Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
23 December 2014
Seven People Indicted in Cocaine Conspiracy Including Five Keeseville Residents, One Plattsburgh ResidentRead the Press Release
Investigation Yields Seizure of Over 500 Grams of Cocaine
PLATTSBURGH, NEW YORK –United States Attorney Richard S. Hartunian, Drug Enforcement Administration Special Agent in Charge James J. Hunt, and New York State Police Troop B Headquarters Bureau of Criminal Investigations Captain Robert S. LaFountain announced that a grand jury has indicted seven individuals on drug trafficking charges.
“The plague of addictive drugs like cocaine devastates lives and communities,” stated United States Attorney Richard S. Hartunian. “We will continue to work with our law enforcement partners to get these substances off our streets and prosecute distributers to the fullest extent of the law.”
DEA Special Agent in Charge James J. Hunt stated, “This investigation is the essence of DEA’s mission - to identify and dismantle drug trafficking organizations responsible for threatening our communities with drug abuse and the perils associated. By working with our federal, local and state law enforcement partners, DEA not only dismantled a local cocaine distribution organization based in Plattsburgh, but located and arrested the cocaine source in New York City.”
“These arrests underscore the extraordinary results that are achieved by the dedication and perseverance of the state, local and federal law enforcement officers who worked so diligently on this case,” said New York State Police Captain Robert S. LaFountain. “The New York State Police are committed to working with our law enforcement partners to identify, investigate and arrest those involved in the distribution and sale of narcotic drugs."
The indictment charges the following individuals with conspiracy to possess with intent to distribute and to distribute cocaine:
• Thomas Farlekas, 31, of Bronx, New York
• Earl Mudd, 48, of Keeseville, New York
• Michael Moran, 43, of Keeseville, New York
• Kelly Nusbaum-Allen, 43, of Plattsburgh, New York
• Clayton Barber, Jr. aka “Junior,” 34, of Keeseville, New York
• Suzanne Gill, 30, of Keeseville, New York
• Joseph Hathaway, 38, of Keeseville, New YorkFarlekas and Mudd face at least ten (10) years and up to life imprisonment, and a fine of up to $10,000,000. Moran faces at least five (5) years imprisonment and up to forty (40) years imprisonment, and a fine of up to $5,000,000. The remaining defendants face up to twenty (20) years imprisonment and up to a $1,000,000 fine.
Farlekas, Mudd, and Moran appeared in United States District Court in Plattsburgh, New York on November 30, 2014. Farlekas and Mudd were detained pending trial and Moran was released on pretrial release supervision. Nusbaum-Allen appeared in United States District Court in Plattsburgh, New York on December 18, 2014, and was released on pretrial release supervision. Barber, Jr., Gill, and Hathaway appeared in United States District Court in Plattsburgh, New York on December 23, 2014. Gill was released on pretrial release supervision. Barber, Jr. and Hathaway were detained pending trial. Trial in this matter is currently scheduled for February 17, 2015 before Senior United States District Court Judge Lawrence E. Kahn in Albany, New York.
The charges contained in the indictment are merely accusations and the defendants are presumed innocent until and unless proven guilty.
The case was investigated by the U.S. Drug Enforcement Administration, the New York State Police, U.S. Border Patrol, and Homeland Security Investigations. Local law enforcement agencies involved include the Plattsburgh Police Department, Essex County Sheriff’s Department, and Malone Village Police Department. The United States is represented in this prosecution by Assistant United States Attorney Katherine Kopita.
Robert Lustyik, Former FBI Special Agent, Pleads Guilty to Bribery Scheme in White Plains Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Leslie R. Caldwell, the Assistant Attorney General of the Justice Department’s Criminal Division, and Michael E. Horowitz, the Justice Department Inspector General, announced that ROBERT LUSTYIK, a former Special Agent with the Federal Bureau of Investigation (“FBI”), pleaded guilty today in White Plains federal court to all counts with which he is charged, including bribery, conspiracy to commit fraud, and theft of government property. LUSTYIK pleaded guilty before United States District Judge Vincent L. Briccetti,.
U.S. Attorney Preet Bharara said: “Robert Lustyik today admitted to conducting a bribery scheme in which, for his own personal gain, he secretly sold information and documents to which he had access as an FBI agent. Lustyik betrayed our system of justice: he breached not only the law, but also his sworn oath, and the great trust and confidence placed in him by citizens and colleagues. For his criminal conduct he now faces, as he must, serious, commensurate penalties.”
