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5 January 2015
Four defendants appear in Bluefield federal court on drug chargesRead the Press Release
Two sentenced, two plead guilty
Bluefield, W.Va. – United States Attorney Booth Goodwin announced today that four defendants appeared before Senior United States District Judge David A. Faber in federal court in Bluefield on drug charges.
David Eldon Williams, 56, of Lewisburg, West Virginia, was sentenced to 18 months in prison for using a communication device to facilitate a felony. Williams pleaded guilty in August 2014, admitting that on April 25, 2014, he used a telephone in Lewisburg to communicate with a confidential informant to set up the purchase of several hundred oxycodone pills. Williams and his co-defendant, Roger Lee Deem, were arrested the next day in Princeton, West Virginia, after meeting with the informant to complete the transaction. Deem was previously sentenced to 18 months for his role in the crime.
The case was investigated by the Greenbrier Valley Drug and Violent Crime Task Force as part of the Greenbrier Valley Heroin and Pill Initiative. Assisting in the investigation was the Southern Regional Drug and Violent Crime Task Force.
Tashaey Mitchell Jones, 25, of Hickory, North Carolina, was sentenced to 16 months in prison for aiding and abetting the distribution of hydromorphone. Jones pleaded guilty in October 2014, and admitted that on May 7, 2013, she helped to distribute five hydromorphone pills to an informant in Bluefield.
The case was investigated by the Southern Regional Drug and Violent Crime Task Force as part of the Bluefield Pill Initiative.
Julie Walters, 36, of Bluefield, pleaded guilty to distribution of a quantity of hydromorphone. Walters admitted that on May 29, 2014, she distributed a hydromorphone pill to a confidential informant in Brushfork in Mercer County, West Virginia. She also admitted that she had sold approximately 13 hydromorphone pills over a period of time.
Walters faces up to 20 years in prison and a $1,000,000 fine when she is sentenced on May 14, 2015.
The case was investigated by the Southern Regional Drug and Violent Crime Task Force as part of the Bluefield Pill Initiative.
Regina Conley, 33, of Princeton, pled guilty to distribution of oxycodone, admitting that on August 27, 2014, she distributed six 30 mg oxycodone pills to a confidential informant in Princeton. She also admitted that she either sold or possessed for sale a total of about 55 oxycodone pills.
Conley faces up to 20 years in prison and a $1,000,000 fine when she is sentenced on May 14, 2015.
The case was investigated by the Greenbrier Valley Drug and Violent Crime Task Force, assisted by the Southern Regional Drug and Violent Crime Task Force. It was prosecuted as part of the Greenbrier Valley Heroin and Pill and Initiative.
Assistant United States Attorney John File handled the prosecution of these cases.
The cases are 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. 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 in communities across the Southern District.
Former Rockaway Township School Superintendent Pleads Guilty to Attempted Witness TamperingRead the Press Release
NEWARK, N.J. – The former Rockaway Township superintendent of schools today admitted instructing a witness to lie to the FBI about $4,000 that the witness had previously given to him, U.S. Attorney Paul J. Fishman announced.
Gary Vitta, 63, of Denville, New Jersey, pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of attempted witness tampering.
According to the documents filed in this case and statements made in court:
Vitta was the superintendent of the Rockaway Township School District from 2006 to 2011. He dealt with brokers who provided insurance brokerage services to the district and were paid a commission for the insurance contracts they negotiated. At a Vitta family event, Vitta accepted approximately $4,000 in cash from three of the brokers who had provided insurance brokerage services. Shortly after accepting the $4,000, Vitta returned the $4,000 to one of the insurance brokers. Then, in December 2013, Vitta again accepted the $4,000 from the same insurance broker to whom he had returned it.
After accepting the $4,000, Vitta was interviewed by law enforcement agents with the FBI about any benefits that he may have received from insurance brokers who provided brokerage services to the school district. Vitta failed to mention the $4,000 that he had recently received from an insurance broker, or the $4,000 that he had previously received from three insurance brokers at a family event. Following the interview, Vitta contacted the insurance broker who had repaid him the $4,000 in December 2013. He met the insurance broker at a restaurant in Denville, New Jersey, where they first discussed whether the broker was wearing a wire. Vitta told broker that he had recently been approached by FBI agents. He handed the broker a note instructing the broker to lie to the FBI about the $4,000 that the broker had given to him in December 2013. He instructed the broker to lie about the $4,000 that Vitta had previously received at a family event. He also confirmed to this broker that one of the other insurance brokers who had paid him money at that family event also would lie to the FBI if questioned about that payment.
The witness tampering charge to which Vitta pleaded guilty carries a maximum potential penalty of 20 years in prison and a maximum fine of $250,000. Sentencing is scheduled for April 22, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal and Lee M. Cortes Jr. of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
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Defense counsel: Henry E. Klingeman Esq., NewarkFormer CFO Heads to Prison for Failing to Pay Employment TaxesRead the Press Release
HOUSTON – Lanny C. McCandles has been ordered to federal prison after pleading guilty to failing to pay employment taxes, announced U.S. Attorney Kenneth Magidson along with Lucy Cruz, special agent in charge of Internal Revenue Service-Criminal Investigation (IRS-CI).
Today, U.S. District Judge Kenneth Hoyt, who accepted the guilty plea, handed McCandles an 18-month sentence to be immediately followed by three years of supervised release. At the hearing, additional evidence/testimony was presented indicating McCandles had prepared tax returns for several people and had defrauded them by, among other things, taking their refunds. He was further ordered to pay $262,791.28 in restitution.
At the time of his plea Sept. 2, 2014, McCandles admitted that between 2008 and 2011, he embezzled funds withheld from employee paychecks rather than paying them to the IRS as required. He also admitted to attaching fabricated and false IRS W-2 forms to his individual income tax returns as well as returns he prepared and filed on behalf of his girlfriend.
McCandles became the Chief Financial Officer (CFO) of the medical supply company Complete Care Medical Inc. (CCMI) in January 2007. As CFO, he was tasked with keeping CCMI’s books, handling its payroll and preparing and filing its corporate tax returns.
CCMI withheld appropriate federal income, Medicare and Social Security taxes from the paychecks of its approximately 30 employees pursuant to federal law. McCandles was responsible for depositing the withheld taxes to the IRS and filing an Employer’s Quarterly Tax Return (Form 941), which sets forth the total amount of wages and compensation subject to withholding, the total amount of Medicare and Social Security taxes due and the total tax deposits.
Beginning with the quarter ending in March 2008 and continuing through March 2010, McCandles did not deposit these taxes with the IRS nor did he file CCMI’s quarterly tax returns. Instead, he admitted he embezzled the funds CCMI withheld from employee paychecks and used them to pay personal expenses. To carry out and conceal his scheme, McCandles prepared a bi-weekly spreadsheet listing employee payroll expenses for the head of CCMI who then transferred funds to McCandles to cover employee paychecks and withholding. McCandles also prepared the quarterly tax returns and presented them for the signature of CCMI’s head. However, he never filed them.
McCandles admitted he stole the funds earmarked for CCMI’s employment taxes and spent them personally.
Specifically, McCandles pleaded guilty to willfully failing to truthfully account for and pay the IRS approximately $13,624.86 in federal income and FICA taxes withheld from taxable wages of CCMI employees for the first quarter of 2008.
Furthermore, as part of the plea agreement, McCandles admitted he fabricated W-2 Forms and attached them to his personal income tax returns for tax years 2007, 2008 and 2009, resulting in the receipt of refunds to which he was not entitled. For tax years 2007 - 2010, he also admitted to fabricating W-2 Forms and attaching them to tax returns he prepared and filed on behalf of his girlfriend.
McCandles was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges are the result of an investigation by IRS-CI and the Treasury Inspector General for Tax Administration. Assistant U.S. Attorney Stephen L. Corso prosecuted the case.
Former Bellingham Financial Adviser Sentenced to Prison for Wire Fraud Involving Theft from Elderly ClientsRead the Press Release
A long-time tax and financial adviser in Bellingham, Washington was sentenced today to 51 months in prison, three years of supervised release and $251,892 in restitution for wire fraud, announced Acting U.S. Attorney Annette L. Hayes. JEFFREY M. KNUTSEN, 43, owned and operated Bellwether Financial Services dba Bellwether Wealth Management. In July 2005, KNUTSEN was barred by the Financial Industry Regulatory Authority (“FINRA”) from associating with any broker-dealer as a stock broker because of a customer complaint that KNUTSEN had embezzled from the client’s account. FINRA is an industry organization which regulates financial brokers and brokerage firms. Despite being barred, KNUTSEN continued to work with clients – many of them elderly – and now has been convicted of stealing more than $255,000 from 26 client accounts. At sentencing U.S. District Judge James L. Robart noted that KNUTSEN had continued a career of misappropriating money saying, “This is a crime of greed -- pure unadulterated greed – plain and simple.”
“This fraud damaged the elderly victims emotionally as well as financially,” said Acting U.S. Attorney Annette L. Hayes. “They trusted Jeffrey Knutsen to honestly invest their savings so they could enjoy a secure retirement. Now they are betrayed and wary as they try to safeguard any savings they have left.”
According to records filed in the case, after being barred by FINRA, KNUTSEN did not tell his clients that he had been barred, but instead told them he was moving to a different online brokerage to reduce the fees they would have to pay. He set up online accounts with TD Ameritrade and later E*Trade in his clients’ names and retained full access and control over the accounts, including check-writing privileges. He told the clients he would charge them a management fee of one percent or less per year to manage their accounts. However over seven and a half years he caused the online broker/dealers to issue more than 200 checks for more than $250,000 without the authorization or knowledge of his clients. KNUTSEN then deposited the checks in his account and used the money for his personal gain. Many of the victims were elderly and had little understanding of online brokerage accounts.
The Financial Industry Regulatory Authority (“FINRA”) has online resources to allow clients to check on their financial advisor’s disciplinary history here. The BrokerCheck website is a free tool that FINRA has set up to help investors research the professional backgrounds of current and former FINRA-registered brokerage firms and brokers, as well as investment adviser firms and representatives.
The case was investigated by the FBI and Bellingham Police Department. The case was prosecuted by Assistant United States Attorneys Steven Masada and Justin Arnold.
Former Banker in Great Bend Indicted on Embezzlement ChargesRead the Press Release
WICHITA, KAN. - A former banker from Great Bend appeared in federal court in Wichita Monday on charges including embezzlement, money laundering and making false entries in bank records, U.S. Attorney Barry Grissom said.
Brian W. Harrison, 55, Great Bend, Kan., is charged with three counts of making false entries in bank records, 16 counts of falsifying loan and credit applications, two counts of embezzlement, and two counts of money laundering.
The indictment, which was unsealed today, alleges the crimes occurred while Harrison was a vice president and loan officer at Farmers Bank & Trust in Great Bend. The indictment alleges Harrison made false statements to Farmers Bank to hide the poor performance of loans he made, approved and maintained. The false statements served to deflect questions from Farmers Bank about the performance of Harrison’s portfolio. The indictment alleges Harrison:
- Falsified credit and loan applications without authority of the borrower.
- Obtained loans based on false statements.
- Refinanced or consolidated loans to hide problems with loan repayments.
- Authorized loans in the name of a borrower without the borrower’s authority.
- Instructed a borrower to dispose of loan collateral in a way that damaged Farmers Bank.
According to the United States Treasury Department’s Troubled Asset Relief Program, on June 19, 2009, Farmers Enterprises, Inc., the holding company for Farmers Bank, received $12 million in TARP funding under the Capital Purchase Program. On Nov. 13, 2013, Farmers Enterprises, Inc., paid $11,439,252 to redeem the original funding of $12 million, resulting in a shortfall to the program of $560,748.
“Harrison’s purported scheme resulted in losses for Farmers Bank, and ultimately, federal taxpayers suffered a $560,000 loss on their TARP investment in the bank,” said Christy Romero, Special Inspector General for TARP (SIGTARP).
Upon conviction, the crimes carry the following penalties:
- Making false bank entries: A maximum penalty of 30 years on each count and a fine up to $1 million.
- Making false statements on loan and credit applications: A maximum penalty of 30 years on each count and a fine up to $1 million.
- Embezzlement: A maximum penalty of 30 years on each count and a fine up to $1 million.
- Money laundering: A maximum penalty of 20 years and a fine up to $500,000 on each count.
The FBI and the Special Inspector General for TARP (SIGTARP) investigated. Assistant U.S. Attorney Aaron Smith is prosecuting.
Former Acting HHS Cyber Security Director Sentenced to 25 Years in Prison for Engaging in Child Pornography EnterpriseRead the Press Release
Five Others Previously Sentenced to Substantial Prison Terms for Participation in the Same Tor-Network-Based Child Pornography Website
The former acting director of cyber security at the U.S. Department of Health and Human Services was sentenced to 25 years in federal prison today for engaging in a child exploitation enterprise and related charges in connection with his membership in a Tor-network-based child pornography website.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Deborah R. Gilg of the District of Nebraska and Special Agent in Charge Thomas R. Metz of the FBI’s Omaha Division made the announcement.
