilas could receive is not more than twenty (20) years imprisonment and a fine of $250,000.00. This case was investigated by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) special agents and is assigned to Assistant United States Attorney William J. Watkins, Jr., of the Greenville office for prosecution.
Foreign Nationals Charged with Illegal Re-entry
Jorge Hernandez-Morales, Nestor Perez-Antonio, Gerson David Ordonez-Irias, Ramon Alvarez-Ornelas, and Francisco Martinez-Sebastian were each charged in Indictments with illegal re-entry to the United States, a violation of Title 8, United States Code, Section 1326. The maximum penalty each could receive, depending on their prior criminal history, is two to twenty years imprisonment. These cases were investigated by U.S. Immigration and Customs Enforcement (ICE) agents and are assigned to Assistant United States Attorney Max Cauthen of the Greenville office for prosecution.
Individual Indicted for Failure to Register as a Sex Offender
Paul Edward Philson, Jr., was charged in a 1-count Indictment with failure to register as a sex offender, a violation of Title 18, United States Code, Section 2250. The maximum penalty Philson could receive is ten years imprisonment. The case was investigated by agents of the United States Marshals Service and is assigned to Assistant United States Attorney Max Cauthen of the Greenville office for prosecution.
The United States Attorney stated that all charges in these Indictments are merely accusations and that all defendants are presumed innocent until and unless proven guilty.Evansville man sentenced to 40 months in fraud caseRead the Press Release
Former insurance agent conspired to steal over $160,000 in commissions based on fraudulent annuity sales to elderly clients
EVANSVILLE - Josh J. Minkler, Acting United States Attorney, announced today an Evansville man was sentenced to 40 months (over three years) in federal prison by U.S. District Chief Judge Richard L. Young. Danny Lee Beavin, 40, Evansville, was found guilty yesterday of wire fraud, conspiracy to commit wire fraud, mail fraud and access device fraud.
“Risking the life’s savings of our seniors to make a fraudulent commission is a crime we take very seriously in my office,” said Minkler. “Those who choose to betray the trust of some of our most beloved citizens will be held strictly accountable.”
Beavin persuaded clients who were over 80 years old, to purchase annuity insurance policies issued by the Americo Company. Beavin made false statements on the applications indicating the clients were younger than 80, allowing him a larger commission. In some cases, he received commissions up to 9% of the original lump sum purchase amount. In some cases, persons over 80 years old were not eligible for the annuity policy he sold to them. The elderly clients trusted Beavin protect their interests and submit accurate information to the insurance company.
Beavin appeared before a magistrate judge on January 16, 2014, for an initial appearance on the original charges. After being released, he went to several health clubs in Vanderburgh and Warrick Counties for the purpose of stealing car keys and wallets from health club members who were using the facility. Beavin successfully used the stolen credit and debit cards of three the health club victims totaling $1,668, and attempted to use the cards for another $931. He used some of the money to buy gift cards, alcohol at an Evansville nightclub, gasoline and cash advances.
This case was jointly investigated by the United States Secret Service and the Evansville Police Department.
According to Assistant United States Attorney Todd Shellenbarger, who prosecuted the case for the government, Beavin was fined $2,000 and must serve three years of supervised release after his sentence. During the period of supervised release Beavin was ordered to pay restitution to the victims.Doctor Sentenced to Four Years for Tax FraudRead the Press Release
SAN DIEGO – Judge Anthony J. Battaglia today sentenced Dr. James Francis Murphy to 48 months in custody for his years-long efforts to obstruct the IRS from assessing and collecting the hundreds of thousands of dollars of income taxes he owed from the operation of his medical practices in Encinitas, California, and Omaha, Nebraska. Dr. Murphy was also ordered to pay nearly half a million dollars in restitution to the Internal Revenue Service.
His wife, Denine Christine Murphy, a co-defendant in the case, was sentenced to 12 months of house arrest and ordered to pay restitution of $147,528.
Evidence presented at trial showed that despite earning as much as $1 million a year from their osteopathic medical practice, Dr. and Mrs. Murphy paid almost no federal income taxes for a decade. Instead of accurately declaring their income and paying taxes lawfully owed to the United States, and despite repeated warnings from the IRS, the Murphys filed false income tax returns for the medical practice using a bogus “trust,” and filed false personal income tax returns concealing their true income. In addition, in some years the Murphys simply refused to file required tax returns at all. Incredibly, for several years their fraudulent tax returns triggered the Earned Income Credit, and resulted in their receiving tax refunds from the IRS.
As presented at trial, when confronted by the IRS and notified that they owed substantial sums in taxes, the Murphys engaged in a variety of schemes to prevent the United States from correctly assessing and collecting these taxes. These schemes included: (1) falsely claiming that they were not citizens of the United States; (2) frivolously claiming that the federal tax laws did not apply to them; (3) fraudulently presenting fictitious documents such as “Private Offset Discharge and Indemnity Bonds” and “Bonded Promissory Notes,” purportedly worth hundreds of millions of dollars, as payment on their tax obligations; and (4) fraudulently claiming that the hundreds of thousands of dollars they paid to credit card companies, utilities, and other vendors were actually withholdings of federal income taxes, thereby entitling them to over a million dollars in refunds from the IRS. The defendants even claimed that the then-Secretary of the Treasury, Henry Paulson, was their “fiduciary,” who was responsible for paying their taxes.
The defendants were found guilty by a jury on June 20, 2014 after a two-week jury trial held before Judge Battaglia. At today’s sentencing, Judge Battaglia described Dr. Murphy’s conduct as “a calculated, deliberate, and orchestrated series of efforts…to avoid tax liability.” The court noted that Dr. Murphy’s crimes represented “a pretty offensive set of circumstances.” Judge Battaglia decried the “nature of the arrogance, [in] how these mechanisms were utilized” to carry out what the court characterized as an “all out scheme to defraud the government.”
U.S. Attorney Laura E. Duffy commented, “The Murphys went to outrageous lengths to deprive the U.S. taxpayers of their fair share of the tax burden. It is especially egregious that they exploited the Earned Income Tax Credit, a credit intended to benefit low-income working families, to collect refunds they were not entitled to receive. Taxpayers should be aware that schemes to avoid paying taxes will result in serious consequences – including significant jail time – in addition to having to pay back taxes with interest.”
“As we approach tax filing season, it’s more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe,” said Erick Martinez, Special Agent in Charge of IRS Criminal Investigation. “No matter what the source of income, all income is taxable. The prosecution of individuals who intentionally conceal income and evade taxes is a vital element of the IRS’ enforcement strategy.”
Rod Ammari, Special Agent in Charge of the Treasury Inspector General for Tax Administration stated, “James and Christine Murphy’s attempts to corruptly impede tax administration by submitting fraudulent documents to the IRS will not be tolerated. These schemes that are used to avoid paying their fair share affects all hard working taxpayers, and Treasury Inspector General for Tax Administration is committed to investigating these criminal schemes.”
Dr. Murphy is required to surrender to begin his custodial term by February 24, 2015.
DEFENDANT Case Number: 12CR2497-AJB Dr. James Francis Murphy Age: 53Encinitas, California
Denine Christine Murphy Age: 52Encinitas, California
CHARGESCount 1: Corrupt interference with the administration of the internal revenue laws, in violation of 26 U.S.C. § 7212(a). Both defendants. Maximum penalties – 3 years’ custody, $250,000 fine.
Counts 2-5: Presenting fictitious financial obligations, in violation of 18 U.S.C. § 514. Defendant Dr. James Francis Murphy. Maximum penalties – 10 years’ custody and $250,000 fine (per count).
Counts 6-8: False claims to the United States, in violation of 18 U.S.C. § 287. Both defendants. Maximum penalties – 5 years’ custody and $250,000 fine (per count). INVESTIGATING AGENCIESInternal Revenue Service, Criminal Investigation
Treasury Inspector General for Tax AdministrationDetroit Gang Leader Sentenced to 346 Months in Prison for Planning Armed RobberyRead the Press Release
A leader of a street gang that operated on the east side of Detroit was sentenced to 346 months in prison today for aiding and abetting an armed robbery of a Little Caesars pizza restaurant, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan and Special Agent in Charge Steven Bogdalek of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) in Detroit.
Christopher LaJuan Tibbs, 38, of Detroit, was convicted on Aug. 29, 2014, of aiding and abetting an armed robbery after a three-day trial before U.S. District Judge Bernard A. Friedman of the Eastern District of Michigan.
The evidence at trial established that Tibbs, also known as “Chief Fatah,” was the leader of the Michigan branch of the Mafia Insane Vice Lords, a violent street gang that operated primarily on the east side of Detroit. The Mafia Insane Vice Lords was a local faction of the national Vice Lord gang that originated in Chicago. The evidence at trial further showed that, during his leadership of the Mafia Insane Vice Lords, Tibbs recruited and used young adults and children to commit crimes for the gang, and ordered the murder of a witness in connection with this case.
The evidence at trial showed that Tibbs helped plan an armed robbery of a Little Caesars restaurant in Redford, Michigan, in September 2013. Tibbs “blessed” it as a mission for the gang, and sent four subordinate members to commit the crime. As part of the planning for the robbery, Tibbs instructed the robbers to disable the cameras and phones in the Little Caesars. Tibbs also told the robbers what to wear, had them diagram the Little Caesars, and instructed them how to use the gun during the robbery. During the robbery, one of the robbers brandished a gun and forced the employees, including a pregnant woman, inside the store, where the robbers tore down the surveillance cameras. At the robbers’ direction, the employees disabled the alarm and opened the safe. Although he was not present for the robbery itself, Tibbs took a majority of the proceeds, some of which were spent on the gang.
This case marked the first time that the federal criminal street gang enhancement was charged in the Eastern District of Michigan. Because the jury found that Tibbs committed the crime to advance the criminal activities of his gang, the maximum penalty for aiding and abetting the robbery was increased.
The case was investigated by the ATF, with assistance from the Redford Police Department, Detroit Police Department, and Chicago Police Department. The case was prosecuted by Trial Attorney Joseph Wheatley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Louis Gabel of the Eastern District of Michigan.
Department of Justice Seeks Recovery of Approximately $1,528,000 in Bribes Paid to a Honduran OfficialRead the Press Release
The Department of Justice filed today a civil forfeiture complaint seeking the forfeiture of nine properties worth approximately $1,528,000 that were allegedly purchased with funds traceable to a $2 million bribe paid by a Honduran information-technology company to the former Executive Director of the Honduran Institute of Social Security.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Polite, Jr. of the Eastern District of Louisiana and Executive Associate Director Peter T. Edge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) made the announcement.
“Mario Zelaya was the director of Honduras’s social security agency, but instead of building a social safety net for his country’s citizens, he allegedly used his position of public trust to steal public money for himself,” said Assistant Attorney General Caldwell. “Our action today highlights how the Criminal Division’s Kleptocracy Initiative, with our network of law enforcement partners around the globe, will trace and recover the ill-gotten gains of corrupt officials. Criminals should make no mistake: the United States is not a safe haven for the proceeds of your crimes. If you hide or invest your stolen money here, we will use all the legal tools we have to find it and seize it.”
“The United States Attorney’s Office for the Eastern District of Louisiana is committed to working with our law enforcement partners, both domestically and internationally, to ensure that this district is not used to launder corruptly obtained funds, no matter the source of the corruption,” said U.S. Attorney Polite.
“ICE’s Homeland Security Investigations will continue to work in cooperation with our international law enforcement partners to ensure that our country is not used as a safe haven for corrupt foreign officials to hide their assets,” said HSI Executive Associate Director Edge.