Assistant Attorney General Leslie R. Caldwell said: “Robert Lustyik discarded the FBI’s principles of ‘fidelity, bravery, and integrity,’ and sold his badge to the highest bidder. Greed has no place in public service or law enforcement. The Department of Justice will root out corruption wherever it takes hold, and hold accountable those who abuse the public’s trust for personal gain.”
Inspector General Michael E. Horowitz said: “The Department of Justice Office of the Inspector General is committed to working with our law enforcement partners to identify, investigate, and bring to justice all DOJ employees who engage misconduct.”
According to the Complaint, the Indictment, court hearings, and today’s plea proceeding:
LUSTYIK was an FBI Special Agent who worked on the counterintelligence squad in the White Plains Resident Agency. LUSTYIK’s co-defendant, Johannes Thaler, was LUSTYIK’s friend, and LUSTYIK’s other co-defendant, Rizve Ahmed, was an acquaintance of Thaler. From in or about September 2011 through March 2012, LUSTYIK, Thaler, and Ahmed engaged in a bribery scheme. As part of the scheme, LUSTYIK and Thaler solicited payments of money from Ahmed, in exchange for LUSTYIK’s agreement to provide internal, confidential documents and other confidential information to which LUSTYIK had access by virtue of his position as an FBI Special Agent. The documents and information pertained to a prominent citizen of Bangladesh (“Individual 1”). Ahmed perceived himself to be on the opposite side of a political rivalry with Individual 1. Ahmed sought, among other things, to obtain information about Individual 1, to locate Individual 1, and to harm Individual 1 and others associated with Individual 1.
As part of the scheme, LUSTYIK and Thaler exchanged text messages, including messages about how to pressure Ahmed to pay them additional money in exchange for confidential information. For example, in text messages, LUSTYIK told Thaler, “we need to push [Ahmed] for this meeting and get that 40 gs quick . . . . I will talk us into getting the cash . . . . I will work my magic . . . . We r sooooooo close.” Thaler responded, “I know. It’s all right there in front of us. Pretty soon we’ll be having lunch in our oceanfront restaurant . . . .”
As another example, in or about late January 2012, LUSTYIK, upon learning that Ahmed was considering using a different source to obtain confidential information about Individual 1, texted Thaler, “I want to kill C . . . . I hung my ass out the window n we got nothing? . . . . Tell [Ahmed], I’ve got [Individual 1’s] number and I’m pissed. . . . I will put a wire on n get [Ahmed and his associates] to admit they want [a Bangladeshi political figure] offed n we sell it to Individual 1].” LUSTYIK further texted THALER, “So bottom line. I need ten gs asap. We gotta squeeze C.”
LUSTYIK, 52, of Westchester County, pleaded guilty to all five counts in the Indictment in which he is charged. LUSTYIK pleaded guilty to (1) conspiracy to engage in a bribery scheme; (2) soliciting bribes by a public official; (3) conspiracy to defraud the citizens of the United States and the FBI; (4) theft of government property; and (5) unauthorized disclosure of a Suspicious Activity Report. He faces a maximum sentence of 55 years in prison. LUSTYIK is scheduled to be sentenced by Judge Briccetti on April 30, 2015, at 9:30 a.m.
Thaler and Ahmed previously pleaded guilty to bribery and conspiracy to commit fraud before Judge Briccetti. Thaler, 51, of New Fairfield, Connecticut, faces a maximum sentence of 35 years in prison. He is scheduled to be sentenced by Judge Briccetti on January 23, 2015, at 11:30 a.m. Ahmed, 35, of Danbury, Connecticut, faces a maximum sentence of 35 years in prison. He is scheduled to be sentenced by Judge Briccetti on January 23, 2015, at 2:30 p.m. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the efforts of the Department of Justice Office of the Inspector General, which conducted the investigation in this case, and the Financial Crimes Enforcement Network for the U.S. Department of Treasury.
The prosecution is being handled by the Office’s White Plains Division and by the Public Integrity Section of the U.S. Department of Justice. Assistant United States Attorney Benjamin Allee and Trial Attorney Emily Rae Woods are in charge of the prosecution.
Lustyik Et Al.Indictment
Registered Sex Offender Sentenced to 35 Years in Federal Prison for Transportation and Possession of Child PornographyRead the Press Release
A registered sex offender was sentenced today to 35 years in prison for transporting and possessing child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John F. Walsh of the District of Colorado and Special Agent in Charge David Thompson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations’ (HSI) Denver Field Office.
“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.”
“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 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.”