“Using the same technological expertise he employed as Acting Director of Cyber Security at HHS, DeFoggi attempted to sexually exploit children and traffic in child pornography through an anonymous computer network of child predators,” said Assistant Attorney General Caldwell. “But dangerous criminals cannot be allowed to operate on-line with impunity. Today’s sentence shows that the Department of Justice will bring criminals and child predators to justice, even when they employ anonymous networks like Tor.”
“Today's sentence and the others imposed earlier demonstrate that those who exploit children will be aggressively pursued and prosecuted to the full extent of the law,” said U.S. Attorney Gilg. “Those who think they are acting anonymously on the Internet will be found and held accountable.”
“The production and distribution of child pornography is one of the most saddening, tragic crimes the FBI investigates,” said Special Agent in Charge Metz. “Today’s sentencing sends a message to those who advertise, distribute, possess, and trade child pornography that the FBI will look for you, will find you and will make sure you are prosecuted to the fullest extent of the law.”
Timothy DeFoggi, 56, formerly of Germantown, Maryland, was convicted on Aug. 26, 2014, following a four-day jury trial before Chief U.S. District Judge Laurie Smith Camp in the District of Nebraska of engaging in a child exploitation enterprise, conspiracy to advertise and distribute child pornography and accessing a computer with intent to view child pornography.
According to evidence presented at trial, DeFoggi registered as a member of the Tor-network-based child pornography website on March 2, 2012, and maintained his membership and activity until Dec. 8, 2012, when the website was taken down by the FBI. The website’s users utilized advanced technological means in order to undermine law enforcement’s attempts to identify them. The website was accessible only through Tor, an Internet application specifically designed to facilitate anonymous communication. Acting under the cloak of anonymity, users advised others on best practices to prevent detection by law enforcement, including advice about the proper use of encryption software, techniques to hide or password-protect child pornography collections, and programs to remove data from a user’s computer.
Through the website, DeFoggi accessed child pornography, solicited child pornography from other members, and exchanged private messages with other members in which he expressed an interest in the violent rape and murder of children. DeFoggi suggested meeting one member in person to fulfill their mutual fantasies to violently rape and murder children.
DeFoggi was the sixth individual to be convicted as part of an ongoing investigation targeting three Tor-network-based child pornography websites. The websites were run by a single administrator, Aaron McGrath, who was previously convicted in the District of Nebraska of engaging in a child exploitation enterprise in connection with his administration of the websites. On Jan. 31, 2014, McGrath was sentenced to 20 years in prison by Senior U.S. District Judge Joseph F. Bataillon.
Four other members of the same website as DeFoggi were previously convicted and sentenced by Senior U.S. District Judge Bataillon in connection with their illegal activity on the site:
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Jason Flanary, then 42, formerly of Chicago, Illinois, the Philippines, and Guam, was sentenced to 20 years in prison on June 30, 2014.
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Wesley Cameron, then 22, formerly of Ashford, Alabama, was sentenced to 15 years in prison on Oct. 24, 2014.
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Zackary Austin, 28, formerly of Reno, Nevada, was sentenced to 16 years in prison on Nov. 6, 2014.
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Charles MacMillan, 29, formerly of Rockville, Maryland, was sentenced to 12 years in prison on Nov. 7, 2014.
These cases were brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case is a result of investigative efforts led by the FBI’s Omaha Field Office and the FBI’s Violent Crimes against Children Section, Major Case Coordination Unit, and Digital Analysis and Research Center. The FBI was assisted in its investigation by Europol, the European Union’s law enforcement agency, as well as members of the FBI’s Violent Crimes Against Children International Task Force. This case was prosecuted by Trial Attorneys Keith Becker and Sarah Chang of CEOS and Assistant U.S. Attorney Michael P. Norris of the District of Nebraska.
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For-Profit College Kaplan to Refund Federal Financial Aid Under Settlement with United StatesRead the Press Release
Over $1 Million will be paid in the form of tuition refunds for 289 students
Kaplan Higher Education (“Kaplan”), a leading for-profit education company with campuses located throughout the country, will pay roughly $1.3 million under a civil settlement with the United States Department of Justice. The settlement resolves whistleblower allegations that the company employed unqualified instructors at its campuses in Texas, Acting U.S. Attorney Richard L. Durbin, Jr. announced today.
Kaplan operates for-profit colleges on several campuses in Texas, including Kaplan College – San Antonio (San Pedro) and Kaplan College – San Antonio (Ingram). These campuses offer a mix of degree and diploma programs, such as a Medical Assistant Diploma program designed to train students for entry-level positions in the health care field. Many of Kaplan’s students receive financial assistance under federal programs that help eligible students obtain higher education. These federal programs, authorized under Title IV of the Higher Education Act of 1965 (“Title IV”), include the Federal Pell Grant Program, Federal Direct Loan Program, and Federal Family Education Loan Program, among others.
The Department of Justice began investigating Kaplan after a whistleblower, Leslie Coleman, filed a qui tam lawsuit under the False Claims Act accusing Kaplan of employing unqualified instructors to teach Medical Assistant courses at its San Antonio campuses. The suit alleged that Kaplan knowingly requested, received, and retained federal tuition funds for courses taught by individuals who did not meet the minimum requirements established by Texas law. Following the United States’ investigation, the parties negotiated a settlement pursuant to which Kaplan will pay $1,329,753.25 to resolve the whistleblower claims. The majority of the settlement – roughly $1,077,000 – will be paid in the form of tuition refunds. These refunds will benefit 289 students, whose student loan debt will decrease as a result of the settlement.
Kaplan fully cooperated with the government’s investigation and negotiated the settlement in good faith, stated Acting U.S. Attorney Durbin. The settlement is not an admission of liability by Kaplan or its affiliates.
The Department of Education Office of Inspector General (DOE-OIG) and the U.S. Attorney’s Office for the Western District of Texas investigated the allegations raised in the whistleblower suit captioned United States ex rel. Leslie Coleman v. Kaplan, Inc., The Washington Post Company, Kaplan Higher Education Corporation, Kaplan College – San Antonio (San Pedro) and Kaplan College – San Antonio (Ingram), no. SA:12-cv-0459-FB (W.D. Tex.) DOE-OIG Special Agent Edd Cole, Assistant U.S. Attorney John J. LoCurto, and ACE Auditor Jamie Cole, CPA handled the investigation for the Government.
Individuals who suspect Title IV fraud, waste, or abuse are encouraged to report their information to the Department of Education by calling the Inspector General’s fraud hotline at 1-800-MIS-USED.
Federal Correctional Officer Sentenced for Accepting Bribes and Providing Contraband to InmatesRead the Press Release
ABINGDON, VIRGINIA – Acting United States Attorney Anthony P. Giorno announced today that Scottie Austin was sentenced in the United States District Court for the Western District of Virginia in Abingdon on charges of receiving bribes.
Scottie Austin, 44, of Kingsport, Tenn., who at the time of his offenses worked as a correctional officer at United States Penitentiary Lee County, previously pled guilty to a one count Information charging him with accepting a bribe as a public official. Today in District Court, Austin was sentenced to 12 months and one day of federal incarceration.
“Mr. Austin betrayed the trust placed in him by the Department of Corrections through his illegal and potentially dangerous activity,” Acting United States Attorney Anthony P. Giorno said today. “The investigation and prosecution of this case shows that our office and our investigative partners will pursue justice no matter the position of the individual who breaks federal law.”
According to evidence presented at the guilty plea and sentencing hearings by Assistant United States Attorney Zachary T. Lee, Austin was employed as a correctional officer for the United States Bureau of Prisons at United States Penitentiary Lee County, Virginia, in Jonesville, Va. Between April 2013 and April 2014, Austin received multiple monetary payments, totaling at least $10,000, from family members of an inmate at the penitentiary in return for Austin smuggling tobacco products and cellular telephones into the penitentiary. These items were then provided to the inmate in violation of Bureau of Prisons regulations.
The investigation of this case was conducted by the Federal Bureau of Investigation, United States Bureau of Prisons Special Investigative Service at United States Penitentiary Lee County, and the United States Department of Justice Office of the Inspector General. Assistant United States Attorney Zachary T. Lee prosecuted the case for the United States.
District Man Sentenced to 36 Years in Prison for Shooting That Killed Two Victims, Injured AnotherDefendant Shot Victims Inside Car Off North Capitol StreetRead the Press Release
WASHINGTON – Jimmie Fleming, 36, of Washington, D.C., was sentenced today to 36 years in prison on charges stemming from a shooting in which two people were killed and another was wounded, U.S. Attorney Ronald C. Machen Jr. announced.
Fleming pled guilty in September 2014, in the Superior Court of the District of Columbia, to two counts of voluntary manslaughter while armed for the deaths of Donchell Thomas and Derek Price, and one count of aggravated assault while armed, for the shooting of the third victim. The plea, which was contingent upon the Court’s approval, called for a prison term of 36 years. The Honorable Robert E. Morin accepted the plea and sentenced Fleming accordingly. Upon completion of his prison term, Fleming is to be placed on five years of supervised release.
According to the government’s evidence, on July 13, 2014, at about 1 a.m., Fleming and a juvenile approached a blue Honda Accord near North Capitol and T Streets NW. Mr. Price, 20, was the driver of the car, and Mr. Thomas, 21, was in the back seat. A second passenger was in the front seat. Mr. Price agreed to drive Fleming and the juvenile down the street.
Fleming and the juvenile entered the back seat, joining Mr. Thomas. As Mr. Price drove the car, Fleming pulled out a gun and fired it at all of the occupants inside the car. This shooting was unprovoked and without any warning. Mr. Price and Mr. Thomas were both shot in the head and died from their respective injuries. The front seat passenger, who survived the incident, was shot multiple times in his torso and arm. The juvenile was not hit by the gunfire.
Due to the shooting, the car crashed at the intersection of North Capitol and T Streets. Fleming fled from the car on foot and ultimately ran to a nearby house, where he was arrested by the Metropolitan Police Department. A search of the home was conducted later that morning. Among other things, the police found a bag of ammunition in the defendant’s room.
In announcing the sentence, U.S. Attorney Machen commended the work of the detectives of the Criminal Investigations Division, crime scene officers, and the Fifth Police District of the Metropolitan Police Department. He also expressed appreciation to those who worked on the case from the U.S. Attorney’s Office, including Victim/Witness Advocate Veronica Vaughn and Paralegal Specialist Fern Rhedrick. He also praised the efforts of Assistant U.S. Attorney Shana L. Fulton, who prosecuted the case.
15-002District Man Pleads Guilty to Possession of Child PornographyOver 3,000 Images and 267 Videos Seized in Search of Defendant’s ResidenceRead the Press Release
WASHINGTON – Michael Centanni, 48, of Washington, D.C., pled guilty today to a federal charge of possession of child pornography, announced U.S. Attorney Ronald C. Machen Jr. and Clark E. Settles, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Washington, D.C.
Centanni entered the plea in the U.S. District Court for the District of Columbia. He is to be sentenced on April 9, 2015 by the Honorable Senior Judge Thomas F. Hogan. The charge carries a statutory maximum of 20 years in prison and potential financial penalties. He also will be required to register as a sex offender for a minimum period of 15 years.
Centanni was arrested on Oct. 30, 2014 following an investigation by HSI. According to a statement of offense signed by the defendant as well as the government, the investigation determined that Centanni had been using the Internet to obtain child pornography files.
Law enforcement searched Centanni’s residence on Oct. 14, 2014 and seized hard drives and other electronic media. A subsequent examination identified more than 3,000 images and 267 videos depicting child pornography. Centanni has been in custody since his arrest. In an interview with law enforcement, he admitted obtaining images and videos depicting child pornography and storing it on the electronic devices seized during the search.
In announcing the plea, U.S. Attorney Machen and Special Agent in Charge Settles commended the work of the HSI Special Agents who investigated the case and expressed appreciation for the assistance of the Metropolitan Police Department (MPD). They also expressed appreciation for the efforts of Assistant U.S. Attorney Cassidy Kesler Pinegar, who prosecuted the case, and Assistant U.S. Attorney Ari Redbord, who assisted in the investigation.
15-003Dickinson County Man Ordered to Pay Back Stolen Railroad Union FundsRead the Press Release
TOPEKA, KAN. - A former secretary-treasurer of a railroad union was sentenced Monday to time served and two years on supervised release for embezzling union funds, U.S. Attorney Barry Grissom said. He also was ordered to pay more than $17,000 in restitution to the union.
Dale T. Hull, 63, Herington, Kan., pleaded guilty to one count of embezzling union funds. In his plea, Hull admitted the crime occurred while he was secretary-treasurer of the Brotherhood of Locomotive Engineers and Trainmen, Division 261, which represented employees of the Union Pacific Railroad who work in the Herington, Kan., terminal and the Salina, Kan., hub.
Starting in 2008, Hull made unauthorized and illegal account transfers from the union’s account to his personal checking account totaling more than $17,000. He also filed false reports to the U.S. Department of Labor in which he understated his earnings as secretary-treasurer of the union.
Grissom commended the U.S. Department of Labor – Office of Inspector General and Assistant U.S. Attorney Richard Hathaway for their work on the case.