From 2010 to 2014, Dr. Mario Roberto Zelaya Rojas, 46, of Tegucigalpa, Honduras, served as the Executive Director of the Honduran Institute of Social Security (HISS), a Honduran Government agency that provides social security services, including workers’ compensation, retirement, maternity, and death benefits. According to allegations in the forfeiture complaint, Zelaya solicited and accepted $2.08 million in bribes from Compania De Servicios Multiples, S. de R. L. (COSEM) in exchange for prioritizing and expediting payments owed to COSEM under a $19 million contract with HISS. Zelaya also allegedly instructed COSEM to make bribe payments to two members of the Board of Directors of HISS charged with overseeing the COSEM contract. To conceal the illicit payments, COSEM allegedly sent the bribes through its affiliate company, CA Technologies.
As further alleged in the complaint, the bribe proceeds were then laundered into the United States and used by Zelaya and his brother, Carlos Alberto Zelaya Rojas, to acquire real estate in the New Orleans area. Certain properties were titled in the name of companies nominally controlled by Zelaya’s brother in an effort to conceal the illicit source of the funds as well as the beneficial owner. The current action seeks forfeiture of nine properties acquired with the proceeds of Zelaya’s alleged bribery scheme.
The investigation was conducted by HSI’s New Orleans and Miami Field Offices. The case is being handled by Trial Attorneys Stephen A. Gibbons and Marybeth Grunstra of the Criminal Division’s Asset Forfeiture and Money Laundering Section and Assistant U.S. Attorney Daniel P. Friel of the Eastern District of Louisiana. Substantial assistance was provided by the Public Ministry of the Republic of Honduras and the HSI Attaché Tegucigalpa. The Criminal Division’s Office of Overseas Prosecutorial Development, Assistance and Training Resident Legal Advisor in Tegucigalpa also provided valuable assistance.
This case was brought under the Kleptocracy Asset Recovery Initiative. Under that initiative, dedicated prosecutors in the Criminal Division’s Asset Forfeiture and Money Laundering Section work in partnership with U.S. Attorneys’ Offices and federal law enforcement agencies to forfeit the proceeds of foreign official corruption and, where possible and appropriate, put forfeited corruption proceeds to use for the benefit of the people of the country harmed by the abuse of public office. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to [email protected].
Complaint
Department of Justice Seeks Recovery of Approximately $1,528,000 in Bribes Paid to A Honduran OfficialRead the Press Release
The Department of Justice filed today a civil forfeiture complaint seeking the forfeiture of nine properties worth approximately $1,528,000 that were allegedly purchased with funds traceable to a $2 million bribe paid by a Honduran information-technology company to the former Executive Director of the Honduran Institute of Social Security.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Polite, Jr. of the Eastern District of Louisiana and Executive Associate Director Peter T. Edge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) made the announcement.
“Mario Zelaya was the director of Honduras’s social security agency, but instead of building a social safety net for his country’s citizens, he allegedly used his position of public trust to steal public money for himself,” said Assistant Attorney General Caldwell. “Our action today highlights how the Criminal Division’s Kleptocracy Initiative, with our network of law enforcement partners around the globe, will trace and recover the ill-gotten gains of corrupt officials. Criminals should make no mistake: the United States is not a safe haven for the proceeds of your crimes. If you hide or invest your stolen money here, we will use all the legal tools we have to find it and seize it.”
“The United States Attorney’s Office for the Eastern District of Louisiana is committed to working with our law enforcement partners, both domestically and internationally, to ensure that this district is not used to launder corruptly obtained funds, no matter the source of the corruption,” said U.S. Attorney Polite.
“ICE’s Homeland Security Investigations will continue to work in cooperation with our international law enforcement partners to ensure that our country is not used as a safe haven for corrupt foreign officials to hide their assets,” said HSI Executive Associate Director Edge.
From 2010 to 2014, Dr. Mario Roberto Zelaya Rojas, 46, of Tegucigalpa, Honduras, served as the Executive Director of the Honduran Institute of Social Security (HISS), a Honduran Government agency that provides social security services, including workers’ compensation, retirement, maternity, and death benefits. According to allegations in the forfeiture complaint, Zelaya solicited and accepted $2.08 million in bribes from Compania De Servicios Multiples, S. de R. L. (COSEM) in exchange for prioritizing and expediting payments owed to COSEM under a $19 million contract with HISS. Zelaya also allegedly instructed COSEM to make bribe payments to two members of the Board of Directors of HISS charged with overseeing the COSEM contract. To conceal the illicit payments, COSEM allegedly sent the bribes through its affiliate company, CA Technologies.
As further alleged in the complaint, the bribe proceeds were then laundered into the United States and used by Zelaya and his brother, Carlos Alberto Zelaya Rojas, to acquire real estate in the New Orleans area. Certain properties were titled in the name of companies nominally controlled by Zelaya’s brother in an effort to conceal the illicit source of the funds as well as the beneficial owner. The current action seeks forfeiture of nine properties acquired with the proceeds of Zelaya’s alleged bribery scheme.
The investigation was conducted by HSI’s New Orleans and Miami Field Offices. The case is being handled by Trial Attorneys Stephen A. Gibbons and Marybeth Grunstra of the Criminal Division’s Asset Forfeiture and Money Laundering Section and Assistant U.S. Attorney Daniel P. Friel of the Eastern District of Louisiana. Substantial assistance was provided by the Public Ministry of the Republic of Honduras and the HSI Attaché Tegucigalpa.
This case was brought under the Kleptocracy Asset Recovery Initiative. Under that initiative, dedicated prosecutors in the Criminal Division’s Asset Forfeiture and Money Laundering Section work in partnership with U.S. Attorneys’ Offices and federal law enforcement agencies to forfeit the proceeds of foreign official corruption and, where possible and appropriate, put forfeited corruption proceeds to use for the benefit of the people of the country harmed by the abuse of public office. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to [email protected].
Counterfeit DVD Movie Supplier Sentenced to Federal PrisonRead the Press Release
A Brooklyn man was sentenced yesterday in Honolulu for his involvement in a counterfeit DVD movie ring, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Florence T. Nakakuni of the District of Hawaii.
Yakov Meir Chazanow, 41, was sentenced yesterday by U.S. District Judge Leslie E. Kobayashi of the District of Hawaii to serve 21 months in prison for conspiring to commit criminal copyright infringement, manufacturing counterfeit goods and to traffic in goods bearing counterfeit Dolby trademarks and counterfeit labels.
According to the evidence set forth in the record and at sentencing, from 2004 to 2011, Chazanow supplied over 30,000 high-quality pirated DVDs containing infringing copies of copyright-protected Asian action movies and corresponding counterfeit labels and packaging. He then distributed them to co-conspirators, who in turn sold them to consumers in stores and online.
Chazanow, Sharon Josef and Jeffrey Alan Stockton were all charged in June 2013, and Stockton pleaded guilty to the charged conspiracy and two counts of trafficking in counterfeit labels on Sept. 19, 2013. On Feb. 3, 2014, Chazanow pleaded guilty to the above charges, and Josef pleaded guilty to misdemeanor copyright infringement. On May 12, 2014, the court sentenced Stockton to 21 months in prison, ordered him to pay restitution of $150, and entered a preliminary order directing Stockton to forfeit $250,000 in illegal proceeds, $32,154 in U.S. currency, a 2003 Toyota Tundra, 29 gold bars, 62 gold coins, six palladium coins and five silver coins. Josef, who supplied pirated DVDs from 2011 to 2012, was sentenced yesterday to serve four months in prison.
The case was investigated by Immigration and Customs Enforcement’s Homeland Security Investigations. Assistance was provided by the Motion Picture Association of America, Dolby Laboratories, Inc. and DVD Format/Logo Licensing Corporation. The case was prosecuted by Assistant Deputy Chief for Litigation John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Andrea W. Hattan and Leslie E. Osborne, Jr. of the District of Hawaii.
Corrections Officer Admits Smuggling Cell Phones into Essex County Correctional Facility for Cash BribesRead the Press Release
TRENTON, N.J. – An Essex County Corrections Officer today admitted her involvement in a scheme to smuggle contraband, including cell phones, into the Essex County Correctional Facility, a federal pretrial detention facility, U.S. Attorney Paul J. Fishman announced.
Channel Lespinasse, 26, of Florham Park, New Jersey, pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging her with one count of conspiring to commit extortion under color of official right.
According to documents filed in this and related cases and statements made in court:
On multiple occasions between August 2013 and January 2014, Lespinasse delivered contraband to federal pretrial detainees at the Essex County Correctional Facility in exchange for cash bribes. On one occasion in November 2013, Lespinasse agreed to deliver a cell phone to an inmate in exchange for $1,000. A conspirator retrieved the cell phone and the $1,000 payment from an individual outside of the facility – actually an undercover FBI agent – and gave the phone, along with a portion of the payment, to Lespinasse, who then delivered the contraband to the inmate.
The conspiracy charge to which Lespinasse pleaded guilty carries a maximum penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for May 7, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and investigators with the Internal Affairs Division of Essex County Correctional Facility, under the leadership of Essex County Corrections Director Al Ortiz, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division and Rob Frazer of the office’s Organized Crime/Gangs Unit in Newark.
15-011
Defense counsel: Paulette Pitt Esq., Woodbridge, New JerseyCorporation Owner/CEO Sentenced to Statutory Maximum for Federal Income Tax FraudRead the Press Release
HOUSTON - Robert Earl Carter, 65, a resident of Fresno and the former owner/CEO of Enterprise Advisory Services Inc. (EASI), has been ordered to federal prison as a result of being convicted for making false statements in a federal income tax return, announced U.S. Attorney Kenneth Magidson. Carter pleaded guilty Sept. 9, 2014.
Today, U.S. District Judge Keith P. Ellison, who accepted the guilty plea, handed Carter the statutory maximum of 36 months in federal prison to be immediately followed by a year of supervised release. At the hearing, additional evidence was presented including testimony from a Texas Southern University (TSU) representative who informed the court TSU had never received the half-million-dollar African Art donation Carter reported in his 2005 federal income tax return. Carter had also claimed the art, via carryover charitable donation deductions, in his 2007 to 2010 tax returns. He was further ordered to pay a $75,000 fine. In handing down the sentence, Judge Ellison concluded Carter had not accepted responsibility for his criminal conduct and found his sworn assertion regarding the art not credible.
At the time of his plea, Carter admitted he willfully made a materially false statement in his 2009 personal federal income tax return by under reporting the total income he earned that year. Carter reported a total income of $276,270, failing to disclose an additional $309,821 in bonus income he received during that year. The investigation established that he had those bonus monies converted into a check payable directly to another company controlled by a family member. Approximately one month later, $286,821 was returned directly to Carter via a cashier's check.
EASI also issued Carter another bonus check for $195,000 on Dec. 22, 2009, which he deposited into his personal savings account. EASI reported this $195,000 payment as executive variable pay (a financial incentive program recognizing the contribution employees make to EASI’s success). EASI did not report the income in Carter’s W-2 form or issue a form 1099-MISC because EASI recorded this bonus payment as a reimbursement payment to Carter.
Carter did not, as required, report this $195,000 personal income on his 2009 individual federal income tax return.
In sum, Carter willfully and intentionally failed to report personal income totaling $504,821 on his 2009 tax return.
Previously released on bond, Carter was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation was conducted by Internal Revenue Service – Criminal Investigation and NASA - Office of Inspector General. Assistant U.S. Attorney Daniel C. Rodriguez is prosecuting.