“Anyone who collects and shares child pornography victimizes the most innocent and most vulnerable members of our society,” said HSI Special Agent in Charge Thompson. “This lengthy prison sentence recognizes the trauma that predators inflict on helpless children.”
Gregory Lynn Hopson, 44, of Westminster, Colorado was indicted on Oct. 24, 2012, and pleaded guilty to transportation and possession of child pornography on Sept. 29, 2014. He has been in custody since his arrest on March 5, 2011. Based on the conduct described below, Hopson is currently serving a state prison sentence of 16 years to life for violating the terms of his state probation in connection with his prior conviction for sexual assault on a child. In addition to the prison sentence imposed today, Senior U.S. District Court Judge Lewis T. Babcock of the District of Colorado ordered Hopson to pay restitution to the victim of his crime.
According to Hopson’s admissions in his plea agreement, during the execution of a search warrant at his residence on March 5, 2011, ICE agents seized Hopson’s encrypted computer and CD-ROMs, which contained a well-organized collection of thousands of images and videos of child pornography. The material depicted children, including infants, being sexually abused. One of the CD-ROMs contained images and videos of Hopson engaged in sexually explicit conduct with a child under the age of 12 with whom Hopson was in a position of trust.
Hopson further admitted in his plea agreement that he exchanged child pornography with others over the Internet. In fact, ICE agents recovered approximately 300 emails that Hopson sent or received containing approximately 1,700 images and videos of child pornography.
At the time of the search warrant, Hopson was already a registered sex offender, having been convicted of sexually abusing two children under the age of 12. He was on intensive probation and was undergoing sex offender treatment when he committed these offenses.
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 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 resources tab.
This case was investigated by HSI, and prosecuted by Trial Attorney Keith Becker of the Criminal Division’s Child Exploitation and Obscenity Section, and Chief Judith A. Smith and Assistant U.S. Attorney Beth N. Gibson of the District of Colorado’s Special Prosecution Section.
Real Estate Developer Sentenced to 41 Months in Prison for Defrauding Investors of more than $15 MillionRead the Press Release
Baltimore, Maryland - U.S. District Judge J. Frederick Motz sentenced Brian McCloskey, age 42, of Baltimore today to 41 months in prison, followed by three years of supervised release, for conspiring to commit wire fraud arising from a $20 million investment fraud scheme. Judge Motz ordered McCloskey to pay restitution of $15.850 million.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
According to his plea agreement and court documents Brian McCloskey, who owned a real estate development business known as the McCloskey Group, LLC., and Patrick Belzner, a home builder who began working with McCloskey in late 2008 or early 2009, conspired with others to perpetrate a fraudulent investment scheme with losses to the victims of more than $15 million.
McCloskey and Belzner’s co-conspirators included Kevin Sniffen, a licensed attorney and escrow agent and Mervyn Phelan, who operated IAG Underwriters (IAGU) which was in the business of underwriting loan applications submitted by real estate developers and then locating project financing from banks and other financial entities. Phelan employed Gregory Grantham, an attorney who held the position of IAGU’s general counsel.
Beginning in 2009 and continuing through June 2011, Belzner and McCloskey persuaded a number of private lenders to loan funds to the McCloskey Group to establish that it had cash reserves or “liquidity” in connection with its efforts to secure funding for real estate development projects through IAGU. Belzner and McCloskey falsely represented that the funds would be maintained in an escrow account under the control of Kevin Sniffen; that the funds would not be used for any other purpose; and that the money would be returned to the lender, either upon the funding of the loan or after a specified period of time. In return for this temporary use of the lender’s funds, Belzner and McCloskey promised to pay substantial rates of interest.
Beginning in the late summer of 2010, Phelan and Grantham cooperated with Belzner and McCloskey in their scheme to defraud by (1) making false representations to help persuade lenders to make loans to the McCloskey Group in order to establish “liquidity”; (2) telling the lenders that the funds had to be placed in an escrow account controlled by Kevin Sniffen; and by (3) making false representations to dissuade previous escrow account lenders from demanding the return of their funds when the original time period established for the loan expired without the McCloskey Group obtaining financing for the project in question.
