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Thursday 13 November 2014
Child Care Center Owner Sentenced for FraudRead the Press Release
PHILADELPHIA –Tianna Edwards, 32, of Philadelphia, Pennsylvania, was sentenced today to 63 months in prison for wire fraud in connection with a scheme to defraud the Pennsylvania Department of Public Welfare. U.S. District Court Judge Juan R. Sanchez also ordered restitution in the amount of $1,459,470.25, three years of supervised release and a $500 special assessment.
In 2008, Edwards had a criminal record which would have prohibited her from obtaining a license to operate a child day care facility and receive state and federal child subsidy payments from the Department of Public Welfare (“DPW”). In order to circumvent the criminal history clearance requirements for a license and to become eligible for state and federal child care subsidy funds, in September 2008, defendant Tianna Edwards submitted the first of two separate applications to DPW containing the forged signatures of another individual, for licenses to operate facilities named “Tianna’s Terrific Tots.” Both applications were false because they listed a person who did not have a criminal record as the sole legal owner and operator of “Tianna’s Terrific Tots” when, in fact, defendant Tianna Edwards controlled and operated “Tianna’s Terrific Tots.” The facilities were located on Germantown Avenue and Rising Sun Avenue in Philadelphia. From December, 2008 through July 2012, Tianna Edwards received from DPW approximately $1,459,470.25 in fraudulent payments to Tianna’s Terrific Tots.
In addition to business expenses, bank records showed that from September 2008 to September 2012, Edwards spent over $135,000 in personal retail, travel and entertainment. Moreover, casino records showed that from January, 2011 through January, 2013, Tianna Edwards spent over 490 hours at Sugarhouse casino, gambling over $1.5 million with a net loss of over $206,000.
The case was investigated by the United States Department of Health and Human Services Office of Inspector General and is being prosecuted by Assistant United States Attorney Joan E. Burnes.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Charleroi Felon Sentenced to 87 Months in Prison for Possessing AmmunitionRead the Press Release
PITTSBURGH - A Washington County resident has been sentenced in federal court to 87 months of imprisonment, to be followed by three years of supervised release, on his conviction of violating federal firearms laws, United States Attorney David J. Hickton announced today.
Chief United States District Judge Joy Flowers Conti imposed the sentence on Thomas David Steiner, 39, formerly of Charleroi, Pennsylvania.
According to information presented to the court, in and around August of 2007, Steiner, a convicted felon, possessed assorted ammunition. Federal law prohibits anyone who has been convicted of a crime punishable by a term of imprisonment exceeding one year to possess a firearm or ammunition.
Assistant United States Attorneys Jessica Lieber Smolar and Jane Dattilo prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Pennsylvania State Police for the investigation leading to the successful prosecution of Steiner.
Burlington Man Sentenced to 128 Months for Drug and Weapons OffensesRead the Press Release
COVINGTON, KY - A Burlington man was sentenced to 128 months in federal prison today for manufacturing methamphetamine and possession of a short-barreled shotgun in furtherance of drug trafficking.
U.S. District Judge Amul Thapar sentenced 38 year-old Joseph Wagner to 128 months in prison and placed him on supervised release for 15 years after he completes his prison term. He also ordered the forfeiture of the shotgun and ammunition used in the offense.
Wagner previously pled guilty on June 30, 2014 and admitted to manufacturing methamphetamine and possessing a sawed-off shotgun to assist in his drug trafficking at a residence in Independence, Kentucky. A construction worker engaged to assist in rehabilitating the residence that Wagner was using to manufacture methamphetamine had an altercation with Wagner on December 17, 2013 and contacted police. Responding officers observed Wagner in possession of the sawed-off shotgun and surrounded the residence. Wagner held them at bay for over three hours before surrendering to police. Officers located the sawed-off shotgun and items confirming the manufacture of methamphetamine. Investigators located a witness who confirmed that Wagner had been manufacturing and distributing methamphetamine.
Under federal law, Wagner must serve at least 85 percent of his prison sentence. He will be on supervised release for fifteen years after completion of his prison term.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Stuart L. Lowrey, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms & Explosives (Louisville Field Division), jointly made the announcement today after the sentencing.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms & Explosives, the Independence Police Department and the Northern Kentucky Drug Strike Force. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorney Tony Bracke.
Broward Real Estate Broker Pleads Guilty in Three Cases to over $5 Million in FraudRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Drew J. Breakspear, Commissioner, Florida’s Office of Financial Regulation, and Scott Israel, Sheriff, Broward Sheriff’s Office, announce that Christopher Wayne White, 44, of Fort Lauderdale, Florida, pled guilty in three separate fraud cases before U.S. District Judge William P. Dimitrouleas. White is scheduled to be sentenced on January 21, 2015 at 1:30 p.m.
In Case No. 14-60216-CR-Dimitrouleas, White pled guilty to three counts of making material false statements to U.S. Citizenship and Immigration Services, in violation of Title 18, United States Code, Section 1001(a)(3). According to the Indictment and documents filed with the court, these statements were included on White’s April 16, 2014, application for naturalization submitted to the U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services. White made the following material false statements in his naturalization application: (1) that he had never claimed to be a U.S. Citizen; (2) that he had never committed, assisted in committing or attempted to commit a crime or offense for which he was never arrested; and (3) that he had never failed to support his dependents. On these counts, White faces a maximum penalty of five years in prison, three years of supervised release, and a fine of up to $250,000 for each count.
In Case No. 14-60282-CR-Martinez, White pled guilty to six counts of wire fraud, in violation of Title 18, United States Code, Section 1343. According to the Information and documents filed with the court, White was a licensed real estate broker and owner and operator of the Christopher White Group in Fort Lauderdale. White obtained real estate deposits totaling approximately $595,000 via wire transfers involving properties in Broward County from individuals and refused to return the escrow deposits. The Secretary of Florida’s Department of Business and Professional Regulation ordered an emergency suspension of his real estate broker’s license. For each count, White faces a maximum penalty of twenty years in prison, five years supervised release, and a fine of up to $250,000 for each count.
In Case No. 14-60283-CR-Moreno, White pled guilty to one count of wire fraud, in violation of Title 18, United States Code, Section 1343. According to the Information and documents filed with the court, White made numerous false statements to the mortgage lender in connection with the purchase a luxury home at 2708 Sea Island Drive in Fort Lauderdale. According to court records, White inflated his bank account balances, income, deposit and assets to fraudulently induce the mortgage lender to issue a mortgage loan in excess of $4.9 million dollars. The property was subsequently foreclosed by the lender resulting in substantial losses. On this count, White faces a maximum term of thirty years in prison, five years supervised release, and a fine of up to $1,000,000.
Mr. Ferrer commended the investigative efforts of the FBI, ICE-HSI, Florida’s Office of Regulation, and the Broward Sheriff’s Office. Mr. Ferrer also thanked the Florida Department of Business and Professional Regulation for their assistance. The case is being prosecuted by Assistant U.S. Attorneys Randy Katz and Thomas P. Lanigan.
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.
Boone County Drug Dealer Admits Methamphetamine DistributionRead the Press Release
Charleston, W.Va. – United States Attorney Booth Goodwin announced that Terry L. Daugherty, 49, of Nellis, West Virginia pled guilty in federal court in Charleston today to aiding and abetting the possession with intent to distribute methamphetamine. Daugherty admitted that he arranged the delivery of methamphetamine to a home in Nellis that he intended to recover and sell in the Boone County area. Daugherty promised the resident of the home some of the drugs in return for allowing the delivery to his address. Daugherty also admitted that he had two similar packages of methamphetamine delivered to his own home, but changed the delivery site for the recent package out of concern that his house law enforcement might be watching his own home. Daugherty faces up to 20 years imprisonment and a $1,000,000.00 fine when he sentenced February 23, 2015.
The successful prosecution of Daugherty was the result of the combined efforts of the Drug EnforcementAdministration and the US 119 Drug and Violent Crime Task Force.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
Board Member Sentenced to 10 Years’ Imprisonment for His Role in $10 Million Advance Fee and Gold Mine Investment SchemesRead the Press Release
Earlier today, Brad Russell, a member of the Board of Harbor Funding Group, Inc. (HFGI), was sentenced in federal court in Brooklyn, New York to 10 years’ imprisonment. In March 2014, following a six-week jury trial, Russell was convicted of all counts of the indictment for defrauding: (i) developers and their clients in areas devastated by Hurricane Katrina of more than $9 million through an advance fee scheme; and (ii) investors of almost $1 million through an Alaskan gold mine investment scheme. As part of the sentence, Russell was also sentenced to 3 years’ supervised release and ordered to pay a total of $10,707,894.59 in forfeiture and restitution to the victims of the two schemes. Co-defendant Kristofor Lange, the Vice President of Black Sand Mine, Inc. (BSMI), who was also convicted following trial, was sentenced earlier today to 5 years’ probation and ordered to pay $780,000 in forfeiture and restitution for his role in the Alaskan gold mine investment scheme.1
The sentences were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Philip R. Bartlett, Inspector in Charge, New York Division, U.S. Postal Inspection Service (USPIS), and Frank Montoya, Jr., Special Agent in Charge, Federal Bureau of Investigation, Seattle Field Office (FBI).
“After the devastation wrought by Hurricane Katrina, many individuals looked to help the storm-tossed area recover. Russell and his co-conspirators looked to line their own pockets, pretending to be able to finance redevelopment projects but in reality fleecing unsuspecting developers and investors of millions. After Russell and his co-conspirators spent the money they stole from their victims, they embarked on a gold mine scheme that too was built and sold on lies and deceit. Those who seek to take advantage of tragedies to line their own pockets are on notice that they will be brought to justice and held accountable for their crimes,” stated United States Attorney Lynch. Ms. Lynch thanked the USPIS and the FBI for their hard work and dedication through the course of the five-year investigation and prosecution. Ms. Lynch also extended her appreciation to the United States Attorney’s Office for the Western District of Washington for their assistance in the case.
Russell, together with others at HFGI, executed an advance fee scheme by targeting regions affected by Hurricane Katrina. They told land developers and their clients that HFGI had lenders and funds available to provide financing for their real estate projects, but as a condition for financing, HFGI required its clients to place ten percent of the loan amount in an attorney escrow account. Contrary to their representations, HFGI did not have lenders or funds available to finance the loans and stole the deposit money placed in escrow. Russell was the loan processor at HFGI and prepared and maintained the loan documents and escrow agreements. Through this scheme, Russell and his co-conspirators stole more than $9 million from approximately 300 individuals.
At trial, the government also proved that Russell and Lange, together with others, executed an investment scheme where they induced investors to invest in BSMI through lies and deceit. BSMI claimed that it was going to mine gold and other precious metals on Sitkinak Island in Alaska. Through the use of in-person presentations, cold calls and “webinars,” Russell, Lange, and their co-conspirators, convinced investors to invest in BSMI by lying to them about the credentials of BSMI’s officers and directors, BSMI’s assets and liabilities, the intended use of investor funds, and by concealing their prior involvement in HFGI.
The sentences were imposed by United States District Judge Dora L. Irizarry.
