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30 December 2014
Dubuque Man Pleads Guilty to Possession of an Unregistered Sawed-off ShotgunRead the Press Release
A Dubuque man who possessed an unregistered sawed-off shotgun pled guilty on December 29, 2014 in federal court in Cedar Rapids.
Jordan Michael Edmonds, age 24, from Dubuque, Iowa, was convicted of one count of possession of an unregistered sawed-off shotgun.
At the plea hearing, Edmonds admitted that, on or about June 14, 2014, he knowingly possessed a firearm not registered to him in the National Firearms Registration and Transfer Record, specifically a Remington Sportsman model 58 12-gauge shotgun, bearing a partially obliterated serial number, which had a barrel of less than 18 inches in length.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Edmonds remains free on bond previously set pending sentencing. Edmonds faces a possible maximum sentence of 10 years’ imprisonment, a $250,000 fine, $100 in special assessments, and 3 years of supervised release following any imprisonment.
The case is being prosecuted by Special Assistant United States Attorney Erin R. Eldridge and Assistant United States Attorney C.J. Williams and was investigated by the Dubuque Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-CR-1017.Chicago U.S. Attorney’s Office Collected $118.9 Million in Civil and Criminal Actions and Asset Forfeitures in Fiscal Year 2014Read the Press Release
CHICAGO ― The U.S. Attorney’s Office for the Northern District of Illinois collected $118.9 million in fiscal year (FY) 2014, Zachary T. Fardon, United States Attorney for the Northern District of Illinois, announced today. These collections included more than $29.8 million in criminal debts, more than $80.4 million in civil actions, and more than $8.7 million collected through asset forfeiture proceedings, resulting in the office’s total collections exceeding more than four times its budget of approximately $28.1 million in FY 2014. Over approximately the last 11 fiscal years combined, the office has collected more than $1 billion on behalf of the United States.
Additionally, the Northern District of Illinois worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $62.79 million, primarily in civil cases pursued jointly with these offices.
Attorney General Eric Holder announced last month that the Justice Department collected $24.7 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2014. The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.
“Every day, the Justice Department’s federal prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people,” said Attorney General Holder. “Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy. And it shows the fruits of the Justice Department’s tireless work in enforcing federal laws; in protecting the American people from violent crimes, national security threats, discrimination, exploitation, and abuse; and in holding financial institutions accountable for their roles in causing the 2008 financial crisis.”
“Collecting more than four times what we cost is nothing short of remarkable considering that we are still recovering from serious financial challenges,” Mr. Fardon said. “Our attorneys and staff, especially in our Civil Division, Financial Litigation Unit, and Asset Forfeiture Section, continue to expand our commitment to protecting the public and recovering funds for the federal treasury and for victims of federal crime. We need to be constantly vigilant to ensure that crime does not pay, and in doing so, we have provided a substantial net financial benefit to the citizens of our district,” Mr. Fardon added.
During FY 2014, the U.S. Attorney’s Financial Litigation Unit in Chicago collected $29,831,085.20 in criminal actions, including more than $2.5 million in criminal fines; more than $6.5 million in restitution owed to the federal government; and more than $10.6 million in non-federal restitution owed to victims, including the victims of numerous financial fraud and Ponzi-type schemes. More than $9.4 million was restored to crime victims from assets that were forfeited in previous years, including approximately $9.2 million in net liquidated proceeds from the forfeited assets of Rita Crundwell, the former comptroller of Dixon, Ill., who is serving a sentence of nearly 20 years in prison for embezzling $53 million from the town over two decades. Some of the largest criminal fines and restitution in FY 2014 came from defendants who were prosecuted in a series of cases involving illegal importations of honey from China to avoid antidumping duties.
In civil actions, the office collected $80,406,164.97, including a $53 million civil penalty on behalf of the Internal Revenue Service from a businessman, H. Ty Warner, who pleaded guilty to failing to report income from a secret foreign bank account. Other significant civil collections included $15.5 million from a pharmaceutical manufacturer to settle Medicare false billing claims, and $7.2 million from a Chicago construction company to settle claims of fraud on government programs to benefit minority and women-owned businesses on public works contracts.
Civil collections typically stem from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. Civil debts were also collected on behalf of federal agencies, such as the U.S. Department of Housing and Urban Development, Health and Human Services, IRS, Small Business Administration, and Department of Education.
The U.S. Attorney’s Offices, along with the Justice Department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the United States and criminal debts owed to federal crime victims. When defendants are convicted and sentenced in criminal cases, judges must impose restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. The U.S. Attorney’s Offices are authorized to make efforts to collect criminal debts for 20 years after defendants are released from custody.
While restitution is paid by Courts directly to the victim, criminal fines and felony assessments are paid to the Justice Department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs. Liquidated assets obtained through criminal and civil forfeiture proceedings are deposited into either the Department of Justice Asset Forfeiture Fund or the Department of Treasury Forfeiture Fund and are used to restore funds to crime victims and for a variety of law enforcement purposes.
Cedar Rapids Woman Sentenced to over 8 Years for Bank RobberyRead the Press Release
A woman who drove the getaway vehicle for a bank robbery was sentenced today to over eight years in federal prison.
Bria Daudinot, age 21, of Cedar Rapids, Iowa, received the sentence after an October 6, 2014 guilty plea to one count of bank robbery. At the guilty plea hearing, Daudinot admitted that she aided and abetted Javon Dockery in the June 26, 2014 robbery of a Cedar Rapids branch of the US Bank. In a plea agreement, Daudinot admitted that she drove the getaway vehicle for this robbery.
Daudinot was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Daudinot was sentenced to 97 months’ imprisonment. A special assessment of $100 was imposed, and Daudinot must also serve a three-year term of supervised release.
This case was prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Federal Bureau of Investigation 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 CR 14-68.Brookings Woman Sentenced for EmbezzlementRead the Press Release
United States Attorney Brendan V. Johnson announced that a Brookings, South Dakota, woman convicted of Theft of Government Funds was sentenced on December 29, 2014, by U.S. District Judge Karen E. Schreier.
Pennie Sue Malenke, age 41, was sentenced to 6 months in custody followed by 3 years of supervised release, including 6 months of home confinement. She was also ordered to make restitution as follows: $32,682.80 to Advance, a non-profit organization, and $4,291.12 to another victim.
Malenke was indicted for Theft of Government Funds, Making a False Statement, and Bank Fraud by a federal grand jury on December 3, 2013. She pled guilty to the Theft charge on October 7, 2014.
Malenke was employed as a case manager and support coordinator by Advance, a non-profit organization located in Brookings that provides services and support to individuals with developmental disabilities. As part of her job responsibilities, Malenke had access to the bank accounts of certain individuals who received program benefit payments administered by the Social Security Administration. Malenke took funds from these accounts by writing checks to cash, withdrawing cash from ATMs, and making direct purchases from stores. She stole approximately $32,682.80 in this manner and used the funds for her own purposes.
This case was investigated by the Social Security Administration – Office of Inspector General. Assistant U.S. Attorney Ann M. Hoffman prosecuted the case.
Malenke was ordered to report to the U.S. Marshals Service by noon on January 21, 2015.
29 December 2014
- Woman Convicted of Preparing False Income Tax Return
U.S. Attorney Charges Hoover Man for Ponzi Scheme That Bilked Millions from InvestorsRead the Press Release
BIRMINGHAM -- Federal prosecutors today charged a Hoover man with fraud and money laundering in connection with an illegal Ponzi scheme that caused investors to lose more than $3 million,announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr., Alabama Securities Commission Director Joseph P. Borg and Hoover Police Chief Nick Derzis.The U.S. Attorney's Office charged BRYAN W. ANDERSON, 40, with one count each of wire fraud, money laundering and securities fraud. The office filed the charges in U.S. District Court, along with a plea agreement in which Anderson acknowledges the charges and agrees to plead guilty to them. As part of his plea agreement, Anderson also agrees to pay restitution of about $3.1 million to victim investors. He also agrees to forfeit that same amount to the government, as proceeds of illegal activity, along with another $368,000, which is the amount cited in the money laundering charge.
"For years this defendant lied about investment options, risks and potential returns so that unwitting investors would continue to put their hard-earned money into his fraudulent scheme," Vance said. "When his Ponzi scheme collapsed, as they always do, the people who trusted him lost millions. I applaud the hard work of the FBI, Alabama Securities Commission and Hoover Police Department, along with Assistant U.S. Attorney J. Patton Meadows, which led to the prosecution of this case."
“This case is a classic Ponzi scheme, as Anderson used false promises and fake returns to steal millions of dollars from his victims," Schwein said. "Consumers looking to invest are encouraged to review www.investor.gov , which helps investors recognize scams and avoid fraud. The public can be assured that the FBI will continue to use our resources and work closely with our partners to expose perpetrators and vindicate the victims of complex financial frauds.”
"The Alabama Securities Commission is gratified to see justice imposed for the crimes that Bryan Anderson committed against innocent citizens of Alabama and other states; of course, no punishment can take away the loss and hurt to the investors who were victimized," Borg said. "We are grateful and want to thank the Hoover Police Department, the FBI and the U.S. Attorney's Office for the Northern District of Alabama, in addition to the ASC staff, for successfully partnering together to ensure justice was served in this case. The strong law enforcement response to this crime should serve as notice to other scammers out there that they should stay out of Alabama or expect prosecution and imprisonment."
“I am very pleased with our department’s response in this case," Derzis said. "After taking the initial report, Hoover investigators realized the extent of the fraud and contacted the Alabama Securities and Exchange Commission, along with the FBI. With these agencies working together, we were able to obtain Mr. Anderson's agreement to plead guilty to his crimes and to repay the victims.”
According to the government's charging information and its plea agreement with Anderson, he conducted his investment scheme as follows between 2009 and May 30, 2014: During most of that time, Anderson was a registered financial broker working, first, with MetLife Securities, from October 1998 to February 2012, then with Pruco Securities, from February 2012 to Sept. 13, 2012, when Pruco terminated his employment.
As part of his scheme to defraud investors, he solicited them to invest in stock options that he said employed various trading strategies. The stock options he described were not registered securities, and Anderson was not authorized to solicit investor money for the funds.
Anderson also offered investments in a company he owned, 360 Properties. Beginning about 2009, Anderson falsely represented to certain 360 Properties investors that their returns would come from leased property income, when there were no leased properties. Some of the investors believed the 360 Properties investments were affiliated with MetLife, and Anderson did nothing to correct that false belief.
Between January 2009 and January 2014, Anderson's false investment promises caused about 18 individual and family investors to deliver more than $8.4 million to Anderson, which he deposited into an account he and his wife held at BancorpSouth, a bank based in Tupelo, Miss. When Anderson's investment scheme collapsed in May 2014, about 12 investors lost about $3.1 million.
Anderson was operating a Ponzi scheme with investor funds, paying returns to existing investors with money from new investors, as well as paying personal expenses. He transferred investor money from one of his and his wife's bank accounts to another, making only a small percentage of the investments he had promised investors.
The wire fraud count charges that Anderson caused an investor, identified in court documents by the initials K.C., to wire transfer $571,378 from the investor's Wells Fargo bank account to Anderson's BancorpSouth account in the name of 360 Properties on Jan. 15, 2014.