Convicted Sex Offender Pleads Guilty to Federal Charge of Failure to Register as AaSex OffenderRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today that Nicodemus Darnell Jefferson (40, Jacksonville) has pleaded guilty to failing to register as a sex offender after traveling to Florida from Maryland. He faces up to 10 years in federal prison and a $250,000 fine. A sentencing date has not yet been set. Jefferson has been in custody since his arrest on September 30, 2014.
According to court documents, in December 1998, Jefferson was convicted of criminal sexual conduct with a minor in Charleston County, South Carolina. Subsequent to his conviction, he traveled from Maryland to Florida, where he has since resided. Jefferson failed to register as a sex offender in Florida as required by the Sex Offender Registration and Notification Act. On September 30, 2014, he was arrested at his Jacksonville residence and acknowledged that he had been living there since June 2014. He had obtained a Florida identification card on August 4, 2014, that referenced a different Jacksonville address as his residence.
The Sex Offender Registration and Notification Act is part of the Adam Walsh Child Protection and Safety Act of 2006. The Adam Walsh Act provides for the use of federal law enforcement resources, including the United States Marshals Service, to assist state and local authorities in locating and apprehending non-compliant sex offenders.
This case was investigated by the Jacksonville Sheriff’s Office, the United States Marshals Service, and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Connecticut Construction Company Admits Underfunding Retirement Plan, Filing False Tax ReturnRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that CHERRY HILL CONSTRUCTION, INC., a company based in North Branford, waived its right to indictment and pleaded guilty today in New Haven federal court to one count of filing a false tax return, and one count of making a false statement in relation to documents required by the Employee Retirement Income Security Act of 1974 (“ERISA”). ERISA is a federal law that sets minimum standards for retirement plans in private industry, including a requirement that plan sponsors provide adequate funding for a plan.
According to court documents and statements made in court, CHERRY HILL CONSTRUCTION, INC., (“CHERRY HILL”) provides statewide service in site development, on-site crushing, trucking, demolition, as well as roll-off dumpsters, top soil, aggregates and landscaping. CHERRY HILL was awarded and completed prevailing wage construction projects requiring payment of the prevailing wage rate plus the fringe rate. The fringe rate is the cost of benefits to the employee.
When a company is awarded a prevailing wage project, the company must submit certified payrolls that list the hours, prevailing wage rate and fringe they are paying each employee. The company can either pay the employee the fringe directly or open a benefit plan with the fringe payment being deposited into an account for the benefit of that employee. The company is then paid by the federal, state or municipal governments the amount of payroll, including the fringe, after receiving the certified payrolls. The government entity for which the project is being worked pays these funds only because the employer certifies that the prevailing wage and fringe is being paid to an employee directly or being deposited into a benefit plan.
CHERRY HILL opened a profit sharing/401(k) plan that was covered under ERISA. In pleading guilty, CHERRY HILL admitted that, in 2010 and 2011, it underfunded its retirement plan by approximately $950,000. CHERRY HILL further admitted that it filed a corporate tax return for the 2010 tax year that inflated its actual contribution to the plan, which resulted in an increased employee benefit deduction.
CHERRY HILL is scheduled to be sentenced by U.S. District Judge Janet Bond Arterton on April 7, 2015, at which time it faces a maximum penalty of 10 years of probation and a $750,000 fine.
CHERRY HILL has fully funded its retirement plan and paid $193,000 in back taxes, interest and penalties.
This matter is being investigated by the Internal Revenue Service – Criminal Investigation Division; U.S. Department of Labor – Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; U.S. Department of Labor – Employee Benefits Security Administration, and U.S. Department of Transportation – Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorney Douglas P. Morabito.
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U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Choctaw County Man Sentenced to 57 Months Incarceration After Guilty Plea to Possession of A Firearm After A Felony ConvictionRead the Press Release
The United States Attorney, Kenyen Brown, announces that Darron L. Ruffin, Jr., a 40 year old resident of Lisman, Alabama was sentenced today. Mr. Ruffin pled guilty to possession of a .40 caliber pistol on July 4, 2014, after being convicted of Assault 1st Degree in 1994. Mr. Ruffin took the firearm into a local nightclub and physically assaulted two of the patrons with the firearm, fled the scene, and was apprehended approximately 30 minutes later in possession of the pistol.
Choctaw County Sheriff’s Office deputies investigated the case and presented it to the U.S. Attorney=s Office for prosecution. The prosecutor assigned to the case is Assistant United States Attorney, Gina S. Vann.
Chiropractor Sentenced for Bribing IRS AuditorRead the Press Release
BOSTON – A Lowell chiropractor was sentenced today to nine months in prison for bribing an IRS agent.
Stephen Jacobs, 56, of Lowell, was sentenced to nine months in prison, two years of supervised release, and ordered to pay a $10,000 fine. Jacobs must report to the custody of the Bureau of Prisons by Feb. 24, 2015. In October 2014, Jacobs pleaded guilty before U.S. District Court Judge William G. Young to bribery of a public official.
In August 2013, an IRS auditor met with Jacobs, a chiropractor, to examine numerous issues with his federal income tax forms for 2011. During the initial interview, the auditor advised Jacobs that two $5,000 payments were not allowable deductions after Jacobs admitted that each was a payment to two different women after they accused him of touching them inappropriately during medical treatments. Jacobs told the auditor that he paid the women because he was concerned that they would report him to the police or to the chiropractic board. Jacobs admitted that he had begun kissing one woman’s feet while he was treating her. He also admitted to other inappropriate contact when he was giving the second woman a massage.
Jacobs asked the IRS auditor if there was anything he could do to “just deal with this…” When the agent said he could not “just deal with this,” Jacobs became agitated and combative, ultimately threatening the agent that he would “ruin [his] career.”
The following month, after several electronically monitored discussions regarding his non-deductible expenses, Jacobs offered to bribe the auditor in exchange for terminating the examination, saying, “. . . you want a bribe? You want me to pay you?...” The auditor, acting under the direction of law enforcement, then accepted Jacobs’s offer of $5,000 to give Jacobs a favorable audit letter showing no additional tax for one year and a small refund for the next year. Jacobs paid the auditor $5,000 in cash for the favorable treatment.
United States Attorney Carmen M. Ortiz and Robert O’Malley, Special Agent in Charge of the Treasury Inspector General for Tax Administration, made the announcement today. The case was prosecuted by Eugenia M. Carris of Ortiz’s Public Corruption Unit.
Cedar Rapids Man Sentenced to 420 Months in Federal Prison for Conspiracy to Manufacture MethamphetamineRead the Press Release
Contact: Steve Young
A man who conspired with others to manufacture and distribute methamphetamine was sentenced on January 12, 2015, to 35 years in federal prison.
Jacob William Brisbin, 28, from Cedar Rapids, Iowa, received the prison term after an October 6, 2014, guilty plea to conspiracy to manufacture and distribute a controlled substance.
Evidence presented at sentencing showed that for over the past year Brisbin was the leader of a drug trafficking organization and was responsible for the near daily manufacture of methamphetamine. During this time, Brisbin personally manufactured over 1.5 kilograms of methamphetamine. He also maintained a network of various individuals who then distributed this methamphetamine on his behalf. Brisbin also distributed “Ice” methamphetamine to various customers and possessed numerous firearms in connection with his drug trafficking operation. During the pendency of this case, Brisbin was detained in the Linn County Jail. While detained, Brisbin engaged in a pattern of behavior designed to obstruct justice by influencing the testimony of government witnesses.
Brisbin was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Brisbin was sentenced to 420 months’ imprisonment. A special assessment of $100 was imposed. He must also serve an eight year term of supervised release after the prison term. There is no parole in the federal system.
Brisbin 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 Lisa C. Williams and investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Cedar Rapids Police Department, the Drug Enforcement Administration, the Iowa Division of Narcotics Enforcement, the Linn County Sherriff’s Office, the Marion Police Department, and the United States Marshall Service.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-cr-88.
Career Criminal Sentenced to 15 Years for Illegal Gun SalesRead the Press Release
BOSTON – An armed career criminal was sentenced today in connection with the illegal sale of three guns and ammunition.
James Dawn, 48, of Brockton, was sentenced to 15 years in prison and three years of supervised release. In Sept. 2014, Dawn pleaded guilty before U.S. District Judge Douglas P. Woodlock to being an armed career criminal, possessing a firearm and ammunition, and dealing in firearms without a license.
In March 2014, Dawn was arrested after he sold three guns – two pistols and one shotgun, along with ammunition for each weapon, to a cooperating witness on three separate occasions. Dawn also offered other types of weapons for sale and discussed future “business.” At the time, Dawn was a lifelong violent criminal. He had numerous felony convictions, including two jail sentences for cocaine trafficking convictions, and numerous other convictions for violent crimes.
During the sentencing hearing, Judge Woodlock noted the seriousness of the offense and the need to protect the public from those, like Dawn, who sell guns illegally on the street. Judge Woodlock also described Dawn’s extensive criminal record as a factor in his sentence.
United States Attorney Carmen M. Ortiz and Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Boston Field Division, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Glenn A. MacKinlay of Ortiz’s Strike Force Unit.Canadian Man Charged in First Federal Securities Fraud Prosecution Involving ‘Layering’Read the Press Release
A Canadian man was arrested today for allegedly orchestrating a large-scale, international stock market manipulation scheme in the first federal prosecution of securities fraud involving a high-frequency trading strategy known as “layering,” U.S. Attorney Paul J. Fishman for the District of New Jersey announced.
Aleksandr Milrud, 50, of Ontario, Canada, and Aventura, Florida, is charged by complaint with one count of conspiracy to commit securities fraud and one count of wire fraud. FBI agents arrested Milrud at his residence in Aventura this morning. He is scheduled to appear this afternoon before U.S. Magistrate Judge John J. O’Sullivan in federal court in Miami.
“As our complaint shows, illegally manipulating markets to cause even small price changes can yield large gains when done on a massive scale,” U.S. Attorney Fishman said. “The defendant and his far-flung network of conspirators operated an international scheme in which they generated millions of dollars in illicit profits for themselves with artificial trade orders executed at high speeds.”
“As alleged in the complaint, Mildrud was the engineer behind a sophisticated, international, groundbreaking market manipulation scheme that utilized an illicit, high-speed trading strategy to execute trades,” said Special Agent in Charge Aaron T. Ford of the FBI in Newark, New Jersey. “The losses to investors due to this innovative fraud could be in the millions. The FBI will continue to identify and investigate frauds such as this one, in order to ensure a level playing field for all investors.”
According to the complaint unsealed today:
Milrud allegedly orchestrated an extensive and sophisticated international layering scheme that, according to him, yielded millions of dollars in illicit profits. Layering, also known as “spoofing,” is a form of manipulative, high-speed stock trading in which a trader places non-bona fide orders to buy or sell securities and then quickly cancels them before they are executed. The purpose of these non-bona fide orders is to artificially move the price of security up (in the case of non-bona fide buy orders) or down (in the case of non-bona fide sell orders) and to induce other market participants to buy or sell a security at a price not representative of actual supply or demand. While the non-bona fide orders are pending, the trader simultaneously executes trades in an attempt to profit from the artificial movement of the share price that the trader has created. Milrud’s layering scheme targeted U.S. securities markets and involved high-speed trading through numerous brokerage accounts and foreign traders that Milrud recruited and managed in China and Korea.