The government’s case was prosecuted by Assistant United States Attorneys Winston M. Paes, Alixandra E. Smith and Melanie Hendry.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The Defendants:
BRAD A. RUSSELL
Age: 43
Residence: Gig Harbor, Washington
KRISTOFOR J. LANGE
Age: 31
Residence: Gig Harbor, Washington
E.D.N.Y. Docket No. 10-CR-968
___________________________________________________________________________
1 Kristofor Lange was not charged in the advance fee scheme.
Bedford Man Charged for Armed Robbery of Garfield Heights BankRead the Press Release
A grand jury returned a two-count indictment charging Landon Darnell McFarland, Jr., 32, of Bedford, with one count of attempted bank robbery and one count of brandishing a firearm during and in relation to a crime of violence, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that McFarland robbed the Ohio Savings Bank, 6016 Turney Road, Garfield Heights, Ohio, a federally insured financial institution, on August 30, 2014.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to his case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney Matthew B. Kall, and was investigated by the Lorain County Sheriff’s Office and the Cleveland Resident Agency of the Federal Bureau of Investigation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Alton Man Sentenced for Firearm OffenseRead the Press Release
Previous Felony Conviction for First Degree Murder
Follow @SDILNewsShannon L. Musgraves, 27, of Alton, Illinois, was sentenced in federal district court on November 10, 2014, to 46 months in prison, to be followed by two years supervised release, a $100 special assessment, and a $375 fine, for unlawful possession of a firearm by a previously convicted felon, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Court proceedings revealed that on March 11, 2014, Musgraves was involved in a hit and run accident. The struck driver pursued Musgraves and reported the traffic crash to the police. The driver also provided an address in Alton, Illinois, where Musgraves could be found. Upon arriving at the address, officers observed that the reported vehicle was still hot to the touch and that the driver’s side mirror had markings of a collision. Officers also noticed a handgun in plain view on the rear seat of vehicle.
After answering the door and allowing officers to enter the residence, Musgraves gave consent for the vehicle to be searched. Officers then found a handgun under the driver’s seat. Musgraves subsequently admitted that the gun belonged to him.
This investigation was conducted by the Alton Police Department and prosecuted by Special Assistant United States Attorney Jonathan S. Drucker.
Alleged Leader of the Lorenzana Drug Trafficking Organization Extradited to the United StatesRead the Press Release
An alleged leader of an international drug trafficking organization based in Guatemala was extradited to the United States today to face international narcotics trafficking charges in the District of Columbia, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.
Waldemar Lorenzana-Cordon, 49, was arrested in Guatemala on Sept. 13, 2013, after being indicted for conspiracy to import cocaine into the United States, and has been detained since that time pending extradition. He arrived in the United States yesterday and was arraigned today before U.S. Magistrate Judge Alan Kay of the District of Columbia.
According to allegations contained in the indictment, Lorenzana-Cordon is a leader of an international drug trafficking organization that includes his father and several additional family members. Between 1996 and 2012, the organization allegedly received and stored multi-ton quantities of cocaine from Colombia for later importation into Mexico and the United States.
These cocaine shipments, worth millions of dollars, were allegedly transported to El Salvador on “go-fast” boats, and then smuggled into Guatemala by land and air. The cocaine was then inventoried and stored for later export to Mexico and eventually the United States.
On April 27, 2010, the Department of Treasury’s Office of Foreign Asset Control designated Lorenzana-Cordon as a Specially Designated Narcotics Trafficker pursuant to the Foreign Narcotics Kingpin Designation Act due to his significant role in international narcotics trafficking and his ties to the Sinaloa Cartel.
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Lorenzana-Cordon’s father, Waldemar Lorenzana-Lima, was charged in the same indictment and pleaded guilty on Aug. 18, 2014, to conspiracy to import over 450 kilograms of cocaine into the United States.
The investigation was led by the DEA’s 959/Bilateral Investigations Unit and Guatemala City Country Office, and was part of the Organized Crime Drug Enforcement Task Force. The case is being prosecuted by the Criminal Division’s Narcotic and Dangerous Drug Section. The Criminal Division’s Office of International Affairs provided significant assistance in the extradition. The department appreciates the assistance provided by the government of Guatemala.
Aisin Seiki Co. Ltd. Agrees to Plead Guilty to Customer Allocation on Automobile Parts Installed in U.S. CarsRead the Press Release
Aisin Seiki Co. Ltd., an automotive parts manufacturer based in Kariya, Japan, has agreed to plead guilty and to pay a $35.8 million criminal fine for its role in a conspiracy to allocate customers of variable valve timing (VVT) devices sold to automobile manufacturers in the United States and elsewhere, the Department of Justice announced today.
According to a one-count felony charge filed today in U.S. District Court for the Southern District of Indiana in Indianapolis, Aisin conspired to allocate customers of VVT devices sold to various automobile manufacturers, including General Motors Company, Nissan Motor Company Ltd., Volvo Car Corporation and BMW AG, in the United States and elsewhere. In addition to the criminal fine, Aisin has agreed to cooperate in the department’s ongoing investigation. The plea agreement is subject to court approval.
“Today’s charge continues the Antitrust Division’s ongoing campaign to hold automobile part suppliers accountable for their illegal collusive conduct,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “The division continues to vigorously prosecute companies and individuals that seek to maximize their profits through illegal, anticompetitive means.”
The department said that Aisin and its co-conspirators held meetings and conversations to discuss and agree upon the customers to whom each would sell VVT devices, and the bids and price quotations each would submit for VVT devices. Aisin’s involvement in the conspiracy lasted from as early as September 2000 until at least February 2010.
VVT devices are installed in automobile engines and regulate the timing, extent, and duration of the opening of the engine’s intake and exhaust valves, thereby increasing fuel economy and engine performance.
Including Aisin, 31 companies and 44 individuals have been charged in the Justice Department’s ongoing investigation into the automotive parts industry. All 31 companies have either pleaded guilty or have agreed to plead guilty and have agreed to pay more than $2.4 billion in criminal fines. Of the 44 individuals, 26 have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.
Aisin is charged with allocating customers in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s Chicago Office and the FBI’s Indianapolis Field Office and Bloomington Resident Agency, with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1–888–647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Indianapolis Field Office at 317-595-4000, or the FBI’s Bloomington Resident Agency at 812-332-9275.
Aisin Seiki Information
Abduction Suspect IndictedRead the Press Release
PHILADELPHIA - Delvin Barnes, 37, of Charles City, Virginia, was charged today by indictment with kidnapping, announced United States Attorney Zane David Memeger.
If convicted the defendant faces a maximum possible sentence of life imprisonment.
The case was investigated by the FBI, the Philadelphia Police Department, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the U.S. Marshal’s Service. It is being prosecuted by Assistant United States Attorney Jeanine Linehan.
Click here to view the indictment.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-852527 Defendants Indicted for Drug-trafficking, Prostitution Conspiracies, Illegal FirearmsRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that 15 Columbia, Mo., residents are among 27 defendants who have been indicted by a federal grand jury for their roles in a large-scale conspiracy to distribute cocaine and crack cocaine in Boone County, Mo., and a conspiracy to promote prostitution in Boone County.
“This federal indictment dismantles a major drug-trafficking organization in Columbia,” Dickinson said. “Today’s operation not only disrupts the flow of cocaine and crack cocaine in the Columbia area, but reduces the level of violence, the number of guns on the street and the prevalence of other crimes associated with illegal drugs. Thanks to the diligent work of our law enforcement partners, Columbia’s neighborhoods and all of the communities involved now will be safer.”
“This case is an example of how ATF is working with our law enforcement partners to target the worst of the worst violent criminals in Columbia and throughout Central Missouri, to bring about safer communities for the citizens that live and work here,” said Gregory Gant, Special Agent in Charge of the Kansas City Field Division, ATF. “We will continue to investigate violent armed criminals who tear at the fabric of our neighborhoods and cities.”
Kenneth Scott, Sr., 46, Dion Antonio Vaughn, 38, and James Thomas Pittman, 41, all of Fulton, Mo.; Malcolm Desean Redmon, 31, Marlon Dion Jordan, 34, Marcus Dion Jordan, 39, Carl Douglass Simon, 27, Rodney Wayne Arnold, 30, Teka Lynn Hayes, 50, Courtney Lashea Thornton, 33, Gregory Vincent Dawson, 38, William Alexander Hill, 29, Travis Dewayne Dennis, 32, Devon Cortez Hopkins, 28, Paydrom Lee Summers, 39, Michael Earl Hunt, Jr., 33, Christin Sledd, 24, and Ryan Montez Kee, 24, all of Columbia, Mo.; Vershawn Dejuan Edwards, 22, of Jefferson City, Mo.; Tyrone Dewayne Jackson, 35, of Boonville, Mo.; Ronald Elwood Brown, 40, of Sturgeon, Mo.; Ronnie Lee Gillette, 53, of Kingdom City, Mo.; Ryan D. Wright, 38, and Courtnie Lea Goins, 25, both of Springfield, Mo.; Marlon Laron Smith, 34, of Murphysboro, Ill.; and Guillermo Ortiz Perez, 24, address unknown, were charged in a 56-count indictment returned under seal by a federal grand jury in Jefferson City on Nov. 5, 2014. That indictment was unsealed and made public today following the arrests of several defendants.
The indictment replaces a federal criminal complaint that was filed against Scott on Aug. 6, 2014. Scott has been in federal custody since his arrest on Aug. 5, 2014. Federal, state and local law enforcement agencies arrested a number of defendants in a law enforcement sweep today. Seven defendants are already in state or federal custody. The government will seek to detain nine of the defendants in federal custody without bond.
Information Leak
According to court documents, Sledd, a former employee of the Boone County Clerk’s Office, assisted in leaking information to targets of the investigation regarding at least one search warrant.
“When this came to light,” Dickinson said, “Circuit Clerk Christy Blakemore cooperated fully with the federal investigators to identify the lone employee involved, to contain any damage and immediately put new procedures in place to protect the integrity of the court system.”
Sledd had access to sensitive information as a part of her job, according to a detention motion filed today. She learned of an impending search warrant on Aug. 1, 2014, according to the government’s motion, and passed the information to Kee (the father of her child). Kee then passed on the information to other criminal conspirators, including Redmon. If the leak had not been detected, the motion says, law enforcement officers and/or others could have been injured or killed executing the search warrant.
Sledd, Kee and Redmon are charged together in the federal indictment with two counts of using a telephone to facilitate the commission of the drug-trafficking conspiracy.
Drug-Trafficking Conspiracy
The federal indictment alleges that all of the defendants, with the exception of Goins, participated in a conspiracy to distribute cocaine and crack cocaine in Boone County, Mo., from Jan. 2 to Aug. 6, 2014. According to the indictment, the conduct of Scott, Redmon, Perez, Jordan, Hayes and Vaughn as member of the conspiracy involved at least five kilograms of cocaine. The indictment alleges that the conduct of other co-defendants in the conspiracy involved various lesser amounts of cocaine and crack cocaine.