The money laundering count charges that Anderson took $368,000 of the $571,378 received from K.C. and on Jan. 15 transferred it by wire to a second BancorpSouth account. According to the charge, the $571,378 was "criminally derived property" obtained through wire fraud. It is a violation of federal law to engage in a monetary transaction involving money or property worth more than $10,000 that was obtained through a criminal act.
The securities fraud count charges that Anderson, on Aug. 20, 2013, fraudulently obtained $100,000 from an investor, identified by the initials T.M., by falsely representing that he would invest the money in a specific type of hedge fund. T.M. wired the money from an account at Bryant Bank to one of Anderson's BankcorpSouth accounts and Anderson took the money and used it for non-investment purposes.
The maximum penalty for wire fraud is 20 years in prison and a $250,000 fine. The maximum penalty for the money laundering charge is 10 years in prison and a $250,000 fine, and the maximum penalty for the securities fraud charge is five years in prison and a $10,000 fine.
The FBI, ASC and the Hoover Police Department investigated the case, which Meadows is prosecuting.
Third Company Agrees to Plead Guilty to Price Fixing on Ocean Shipping Services for Cars and TrucksRead the Press Release
Company Agrees to Pay $59.4 Million Criminal Fine
Nippon Yusen Kabushiki Kaisha (NYK), a Japanese corporation, has agreed to plead guilty and to pay a $59.4 million criminal fine for its involvement in a conspiracy to fix prices, allocate customers, and rig bids of international ocean shipping services for roll-on, roll-off cargo, such as cars and trucks, to and from the United States and elsewhere, the Department of Justice announced today.
According to a one-count felony charge filed today in U.S. District Court for the District of Maryland in Baltimore, NYK conspired to suppress and eliminate competition by allocating customers and routes, rigging bids and fixing prices for the sale of international ocean shipments of roll-on, roll-off cargo to and from the United States and elsewhere, including the Port of Baltimore. NYK participated in the conspiracy from at least February 1997 until at least September 2012. NYK has agreed to cooperate with the Department’s ongoing antitrust investigation. The plea agreement is subject to court approval. NYK is the third company to agree to plead guilty in this investigation, bringing the total agreed-upon fines to over $135 million.
Roll-on, roll-off cargo is non-containerized cargo that can be both rolled onto and rolled off of an ocean-going vessel. Examples of this cargo include new and used cars and trucks and construction and agricultural equipment.
“This is another step in the effort to restore competition in the ocean shipping industry to the benefit of U.S. consumers,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Including today’s charges, three companies have now agreed to plead guilty to participating in this long-running conspiracy. We are not done. Our investigation is ongoing.”
According to the charge, NYK and its co-conspirators conspired by agreeing on prices, allocating customers, agreeing to refrain from bidding against one another and exchanging customer pricing information. The department said the companies then charged fees in accordance with those agreements for international ocean shipping services for certain roll-on, roll-off cargo to and from the United States and elsewhere at collusive and non-competitive prices.
NYK is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging, and other anticompetitive conduct in the international roll-on, roll-off ocean shipping industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Baltimore Field Office, along with assistance from the U.S. Customs and Border Protection Office of Internal Affairs, Washington Field Office/Special Investigations Unit. Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.html, or call the FBI’s Baltimore Field Office at 410-265-8080.
Sedgwick Man Pleads Guilty to Possession of Child PornographyRead the Press Release
Contact: Andrew McCormack
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that John
Tapley, 58, of Sedgwick, Maine, pleaded guilty today in U.S District Court in Bangor to possession of child pornography.Court records and proceedings reveal that in January of 2013, Tapley brought his laptop computer to a computer repair shop for service. A service technician found sexually suggestive images of prepubescent girls on the computer and reported it to the police. Law enforcement agents obtained a search warrant for the computer and found images and videos of child pornography.
Tapley faces a minimum of 10 years and up to 20 years in prison and a $250,000 fine. He faces an enhanced sentence because of two prior Maine Superior Court convictions for unlawful sexual contact. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by the Hancock County Sheriff’s Office, the Federal
Bureau of Investigation, the Maine State Police Computer Crimes Unit, and the Ellsworth Police
Department.Pittsburgh Woman Sentenced to Probation for Defrauding Social SecurityRead the Press Release
PITTSBURGH - A Pittsburgh resident has been sentenced in federal court to two years of probation and ordered to pay $78,719.00 in restitution on her conviction of theft of government property, United States Attorney David J. Hickton announced today.
United States District Judge Nora Barry Fischer imposed the sentence on Laverne Russell, 74.
According to information presented to the court, Russell converted to her own use over $78,000 in Social Security Income Benefits from the Social Security Administration.
Assistant United States Attorney Robert S. Cessar prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Social Security Administration, Office of Inspector General, for the investigation leading to the successful prosecution of Russell.
Notice of Court Proceedings Guilty Plea Hearing Scheduled for Former Lexington County Sheriff James R. MettsRead the Press Release
Contact Person: Beth Drake (803) 929-3000
Charleston, South Carolina ---- United States Attorney Bill Nettles stated today that Chief United States District Judge Terry L. Wooten will hold a change of plea hearing in the case of United States v. James R. Metts, Case No. 3:14-cr-429.
WHEN Tuesday, December 30, 2014,
at 10:00 a.m WHERE Matthew J. Perry, Jr., Courthouse
901 Richland Street, Courtroom V
Columbia, SC 29201Muldrow Man Pleads Guilty to Firearm PossessionRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that TERRY WAYNE HYATT, age 34, of Muldrow, Oklahoma, pled guilty to Felon in Possession of a Firearm, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(e)(1), punishable by not more than 10 years imprisonment and/or up to a $250,000.00 fine.
The charge arose from an investigation by the Muldrow Police Department. The defendant was indicted in November, 2014.
The Indictment alleged that on or about February 13, 2014, within the Eastern District of Oklahoma, the defendant, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, a firearm, which had been shipped and transported in interstate commerce.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. The defendant will remain in the custody of the United States Marshal Service pending sentencing.
Assistant United States Attorney Melody Nelson represented the United States.
Mauritius Man Charged with Abusive Sexual Contact of a Sleeping Woman on a Cruise ShipRead the Press Release
NEWARK, N.J. – A Mauritius man is scheduled to appear in Newark federal court for allegedly engaging in abusive sexual contact with a sleeping woman aboard a cruise ship, U.S. Attorney Paul Fishman announced.
Karan Seechurn, 25, was detained upon arrival in Bayonne, New Jersey, early on Dec. 27, 2014, and arrested by agents of the FBI. He is charged by complaint with abusive sexual contact and is scheduled to appear this afternoon before U.S. Magistrate Judge Michael A. Hammer in Newark federal court.
According to the complaint:
Seechurn was an employee of the cruise line and was responsible for restocking the minibars located in passengers’ rooms. In order to conduct this duty, he was provided with a key that gave him access to passengers’ rooms. On Dec. 23, 2014, he allegedly used this key to access passengers’ rooms when he was not authorized or permitted to do so. Seechurn entered a sleeping female passenger’s room without her knowledge and permission. She awoke to find Seechurn touching her genitalia and she pushed him off her. When she tried to leave the room, he pulled her back and threated to burn down the cruise ship if she told anyone.
The federal government has special maritime jurisdiction over sexual abuse cases, such as those that occur on cruise ships.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to the charge.
The government is represented by Meredith Williams of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charge and allegations in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
14-459
Defense counsel: Linda Foster Esq., Assistant Federal Public Defender, Newark
Seechurn, Karan Complaint
Hartshorne Man Pleads Guilty to Firearm PossessionRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that KENNETH EDWARD DAY, age 37, of Hartshorne, Oklahoma, pled guilty to Felon in Possession of Firearm, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(e), punishable by not less than 15 years imprisonment and/or up to a $250,000.00 fine.
The charge arose from an investigation by the Drug Enforcement Administration. The defendant was indicted in November, 2014.
The Indictment alleged that on or about August 20, 2014, within the Eastern District of Oklahoma, the defendant having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, firearms which had been shipped and transported in interstate commerce.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. The defendant will remain in the custody of the United States Marshal Service pending sentencing.
Assistant United States Attorney Melody Nelson represented the United States.
Harrisburg Man Sentenced to 12 Years in Prison for Leading Drug Traffickers Who Sold Cocaine and Heroin in State College AreaRead the Press Release
The United States Attorney's Office for the Middle District of Pennsylvania announced today that United States District Court Chief Judge Christopher C. Conner imposed a 147 month-sentence (12 years, 3 months)on Azim W. Showell, age 25, of Harrisburg, for trafficking heroin and cocaine, as well as trading drugs for firearms.
According to United States Attorney Peter Smith, Showell was the leader of a group of drug traffickers who brought heroin and cocaine from Harrisburg to State College, where motel and hotel rooms they distributed drugs throughout the region. According to the government’s evidence presented at trial, many of the customers had also burglarized homes and stole firearms, which they traded to the group for drugs. Many of the firearms were ultimately brought to Harrisburg.
In February 2012, police arrested Fareed Ray and other conspirators, who were in possession of stolen firearms and cocaine. That same month, Fairview Township Police stopped Showell in a rental car. In the trunk of the car, police found two stolen firearms, $10,000 in cash, and bundles of heroin packaged for sale.
In May 2014, Showell and Fareed Ray went on trial before a federal jury in Harrisburg. Police, co-defendants, drug users, and victims of the home break-ins testified during the four-day trial. The jury convicted both Showell and Ray of all ten counts of drug trafficking, conspiracy, and firearms offenses.
In May 2014, co-defendant Darrin Matthis was sentenced to 37 months in prison. In June 2014, co-defendant Josh Breon was sentenced 22 months in prison. In July 2014, co-defendant Dawan Maynard was sentenced to 151 months in prison. Fareed Ray is not yet scheduled for sentencing.
The investigation was conducted by the Drug Enforcement Administration in conjunction with the Pennsylvania State Police. Prosecution is assigned to Assistant United States Attorney Michael A. Consiglio.
Former Postal Service Letter Carrier Sentenced to Prison for Drug Distribution and Accepting BribesRead the Press Release
Corruption of Letter Carriers a “Significant Vulnerability” for Postal Service
Greenbelt, Maryland – U.S. District Judge Deborah K. Chasanow sentenced former U.S. Postal Service letter carrier Devona Ursula Charley, age 27, of Washington, D.C., today to a year and a day in prison, followed by 6 months of home detention as part of three years of supervised release, for conspiracy to distribute and possess with intent to distribute marijuana, and a bribery conspiracy.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division; and Chief Mark A. Magaw of the Prince George’s County Police Department.
“The corruption of postal employees is a significant vulnerability in the system,” said U.S. Attorney Rod J. Rosenstein. “Through the coordinated efforts of the U.S. Postal Inspection Service and other law enforcement agencies, we are investigating several cases involving letter carriers who took bribes to divert shipments of illegal drugs.”
According to her plea agreement, from at least September 2013 through April 2014, Charley, a U.S. Postal Service letter carrier, conspired with Dominique Jones and others to distribute marijuana. In addition, Charley admitted that she received money to deliver mail packages to Jones that were addressed to other people. Charley knew that the packages contained marijuana.Specifically, Charley provided Jones with addresses for the shipment of packages along her postal route. Charley agreed to deliver the packages to Jones even though they were addressed to another person. Her co-conspirators agreed to pay Charley $350 per package. Based on the information provided by Charley, packages containing marijuana were shipped to the addresses provided by Charley. When the packages arrived at the post office, Charley picked up the packages and texted Jones. Jones and an associate then met Charley along her mail route and Charley delivered the packages.