Once the lenders transferred their funds into the escrow accounts, Belzner and/or McCloskey removed those funds from the escrow accounts without the knowledge of the lenders. Belzner and McCloskey then used the stolen funds to repay earlier loans to the McCloskey Group and to Belzner personally; to meet ongoing business expenses of the McCloskey Group; and to support Belzner’s life-style. The total losses resulting from the scheme were approximately $20 million.Patrick J. Belzner, a/k/a “Patrick McCloskey,” age 45, of Selbyville, Delaware, was sentenced to 15 years in prison for wire fraud conspiracy, wire fraud and tax evasion, and was ordered to pay $19.805 million in restitution; Gregory E. Grantham, age 57, of Oceanside, California, was sentenced to five years in prison and ordered to forfeit and pay restitution of $17.4 million; and Kevin Sniffen was sentenced to three years in prison and ordered to pay restitution of $15.85 million.
Mervyn A. Phelan, Sr., age 74, of Newport Beach, California, pleaded guilty to his role in the conspiracy and is scheduled to be sentenced on January 23, 2015, at 2:45 p.m.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
United States Attorney Rod J. Rosenstein thanked the FBI and IRS – Criminal Investigation for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorneys Jefferson M. Gray and Kathleen Gavin, who prosecuted the case.
Owner of Car Dealership Charged with Large-Scale FraudRead the Press Release
NEWARK, N.J. - A complaint charging the owner of a Ramsey, New Jersey, auto dealership with allegedly engaging in a pattern of fraudulent activity through his business has been unsealed, U.S. Attorney Paul J. Fishman announced today.
Afzal Khan, a/k/a “Bobby Khan,” 32, of Egg Harbor Township, New Jersey, was charged by complaint with one count of wire fraud. He is currently being sought by law enforcement.
According to the complaint unsealed today in Newark federal court:
From at least December 2013 through September 2014, Khan, through Emporio Motor Group, engaged in acts to defraud lenders to Emporio and customers of the dealership.
As part of his criminal activities, Khan obtained loans from the auto finance division of a large bank for cars that he never delivered, but for which the purchaser was still responsible. He also obtained loans from the bank for cars that were delivered, but for which neither he nor Emporio had title. As a result, the purchasers of these cars were liable for the loan, but could not register the vehicles. In addition, Khan offered to sell cars for individuals on consignment, and then neither returned the cars nor provided any money from car sales.
For example, Emporio submitted a loan application in February 2014 for approximately $150,000 in connection with the sale of a 2013 Rolls Royce. The victim who had intended to purchase the car had signed the necessary paperwork for the purchase and financing of the car, but never received the vehicle. Khan himself sent some loan payment checks – some of which he stopped or were returned for insufficient funds – but failed to pay the balance on the car. The true owner of the Rolls Royce told law enforcement that it had never even been sold to Khan or left the owner’s possession.
As a result of Khan’s actions, the bank is exposed to a potential loss of more than $1.7 million. To date, more than 75 individuals have filed complaints concerning Khan’s actions at Emporio.
The charge of wire fraud carries a maximum potential penalty of 20 years in prison and a fine of the greater of $250,000 or twice the gross profits to Khan or twice the gross loss suffered to the victims of the offense.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; as well as officers of the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli, and the Borough of Ramsey Police Department, under the direction of Chief of Police Bryan H. Gurney, Chief of Police, with the investigation.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
14-458Khan, Afzal Complaint
Mortgage Lender Agrees to $4.2 Million SettlementRead the Press Release
A Southfield mortgage lender has agreed to pay $4.2 million to resolve allegations that it violated the False Claims Act in its origination of loans backed by the federal government, United States Attorney Barbara L. McQuade announced today.
GTL Investments, Inc., doing business as John Adams Mortgage Company (JAMCO), entered into the agreement with the U.S. Attorney’s Office for the Eastern District of Michigan to resolve allegations that it originated mortgage loans that had material underwriting deficiencies. The loans were guaranteed by the Federal Housing Administration.
The FHA makes home financing available by insuring residential mortgages for the purchase of properties with modest down-payments for purchasers meeting certain criteria, known as underwriting standards. The original lender or loan originator is responsible for making sure that the borrower meets these underwriting standards to minimize the possibility of default and the need for the FHA to pay the mortgage holder for the losses caused by the default.
An investigation by the Office of Inspector General for the Department of Housing and Urban Development found that GTL originated 31 FHA mortgage loans between January 2008 and April 2012 that had material underwriting deficiencies. Twenty-nine of these loans went to claim, causing the FHA damages of $2,445,912. The investigation also identified two loans that had not yet been presented for payment by the FHA with approximately $250,000 in potential losses. GTL has agreed to indemnify the FHA for these two loans.
“By holding accountable lenders who fail to comply with underwriting requirements, we hope to send a message to all lenders that they must comply with government standards for federally insured loans,” McQuade said.