In January 2013, Milrud solicited the assistance of an individual who owned an off-shore broker-dealer (the Foreign-BD) but who, unbeknownst to Milrud, was a cooperating witness (CW) with law enforcement. Milrud sought to open a trading account at the Foreign-BD for use in his layering scheme. Over the course of several consensually recorded calls and meetings between the CW, Milrud and others, Milrud explained his illegal trading strategies in detail. Milrud said he controlled approximately 60 percent of all China-based traders engaged in layering, that his traders used various trading accounts that were not tied to Milrud in any manner and that the layering scheme generated millions of dollars in illicit profits. Milrud explained that to enable his traders to place and cancel many orders quickly, he worked with a software company on programming “hotkeys” – shortcuts for placing and cancelling multiple orders quickly with few keystrokes. Milrud also explained his efforts to avoid detection by law enforcement and regulators, including not discussing business on the phone, communicating through third party liaisons, and using multiple trading and clearing firms and accounts to execute a single securities transaction, a practice he described as “shredding.”
On Aug. 27, 2014, Milrud met the CW at the offices of the Foreign-BD. The meeting was video and audio recorded by law enforcement. Milrud explained his layering scheme in more detail. Milrud stated that overseas stock traders who he controlled simultaneously utilized at least two trading accounts to execute the layering scheme; one account was used to conduct the manipulative layering trading (the Layering Account), which Milrud referred to as the “dirty work,” and another “clean” account (the Profit Account) was used to buy or sell the manipulated stock at a profit during the small window of time in which the stock price had been artificially moved by the “dirty” activity in the Layering Account. According to Milrud, his foreign traders logged into these accounts from different computers and different internet protocol (IP) addresses so that it would not appear as if the same individual was trading through the two accounts and to evade automated fraud detection systems established by the trading platforms. After explaining his manipulative trading strategy, Milrud said, “Regular trading. If I didn’t tell you what I just told you, it would seem like regular trading – you would not know nothing of what I do.” The CW replied, “Will look just like regular buying and selling?” Milrud responded, “Exactly. One hundred percent kosher. If I didn’t tell you everything behind it, you have no way of [knowing].”
During the Aug. 27, 2014, meeting, Milrud agreed to log into his trading platform using the CW’s computer to show the CW his traders’ activity in real time. The CW had been provided by law enforcement with a laptop computer (the FBI Computer), which included software that recorded all activity and keystrokes on the computer. Milrud logged into and remotely accessed his trading system using the FBI Computer. According to Milrud, his overseas traders were controlling the orders and trades that he and the CW were observing on the FBI Computer. The CW then observed multiple real time trades in a number of different securities in both the Layering and Profit Accounts, and orders being placed and cancelled, while Milrud narrated.
According to Milrud’s statements to the CW during a consensually recorded call on Dec. 15, 2014, the scheme could generate anywhere from $1 million to $50 million per month and had yielded approximately $600,000 in a single day in recent weeks. The investigation is ongoing and law enforcement continues to investigate the brokerage accounts, trader identification numbers that Milrud used to carry out the scheme and the full scope of the illicit profits.
The conspiracy count with which Milrud is charged carries a statutory maximum sentence of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. The wire fraud count carries a statutory maximum sentence of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s arrest and complaint. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Daniel M. Hawke, for its role in the case.
The government is represented by Chief Gurbir S. Grewal and Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Economic Crimes Unit .
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Canadian Man Charged in First Federal Securities Fraud Prosecution Involving 'Layering'Read the Press Release
Scheme Targeted U.S. Securities Markets and Involved Complex Web of Brokerage Accounts, Off-Shore Entities and High-Speed Trading by Stock Traders in China and Korea
NEWARK, N.J. – A Canadian man was arrested today for allegedly orchestrating a large-scale, international stock market manipulation scheme in the first federal prosecution of securities fraud involving a high-frequency trading strategy known as “layering,” U.S. Attorney Paul J. Fishman announced.
Aleksandr Milrud, 50, of Ontario, Canada, and Aventura, Florida, is charged by complaint with one count of conspiracy to commit securities fraud and one count of wire fraud. FBI agents arrested Milrud at his residence in Aventura this morning. He is scheduled to appear this afternoon before U.S. Magistrate Judge John J. O’Sullivan in Miami federal court.“As our complaint shows, illegally manipulating markets to cause even small price changes can yield large gains when done on a massive scale,” U.S. Attorney Fishman said. “The defendant and his far-flung network of conspirators operated an international scheme in which they generated millions of dollars in illicit profits for themselves with artificial trade orders executed at high speeds.”
“As alleged in the complaint, Mildrud was the engineer behind a sophisticated, international, groundbreaking market manipulation scheme that utilized an illicit, high-speed trading strategy to execute trades,” Aaron T. Ford, FBI Special Agent in Charge, Newark, said. “The losses to investors due to this innovative fraud could be in the millions. The FBI will continue to identify and investigate frauds such as this one, in order to ensure a level playing field for all investors.”
According to the complaint unsealed today:
Milrud allegedly orchestrated an extensive and sophisticated international layering scheme that, according to him, yielded millions of dollars in illicit profits. “Layering,” also known as “spoofing,” is a form of manipulative, high-speed stock trading in which a trader places non-bona fide orders to buy or sell securities and then quickly cancels them before they are executed. The purpose of these non-bona fide orders is to artificially move the price of security up (in the case of non-bona fide buy orders) or down (in the case of non-bona fide sell orders) and to induce other market participants to buy or sell a security at a price not representative of actual supply or demand. While the non-bona fide orders are pending, the trader simultaneously executes trades in an attempt to profit from the artificial movement of the share price that the trader has created. Milrud’s layering scheme targeted U.S. securities markets and involved high-speed trading through numerous brokerage accounts and foreign traders that Milrud recruited and managed in China and Korea.
In January 2013, Milrud solicited the assistance of an individual who owned an off-shore broker-dealer (the “Foreign-BD”) but who, unbeknownst to Milrud, was a cooperating witness (“CW”) with law enforcement. Milrud sought to open a trading account at the Foreign-BD for use in his layering scheme. Over the course of several consensually recorded calls and meetings between the CW, Milrud, and others, Milrud explained his illegal trading strategies in detail. Milrud said he controlled approximately 60 percent of all China-based traders engaged in layering, that his traders used various trading accounts that were not tied to Milrud in any manner, and that the layering scheme generated millions of dollars in illicit profits. Milrud explained that to enable his traders to place and cancel many orders quickly, he worked with a software company on programming “hotkeys” – shortcuts for placing and cancelling multiple orders quickly with few keystrokes. Milrud also explained his efforts to avoid detection by law enforcement and regulators, including not discussing business on the phone, communicating through third party liaisons, and using multiple trading and clearing firms and accounts to execute a single securities transaction, a practice he described as “shredding.”
On August 27, 2014, Milrud met the CW at the offices of the Foreign-BD. The meeting was video and audio recorded by law enforcement. Milrud explained his layering scheme in more detail. Milrud stated that overseas stock traders who he controlled simultaneously utilized at least two trading accounts to execute the layering scheme; one account was used to conduct the manipulative layering trading (the “Layering Account”), which Milrud referred to as the “dirty work,” and another “clean” account (the “Profit Account”) was used to buy or sell the manipulated stock at a profit during the small window of time in which the stock price had been artificially moved by the “dirty” activity in the Layering Account. According to Milrud, his foreign traders logged into these accounts from different computers and different internet protocol (IP) addresses so that it would not appear as if the same individual was trading through the two accounts and to evade automated fraud detection systems established by the trading platforms. After explaining his manipulative trading strategy, Milrud said, “Regular trading. If I didn’t tell you what I just told you, it would seem like regular trading – you would not know nothing of what I do.” The CW replied, “Will look just like regular buying and selling?” Milrud responded, “Exactly. One hundred percent kosher. If I didn’t tell you everything behind it, you have no way of [knowing].”During the August 27, 2014, meeting, Milrud agreed to log into his trading platform using the CW’s computer to show the CW his traders’ activity in real time. The CW had been provided by law enforcement with a laptop computer (the “FBI Computer”), which included software that recorded all activity and keystrokes on the computer. Milrud logged into and remotely accessed his trading system using the FBI Computer. According to Milrud, his overseas traders were controlling the orders and trades that he and the CW were observing on the FBI Computer. The CW then observed multiple real time trades in a number of different securities in both the Layering and Profit Accounts, and orders being placed and cancelled, while Milrud narrated.
According to Milrud’s statements to the CW during a consensually recorded call on Dec. 15, 2014, the scheme could generate anywhere from $1 million to $50 million per month and had yielded approximately $600,000 in a single day in recent weeks. The investigation is ongoing and law enforcement continues to investigate the brokerage accounts, trader identification numbers that Milrud used to carry out the scheme, and the full scope of the illicit profits.
The conspiracy count with which Milrud is charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. The wire fraud count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s arrest and complaint. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Daniel M. Hawke, for its role in the case.
The government is represented by Gurbir S. Grewal, Chief of the U.S. Attorney’s Office Economic Crimes Unit, and Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
15-009
Buffalo Man Arrested; Accused of Stealing Funds from Buffalo SchoolsRead 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 Hassan El Saddique, 34, of Buffalo, NY, was arrested and charged by criminal complaint with stealing and converting to his own use, more than $5,000 from the Buffalo Board of Education. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.
Assistant U.S. Attorney Kathleen A. Lynch, who is handling the case, stated that between September 2009 and June 2010, the defendant obtained a contract from the Buffalo Board of Education to provide Title I services at the Universal School. Title I is a federally funded program that provides assistance to school districts with high numbers of children from low income families.
According to the complaint, El Saddique never provided Title I services to students at the Universal School. Rather, the defendant appeared uninvited at Bishop Time High School, which already had a Title I program in place, and told school officials that he was there to provide Title I assistance.
The complaint further states that El Saddique volunteered at Bishop Timon knowing that there were no Title I funds available to compensate him. However, the defendant subsequently submitted fraudulent invoices and received payment totaling $15,120. Some of the invoices were submitted for days before and after the Title I program began and ended at Bishop Timon.
The defendant will make an initial appearance at 2:00 p.m. today before U.S. Magistrate Judge Hugh B. Scott.
The criminal complaint is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation and the U.S. Department of Education, Office of Inspector General, under the direction of Assistant Special Agent in Charge Geoff Wood.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Buffalo Man Arrested; Accused of Stealing Funds from Buffalo SchoolsRead 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 Hassan El Saddique, 34, of Buffalo, NY, was arrested and charged by criminal complaint with stealing and converting to his own use, more than $5,000 from the Buffalo Board of Education. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.
Assistant U.S. Attorney Kathleen A. Lynch, who is handling the case, stated that between September 2009 and June 2010, the defendant obtained a contract from the Buffalo Board of Education to provide Title I services at the Universal School. Title I is a federally funded program that provides assistance to school districts with high numbers of children from low income families.
According to the complaint, El Saddique never provided Title I services to students at the Universal School. Rather, the defendant appeared uninvited at Bishop Time High School, which already had a Title I program in place, and told school officials that he was there to provide Title I assistance.
The complaint further states that El Saddique volunteered at Bishop Timon knowing that there were no Title I funds available to compensate him. However, the defendant subsequently submitted fraudulent invoices and received payment totaling $15,120. Some of the invoices were submitted for days before and after the Title I program began and ended at Bishop Timon.
The defendant will make an initial appearance at 2:00 p.m. today before U.S. Magistrate Judge Hugh B. Scott.