Based upon her role in the conspiracy, Charley is responsible for the distribution of between 40 and 60 kilograms of marijuana which was valued at between $70,000 and $120,000.
Dominique Jones, age 29, of Oxon Hill, Maryland, previously pleaded guilty to his role in the conspiracy and was sentenced to 54 months in prison.
United States Attorney Rod J. Rosenstein praised the U.S. Postal Inspection Service and Prince George’s County Police Department for their work in the investigation and thanked Assistant U.S. Attorney Deborah A. Johnston, who prosecuted the case.First Circuit Court of Appeals Denies Effort by Jose Santiago to Vacate Guilty PleaRead the Press Release
PROVIDENCE, R.I. – The First Circuit Court of Appeals has denied an effort by Jose Alibal Santiago to withdraw his guilty plea in connection with the 2010 robbery and murder of a Woonsocket gas station manager.
On September 5, 2013, Jose Santiago pleaded guilty to conspiracy to commit robbery affecting commerce; robbery affecting commerce; and possessing, using, carrying, and discharging a gun in relation to a crime of violence with death resulting. On February 13, 2014, Santiago was sentenced to serve 40 years in federal prison.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Federal Grand Jury Indicts Huntsville Police Officer on Bribery ChargesRead the Press Release
BIRMINGHAM - A federal grand jury today indicted a Huntsville police officer in connection with a conspiracy to fix cocaine trafficking charges against an individual arrested by another Huntsville officer, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr. and Huntsville Police Chief Lewis Morris.
A four-count indictment filed in U.S. District Court charges LEWIS BERNARD HALL, 45, of Meridianville, Ala., with conspiracy, bribery, obstruction of justice and making a false statement to investigators. According to the charges, Hall conspired with someone identified in the indictment as "Individual B" to pay a fellow police officer $5,000 if that officer would claim his July 29 vehicle search that resulted in drug-trafficking charges against "Individual A" was unlawful, thereby making the criminal case against Individual A go away. The Huntsville officer who conducted the vehicle search and, subsequently, assisted in the investigation of Hall is identified in the indictment as "Cooperating Officer."
"Our community expects and deserves police officers who will protect citizens and uphold the law, not tarnish their badge and work to protect criminals," Vance said. “The U.S. Attorney's Office prosecutes public corruption cases to punish those who violate the law and the public trust and to reinforce the need and expectation of integrity in government and police service."
"Public corruption is the FBI’s number one criminal priority for a reason," Schwein said. "It tears at the fabric of our democracy and works to undermine the public’s trust and confidence in the government. The FBI will continue to aggressively investigate violations of that trust committed by any public official, regardless of position.”"The Huntsville Police Department contacted the FBI as soon as we learned of possible corruption and we assisted the FBI in its investigation," Morris said. "I want to assure the public that this indictment addresses the actions of one police officer, and the Huntsville department will diligently address any other issues that might come to our attention. We value the working relationship we enjoy with the FBI and the U.S. Attorney's Office and appreciate their attention to this case."
According to the indictment's conspiracy count, on July 31, Hall and Individual B discussed offering the Cooperating Officer a bribe to tell other law enforcement officers that his search of Individual A's vehicle, which uncovered about three ounces of cocaine, was unlawful. Hall offered the bribe to the Cooperating Officer on July 31, paid him $1,000 on Aug. 12, and had two follow-up conversations in November about what the officer was supposed to say when asked about the search of Individual A's vehicle, the indictment says.
The bribery count charges Hall with corruptly offering the bribe to an agent of the City of Huntsville and its police department, which received more than $10,000 in federal benefits within one year, to influence the Cooperating Officer in how he reported the July 29 vehicle search.The obstruction of justice count charges Hall with offering the bribe with the intent to delay or prevent the reporting of a felony or possible felony offense and the violation of conditions of supervised release by Individual A.
The false statement count charges Hall with knowingly making a false statement to an FBI agent on Dec. 8, saying he did not give money to the Cooperating Officer in connection with that officer's reporting of his search of Individual A's vehicle.
The maximum penalty for both the conspiracy and the false statement charges is five years in prison and a $250,000 fine. The maximum penalty for the bribery count is 10 years in prison and a $250,000 fine, and the maximum for the obstruction count is 20 years in prison and a $250,000.
The FBI investigated the case in conjunction with the Huntsville Police Department. Assistant U.S. Attorney George A. Martin Jr. is prosecuting the case.
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Department of Justice Grantee Pays $105,000 to Settle False Claims Act AllegationsRead the Press Release
NEWARK, N.J. – A company and its owner have agreed to pay $105,000 to settle allegations that they failed to properly account for grant money given to Justice Planners International, a joint venture created to provide juvenile detention center consulting services to Native American tribes, U.S. Attorney Paul J. Fishman and Michael Horowitz, Inspector General for the U.S. Department of Justice, announced today.
Mark Goldman of Atlanta, Georgia, and Mark Goldman Associates (MGA) have agreed to resolve allegations that they violated the federal False Claims Act. They have agreed to pay $105,000 to the United States to resolve the federal and civil claims.
According to documents filed in this case and statements made in court:
Beginning in October 2005 Goldman and MGA allegedly failed to properly account for $2,369,838 drawn from Justice Department grants. These funds were used by Goldman and his business partner, Justice Solutions Group, of Closter, New Jersey, to provide training and technical assistance to Native American tribes in planning and constructing correctional facilities. While there was no indication that Goldman and MGA failed to perform the services as required by the grants, they nevertheless failed to maintain books and records to satisfactorily account for the funds drawn down from those grants.
The civil settlement agreement is between the United States of America – acting through the U.S. Attorney’s Office for the District of New Jersey and on behalf of the U.S. Department of Justice Office of the Inspector General (DOJ OIG), and Goldman and MGA.
U.S. Attorney Fishman credited Special Agent in Charge M. Elise Chawaga of the DOJ OIG with the investigation leading to the settlement.
The government is represented by Special Litigation Counsel Anthony J. LaBruna of the U.S. Attorney’s Office Civil Division in Newark.
The claims settled by this agreement are allegations only; there have been no admissions of liability.
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Defense counsel: Brian McEvoy Esq., Atlanta, Ga.
Denver Man Arrested for Production and Transportation of Child PornographyRead the Press Release
UPDATE: December 31, 2014
Today U.S. District Court Judge R. Brooke Jackson granted a stay of release on bond in U.S. v. Michael Yellowhorse after the U.S. Attorney’s Office appealed a decision made by a U.S. Magistrate Judge to release the defendant on a $25,000 unsecured bond with numerous conditions, including that he be held in home detention with electronic monitoring. Yellowhorse was arrested last week based on a Criminal Complaint for the production and transportation of child pornography.
DENVER – Michael Yellowhorse, born in 1987 and of Denver, Colorado, was arrested last week based on a Criminal Complaint for the production and transportation of child pornography, the U.S. Attorney’s Office and the U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) announced. Yellowhorse appeared this afternoon before U.S. Magistrate Judge Boyd N. Boland for a preliminary hearing and detention hearing. Magistrate Judge Boland found during the preliminary hearing that probable cause existed that Yellowhorse committed the crimes alleged in the Criminal Complaint. The Magistrate Judge then ordered the defendant released on bond. The government is considering filing a request for emergency stay of the release order to obtain a review of the conditions of the defendant’s release.
Yellowhorse made his initial appearance before a Magistrate Judge on the day he was arrested, December 23, 2014. At that hearing he was advised of his rights and the charges pending against him. The preliminary hearing and detention hearing occurred today, Monday, December 29, 2014.
According to the Criminal Complaint, Yellowhorse is charged with two counts of production of child pornography and one count of transportation of child pornography. During the hearings, evidence was presented that the defendant was investigated for posting images to a photo-sharing website popular amongst individuals interested in trading child pornography. Additionally, evidence was presented showing the defendant sent child pornography to an undercover investigator in Australia. Further investigation, to include preliminary analysis of the defendant’s cell phone and computer, revealed that the defendant created the child pornography he sent to the investigator in Australia.
If convicted, Yellowhorse faces not less than 15 years, not more than 30 years in federal prison, and a fine of not more than $250,000 for each of the two counts of producing child pornography. He faces not less than 5 years and not more than 20 years in prison, and up to a $250,000 fine for the one count of transportation of child pornography.
This case is being investigated by ICE HSI. The defendant is being prosecuted by Assistant U.S. Attorney Alecia Riewerts.
The charges are allegations, and the defendant is presumed innocent unless and until proven guilty.
A Criminal Complaint is a probable cause charging document. Anyone accused of committing a federal felony crime has a Constitutional right to be indicted by a federal grand jury.
This case was brought as part of Project Safe Childhood (PSC), 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 Attorney’s? Offices and the Criminal Division?s Child Exploitation and Obscenity Section, PSC 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 PSC, please visit http://www.justice.gov/psc/ For more information about Internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab ?resources.?
Delaware County Man Charged with Receipt and Possession of Child PornographyRead the Press Release
Paul LeClere, age 50, of Hopkinton, Iowa, has been charged with one count of receipt of child pornography and five counts of possession of child pornography. The charges are contained in an Indictment filed on December 17, 2014, in United States District Court in Cedar Rapids.
The Indictment alleges that, between 2003 and 2013, LeClere received and possessed child pornography.
If convicted, LeClere faces a mandatory minimum sentence of five years’ imprisonment and a possible maximum sentence of 110 years’ imprisonment, a $1,500,000 fine, a $600 special assessment, and at least five years and up to life on supervised release following any imprisonment.
LeClere appeared for a detention hearing on December 24, 2014, in federal court in Cedar Rapids and was released on bond. LeClere’s next appearance for trial is set for February 23, 2015.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
This case is being prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Scott County Sheriff’s Office, the Davenport Police Department, the Delaware County Sheriff’s Office, the Dubuque County Sheriff’s Office, the Clinton County Sheriff’s Office, and Homeland Security Investigations.
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.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 14-2054.Calera Man Pleads Guilty to Making a False StatementRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that MICHAEL GLENN VALLES, age 47, of Calera, Oklahoma, pled guilty to making a False Statement, in violation of Title 18, United States Code, Section 1014, punishable by not more than 30 years imprisonment and/or up to a $1,000,000.00 fine.
The charge arose from an investigation by the United States Department of Agriculture. The defendant was indicted in November, 2014.
The Indictment alleged that on or about January 22, 2010, within the Eastern District of Oklahoma, the defendant, knowingly made a false statement for the purpose of influencing the action of the United States Department of Agriculture, Farm Service Agency in connection with a security agreement in which the defendant listed $80,739.19 in value of cattle that he had purchased in August and September 2009 when in truth and in fact, as the defendant well knew, he had only purchased $27,178.91 worth of cattle during that time period.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report.
Assistant United States Attorney Melody Nelson represented the United States.
Bureau of Prisons Employee Admits Providing Mobile Phones to an Inmate at Federal Prison at Fort DixRead the Press Release
TRENTON, N.J. - A U.S. Bureau of Prisons employee today admitted providing two mobile phones to an inmate at Fort Dix Federal Correctional Institution (FCI Fort Dix), U.S. Attorney Paul J. Fishman announced.