Minneapolis Man Charged with Providing Stolen Cell Phones to Organized Crime RingRead the Press Release
United States Attorney Andrew M. Luger today announced a criminal complaint charging ABBAS ATEIA AL HUSSAINAWEE, 40, for acting as a runner for defendants separately charged with conspiring to engage in the interstate transportation of stolen goods, namely cell phones and other electronic devices. AL HUSSAINAWEE was charged on December 19, 2014, in U.S. District Court in St. Paul, Minn., with conspiracy to engage in interstate transportation of stolen goods. In a separate complaint filed today, AL HUSSAINAWEE was charged with possession with intent to distribute methamphetamine.
“This defendant is charged with being one of the many runners employed by the Mustafa Organization,” said U.S. Attorney Luger. “In August, my office charged 20 defendants with conspiracy to steal and sell mobile devices on the underground market. Our investigation continues to uncover others who fueled the theft of cell phones in Minnesota and elsewhere.”
According to the criminal complaint and documents filed in court, from at least 2006 through 2014, the separately charged Mustafa Organization and their criminal associates illegally obtained cellular telephones and other mobile devices for the purpose of trafficking them throughout the United States and internationally. The Mustafas paid runners who stole mobile devices or obtained them fraudulently by other means. AL HUSSAINAWEE is an alleged runner for the Mustafa Organization.
According to the criminal complaint and documents filed in court, AL HUSSAINAWEE regularly traveled to other states to steal phones, including to Michigan, Illinois, and Missouri. To avoid detection while burglarizing cell phone stores, AL HUSSAINAWEE broke into businesses adjacent to cell phone stores, and then gained entry to the cell phone store by breaking through the wall. He specifically targeted strip malls with vacant adjacent store space.
According to the criminal complaint and documents filed in court, on November 27, 2012, AL HUSSAINAWEE burglarized a Best Buy in Maplewood, Minn. The defendant broke into an adjacent business and broke through the wall to gain entry to the Best Buy. He stole 48 cellular phones, 20 iPads and five tablet computers. On December 12, 2014, AL HUSSAINAWEE burglarized a Verizon Store in Buffalo, Minn. He gained entry to the store by prying open the back door of a vacant business and then breaking through the sheetrock to gain access to the adjacent Verizon Store. The defendant stole $33,015 in cell phones.
According to the criminal complaint and documents filed in court, on July 14, 2014, the defendant stole 44 cell phones and iPads from a Verizon store in Waconia, Minn. The total value of the stolen merchandise was $22,279.97. On March 9, 2014, the defendant broke through the sheetrock of a Verizon store in Menomonie, Wis., and stole $32,000 worth of cell phones and iPads. AL HUSSAINAWEE was responsible for burglary or attempted burglary in at least 22 cell phone stores. The Mustafas paid AL HUSSAINAWEE in cash for the stolen merchandise.
According to a separate criminal complaint filed today, when agents executed a search warrant at AL HUSSAINAWEE’S home in Minneapolis, they discovered a backpack containing approximately 268 grams of methamphetamine.
This case is the result of an investigation conducted by the St. Paul Police Department, United States Secret Service, and Minnesota Bureau of Criminal Apprehension, under the auspices of the Minnesota Financial Crimes Task Force.
Assistant U.S. Attorneys Steven Schleicher and John Marti are prosecuting this case.
Defendant Information: ABBAS ATEIA AL HUSSAINAWEE, 40
Minneapolis, Minn.
Charges: • Conspiracy to engage in interstate transportation of stolen property, 1 count
• Possession with intent to distribute methamphetamine, 1 countThe charges contained in the criminal complaints are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Meth Cookers Who Burned Down Trailer SentencedRead the Press Release
MARQUETTE, MICHIGAN – U.S. Attorney Patrick Miles announced today the sentencing on December 22 of Leanna Lynn Horton, age 38, and Christopher Wayne Brow, age 34, both of Marquette. Horton and Brow had each pled guilty to a single charge of conspiracy to manufacture, distribute and possess with intent to distribute methamphetamine in Marquette County from July 2013 to May 8, 2014.
U.S. District Judge R. Allan Edgar sentenced Horton to 175 months in prison and Brow to 140 months. Detectives from the Upper Peninsula Substance Enforcement Team (UPSET) began investigating this conspiracy on October 26, 2013, after the Marquette Fire Department responded to a trailer fire in the Birch Grove Mobile Home Community on Pioneer Road in Marquette and found a methamphetamine lab. The trailer was a complete loss and eventually had to be towed from the trailer park.