In addition to the drug-trafficking conspiracy, the indictment also charges various defendants in 24 counts of possessing crack cocaine with the intent to distribute, five counts of possessing cocaine with the intent to distribute, two counts of maintaining premises at two Columbia locations for the purpose of unlawfully storing cocaine and crack cocaine and 19 counts of using a telephone to facilitate the drug-trafficking conspiracy.
Prostitution Conspiracy
Redmon, Wright and Goins are charged with participating in a conspiracy to use telephones to promote an unlawful activity – prostitution – in Boone County from June to August 2014.
According to the indictment, Redmon established a separate prostitution business, in addition to his drug-trafficking business, in order to diversify his unlawful efforts. Wright allegedly taught Redmon how to conduct the prostitution business and assisted him in several ways, including lending him the services of Goins. In return for his help, the indictment says, Redmon sold Wright cocaine and taught him how to be successful in the illegal distribution of narcotics.
Redmon allegedly supplied Goins with a room from which to work as a prostitute and allegedly provided her with protection and cocaine while she was working for him. Conspirators used telephones to communicate between themselves about the prostitution business, including assignments, payment and customers. Phones were also used to attempt to recruit additional persons to serve as prostitutes.
In addition to the conspiracy, Redmon and Wright are charged together in one count of using telephones to promote prostitution. Redmon and Goins are also charged together in one count of using telephones to promote prostitution.
Firearms Offenses
Scott and Jordan are each charged with being a felon in possession of firearms. Under federal law, it is illegal for anyone who has been convicted of a felony to possess any firearm or ammunition.
Scott allegedly possessed a Smith & Wesson .40-caliber pistol with a serial number that had been ground off, a Kel-Tec .380-caliber pistol and a Phoneix Arms .22-caliber pistol on Aug. 5, 2014. Scott has prior felony convictions for delivery of a controlled substance, drug trafficking and possessing a controlled substance in a correctional facility.
Jordan allegedly possessed a Jennings .22-caliber pistol and a Phoenix Arms Company .25-caliber pistol on Aug. 5, 2014. Jordan has prior felony convictions for burglary, drug trafficking, possession of a controlled substance and illegally possessing a firearm.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Anthony P. Gonzalez. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, IRS-Criminal Investigation, the Columbia, Mo., Police Department, the Boone County, Mo., Sheriff’s Department, the U.S. Marshal’s Service, MUSTANG (the Mid-Missouri Unified Strike Team and Narcotics Group), the Drug Enforcement Administration and the Boone County, Mo., Prosecuting Attorney’s Office.
Wednesday 12 November 2014
Westover, WV Man Sentenced for Heroin DistributionRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – Charles E. Jefferson, 26, of Westover, West Virginia, was sentenced to 37 months in prison for selling heroin, United States Attorney William J. Ihlenfeld, II, announced today.
Jefferson pled guilty in February 2014 to one count of “Distribution of Heroin” after a West Virginia State Police investigation.
Assistant U.S. Attorney Zelda Wesley prosecuted the case on behalf of the government.
U.S. District Judge Irene S. Keeley presided.
Washington County Man Pleads Guilty to Conspiracy ChargeRead the Press Release
PITTSBURGH - A Washington County resident pleaded guilty in federal court to a charge of conspiracy to defraud the United States, United States Attorney David J. Hickton announced today.
Watson L. Maloy, Jr., 74, of Finleyville, Pa. pleaded guilty to one count before Chief United States District Judge Joy Flowers Conti.
In connection with the guilty plea, the court was advised that from in and around January 2012 and continuing thereafter to in and around February 2014, Maloy, Jr. and persons and entities known and unknown to the United States Attorney, conspired to defraud the United States.
Judge Conti scheduled sentencing for March 6, 2015, at 3:30 p.m. The law provides for a total sentence of not more than five years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorneys Robert S. Cessar and Jonathan B. Ortiz are prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the United States Department of Transportation, Officer of Inspector General and the Pennsylvania Turnpike Commission conducted the investigation that led to the prosecution of Watson L. Maloy, Jr.
U.S. Coast Guard It Contractor Admits Stealing Personal Information from ComputersRead the Press Release
Follow @USAO_CT
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that LARRY MATHEWS, 34, of Pawcatuck, Conn., waived his right to indictment and pleaded guilty today before U.S. Magistrate Judge Donna F. Martinez in Hartford to stealing personal information from hundreds of computers and personal electronic devices that had been brought to him for repair.
According to court documents and statements made in court, MATHEWS was the proprietor of a computer repair business in Pawcatuck. Beginning in 2008, MATHEWS was also employed as a civilian contract employee for the U.S. Coast Guard as a computer “help desk” technician. On more than 250 occasions, for his own use, MATHEWS copied personal information and files from computers and personal electronic devices that had been brought to him for repair. The personal information and files included account names and passwords, and sexually-explicit photographs and videos.
The investigation has revealed that MATHEWS shared the stolen personal information with only one other individual, who reported the criminal activity to law enforcement in 2013.
MATHEWS pleaded guilty to one count of computer intrusion in furtherance of a tortious invasion of privacy. He is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on February 4, 2015, at which time he faces a maximum term of imprisonment of five years and a fine of up to $250,000.
This case is being investigated by the U.S. Coast Guard Investigative Service and is being prosecuted by Assistant U.S. Attorneys Edward Chang and Carolyn Ikari.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]U.S. Attorney Hickton Receives A. Philip Randolph AwardRead the Press Release
PITTSBURGH – United Steelworkers International President Leo W. Gerard presents US Attorney David J. Hickton (WDPA) with the A. Philip Randolph Award for his support of the APR Institute’s “Breaking the Chains of Poverty” Program on October 30, at the Westin Hotel in Pittsburgh. The BTCP Program gives underserved individuals the opportunity to work in careers that are a new wave of the future – green jobs. APRI partners with the United Steelworkers, the Housing Authority of the University of Pittsburgh, GTECH Strategies and Kappa Alpha Psi Fraternity, Inc., to recruit and train men and women in green jobs and prepare them for employment in the building trades. Since the program’s inception in 2009, 184 Pittsburgh residents have competed the training and over 100 have received job placement.
Two Brevard County Residents Plead Guilty to $18 Million Fraud SchemeRead the Press Release
Orlando, FL – United States Attorney A. Lee Bentley, III announces that Donald Ray Babb (58, Merritt Island) and Ralph Victor Ruth (61, Melbourne) have pleaded guilty to an Information charging them with conspiracy to commit wire fraud. Each faces a maximum penalty of 20 years in federal prison. A sentencing date has not yet been set. The Information also notifies Babb and Ruth that the United States is seeking a money judgment in the amount of $18,731,125.58 and the forfeiture of their interest in the following properties: 422 Waterside Drive, Merritt Island, FL; 3502 Tipperary Drive, Merritt Island, FL; 3661 Turtle Mound Road, Melbourne, FL; 312 Sycamore Circle, Warne, NC; and 3498 NC Highway 60, Murphy, NC.
According to court documents, between June 2006 and December 2013, Babb and Ruth orchestrated a scheme in Brevard County that defrauded approximately 181 investors out of $18 million. Doing business as Southeast Mutual Insurance and Investment, LLC, Capstar Industries, LLC, and First Merchant Capital, LLC, Babb and Ruth falsely represented their businesses as licensed financial institutions whose deposits were insured by the FDIC. Using these entities, they advertised risk-free Certificates of Deposit (CD) investment opportunities that yielded high rates of return. However, neither Babb nor Ruth ever purchased a CD for an investor. Instead, they used the money to make payments to earlier investors in the scheme, and to purchase real estate and other luxury items for themselves.
This case was investigated by Federal Bureau of Investigation, the Internal Revenue Service - Criminal Investigation, the Florida Office of Financial Regulation, and the Brevard County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney David Haas.
Third Defendant Pleads Guilty to Customer Impersonation Bank Fraud SchemeRead the Press Release
NORFOLK, Va. – Catya J. Craig, 30, of New York, N.Y., pled guilty today to conspiracy to commit bank fraud.
Dana J. Boente, United States Attorney for the Eastern District of Virginia made the announcement after the plea was accepted by U. S. District Judge Arenda L. Wright Allen.
Craig was charged in a superseding criminal indictment returned on July 15, 2014, with one count of conspiracy to commit bank fraud, one count of bank fraud, one count of aggravated identity theft, and one count of interstate transportation of property converted or taken by fraud.
Craig is the third defendant to plead guilty in a scheme that victimized Wells Fargo and other financial institutions through an extensive mortgage office burglary and bank customer impersonation scheme. She faces a maximum penalty of thirty (30) years in prison and a $1,000,000 fine when she is sentenced on February 27, 2014, in Norfolk.According to a statement of facts filed with her plea agreement, Craig was part of a group of individuals that conspired to steal identity and financial information from Wells Fargo Mortgage offices. There were twelve Wells Fargo offices in New York, Pennsylvania, Maryland and New Jersey that were the subject of burglaries from 2012 through 2014. Over 1,800 mortgage files were stolen that contained identity and financial information. Craig, who worked for a New York bank at the time, introduced Jeffrey Washington to Alice Howard, who, traveled up and down the East Coast on some seven different trips with Howard impersonating Wells Fargo customers, opening business accounts and transferring balances from true accounts in the newly opened accounts. They impersonated various bank customers, using counterfeit identifications created from the stolen personal information, and opened business accounts in fake business names in order to drain legitimate customer accounts at various banks of hundreds of thousands of dollars. In August 2013, conspirator Alice Howard was arrested in the course of impersonating a bank customer at a Wells Fargo bank branch in Ashland, Virginia. Howard was charged with the same scheme and was sentenced to sixty-five (65) months imprisonment in April 2014. Following Howard’s arrest, Washington continued his involvement in obtaining mortgage files through the burglaries of other mortgage offices. Washington pled guilty on August 28, 2014 to bank fraud and aggravated identity theft and will sentenced on December 5, 2014.
This case was investigated by the United States Secret Service, the United States Postal Inspection Service and the Newport News Police Department. Assistant U. S. Attorney Brian Samuels 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 at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
Supervisors at Seafood Processing Facility Sentenced to Jail for Clean Air Act CrimeRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that James Hampton, 45, the former Assistant Chief Engineer for Westward Seafoods, Inc. (Westward), and Raul Morales, 53, the former Powerhouse Supervisor, were each sentenced today in U.S. District Court, in Anchorage, by Chief U.S. District Court Judge Ralph R. Beistline, to serve time in jail for falsifying data to cover up the fact that they intentionally failed to operate air pollution controls required under the Clean Air Act at the Westward seafood processing facility in Dutch Harbor.
James Hampton was sentenced to just over two months in prison (70 days), and Raul Morales was sentenced to one and one-half months in prison (45 days). Both defendants were ordered to pay a $1,000 fine and serve a one-year term of supervision upon release from prison. Judge Beistline noted that both defendants knew what they were doing was against the law, but they did it anyway, and that the sentences imposed should deter others from committing similar crimes. According to Karla Perrin, EPA Regional Criminal Enforcement Counsel, who prosecuted the case in conjunction with the United States Attorney’s Office, both defendants were allowed to return to their homes out-of-state pending being designated to a prison facility by the Bureau of Prisons.