College Park Tax Preparer Sentenced to 5 Years in Prison for Scheme to Obtain Fraudulent Refunds for Temporary WorkersRead the Press Release
Also Used the Personal Information of Former Clients to Falsely Claim Them as Dependents on Current Clients’ Returns
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Julius Valentine Williams, age 61, of College Park, Maryland today to five years in prison, followed by three years of supervised release, for aiding and assisting in filing false tax returns, filing false tax returns, wire fraud and aggravated identity theft. Judge Grimm entered an order requiring Williams to pay restitution of $1 million.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.“In preparing tax returns for his clients, Julius Valentine Williams added false deductions, expenses and credits to wipe out their tax liabilities and in many cases to claim fraudulent tax credits, so the IRS paid out tax revenue instead of collecting it,” said U.S. Attorney Rod J. Rosenstein. “Mr. Williams also filed fraudulent tax returns in his own name in his scheme to rip off the taxpayers.”
“While most tax return preparers provide excellent service to their clients, a few dishonest return preparers give the industry a black eye. IRS-CI works year round to investigate dishonest return preparers and protect the American taxpayer’s money,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office. “Return preparers must comply with the same tax obligations as the clients that they serve. No one is above the law.”
According to his plea agreement, Williams was a tax return preparer who owned and operated Julius Williams Tax Service out of his home in College Park. During tax years 2007 through 2010, William prepared and submitted to the IRS more than 5,000 client individual tax returns. Many of Williams’ clients were from Jamaica and resided in the United States under a temporary worker program. At the end of their employment, they were required to return to their home countries. Williams admitted that when preparing tax returns for these clients, he added false items, such as false Schedule C businesses, false deductions, false Earned Income tax credits, and false education credits, in order to fraudulently increase the size of the refund to the client.
In addition, Williams kept detailed lists of identification information of former clients who had returned to their home countries, including names, social security numbers and dates of birth. Williams then used that identification information, without the former clients’ knowledge or permission, to claim them as dependents on the income tax returns of current clients, in order to fraudulently increase the refunds on those returns.
Williams also filed false personal tax returns for tax years 2007 through 2010, in which Williams underreported his income from his tax business by a total of more than $1 million. As a result, the tax loss to the government was approximately $411,056, for those years. Williams also used the personal identification information of his former clients to fraudulently claim them as dependents on his personal income tax returns, which increased his refund and resulted in additional the taxes owed to the government.
As a result of the fraudulent tax returns prepared by Williams for his clients, and his own fraudulent returns, the total tax loss to the government is at least $1 million.
United States Attorney Rod J. Rosenstein praised the IRS-CI for its work in the investigation and thanked Assistant U.S. Attorneys Kelly O. Hayes and Sean R. Delaney, who prosecuted the case.Chiropractor Sentenced in Health Care Fraud CaseRead the Press Release
FORT WORTH, Texas — A local chiropractor, who was convicted at trial on felony offenses stemming from his involvement in a health care fraud case, was sentenced this morning, announced John R. Parker, Acting U.S. Attorney for the Northern District of Texas.
Dr. Abbas Zahedi, 49, of Carrollton, Texas, was sentenced by U.S. District Judge Reed C. O’Connor to serve 145 months in federal prison and ordered to pay approximately $2.4 million in restitution. He was convicted at trial in June 2014 on all counts of a superseding indictment charging one count of conspiracy to commit health care fraud, five counts of health care fraud and four counts of aggravated identity theft. Dr. Zahedi, who has been in custody since his conviction, owned and operated DFW Rehab & Diagnostics.
Five other defendants convicted in the case have also been sentenced.
Reginald Guy, 44, of Arlington, Texas, was sentenced to serve 156 months in federal prison and ordered to pay approximately $2.4 million in restitution. He was convicted at trial on the same offenses as Dr. Zahedi. Guy was a factory worker in Arlington, and from approximately 2003 until November 2009, when his employment was terminated, he served as a union representative.
Guy used that union position to recruit and refer his co-workers to DFW Rehab & Diagnostics, which was operated from the office of Metroplex DFW Sports Rehab Center in Arlington, and then later from a stand-alone location in Grand Prairie, Texas. In exchange for monthly kickbacks, work excuse notes and a variety of prizes, the workers agreed to allow their insurance companies to be billed for services they did not receive.
From 2009 to 2012, Dr. Zahedi, Guy, and their four codefendants conspired to submit health insurance claims to Blue Cross Blue Shield of Texas (BCBS) and other insurers for services not rendered. These four coconspirators, James Sterns, Tina Perkins, Donna Harris and Gregory Wattron, cooperated with the government in the investigation and testified against Zahedi and Guy at their trial.
Sterns, 50, of DeSoto, Texas, was sentenced to 10 months in federal prison and ordered to pay approximately $2.2 million in restitution. Sterns owned and operated Metroplex. In early 2010, Sterns hired Guy to be the office manager of Metroplex, where he worked in that position to mid-2011, shortly before the clinic closed. In March or April 2011, Dr. Zahedi hired Guy to work as a consultant at the clinic’s Grand Prairie location. After Guy began working for Dr. Zahedi, Guy helped transfer patients and patient information to Dr. Zahedi, and the fraudulent referral and billing scheme continued.
Perkins, 43, of Dallas, was sentenced to 10 months in federal prison and was ordered to pay approximately $2.4 million in restitution. Perkins worked as the biller and office consultant for Dr. Zahedi and was responsible for submitting claims to insurance companies.
Perkins’ sister-in-law, Donna Harris, 43 of Haltom City, Texas, was sentenced to eight months in federal prison and was ordered to pay approximately $2 million in restitution. Harris permitted the clinic, in exchange for cash payments, to submit claims to BCBS for services purportedly performed by Dr. Zahedi and Wattron, when in fact she received no treatment. Then, in early 2011, Dr. Zahedi hired Harris to be the office manager at the Grand Prairie location. There, she continued to allow Dr. Zahedi to submit claims under her name to BCBS for services that were not performed. Harris also permitted Dr. Zahedi to submit claims to BCBS for Harris’ immediate and extended family members for services they did not receive.
Wattron, 56, of Grapevine, Texas, was sentenced to six months in federal prison and was ordered to pay approximately $1.3 million in restitution. He worked as an occupational therapist at the clinic from approximately 2008 until August 2011. Wattron agreed to allow Sterns and Dr. Zahedi bill insurance companies for occupational therapy that he did not perform.
The FBI and the Office of Personnel Management - Office of Inspector General investigated. Assistant U.S. Attorney Nancy Larson and Special Assistant U.S. Attorney Douglas Brasher prosecuted the case.
Chiropractor Sentenced in Health Care Fraud CaseRead the Press Release
FORT WORTH, Texas — A local chiropractor, who was convicted at trial on felony offenses stemming from his involvement in a health care fraud case, was sentenced this morning, announced John R. Parker, Acting U.S. Attorney for the Northern District of Texas.
Dr. Abbas Zahedi, 49, of Carrollton, Texas, was sentenced by U.S. District Judge Reed C. O’Connor to serve 145 months in federal prison and ordered to pay approximately $2.4 million in restitution. He was convicted at trial in June 2014 on all counts of a superseding indictment charging one count of conspiracy to commit health care fraud, five counts of health care fraud and four counts of aggravated identity theft. Dr. Zahedi, who has been in custody since his conviction, owned and operated DFW Rehab & Diagnostics.
Five other defendants convicted in the case have also been sentenced.
Reginald Guy, 44, of Arlington, Texas, was sentenced to serve 156 months in federal prison and ordered to pay approximately $2.4 million in restitution. He was convicted at trial on the same offenses as Dr. Zahedi. Guy was a factory worker in Arlington, and from approximately 2003 until November 2009, when his employment was terminated, he served as a union representative.
Guy used that union position to recruit and refer his co-workers to DFW Rehab & Diagnostics, which was operated from the office of Metroplex DFW Sports Rehab Center in Arlington, and then later from a stand-alone location in Grand Prairie, Texas. In exchange for monthly kickbacks, work excuse notes and a variety of prizes, the workers agreed to allow their insurance companies to be billed for services they did not receive.
From 2009 to 2012, Dr. Zahedi, Guy, and their four codefendants conspired to submit health insurance claims to Blue Cross Blue Shield of Texas (BCBS) and other insurers for services not rendered. These four coconspirators, James Sterns, Tina Perkins, Donna Harris and Gregory Wattron, cooperated with the government in the investigation and testified against Zahedi and Guy at their trial.
Sterns, 50, of DeSoto, Texas, was sentenced to 10 months in federal prison and ordered to pay approximately $2.2 million in restitution. Sterns owned and operated Metroplex. In early 2010, Sterns hired Guy to be the office manager of Metroplex, where he worked in that position to mid-2011, shortly before the clinic closed. In March or April 2011, Dr. Zahedi hired Guy to work as a consultant at the clinic’s Grand Prairie location. After Guy began working for Dr. Zahedi, Guy helped transfer patients and patient information to Dr. Zahedi, and the fraudulent referral and billing scheme continued.
Perkins, 43, of Dallas, was sentenced to 10 months in federal prison and was ordered to pay approximately $2.4 million in restitution. Perkins worked as the biller and office consultant for Dr. Zahedi and was responsible for submitting claims to insurance companies.
Perkins’ sister-in-law, Donna Harris, 43 of Haltom City, Texas, was sentenced to eight months in federal prison and was ordered to pay approximately $2 million in restitution. Harris permitted the clinic, in exchange for cash payments, to submit claims to BCBS for services purportedly performed by Dr. Zahedi and Wattron, when in fact she received no treatment. Then, in early 2011, Dr. Zahedi hired Harris to be the office manager at the Grand Prairie location. There, she continued to allow Dr. Zahedi to submit claims under her name to BCBS for services that were not performed. Harris also permitted Dr. Zahedi to submit claims to BCBS for Harris’ immediate and extended family members for services they did not receive.
Wattron, 56, of Grapevine, Texas, was sentenced to six months in federal prison and was ordered to pay approximately $1.3 million in restitution. He worked as an occupational therapist at the clinic from approximately 2008 until August 2011. Wattron agreed to allow Sterns and Dr. Zahedi bill insurance companies for occupational therapy that he did not perform.
The FBI and the Office of Personnel Management - Office of Inspector General investigated. Assistant U.S. Attorney Nancy Larson and Special Assistant U.S. Attorney Douglas Brasher prosecuted the case.
Cedar Rapids Man Sentenced to Five Years for Being A Felon in Possession of A Handgun Stolen During BurglaryRead the Press Release
Contact: Steve Young
A man who stole a firearm during the burglary was sentenced today to five years in federal prison. Tanner Williams, age 25, from Cedar Rapids, Iowa, received the prison term after a guilty plea to one count of being a felon in possession of a firearm.
In a plea agreement, Williams admitted he is a felon, having been convicted on April 7, 2014, of Theft 2nd Degree. On May 18, 2014, a Cedar Rapids home was burglarized. Among the property stolen during the burglary was a .22 caliber handgun. Williams pawned the firearm at a Cedar Rapids pawn shop two days after the burglary. Williams later admitted lying to police when he falsely denied committing the burglary and claimed that another person had asked him to pawn the handgun. At the sentencing hearing, the court refused to reduce the sentence for acceptance of responsibility, and further increased the sentence beyond the advisory guidelines range, because of his conduct while on release pending trial. The court had released Williams after his arrest subject to certain conditions. The court found Williams violated those conditions by repeatedly using marijuana and heroin, possessing ammunition as a felon, lying to the probation officers and police, and by possessing a stolen purse.
Williams was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Williams was sentenced to 60 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system. Williams is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney C.J. Williams and investigated by the Federal Bureau of Investigation’s Safe Streets Task Force and the Cedar Rapids Police Department.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-cr-71.
Buffalo Man Pleads Guilty to Drug ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Anthony Anastasia, 48, of Buffalo, NY, pleaded guilty to possession with intent to distribute cocaine before Chief U.S. District Judge William M. Skretny. The charge carries a maximum penalty of 20 years in prison, a fine of $1,000,000 or both.Assistant U.S Attorney Mary Catherine Baumgarten, who is handling the case, stated that on November 16, 2011, Anastasia was arrested after he admitted that he was selling cocaine. The defendant also admitted to having approximately three ounces of cocaine at his residence at 32 Lovering in Buffalo. As part of the investigation, the cocaine was seized by law enforcement.
The plea is the result of an investigation by Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Office.
Sentencing is scheduled for May 6, 2015 at 9:00 a.m. before Judge Skretny.
Bastrop Tax Preparer Sentenced to 39 Months in Prison for Preparing False Returns, Wire Fraud and Identity TheftRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced today that a Bastrop tax preparer was sentenced to 39 months in prison for filing fraudulent income tax returns using stolen identities and false information.
Claudia Marie Mays, 41, of Bastrop, La., was sentenced by U.S. District Judge Robert G. James for one count of aiding and assisting in making and subscribing a false tax return, two counts of wire fraud, and two counts of identity theft. She was also ordered to pay $94,043.15 restitution and was sentenced to three years of supervised release. According to evidence presented at the June 17, 2014 guilty plea, Mays prepared fraudulent income tax returns and filed 15 fraudulent tax returns using stolen identities and false information from January 2011 to April 2011. The IRS issued $94,043.15 in fraudulent refunds because of the scheme.
Co-conspirator Carla Inzina, 53, also of Bastrop, assisted Mays in filing one of the fraudulent returns by obtaining another person’s personal information and using it to file a false return without the person’s permission. Inzina was sentenced to three years of probation for one count of aiding and assisting in making and subscribing a false return.