END
Man Sentenced to Prison for Illegal Re-EntryRead the Press Release
A man who re-entered the United States illegally after being removed as a felon was sentenced today to thirteen months in federal prison.
Manuel Reveles-Martinez, age 33, a Mexican citizen living in Cedar Rapids, Iowa, received the prison term after a September 15, 2014, guilty plea to one count of illegal re-entry as a felon.
At the guilty plea, Reveles-Martinez admitted he re-entered the United States without permission after being removed from the country on November 8, 2013. On July 10, 2014, Reveles-Martinez was arrested in Cedar Rapids by agents with Immigration and Customs Enforcement. Reveles-Martinez had previously been convicted of operating while intoxicated (OWI) five times, including OWI third offense, a felony, in 2006.
Reveles-Martinez was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Reveles-Martinez was sentenced to thirteen months’ imprisonment. A special assessment of $100 was imposed. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Reveles-Martinez is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Daniel C. Tvedt and investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-CR-0073.
LeClaire Man is Sentenced in Federal Court for Conspiracy to Distribute MarijuanaRead the Press Release
DAVENPORT, IA - On December 22, 2014, Morgan Michael Hermiston, age 26, of LeClaire, Iowa, was sentenced by United States District Court Chief Judge James E. Gritzner to 46 months imprisonment, announced U. S. Attorney Nicholas A. Klinefeldt. Hermiston was also ordered to serve three years of supervised release following his imprisonment, and to pay $100 towards the Crime Victims Fund.
Beginning by at least November 2011, Hermiston entered into an agreement to receive marijuana from co-defendant Jared Fromknecht to distribute to others. Hermiston was aware that Fromknecht was shipping marijuana via mail from Colorado to Iowa for re-distribution. As part of this agreement, Hermiston arranged for Fromknecht to mail marijuana to others who then delivered this marijuana to Hermiston for distribution.
Hermiston pled guilty on October 4, 2013, to the charge of conspiracy to distribute marijuana. At sentencing, Hermiston admitted being responsible for over 100 kilograms of marijuana.
This case was investigated by the Drug Enforcement Administration, the Iowa Department of Public Safety-Division of Narcotics Enforcement, the United States Postal Inspections Service, and the Davenport, Iowa, Police Department. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
(Download Press Release)
Last of 18 Members of Methamphetamine Trafficking Ring Sentenced on Drug ChargesRead the Press Release
ASHEVILLE, N.C. – The last of 18 members of a methamphetamine trafficking organization was sentenced on Wednesday, December 17, 2014, to 46 months on drug charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Angela Leigh Wike, of Bryson City was also ordered to serve three years under court supervision.
U.S. Attorney Tompkins is joined in making today’s announcement by John S. Comer, Acting Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office and Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division.
In May of 2013, 18 members of the drug ring were arrested as the result of a joint law enforcement investigation conducted by DEA, ATF, North Carolina State Bureau of Investigation, Macon County Sheriff’s Office, Jackson County Sheriff’s Office, Swain County Sheriff’s Office, Franklin Police Department, and Cherokee Indian Police Department.
According to filed court documents and court proceedings, from May 2012 to April 2013, the drug ring operated primarily in Jackson, Haywood, Macon, Swain and Buncombe counties in Western North Carolina. Wake was the last defendant to be sentenced in this case. Those already sentenced are:
• Cipriano Ramos Altamirano – 135 months in prison and five years of supervised release.
• Claude Gregory Coggins – 70 months in prison and three years of supervised release.
• Anne Harvey Cresswell – 60 months in prison and three years of supervised release.
• Joseph Daniel Denmark – 60 months in prison and four years of supervised release.
• Patricia Leigh Dreml – 57 months in prison and two years of supervised release.
• Daniel Furman Gibson - 151 months in prison and four years of supervised release.
• Gerardo Beltran Llanas – 97 months in prison and three years of supervised release.
• Forest Shane Lynn – 30 months in prison and three years of supervised release. Joshua Bryan Parker – 60 months in prison and four years of supervised release.
• Eddie Dwayne Potts – 27 months in prison and three years of supervised release.
• Gerardo Rodriquez-Aragon – 46 months in prison and two years of supervised release.
• Javier Serna-Trejo – 37 months in prison and two years of supervised release.
• Chad Keith Shuler – 100 months in prison and four years of supervised release.
• Paul Michael Swofford – 30 months in prison and three years of supervised release.
• Ronald Edward Swofford – 46 months in prison and three years of supervised release.