Westward has operated a sizeable seafood processing facility in Dutch Harbor since 1999, processing approximately 250 million pounds of seafood per year. Westward is a wholly owned subsidiary of Maruha-Nichiro Holdings, Inc., a Japanese-based company, and maintains its headquarters in Seattle, Washington. The Dutch Harbor facility generates its own electricity with three diesel-fueled generators contained in its powerhouse building. Air emissions from these generators are vented through a single combined smokestack, and these emissions are regulated by a Title V Permit under the Clean Air Act. The permit was issued by the Alaska Department of Environmental Conservation (ADEC), under delegated authority from the U.S. Environmental Protection Agency (EPA).
Under the terms of its permit, Westward was required to install and use pollution control equipment to decrease the amount of nitrogen dioxide (NOx) being emitted from the powerhouse smokestack. To meet this requirement, Westward installed a Combustion Air Saturation System (CASS) for each generator unit, which uses water to saturate the air and reduce emissions from each generator. The permit also required Westward to operate each generator with a “dedicated fuel and water flow meter” and to record the fuel and water consumption “at a consistent time once per day.”
Beginning in 2009, and continuing until August 2011, Westward failed to operate the CASS pollution control equipment. Raul Morales discussed with James Hampton that he and the powerhouse staff had stopped operating the CASS. Thereafter, Hampton not only allowed this permit violation to continue, but he used his position to actively participate in a cover-up designed to make it appear that the CASS was in fact being used as required by law. Morales, along with Bryan Beigh, a powerhouse operator, falsified data collection forms called “Engine Round” forms on a daily basis when it came to recording information about the operation of the CASS. The false information not only included indicating that the CASS was operating “OK” when it was off, but also included generating false water meter flow readings. Because the CASS was not being operated, no water was flowing through the system and therefore the actual water flow meter readings would have revealed no water use. Morales maintained a running calculation of what the flow meters should have indicated if the CASS had been properly operated, and Beigh went so far as to develop a system of removing the water flow meters and manually spinning them using a drill and a magnet to make it appear that water had been flowing through the system.
The false information from the Engine Rounds was then included in the End of Day (EOD) reports and the Environmental Report Sheets (ERS) maintained by Westward. This false information was in turn reported to ADEC and EPA. On several occasions, Westward’s environmental compliance manager noticed a discrepancy and had questions about the water usage data recorded for the CASS and contacted Hampton for answers. In response, Hampton either changed the numbers or requested that Morales provide new numbers, knowing that both the previous numbers and the new numbers he provided were false. Hampton then submitted the new, but still false, water usage numbers to the environmental compliance manager.
Additionally, in April 2011, Hampton escorted an EPA inspector through the powerhouse at Westward during an inspection. Westward had advance notice of the inspection and the powerhouse supervisor and operators began operating the CASS in preparation for the inspection to make it appear that they were in fact operating the CASS routinely as required by the permit. During the inspection, Hampton guided the EPA inspector around the powerhouse and to view the daily logs which indicated that the CASS had been regularly operating, when Hampton knew that it was not being operated and the logs were false.
In 2010, Westward entered into a civil consent decree with the United States and agreed to pay a civil penalty following prior allegations that the company had, among other things, violated emissions limits under the Clean Air Act. The consent decree, filed in United States v. Westward, 3:10-cv-00073-JWS, required Westward to reduce its NOx emissions by properly operating pollution prevention equipment. Hampton and Morales were aware of the consent decree.
While the EPA did not receive any reports of harm to human beings as a result of the emissions at Westward during this period of time, NOx can cause airway inflammation in otherwise healthy people and can cause or worsen symptoms of asthma, bronchitis, and other respiratory diseases.
Bryan Beigh previously pled guilty to charges that he tampered with the meters used to monitor the operation of the CASS pollution control equipment, and he will be sentenced by Chief Judge Beistline on November 25th.
“All citizens are victims when pollution control laws are violated. Westward has been operating under a Clean Air Act permit since 2003 requiring it to reduce its NOx emissions, and it was put on further notice of the need to operate pollution control equipment when it paid penalties and entered into a consent decree in 2010,” said Karen Loeffler, U.S. Attorney. “Mr. Hampton and Mr. Morales violated the law and undermined the integrity of the self-reporting system that we all rely upon to protect human health and the environment. These two defendants were not only directly responsible for the decision not to operate the required pollution control equipment, which it appears they did largely for their own convenience, but also for the active steps they took to falsify data and cover up what they knew was wrong.”
“By failing to operate required controls, falsifying documents to cover their tracks and then misleading an EPA inspector at the facility, these defendants ‘went the extra mile’ to break the law,” said Tyler Amon, Special Agent-in-Charge of EPA Criminal Investigation Division in the Pacific Northwest and Alaska. “When they turned off the pollution controls for two years, emissions from this major pollution source increased, potentially putting workers or anyone nearby at risk for increased breathing problems.”
This case was investigated by the U.S. Environmental Protection Agency Criminal Investigation Division.Strong Sentences Handed Down by Alabama Court in Historic Dog Fighting CaseRead the Press Release
Montgomery, Alabama - The United States District Court for the Middle District of Alabama concluded sentencing today for eight individuals arrested during the second largest dog fighting raid in U.S. history in August 2013. The case was led by the United States Attorney’s Office and the Federal Bureau of Investigation, who requested assistance from the ASPCA® (American Society for the Prevention of Cruelty to Animals®) and The Humane Society of the United States in the removal, transport, sheltering, medical and daily care of the animals seized during the raid. Sentences ranged from six months to eight years—which is the longest prison term ever handed down in a federal dog fighting case.
Sentenced defendants:
- Donnie Anderson, 50, of Auburn, Alabama, received an eight-year sentence after pleading guilty to conspiracy, sponsoring dog fights, possessing a fighting dog and operating an illegal gambling business;
- Demontt Allen, 38, of Houston, Texas, received five years in prison after pleading guilty to conspiracy and admitting participation in high-stakes dog fights;
- Michael Martin, 56, of Auburn, Alabama, received a five-year sentence after pleading guilty to conspiracy and being a felon in possession of firearms;
- Irkis Forrest, 33, of Theodore, Alabama, received a three-year sentence after pleading guilty to conspiracy;
- William Antone Edwards, 43, of Brantley, Ala. received one year and one day in prison after pleading guilty to conspiracy;
- Sandy Brown, 48, of Brownsville, Alabama, received six months in prison for sponsoring a dog fight;
- Edward Duckworth, 39, of Decatur, Ga., received 14 months in prison and two years of supervised release after pleading guilty to conspiracy; and
- Jennifer McDonald, 36, of Collins, Miss., received two months in prison and two years of supervised release after pleading guilty to conspiracy.
U.S. District Judge Keith Watkins also ordered that after their release from prison, each defendant serve a two or three-year term of supervised release. While on supervised release, the defendants are prohibited from possessing dogs. Further, a restitution hearing will be scheduled in the future where the defendants may be ordered to pay restitution to the ASPCA and The HSUS for the cost of caring for the seized dogs. Some defendants will be required to attend a drug program due to the large amounts of drugs involved with this case.
“These dogs lived in deplorable conditions that constituted extraordinary cruelty,” stated U.S. Attorney George L. Beck, Jr. “They were made to fight and if they lost, they were killed. In addition to the brutality experienced by the dogs, these events attracted drugs dealers and illegal gambling. It was not uncommon for large amounts of cash, often between twenty and two-hundred thousand dollars, to change hands. The prospect of huge profits made these fights even more popular and provided a venue for other criminal activity. I hope that these sentences demonstrate the seriousness of this crime and will deter others from committing these atrocities.”
Throughout the hearing, Judge Watkins commented on the extreme cruelty committed both due to dog fighting and the conditions in which these dogs were forced to live. Judge Watkins further reiterated that the federal sentencing guidelines for dog fighting are wholly inadequate to address the seriousness of the crime. He estimated that the defendants had injured or killed between 420 to 640 dogs in the course of this dog fighting operation. Also noted was the amount of drugs, weapons and violence intertwined with dog fighting.
“This is truly a landmark case for the animal welfare community,” said Tim Rickey, vice president of ASPCA Field Investigations and Response, who testified at the hearings. “We hope this case serves as a precedent for future dog fighting cases and sends a message to dog fighters everywhere that this crime will be prosecuted to the fullest extent of the law. We are grateful to Assistant U.S. Attorney Clark Morris of the Office of U.S. Attorney George L. Beck for her determination in seeking justice for the hundreds of dogs tortured at the hands of their owners.”
“Through his closing statements and the sentences he has handed down, U.S. District Judge Keith Watkins is making a strong statement,” said Chris Schindler, manager of animal fighting investigations for the HSUS, who testified at the hearings. “The Humane Society of the United States wants to echo that statement loud and clear: dogfighting is a serious crime, it will not be tolerated, and there will be consequences if you chose to partake. We are proud to have been involved in this case from the start, and we owe our immense gratitude to the U.S. Attorney’s Office, the FBI, and the Auburn Police Department for their unwavering dedication to seeing justice served for more than 400 innocent dogs.”
On Aug. 23, 2013, The HSUS and ASPCA assisted the United States Attorney’s Office and FBI in seizing hundreds of dogs in Alabama, Mississippi and Georgia. Federal and local officials also seized firearms and drugs, as well as more than $500,000 in cash from dog fighting gambling activities. The ASPCA and the HSUS assisted authorities with collecting forensic evidence and testified to the gruesome cruelty committed. Many of the dogs seized during this case have finally moved on to the second chapters of their lives and were placed with various rescue groups across the country to be made available for adoption.
Dog fighting is a felony in all 50 states and the District of Columbia. Earlier this year, the Farm Bill was signed by President Obama, making it a federal offense to attend an organized animal fight and imposing additional penalties for bringing a minor to a fight. The HSUS and ASPCA advocate strengthening federal and state animal fighting statutes, and regularly assist local, state and federal authorities on dog fighting investigations and raids across the country.
The case was investigated by the Auburn Police Division and the Federal Bureau of Investigation, with assistance from the Alabama Alcoholic Beverage Control Board; the Coffee County Sheriff’s Office; Alabama State Troopers; the Lee County District Attorney’s Office; the Alabama Department of Public Safety; Bainbridge, Georgia Department of Public Safety; Georgia Bureau of Investigation, Echols County Sheriff’s Office, the United States Marshals Service; the Lee County Sheriff’s Office; the Houston County Sheriff’s Office; the Opelika Police Department; the Georgia Highway Patrol; the Georgia Bureau of Investigation; the Mississippi Bureau of Investigation; the Pensacola, Florida and Columbus, Georgia offices of the Drug Enforcement Administration; and Taylor Crossing Animal Hospital. Assistant United States Attorney Clark Morris prosecuted the case.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Stockton Man Pleads Guilty to Dealing Guns Without A LicenseRead the Press Release
SACRAMENTO, Calif. —Johnny Torres, 22, of Stockton, pleaded guilty today to dealing firearms without a license, United States Attorney Benjamin B. Wagner announced.