The criminal complaint is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation and the U.S. Department of Education, Office of Inspector General, under the direction of Assistant Special Agent in Charge Geoff Wood.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Brandenburg, Kentucky, Man Charged with Threatening to Blow up A Church and Apartment ComplexRead the Press Release
OWENSBORO, Ky. - A Meade County, Kentucky man was charged in a two-count indictment with threatening, by way of a telephone, to damage and destroy with explosives, a church located in Brandenburg, Kentucky, and with threatening, by way of telephone, to damage and destroy with explosives, an apartment building located in Brandenburg, announced Acting United States Attorney John E. Kuhn, Jr.
Shelly L. Wright, age,45 was charged on January6, 2015, and the indictment was unsealed today following his arrest by Agents of the Federal Bureau of Investigation, Brandenburg Police Department and Kentucky State Police.
According to the indictment, on November 16, 2014, Wright, through the use of a telephone, willfully made a threat to unlawfully damage and destroy the Glad Tidings Church, located on Bypass Road in Brandenburg, by means of explosives. Further, it is alleged that on or November 26, 2014, Wright, through the use of a telephone, willfully made a threat to unlawfully damage and destroy the Riverview Apartments.
If convicted at trial, Wright would face no more than ten years in prison, a fine of $250,000 and a three year period of supervised release. Wright is scheduled to appear before Magistrate Judge Colin Lindsay, in Louisville, tomorrow morning at 10am, for arraignment and a detention hearing.
This case is being prosecuted by Assistant United States Attorney Randy Ream and is being investigated by the Federal Bureau of Investigation (FBI) and the Meade County Sheriff’s Department.
***
The indictment of a person by a Grand Jury is an accusation only and that person is presumed
innocent until and unless proven guilty.
Bay Area Man Who Defrauded Website Investors Sentenced to 10 Years in Federal Prison for Running $1.2 Million ScamRead the Press Release
LOS ANGELES – A Northern California man who defrauded 18 victims by selling website domains that he falsely claimed would generate substantial advertising revenue was sentenced today to 120 months in federal prison.
John Winston Boone, 51, of Novato, was sentenced by United States District Judge Otis D. Wright II, who called the defendant’s conduct “cruel and callous.”
In addition to the 10-year prison term, Judge Wright ordered Boone to pay $1,219,138 in restitution to the victims, who reside across the United States and in Canada.
During today’s hearing, Judge Wright said Boone “showed a lack of humanity that was so base and so depraved.”
Boone pleaded guilty in November 2013 to two counts of wire fraud, admitting that he engaged in a five-year-long fraud scheme that targeted victims who wanted to own online businesses that would allow them to work from home. Boone offered the websites for sale in advertisements he placed on popular business websites, such as Bizquest.com and BizBen.com. When prospective buyers responded to his ads, Boone sent them phony financial records that falsely showed the websites had generated advertising revenue in the past. As part of his scheme, Boone lied about his employment background and falsely promised to provide training and other assistance in setting up the websites. After the victims paid money, Boone failed to provide any training or other support he promised, and the websites, with one small exception, never generated any income. When victims discovered the scam, Boone ceased all contact with them and he never returned their money.
Boone is a “financial predator, a master manipulator and a pathological liar who will do or say anything to steal money from his victims,” prosecutors wrote in a sentencing memo filed with the court. Prosecutors also cited Boone's callous conduct, describing how he defrauded one victim knowing he was disabled, and defrauded another victim knowing he had large medical bills to pay.
Boone displayed predatory conduct, according to the government's sentencing papers. After a victim sued him for return of her $60,000 down payment, Boone counter-sued her for the full amount of the $100,000 bogus contract and won, and then harassed her for payment with the knowledge that she suffered from panic attacks.
“For 30 years, nothing has deterred him – not criminal investigation or prosecution, not civil judgments, and not distraught victims,” according to prosecutors, who described the defendant as “extraordinarily charismatic and manipulative, while lacking any conscience.”
The case against Boone was investigated by the Federal Bureau of Investigation.
Release No. 15-004
Baltimore Area Pimp Exiled to 7 Years in Prison for Illegal Possession of A Firearm and AmmunitionRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles, Jr., sentenced Craig Okeido Anderson, a/k/a “Snap,” “Sir Chill,” King Hundredgrand,” and “Yung Royalty,” age 25, of Catonsville, Maryland, today to seven years in prison followed by three years of supervised release for being a felon in possession of a firearm and ammunition, which Anderson brandished in connection with his prostitution business. Anderson had four prior assault convictions and was prohibited from possessing a firearm or ammunition.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Chief Gary Gardner of the Howard County Police Department; Anne Arundel County Police Chief Tim Altomare; and Howard County State’s Attorney Dario Broccolino.
According to his plea agreement, from February 1, 2012, through October 3, 2013, Anderson was a pimp who persuaded, enticed and coerced women to travel interstate, and transported women interstate, with the intent that they engage in prostitution. Anderson recruited women whom he met in public and over the internet to work for him as prostitutes. Anderson had the women advertise their services on websites that marketed commercial sex workers. Anderson routinely took all of the money the women earned by engaging in prostitution. Anderson provided the women with drugs and alcohol to facilitate the prostitution. Anderson used aliases in advertisements and on a website to promote himself and his prostitution enterprise to women and commercial sex customers.
In August 2012, Anderson purchased a semi-automatic rifle and an extended magazine, loaded with 7.62mm ammunition. Between August 2012, and his arrest on October 3, 2013, Anderson stored the firearm in a vehicle he used to transport prostitutes who worked for him and brandished the firearm in relation to his prostitution activities, including threatening a drug dealer who attempted to cheat some of Anderson’s prostitutes in a drug deal, and threatening a commercial sex customer who would not leave during an encounter with one of Anderson’s prostitutes.
This case was investigated by the Maryland Human Trafficking Task Force, formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders. Members include federal, state and local law enforcement, as well as victim service providers and local community members. For more information about the Maryland Human Trafficking Task Force, please visit http://www.justice.gov/usao/md/priorities_human.html.
United States Attorney Rod J. Rosenstein commended HSI Baltimore, the Howard County Police Department, Anne Arundel County Police Department and Howard County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Zachary A. Myers and Paul E. Budlow, who prosecuted the case.
Authorities Arrest 5 Linked to ‘Pill Mill’ That Used L.A. Medical Clinic to Generate Illegal Prescriptions and Distribute the Narcotics in TexasRead the Press Release
LOS ANGELES – After a federal grand jury issued a 33-count indictment last week, federal authorities in Texas and Southern California this morning arrested five defendants linked to a narcotics trafficking ring that sold illegal prescriptions for cash and obtained drugs that were shipped to Texas for sale on the black market. Two other defendants named in the indictment are currently being sought by authorities.
Those arrested this morning include the operators of the now-closed Southfork Medical Clinic, who allegedly sold unnecessary prescriptions for drugs that included oxycodone (best known by the brand names OxyContin and Percocet), hydrocodone (commonly sold under the brand names Vicodin, Norco and Lortab), alprazolam (best known by the brand name Xanax), carisoprodol (a muscle relaxant sold under the brand name Soma) and promethazine with codeine (a cough syrup sold on the street as “purple drank” and “sizzurp”). A doctor at Southfork wrote prescriptions “while acting and intending to act outside the usual course of professional practice and without a legitimate medical purpose,” and Southfork employees forged another doctor’s handwriting and signature on illegal prescriptions, according to the indictment.
The doctor employed by Southfork during the charged conspiracy, Madhu Garg, issued more than 10,000 prescriptions – with nearly 80 percent of those for hydrocodone or alprazolam, most of which were at the maximum dosage – over a 15-month period, according to records maintained by the State of California.
The conspirators also used Los Angeles as a base of operations to acquire and deliver bulk shipments of prescription drugs to Texas, according to the indictment. The investigation resulted in the seizure of multiple drug loads, including a January 2013 seizure of nearly 10,000 pills from the residence of ringleader Jagehauel Gillespie, and a July 2010 seizure of 48 bottles of promethazine with codeine from a car being driven across Texas by Gillespie and another defendant.
“Los Angeles is a major source of the deadly and addictive prescription drugs that are diverted to street sales across the Western United States,” said Acting United States Attorney Stephanie Yonekura. “This case in the latest in a series of prosecutions clearly demonstrating that law enforcement is committed to stemming the tide of drugs being diverted to the black market, as well as putting an end to medical professionals who abuse their prescription pads and their ethical obligations.”
The indictment describes multiple undercover operations conducted during the investigation. During an October 2013 meeting at Southfork, Gillespie agreed that Garg would prescribe oxycodone and promethazine with codeine for an undercover cooperator in exchange for the person returning to the clinic with bottles of the prescribed cough syrup. Later that day, Garg gave the undercover witness prescriptions for those drugs, and Garg agreed to issue more prescriptions later that week under a different patient name. Six days later, during another meeting at Southfork, Gillespie gave the undercover witness forged prescriptions for oxycodone and promethazine with codeine using another doctor’s name and medical license number.
“These arrests demonstrate law enforcement’s continuing intolerance for those who are simply drug traffickers operating behind the thinly veiled guise of a medical practice,” said Anthony D. Williams, Special Agent in Charge of the DEA’s Los Angeles Field Division. “Dr. Garg and her employees brazenly wrote and distributed thousands of illicit prescriptions with no legitimate necessity, allowing a countless number of highly addictive prescription opioids to hit the streets of Los Angeles and Texas. The DEA will persist its longstanding efforts to investigate and dismantle pill mills like Southfork Medical.”
All seven defendants are charged with conspiring to distribute narcotics, a charge that carries a statutory maximum penalty of 20 years in federal prison. Additionally, each of the defendants is charged in at least one substantive counts of distributing a controlled substance, charges that could increase a prison term if they are convicted.
The five arrested this morning are:
Jagehauel Gillespie, 39, of Houston, the operator of Southfork who allegedly charged flat fees of up to $500 for prescriptions and who will face a statutory maximum sentence of 149 years in federal prison if he is convicted;
Dr. Madhu Garg, 63, of Glendora, California, the medical doctor who wrote prescriptions at Southfork, allegedly without any medical necessity, before the Medical Board of California revoked her license in late 2013;
Diane Nunez, 24, of Long Beach, California, who oversaw day-to-day operations at Southfork;
Daniel Clay, 45, of Houston, who allegedly shipped controlled substances from Southern California to Texas; and
Ray Steven Benton, 56, of Baldwin Hills, California, a “capper” who recruited patients to obtain prescriptions at Southfork.
These defendants will be making initial court appearances this afternoon in the district in which they were arrested, meaning that Garg, Nunez and Benton will be arraigned in United States District Court in Los Angeles (and Gillespie and Clay will be appearing in federal court in Houston).
The two fugitives currently being sought are:
Jessica Poe, 32, of Inglewood, California, Gillespie’s girlfriend, who allegedly forged a doctor’s signature on prescriptions; and
Joseph Tyree Boyance, 35, whose whereabouts are presently unknown, a “capper” who recruited patients to obtain prescriptions at Southfork; and
The drug ring allegedly was based at the Southfork Medical Clinic, which until last February operated at 1818 South Western Avenue in the Harvard Heights district of Los Angeles.
In addition to the drug counts, Garg is charged with money laundering for allegedly wiring money obtained from the drug conspiracy to an account in Kuala Lumpur.
“IRS Criminal Investigation contributes our financial expertise in an effort to halt the illegal sale and distribution of prescription drugs,” stated IRS-Criminal Investigation Special Agent in Charge Erick Martinez. “Our goal is to stop criminal enterprises that profit from the illegal trade of dangerous narcotics and take away any financial benefit they receive from their criminal activity.”