Elizabeth M. Quinones, 30, of Willingboro, New Jersey, pleaded guilty before U.S. Magistrate Judge Tonianne J. Bongiovanni in Trenton federal court to an information charging her with one count of giving an inmate at FCI Fort Dix two mobile telephones.
According to documents filed in this case and statements made in court:
Quinones worked as a health services assistant at FCI Fort Dix, in Burlington County, New Jersey. Between May 2014 and June 2014, Quinones provided an FCI Fort Dix inmate with two mobile phones. Federal inmates housed at FCI Fort Dix are prohibited by federal statute from possessing mobile telephones.
The offense to which Quinones pleaded guilty is punishable by a maximum potential penalty of one year in prison and a $100,000 fine. Sentencing is scheduled for April 9, 2015.
U.S. Attorney Fishman credited special agents of the U.S. Department of Justice Office of the Inspector General, New Jersey Area Office, under the direction of Special Agent in Charge Ronald G. Gardella, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Eric W. Moran of the U.S. Attorney’s Office Special Prosecutions Division in Trenton.
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Defense Counsel: Mark W. Catanzaro Esq., Trenton, N.J.
Benton County Man Sentenced to 5 Years for Failing to Register as A Sex OffenderRead the Press Release
A man who failed to register as a sex offender was sentenced today to five years in federal prison.
David Kimble, age 48, of Norway, Iowa, received the sentence after a September 25, 2014, guilty plea to one count of failing to register as a sex offender. At the guilty plea hearing, Kimble admitted that he moved from North Carolina to Iowa and did not register as a sex offender in Iowa. Kimble was required to register because of his 2004 Linn County conviction for assault with intent to commit sexual abuse.
Kimble was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Kimble was sentenced to 60 months’ imprisonment. A special assessment of $100 was imposed, and Kimble must also serve a five-year term of supervised release. He must comply with all sex offender registration and public notification requirements.
This case was prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the United States Marshals Service, the Linn County Sheriff’s Office, 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 CR 14-77.Bank Branch Manager Sentenced to Two Years in Prison for Defrauding CustomersRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that today United States District Court Judge John E. Jones sentenced Tiffany K. Look, age 39, of Harrisburg, Pennsylvania, to 24 months in prison for mail fraud.
According to U.S. Attorney Peter Smith, at separate times between 2007 and 2013, Look was a branch manager at two area financial institutions, Mid Penn Bank and Members First Federal Credit Union. While at Mid Penn Bank, Look carried out a scheme to obtain money from a bank customer by taking out a fraudulent loan in the customer’s name. After she left Mid Penn Bank, and began working at Members First, Look continued the scheme by taking out fraudulent loans in the names of three customers of the credit union. Members First reported the fraud to law enforcement. Judge Jones ordered Look to be taken into custody to begin serving her sentence immediately. She was also ordered to pay restitution in the amount of $139,820.60.Charges were filed against Look in May 2014. She pled guilty later that month. The financial institutions cooperated with the investigation conducted by the United States Postal Inspectors and the Swatara Township and Hampden Township Police Departments. The case was prosecuted by Assistant United States Attorney Joseph J. Terz.
24 December 2014
Utility Company CFO Pleads Guilty to Defrauding Bank, IRSRead the Press Release
ERIE, Pa. - A former resident of Erie, Pennsylvania, pleaded guilty in federal court to charges of bank fraud and tax evasion, United States Attorney David J. Hickton announced today.
Brian M. Quimby, 48, pleaded guilty to two counts before Senior United States District Judge Maurice B. Cohill, Jr.
In connection with the guilty plea, the court was advised that while Quimby was employed as CFO of Thayer Power and Communications, he defrauded Key Bank. In addition, Quimby failed to file his income tax return for calendar year 2007.
Judge Cohill scheduled sentencing for May 4, 2015 at 11:00 a.m. The law provides for a total sentence of 35 years in prison, a fine of $1,250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued Quimby on bond.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation conducted the investigation that led to the prosecution of Quimby.
Second Conspirator Pleads Guilty in Lakeland SNAP Fraud RingRead the Press Release
Tampa, Florida - United States Attorney A. Lee Bentley, III announces that Basem Abualteen (48, Lakeland) pleaded guilty yesterday to conspiracy to defraud the United States. He faces a maximum penalty of five years in federal prison, and has agreed to make restitution (along with co-conspirators) in the amount of $2,110,778 to the U.S. Department of Agriculture (USDA) and the Food Nutrition Service.
According to the plea agreement, from January 2013 to August 27, 2014, Abualteen conspired with Hamzeh Abu-Aish and Shoeneikia Abu-Aish to defraud the USDA’s food stamp program, now known as the Supplemental Nutrition Assistance Program (SNAP). Hamzeh Abu-Aish was the owner of Finest Meat Market d/b/a Finest Super Market in Lakeland. Abualteen and Shoeneikia Abu-Aish worked as Finest store clerks beginning in about January 2013. Hamzeh Abu-Aish instructed the clerks to purchase SNAP benefits from SNAP recipients in exchange for cash and a commission, a practice called “cash back” or “discounting.” For example, a SNAP recipient would approach a store clerk and ask for $100 in cash. The store clerk would charge approximately $200 to the recipient’s Electronic Benefit Transfer (EBT) card, and then give the SNAP recipient $100 in cash. This practice is strictly prohibited by SNAP regulations. During the scheme, Finest SNAP EBT redemptions far exceeded the national and state averages of similarly sized stores. For example, during July 2013, the average SNAP benefit redemptions for a similarly sized store were $7,059 in Florida, and $6,490 nationally. Finest had $160,821 in SNAP benefit redemptions for the month of July alone. During Abualteen’s participation in the scheme, Finest submitted and received approximately $2,110,778 in fraudulent SNAP EBT redemptions.
On December 3, 2014, Shoenekia Abu-Aish pleaded guilty to conspiracy to commit wire fraud in connection with the same fraudulent SNAP scheme. On the same date, a grand jury returned a two count indictment charging Hamzeh Abu-Aish with conspiracy to commit wire fraud and conspiracy to defraud the United States.
This case was investigated by the Federal Bureau of Investigation and the U.S. Department of Agriculture-Office of Inspector General (USDA-OIG). It is being prosecuted by Assistant United States Attorney Mark E. Bini.
Orange County Man Charged with Defrauding Bay Area BanksRead the Press Release
SAN FRANCISCO –Daniel Rosenthal was arraigned today on charges of submitting fraudulent loan applications to three Bay Area banks using a false name and then laundering more than $2.5 million in fraudulently obtained proceeds, announced United States Attorney Melinda Haag and Federal Bureau of Investigation Special Agent in Charge David Johnson.
A federal grand jury in San Francisco indicted Daniel Rosenthal on December 23, 2014. According to the Indictment, Rosenthal, 31, of Yorba Linda, Calif., submitted fraudulent loan applications to three Bay Area banks using a false name, false bank statements, and false financial statements in support of the loan applications. According to the Indictment, Rosenthal falsely claimed that the loans were to be used to finance Sunshine Daydream, an event planning business that he falsely claimed to own. The Indictment also alleges that after receiving the loan proceeds, Rosenthal used some of the proceeds to purchase gold and send some of the money to a bank in Cyprus and to third parties.
Rosenthal was first charged in a Criminal Complaint filed on December 9, 2014. He was arrested in Yorba Linda, Calif., on December 11, 2014. He made his initial appearance in federal court in Santa Ana, California, on December 11, 2014, where he was detained and ordered transported to the Northern District of California. Rosenthal first appeared in federal court in San Francisco on December 22, 2014. Today, Rosenthal was ordered detained by the Honorable Bernard Zimmerman, U.S. Magistrate Judge, and is currently being held in the custody of the United States Marshal’s Service. Rosenthal is next scheduled to appear on January 12, 2015, at 2:00 p.m., for an initial appearance before the Honorable Vince Chhabria, U.S. District Court Judge.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted of bank fraud, Rosenthal faces a maximum sentence of 30 years in prison for each violation of 18 U.S.C. § 1344, plus restitution. If convicted of money laundering, Rosenthal faces a maximum sentence of 10 years in prison for each violation of 18 U.S.C. § 1957. If convicted of aggravated identity theft, Rosenthal faces a mandatory two-year sentence for each violation of 18 U.S.C. § 1028A . However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Denise Marie Barton is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Trina Khadoo. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Northern California Real Estate Investor Pleads Guilty to Bid Rigging and Fraud at Public Foreclosure AuctionsRead the Press Release
A Northern California real estate investor pleaded guilty for his role in bid rigging and fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Charles Rock was indicted on Dec. 3, 2014, in the U.S. District Court for the Northern District of California in Oakland, California. The indictment alleged that Charles Rock and others agreed not to compete at public foreclosure auctions in Contra Costa County, California, and diverted money to themselves that should have gone to mortgage holders and other beneficiaries. Charles Rock pleaded guilty to one count of bid rigging and two counts of mail fraud.
To date, 51 individuals have agreed to plead or have pleaded guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California. In addition, 21 real estate investors, including Charles Rock, have been charged in five multi-count indictments for their roles in bid-rigging and fraud schemes at foreclosure auctions in Alameda, Contra Costa, San Francisco, and San Mateo counties.
The indictment alleges, among other things, that as early as June 2008 until about January 2011, Charles Rock and others conspired to rig bids to obtain numerous properties sold at foreclosure auctions in Contra Costa County, negotiated payoffs for agreeing not to compete, held second, private auctions known as “rounds,” concealed those rounds and payoffs, and in the process, defrauded mortgage holders and other beneficiaries.
“This is the first post-indictment plea resulting from the investigation and marks a positive step forward in resolving the case,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “It is important for those who conspired to profit from rigged bids and illegal payoffs to take responsibility for their actions.”
“These charges demonstrate our continued commitment to investigate and prosecute individuals and organizations responsible for the corruption of the public foreclosure auction process,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “The FBI is committed to work these important cases and remains unwavering in our dedication to bring the members of these illegal conspiracies to justice.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than $1 million. Each count of mail fraud carries a maximum sentence of 20 years in prison and a $1 million fine.
Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties, California. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300, or call the FBI tip line at 415-553-7400.
Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
**The fraud charge(s) referenced in this press release were
subsequently dismissed on the government’s motion.**
Jury Finds Sacramento Man Guilty of Sex TraffickingRead the Press Release
SACRAMENTO, Calif. — Late Tuesday evening, a federal jury found a Sacramento man guilty of five counts of sex trafficking related to five victims, United States Attorney Benjamin B. Wagner announced.
After an 11-day trial before U.S. District Judge Troy L. Nunley, Percy Love III, 32, was convicted of three counts of sex trafficking by force, fraud and coercion, one count of sex trafficking of a minor, and one count of attempted sex trafficking of a minor.
This case is the product of an investigation by the FBI’s Child Exploitation Task Force, a multijurisdictional task force composed of representatives from the FBI and the Sacramento Police Department, with assistance from the Sacramento County District Attorney’s Office. Assistant United States Attorneys Michele Beckwith and Jason Hitt are prosecuting the case. Assistant U.S. Attorney Kyle Reardon, formerly with this office, prosecuted the case pretrial.
According to evidence produced at trial, Love targeted vulnerable young women and underage girls to work as prostitutes for him since at least 2007. The testimony of witnesses at trial, including the victims, revealed a pattern of conduct where Love used charm to recruit and brute force to control the women and girls who worked for him.