According to court documents, Torres sold five firearms to an undercover agent at a house in Stockton. On January 15, 2014, Torres sold three firearms to the undercover agent for $1,200: a .22-caliber Ruger Mark 1 pistol, a 9 mm Hi-Point pistol, and a 9 mm KEL-TEC P11 pistol. On February 20, 2014, Torres sold the undercover agent the following firearms for $550: a Mossberg 500 12-gauge shotgun and a short-barreled Ruger 10/22 rifle. Torres never had a license to sell firearms.
This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Christiaan Highsmith is prosecuting the case.
Torres currently is out of custody. Co-defendants, Donovan Torres, Melissa Torres, and Sally Evans are also out of custody pending trial. Co-defendant Jorge Magana is in custody pending trial.
Torres is scheduled to be sentenced by United States District Judge Morrison C. England Jr. on February 5, 2015. Torres faces a maximum statutory penalty of five years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Steelton Man Sentenced for Federal Firearm ViolationsRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that the Honorable William W. Caldwell sentenced Donnell Thomas, 27, of Steelton, Pennsylvania, to serve 87 months in prison. Thomas had previously pleaded guilty to Possession of a Firearm by a Convicted Felon and Possession with Intent to Distribute a Controlled Substance.
According to United States Attorney Peter Smith, the charges against Thomas are a result of allegations that in February 2013, Thomas attempted to ram a vehicle being driven by uniformed officers from the Harrisburg Police Bureau. He then fled from those officers but was ultimately apprehended after discarding a firearm with an obliterated serial number from the waistband of his pants. Upon his arrest, bags containing a controlled substance were seized from his person and his vehicle.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Harrisburg Police Bureau and was being prosecuted by Assistant United States Attorney Meredith A. Taylor as part of the on-going cooperative effort by federal, county and Harrisburg law enforcement agencies to fight violent crime in the city.
St. Johns County Man Sentenced to 105 Years in Federal PrisonRead the Press Release
Jacksonville, Florida – United States District Judge Marcia Morales Howard has sentenced Lucas Michael Chansler (31, St. Johns) to 105 years in federal prison for engaging in an extortion scheme to produce child pornography. On August 13, 2014, Chansler pleaded guilty to nine counts of producing child pornography.
According to court documents, from 2007 and continuing until January 2010, Chansler transmitted threatening communications to hundreds of girls over the Internet. He transmitted these threats with the intent to extort photographs and webcam videos showing the victims exposing themselves and engaging in sexually explicit conduct. Chansler pretended to be a friend, acquaintance, or admirer of the victims on various social networking websites.
After gaining some measure of trust from a particular child, Chansler would invite her to engage in a live video chat and later would ask her to expose herself. Unbeknownst to the child, he was recording the video session. Chansler often enticed his victims to expose themselves by showing a streaming video of a minor male exposing himself or engaging in masturbation. If a victim did expose herself, he recorded it and then later sent it to her over the Internet. Chansler would then demand additional and more graphic images or webcam videos. He would inform the child that if she did not comply, he would post the images and videos online, or send them to her family and friends.
Using information received from the parents of one victim and working with the National Center for Missing and Exploited Children (NCMEC), agents were able to identify Chansler and locate his residence. A federal search warrant was executed at the residence on January 8, 2010.
During an interview, Chansler stated that that he used social networking sites to meet girls who ranged in age from 13 to 18. He stated that he targeted underage girls because adult women were “too smart” to fall for his scheme.
Forensic analyses of Chansler's computer media revealed hundreds of folders labeled with the name of each child victim. These folders contained personal information specific to the victims, as well as related chat logs and videos or digital photos. Many of the chat logs contained the threats Chansler had made to the children. In several of the videos, the victims are seen crying and pleading with Chansler. In total, he had approximately 80,000 images and videos in his possession.
According to court testimony, Chansler targeted 350 child victims in 26 different states throughout the U.S., three Canadian provinces, and the United Kingdom, 106 of which have been positively identified. According to NCMEC, in terms of number of victims, this case is the largest “sextortion” case prosecuted to date in the United States.
This case was investigated by the Federal Bureau of Investigation, the National Center for Missing and Exploited Children, the Florida Attorney General's Office, the St. Johns County Sheriff's Office, and numerous other agencies working in Internet Crimes Against Children (“ICAC”) task forces across the United States and Canada. It was prosecuted by Assistant United States Attorney D. Rodney Brown.
“Child predators, such as Chansler, are using increasingly devious techniques to lure and exploit innocent children,” said U.S. Attorney A. Lee Bentley, III. “Our Office will continue to work with law enforcement to investigate and prosecute these cases. Protecting vulnerable victims, such as children, is a top priority of our Office. For years, we have been at the forefront in the country in prosecuting federal crimes against children.”
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.
Springfield Man Arrested for Impersonating U.S. MarshalRead the Press Release
BOSTON – A Springfield man appeared in federal court this afternoon on a charge of impersonating a Deputy United States Marshal.
Dennis Wilhite, 49, was arrested on Nov. 10, 2014, and appeared in U.S. District Court today before Magistrate Judge Judith G. Dein. It is alleged in a criminal complaint that Wilhite falsely represented himself as a Deputy United States Marshal in an effort to secure the release of a friend from state custody. In posing as a U.S. Marshal, Wilhite claimed that his friend was working with law enforcement on a sex trafficking investigation involving minors, and should be released from custody to assist in that investigation. Wilhite is also alleged to have posed as a U.S. Marshal in calls made to a victim in a state criminal case filed against Whilhite’s friend.
The charging statute provides a sentence of three years in prison, one year of supervised release and a maximum $250,000 fine. 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 United States Marshal John Gibbons made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.
The details contained in the charging document are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Secret Service Investigation Leads to Counterfeiting Charges Against Pittsburgh ManRead the Press Release
PITTSBURGH - A Pittsburgh resident has been indicted by a federal grand jury on charges of conspiracy, making counterfeit currency and passing counterfeit money, United States Attorney David J. Hickton announced today.
The six-count indictment named Robert W. Jackson, Jr., a/k/a Flacc Rob, a/k/a Black Rob, 25.
According to indictment, in and around May 2013, Jackson and others conspired to make and pass counterfeit currency, and from on or about Jan. 14, 2014, Jan. 23, 2014, and Jan. 26, 2014, Jackson passed counterfeit money.
The law provides for a maximum total sentence of 105 years in prison, a fine of $1,500,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Shardul S. Desai is prosecuting this case on behalf of the government.
The United States Secret Service conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Saint Albans Meth Dealer to Serve Federal Prison SentenceRead the Press Release
CHARLESTON, W.Va. – A Saint Albans man who sold methamphetamine to an informant in Jefferson and Saint Albans, West Virginia on four occasions in November and December of 2012 was sentenced today to serve three years and ten months in federal prison, announced United States Attorney Booth Goodwin. Alva Osborne, 47, previously pleaded guilty in April of 2014 to distribution of methamphetamine.
This case was investigated by the Metropolitan Drug Enforcement Network Team. Assistant United States Attorneys Haley Bunn and Jennifer Rada Herrald handled the prosecution.
Ron Wilson's Wife and Brother Plead Guilty to Conspiracy to Hide AssetsRead the Press Release
Contact Person: Bill Watkins (864) 282-2100
Columbia, South Carolina ---- United States Attorney Bill Nettles stated today that Cassandra Kendall Wilson, age 66, of Woodruff, South Carolina, and Timothy L. Wilson, age 60, of Martin, Tennessee, pled guilty today in federal court in Greenville, to conspiracy to obstruct justice, a violation of Title 18, United States Code, Section 371. United States District Judge J. Michelle Childs of Greenville accepted the plea and will impose sentence after she has reviewed the presentence report which will be prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that in late 2011 and early 2012, agents with Secret Service and state law enforcement officers began to investigate Atlantic Bullion and Coin and Ronnie Gene Wilson. It was discovered that Wilson operated what is generally described as a “Ponzi scheme.” In April 2012, Wilson confessed to operating the Ponzi.
On April 27, 2012, the United States District Court—with the consent of Wilson and the Government—appointed a Federal Receiver. The Court’s Order directed the Receiver to take immediate possession of all property, assets and estates owned, controlled, used, or in the possession of Wilson.
During the course of the investigation, the Secret Service talked with Wilson on multiple occasions. On or about September 20, 2012, agents interviewed Wilson about possible hidden assets and cash. Wilson was adamant that there were no hidden assets or cash. He stated that he had turned everything over to the Government.
On November 13, 2012 the District Court ordered Wilson to pay approximately $57 million in restitution to the 798 victims of the Ponzi Scheme. He was sentenced to 235 months in prison.
In April 2014, the Government recovered approximately $164,300. This money had been hidden in an ammunition can. Ron Wilson gave this money to Timothy L. Wilson member to keep for Ron Wilson so he would have something if he was ever released from the Bureau of Prisons.
The evening before Ron Wilson was sentenced in November 2012, evidence established that Ron Wilson visited the hotel room of Timothy L. Wilson in Greenville and gave him $7000 in cash in an envelope.
In March 2014, Secret Service and the Receiver recovered another ammunition can of money ($172,859). Ron Wilson had given this canister to Cassandra K. Wilson prior to his sentencing hearing.
Mr. Nettles stated the maximum penalty Defendants can receive is a fine of $250,000 and/or imprisonment for 5 years, plus a special assessment of $100.
The case was investigated by agents of the United States Secret Service. Assistant United States Attorney Bill Watkins of the Greenville office handled the case.Rochester Woman Pleads Guilty in Sex Trafficking CaseRead the Press Release
ROCHESTER, N.Y. — U.S. Attorney William J. Hochul, Jr. announced today that Jennifer Miller, 26, of Rochester, NY, pleaded guilty to conspiracy to commit sex trafficking of a minor before U.S. District Judge Elizabeth A. Wolford. The charge carries a maximum penalty of life in prison and a fine of $250,000.
Assistant U.S. Attorney Tiffany H. Lee, who is handling the case, stated that in April 2013, Miller and another co-conspirator transported a minor to New Jersey and Pennsylvania in order for the minor to engage in commercial sex acts. The defendant used Backpage.com to post ads for the minor. Miller also transported the minor to Pennsylvania another time knowing that the minor would be engaging in commercial sex acts.
Miller was arrested in April 2014 along with Jodia Campbell and Laree Greggs. Charges are pending against defendants Campbell and Greggs. 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.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys= Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The plea is the culmination of an investigation on the part of the FBI's Task Force, which includes the Rochester Police Department, under the direction of Chief Michael Ciminelli, the Monroe County Sheriff’s Office, under the direction of Chief Patrick O’Flynn, and Special Agents of the Federal Bureau of Investigation.
Sentencing will be scheduled at a later date.Reda Overton Sentenced to Serve 18 Months in Prison for Embezzlement and Theft from A Labor UnionRead the Press Release
KNOXVILLE, Tenn. – On Nov. 10, 2014, Reda Overton, 60, of Powell, Tenn., was sentenced to serve 18 months in prison by the Honorable Thomas A. Varlan, Chief U.S. District Judge. Upon her release from prison, she will be supervised by the U.S. Probation Office for three years. Overton was also ordered to pay $206,056.71 in restitution.
Overton pleaded guilty in May 2014 to a one-count information charging her with unlawfully and willfully embezzling over $200,000 from Locomotive Engineers, a labor union.