The IRS Criminal Investigation-Shreveport Division conducted the investigation. Assistant U.S. Attorney Seth D. Reeg prosecuted the case.
3 January 2015
St. Paul Felon Sentenced for Possessing A .357-revolverRead the Press Release
MINNEAPOLIS—Earlier today in federal court in St. Paul, a 29-year-old St. Paul felon was sentenced for possessing a .357-caliber revolver. United States District Court Judge Susan Richard Nelson sentenced Richard Alonzo Woods to 77 months in prison on one count of being a felon in possession of a firearm. Woods was indicted on May 15, 2012, and pleaded guilty on July 27, 2012.
In his plea agreement, Woods admitted that on November 16, 2011, he possessed the Smith & Wesson revolver. Because he is a felon, Woods is prohibited under federal law from possessing a firearm at any time. His prior convictions – all in Ramsey County-- include third-degree sale of controlled substances (2002 and 2003), check forgery (2003), fifth-degree possession of controlled substances (2006), and possession of a firearm by an ineligible person (2006).
This case was the result of an investigation by the St. Paul Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant U.S. Attorneys Julie E. Allyn and Surya Saxena.
2 January 2015
U.S. Attorney’s Office Will Not Pursue Charges Against John W. Hinckley, Jr. for Death of James BradyLegal Barriers Cited in DecisionRead the Press Release
WASHINGTON – The U.S. Attorney’s Office for the District of Columbia announced today that it will not pursue criminal charges against John W. Hinckley, Jr., related to the death last summer of former White House Press Secretary James Brady.
The decision was made following a review of applicable law, the history of the case, and the circumstances of Mr. Brady’s death, including recently finalized autopsy findings.
On March 30, 1981, President Ronald Reagan, his Press Secretary, Mr. Brady, Secret Service Agent Timothy McCarthy, and Metropolitan Police Department Officer Thomas Delahanty were shot during an assassination attempt in the driveway of the Washington Hilton Hotel. All four victims immediately survived the shooting. Mr. Brady, however, was gravely wounded by a bullet to the brain, and remained incapacitated by that injury for the rest of his life.
Hinckley was apprehended on the scene. He later was charged with three federal and 10 District of Columbia offenses. In June 1982, following a trial in the U.S. District Court for the District of Columbia, a jury returned a verdict of not guilty by reason of insanity on all charges. Hinckley, 59, has now been committed for over 32 years to St. Elizabeths Hospital.
Mr. Brady died on Aug. 4, 2014. He was 73. On Aug. 8, 2014, the Commonwealth of Virginia Office of the Chief Medical Examiner ruled that Mr. Brady’s death was a homicide and that it was caused by the 1981 gunshot wound. In the wake of that ruling, the U.S. Attorney’s Office initiated a review to determine whether to prosecute Hinckley for the homicide.
According to an autopsy report prepared by the chief medical examiner’s office, and finalized on Dec. 4, 2014, the traumatic brain injury sustained by Mr. Brady created difficulty managing oral secretions and food and led to aspiration pneumonia and other chronic diseases. At the time of his death, Mr. Brady was suffering from aspiration pneumonia. The chief medical examiner thus concluded that Mr. Brady’s death was determined to be “gunshot wound of head and consequences thereof.”
At his 1982 trial, the jury found Hinckley not guilty by reason of insanity of the two charges, assault with intent to kill while armed and assault with a dangerous weapon, related to the shooting of Mr. Brady. Because the jury conclusively made this finding, the government would be precluded now from arguing that Hinckley was sane at the time he shot Mr. Brady.
Additionally, before 1987, the District of Columbia courts abided by the “year and a day rule,” by which a homicide prosecution could only be brought if the victim died within a year and day of the injury causing death. At the time that Hinckley made his assassination attempt, the year-and-a-day rule was still in effect.
In summary, any further prosecution of Hinckley premised on his March 1981 shooting of Mr. Brady would be precluded by the doctrine of collateral estoppel, which would prevent the U.S. Attorney’s Office from arguing, or a court or jury from finding, that Hinckley was sane at the time Mr. Brady was shot. Thus, Hinckley would be entitled to a directed verdict that he was not guilty of the murder of Mr. Brady by reason of insanity. Furthermore, a homicide prosecution would be precluded by the common law "year-and-a-day rule," in effect at the time.
15-001Navajo Man Pleads Guilty to Federal Involuntary Manslaughter ChargeRead the Press Release
ALBUQUERQUE – Kameron Lee Frank, 21, an enrolled member of the Navajo Nation who resides in Iyanbito, N.M., pled guilty this morning to an indictment charging him with involuntary manslaughter.
Frank was arrested on July 21, 2014, based on a criminal complaint charging him with involuntary manslaughter. According to the complaint, Frank killed a Navajo man who was a passenger in his vehicle when he crashed and rolled his pickup truck while driving under the influence of alcohol. The crash occurred on May 23, 2014, in a location within the Navajo Indian Reservation in McKinley County, N.M.
During today’s plea hearing, Frank admitted killing the victim by driving recklessly while under the influence of alcohol which rendered him incapable of exercising clear judgment and a steady hand in operating a vehicle. Frank acknowledged that he operated the vehicle without using due caution and with a reckless disregard that imperiled the lives of others.
Frank faces a statutory maximum penalty of eight years in federal prison. Maximum potential sentences are prescribed by Congress and are provided for informational purposes only. The sentence imposed on Frank will be determined by the court. Frank’s sentencing hearing has yet to be scheduled.
This case was investigated by the Crownpoint office of the Navajo Nation Division of Public Safety. Assistant U.S. Attorney Kyle T. Nayback is prosecuting this case.
Fort Smith, Arkansas, Agrees to Upgrade Sewer System to Reduce Discharges of Raw Sewage into Local WaterwaysRead the Press Release
The Department of Justice, the U.S. Environmental Protection Agency (EPA) and the state of Arkansas today announced that the city of Fort Smith, Arkansas, will spend more than $200 million over the next 12 years on upgrades to its sewer collection and treatment system to reduce discharges of raw sewage and other pollutants into local waterways. Under a settlement filed in federal court in the Western District of Arkansas, Fort Smith will also pay a $300,000 civil penalty and spend $400,000 on a program to help qualified low-income residential property owners to repair or replace defective private sewer lines that connect to the city collection system.
“This settlement will achieve long overdue improvements in the city’s sewer system that will substantially reduce the number of sewage discharges and help assure that the citizens of Fort Smith reside in a safe and clean environment,” said Acting Assistant Attorney General Sam Hirsch for the Justice Department’s Environment and Natural Resource Division.
Today’s agreement resolves alleged Clean Water Act violations related to Fort Smith’s failure to properly operate and maintain its sewer collection and treatment system. Since 2004, Fort Smith has reported more than 2,000 releases of untreated sewage from its municipal sewage system, resulting in more than 119 million gallons of raw sewage flowing into local waterways, including the Arkansas River. These types of releases, known as sanitary sewer overflows, cause serious water quality and public health problems. Fort Smith also violated limits for discharges of various pollutants from its Massard and P Street wastewater treatment plants numerous times over the last decade.
“This agreement means cleaner water for the residents of Fort Smith by reducing pollution flowing into local waterways,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “EPA works with communities like Fort Smith to develop cost-effective and pragmatic solutions to protect residents from exposure to raw sewage.”
Many of the manholes and pump stations from which Fort Smith’s sanitary sewer overflows occur are located in low-income and minority communities.
To reduce sanitary sewer overflows Fort Smith will conduct a comprehensive assessment of its sewer system to identify defects and places where stormwater may be entering the system. The city will also repair all sewer pipe segments and manholes that are likely to fail within the next 10 years, develop projects to improve its sewers’ performance and implement a program to reduce the introduction of fats, oil and grease into its system, to reduce root intrusion, and to clean the system of debris which can cause sanitary sewer overflows. Fort Smith will also implement a program to determine whether human waste is entering and being released from the city’s stormwater system.
The implementation of the consent decree will reduce releases of approximately 3,492 pounds of total suspended solids, 3,343 pounds of biological oxygen demand, 543 pounds of nitrogen, and 78 pounds of phosphorus from the Fort Smith sewage system each year. High levels of these pollutants can reduce oxygen levels in water bodies, which can threaten the health of aquatic plants and animals. Too much nitrogen and phosphorus in the water cause algae to grow faster than ecosystems can handle. Large growths of algae, known as algal blooms, contribute to the creation of hypoxia or “dead zones” in water bodies where oxygen levels are so low that most aquatic life cannot survive.
Sanitary sewer overflows and backups of raw sewage onto private property pose a risk to human health and the environment. Untreated sewage contains organic matter, bacteria, viruses, parasites, toxics and metals, which may cause illness or even death when humans come into contact with them. Most illnesses that arise from contact with sewage are caused by pathogens, which are biological agents that cause disease or illness in a host. The most common pathogens in sewage are bacteria, parasites, and viruses. They cause a wide variety of acute illnesses including diarrhea and infections.
Keeping raw sewage and contaminated stormwater out of the waters of the United States is one of EPA’s National Enforcement Initiatives. EPA is working to reduce sanitary sewer overflows by obtaining commitments from cities to implement timely, affordable solutions.
The proposed settlement is subject to a 30-day public comment period and final court approval. The consent decree is available for review at www.justice.gov/enrd/Consent_Decrees.html.
1 January 2015
Hall County Deputy Sheriff Charged with Accepting BribesRead the Press Release
January 1, 2015GAINESVILLE, Ga. - David M. Treadwell, a Hall County Deputy Sheriff, has been arraigned on federal charges of accepting bribes and conspiring to possess with intent to distribute marijuana. Treadwell was indicted by a federal grand jury on January 28, 2015.
“When a police officer becomes the exception and betrays his badge to protect criminals and promote crime, he undermines the dedication and sacrifices of his fellow officers that allow our citizens to trust and respect law enforcement,” said Acting United States Attorney John A. Horn. “This case unfortunately follows too closely on the heels of other instances of police corruption in this district, but we are committed to aggressively investigating and prosecuting these cases to ensure that people have faith and confidence in our police.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “Allegations of public corruption at all levels is a priority concern to us at the FBI, but allegations involving a law enforcement officer offer additional challenges and concerns. The FBI, upon receiving such allegations in this case, worked aggressively with its law enforcement partners to quickly investigate those allegations and present that investigation to federal prosecutors.”
“When you have a seasoned deputy sheriff who makes the conscious choice to violate his oath of office and seek illegal financial gain it must be dealt with expeditiously,” said Hall County Sheriff Gerald Couch. “I will not tolerate this kind of criminal action and I am thankful for the duty-bound officers who brought these heinous activities to the forefront.”
According to Acting United States Attorney Horn, the charges, and other information presented in court: Treadwell was employed as a deputy sheriff with the Hall County Sheriff's Office. On five occasions in late 2014, Treadwell accepted $200 or $300 from a person he believed was a drug dealer. In exchange for the money Treadwell agreed to alert the drug dealer if Treadwell learned that the drug dealer was under investigation in Hall County.
David M. Treadwell, 33, of Gainesville, Ga., was arraigned before United States Magistrate Judge J. Clay Fuller. Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation with assistance from the North Georgia Major Offenders Task Force that includes members of the Hall County Sheriff’s Office which assisted in the investigation.
Assistant United States Attorney William L. McKinnon, Jr. is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Gainesville Division is http://www.justice.gov/usao/gan/.
31 December 2014
Texas Man Sentenced to 15 Years and 8 Months Imprisonment for Distributing Cocaine in NebraskaRead the Press Release
United States Attorney Deborah R. Gilg announced that on December 30th, 2104, Laron Gray was sentenced by the Honorable Chief United States District Court Judge Laurie Smith Camp to a term of 15 years and 8 months imprisonment, which will be followed by 4 years of supervised release. On June 30, 2014, Gray, who is 37 years old and from Fort Worth, Texas, pleaded guilty to distribution of 28 grams or more of cocaine base (i.e. crack cocaine) on December 12th, 2013 in Omaha, Nebraska. Evidence at the sentencing hearing showed that Gray would regularly arrange for large quantities of cocaine base to be delivered to people in Omaha Nebraska. On December 12th, 2013, Gray sold approximately 4 ounces of cocaine base to an undercover officer. Evidence adduced at the sentencing hearing also showed that Gray’s prior criminal record included convictions in Dumas, Arkansas for violent felony offenses including aggravated assault and battery.
This case was investigated by the Federal Bureau of Investigation and the Greater Omaha Safe Streets Task Force.Rockford Woman Sentenced to 80 Months in Prison for Drug TraffickingRead the Press Release
ROCKFORD — A Rockford, Ill. woman was sentenced today in federal court by U.S. District Judge Frederick J. Kapala on a federal drug trafficking charge. The defendant, DENISE LAMBERT, 56, was sentenced to 80 months in federal prison, to be followed by 3 years of supervised release.