According to court documents, on July 22, 2013, Sacramento police officers were called to a report of domestic violence and found Love asleep in the front seat of a car with a woman, whose sister had called in the report. The woman explained to officers that she was in a “working relationship” with Love. She claimed that Love had beaten her many times, and she had bruises and cigarette burns on her hand, arm and stomach. Love was arrested that night for domestic violence and possession of Ecstasy.
On September 12, 2013, a federal grand jury indicted Love, charging him with two counts of sex trafficking by force, fraud, or coercion. After further investigation revealed more victims, a superseding indictment was brought on March 13, 2014. Love has been in custody since his arrest and represented himself during trial.
Sentencing is scheduled for March 12, 2015, before Judge Nunley. Love faces 15 years to life in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Former Napa Doctor Charged with Medicare Fraud and Distribution of Controlled SubstancesRead the Press Release
SAN FRANCISCO – Paul D. Woodward was arraigned yesterday for allegedly operating a scheme to defraud Medicare and allegedly distributing controlled substances, announced United States Attorney Melinda Haag, Office of Inspector General – Health and Human Services Special Agent in Charge Ivan Negroni, and Drug Enforcement Administration Special Agent in Charge Jeffrey J. Fitzpatrick.
A federal grand jury in San Francisco indicted Paul D. Woodward and Karen Kramer on December 4, 2014. The indictment remained under seal until December 11, 2014, when Kramer was arraigned on the charges. According to the Indictment, Woodward, 71, and Kramer, 54, both of Napa, Calif., were charged with conspiring to defraud Medicare by having Woodward write prescriptions to Kramer, at her request, for controlled substances, including fentanyl; Woodward falsely representing that the prescriptions were prescribed in the usual course of professional medical practice and for a legitimate medical purpose; and both Woodward and Kramer causing claims for those prescriptions to be submitted to Medicare for payment. Between January 2006 and June 2010, Medicare allegedly paid over $1.3 million for false and fraudulent prescriptions prescribed by Woodward to Kramer. Woodward is also charged with prescribing controlled substances, including oxycodone, hydromorphone, and hydrocodone, outside the usual course of professional medical practice and not for a legitimate medical purpose, to other patients.
Kramer was arrested on December 10, 2014, in Napa, and made her initial appearance in federal court in San Francisco on December 11, 2014. Kramer was ordered detained and is currently being held in the custody of the United States Marshal’s Service. Kramer will next appear before the Honorable Laurel Beeler, United States Magistrate Judge, on January 8, 2015, at 10:30 a.m. Woodward voluntarily appeared and made his initial appearance yesterday before the Honorable Bernard Zimmerman, United States Magistrate Judge. Woodward was released on a $100,000 secured bond. Both defendants are scheduled to appear on January 29, 2015, at 1:30 p.m., for an initial appearance before the Honorable William H. Orrick, U.S. District Court Judge.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted of the conspiracy to commit health care fraud or health care fraud charges, Woodward and Kramer face a maximum sentence of 10 years imprisonment and a fine of twice the gross gain or loss for each violation of 18 U.S.C. § 1347 and 1349, plus restitution if ordered. If convicted of the distribution of a controlled substance charges, Woodward faces a maximum sentence of 20 years imprisonment and a fine of $1 million. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Denise Marie Barton is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Maryam Beros, Trina Khadoo, and Bridget Kilkenny. The prosecution is the result of an investigation by Office of Inspector General – Health and Human and the Drug Enforcement Administration, with the assistance of the California Department of Insurance, the Napa County Sheriff’s Office, and the Napa Police Department.
Aurora Drug Dealer Is Sentenced to 54 Months in Federal Prison for Distribution of Cocaine and Money LaunderingRead the Press Release
DENVER – Robert Bellender, age 39, of Aurora, Colorado, was sentenced this week by U.S. District Court Judge Christine M. Arguello to serve 54 months in federal prison for possession with intent to distribute cocaine and money laundering, federal authorities announced. Following his prison sentence, Bellender was ordered to serve 5 years on supervised release. Bellender was taken into custody at the conclusion of the sentencing hearing.
Bellender was originally charged by a criminal complaint on May 10, 2013, followed by a superseding indictment on June 18, 2013. He then plead guilty on July 29, 2014. Other defendants charged in the superseding indictment include Korian Bascombe (aka k-Mac), Victor Rivas-Pinzon, Andrew T. Sorensen and Bruce Thomas. Sorensen pled guilty and was sentenced to time served. Rivas-Pinzon and Thomas plead guilty and were sentenced to 42 and 38 months in prison, respectively. Bascombe pled guilty on September 9, 2014 and scheduled to be sentenced on January 16, 2014 by Judge Arguello.
According to information contained in court documents, including the stipulated facts contained in Bellender’s plea agreement, the investigation started in October of 2011 and continued through the date of Bellender’s arrest on May 28, 2013. Numerous cocaine purchases from Bellender were made by a DEA undercover agent. Through investigative techniques, agents noted that codefendants Thomas, Sorensen and numerous other individuals, both known and unknown, were ordering quantities of powder and crack cocaine from Bellender on numerous occasions.
Bellender’s initial supplier of cocaine stopped distributing to him. At that point, Bellender began to purchase distribution quantities of powder cocaine and crack cocaine from Bascombe who was in turn being supplied with powder cocaine by Rivas-Pinzon. Bellender was selling both forms of cocaine during this entire period. Bellender and Bascombe were converting or “cooking” powder cocaine to convert it into the crack form.
Based on the investigation of the Front Range Task Force, which includes DEA, IRS CI and Aurora Police Department, from October of 2011 through May of 2013, Bellender and his coconspirators purchased and distributed or sold a conservatively estimated 20 kilograms or more of cocaine and 5 kilograms or more of crack cocaine. Bellender was purchasing cocaine from Bascombe for $1,200 per ounce. Twenty kilograms is the equivalent of approximately 705 ounces.
This case was investigated by agents with the Front Range Task Force which includes the Drug Enforcement Administration, IRS Criminal Investigation (IRS CI) and the Aurora Police Department.
The case is being prosecuted by Assistant U.S. Attorney James R. Boma.
23 December 2014
Youngstown, Ohio Man Convicted in Bath Salts and Synthetic Drug Distribution OperationRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – John Skruck, 59, of Youngstown, Ohio, was convicted in federal court for his role in distributing bath salts and synthetic drugs through local retail stores, United States Attorney William J. Ihlenfeld, II, announced today.
Skruck was a manager of the Hot Stuff Cool Things retail shops in Clarksburg and Buckhannon. He admitted that he participated in a scheme to distribute bath salts. Skruck further admitted to structuring financial transactions to shield more than $200,000.00 from the reporting requirements of the Internal Revenue Service throughout 2012.
Skruck pled guilty to one count of “Drug Conspiracy,” for which he faces 20 years in prison and a fine of up to $1,000,000.00. He also pled guilty to one count of “Structuring Monetary Transactions to Evade the Reporting Requirement,” for which he faces up to ten years in prison and a fine of up to $500,000.00. He also agreed to forfeit multiple parcels of real property, U.S. currency and bank accounts, vehicles, heavy equipment, a trailer, and a professional embroidery machine. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Three others have already been sentenced in connection with the drug distribution operation. Jeffrey J. Paglia, of Clarksburg, West Virginia, owner of the Hot Stuff Cool Things store in Rosebud Plaza, was sentenced to 87 months in prison. Jeremia J. Phillips and Derrick L. Calip were each sentenced to 21 months in prison.
Assistant U.S. Attorneys Robert McWilliams and Shawn Morgan are prosecuting the case on behalf of the government. The Internal Revenue Service Criminal Investigations, the Three Rivers Drug and Violent Crime Task Force, and the Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, are leading the investigation.
U.S. District Judge Irene M. Keeley presided.
- Woodlands Man Charged in Oil and Gas Investment Fraud
Wisconsin Man Sentenced in KBIC Child Sexual Abuse CaseRead the Press Release
MARQUETTE, MICHIGAN – Douglas Emil Kugler, Jr., 34, of Eagle River, Wisconsin, was sentenced to 71 months in federal prison for abusive sexual contact with a child under twelve years old, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge R. Allan Edgar ordered Kugler to serve 20 years of supervised release following completion of his prison term, and to pay a $100 special assessment.
The sentencing followed Kugler’s plea of guilty to the charge on August 13, 2014. The charge arose from an incident that occurred at a residence on Keweenaw Bay Indian Community reservation land between September 2004 and May 2006 involving Kugler, a non-Indian, and a boy between the ages of four and five. The incident came to light in December 2011, when the victim first disclosed what had happened to him. In sentencing Kugler, Judge Edgar found that Kugler had engaged in a pattern of prohibited sexual conduct with children.
The Keweenaw Bay Indian Community Tribal Police and the FBI investigated the case. Assistant U.S. Attorney Paul D. Lochner prosecuted the case..
END
Wisconsin Man Sentenced in KBIC Child Sexual Abuse CaseRead the Press Release
MARQUETTE, MICHIGAN – Douglas Emil Kugler, Jr., 34, of Eagle River, Wisconsin, was sentenced to 71 months in federal prison for abusive sexual contact with a child under twelve years old, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge R. Allan Edgar ordered Kugler to serve 20 years of supervised release following completion of his prison term, and to pay a $100 special assessment.
The sentencing followed Kugler’s plea of guilty to the charge on August 13, 2014. The charge arose from an incident that occurred at a residence on Keweenaw Bay Indian Community reservation land between September 2004 and May 2006 involving Kugler, a non-Indian, and a boy between the ages of four and five. The incident came to light in December 2011, when the victim first disclosed what had happened to him. In sentencing Kugler, Judge Edgar found that Kugler had engaged in a pattern of prohibited sexual conduct with children.
The Keweenaw Bay Indian Community Tribal Police and the FBI investigated the case. Assistant U.S. Attorney Paul D. Lochner prosecuted the case..
Westminster Man Sentenced to 35 Years in Federal Prison for Transportation and Possession of Child PornographyRead the Press Release
DENVER -- Gregory Lynn Hopson, age 44, of Westminster, Colorado, was sentenced today by U.S. District Court Judge Lewis T. Babcock to serve 420 months (35 years) in federal prison for the transportation and possession of child pornography, to run concurrently with a Colorado state prison sentence for a prior felony conviction of sex assault on a child by a person in a position of trust, U.S. Attorney John Walsh and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Special Agent in Charge David Thompson announced. Following his prison sentence, Hopson was ordered to serve lifetime supervised release, and register as a sex offender. He was also ordered to pay restitution to the victim of his crime. Hopson, who appeared at the hearing in custody, was remanded at its conclusion.
Hopson was indicted by a federal grand jury on October 24, 2012. On September 25, 2013, Hopson was named in a superseding indictment. On September 29, 2014, Hopson pled guilty before Judge Babcock to the transportation and possession of child pornography. He was sentenced today, December 23, 2014. Hopson is currently serving a state prison sentence of 16 years to life for his second violation of probation for a sex assault on a child conviction out of Boulder County, Colorado.
According to the stipulated facts contained in the plea agreement, on March 5, 2011, special agents from ICE executed a search warrant at an address in Westminster. A resident at the address in question was a registered sex offender, on probation for sex assault on a child by a person in a position of trust in 2000. The defendant had admitted in that case to sexually abusing two children under the age of 12.