According to the plea agreement on file with the U.S. District Court, beginning in December 2008, Overton was employed as the Executive Secretary to the General Chairman of a Locomotive Engineers’ committee. Locomotive Engineers is a labor organization which represents bargaining unit members who are employed by Norfolk Southern, a Virginia-based railway company that ships products across state lines throughout the United States. She was paid a bi-weekly salary in exchange for her secretarial and treasury duties that consisted of processing the payroll for herself and others. Acting unlawfully and willfully with the intent to defraud, in her official capacity as an employee, Overton transferred or overpaid herself over $200,000. This was union money taken from the organization’s bank accounts and deposited into Overton’s personal bank accounts. She confessed to the embezzlement to U.S. Department of Labor investigators.
Special agents with Department of Labor investigated this case. Assistant U.S. Attorney Brooklyn Sawyers represented the United States.
Real Estate Developer Sentenced to 121 Months in Prison for $50 Million Dollar Securities Fraud SchemeRead the Press Release
A commercial real estate developer and mortgage broker was sentenced to serve 121 months in prison today for his role in a $50 million securities fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California and Special Agent in Charge Douglas G. Price of the FBI’s Phoenix Division made the announcement. U.S. District Judge Cathy Ann Bencivengo of the Southern District of California imposed the sentence.
Bradley Holcom, 57, of Canby, Oregon, previously pleaded guilty to wire fraud in connection with the sale of approximately $50 million worth of promissory notes to more than 150 investors located throughout the United States.
Holcom admitted that he solicited investors to provide funds for the development of raw land for commercial and residential purposes through an investment program he called the Trust Deed Investment Program. Holcom falsely told investors who purchased notes through the program that they would receive a lien on a specific piece of property, and that the lien would be in first position. Holcom admitted, however, that he never provided investors with a lien, and instead conveyed a lesser interest that did not allow investors to directly foreclose on the property to protect their investment. In addition, he admitted that while promising investors that their purported lien would be in first position, he knew the properties were already encumbered by first position liens. Holcom also admitted that he sold the properties that were supposedly serving as the security for the promissory notes without informing investors. Despite his declining financial condition in 2008 and 2009, Holcom continued to solicit investors by misrepresenting the manner in which he would use their investments. As a result of the scheme, Holcom admitted that his conduct caused approximately $50 million in losses to investors.
In addition to the prison sentence, Holcom was ordered to pay restitution to his victims, with the final amount to be determined at a subsequent hearing.
This case was investigated by the FBI’s Phoenix Division – Yuma Resident Agency. The case is being prosecuted by Trial Attorney Henry P. Van Dyck and Deputy Chief Daniel Braun of the Criminal Division’s Fraud Section, and Assistant U.S. Attorney Mark Pletcher of the Southern District of California. The U.S. Securities and Exchange Commission also provided substantial assistance.
Readout of Attorney General Holder's Phone Call with Elected Officials from MissouriRead the Press Release
The following statement is attributable to Justice Department spokesman Brian Fallon:
“The Attorney General participated in a conference call this afternoon with federal, state and local elected officials from Missouri. The Attorney General thanked the elected officials for their work in planning the local response to the ongoing demonstrations in and around Ferguson. He said he was encouraged by reports he has received about progress being made in those planning efforts, including dialogue with coalition leaders about constructive engagement in the weeks ahead. The Attorney General stressed that going forward, it will be more important than ever that the law enforcement response to the demonstrations always seek to deescalate tensions and respect the rights of protestors. At the same time, the Attorney General said, it must be clearly communicated that any acts of violence by the demonstrators, or other attempts to provoke law enforcement, are unacceptable.
“With respect to the Department’s ongoing investigations into both the shooting of Michael Brown and the Ferguson police department generally, the Attorney General said he could not provide a specific timeline for concluding those inquiries. He did stress, however, that he had devoted significant resources to these investigations in order to ensure they are conducted in as thorough and expeditious a manner as possible.
“The Attorney General concluded by offering the Department’s continued assistance, and by urging continued and direct communication between elected officials, law enforcement, and community leaders in the days ahead to help deescalate tensions and assist with planning.”
Pine City Couple Sentenced to A Total of 70 Months in Federal Prison for Tax FraudRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of MARK ALLEN GARCIA, 60, and PATRICIA ANN MCQUARRY, 56, for conspiracy to defraud the United States by filing false individual income tax returns. On May 20, 2014, following a one-week trial, a federal jury found the two defendants guilty of all charges. United States District Court Judge Patrick J. Schiltz sentenced GARCIA to 30 months in prison and MCQUARRY to 40 months in prison. Both defendants were also ordered to pay $226,000 in restitution.
As proven at trial, beginning in 2007, GARCIA and MCQUARRY engaged in a scheme to obstruct foreclosure proceedings on their house, avoid responsibility for repaying loans, and steal money from the United States Treasury by filing false individual income tax returns. In 2007, GARCIA and MCQUARRY were several months behind on their mortgage payments and attempted to obstruct foreclosure proceedings by sending a host of frivolous documents to their bank. The documents included fake tax forms and a “Bonded Promissory Note” for $10,000,000, along with instructions that the financial institution should use the document to pay off their $266,000 mortgage and keep the remaining funds.
For tax years 2007 and 2008, both defendants filed self-prepared tax returns falsely claiming to have received hundreds of thousands of dollars in 1099-OID income and that the entire amount had been withheld and paid over to the IRS on their behalf. Although the defendants filled out their tax returns in a way that made them appear legitimate, GARCIA and MCQUARRY knew that their claims for large refunds were frivolous and were based on the fraudulent 1099-OID tax defier scheme.
Both defendants created fake 1099s showing false interest income and withholding from various financial institutions, going so far as to include the banks’ tax identification numbers on the forged documents. In total, the defendants sought more than $500,000 in false refunds. GARCIA and MCQUARRY attempted to hide the proceeds of their fraud scheme by purchasing real estate near Pine City, Minn., and then transferring the property to a private Trust called “POKE-A- BOTTOM.” The defendants also used the stolen money to purchase gold coins and a motorhome.
This case resulted from an investigation conducted by the Internal Revenue Service-Criminal Investigations. It was prosecuted by Assistant U.S. Attorneys Kimberly A. Svendsen and Timothy C. Rank.
Defendant Information:
MARK ALLEN GARCIA, 60
Pine City, Minn.
Convicted:
• Conspiracy to Defraud the United States, 1 count
• False Claims Against the United States, 2 counts
Sentenced:
• 30 months in prison
• 3 year term of supervised release
PATRICIA ANN MCQUARRY, 56
Pine City, Minn.
Convicted:
• Conspiracy to Defraud the United States, 1 count
• False Claims Against the United States, 2 counts
Sentenced:
• 40 months in prison
• 3 year term of supervised release###
Penn Hills Man Charged with Violating Federal Drug and Gun LawsRead the Press Release
PITTSBURGH – An Allegheny County resident was charged in a superseding indictment by a federal grand jury in Pittsburgh with violations of federal narcotics and firearms laws, United States Attorney David J. Hickton announced today.
The five-count superseding indictment named Montay King, 39, of Penn Hills, Pa., as the sole defendant.
According to the superseding indictment, on or about Dec. 20, 2012, King, being a convicted felon, knowingly possessed a Yugoslavian, Model 59/66, 7.62x39mm caliber rifle, a Bulgarian, Model SLR-107FR, 7.62x39mm caliber rifle, and a North American Arms, Model NAA22, .22 caliber revolver. Federal law prohibits anyone who has been convicted of a crime punishable by a term of imprisonment exceeding one year to possess a firearm. Additionally, on or about Dec. 20, 2012, King possessed with the intent to distribute a quantity of heroin, a quantity of cocaine, and a quantity of cocaine base, in the form commonly known as crack, while possessing the three firearms in furtherance of his drug trafficking crimes.
The law provides for a maximum total sentence of life in prison, a fine of $3,500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history of the defendant.
Assistant United States Attorney Charles A. Eberle is prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, Allegheny County Adult Probation, the Penn Hills Police Department and the Allegheny County Sheriff's Office Fugitive Task Force conducted the investigation leading to the superseding indictment in this case. This case is being prosecuted under Project Safe Neighborhoods, a collaborative effort by federal, state and local law enforcement agencies, prosecutors and communities to prevent, deter and prosecute gun crime.
A superseding indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Peach Springs Man Sentenced to 8 Years in Federal Prison for AssaultRead the Press Release
PHOENIX, – Having previously pleaded guilty to assault resulting in serious bodily injury, Jesus Fernando Navarro-Delgado, 20, of Peach Springs, Ariz. was sentenced on Nov. 3, 2014, by U.S. District Judge David G. Campbellto 96 months in prison, followed by three years of supervised release.
According to court documents, on April 10, 2014, Navarro-Delgado was with the minor victim at a residence located on the Hualapai Indian Reservation when he became enraged and stabbed the victim multiple times causing the victim to sustain serious and permanent injuries. The minor victim is a member of the Hualapai Indian Tribe.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Hualapai Nation Police Department. The prosecution was handled by Christina J. Reid-Moore, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-14-8089-PCT-DGC
RELEASE NUMBER: 2014-062_Navarro-DelgadoFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.Omaha Man Sentenced to Ten Years for Possessing Child PornographyRead the Press Release
United States Attorney Deborah R. Gilg announced that Jeffrey S. Leslie, 31, was sentenced in the United States District Court in Omaha, Nebraska for possession of child pornography. The Honorable Laurie Smith Camp sentenced Leslie to a ten year term of imprisonment. There is no parole in the federal system. After his release from prison Leslie will begin a 15 year term of supervised release.
Leslie was previously convicted in Douglas County, Nebraska in 2002 of Third Degree Sexual Assault, a misdemeanor. Prior to April 2012 an Internet Protocol (IP) address at Leslie’s Southwest Omaha residence was observed by law enforcement hosting videos of child pornography.
A search warrant was executed at the residence on March 19, 2013. Forensic analysis revealed over 100 images of child pornography. Leslie admitted to being the sole user of the computer. He admitted to deleting child pornography from the computer. The images included prepubescent minors engaged in sexually explicit conduct.
The case was investigated by Homeland Security Investigations (HSI). It was brought as a part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys= Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Oklahoma Man Sentenced to 15 Months for EscapeRead the Press Release
Anchorage, Alaska B U.S. Attorney Karen L. Loeffler announced today that a man from Tulsa, Oklahoma, was sentenced in federal court in Anchorage for one count of Escape.
Jerome Dwight Dale, 41, was sentenced on Wednesday, November 12, 2014, by Chief U.S. District Court Judge Ralph R. Beistline. Dale received a sentence of 15 months in prison without a period of supervised release to follow.
On August 18, 2014, Dale was serving a federal sentence of imprisonment on a prior federal conviction and confined to the Cordova Center, a halfway house located in Anchorage, Alaska. Dale was in the Cordova Center to finish his federal sentence for his conviction for Escape in Georgia and then transition to living in Anchorage with family that relocated here. On August 18, Dale was not present at the Cordova Center and had not been given permission to leave. Dale was contacted by the U.S. Marshal Service on August 22, 2014, and was taken back into custody. When Dale walked away from the Cordova Center he only had 11 days left to serve on his prior sentence.