Lambert pleaded guilty to the charge on April 11, 2014. According to the written plea agreement, from Oct. 1, 2010 to Jan. 5, 2012, Lambert was part of a heroin trafficking organization in Rockford and conspired with her co-defendants, Michael J. Craig, Michael W. Charles, Elbert Charles Dixon, Melvin Bradley, Devon Zachary and Jose Melendez, to distribute heroin. The plea agreement noted that while working for Craig taking care of Craig's children, Lambert performed tasks at the request and direction of Craig to assist Craig in distributing heroin in Rockford, Illinois including renting an apartment and vehicles in Lambert’s relatives’ names for Craig to use to store and transport heroin and heroin trafficking proceeds, delivering heroin mixtures packaged in plastic baggies to Charles, Dixon, Zachery and Bradley for them to sell to others, and collecting money from Charles, Dixon, Zachery and Bradley after they sold the heroin and delivering the money to Craig.
Co-defendants Craig, Charles, Dixon, Bradley Lambert, Zachary and Melendez all previously pleaded guilty to conspiring to distribute heroin. On May 28, 2014, Charles was sentenced to 151 months’ imprisonment. On May 23, 2014, Dixon was sentenced to 70 months’ imprisonment. On May 9, 2014, Bradley was sentenced to 18 months’ imprisonment. On May 6, 2014, Zachery was sentenced to 124 months’ imprisonment. On Nov. 13, 2014, Melendez was sentenced to 135 months’ imprisonment. On Nov. 17, 2014, Craig was sentenced to 169 months’ imprisonment.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Carl Vasilko, Special Agent-in-Charge of the Chicago Office of the Bureau of Alcohol, Tobacco, Firearms, & Explosives; Gary Caruana, Winnebago County Sheriff; Chet Epperson, Chief of the Rockford Police Department; and Hiram Grau, Director of the Illinois State Police.
The government was represented by Assistant U.S. Attorney Joseph C. Pedersen.
Mission Woman Charged with Second Degree Murder, Assault, and Child AbuseRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mission, South Dakota, woman has been indicted by a federal grand jury for Second Degree Murder, Assault Resulting in Serious Bodily Injury, and Child Abuse.
Rae Dawn Lunderman, age 28, was indicted on December 9, 2014. She appeared before U.S. Magistrate Judge Mark A. Moreno on December 31, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to life in prison and/or a $250,000 fine, 5 years of supervised release, and $500 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on August 11, 2013, Tyler Erickson and Lunderman unlawfully and with malice murdered and assaulted a human being who had not attained the age of 18 years old. The Indictment also alleges that between August 1, 2013, and August 10, 2013, Lunderman abused, exposed, tortured, and cruelly punished two children who had not attained the age of 7 years old.
The charges are merely accusations and Lunderman is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation and the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Tim Maher is prosecuting the case.
Lunderman was remanded to the custody of the U.S. Marshals Service pending trial, which has been set for February 24, 2015.
Mission Woman Charged with Misprision of FelonyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mission, South Dakota, woman has been indicted by a federal grand jury for Misprision of Felony.
Chelsea Larvie, age 21, was indicted on December 9, 2014. She appeared before U.S. Magistrate Judge Mark A. Moreno on December 23, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 3 years in custody and/or a $250,000 fine, 1 year of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about August 26, 2014, Larvie was aware that burglary and larceny offenses had been committed by her friends at the Todd County government building, but she concealed her knowledge of the felony offenses from law enforcement authorities investigating the matter.
The charge is merely an accusation and Larvie is presumed innocent until and unless proven guilty.The investigation is being conducted by the Federal Bureau of Investigation and the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Timothy Maher is prosecuting the case.
Larvie was released on bond pending trial. A trial date has not been set.
Manufacturer Fiskars Brands Inc. Agrees to Pay $2.6 Million Civil Penalty for Delay in Reporting “Gator Combo Axe” Safety HazardRead the Press Release
The Department of Justice has announced today that Gerber Legendary Blades, a division of Fiskars Brands Inc., of Madison, Wisconsin, has agreed to pay a civil penalty of $2.6 million to settle allegations that it knowingly failed to immediately report to the U.S. Consumer Product Safety Commission (CPSC) a safety hazard associated with Fiskars’ Gator Combo Axe. Fiskars has also agreed to establish and maintain a compliance program with internal recordkeeping and monitoring systems to keep track of information about product safety hazards. The settlement agreement is awaiting judicial approval.
“Fiskars received numerous reports from consumers who were harmed by this product,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “The company had an obligation to immediately report to the CPSC and it failed to do so. We will take action against those who fail to abide by the law so that our partners at the CPSC can protect consumers from injuries.”
The Axe was a combination product that had a knife embedded in its handle that was supposed to be secured by two small magnets. In a complaint filed on behalf of the CPSC in U.S. District Court for the District of Oregon, the United States alleged that Fiskars became aware that the knife in the Axe handle could and did dislodge from the Axe’s handle when the Axe was in use, causing serious injuries to consumers. Fiskars imported approximately 103,000 Axes from Taiwan through its Gerber Legendary Blades division in Portland, and distributed those Axes to retail sporting good chains and stores throughout the United States.
“CPSC’s job is to protect consumers,” said Chairman Elliot F. Kaye. “The sooner a firm informs CPSC about incidents or injuries with defective products, the quicker we can act to protect the American public. Failure to report in a timely basis is not only illegal, it can endanger consumer safety. We will not tolerate such irresponsible and dangerous behavior.”
Under the Consumer Product Safety Act (CPSA), manufacturers, distributors and retailers are required to report product hazards to the CPSC. A knowing violation of the CPSA subjects a firm to civil penalties. The United States alleged that beginning as early as 2005 and continuing over the next several years, Fiskars received consumer complaints and warranty claims indicating that the knife fell out of the Axe handle while the Axe was being used to chop, pound or hammer. In several instances, the knife dislodged from the handle during use and caused injuries including lacerations requiring stitches, permanent nerve damage and surgery to repair severed tendons.
“In this case, Fiskar's failure to report to the CPSC not only put consumers at risk, it contributed to people being injured as a result of the unsafe product design,” said U.S. Attorney S. Amanda Marshall for the District of Oregon. “The settlement not only addresses the product safety issue, but also holds the company accountable and sends a message to others that these violations will be taken seriously.”
In March 2011, Gerber and the CPSC announced a voluntary recall of the Axe. At that time, consumers were advised to remove the knife from the axe handle and contact Gerber to receive a free handle cap for holding the knife in the axe handle during transport and storage, instructions and a warning label. Information on the recall can be found on the CSPC website.
The matter is being handled by Trial Attorney Roger Gural of the Civil Division’s Consumer Protection Branch, Assistant U.S. Attorney Neil J. Evans for the District of Oregon and Harriet Kerwin of the CPSC Office of the General Counsel.
In agreeing to settle this matter, Fiskars has not admitted that it knowingly violated the CPSA.
Manufacturer Fiskars Brands Inc. Agrees to Pay $2.6 Million Civil Penalty for Delay in Reporting "Gator Combo Axe" Safety HazardRead the Press Release
WASHINGTON – The Department of Justice has announced today that Gerber Legendary Blades, a division of Fiskars Brands Inc., of Madison, Wisconsin, has agreed to pay a civil penalty of $2.6 million to settle allegations that it knowingly failed to immediately report to the U.S. Consumer Product Safety Commission (CPSC) a safety hazard associated with Fiskars’ Gator Combo Axe. Fiskars has also agreed to establish and maintain a compliance program with internal recordkeeping and monitoring systems to keep track of information about product safety hazards. The settlement agreement is awaiting judicial approval.
“Fiskars received numerous reports from consumers who were harmed by this product,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “The company had an obligation to immediately report to the CPSC and it failed to do so. We will take action against those who fail to abide by the law so that our partners at the CPSC can protect consumers from injuries.”
The Axe was a combination product that had a knife embedded in its handle that was supposed to be secured by two small magnets. In a complaint filed on behalf of the CPSC in U.S. District Court for the District of Oregon, the United States alleged that Fiskars became aware that the knife in the Axe handle could and did dislodge from the Axe’s handle when the Axe was in use, causing serious injuries to consumers. Fiskars imported approximately 103,000 Axes from Taiwan through its Gerber Legendary Blades division in Portland, and distributed those Axes to retail sporting good chains and stores throughout the United States.
Under the Consumer Product Safety Act (CPSA), manufacturers, distributors and retailers are required to report product hazards to the CPSC. A knowing violation of the CPSA subjects a firm to civil penalties. The United States alleged that beginning as early as 2005 and continuing over the next several years, Fiskars received consumer complaints and warranty claims indicating that the knife fell out of the Axe handle while the Axe was being used to chop, pound or hammer. In several instances, the knife dislodged from the handle during use and caused injuries including lacerations requiring stitches, permanent nerve damage and surgery to repair severed tendons.
“In this case, Fiskar's failure to report to the CPSC not only put consumers at risk, it contributed to people being injured as a result of the unsafe product design,” said U.S. Attorney S. Amanda Marshall for the District of Oregon. “The settlement not only addresses the product safety issue, but also holds the company accountable and sends a message to others that these violations will be taken seriously.”
In March 2011, Gerber and the CPSC announced a voluntary recall of the Axe. At that time, consumers were advised to remove the knife from the axe handle and contact Gerber to receive a free handle cap for holding the knife in the axe handle during transport and storage, instructions and a warning label. Information on the recall can be found on the CSPC website.
The matter is being handled by Trial Attorney Roger Gural of the Civil Division’s Consumer Protection Branch, Assistant U.S. Attorney Neil J. Evans for the District of Oregon and Harriet Kerwin of the CPSC Office of the General Counsel.
In agreeing to settle this matter, Fiskars has not admitted that it knowingly violated the CPSA.
To view the Consent please click here.
To view the Complaint please click here.
Manhattan U.S. Attorney Settles Civil Mortgage Fraud Lawsuit Against Golden First Mortgage Corp. and Its Owner, David MovtadyRead the Press Release
Defendants Admit to and Accept Responsibility for Submitting False Loan Certifications to HUD-FHA
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States has settled a civil mortgage fraud lawsuit against GOLDEN FIRST MORTGAGE CORP. (“GOLDEN FIRST”), and its owner, operator and President, DAVID MOVTADY (“MOVTADY”). The Government’s complaint, filed in April 2013, and amended in August 2013 (the “Amended Complaint”), sought damages and civil penalties under the False Claims Act for years of misconduct in connection with GOLDEN FIRST’s participation in the Federal Housing Administration’s (“FHA’s”) Direct Endorsement Lender Program. In the settlement approved today in Manhattan federal court by U.S. District Judge Jesse Furman, MOVTADY and GOLDEN FIRST admitted, acknowledged, and accepted responsibility for conduct alleged in the Amended Complaint, specifically that they failed to maintain a compliant quality control program and therefore did not conform to all U.S. Department of Housing and Urban Development (“HUD”) and FHA regulations applicable to the Direct Endorsement Lender Program. This conduct was contrary to the representations in GOLDEN FIRST’S annual certification, including the annual certification signed by MOVTADY on September 15, 2008. The defendants also agreed to a $36 million judgment against GOLDEN FIRST and a $300,000 payment from MOVTADY. Finally, the settlement permanently bars MOVTADY from conducting any business with the federal government.
Manhattan U.S. Attorney Preet Bharara said: “This settlement holds Golden First and its owner, David Movtady, accountable for lying to the Government about compliance with HUD requirements and approving bad loans. This type of conduct costs the United States millions of dollars when the loans inevitably default, and this Office is committed to snuffing it out.”
According to the allegations contained in the Complaint, the Amended Complaint, and other public court filings:
GOLDEN FIRST was a participant in the Direct Endorsement Lender program – a federal program administered by FHA – from 1989 until 2010. MOVTADY was the owner, president and operator of GOLDEN FIRST from 1979 until 2010. As a Direct Endorsement Lender, GOLDEN FIRST had the authority to originate, underwrite, and certify mortgages for FHA insurance. If a Direct Endorsement Lender approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD for the costs associated with the defaulted loan, which HUD must then pay. Under the Direct Endorsement Lender program, HUD relies on lenders to properly review, underwrite, and certify loans before they are endorsed for FHA insurance. Direct Endorsement Lenders are therefore required to follow HUD’s program rules, including certifying mortgages and maintaining a quality control program that can prevent and correct any deficiencies in their underwriting. The quality control program requirements include maintaining a program independent of the lender’s business units; disclosing to HUD, within 60 days of initial discovery, all loans containing evidence of fraud or other serious underwriting problems; and conducting a full review of all loans that go into default within the first six payments (“early payment defaults”). GOLDEN FIRST and MOVTADY failed to comply with all three of these basic requirements. Notwithstanding these failures, MOVTADY fraudulently certified that GOLDEN FIRST “conforms to all HUD-FHA regulations necessary to maintain its HUD-FHA approval.”
GOLDEN FIRST and MOVTADY also engaged in a regular practice of originating and underwriting FHA loans that GOLDEN FIRST and MOVTADY knew should have never been approved. Nonetheless, GOLDEN FIRST certified that more than a thousand FHA loans met HUD’s requirements and therefore were eligible for FHA insurance.