Benton is also charged with firearms offenses, and both Gillespie and Benton are charged with using fake identities and fraudulent driver’s licenses to fill prescriptions at Los Angeles-area pharmacies.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
The case related to Southfork is the product of an investigation by the Drug Enforcement Administration’s Los Angeles and Houston field divisions, Internal Revenue Service-Criminal Investigation, the Los Angeles Police Department, the California Department of Justice, and the Texas Department of Public Safety.
Release No. 15-003
Attorney Indicted in Nearly $1 Million Tax Refund Check ScamRead the Press Release
BOSTON – An attorney specializing in real estate closings and a co-conspirator were charged today with depositing almost $1 million in fraudulently obtained IRS refund checks into several different bank accounts, including the attorney's trust account, in an effort to launder the proceeds.
R. David Cohen, 63, and Francisco Oscar “Frank” Grullon, 48, both of Andover at the time of the alleged crime, were indicted on charges of conspiracy, conversion and receipt of stolen United States property, and conspiracy to commit money laundering. Cohen was previously arrested by complaint on Dec. 17, 2014. Grullon is believed to be outside of the United States.
According the indictment and an affidavit filed in the case, the investigation identified a scheme in which individuals filed fraudulent tax returns with fictitious W-2 information, usually a name and social security number of a resident of Puerto Rico, whose residents are not required to file federal income tax returns. Once the fraudulent returns were accepted by the IRS, refund checks were sent to designated addresses in Lawrence, East Boston and New York controlled by his co-conspirators.
Beginning in October 2011, Cohen, Grullon and another co-conspirator deposited 152 fraudulently deposited tax refund checks totaling $993,677 into various local banks to launder them through Cohen’s “Interest On Lawyer’s Trust Accounts” (IOLTA), as well as through bank accounts in the name of AD Professional Association, Inc. When questioned by bank officials about the large amount of third-party U.S. Treasury checks Cohen was depositing and negotiating through his IOLTA and personal accounts, Cohen falsely claimed that the payees were his clients.
The charge of conspiracy provides a sentence of no greater than five years in prison, three years of supervised release, a fine of $250,000 or twice the loss or gain from the offense. The charge of conversion and receipt of stolen U.S. property provides a sentence of no greater than 10 years in prison, three years of supervised release, a fine of $250,000 or twice the loss or gain from the offense. The charge of money laundering provides a sentence of no greater than 20 years in prison, five years of supervised release, a fine of $500,000 or twice the value of the property involved in the transaction. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case was also investigated by the Department of Homeland Security and U.S. Secret Service. The case is being prosecuted by S. Theodore Merritt of Ortiz’s Public Corruption and Special Prosecutions Unit.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Attorney General Holder Announces New Partnership with Facebook and Bing to Expand Reach of AMBER Alert SystemRead the Press Release
Attorney General Eric Holder announced today that – as the nation observes National AMBER Alert Awareness Day – the Justice Department has partnered with Facebook and Bing to expand the reach of the AMBER Alert system. Facebook will begin sending alerts to its members in designated search areas and Bing will allow users to access AMBER Alerts through its online tools. Attorney General Holder continued to urge other companies and organizations to step forward and do their part by offering whatever assistance they can provide.
“Protecting the well-being of our young people is a responsibility that falls to every American,” said Attorney General Holder. “Each of us can help by paying close attention to alerts that come in – and by making sure you are plugged into the AMBER Alert network via social media. Remember: finding an abducted child and returning him or her to safety depends on a fast response. The more vigilant citizens we have on the look-out, the better our chances of a quick recovery.”
The complete text of the Attorney General’s video message is below:
“At the Department of Justice, we are committed to ensuring the safety and security of everyone in this country – and especially our young people. Over the last two decades, a key tool in this effort has been the AMBER Alert system – an early warning system that helps us find and return abducted children.
“Since the first AMBER Alert system became operational in 1996, AMBER Alert’s strong network of law enforcement and transportation officials, broadcasters, private-sector representatives – and dedicated ordinary citizens – has helped to rescue and safely return more than 700 abducted children. Just last month, two young children were recovered. In one incident, a three-year-old boy who had been taken in a domestic dispute was used as a shield by his abductor. In another, an infant just 20 days old was abducted by a carjacker. Fortunately, with the help of the AMBER Alert system, both children were rescued unharmed.
“Through radio announcements, highway signs, wireless notifications, and Web posts, AMBER Alerts are now capable of rapidly reaching millions of people across the country. But we have a great deal more to do in order to ensure that we can spread the word about missing children as quickly and as widely as possible.
“Today – as our nation observes National AMBER Alert Awareness Day – I am pleased to announce that we are making two vital additions to our innovative national partnerships in order to expand the reach of the AMBER Alert system. Facebook, already an AMBER Alert partner, will now begin sending alerts, along with detailed information and photographs, to its members in designated search areas. And the search engine Bing will begin allowing users to access AMBER Alerts through its online tools. These cutting-edge tools are available as a result of agreements with the National Center for Missing and Exploited Children, which coordinates our AMBER Alert distribution efforts.
“Facebook’s geo-targeted alerts and Bing’s online broadcast tools will give AMBER Alerts an expanded social media and Internet presence – extending our web of child protection resources into new and critical areas. I am grateful for their involvement, and for the participation of so many organizations and agencies that have helped to make the AMBER Alert system such an important public safety asset. And I urge other companies and organizations to step forward and do their part by offering whatever assistance they can provide.
“Protecting the well-being of our young people is a responsibility that falls to every American. Each of us can help by paying close attention to alerts that come in – and by making sure you are plugged into the AMBER Alert network via social media. Remember: finding an abducted child and returning him or her to safety depends on a fast response. The more vigilant citizens we have on the look-out, the better our chances of a quick recovery.
“For more information on how to get involved, please go to AMBERAlert.gov or www.missingkids.com.”
The full video of the Attorney General’s message is available at http://www.justice.gov/opa/video/expanding-amber-alert-tools-recover-missing-children.
Ardmore Man Sentenced to 92 Months for Methamphetamine DistributionRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that NIKEA PAUL LEE, age 38, of Ardmore, Oklahoma, was sentenced to 92 months imprisonment, followed by 4 years of supervised release for Possession with Intent to Distribute Methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(B).
The charge arose from an investigation by the Chickasaw Lighthorse Police, the Ardmore Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The defendant was indicted in June 2014 and pled guilty in July 2014.
The Indictment alleged that on or about February 6, 2014, within the Eastern District of Oklahoma, the defendant did knowingly and intentionally possess with the intent to distribute over five (5) grams or more of actual Methamphetamine, a Schedule II Controlled Substance.
The Honorable James H. Payne, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant was remanded to the custody of the United States Marshal Service pending transportation to the designated federal prison at which he will serve his nonparolable sentence.
Assistant United States Attorney Chris Wilson represented the United States.
12 January 2015
Wilmington Man Found Guilty of Interstate Transportation for ProstitutionRead the Press Release
WILMINGTON – United States Attorney Thomas G. Walker announced today that a jury convicted RANDOLPH JOHNSON SPAIN, 25of Wilmington, North Carolina, of two counts of interstate transportation of a person(s) with the intent that person(s) engage in prostitution. The jury returned its verdict following a trial in federal court before United States District Judge James C. Fox.
The defendant was the target of an investigation which was a collaborative effort among several law enforcement agencies, to include the Wilmington Police Department, the New Hanover County Sheriff’s Office, and the United States Department of Homeland Security. Among other evidence received during the trial, in August 2010, law enforcement in Norfolk, Virginia, were called to a hotel for a reported domestic assault. Upon investigation, two women encountered there told the Virginia authorities that they had been working as prostitutes for SPAIN, that he had brought them by automobile to Virginia from North Carolina, that he would not pay them, and that he would not let them leave. Spain faces a maximum of ten years imprisonment on each of the two counts.
Williston Man Sentenced on Two Counts of Possession of a Firearm and AmmunitionRead the Press Release
BISMARCK - U. S. Attorney Timothy Q. Purdon announced that on Jan. 12, 2015, Ronald Keith Edwards Gibbons, 28, Williston, N.D., was sentenced by U.S. District Judge Daniel L. Hovland on two counts of possession of firearm and ammunition by a convicted felon. Judge Hovland sentenced Gibbons to serve seven years and six months in federal prison, to be followed by three years of supervised release on each count to be served concurrently. Gibbons was ordered to pay a $200 special assessment to the Crime Victim’s Fund.
On April 15, 2014, in Williston, North Dakota, Gibbons was stopped for a traffic violation. After an arrest for driving under suspension, a law enforcement search resulted in the discovery of a loaded .45 handgun in a tool bag in the back seat. After being charged in William County District Court, Gibbons bonded out.
On June 11, 2014, Gibbons was operating a motorcycle with an expired registration in Williston. When an officer attempted to stop him, Gibbons fled at a high rate of speed and crashed. He fled on foot, but was quickly apprehended and had a shoulder holster and loaded gun magazine on him. A witness stated she observed Gibbons crash, run and throw a gun. Officers found a loaded Ruger 9mm in the area where the witness said she saw him throw the gun.
Gibbons was prohibited from possessing either a firearm or ammunition by virtue of Washington state court felony convictions for assault in the third degree in 2004, unlawful possession of a firearm in the second degree in 2005, and obtaining a controlled substance by fraud or forged prescription, in 2011.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives, and the Williston Police Department.
Assistant U.S. Attorney David Hagler prosecuted the case.
Williston Man Sentenced for Possession of Firearm and AmmunitionRead the Press Release
BISMARCK - U. S. Attorney Timothy Q. Purdon announced that on Jan. 12, 2015, Michael John Schell, 44, Williston, N.D., was sentenced by U.S. District Judge Daniel L. Hovland on a charge of possession of firearm and ammunition by a convicted felon. Judge Hovland sentenced Schell to serve seven years in federal prison, to be followed by three years of supervised release. Schell was ordered to pay a $100 special assessment to the Crime Victim’s Fund.
On July 20, 2013, in Williston, North Dakota, Schell was stopped for a traffic violation. After discovery of a drug paraphernalia pipe, a law enforcement search resulted in the discovery of four firearms in the vehicle, including a semi-automatic rifle and over 500 rounds of ammunition.
Schell was prohibited from possessing either a firearm or ammunition by virtue of multiple felony convictions, including California convictions for possession of a controlled substance for sale in 1995, possession of a controlled substance in 1996, possession of a controlled substance in 2001, domestic assault in 2010, and felon in possession of a firearm in 2010.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives, and the Williston Police Department.
Assistant U.S. Attorney David Hagler prosecuted the case.
Wheeling man sentenced in painkiller distribution networkRead the Press Release
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(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistWheeling man sentenced in painkiller distribution network
WHEELING, WEST VIRGINIA – Derick Namack, 39, of Wheeling, West Virginia, was sentenced to 18 months in prison for selling oxycodone in a painkiller distribution network based in the Ohio Valley, United States Attorney William J. Ihlenfeld, II, announced.
An investigation by the Drug Enforcement Administration and the Ohio Valley Drug and Violent Crimes Task Force, a HIDTA-funded initiative, revealed Namack’s involvement in a painkiller distribution network led by 38-year-old Triadelphia, West Virginia resident Brian Schultz. Namack pled guilty in June 2014 to one count of “Distribution of Oxycodone.”
Assistant U.S. Attorney John Parr prosecuted the case on behalf of the government.
Senior U.S. District Judge Frederick P. Stamp presided.