During the search HSI agents seized a computer and CD-ROMs. After un-encrypting the data, agents found a well-organized collection of thousands of images and videos of child pornography. The material depicted children as young as infants being sexually abused. One of the CD-ROMs contained images and videos of a minor child under the age of 12 with whom the defendant was in a position of trust. The images depicted the defendant engaged in sexually explicit conduct with the child or depicted the child’s genitalia in a lewd and lascivious way. It was further determined that Hopson exchanged child pornography with others. HSI agents uncovered approximately 300 emails that the defendant had sent or received – and attached to those emails were approximately 1,700 images and videos of child pornography.
“Defendant Hopson, by his repeated acts of victimization and criminal conduct, has made clear that he poses a real and present danger to children and to society,” said U.S. Attorney John Walsh. “The sentence imposed today will neutralize this dangerous perpetrator for 35 years and is a true victory for the community and for Colorado’s children.”
“Insidious crimes like this steal the innocence and youth of our nation’s children,” said Assistant Attorney General Caldwell. “The Department of Justice is committed to investigating, prosecuting and incapacitating those who prey upon the most vulnerable members of our society.”
“Anyone who collects and shares child pornography victimizes the most innocent and most vulnerable members of our society,” said Special Agent in Charge David Thompson, Homeland Security Investigations (HSI) in Denver. “This lengthy prison sentence recognizes the trauma that predators inflict on helpless children.”
This case was investigated by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI).
Hopson was prosecuted by Assistant U.S. Attorney and Chief of the Special Prosecutions Section, Judith A. Smith, Assistant U.S. Attorney Beth N. Gibson, and Department of Justice Child Exploitation and Obscenity Section Trial Attorney Keith Becker.
This case was brought as part of Project Safe Childhood (PSC), 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 Attorney’s? Offices and the Criminal Division?s Child Exploitation and Obscenity Section, PSC 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 PSC, please visit http://www.justice.gov/psc/ For more information about Internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab ?resources.?
Week in Review – South BendRead the Press Release
South Bend, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITIONS
- Alfred Frank Dillard, 54, of South Bend, Indiana was sentenced to 12 months and 1 day imprisonment with 2 years supervised release after pleading guilty to the felony offense of being a felon in possession of a firearm. According to documents filed in this case, on October 27, 2013, Dillard was stopped on US31 in Fulton County, Indiana. When stopped, he was found to be in possession of an AK-47 type rifle, specifically a SKS, with collapsible stock and bayonet that was carried in his truck. This was a 7.62X39mm semi-automatic rifle. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Donald Schmid.
- Clifton Valentius Holiday, 27, of Winona Lake, Indiana was sentenced to 84 months imprisonment with 2 years supervised release after pleading guilty to the felony offense of being a felon in possession of a firearm. According to documents filed in this case, on March 2, 2014, officers while responding to a fight call at a residence in Winona Lake, Indiana found a Ruger handgun with a jammed round in the breach belonging to the defendant. Additional magazines and rounds of ammunition were also found. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Jesse Barrett.
Week in Review – HammondRead the Press Release
Hammond, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS
- D’Andre Lamonte Hall, 33, of Gary, Indiana pled guilty to the felony offense of Possessing with Intent to Distribute Cocaine. This charge was filed as a result of an investigation by the Federal Bureau of Investigation. Sentencing has been set for March 20, 2015. This case is being prosecuted by Assistant United States Attorney Nicholas Padilla.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
Virginia Woman Charged with Identity TheftRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania, announced that a criminal information was filed today charging Adrea Cannon, age 21, of Portsmouth, Virginia with aggravated identity theft in connection with the unlawful use of a bank account number belonging to a legitimate account holder on or about March 12, 2014.
Cannon faces a statutorily mandated term of imprisonment of 24 months and a fine in the amount of $250,000.The investigation was conducted by the United States Secret Service. The prosecution is assigned to Assistant United States Attorney Michelle Olshefski.
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.
United States Congressman Michael Grimm Pleads Guilty to Causing the Filing of a False and Fraudulent Tax ReturnRead the Press Release
Earlier today, United States Congressman Michael Grimm pleaded guilty at the federal courthouse in Brooklyn, New York, to aiding and assisting the preparation of a false tax return. Since 2011, Grimm has served as a member of the United States House of Representatives representing New York’s 11th Congressional District, which includes the borough of Staten Island and parts of the borough of Brooklyn, in New York City. When sentenced, Grimm faces a prison term of up to three years. In connection with his guilty plea, Grimm also agreed to pay restitution to the Internal Revenue Service (IRS), the New York State Department of Taxation and Finance, and the New York State Insurance Fund (NYSIF). Today’s guilty plea proceeding took place before the Honorable Pamela K. Chen, United States District Judge, Eastern District of New York.
The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office, and Richard Weber, Chief, IRS- Criminal Investigation.
“With today’s guilty plea, Michael Grimm has admitted that while running his business he chose lies and deception over honest dealings with federal and state authorities as well as his own employees. In addition to pleading guilty to causing the filing of a false tax return for his restaurant, Grimm has signed a statement admitting to the conduct underlying every charge filed against him. Michael Grimm has now publicly admitted that he hired unauthorized workers whom he paid “off the books” in cash, took deliberate steps to obstruct the federal and state governments from collecting taxes he properly owed, cheated New York State out of workers’ compensation insurance premiums, caused numerous false business and personal tax returns to be filed for several years, and lied under oath to cover up his crimes. He will now be held to account for all of his actions that led to those charges,” said U.S. Attorney Lynch. “This guilty plea makes clear that we and our partners in the FBI and the IRS will vigorously investigate and prosecute fraud wherever we find it, and that no one is above the law.” Ms. Lynch expressed her appreciation to the Public Integrity Section of Department of Justice, the Northern Criminal Enforcement Section of the Tax Division of the Department of Justice, the New York State Insurance Fund, the New York State Department of Taxation and Finance, and the New York State Department of Labor for their assistance in the investigation.
FBI Assistant Director-in-Charge Venizelos stated, “As an elected official, Grimm was responsible for deciding how taxpayers' money should be spent, yet he chose not to pay his fair share of taxes while operating his business. Adding insult to injury, while serving as a Member of Congress, Grimm lied under oath in an effort to conceal his criminal activity. The public expects their elected officials at all levels of government to behave honorably, or at a minimum, lawfully. As his guilty plea demonstrates, Grimm put self-interest above public service.”
Richard Weber, Chief, IRS-Criminal Investigation stated, “The public expects their elected officials to meet their tax obligations before they take office, while they hold office and when they leave office. Today, Mr. Grimm admitted to breaching the public's trust by fraudulently underreporting $900,000 in restaurant gross receipts and lowering payroll taxes through 'off-the-book' payments. As the only law enforcement agency with the authority to investigate federal tax crimes, IRS-Criminal Investigation is committed to ensuring that everyone pays their fair share. In the eyes of the law, public officials are not above the citizens they serve.”
In connection with his guilty plea, Grimm entered into a stipulation of facts, filed with the Court today, that acknowledged the scope of his criminal conduct. As part of that stipulation of facts, Grimm admitted that:
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From 2007 through 2009, Grimm was a member in Healthalicious, a restaurant located in Manhattan.During that time period, Grimm oversaw the day-to-day operations of the restaurant, which included the reporting and distribution of the restaurant’s payroll.
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Grimm under-reported the true amount that Healthalicious earned, using a portion of those unreported receipts to pay the restaurant’s workers “off the books” in cash.With Grimm’s knowledge, the restaurant employed those who were not lawfully admitted to the United States and who were not authorized to work in this country.
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In total, Grimm concealed over $900,000 in Healthalicious’ gross receipts from the accountant who prepared and filed the restaurant’s tax returns.That accountant used the false information provided by Grimm to prepare and file false federal and state tax returns for Healthalicious.
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Grimm also failed to report the “off the books” cash wages he was paying to Healthalicious workers, which resulted in the restaurant paying lower federal and state payroll taxes.Some Healthalicious employees received at least half of their wages in cash, while other workers were paid entirely in cash.Grimm tracked these payments in electronic spreadsheets, but failed to provide accurate information about the restaurant’s payroll to the payroll processing companies employed by the restaurant.As a result, Grimm caused the payroll processing companies to report to the IRS and the NYS Tax Department less than half of the wages Healthalicious actually paid its employees.
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Additionally, Grimm under-reported Healthalicious’ payroll to the New York State Insurance Fund (“NYSIF”), lowering the monthly workers’ compensation premium the restaurant paid to NYSIF.
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As part of his scheme, Grimm caused numerous false documents to be filed with federal and state tax authorities between 2007 and 2010, including: (1) Form 941 Employer’s Quarterly Federal Tax Returns for Healthalicious; (2) Form 1065 U.S. Return of Partnership Income tax returns for Healthalicious; (3) Forms W-2 reported annual wages of Healthalicious employees; (4) his Form 1040 U.S. Individual Income Tax Returns and Form IT-201 Resident Income Tax Returns; and (5) New York State Form ST-100 Quarterly Sales and Use Tax Returns.
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In total, Grimm’s conduct caused federal and New York State tax and NYSIF premium losses between $80,000 and $200,000.
Moreover, while a Member of Congress in January 2013, Grimm was deposed under oath by the attorney of a former employee in connection with a civil lawsuit relating to the labor practices at Healthalicious in which Grimm was a defendant. The lawsuit was pending in the United States District Court for the Southern District of New York. Today, as part of the stipulation of facts, Grimm admitted to testifying during the deposition to things that, at the time, he knew to be false. Specifically, Grimm testified during the deposition that Healthalicious employees had not been paid in cash, when he knew that restaurant employees had in fact been paid “off the books” in cash. Similarly, Grimm testified that, to the extent he used email in operating Healthalicious, he used a Yahoo account to which he no longer had access. Today, Grimm admitted that, at the time of the deposition, he in fact had access to an AOL account which he had used for Healthalicious related business and which contained many emails related to the restaurant.
The government’s case is being prosecuted by Assistant United States Attorneys Anthony M. Capozzolo, James D. Gatta, and Nathan Reilly.
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United States Congressman Michael Grimm Pleads Guilty to Causing the Filing of A False and Fraudulent Tax ReturnRead the Press Release
Earlier today, United States Congressman Michael Grimm pleaded guilty at the federal courthouse in Brooklyn, New York, to aiding and assisting the preparation of a false tax return. Since 2011, Grimm has served as a member of the United States House of Representatives representing New York’s 11th Congressional District, which includes the borough of Staten Island and parts of the borough of Brooklyn, in New York City. When sentenced, Grimm faces a prison term of up to three years. In connection with his guilty plea, Grimm also agreed to pay restitution to the Internal Revenue Service (IRS), the New York State Department of Taxation and Finance, and the New York State Insurance Fund (NYSIF). Today’s guilty plea proceeding took place before the Honorable Pamela K. Chen, United States District Judge, Eastern District of New York.
The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office, and Richard Weber, Chief, IRS- Criminal Investigation..