Pursuant to the settlement, the United States will obtain a $36 million judgment against GOLDEN FIRST and recover $300,000 from MOVTADY, individually, within six months of the settlement. MOVTADY will also be permanently barred from conducting any business with the federal government. As part of the settlement, the defendants admitted, acknowledged, and accepted responsibility for the following misconduct:
- GOLDEN FIRST failed to conform fully to HUD-FHA rules requiring Direct Endorsement Lenders to maintain a compliant quality control program;
- Contrary to representations in GOLDEN FIRST’S annual certifications, including an annual certification signed by MOVTADY on September 15, 2008, GOLDEN FIRST did not conform to all applicable HUD-FHA regulations;
- GOLDEN FIRST endorsed certain loans for FHA mortgage insurance that did not meet all underwriting requirements contained in HUD’s handbooks and mortgagee letters, and therefore were not eligible for FHA mortgage insurance under the DEL program; and
- GOLDEN FIRST submitted to HUD-FHA certifications stating that certain loans were eligible for FHA mortgage insurance when in fact they were not; FHA insured certain loans endorsed by GOLDEN FIRST that were not eligible for FHA mortgage insurance; and HUD consequently incurred losses when some of those loans defaulted.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Mr. Bharara thanked HUD’s Office of the Inspector General for its assistance in this case.
This case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Lara K. Eshkenazi and Lawrence H. Fogelman are in charge of the case.
Major Drug Dealer Pleads Guilty to Drug Distribution and Money LaunderingRead the Press Release
Defendant Must Forfeit Cash, Jewelry and Luxury Automobiles; Conspiracy Generated Total of $108 Million in Revenue
Greenbelt, Maryland – Anthony Torrell Tatum, age 36, of Arlington, Virginia, pleaded guilty late yesterday to drug and money laundering conspiracies, and possession of a firearm in furtherance of drug trafficking. As part of his guilty plea, Tatum consented to the entry of a $108 million forfeiture order, including luxury vehicles, jewelry and cash.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Assistant Director in Charge Andrew G. McCabe of the Federal Bureau of Investigation - Washington Field Office; Chief Mark A. Magaw of the Prince George’s County Police Department; Chief of Police Robert D. MacLean of the U.S. Park Police; and Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division.According to his plea agreement, from at least January 2011 through his arrest on September 6, 2013, Tatum conspired with others to distribute cocaine and heroin in Maryland and elsewhere. A co-conspirator, Ishmael Ford-Bey communicated with the drug supplier, who was located in California. The supplier shipped kilograms to Ford-Bey, using a truck driver to transport the cocaine. The same procedure was followed for each of the deliveries. The truck driver would communicate with the source in California and with Ford-Bey. After Ford-Bey took the boxes of drugs, a co-conspirator would usually drive up and deliver a box of money to the truck driver to be returned to the supplier in California.
On August 28, 2013, a search warrant was executed on a storage unit Tatum had rented in Fort Washington, Maryland, using an alias. Law enforcement agents located and seized, among other things, approximately one kilogram of cocaine wrapped in a white T-shirt, inside a black plastic bag, which was inside a cardboard box addressed to Tatum; approximately 258 grams of cocaine in three clear plastic bags, as well as multiple empty plastic bags, all found in the same cardboard box; approximately 195 grams of heroin in two clear plastic bags and approximately 6.9 grams of cocaine in one clear plastic bag, all found in a large black paper bag; a vacuum food sealer; a black 7.62x39 assault rifle, and two 7.62x39 magazines.
On September 6, 2013, a search warrant was executed at an apartment in Arlington, Virginia. In the apartment, law enforcement agents seized, among other things, $7,823 in cash; a Maryland Driver’s license in the name of the alias used by Tatum to rent the Fort Washington storage unit, but bearing Tatum’s picture; six cellular telephones; blank checks and business documents in the name of businesses used by Tatum to facilitate the drug and money laundering conspiracies; a book titled “Cover Your Tracks Without Changing Your Identity; How to Disappear Until You Want to Be Found”; and pieces of expensive jewelry and clothing. Tatum also was located at the apartment and arrested.
Also on September 6, 2013, a search warrant was executed on a storage unit used by the conspirators in Temple Hills, Maryland. Law enforcement agents seized, among other things, two digital scales with drug residue; approximately 0.083 grams of heroin recovered from a glass table top; a Glock 30 handgun, a ten round magazine, and.45 caliber ammunition; two boxes of ziplock bags; and a payment receipt for the storage unit in the name of Tatum.
On October 1, 2013, a search warrant was executed at the apartment of a co-conspirator that Tatum and Ford-Bey had been identified as visiting. Agents located a safe which contained $823,640 in cash, several expensive watches, and jewelry. In addition, agents recovered scales, three heat sealers, a coffee grinder, a currency counter, and other drug paraphernalia, as well as approximately 350 grams of cocaine. Latent fingerprints recovered from the heat sealers were identified as Tatum and Ford Bey’s.
In an effort to disguise and hide their drug proceeds, Tatum and others created numerous business entities, which had little, if any legitimate business. Tatum set up bank accounts in the name of each business and deposited drug proceeds into those business accounts. On September 6, 2013, warrants were executed on bank accounts in the name of Tatum or his businesses, resulting in the seizure of over $185,000. Tatum used drug proceeds to purchase a BMW, a 2013 Volvo, a 2010 Land Rover. Tatum also used drug proceeds to purchase expensive jewelry, including men’s watches.
Tatum faces a minimum mandatory sentence of 10 years in prison and up to life in prison for the drug conspiracy, a maximum of 20 years in prison for the money laundering conspiracy; and a mandatory minimum sentence of five years, consecutive to any other sentence, and maximum of life in prison for the gun charge. The government will recommend a sentence of 35 years in prison. U.S. District Judge Deborah K. Chasanow has scheduled sentencing for May 18, 2015 at 9:30 a.m.
Ishmael Ford-Bey, age 40, of Mitchellville, Maryland, previously pleaded guilty to nine counts of a superseding indictment charging him with conspiracy, possession with intent to distribute cocaine, using a phone to facilitate drug distribution, and money laundering. As part of his guilty plea, Ford-Bey also consented to the entry of a $108 million forfeiture order, including luxury vehicles, jewelry and cash. He is scheduled to be sentenced on March 5, 2015, at 10:00 a.m.
United States Attorney Rod J. Rosenstein commended the DEA, FBI, Prince George’s County Police Department, U.S. Park Police and U.S. Postal Inspection Service for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Deborah A. Johnston and Thomas P. Windom, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
Local Man Sentenced for Aggravated Identity Theft, Using Deceased Children’s Identities to File False Income Tax ReturnsRead the Press Release
CINCINNATI, OHIO – Christopher K. Smith, 29, of Hamilton, Ohio, was sentenced to 24 months in jail for aggravated identity theft. Smith filed false federal income tax returns with the Internal Revenue Service (IRS) using the stolen identities belonging to deceased individuals, including children.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, announced the sentence handed down today by U.S. District Judge Michael R. Barrett.
According to court documents, between February 2012 and June 2012 Christopher Smith electronically submitted at least five false income tax returns to the IRS for the 2011 income tax year using at least ten stolen identities, all but one of which belonged to deceased individuals, including children. Smith attempted to file at least three more false income tax returns using nine other stolen identities, but these returns were rejected by the IRS.
Smith prepared and filed the false income tax returns in Fairfield, Ohio. The income tax returns contained fabricated information as it related to the taxpayer, including addresses, dependents, occupations, income amounts and education expenses. The inclusion of this false information often qualified the taxpayer listed on the return to receive the Earned Income Credit, Additional Child Tax Credit and Education Credit, which resulted in even greater refund amounts.
Smith primarily used the stolen identities of deceased persons – using the names and Social Security numbers of adults as the taxpayers and the names and Social Security numbers of children as the dependents. He further indicated on the returns that the children had passed away during the tax year. In at least four instances, including his own 2011 tax return, Smith had to change the names and Social Security numbers used as dependents on each return, until they were accepted by the IRS, as some of the victims' information had already been sent to the IRS.
Smith prepared and electronically submitted a false federal income tax return using his own name as a taxpayer and the stolen identity of an individual, falsely claiming the stolen identities of this individual’s daughter and son. This then allowed him to falsely qualify for the Earned Income Tax Credit and Additional Child Tax Credit. Smith claimed, and received on a prepaid debit card, a fraudulent refund in the amount of $7,482. Both the children’s identities were those of children who had died in 2011. Neither of the children’s parents had given Smith permission to use their child’s Social Security number of claim their child on his tax return.
The total intended loss for this scheme was $41,522. For restitution purposes, Smith owes the IRS $9,344.
U.S. Attorney Stewart commended the investigation by IRS and Assistant United States Attorney Jessica W. Knight, who is prosecuting this case.
Laguna Pueblo Man Pleads Guilty to Federal Assault ChargeRead the Press Release
ALBUQUERQUE – Bradford Day, 40, an enrolled member of the Laguna Pueblo who resides in Laguna, N.M., pleaded guilty this morning to an assault resulting in serious bodily injury charge.
Day was arrested on May 6, 2014, on a criminal complaint charging him assault with a deadly weapon and assault resulting in serious bodily injury. According to the complaint, Day assaulted a member of the Acoma Pueblo on April 26, 2014, in a location within Acoma Pueblo in Cibola County, N.M. The complaint alleges that in the early morning hours of April 26, 2014, Day assaulted the victim by throwing a full pint of beer at the victim’s face, causing the victim to suffer bruises, cuts and the loss of three teeth.
During today’s proceedings, Day entered a guilty to a felony information charging him with assault resulting in serious bodily injury. Day admitted assaulting the victim on April 26, 2014, by throwing an unopened bottle of beer at the victim and knocking out three of the victim’s teeth.
At sentencing Day faces a statutory maximum penalty of ten years in federal prison. His sentencing hearing has yet to be scheduled. The maximum potential sentence is prescribed by Congress and is provided for informational purposes only. The sentence imposed will be determined by the court.
This case was investigated by the Laguna/Acoma Agency of the BIA’s Office of Justice Services and the Acoma Tribal Police Department. Assistant U.S. Attorney David Adams is prosecuting this case.
Justice Department Requires Divestitures in Verso Paper Corp.'s Acquisition of NewPage Holdings Inc.Read the Press Release
The Department of Justice announced today that it will require Verso Paper Corp. (Verso) and NewPage Holdings Inc. (NewPage) to divest two paper mills, one in Rumford, Maine, and another in Biron, Wisconsin, in order for Verso to proceed with its acquisition of NewPage. Without this divestiture, the department said, the transaction would have risked higher prices in the United States and Canada for papers used for labels, magazines and catalogues.
The Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed acquisition. At the same time, the division filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the lawsuit.
“This deal threatened to weaken competition in key coated publication and label paper markets in the United States and Canada,” said William J. Baer, Assistant Attorney General of the department’s Antitrust Division. “Competition between Verso and NewPage historically has resulted in lower prices, improved products, and better service. By requiring the divestiture of mills that produce these products, today’s proposed settlement will ensure that consumers benefit from continuing competition in the sale of coated paper. The Antitrust Division remains committed to preserving competitive vigor in markets for forest products.” Baer also noted that this divestiture requirement follows two other proposed mergers between forest products suppliers that were abandoned after the department expressed concern.
Coated freesheet web paper is bright, heavier-weight glossy paper with excellent print qualities that is used for magazine covers, premium magazines, and similar products. Coated groundwood paper is typically used for the covers of low-cost magazines and the interior pages of magazines and catalogues. Label paper, a type of freesheet paper, is coated on only one side to allow for the use of graphics on the coated side and adherence of the uncoated side to a product. Coated label paper is used on a wide variety of products, from soup cans to wine bottles.
According to the department’s complaint, Verso’s acquisition of NewPage would significantly increase concentration in various coated paper markets in the United States and Canada. Verso and NewPage’s combined share is approximately 50 percent in coated freesheet web paper, 40 percent in coated groundwood paper, and 70 percent in coated label paper. Preserving competition between Verso and NewPage is particularly important in the shrinking coated freesheet web and coated groundwood markets, which are likely to see higher-cost competitors exit in the next few years.
The proposed divestitures address these competitive concerns. Under the terms of the proposed consent decree, Verso must divest NewPage’s Rumford and Biron paper mills to Catalyst Paper Corporation (Catalyst) or an alternative, independent buyer approved by the United States. Collectively, the mills to be divested produced approximately 940,000 tons of coated groundwood, coated freesheet, and other papers, which is approximately the same amount of production as Verso currently operates.
Verso is a Delaware corporation headquartered in Memphis, Tennessee. It operates two mills that collectively produce coated freesheet web paper, coated groundwood paper, label paper, and other types of paper. In 2013, Verso had approximately $1.4 billion in sales.
NewPage is a Delaware corporation headquartered in Miamisburg, Ohio. NewPage operates eight mills that collectively produce coated freesheet web paper, coated groundwood paper, label paper, and other types of paper. Its annual sales for 2013 were approximately $3.1 billion.
Catalyst is a Canadian corporation headquartered in Richmond, British Columbia. Catalyst operates three paper mills. Catalyst’s 2013 sales totaled approximately $1 billion.
As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Peter Mucchetti, Chief, Litigation I Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 4100, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may approve the proposed settlement upon finding that it is in the public interest.
Fort Thompson Man Charged with Arson and BurglaryRead the Press Release
United States Attorney Brendan V. Johnson announced that a Fort Thompson, South Dakota, man has been indicted by a federal grand jury for Arson and Burglary.