Wapato Man Sentenced to Ten Years in Prison for Possession of Stolen FirearmRead the Press Release
Spokane – Today, Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Aaron Winnier, age 33, of Wapato, Washington, was sentenced for possessing a stolen firearm. Senior United States District Court Judge Wm. Fremming Nielsen sentenced Winnier to a ten-year term of imprisonment and a three-year term of court supervision following his release from Federal prison. At today’s sentencing hearing, the Senior Judge Nielsen noted that Winnier had previously been convicted of more than 40 offenses.
According to information disclosed during court proceedings, on April 22, 2014, the Yakama Nation Police Department received a complaint of a disturbance. The Tribal Police Officers arrived at a residence where the disturbance was reportedly occurring. The officers apprehended Winnier, who appeared to be intoxicated. At the time, the officers discovered a stolen firearm in Winnier’s pocket. Winnier told the officers that he did not care if the firearm was stolen and that he would just “get another one.” Winnier has a lengthy criminal history which includes, among other conduct, convictions for: possession of marijuana; resisting arrest; obstruction; taking vehicle without permission; protection order violation; attempt to elude a police vehicle; third degree assault; fourth degree assault; third degree escape; reckless endangerment; malicious injury to property; residential burglary; possession of a stolen vehicle; and felony harassment – threat to kill.
Michael C. Ormsby said, “The United States Attorney’s Office is committed to prosecuting individuals who unlawfully possess firearms. Such offenses are serious and just punishment will be pursued against individuals who violate the firearms laws, as was done in this case. I commend the Yakama Nation Police Department and the Bureau of Indian Affairs for their commitment to this successful prosecution.”
This investigation was conducted by the Yakama Nation Tribal Police Department and the Bureau of Indian Affairs. The case was prosecuted by Tom Hanlon, an Assistant United States Attorney for the Eastern District of Washington.14-CR-13-2035-WFN-1
Virginia Beach Man Sentenced to Seven-and-a-Half Years for Receiving Child PornographyRead the Press Release
NORFOLK, Va. – David Beningo, 53, of Virginia Beach, was sentenced today to 90 months in prison, followed by a life term of supervised release for receipt of child pornography.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Washington, D.C., made the announcement after sentencing by U.S. District Judge Mark S. Davis.
Beningo pleaded guilty on June 24, 2014. According to court documents, Beningo, a retired Navy Chief, was a child pornography file sharer on a peer-to-peer network. Agents were able to determine that someone using a particular internet protocol address was sharing files. That online activity was then linked to Beningo’s residence. Agents executed a search warrant on Beningo’s home and his computer equipment was seized and examined. The hard drive contained more than 450 videos of child pornography including 4 videos which contained sadistic/masochistic depictions. Beningo admitted to downloading images of child pornography and to using the peer-to-peer network. He also acknowledged that the network required him to set up a shared folder from which others could download images.
This case was investigated by Homeland Security Investigations. Assistant U.S. Attorney Randy Stoker is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14cr86.Virginia Beach Man Sentenced for Possession of Child PornographyRead the Press Release
NORFOLK, Va. – Bruce Michael Jarvela II, age 41, of Virginia Beach was sentenced today to 97 months in prison, followed by 25 years of supervised release for possession of child pornography.
Dana J. Boente, United States Attorney for the Eastern District of Virginia, and Susan E. Triesch, Special Agent-in-Charge of the Naval Criminal Investigative Service, Norfolk Field Office, made the announcement after sentencing by Senior United States District Judge Robert G. Doumar.Jarvela pled guilty to the charge on September 4, 2014. According to court documents, Jarvela, an active duty petty officer in the Navy, downloaded an image of child pornography to his Facebook page and then tried to distribute that image to another Facebook user. Facebook flagged the image, shut down Jarvela’s account, and notified the National Center for Missing and Exploited Children. Investigators executed a search warrant on Jarvela’s Virginia Beach residence in November 2013. They seized numerous pieces of computer equipment. Jarvela had been downloading images since 2003 and sharing with others via chat rooms and email since 2008. He is attributed with having 775 images.
This case was investigated by the Naval Criminal Investigative Service. Assistant United States Attorney Randy Stoker is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-101.United States Attorney Andrew M. Luger’s Statement Regarding Twin Cities Particpation in White House Summit on Countering Violent ExtremismRead the Press Release
United States Attorney Andrew M. Luger said: “I look forward to participating in the White House Summit on February 18 with Twin Cities law enforcement and community leaders and stakeholders, my colleagues from the U.S. Attorney’s Offices in Boston and Los Angeles, and CVE leaders from around the world. Since I began working with the Somali Minnesotan community last spring to design a plan that will address the root causes of terrorist recruiting, I have come to learn that we share a deep commitment to see our community prosper in peace and security.”
It is expected that the Minneapolis-St. Paul delegation to the White House Summit will include approximately 15 law enforcement and Somali community leaders.U.S. Attorney Machen Announces Selection of Consultants to Work with Office’s New Conviction Integrity UnitExperienced Attorneys to Help Assess Cases, Recommend Best PracticesRead the Press Release
WASHINGTON – U.S. Attorney Ronald C. Machen Jr. today announced the selection of two independent consultants who will provide guidance and outside expertise to the U.S. Attorney’s Office’s newly created Conviction Integrity Unit.
The consultants are Jeffrey D. Robinson, Senior CounselatLewis Baach, and Kristine Hamann, a Visiting Fellow at the U.S. Department of Justice’s Bureau of Justice Assistance, who specializes in developing "Best Practices" programs for prosecutor's offices.
“In standing up the first federal Conviction Integrity Unit, we wanted to bring in outside counsel who would offer a fresh perspective to our review process in order to ensure that we were reaching the right conclusions when assessing these innocence claims,” said U.S. Attorney Machen. “Our goal is to not only identify historic wrongful convictions but to do everything in our power to prevent those wrongful convictions from occurring on a going forward basis. I am confident that these experienced attorneys will offer thoughtful, independent feedback that helps us achieve both of these goals.”
The Conviction Integrity Unit, established in September 2014, will review cases in which defendants convicted of violent felonies can proffer new evidence that merits reconsideration, including those in which DNA testing of biological material may establish actual innocence. Cases will be reviewed by experienced prosecutors and investigators from the U.S. Attorney’s Office for the District of Columbia, who then will determine if further action is needed.
Mr. Robinson and Ms. Hamann have agreed to serve as a resource to the Conviction Integrity Unit by reviewing material relating to incoming claims and providing their individual assessments of the potential merits of and investigative steps necessary as to those claims. Once a claim has been thoroughly re-investigated, Mr. Robinson and Ms. Hamann will be available to consult with the U.S. Attorney about the proposed outcome.
Finally, Mr. Robinson and Ms. Hamann will offer their guidance as to recommended training, policy revisions, and changes in trial practice suggested by the conviction review process. Shawn Armburst, the Executive Director of the Mid-Atlantic Innocence Project, also will assist the Conviction Integrity Unit in recommending changes in training, policy, and trial practice.
This is the first Conviction Integrity Unit created within a U.S. Attorney’s Office. A number of prosecutors’ offices nationwide have established such units in recent years, including the Manhattan District Attorney’s Office and the Dallas County District Attorney’s Office. As the Conviction Integrity Unit’s work continues, additional consultants could be named.
The unit, which began reviewing cases this fall, is part of the office’s Special Proceedings Division, which handles all post-conviction litigation in both the U.S. District Court for the District of Columbia and the Superior Court of the District of Columbia.
The external consultants have extensive experience with criminal justice issues:
Jeffrey D. Robinson, Senior CounselatLewis Baach, is an experienced litigator who handles complex commercial and civil rights matters, responds to governmental and congressional investigations, develops legal strategies, and addresses media inquiries. He was lead counsel in the case establishing that racially targeted predatory lending is a violation of the Fair Housing Act. Mr. Robinson has a long and distinguished career in areas in which traditional law and litigation intersect with public policy and politics. He served for four years as Associate Director-Counsel for the NAACP Legal Defense and Education Fund (LDF), where he successfully led an effort to reform California's Three Strikes law through a ballot initiative, and he also played an important role in multiple legislative efforts, including the inclusion of civil rights protections in the Affordable Care Act and criminal justice reform measures before the Senate and House Judiciary Committees. Mr. Robinson worked on behalf of Vice President Al Gore during the 2000 election Florida vote-count challenge, serving as trial counsel and a media spokesman. Mr. Robinson is a former Principal Deputy in the District of Columbia Office of the Corporation Counsel (now the District of Columbia Office of the Attorney General). He also is a former Deputy Assistant Attorney General for Legislative Affairs and a Subcommittee Chief Counsel on the Senate Judiciary Committee.
Kristine Hamann, a Visiting Fellow at the Department of Justice/Bureau of Justice Assistance, works with prosecutors throughout the country to develop statewide Best Practices Committees. She also is the chair of the Best Practices Committee for the New York State District Attorney’s Association. The Committee develops best practices and innovative strategies aimed at improving the criminal justice system and preventing wrongful convictions. The Committee has led statewide initiatives that include enhanced identification procedures, video interrogation protocols, an Ethics Handbook for prosecutors, and discovery training for the police. Ms. Hamann has decades of experience as a prosecutor. From 2008 to 2013, she was the Executive Assistant District Attorney for the Special Narcotics Prosecutor for the City of New York. The office conducts international, national, and local drug trafficking investigations and prosecutions, which impact New York City. From 2007 to 2008, she was the New York State Inspector General, charged with investigating and preventing fraud, waste and abuse in state government. Before serving as Inspector General, Ms. Hamann served more than 25 years at the New York County District Attorney’s Office, including nine years as the Executive Assistant District Attorney to Robert M. Morgenthau in the Manhattan District Attorney’s Office. She also has worked as an associate at Simpson Thacher and Bartlett in New York.
15-010U.S. Attorney Announces Formation of Educational Opportunities Civil Rights Working GroupRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced the formation of the Educational Opportunities Civil Rights Working Group to address civil rights violations by public and private educational institutions, afterschool programs, summer camps and day care centers.
U.S. Attorney Daly stated that the U.S. Attorney’s Office in Connecticut regularly receives complaints from concerned parents and caregivers alleging that their children were discriminated against by schools, afterschool programs and summer camps because of the child’s disability, gender, gender identity, or limited ability to speak English. In addition, the Office has received an increasing number of complaints about bullying, sexual harassment and school segregation in public and private schools. Over the last several months, the Office has settled cases against schools, afterschool programs and day care centers for violations of the Americans with Disabilities Act and the Equal Educational Opportunities Act of 1974. These settlements have resulted in monetary settlements to parents, comprehensive training for providers, and sweeping policy changes to entire educational programs and systems.
Most recently, the U.S. Attorney’s Office has reached a settlement with Quinnipiac University to resolve allegations that the university violated the Americans with Disabilities Act by placing a student who had been diagnosed with depression on a mandatory medical leave of absence without first considering options for the student’s continued enrollment.
Recognizing a greater need to address and help prevent civil rights violations in educational and camp settings, the U.S. Attorney’s Office has partnered with federal and state agencies and advocacy groups to form the Educational Opportunities Civil Rights Working Group.
Participating in the Working Group are representatives from the U.S. Department of Health and Human Services, U.S. Department of Education, Connecticut Department of Education, Commission on Human Rights and Opportunities, Connecticut Office of Protection and Advocacy for Persons with Disabilities, African American Affairs Commission, Latino and Puerto Rican Affairs Commission, Asian Pacific American Affairs Commission, National Association for the Advancement of Colored People, Connecticut Children’s Medical Center, Connecticut Center for Children’s Advocacy, Connecticut Afterschool Network, Connecticut Recreation and Parks Association and the Connecticut Summer Camp Network.