“With today’s guilty plea, Michael Grimm has admitted that while running his business he chose lies and deception over honest dealings with federal and state authorities as well as his own employees. In addition to pleading guilty to causing the filing of a false tax return for his restaurant, Grimm has signed a statement admitting to the conduct underlying every charge filed against him. Michael Grimm has now publicly admitted that he hired unauthorized workers whom he paid “off the books” in cash, took deliberate steps to obstruct the federal and state governments from collecting taxes he properly owed, cheated New York State out of workers’ compensation insurance premiums, caused numerous false business and personal tax returns to be filed for several years, and lied under oath to cover up his crimes. He will now be held to account for all of his actions that led to those charges,” said U.S. Attorney Lynch. “This guilty plea makes clear that we and our partners in the FBI and the IRS will vigorously investigate and prosecute fraud wherever we find it, and that no one is above the law.” Ms. Lynch expressed her appreciation to the Public Integrity Section of Department of Justice, the Northern Criminal Enforcement Section of the Tax Division of the Department of Justice, the New York State Insurance Fund, the New York State Department of Taxation and Finance, and the New York State Department of Labor for their assistance in the investigation.
FBI Assistant Director-in-Charge Venizelos stated, “As an elected official, Grimm was responsible for deciding how taxpayers' money should be spent, yet he chose not to pay his fair share of taxes while operating his business. Adding insult to injury, while serving as a Member of Congress, Grimm lied under oath in an effort to conceal his criminal activity. The public expects their elected officials at all levels of government to behave honorably, or at a minimum, lawfully. As his guilty plea demonstrates, Grimm put self-interest above public service.”
Richard Weber, Chief, IRS-Criminal Investigation stated, “The public expects their elected officials to meet their tax obligations before they take office, while they hold office and when they leave office. Today, Mr. Grimm admitted to breaching the public's trust by fraudulently underreporting $900,000 in restaurant gross receipts and lowering payroll taxes through 'off-the-book' payments. As the only law enforcement agency with the authority to investigate federal tax crimes, IRS-Criminal Investigation is committed to ensuring that everyone pays their fair share. In the eyes of the law, public officials are not above the citizens they serve.”
In connection with his guilty plea, Grimm entered into a stipulation of facts, filed with the Court today, that acknowledged the scope of his criminal conduct. As part of that stipulation of facts, Grimm admitted that:
- From 2007 through 2009, Grimm was a member in Healthalicious, a restaurant located in Manhattan. During that time period, Grimm oversaw the day-to-day operations of the restaurant, which included the reporting and distribution of the restaurant’s payroll.
- Grimm under-reported the true amount that Healthalicious earned, using a portion of those unreported receipts to pay the restaurant’s workers “off the books” in cash. With Grimm’s knowledge, the restaurant employed those who were not lawfully admitted to the United States and who were not authorized to work in this country.
- In total, Grimm concealed over $900,000 in Healthalicious’ gross receipts from the accountant who prepared and filed the restaurant’s tax returns. That accountant used the false information provided by Grimm to prepare and file false federal and state tax returns for Healthalicious.
- Grimm also failed to report the “off the books” cash wages he was paying to Healthalicious workers, which resulted in the restaurant paying lower federal and state payroll taxes. Some Healthalicious employees received at least half of their wages in cash, while other workers were paid entirely in cash. Grimm tracked these payments in electronic spreadsheets, but failed to provide accurate information about the restaurant’s payroll to the payroll processing companies employed by the restaurant. As a result, Grimm caused the payroll processing companies to report to the IRS and the NYS Tax Department less than half of the wages Healthalicious actually paid its employees.
- Additionally, Grimm under-reported Healthalicious’ payroll to the New York State Insurance Fund (“NYSIF”), lowering the monthly workers’ compensation premium the restaurant paid to NYSIF.
- As part of his scheme, Grimm caused numerous false documents to be filed with federal and state tax authorities between 2007 and 2010, including: (1) Form 941 Employer’s Quarterly Federal Tax Returns for Healthalicious; (2) Form 1065 U.S. Return of Partnership Income tax returns for Healthalicious; (3) Forms W-2 reported annual wages of Healthalicious employees; (4) his Form 1040 U.S. Individual Income Tax Returns and Form IT-201 Resident Income Tax Returns; and (5) New York State Form ST-100 Quarterly Sales and Use Tax Returns.
- In total, Grimm’s conduct caused federal and New York State tax and NYSIF premium losses between $80,000 and $200,000.
Moreover, while a Member of Congress in January 2013, Grimm was deposed under oath by the attorney of a former employee in connection with a civil lawsuit relating to the labor practices at Healthalicious in which Grimm was a defendant. The lawsuit was pending in the United States District Court for the Southern District of New York. Today, as part of the stipulation of facts, Grimm admitted to testifying during the deposition to things that, at the time, he knew to be false. Specifically, Grimm testified during the deposition that Healthalicious employees had not been paid in cash, when he knew that restaurant employees had in fact been paid “off the books” in cash. Similarly, Grimm testified that, to the extent he used email in operating Healthalicious, he used a Yahoo account to which he no longer had access. Today, Grimm admitted that, at the time of the deposition, he in fact had access to an AOL account which he had used for Healthalicious related business and which contained many emails related to the restaurant.
The government’s case is being prosecuted by Assistant United States Attorneys Anthony M. Capozzolo, James D. Gatta, and Nathan Reilly.
The Defendant:
MICHAEL GRIMM
Age: 44
Staten Island, New York
E.D.N.Y. Docket No. 14-CR-248 (PKC)
Uniontown Man Charged with Child Pornography PossessionRead the Press Release
PITTSBURGH - A resident of Fayette County, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of possession of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
The one-count indictment named Jeremy S. Burnworth, 35, of Uniontown, Pa., as the sole defendant.
According to the indictment, on or about June 2, 2014, Burnworth knowingly possessed images in digital files, the production of which involved the use of minors engaging in sexually explicit conduct, some of whom had not yet attained 12 years of age.
The law provides for a maximum total sentence of 20 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Jessica Lieber Smolar is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the Reserve Township Police Department, and the Pennsylvania Office of Attorney General 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.
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.justice.gov/psc.
U.S. Attorney's Office Collects More Than $2.3 Billion in Civil and Criminal Actions in Fiscal Year 2014Read the Press Release
(PHILADELPHIA) - U.S. Attorney Zane David Memeger announced today that the Eastern District of Pennsylvania collected $2,373,688,153 in criminal and civil actions in Fiscal Year (FY) 2014.
The Department of Justice collected $24.7 billion in civil and criminal actions in FY 2014. The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.
“Recouping federal funds that were misspent due to fraud, including substantial health care and mortgage insurance funds, is a critical part of our mission,” said Memeger. “Our nation’s taxpayers deserve our most aggressive efforts to recover their hard-earned tax dollars that have been misappropriated. During fiscal year 2014, we continued to honor this mission with these tremendous resolutions and collections.”
The recoveries in the Eastern District of Pennsylvania include more than $1.6 billion in civil and criminal penalties paid by healthcare giant Johnson & Johnson (J&J) to resolve misbranding and unapproved use allegations. J&J paid a $1.273 billion civil settlement to resolve allegations of off-label marketing for Risperdal and Invega, as well as the alleged payment of kickbacks to physicians involving Risperdal. Janssen Pharmaceuticals, Inc. (Janssen), a subsidiary of J&J, paid $400 million in a criminal fine and forfeiture for promoting Risperdal to health care providers for unapproved uses.
The collections also include: a $56.5 million civil settlement with Shire Pharmaceuticals LLC to resolve False Claims Act allegations; a $150 million civil settlement with Amedisys Inc. and its affiliates to resolve False Claims Act allegations; a $7.3 million civil settlement with pharmaceutical company Astellas Pharma US, Inc., to resolve False Claims Act allegations; and a $172.9 million civil settlement with specialty pharmaceuticals company Endo Health Solutions, Inc. and its subsidiary Endo Pharmaceuticals Inc. (Endo), to resolve allegations of off-label marketing.
Additionally, the U.S. Attorney’s office in the Eastern District of Pennsylvania, working with partner agencies and divisions, collected approximately $15 billion in asset forfeiture actions in FY 2014, which includes a $13 billion settlement with JP Morgan - the largest settlement with a single entity in American history - to resolve federal and state civil claims arising out of the packaging, marketing, sale and issuance of residential mortgage-backed securities (RMBS).
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud and other misconduct and collected fines imposed on individuals and corporations for violations of federal health, safety, civil rights, and environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration, and Department of Education.
Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
U.S. Attorney's Office Collects $22,164,212.92 in Fiscal Year 2014Read the Press Release
CHARLOTTE, N.C. - U.S. Attorney Anne M. Tompkins announced today that the Western District of North Carolina (WDNC) collected $22,164,212.92 in criminal and civil actions in Fiscal Year (FY) 2014. Of this amount, WDNC collected $9,677,978.82 in criminal actions and $12,486,234.10 in civil actions.*
Attorney General Eric Holder announced last month that the Justice Department collected $24.7 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2014. The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.
“Every day, the Justice Department’s federal prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people,” said Attorney General Holder. “Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy. And this result shows the fruits of the Justice Department’s tireless work in enforcing federal laws; in protecting the American people from violent crime, national security threats, discrimination, exploitation, and abuse; and in holding financial institutions accountable for their roles in causing the 2008 financial crisis.”
“The men and women of the U.S. Attorney’s Office for the Western District of North Carolina are dedicated public servants tasked with an important mission: to enforce the laws of our nation and to ensure that criminals do not profit from their illegal activities. I am proud of their hard work and their commitment to recovering taxpayer dollars, securing restitution for victims of federal crimes and protecting the public from fraud, waste and abuse,” said U.S. Attorney Tompkins.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing criminal and civil actions and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. Criminal actions comprise criminal fines, special assessments and restitution. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. For example, in FY 2014, in US v. Martin, WDNC collected assets and cash from Gary D. Martin totaling $4,656,140.31, to be applied toward restitution for the victims of the scheme. WDNC prosecuted Martin for his involvement in the $32.5 million Queen Shoals Ponzi scheme. Martin was sentenced in March 2013 to 10 years in prison and was ordered to pay $31,707,038 as restitution. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
In FY 2014, the largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education. In WDNC, in US vs. Mark Le, the office collected $2.1 million of its $6.2 million civil settlement with Dr. Le, on civil fraud allegations arising from the submission of fraudulent reimbursement claims to Medicare and Medicaid for medically unnecessary diagnostic tests and procedures.
Additionally, the Western District of North Carolina worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $850,830,833.59 in cases pursued jointly with these offices. Of this amount, $850,786,750 was collected in civil actions and $44,083.59 was collected in criminal actions. In FY 2014, in US v. Bank of America Corp., et al. (Mortgage Services Global Settlement), WDNC shared in on $850 million collected from Bank of America as part of the multi-district settlement with the nation’s five largest mortgage servicers – Bank of America, Wells Fargo, Citigroup, JPMorgan Chase, and Ally. As part of the 2012 settlement, the servicers agreed to pay a $25 billion to resolve allegations of abuse and fraud in mortgage loan servicing and foreclosures.
In addition to the criminal and civil actions, the U.S. Attorney’s office in Western District of North Carolina, working with partner agencies and divisions, collected $4,415,201 in asset forfeiture actions in FY 2014. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
* In measuring collections recovered in FY 2014, the figures necessarily include some cases that were resolved in previous years but the proceeds were collected in FY 2014. Similarly, the FY 2014 figures do not include some cases resolved in the 2014 fiscal year, for which collections will begin in FY 2015.