Lewis Brown, Jr., age 21, was indicted on December 9, 2014. He appeared before U.S. Magistrate Judge Mark A. Moreno on December 18, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to life in custody and/or a $250,000 fine, 5 years of supervised release, and $200 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about October 15, 2014, Brown willfully and maliciously set fire to and burned a duplex. Brown is also alleged to have entered and remained in an occupied structure, without permission, during night time, with the intent to commit the crime of arson.
The charges are merely accusations and Brown is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Crow Creek Agency. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Brown was released on bond pending trial. A trial date has not been set.
Cherry Creek Man Charged with Assault Resulting in Serious Bodily InjuryRead the Press Release
United States Attorney Brendan V. Johnson announced that a Cherry Creek, South Dakota, man has been indicted by a federal grand jury for Assault Resulting in Serious Bodily Injury.
Joshua Hale, age 24, was indicted on December 9, 2014. He appeared before U.S. Magistrate Judge Mark A. Moreno on December 18, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about February 6, 2014, Hale unlawfully assaulted an adult male, resulting in serious bodily injury.
The charge is merely an accusation and Hale is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Mikal Hanson is prosecuting the case.
Hale was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Chamberlain Man Sentenced for Possession of A Controlled SubstanceRead the Press Release
United States Attorney Brendan V. Johnson announced that a Chamberlain, South Dakota, man convicted of Possession of a Controlled Substance was sentenced on December 31, 2014, by U.S. Magistrate Judge Mark A. Moreno.
Rodney Hickey, age 49, was sentenced to 12 months of custody, 1 year of supervised release, a $1,000 fine, and a $25 special assessment to the Federal Crime Victims Fund.
Hickey was indicted by a federal grand jury on May 21, 2013. He pled guilty on December 16, 2014.
The conviction stems from an incident on or about January 12, 2013, when a vehicle operated by Hickey was the subject of a felony traffic stop by a South Dakota Highway Patrol Trooper. During the search of the vehicle, the trooper found a pill bottle with 48 pills of various kinds, as well as two baggies of white powder later determined to be methamphetamine. Also found in the vehicle were firearms, a scale, a glass pipe, a paper snort tube with methadone residue, three baggies with residue amounts of methamphetamine, four syringes, four cook spoons, a film canister with a residue amount of marijuana, ten needles, five Q-tips, and “Hickey Drilling” forms.
This case was investigated by the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney Jay Miller prosecuted the case.
Hickey was immediately turned over to the custody of the U.S. Marshals Service.
30 December 2014
Woman Arraigned on Fraudulently Obtaining Ssi BenefitsRead the Press Release
CONTACT: Karen Brown
PHONE: (716) 843-5836
FAX: (716) 551-3051
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury in Buffalo returned a two-count Indictment on December 17, 2014, charging Tracy Anderson, age 43, of Tonawanda, New York, with knowingly and willfully making a false document and unlawfully receiving supplemental security income, in violation of Title 18, United States Code, Sections 1001(a)(3) and 641. Anderson was arrested and arraigned on December 29, 2014. The charges carry a maximum penalty of 10 years in prison, a fine of $250,000, or both.
Assistant U.S. Attorney Scott S. Allen, Jr. stated that the Indictment charges the defendant with making a false document and fraudulently receiving federal benefits on behalf of her son when in fact, her child was not living with her at the time of receipt.
The Indictment is the result of an investigation from the Office of the Inspector General of the Social Security Administration, under the direction of Resident Agent in Charge Bradley Parker.
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.
West Virginia Man Charged with Methamphetamine TraffickingRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – Noel Barrera Silva, 25, a foreign national living in Moorefield, West Virginia, was charged today with methamphetamine trafficking after authorities recently recovered a large quantity of the drug from a vehicle Silva was operating, United States Attorney William J. Ihlenfeld, II, announced.
According to Ihlenfeld, the West Virginia State Police conducted a traffic stop in Wardensville, West Virginia last week and discovered Silva to be in possession of four pounds of methamphetamine. As a result of the traffic stop, Silva was charged today in federal court by criminal complaint with the felony offense of “Possession with Intent to Distribute Methamphetamine.” A similar charge that was filed in state court will be dismissed once a federal detainer has been lodged against Silva.
“I commend the efforts of the Potomac Highlands Drug and Violent Crimes Task Force and the West Virginia State Police in preventing such a large quantity of methamphetamine from hitting the streets of North Central West Virginia,” said U.S. Attorney Ihlenfeld. “In light of the increasing influx of methamphetamine from foreign sources, we must remain vigilant in identifying and prosecuting the sources of supply for this highly addictive and dangerous drug.”
A complaint is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Watertown Man Sentenced for His Role in Operation Black WidowRead the Press Release
United States Attorney Brendan V. Johnson announced that a Watertown, South Dakota, man convicted of Conspiracy to Distribute a Controlled Substance was sentenced on December 29, 2014, by U.S. District Judge Karen E. Schreier.
Patricio Rodriguez Pena, age 56, was sentenced to 180 months in prison, to be followed by 5 years of supervised release.
Pena was indicted for Conspiracy to Distribute 50 Grams or More of Methamphetamine by a federal grand jury on July 9, 2013. He pled guilty to the offense on October 6, 2014.
Pena’s indictment was a result of Operation Black Widow, an extensive multi-year investigation into a wide variety of alleged criminal activity. The investigation resulted in nearly a dozen indictments for drug trafficking and firearm offenses.
For his part in the Operation, Pena provided at least 500 grams, but not more than 1.5 kilograms, of “ice” methamphetamine (at least 80% purity) to various co-conspirators to distribute in South Dakota and elsewhere.
The investigation was led by the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF). ATF received significant assistance from other law enforcement agencies, including the Watertown Police Department, the Codington County Sheriff, the South Dakota Division of Criminal Investigation, and the Drug Enforcement Administration. Assistant U.S. Attorney John E. Haak prosecuted the case.
Pena was immediately turned over to the custody of the U.S. Marshals Service.
Two Serra Nissan Managers Charged in Loan Fraud ConspiracyRead the Press Release
BIRMINGHAM -- Federal prosecutors today charged two former managers at Serra Nissan in connection with a conspiracy at the Birmingham car dealership to boost loan approvals and car sales fraudulently, announced U.S. Attorney Joyce White Vance, IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot and FBI Special Agent in Charge Richard D. Schwein Jr.
The U.S. Attorney's Office filed a three-count information in U.S. District Court charging former Serra Nissan sales manager GERALD R. SHEPARD, 56, of Pinson, with conspiracy, bank fraud and subscribing to a false tax return. The U.S. Attorney filed a separate two-count information charging JEFFREY R. GREEN, 33, of Porterdale, Ga., a former Serra Nissan finance manager, with conspiracy and failure to file an individual tax return. A federal grand jury indicted Shepard on similar charges in August, but he has agreed to plead guilty to the charges filed today. The government agrees to dismiss the August indictment when Shepard is sentenced on the new charges.
"These defendants are charged with conspiring to defraud customers and financial institutions who trusted the dealership to provide truthful information during the vehicle financing process," Vance said.
"Car-buyers who trusted this dealership to honestly handle their vehicle financing and financial institutions that provided loans through the dealership all became victims of fraud perpetrated to increase vehicle sales," Schwein said. "The public can expect that the FBI will continue to aggressively investigate loan fraud to protect consumers and the nation's financial system."
"The charges against these two defendants clearly illustrate that all individuals who engage in these types of illegal activities will be held accountable for their actions," Hyman-Pillot said. "These defendants not only manipulated the system and falsified documents with the intention of increasing profits at the expense of others; they also ignored the federal tax laws with regards to their own personal income tax returns."
Prosecutors charged both Shepard and Green with conspiring with others at the dealership, between August 2010 and October 2013, to defraud financial institutions and Serra Nissan customers by submitting false information to lenders to increase vehicle sales in order to boost personal profits.
The information filed against Shepard also charges him with submitting a false tax return for 2012. The information against Green charges him with failing to file his Individual Income Tax Return with the IRS for tax year 2012.
The charges against these Serra Nissan managers follow federal charges earlier this year against six other sales managers, finance managers and salesmen at Serra Nissan, including Abdul Islam Mughal, D. Scott Burton, Michael J. Wilkinson, Dwight A. Perry, Terry W. Henderson, Jr., and Roland W. Riley. Mughal, 48, of Trussville, pleaded guilty in July to conspiring with other Serra Nissan salesmen and managers to sell more cars by falsifying loan documents in order to defraud customers and financial institutions. Mughal also pleaded guilty to one count of bank fraud for submitting falsified loan documents to financial institutions between January 2012 and October 2013. Mughal is scheduled for sentencing May 21, 2015. The charges against Burton, Wilkinson, Perry, Henderson, and Riley are pending and that case is scheduled for trial March 16, 2015.According to the charges against Shepard and Green, they and other members of the conspiracy participated in various means to carry out their fraud and obtain auto loans that, otherwise, would not have been approved. Those means included the following:
• Creating or altering documents to submit to financial institutions to show inflated income for prospective buyers.
• Directing finance managers and salesmen to submit fraudulent documents to financial institutions to misrepresent proof of a customer's residency.
• Listing accessories not actually included on a vehicle so a financial institution would increase its loan amount. The defendants and others had a financial incentive to increase a loan amount in order to increase commissions paid to certain employees.
• Presenting straw buyers, who could qualify for a loan, to financial institutions when the actual buyer could not qualify.The defendants and others also defrauded customers and financial institutions by quoting a customer an inflated monthly vehicle loan payment so that a finance manager could add a warranty and gap insurance without the customer realizing it, according to the indictment.
The maximum penalty for the conspiracy count is five years in prison and a $250,000 fine. The maximum penalty for bank fraud is 30 years in prison and a $1 million fine. The maximum penalty for subscribing to a false tax return is 3 years in prison and a $100,000 fine. The maximum penalty for failing to file an individual tax return is 1 year in prison and a $25,000 fine.
The IRS and the FBI investigated the case, which Assistant U.S. Attorneys Amanda S. Wick and Robin B. Mark are prosecuting.
The public is reminded that an information contains only charges. Defendants are presumed innocent unless and until proven guilty.
Statement from Attorney General Holder on Yearly Law Enforcement Officer Fatality StatisticsRead the Press Release
The National Law Enforcement Officers Memorial Fund today released preliminary fatality statistics for 2014. The data in the report shows that 126 federal, state, local, tribal and territorial officers were killed in the line of duty this year. The report further showed that in 2014, 50 officers were killed by firearms, 49 officers were killed in traffic-related incidents, and 27 officers died due to other causes including 24 who suffered from job-related illnesses—such as heart attacks—while performing their duties.
Attorney General Eric Holder made the following statement today:
"These troubling statistics underscore the very real dangers that America's brave law enforcement officers face every time they put on their uniforms. Each loss is both tragic and unacceptable -- a beloved father, mother, son, or daughter who never came home to their loved ones.
"That's why, over the last six years, my colleagues and I have taken action to support these courageous men and women. As we speak, the Justice Department continues its efforts to empower local, state, tribal, and federal law enforcement personnel to do their jobs as safely and effectively as possible. In 2011, I created an Officer Safety Working Group in response to concerns about violence directed at law enforcement. The department is currently funding thorough analysis of 2014 officer fatalities, including ambushes of law enforcement and other incidents, so we can mitigate risks in the future. And through groundbreaking initiatives like VALOR, we are providing cutting-edge training to help prevent violence against law enforcement, to improve officer resilience, and to increase survivability during violent encounters.
"Through our Bulletproof Vest Partnership Program, we're helping to provide lifesaving equipment to those who serve on the front lines. And through the Public Safety Officers' Benefits Program, we're offering our strongest support to our brave officers and their loved ones in the toughest of times.
"Going forward, this unshakeable commitment to those who serve will continue to guide our efforts to improve 21st-century policing and build trust between law enforcement and the communities they protect.
"I have always been proud to support these selfless public servants. All Americans owe our courageous law enforcement personnel a tremendous debt of gratitude for their patriotic service, for their often-unheralded sacrifices, and for the dangers they routinely face in the name of public safety."
Seven Persons Charged in Telemarketing Scheme Targeting Small Business OwnersRead the Press Release
LAS VEGAS, Nev. – Seven persons have been charged by the federal grand jury in Las Vegas with using fraud and deception to steal money from small business owners who thought they were receiving assistance in obtaining grants for their businesses, announced U.S. Attorney Daniel G. Bogden for the District of Nevada and Laura A. Bucheit, Special Agent in Charge of the FBI for Nevada.
Mark L. Bausch, aka Mark Eting, 40, Alan W. Rodrigues, 55, David Bergstrom, 49, Jonas Bowen, 61, Rachel Glaser, 74, Lee Panelli, 66, all of the Las Vegas area, and Craig Rudolph, 43, of Wonder Lake, Ill., are charged in a criminal indictment with one count of conspiracy to commit wire fraud and 31 counts of wire fraud. Bausch and Rodrigues are also charged with six counts of money laundering. Defendants Bausch, Rodrigues, Glaser, and Panelli were arrested this morning in Las Vegas. They appeared this afternoon before U.S. Magistrate Judge Nancy J. Koppe and pleaded not guilty to the charges, and were released on personal recognizance bonds with conditions pending trial. Defendant Rudolph was arrested in Chicago this morning and will be scheduled for a court appearance in Las Vegas in the near future. Defendants Bergstrom and Bowen are scheduled to surrender to federal authorities next week.