Before imposing a sentence, Judge Beistline commented that this offense was "senseless, stupid, and consistent with your prior history."
Ms. Loeffler commended the U.S. Marshal Service for the investigation leading to the successful prosecution of Mr. Dale.Ohio Lobbyist Sentenced to 48 Months for Role in Public Corruption SchemeRead the Press Release
COLUMBUS – A former Ohio attorney and lobbyist was sentenced today for his role in a bribery and money laundering scheme involving the Ohio Treasurer’s Office.
Assistant Attorney General Leslie Caldwell of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Mark T. D’Alessandro of the Southern District of Ohio, Special Agent in Charge Kevin R. Cornelius of the FBI’s Cincinnati Division, and Ohio Attorney General Mike DeWine made the announcement.
Mohammed Noure Alo, 35, of Columbus, Ohio, appeared before U.S. District Judge Michael H. Watson of the Southern District of Ohio for sentencing today. Judge Watson sentenced Alo to 48 months in prison for honest services wire fraud and ordered he pay over $123,000 forfeited as a money judgment. A co-defendant, the former Deputy Treasurer for Ohio, Amer Ahmad, fled after his guilty plea to federal program bribery and conspiracy, and is currently in Pakistani custody pending an extradition request from the United States government.
Alo was a partner and founding member of a Columbus-based law firm and became a registered lobbyist to the State of Ohio in 2010. Court records state that from approximately January 2009 through January 2011, Alo admitted he conspired with his close personal friend Amer Ahmad, 38, of Chicago, and others to use Ahmad’s role as deputy treasurer to direct official State of Ohio broker services business to Douglas E. Hampton, 39, a securities broker from Canton, Ohio, in return for payments from Hampton. Hampton funneled bribe payments in excess of $123,000 through Alo. Ahmad and Joseph M. Chiavaroli concealed additional payments from Hampton by passing them through the accounts of a landscaping business in which Ahmad and Chiavaroli held ownership interests.
As a result of the scheme, Hampton received approximately $3.2 million in commissions for 360 trades on behalf of the Ohio Treasurer’s Office. Ahmad and his co-conspirators received in excess of $500,000 from Hampton. Alo entered a guilty plea in December 2013. Both Hampton and Chiavaroli entered guilty pleas in August 2013.
Hampton is scheduled for sentencing tomorrow at 10am. Chiavaroli is scheduled for sentencing at 10am on December 1, 2014.
The case was investigated by the FBI’s Central Ohio Public Corruption Task Force, which includes special agents from the FBI and the Ohio Bureau of Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Douglas W. Squires and Trial Attorneys Eric L. Gibson and Menaka Kalaskar of the Criminal Division’s Public Integrity Section.
Newburgh Man Sentenced to 37 Months for Tax FraudRead the Press Release
ALBANY, NEW YORK – On November 10, 2014, TOMAS BURGOS, age 45, of Newburgh, New York, was sentenced by the Honorable Gary L. Sharpe to 37 months in prison followed by three years of supervised release for filing a false claim with the Internal Revenue Service, announced United States Attorney Richard S. Hartunian and Shantelle P. Kitchen, Acting Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York Field Office. BURGOS was also ordered to pay restitution of $88,979.71. The sentence follows BURGOS’ July 7, 2014 guilty plea.
In connection with his guilty plea, BURGOS admitted that, on April 21, 2011, he submitted a fraudulent U.S. Income Tax Return for Estates and Trusts to the Internal Revenue Service. The return claimed, falsely, that the Tomas Burgos, Jr. Estate had received $900,000 in income for the 2010 tax year. In the return, BURGOS sought a refund of $300,000 from the Internal Revenue Service, based on the false claim that $300,000 of federal income tax was withheld from the $900,000 income. In fact, $300,000 of federal income tax had not been paid nor had $900,000 been received as income by the Tomas Burgos, Jr. Estate.
Special Agents with the Internal Revenue Service, Criminal Investigation Division investigated the case. The case was prosecuted by Assistant United States Attorneys Geoffrey J.L. Brown and Wayne A. Myers.
Moscow, Pennsylvania Man Sentenced for Theft of Crucifix from VA PatientRead the Press Release
The United States Attorney's Office for the Middle District of Pennsylvania, announced that Warren T. Wells, age 43, of Moscow, Pennsylvania, was sentenced by Senior U.S. District Court Judge Edwin M. Kosik today in Scranton to two years of probation, to include six months of home confinement. Wells previously pleaded guilty to a felony criminal information charging him with theft of a golden crucifix necklace from a veteran/patient of the VA Medical Center in Wilkes-Barre, Pennsylvania on December 13, 2013.
According to United States Attorney Peter Smith, Wells’s victim was admitted to the VA Medical Center as a critically ill patient; she died several hours after Wells, a nurse’s aide at the Center, stole the crucifix worn by her as a gift from her son. Wells has been dismissed from his job as a result of his conduct.
The investigation was conducted by the VA Police. The case was prosecuted by Assistant United States Attorney Todd K. Hinkley.
Montgomery Brothers Sentenced for Check Fraud SchemeRead the Press Release
Montgomery, Alabama - On November 6, 2014, Derrick Gadsden, 34 years old of Montgomery, Alabama, was sentenced to 240 months imprisonment followed by three-years of supervised release for conspiracy to commit wire fraud. Derrick Gadsen’s brother, David Gadsden, 45 years old of Montgomery, Alabama, was sentenced to 120 months imprisonment followed by three-years of supervised release for conspiracy to commit wire fraud. Both of the brothers were ordered to pay $1,000,000.00 in restitution to the victims of their scheme.
From approximately 2006 to 2013, the Gadsden brothers ran a check fraud scheme from David Gadsden’s and Derrick Gadsden’s places of business in Montgomery, Alabama. David Gadsden’s place of business was supposedly an automotive garage, and Derrick Gadsden’s was a tire shop. However, these businesses were actually the nerve center of the scheme that the Gadsdens ran. The Gadsdens or their assistants would find vulnerable people, such as those who were in dire financial straits, and lure them into the scheme with the promise of money. These people were the “runners” in the scheme. The Gadsdens would enlist the runners to open bank accounts at different financial institutions, transport them to the banks, and provide the minimum amount to open up a checking account. After the initial deposit, no further deposits were placed into these accounts. The Gadsdens would then have the runners order checks for these accounts, and have the checks sent overnight to them.
The next members of the scheme were the “buyers” who placed orders with the Gadsdens to purchase large ticket items such as trailers, shingles, plywood, washers, and dryers. These buyers wanted to pay much less than market or wholesale price for these items. Once orders were placed, the Gadsdens or their assistants would take the runners to various merchants and they would pay for the merchandise with the checks the Gadsdens had acquired even though there were insufficient funds in the account. The checks were accepted by the merchants for sale of the items, and the Gadsdens were able to leave the businesses with their purchases. They would then resell or trade the items for a profit to their fraudulent buyers.
The scheme involved approximately two-hundred bank accounts, and at least seven different financial institutions. Over one hundred victims have been identified in this scheme. In addition to Alabama, the scheme also affected the states of Florida, Mississippi, Georgia, and Louisiana.
The case was investigated by the United States Secret Service, the Montgomery Police Department, Opelika Police Department, and the Alabama Alcoholic Beverage Control Board. The case was prosecuted by Assistant United States Attorney Denise O. Simpson.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Miami-Dade Man Sentenced to 175 Months in Prison for Extortion ConspiracyRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce the sentencing of Eliezer Lazo, 41, of Miami-Dade County. U.S. District Judge Joan A. Lenard sentenced Lazo to 175 months in prison, followed by three years of supervised release. In addition, the Court ordered Lazo to pay a $17,500 fine, and to forfeit his right to $1.49 million in cash, several real properties and a vehicle.
Lazo pled guilty to one count of conspiring to commit extortion for his role in an alien smuggling operation that moved approximately 1,000 Cuban migrants from Cuba to Mexico, and then the United States. According to court documents, many of the Cuban migrants pre-paid for their illegal journey to the United States. Other migrants were Cuban baseball players who paid for the journey by entering into a contract with Lazo’s company – Estrellas del Beisbol – in which the migrants agreed to pay Lazo a share of their respective earnings from U.S. baseball teams. A third group of migrants, comprising of approximately 100 migrants, did not pre-pay for their journey and were held and restrained in Mexico. These migrants were beaten during phone calls with family members who were forced to pay $10,000 for the release of their relatives.
Mr. Ferrer commended the investigative efforts of ICE-HSI and FBI. This case is being prosecuted by Assistant U.S. Attorneys H. Ron Davidson and Evelyn Sheehan.
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.
Mexican National Convicted of Producing Unauthorized Driver’s LicenseRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA – Mexican national Jesus Ramon Garcia Campos, 57, was convicted today for his role in producing an unauthorized West Virginia driver’s license, United States Attorney William J. Ihlenfeld, II, announced today.
A U.S. Immigration and Customs Enforcement investigation revealed that Garcia Campos, also known as “Chicano,” conspired with a Department of Motor Vehicles employee to sell unauthorized identification documents to foreign nationals.
Garcia Campos, pled guilty today to one count of “Aiding and Abetting Unlawful Production of Identification Document.” He faces up to five years in prison and a fine of up to $250,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Jarod Douglas is prosecuting the case on behalf of the government.
U.S. District Gina M. Groh presided.
NOTE: This press release was on 11/20/2014 to reflect the fact that the driver's license in question was produced without authorization.
Mescalero Apache Man Pleads Guilty to Assaulting Intimate PartnerRead the Press Release
Defendant Prosecuted as Part of Federal Initiative to Address
the Epidemic Incidence of Violence Against Native WomenALBUQUERQUE – Sonny Roy Valdez, 19, a member of the Mescalero Apache Nation, entered a guilty plea today in federal court in Las Cruces, N.M., to a federal assault charge. The guilty plea was entered without the benefit of a plea agreement.
Valdez was arrested on June 5, 2014, on a criminal complaint charging him with assault resulting in serious bodily injury. According to the criminal complaint, Valdez assaulted his intimate partner, a Mescalero Apache woman, on May 27, 2014, by biting off part of her lip. The victim’s injuries required medical treatment and hospitalization. The offense occurred within the Mescalero Apache Reservation in Otero County, N.M.
Today Valdez pled guilty to a felony information charging him with assault resulting in serious bodily injury and admitted assaulting the victim.
Valdez has been in federal custody since his arrest and remains detained pending sentencing, which has yet to be scheduled. At sentencing, Valdez faces a statutory maximum penalty of ten years in prison.
This case was investigated by the Mescalero Agency of the BIA’s Office of Justice Services and is being prosecuted by Assistant U.S. Attorney Aaron O. Jordan of the U.S. Attorney’s Las Cruces Branch Office.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.Local Man Charged with Armed Robbery of Allegheny Valley Bank in GreentreeRead the Press Release
PITTSBURGH – An Allegheny County resident has been indicted by a federal grand jury in Pittsburgh on charges of bank robbery and armed bank robbery, United States Attorney David J. Hickton announced today.