The Working Group is developing and implementing a strategic action plan to address civil rights violations through educational outreach programs as well as law enforcement actions.
“Civil rights violations in educational and camp settings undermine the well-being of our most vulnerable citizens – our children,” stated U.S. Attorney Daly. “Through aggressive outreach and enforcement initiatives, the U.S. Attorney’s Office and our working group partners strive to eliminate these violations to improve the health and welfare of all children and young adults.”
To contact the Educational Opportunities Civil Rights Working Group, please call 203-821-3836.
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U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Two Conspirators Sentenced for the Armed Robbery of A Waldorf Convenience StoreRead the Press Release
Greenbelt, Maryland – U.S. District Judge George Jerrod Hazel sentenced Charles Johnson, age 20, of Beltsville, Maryland, and Madani Ilara Tejan, age 32, of Upper Marlboro, Maryland, today to 51 months in prison and 68 months in prison, respectively, each followed by three years of supervised release, for robbing a convenience store in Waldorf, Maryland,.The sentences were 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; Chief J. Thomas Manger of the Montgomery County Police Department; and Charles County Sheriff Troy Berry.
According to their plea agreements, on September 11, 2013, Johnson, Tejan and Donnell Harris robbed a convenience store on St. Ignatius Drive in Waldorf. Harris brandished a firearm during the robbery and the conspirators forced the store employee at gunpoint to open the store’s cash register. The robbers stole $90 in cash and several packs of cigarettes.
Harris also admitted that after he was arrested for the robbery and while he was incarcerated, he threatened to hurt co-conspirator Charles Johnson if Johnson did not lie to law enforcement by stating that he (Johnson) had brandished the firearm during the robbery.
Donnell Edward Harris, age 21, of Burtonsville, Maryland, previously pleaded guilty to the robbery and to brandishing a gun during the robbery. Harris is scheduled to be sentenced on March 20, 2015 at 9:00 a.m.
United States Attorney Rod J. Rosenstein commended the ATF, Montgomery County Police Department and Charles County Sheriff’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Leah J. Bressack and Daniel Gardner, who prosecuted the case.
Topeka Man Sentenced to Seven Years for Armed RobberyRead the Press Release
TOPEKA, KAN. - A Topeka man was sentenced Monday to seven years in federal prison for armed robbery, U.S. Attorney Barry Grissom said today.
Weston Brett Canfield, 28, Topeka, Kan., pleaded guilty to one count of commercial robbery and one count of brandishing a firearm during the robbery. In his plea, Canfield admitted that May 12, 2014, he robbed Patty’s Retail Liquor at 3705 S.W. Plaza Drive in Topeka. During the robbery, he threatened the clerk with a .22 caliber rifle. Canfield got the rifle from co-defendant Aaron Roy Bundy. Bundy died on July 31, 2014, while awaiting trial.
Grissom commended the Topeka Police Department, the FBI and Assistant U.S. Attorney Jared Maag for their work on the case.
Thirteen Indicted for Interstate Drug Conspiracy Controlled from PrisonRead the Press Release
A 30-count federal indictment was unsealed charging 13 people with participating in a multi-state conspiracy to distribute heroin, cocaine and methamphetamine, a conspiracy which was controlled by an inmate inside an Ohio prison, law enforcement officials said.
Indicted are: Fernando Auces, 50, currently residing at Grafton Correctional Institution; Ricardo Morales-Almazan, 32, currently residing at FCI Big Spring in Texas; Alejandro Sanchez, 33, of Toledo; Roberto Agapito Vallejo-Becerra, 50, currently residing at East Hidalgo Detention Center in Texas; Alexander Gonzales, 38, currently residing at Southern Ohio Correctional Institution (Lucasville); Tammy Gibson, 40, of Akron; Javier Jimenez, 39, of Toledo; Noe Reyes, 33, currently residing at FCI Lucero in Alabama; Randy Koelblin, 39, of Cincinnati; Jasmine Reyes, 29, of Omaha, Neb.; Jenneth De La Rosa, 58, of Toledo; Daniel Ulis, 40, of Toledo and Anthony King, 41, currently residing at Ross Correctional Institution (Chillicothe).
All 13 people were indicted in Count 1 with conspiracy to possess with intent to distribute heroin, cocaine and methamphetamine.
Auces, while an inmate at Allen Correctional Institute in Lima, Ohio, with the assistance of Almazan and others, controlled a multi-state drug operation by communicating through a contraband cell phone with others outside the prison to arrange the delivery and sale of heroin, cocaine and methamphetamine, according to the indictment.
Between 2010 and 2014, Auces and others arranged for deliveries of large amounts of heroin to Ohio from suppliers in Indiana and Texas. He recruited friends and relatives, including Almazan, De La Rosa, Sanchez, Ulis, King, Jimenez and Koelblin to receive and distribute the heroin, cocaine and methamphetamine to Cleveland, Toledo and elsewhere, according to the indictment.
Auces, as part of the conspiracy, agreed with Gonzales, an inmate at the Southern Ohio Correctional Facility in Lucasville, Ohio, to share customers and drug suppliers. Auces arranged for Gonzales to distribute drugs to various locations throughout Ohio, including Cleveland, Akron/Canton, Dayton and Cincinnati, according to the indictment.
“This was a major interstate drug ring run from inside a prison cell,” said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio. “Thanks to the hard work of our law enforcement partners those who were helping this drug trafficker from the outside will soon be joining him behind bars. We will continue to work together to reduce the supply of heroin, cocaine and methamphetamine.”
“Refuge from law enforcement can't be found behind a prison wall,” said Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland Office. “The Northern Ohio Law Enforcement Task Force will continue to bring to justice drug dealers that distribute pois0n to our streets, no matter where they reside."
“Our collective enforcement efforts in this investigation have effectively shut down an operation that allegedly funneled copious amounts of illegal drugs into this community," Marlon Miller, Special Agent in Charge of HSI Detroit, which covers Michigan and Ohio. "These charges announced today are the culmination of an extensive multi-agency approach to combating drug trafficking organizations."
Counts 2 through 7 are substantive counts of distribution of methamphetamine or heroin. Counts 8 through 28 deal with the use of communication facility to facilitate a felony. Counts 29 and 30 deal with traveling interstate to distribute heroin. The indictment also seeks to forfeit $37,050 in cash seized from a storage locker in Toledo on April 4, 2014, according to the indictment.
This case is being prosecuted by Assistant U.S. Attorneys Vasile C. Katsaros and Christian H. Stickan and Special Assistant U.S. Attorney Margaret Tomaro of the Ohio Attorney General’s Office following an investigation by the Northern Ohio Law Enforcement Task Force. The NOLETF is a task force comprised of investigators from the Federal Bureau of Investigation, Cleveland Division of Police, Cuyahoga Metropolitan Housing Authority, Drug Enforcement Administration, Internal Revenue Service, Cuyahoga County Sheriff’s Office, Ohio Bureau of Criminal Investigation and the police departments of Cleveland Heights, Euclid, Lakewood, the Regional Transit Authority, Westlake and Shaker Heights. The NOLETF is also one of the initial Ohio High Intensity Drug Trafficking Area initiatives, which supports and helps coordinate numerous Ohio drug task forces in their efforts to eliminate or reduce drug trafficking in Ohio.
If convicted, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Texas Man Pleads Guilty to Methamphetamine Distribution ConspiracyRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced today that a Texan pleaded guilty to conspiring to sell methamphetamine in the Winn Parish area.
Instead of proceeding with a federal jury trial scheduled to start today, Alwyn Nord Stewart Jr., 35, of Houston, Texas, pleaded guilty before U.S. District Judge Donald E. Walter to one count of conspiracy to distribute methamphetamine. According to evidence presented at the guilty plea, Stewart; David Lamont Mangum, 36, of Winnfield, La.; Altomio Kente Phillips, 29, of Winnfield; and Demetrius Marie Jackson, 31, of Deridder, La., conspired to distribute methamphetamine transported from Houston to the Winnfield area from the beginning of 2011 until September 2012. Stewart was the supplier of methamphetamine to Mangum. Stewart and Mangum would arrange transport of the drugs to Louisiana, and other conspirators assisted with the delivery and distribution.
Stewart faces 20 years to life in prison, five years of supervised release, and a $10 million fine. He and the other conspirators also face forfeiture of the property seized during the case, which includes: $29,067, two plots of land in Winnfield, seven vehicles and other seized items. A sentencing date of April 2, 2015 was set. Mangum, Phillips and Jackson previously pleaded guilty and are set to be sentenced on January 22, 2015.
The defendants were arrested as part of an Organized Crime Drug Enforcement Task Force (OCDETF) Operation named “Trend Setters.” The DEA conducted the investigation. The OCDETF program is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
Assistant U.S. Attorneys James G. Cowles Jr., Brandon B. Brown and Joseph G. Jarzabek are prosecuting the case.
Tax Preparer Sentenced for Fraud SchemeRead the Press Release
PHILADELPHIA - Crystal Graham, 42, of Philadelphia, PA, was sentenced today to 12 months in prison and was ordered to pay restitution of $266,243 to the IRS for filing false claims with the United States through federal income tax returns she prepared. Graham pleaded guilty on September 22, 2014, to 11 counts of filing false claims.
Graham created bogus wage statements and other false financial information which she placed on tax returns that she prepared for individuals for the purpose of obtaining tax refunds in the names of the filers. The fraudulent returns sought refunds of $354,000 based on bogus expense deductions and refundable credits, such as a filer=s entitlement to the First Time Home Buyer=s Credit and the Earned Income Tax Credit when the filer had little, if any, taxes withheld from income in that year. Graham also had her clients sign statements giving her the authority to deposit the clients= refund checks into her savings account, or to have the refund checks placed on prepaid access devices. This gave Graham the ability to take a substantial portion of the fraudulent refunds before giving her clients the remainder.
In addition to the prison term, U.S. District Court Judge Cynthia Rufe ordered Graham to pay a $1,100 special assessment. She is also prohibited from preparing tax returns. The case was investigated by the Internal Revenue Service Criminal Investigation. It was prosecuted by Assistant United States Attorney Floyd J. Miller.
Syracuse Man Pleads Guilty to Robbing Two BanksRead the Press Release
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FAX: (716) 551-3051BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Gary R. Latray, 54, of Syracuse, NY, pleaded guilty to aggravated bank robbery before U.S. District Judge Richard J. Arcara. The charge carries a maximum sentence of 25 years in prison and a $250,000 fine.
Assistant U.S. Attorney John M. Alsup, who is handling the case, stated that on November 10, 2009, the defendant entered Northwest Savings Bank at 3670 McKinley Parkway in Hamburg, NY, and handed the teller a note demanding a sum of money and indicating that he had an explosive device. The teller gave Latray a specific amount of money in response to the threat.
On December 1, 2009, the defendant entered a Suntrust Bank in Harrisonburg, Virginia, and carried out a similar style bank robbery.
The plea is the culmination of an investigation on the part of the Federal Bureau of Investigation, the Hamburg Police Department, under the direction of Chief Michael Williams, the United States Attorney’s Office in the Western District of Virginia, under the direction of acting U.S. Attorney Anthony Giorno, the Harrisonburg, Virginia Police Department, under the direction of Chief Stephen B. Monticelli, the West Virginia State Police, under the direction of Colonel Jay Smithers, and the Garrett County, Maryland Sherriff’s Office, under the direction of Sheriff Rob Corley.
Sentencing is scheduled for March 27, 2015 at 12:00 p.m. before Judge Arcara.