“Paying money to someone in anticipation of receiving something of greater value—such as a loan, contract, investment, or gift, is a risky proposition,” said U.S. Attorney Bogden. “You should always ask yourself if you have any guarantee that the person requesting your money will use it in the manner upon which you agreed. If the opportunity seems too good to be true, it probably is.”
“Today’s arrests highlight the FBI’s commitment to investigate financial crimes and the continued need for consumers to be cautious and protect themselves,” said Special Agent in Charge Bucheit.
According to the indictment, from about 2007 to 2010, the defendants allegedly organized and operated four telemarketing companies, Small Business Funding Co., Inc., Company Funds, Inc., Foundation Research, Inc., and Silver State Holding Company. In exchange for fees, the defendants offered to help small business owners obtain grants from public and private entities. The defendants made false statements and promises to the victims to make it appear that they were likely to or guaranteed to receive a grant. The defendants hired salespersons to market the services and to provide false information to the customers. In order to convince the customers that the service was legitimate, the defendants instructed their employees to conduct research about funding entities and send letters to customers and funders, knowing that many of the customers would not qualify for the grants. The defendants also solicited customers by conducting seminars throughout the United States. Through the entire scheme, the telemarketing companies received numerous complaints, and the defendants made false statements to them to prevent or delay them from contacting law enforcement. The defendants used the proceeds from the scheme to enrich themselves.
If convicted, the defendants face a maximum of 20 years in prison on all counts. Additionally, there is a maximum $250,000 fine on the conspiracy and each wire fraud count, and a maximum fine of $500,000 on each money laundering count.
The case is being investigated by the FBI and IRS Criminal Investigation, and prosecuted by Assistant U.S. Attorney Daniel R. Schiess.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.com.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Schuylkill County Man Charged with Attempting to Entice A Minor and Receiving and Possessing Child PornographyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Coaldale resident was charged yesterday in a criminal complaint by agents of the United States Postal Inspectors Service with attempting to entice a minor to engage in illegal sexual activities and receiving and possessing child pornography.
According to United States Attorney Peter Smith, the complaint alleges that Robert Rang, age 25, used a facility of interstate commerce during September and October of 2014, to attempt to persuade and induce a minor to engage in illegal sexual activities. The complaint also alleges that Rang received and possessed child pornography from September 2014 to December 29, 2014.
The investigation is being conducted in cooperation with the U.S. Attorney’s Office and the United States Postal Inspection Service in Massachusetts.
Rang appeared yesterday before U.S. Magistrate Judge Karoline Mehalchick in Wilkes-Barre and was ordered to be detained in prison pending a detention hearing scheduled for January 6, 2015. Rang faces a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison if he is convicted of the enticement charge; a mandatory minimum sentence of five years in prison and a possible maximum sentence of 20 years in prison if he is convicted of the receiving child pornography charge; and a maximum sentence of 10 years in prison if he is convicted of the possession of child pornography charge.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc for more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
The case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
****Pool Company Owner Sentenced for Hiring Unauthorized AliensRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Raymond Scott Vincent, age 47, of Gaithersburg, Maryland, yesterday to two days in prison and 60 days of home confinement as part of 18 months of probation, for a pattern and practice of knowingly hiring unauthorized aliens. Judge Grimm also ordered Vincent to perform 80 hours of community service, pay a fine of $36,000 and forfeit $42,262.60.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Special Agent in Charge Steven Anderson, of the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; Special Agent in Charge Niall Meehan of the Washington Field Office of the U.S. Department of State’s Diplomatic Security Service; and District Director Gregory Collett of the U.S. Citizenship and Immigration Services (USCIS) Baltimore District Office.
According to his plea agreement, Vincent was the owner of RSV Pools, a pool service company that provided lifeguards and pool maintenance to pools in the Washington, DC metropolitan area. From January 2009 through June 2013, RSV hired at least 12 unauthorized aliens. Vincent approved the employment of each unauthorized alien and knew that at least three of the individuals were not legally authorized to work when he approved them for employment. The other nine employees were legally authorized for employment when they were hired, but their work status expired and they continued employment with RSV, all with Vincent’s knowledge. Vincent approved paying four of the unauthorized employees in cash so that they did not appear on RSV’s books.Vincent also permitted at least three of the unauthorized aliens to rent a company apartment in 2012 and 2013. Vincent profited, either directly or indirectly through RSV, from the unauthorized aliens’ rent payments.
In a related case, Judge Paul W. Grimm previously sentenced Milen Radomirski, age 34, a Bulgarian national residing in Germantown, Maryland, to two years in prison for visa fraud and ordered Radomirski to forfeit $100,000. Radomirski worked for RSV from 2003 to August 2013. As part of his employment, Radomirski recruited international workers that RSV could sponsor to work in the U.S. on H-2B visas and other short-term visas. Radomirski admitted that he fraudulently obtained more than 100 H-2B visas. An H-2B visa is a non-immigrant visa granted to citizens of other countries to work in the U.S. on a temporary basis. Although sponsored workers could not legally be employed by any other company, Radomirski knew that many of the visa beneficiaries would not work for his company at all, would only work at his company for a short period of time, or would work for other employers in addition to his company.
As part of Vincent’s plea agreement, neither he nor his company can apply for visas or work permits for any foreign workers for three years.United States Attorney Rod J. Rosenstein praised the agencies participating in the Document Benefit Fraud Task Force - HSI Baltimore, Department of Labor – Office of Inspector General; U.S. Department of State’s Diplomatic Security Service and U.S. Citizenship and Immigration Services - for their work in the investigation and thanked Assistant U.S. Attorney Thomas P. Windom, who prosecuted the case.
Lower Brule Man and Woman Sentenced for Assaulting A Federal Officer and Aiding and AbettingRead the Press Release
United States Attorney Brendan V. Johnson announced that a Lower Brule, South Dakota, man and woman convicted of Assaulting, Resisting and Impeding a Federal Officer and Aiding and Abetting have been sentenced by U.S. District Judge Roberto A. Lange.
Toni Harmon, a/k/a Toni Bad Horse, age 39, and Sterling St. Cloud, age 33, were sentenced to time served (approximately 8 months), 2 years of supervised release, and each were ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Harmon and St. Cloud were indicted by a federal grand jury on May 13, 2014. Harmon pled guilty on September 23, 2014, and St. Cloud pled guilty on October 9, 2014.
The convictions stem from an incident on or about March 8, 2014, when a Bureau of Indian Affairs officer responded to a call on an alleged assault. Upon arrival, he made contact with St. Cloud, Harmon, and others. The officer began to place St. Cloud into custody for an outstanding tribal warrant, when St. Cloud attempted to run away, and a struggle ensued with the officer. Harmon then intervened and grabbed the officer’s hand. St. Cloud was able to get free with the assistance of Harmon and they both fled the house through the door Harmon had opened.
This case was investigated by the Bureau of Indian Affairs, Lower Brule Agency. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
Lee's Summit Man Sentenced for Selling Stolen Items on eBayRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Lee’s Summit, Mo., man was sentenced in federal court today for his role in a conspiracy to burglarize the vehicles of at least 144 victims and sell the stolen items on eBay.
Nathaniel Dixon, 37, of Lee’s Summit, was sentenced by U.S. Chief District Judge Greg Kays to five years in federal prison without parole, which is the statutory maximum sentence. The court also ordered Dixon to pay $104,657 in restitution to his victims and to forfeit to the government $125,921, which represents the proceeds he obtained from the criminal conspiracy.
On May 27, 2014, Dixon pleaded guilty to participating in a conspiracy to commit wire fraud. From Jan. 1, 2010, until Aug. 31, 2011, Dixon led a conspiracy to burglarize scores of vehicles in the Kansas City metropolitan area, in both Missouri and Kansas. They broke into the vehicles, removed entertainment/navigation systems (often MyGigs) from the dashboard, and stole other personal items such as computers, briefcases, purses, cell phones and credit cards from the vehicles. They also jacked up the vehicles to steal the tires and wheels, and would often use the victims’ landscaping blocks to prop the vehicles up after stealing the tires and wheels.
Dixon bought the stolen auto parts and electronics from his coconspirators, then posted the items for sale on his eBay account, listing the parts at prices lower than retail value. Dixon and his coconspirators caused a loss of approximately $476,000 to the victims. Dixon received payments through his PayPal account totaling approximately $125,921.
In a separate case, Nickalass King, 36, pleaded guilty and was sentenced to a total of three years and three months in federal prison without parole for his role in the conspiracy and for violating the conditions of his supervised release.
This case was prosecuted by Assistant U.S. Attorney Kate Mahoney. It was investigated by the U.S. Secret Service and the Kansas City, Mo., Police Department.Fort Thompson Man Sentenced for AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a Fort Thompson, South Dakota, man convicted of two counts of Domestic Assault by an Habitual Offender, and one count of Simple Assault, was sentenced on December 22, 2014, by U.S. District Judge Roberto A. Lange. He was found guilty by a federal jury in Pierre on October 10, 2014.
Santana Drapeau, age 22, was sentenced to 41 months in custody, 2 years of supervised release, $954 in restitution, and a $210 special assessment to the Federal Crime Victims Fund.
The conviction stemmed from incidents occurring on May 18, 2014, in which Drapeau assaulted his spouse and intimate partner at two different locations, by hitting the victim in the face at a bonfire and physically assaulting her at a residence. Drapeau committed these two assaults at a time when he had three final convictions in Crow Creek Sioux Tribal Court for domestic violence against the same victim.
This case was investigated by the Bureau of Indian Affairs, Crow Creek Agency. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
Drapeau was immediately turned over to the custody of the U.S. Marshals Service.
Florida Man Sentenced in Fraud CaseRead the Press Release
United States Attorney Brendan V. Johnson announced that a Temple Terrace, Florida, man convicted of Conspiracy to Defraud the United States and Aggravated Identity Theft was sentenced on December 29, 2014, by U.S. District Judge Karen E. Schreier.
Jeremy Jamar Blount, age 26, was sentenced to 21 months in prison on the conspiracy charge and 24 months on the identity theft charge, to be served consecutively. Upon release from prison he will be on supervised release for 3 years. Blount was also ordered to make restitution to the Internal Revenue Service (IRS) and the identity theft victims in the amount of $421,116.
Blount and 10 others were indicted on the above charges by a federal grand jury on May 8, 2013. Blount pled guilty on October 6, 2014.
Several of Blount’s co-defendants attended the University of South Dakota in Vermillion and are former members of the football team.Blount was involved in a scheme to defraud the United States by using personal identifying information, including names, Social Security numbers, and dates of birth, of other individuals to file bogus income tax returns showing tax refunds due. The requested refunds totaled approximately $1 million, and the IRS paid fraudulent claims of over $400,000 before the fraud came to light.
As his part in the conspiracy, Blount provided co-conspirators with stolen identities and addresses that were used to receive refunds, knowing that the information was being used in the scheme to receive fraudulent tax refunds in the mail. He also exchanged stolen identities, including names, Social Security numbers, and dates of birth, via text messages with co-conspirators, again knowing that the information was being used in the scheme to receive fraudulent tax refunds in the mail.
This case was investigated by the Vermillion Police Department, the South Dakota Division of Criminal Investigation, and the IRS Criminal Investigation Division. Assistant U.S. Attorney John E. Haak prosecuted the case.
Blount was ordered to surrender to the U.S. Marshals Service by noon on January 20, 2015.
Federal Arson and Fraud Charges Lodged Against Oakdale WomanRead the Press Release
PITTSBURGH - A resident of Allegheny County, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh, Pennsylvania, on charges of malicious destruction of property by fire and wire fraud, United States Attorney David J. Hickton announced today.
The four-count Indictment named Andrea Forsythe, 26, of Oakdale, Pa., as the sole defendant.
According to the Indictment, on or about June 23, 2014, Forsythe set fire to a residential structure located in Sturgeon, Pa., a rental home where she had been residing, so that she could obtain money from the insurance company which provided coverage on that structure. The fraud charges in the Indictment allege that from in and around June of 2014, and continuing thereafter until on or about Dec. 1, 2014, Forsythe engaged in a scheme to defraud Nationwide insurance company in connection with the claim she made for the fire loss.
The law provides for a maximum total sentence of 80 years in prison, a fine of $1,000,000, 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 Shaun E. Sweeney is prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Allegheny County Fire Marshal’s Office 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.
Dupree Man Sentenced for Sexual ContactRead the Press Release
United States Attorney Brendan V. Johnson announced that a Dupree, South Dakota, man convicted of two counts of Sexual Contact by Force and Threat was sentenced on December 22, 2014, by U.S. District Judge Roberto A. Lange.
James Pesicka, a/k/a Pard Pesicka, age 31, was sentenced to 13 years in custody, 5 years of supervised release, and a $200 special assessment to the Federal Crime Victims Fund.
The conviction stems from incidents between July 28, 2008, and February 17, 2012, when Pesicka sexually assaulted a young female victim. Additionally, between March 6, 2012, and May 28, 2013, Pesicka also engaged in sexual contact by fear with another young female victim.
This case was investigated by the Federal Bureau of Investigation and the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Mikal Hanson prosecuted the case. Pesicka was immediately turned over to the custody of the U.S. Marshals Service.