• James Homer Taylor – 30 months in prison and three years of supervised release.
• Heather Marie West – 54 months in prison and three years of supervised release.Wike will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the DEA and ATF, assisted by the North Carolina State Bureau of Investigation, Macon County Sheriff’s Office, Jackson County Sheriff’s Office, Swain County Sheriff’s Office, Franklin Police Department, and Cherokee Indian Police Department. The prosecution is being handled for the government by Assistant U.S. Attorney Thomas Kent of the U.S. Attorney’s Office in Asheville.
Kentucky Businessman Pleads Guilty in Manhattan Federal Court to $53 Million Tax Scheme and Massive Fraud That Involved the Bribery of Bank OfficialsRead the Press Release
U.S. Attorney Preet Bharara for the Southern District of New York and Deputy Assistant Attorney General David A. Hubbert for the Tax Division of the Department of Justice announced that Wilbur Anthony Huff, a Kentucky businessman, pleaded guilty today in Manhattan federal court to various tax crimes that caused more than $50 million in losses to the Internal Revenue Service (IRS), and a massive fraud that involved the bribery of bank officials, the fraudulent purchase of an insurance company, and the defrauding of insurance regulators. Huff pleaded guilty this afternoon before U.S. District Judge Naomi Reice Buchwald.
“Today’s guilty plea ensures that Wilbur Huff will be punished for perpetuating a vortex of fraud – complete with bribery, tax crimes that caused $53 million in losses to the IRS, the fraudulent purchase of a company, and the defrauding of insurance regulators,” said U.S. Attorney Bharara. “Those who might be tempted to follow in Huff’s criminal footsteps should understand that this office and our law enforcement partners will aggressively pursue and root out fraud wherever we find it.”
Huff, 53, of Caneyville and Louisville, Kentucky, pleaded guilty to one count of corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws, which carries a maximum penalty of three years in prison, one count of aiding and assisting with the preparation and presentation of false and fraudulent tax returns, which carries a maximum penalty of three years in prison, one count of failing and causing the failure to pay taxes to the IRS, which carries a maximum penalty of one year in prison, and one count of conspiracy to (a) commit bank bribery, (b) commit fraud on bank regulators and the board and shareholders of a publicly-traded company, and (c) fraudulently purchase an Oklahoma insurance company, which carries a maximum penalty of five years in prison. He is scheduled to be sentenced by Judge Buchwald on April 8, 2015, at 2:30 p.m. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. As part of his plea, Huff also agreed to forfeit $10.8 million to the United States and to provide restitution in the following amounts to victims of his crimes: $70,100,000 to the Receiver for Park Avenue Property and Casualty Insurance Company; $4,857,266.62 to the Federal Deposit Insurance Corporation (FDIC); $597,420.29 to Valley National Bank (the successor of Park Avenue Bank); and $53,094,219 to the IRS.
According to the information, plea agreement, and statements made during court proceedings:
Background
Huff was a businessman who controlled numerous entities located throughout the United States (Huff-controlled entities). Huff controlled the companies and their finances, using them to orchestrate a $53 million fraud on the IRS as well as other illegal schemes. However, rather than exercise control of these companies openly, Huff concealed his control by installing other individuals to oversee the companies’ day-to-day functions and to serve as the companies’ titular owners, directors or officers. Huff also maintained a corrupt relationship with Park Avenue Bank and its executives, Charles J. Antonucci Sr., the president and chief executive officer, and Matthew L. Morris, the senior vice president.
Tax Crimes
From 2008 to 2010, Huff controlled O2HR, a professional employer organization (PEO) located in Tampa, Florida. Like other PEOs, O2HR was paid to manage the payroll, tax, and workers’ compensation insurance obligations of its client companies. However, instead of paying $53 million in taxes that O2HR’s clients owed the IRS, and instead of paying $5 million to Providence Property and Casualty Insurance Company (Providence P&C) – an Oklahoma-based insurance company – for workers’ compensation coverage expenses for O2HR clients, HUFF stole the money that his client companies had paid O2HR for those purposes. Among other things, Huff diverted millions of dollars from O2HR to fund his investments in unrelated business ventures, and to pay his family members’ personal expenses. The expenses included mortgages on Huff’s homes, rent payments for his children’s apartments, staff and equipment for Huff’s farm, designer clothing, jewelry, and luxury cars.