U.S. Attorney for Northern District of Texas Announces ResignationRead the Press Release
DALLAS, Texas —Sarah R. Saldaña has announced her resignation as United States Attorney for the Northern District of Texas, effective immediately. She was nominated by President Barack Obama to be Assistant Secretary of the U.S. Department of Homeland Security on August 28, 2014 and was confirmed by the United States Senate on December 16, 2014. The President signed her commission last Thursday, December 18, and the Honorable Chief District Judge Jorge Solis administered the oath of office to her this afternoon.
“I am overwhelmed by the outpouring of good wishes and kind remarks from the North Texas law enforcement and citizen community,” Saldaña said. “I have never had a greater privilege than to serve this community as United States Attorney. And at this particular time, when the perils faced by law enforcement are heightened even beyond that which they face every day, I offer my utmost gratitude and admiration for the extraordinary service provided by police departments, sheriff’s offices, and all state and federal officers everywhere, particularly those with whom I have served side-by-side for the last 10 years in the 100 counties of this district.”
Saldaña has served as United States Attorney for the Northern District of Texas since September 29, 2011. Prior to that appointment, she served as Deputy Criminal Chief of the District’s Major Fraud/Public Corruption Section, having joined the office in 2004. As United States Attorney, Saldaña has directed some of the most high-profile and successful prosecutions in the country. Moreover, faced with significant challenges during her tenure, including hiring freezes, an unprecedented sixteen-day government shutdown, and new Department of Justice policies aimed at managing limited resources on the most important federal law enforcement priorities, Saldaña’s office actually increased the number of cases prosecuted by 51% from 2011 to 2014.
Most recently, Saldaña served on the Attorney General’s Advisory Committee as one of 17 United States Attorneys appointed by the AG to advise him on policy, management and operational issues affecting the Department of Justice.
From 1985 to 1999, Saldaña was an Attorney at Haynes and Boone, LLP and Baker Botts LLP. She clerked for Judge Harold Barefoot Sanders in U.S. District Court for the Northern District of Texas from 1984 to 1985. From 1974 to 1981, she worked for several federal agencies including the Equal Employment Opportunity Commission, the Department of Labor, and the Department of Housing and Urban Development. She received her J.D. from Southern Methodist University and her B.A. from Texas A&I University.
Upon Saldaña’s departure, First Assistant United States Attorney John R. Parker will be appointed Acting United States Attorney until a new United States Attorney is selected.
The United States Attorney’s Office for the Northern District of Texas has prosecutive responsibility over 100 counties in the northern and western areas of Texas, encompassing nearly 96,000 square miles and a population in excess of seven million. The District is headquartered in Dallas and has staffed offices in Fort Worth, Lubbock, Abilene, and Amarillo, Texas.
Two New Haven Men Sentenced to Federal Prison for Roles in Gang-related Crack Cocaine Distribution RingRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that two New Haven men involved in a gang-related crack cocaine distribution ring were sentenced today by U.S. District Judge Alvin W. Thompson in Hartford. MUJAHID MUHAMMED, also known as “Doughboy,” 29, was sentenced to 120 months of imprisonment, followed by five years of supervised release, and GREGORY TEEL, also known as “Detwan,” 36, was sentenced to 58 months of imprisonment, followed by three years of supervised release.
According to court documents and statements made in court, this matter stems from an investigation conducted by the FBI New Haven Safe Streets Task Force into drug distribution and related gang activity in The Hill neighborhood of New Haven. The investigation, which included the use of court-authorized wiretaps, revealed that members and associates of the Southside Bloods were distributing large quantities of crack cocaine. MUHAMMED was the leader of the organization in New Haven.
On August 7, 2013, MUHAMMED pleaded guilty to one count of conspiracy to possess with intent to distribute 280 grams or more of cocaine base (“crack”), and on December 4, 2013, TEEL pleaded guilty to one count of conspiracy to possess with intent to distribute a quantity of cocaine base.
Eight other individuals were charged as a result of this investigation. All have pleaded guilty.
This matter was investigated by the FBI’s New Haven Safe Streets Task Force, including the New Haven, Hamden and Milford Police Departments, and the State of Connecticut Department of Correction. The case is being prosecuted by Assistant U.S. Attorneys Anthony Kaplan and Gordon Hall.
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Tom Carson
(203) 821-3722 [email protected]Two Men Charged with Operating Multimillion Dollar Fraud SchemeRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that a federal grand jury in New Haven has returned an 11-count indictment charging DAVID C. JACKSON, also known as “C. David Manns,” “Charles Jackson” and “Andrew D. Smithson,” 53, and ALEX HURT, also known as “Alex Dante,” 45, with various offenses related to an advance fee fraud scheme that defrauded individuals out of several million dollars.
The indictment was returned yesterday. JACKSON, who has resided in Maryland, Ohio and Pennsylvania, has been detained since his arrest on a criminal complaint on August 26, 2014. HURT, recently of Dover, Massachusetts, has been ordered to report to the District of Connecticut for his arraignment.
As alleged in the indictment and in previously-filed court documents, in approximately September 2009, JACKSON, using the alias “C. David Manns,” established Jalin Realty Capital Advisors, LLC, using a business address in Dayton, Ohio. In 2011, JACKSON changed the name of his business to American Capital Holdings, LLC, using business addresses in Pittsburgh, Pennsylvania. Soon after changing the business name, JACKSON began introducing himself to victim clients as “Charles Jackson.”
HURT held himself out as Vice President of Brightway Financial Group, LLC, a company that used a business addresses in Grapevine, Texas.
The indictment alleges that JACKSON, HURT and others defrauded individuals, including Connecticut residents, who wired funds to them in anticipation of receiving large business loans. The upfront fees were alternately described as “application fees,” “collateral fees” or “commitment fees.” The victims were promised a refund of the upfront fees if their loan transactions were not completed. In order to convince victim-borrowers that the loans were legitimate and Jalin and ACH had successfully secured loans in the past, JACKSON provided victims and potential victims the name and phone number of a co-conspirator and told them that they could contact his co-conspirator for a reference. After she was contacted, the co-conspirator falsely represented to victims and potential victims that she had, in fact, received funding from JACKSON for a construction loan, and that she had successfully done a project financed with her co-conspirator and Jalin.
Through this alleged scheme, more than 20 individuals provided JACKSON and HURT with millions of dollars in advance fees for business loans that were never provided. Some of the individuals received partial refunds of the advance fees they had provided, but the refunds were made using fees that had been paid by other victims.
The indictment charges JACKSON and HURT with one count of conspiracy to commit wire fraud and multiple counts of wire fraud, offenses that carry a maximum term of imprisonment of 20 years on each count. The indictment also charges HURT with one count of making a false statement to federal law enforcement, which carries a maximum term of imprisonment of five years.
U.S. Attorney Daly stressed that an indictment is only a charge and is not evidence of guilt. Charges are only allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and the Ansonia Police Department, and is being prosecuted by Assistant U.S. Attorneys Anthony E. Kaplan and Michael S. McGarry.
Citizens with information that may be helpful to this ongoing investigation are encouraged to contact the FBI at (203) 777-6311.
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(203) 821-3722 [email protected]Trivillian's Pharmacy, owner charged with federal criminal healthcare and drug crimesRead the Press Release
Butterfield agrees to settle civil claims to Medicare and Medicaid for $1.1 million
CHARLESTON, W.Va. – United States Attorney Booth Goodwin today announced that Trivillian’s Pharmacy, a long-standing Kanawha City retail and compounding pharmacy, was charged by information with two counts of health care fraud and one count of misbranding drugs.
Paula Butterfield, Trivillian’s owner, operator and pharmacist-in-charge, was also charged by information with making a false statement in a healthcare matter.
Goodwin also announced his office has reached a civil settlement with Trivilllian’s and Butterfield, recovering $1.1 million on behalf of Medicare and West Virginia Medicaid. The settlement represents more than three times the loss suffered by Medicare and Medicaid.
“Cheating Medicare and Medicaid is really cheating the American taxpayer,” Goodwin said. “Thanks to this settlement, money that was taken from the taxpayers by fraud can now be used to provide health care to the many people who depend on these programs.”
One information alleges that Trivillian’s defrauded Medicare and Medicaid by dispensing compounded drugs while billing for more expensive brand name drugs, dispensing generic drugs while billing for more expensive brand name drugs, billing for drugs that were never dispensed and dispensing drugs that were compounded outside of a safe and clean environment. The information also charges Trivillian’s with dispensing compounded drugs under labels and identification numbers associated with name brand drugs.
Butterfield, a Medicare beneficiary, is charged in a separate information with submitting false claims to Medicare on her own behalf, seeking payment for drugs that were never dispensed to her.
If convicted, the pharmacy faces a fine of up to $1 million or twice the gross financial gain or twice the gross financial loss resulting from the pharmacy’s conduct, whichever is greater; not less than two years nor more than 10 years of probation; a mandatory special assessment of $800; and an order of restitution.
If convicted, Butterfield faces a maximum of five years in prison; a fine of $250,000, or twice the gross financial gain or twice the gross financial loss resulting from her conduct, whichever is greater; a term of supervised release of three years; a mandatory special assessment of $100; and an order of restitution.
The investigation was conducted by United States Health and Human Services, the United States Food and Drug Administration, the West Virginia State Police, the West Virginia Medicaid Fraud Control Unit and the Drug Enforcement Administration.
Assistant United States Attorney Eumi Choi is in charge of the prosecution, and Assistant United States Attorney John Gianola is responsible for the civil settlement.
Click here to view a copy of the Trivillian’s information
Click here to view a copy of the Butterfield information
Click here to view the civil settlementAn information is a formal court charge filed after the defendant has voluntarily waved their right to be indicted by a grand jury. The charges are merely accusations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Taos Pueblo Man Pleads Guilty to Federal Assault ChargeRead the Press Release
ALBUQUERQUE – Nathan Mondragon, 28, a member and resident of Taos Pueblo, N.M., pleaded guilty this morning to an indictment charging him with an assault resulting in serious bodily injury. The guilty plea was entered under a plea agreement with the U.S. Attorney’s Office.
Mondragon was arrested on Sept. 23, 2014, on a criminal complaint charging him with assault with a deadly weapon and assault resulting in serious bodily injury. According to the complaint, Mondragon assaulted another Taos Pueblo member on Sept. 14, 2014, in Taos County, N.M., on land owned by the Taos Pueblo Indian Tribe. The complaint alleges that Mondragon stabbed the victim multiple times before fleeing the crime scene. Mondragon was apprehended on Sept. 14, 2014, by New Mexico State Police and held in tribal custody until his arrest on federal charges.
On Oct. 21, 2014, Mondragon was indicted and charged with assault with a dangerous weapon and assault resulting in serious bodily injury.
During today’s proceedings, Mondragon entered a guilty plea to Count 2 of the indictment charging him with assault resulting in serious bodily injury. Mondragon admitted that on Sept. 14, 2014, he assaulted the victim by stabbing him with a knife at a location within Taos Pueblo.
At sentencing Mondragon faces a statutory maximum penalty of ten years in federal prison. He remains in federal custody pending his sentencing hearing which has yet to be scheduled.This case was investigated by the Northern Pueblos Agency of the BIA’s Office of Justice Services and the Taos Pueblo Tribal Police Department. Assistant U.S. Attorney David Adams is prosecuting this case.