The two-count indictment named Graling Arnold, 50, as the sole defendant.
According to the Indictment, on or about Aug. 30, 2014, Arnold robbed the Allegheny Valley Bank, located at 875 Greentree Rd, Pittsburgh, PA, with a dangerous weapon. The Allegheny Valley Bank is insured by the Federal Deposit Insurance Corporation.
The law provides for a maximum total sentence of 45 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Cindy K. Chung is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Green Tree Police Department conducted the investigation leading to the indictment in this case.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Lebanon County Man Sentenced for Million Dollar Investment Fraud SchemeRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that Christopher Burhans, age 65, was sentenced by Chief U.S. District Court Judge Christopher C. Conner today to 37 months’ imprisonment, two years supervised release and $1,658,205 in restitution. Burhans is scheduled to surrender to the U.S. Bureau of Prisons by January 8, 2015.
In sentencing Burhans, Chief Judge Conner said “these were not business mistakes. This was fraud; outright, clear, unmitigated fraud.”
According to United States Attorney Peter Smith, Burhans pled guilty in December 2013 to conspiracy to commit mail fraud. As presented to the Court by Assistant U.S. Attorney Joseph Terz, in 2003, Burhans started a private mortgage company known as Angelic Ventures. The stated business purpose was to solicit private investors to provide money for private mortgages. In about 2006, Burhans started a business known as Home Buyers Solutions, Inc. ("HBSI"). HBSI, like Angelic Ventures, was in the business of making private real estate loans financed with private investor funds. Burhans operated both businesses out of his home at 847 Maple Street, Lebanon, Pa.
Burhans carried out the scheme by placing advertisements in farming newspapers, including "Fish Wrapper," "Die Botschaft," and "Lancaster Farming," announcing an investment opportunity with Angelic Ventures and HBSI. In the advertisement, Burhans represented that the investments were insured, secured, and promised rates of return as high as 12%.
Burhans falsely represented to investors that their money would be solely used to make loans for the purchase of real estate.
In fact, Burhans misappropriated much of the money he received form investors. He diverted money to other businesses he owned and for his own personal needs and expenses, including payment of a salary for himself, his wife and son. Burhans also used investor money to purchase multiple timeshares he used for vacation.
In December 2009, Burhans wrote to the investors stating that, due to the downturn in the economy, Angelic Ventures and HBSI were no longer in business. In the December 2009 letter, Burhans misrepresented to investors that the business losses "ate up even our reserves and all our own personal belongings." Those statements were false.
At the sentencing, Burhans promised to pay back the lenders who lost money by investing in his company. Assistant U.S. Attorney Joesph Terz noted that those who lost their money were not “lenders” as Burhans repeatedly stated, but his victims.
The investigation was conducted by the Federal Bureau of Investigations.
Laguna Pueblo Man Sentenced to Federal Prison for Attempting to Rob Sky City CasinoRead the Press Release
ALBUQUERQUE – Steven Paul Tharpe, 51, a member and resident of the Laguna Pueblo, was sentenced this morning to 24 months in federal prison followed by three years of supervised release for his attempted robbery conviction.
Tharpe was arrested on May 15, 2014, on an indictment charging him with attempted robbery, and has been in federal custody since that time. According to the indictment, on July 21, 2012, Tharpe attempted to commit a robbery in Indian Country in Cibola County, N.M.
On July 9, 2014, Tharpe entered a guilty plea to the indictment and admitted that he attempted to rob the Sky City Casino, which is located in Acoma Pueblo, on July 21, 2012. In his plea agreement, Tharpe admitted that he attempted to rob the Casino by displaying a BB gun to a teller in a cashier’s cage at the Casino and demanding money.
This case was investigated by the Albuquerque office of the FBI, the Laguna/Acoma Agency of the BIA’s Office of Justice Services and the Acoma Pueblo Tribal Police Department, and was prosecuted by Assistant U.S. Attorney Elaine Y. Ramirez.
Lafayette Man Pleads Guilty to Making a False Tax ReturnRead the Press Release
LAFAYETTE, La. –U.S. AttorneyStephanie A. Finley announced today that a Lafayette stockbroker and financial consultant pleaded guilty to not reporting more than $350,000 of income on his tax return.
Donald Domingues, 56, of Lafayette, entered a guilty plea before U.S. District Judge Richard Haik for one count of making a false tax return. According to the guilty plea, Domingues, who is a financial consultant and stockbroker in Lafayette, was paid a $351,000 commission in 2007 to help negotiate the sale of Powerhouse Inc., a Louisiana natural gas equipment supply service company. However, rather than take possession of the check in his own name, Domingues had Powerhouse make the check payable to Ray Chevrolet, a car dealership in which he maintained an ownership interest. The day after depositing the check into the dealership’s bank account, he caused the issuance of a check to himself for the same amount. When Domingues filed his U.S. Individual Income Tax Return, Form 1040 for calendar year 2007, he intentionally left out the $351,000 sales commission. The intended tax loss as a result of this transaction was calculated to be $121,050.75.
Domingues faces up to three years in prison, one year supervised release, a $100,000 fine and any applicable restitution. A sentencing date was not set.The IRS investigated the case. Assistant U.S. Attorneys Howard C. Parker and David C. Joseph are prosecuting the case.
Judge Sentences Washington County Man to 20 Years in Prison for Child Exploitation OffensesRead the Press Release
PITTSBURGH – A Washington County man has been sentenced in federal court to 20 years imprisonment on his conviction of receipt and distribution of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
United States District Judge Cathy Bissoon imposed the sentence on David Luke Cunningham, 42.
According to information presented to the court, Cunningham was detected sharing videos depicting the sexual exploitation of children by the Pennsylvania State Police in an undercover online investigation of peer-to-peer networks in May and June 2007. More than 50 videos, including sadomasochistic images and violent sexual assault of children appearing as young as two years of age, were later recovered from Cunningham's computer following a search warrant. Evidence presented by Assistant U.S. Attorney Soo C. Song at sentencing revealed that at the time of the investigation in 2007, Cunningham was on probation for a sexual offense involving a 4-year- old child in Washington County.
Prior to imposing sentence, Judge Bissoon emphasized that the defendant’s “actions speak louder than words,” noting that despite denials of a sexual interest in children, the defendant’s criminal conduct formed the basis for his state and federal convictions for sexual crimes against children.
Assistant United States Attorneys Soo C. Song and Jessica Leiber Smolar prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Pennsylvania State Police, together with the Federal Bureau of Investigation, for the investigation leading to the successful prosecution of Cunningham.
Jersey City, N.J., Fire Inspector Admits Accepting Bribes for Official Assistance with Prostitution BusinessesRead the Press Release
NEWARK, N.J. – A Jersey City fire inspector admitted today to accepting bribes to provide prostitution businesses with certificates of occupancy and advance notice of inspections or law enforcement activity, U.S. Attorney Paul J. Fishman announced.
Phillip Procaccino, 56, of Belleville, New Jersey, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with one count of attempting to obstruct, delay and affect interstate commerce by extortion under color of official right.
According to documents filed in this case and statements made in court:
Procaccino admitted that on Oct. 23, 2013, he accepted $2,500 in exchange for his official assistance in obtaining a certificate of occupancy for a massage parlor, which also operated as a prostitution business. Procaccino also offered to provide notice of impending inspections from Jersey City authorities so the owner and employees could preemptively hide evidence of prostitution.
In addition, Procaccino agreed to take 10 percent of a separate prostitution business’ future profits in exchange for a certificate of occupancy and one day’s advance notice of any police activity targeting the business. Both prostitution businesses were located in Jersey City.
The extortion count to which Procaccino pleaded guilty carries a maximum potential penalty of up to 20 years in prison and a fine of the greater of $250,000 or twice the gross gain or loss caused by the offense. Sentencing is scheduled for Feb 23, 2015.
U.S. Attorney Fishman praised special agents of the FBI’s Newark Field Office, under the direction of Special Agent in Charge Aaron T. Ford; and criminal investigators from the U.S. Attorney’s Office in Newark, for their work leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Vikas Khanna and Amy Luria of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
14-396
Defense counsel: Paul B. Brickfield Esq., River Edge, New Jersey
Procaccino, Phillip Information
Investment Fund Manager Pleads Guilty to Securities Fraud for Operating A $17 Million Ponzi SchemeRead the Press Release
On Monday, November 10, 2014, James M. Peister pleaded guilty at the federal courthouse in Central Islip, New York, to securities fraud for operating a $17.9 million Ponzi scheme. Peister deceived investors about the stability and performance of their investments in a fund that he founded and managed to prevent them from seeking to redeem their interests. Pursuant to his plea agreement with the government, Peister agreed to pay $9,657,218.65 in restitution to the victims of his fraud and consented to the forfeiture of $17.9 million, which includes his residence in St. James, New York, and his Hummer sport utility vehicle. When sentenced, Peister faces up to 20 years in prison and a fine of up to $5,000,000.
The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“For nearly a decade, rather than make sound investment decisions as he had promised, James Peister fleeced dozens of investors and used their money to fund his own lavish lifestyle. When the financial crises struck in 2008 and his investor pool dried up, Peister’s carefully woven web of lies and deceit began to untangle and his scheme was revealed. Monday’s plea marks the end of Peister’s scheme and demonstrates this Office’s steadfast commitment to investigating and prosecuting fund managers who prey on the investing public,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the FBI, the agency responsible for leading this investigation, and to the United States Securities Exchange Commission and United States Commodity Futures Trading Commission for their cooperation and assistance in the investigation.
According to court filings and facts presented at the plea hearing, between January 2000 and June 2009, Peister raised more than $17 million from at least 74 investors in connection with his investment funds: Northstar International Group Inc., North American Globex Group, and North American Globex Fund, LP. Through representations in marketing materials and other disclosures to investors and potential investors, Peister promised to invest in a variety of securities, including stocks, futures and fixed income instruments. Contrary to his purported investment strategy, Peister used new investors’ money to pay out existing investors and to finance business and personal expenses, including payments on a personal residence and a Hummer luxury sport utility vehicle. To conceal the true nature of the use of his victims’ money, Peister grossly overstated the value of the assets under his management by providing bogus financial statements to investors and to auditors. As a result, investors believed that their accounts with Peister were performing satisfactorily, and they continued to invest with him. Peister’s Ponzi scheme collapsed in the wake of the financial crisis in 2008 when he could no longer keep up with demands for redemptions from nervous investors. Since Peister’s arrest this past June, the government has seized his Hummer sport utility vehicle and restrained rental payments owed to Peister in connection with the leasing of property that was purchased with proceeds of his fraud.
Monday’s plea took place before United States District Judge Joseph F. Bianco.
The government’s case is being prosecuted by Assistant United States Attorneys Jacquelyn M. Kasulis, Jonathan P. Lax and Brian D. Morris.
This prosecution was the result of efforts by President Obama's Financial Fraud Enforcement Task Force which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit http://www.StopFraud.gov.
The Defendant:
JAMES M PEISTER
Age: 62
St. James, New York
E.D.N.Y. Docket No. 14-CR-328 (JFB)