Conspiracy to Commit Bank Bribery, Defraud Bank Regulators, and Fraudulently Purchase an Oklahoma Insurance Company
From 2007 up to and including 2010, HUFF engaged in a massive multi-faceted conspiracy, in which he schemed to (i) bribe executives of Park Avenue Bank, (ii) defraud bank regulators and the board and shareholders of a publicly-traded company and (iii) fraudulently purchase an Oklahoma insurance company. As described in more detail below, Huff paid bribes totaling hundreds of thousands of dollars in cash and other items to Morris and Antonucci, in exchange for their favorable treatment at Park Avenue Bank.
As part of the corrupt relationship between Huff and the bank executives, Huff, Morris, Antonucci, and others conspired to defraud various entities and regulators during the relevant time period. Specifically, Huff conspired with Morris and Antonucci to falsely bolster Park Avenue Bank’s capital, by orchestrating a series of fraudulent transactions to make it appear that Park Avenue Bank had received an outside infusion of $6.5 million, and engaged in a series of further fraudulent actions to conceal from bank regulators the true source of the funds.
Huff further conspired with Morris, Antonucci, and others to defraud Oklahoma insurance regulators and others by making material misrepresentations and omissions regarding the source of $37.5 million used to purchase Providence Property and Casualty Insurance Company, an Oklahoma insurance company that provided workers’ compensation insurance for O2HR’s clients, and to whom O2HR owed a significant debt.
Bribery of Park Avenue Bank Executives
From 2007 to 2009, Huff paid Morris and Antonucci at least $400,000 in exchange for which they: (1) provided Huff with fraudulent letters of credit obligating Park Avenue Bank to pay an investor in one of Huff’s businesses $1.75 million if Huff failed to pay the investor back himself; (2) allowed the Huff-controlled entities to accrue $9 million in overdrafts; (3) facilitated intra-bank transfers in furtherance of Huff’s frauds; and (4) fraudulently caused Park Avenue Bank to issue at least $4.5 million in loans to the Huff-controlled entities.
Fraud on Bank Regulators and a Publicly-Traded Company
From 2008 to 2009, Huff, Morris, and Antonucci engaged in a scheme to prevent Park Avenue Bank from being designated as “undercapitalized” by regulators – a designation that would prohibit the bank from engaging in certain types of banking transactions, and that would subject the bank to a range of potential enforcement actions by regulators. Specifically, they engaged in a series of deceptive, “round-trip” financial transactions to make it appear that Antonucci had infused the bank with $6.5 million in new capital when, in actuality, the $6.5 million was part of the bank’s pre-existing capital. Huff, Morris, and Antonucci funneled the $6.5 million from the bank through accounts controlled by Huff to Antonucci. This was done to make it appear as though Antonucci was helping to stabilize the bank’s capitalization problem, so the bank could continue engaging in certain banking transactions that it would otherwise have been prohibited from doing, and to put the bank in a better posture to receive $11 million from the Troubled Asset Relief Program. To conceal their unlawful financial maneuvering, Huff created, or directed the creation of, documents falsely suggesting that Antonucci had earned the $6.5 million through a bogus transaction involving another company Antonucci owned. Huff, Morris, and Antonucci further concealed their scheme by stealing $2.3 million from General Employment Enterprises Inc., a publicly-traded temporary staffing company, in order to pay Park Avenue Bank back for monies used in connection with the $6.5 million transaction.
Fraud on Insurance Regulators and the Investment Firm
From July 2008 to November 2009, Huff, Morris, Antonucci, and Allen Reichman, an executive at an investment bank and financial services company headquartered in New York, New York (the “investment firm”), conspired to (i) defraud Oklahoma insurance regulators into allowing Antonucci to purchase the assets of Providence P&C – the Oklahoma insurance company that was owed $5 million by O2HR and (ii) defraud the investment firm into providing a $30 million loan to finance the purchase. Specifically, HUFF and Antonucci devised a scheme in which Antonucci would purchase Providence P&C’s assets by obtaining a $30 million loan from the Investment Firm, which used Providence P&C’s own assets as collateral for the loan. However, because Oklahoma insurance regulators had to approve any sale of Providence P&C, and because Oklahoma law forbade the use of Providence P&C’s assets as collateral for such a loan, Huff, Morris, Antonucci, and Reichman made, and conspired to make, a number of material misstatements and material omissions to the investment firm and Oklahoma insurance regulators concerning the true nature of the financing for Antonucci’s purchase of Providence P&C. Among other things, Reichman directed Antonucci to sign a letter that provided false information regarding the collateral that would be used for the loan, and Huff, Morris, and Antonucci conspired to falsely represent to Oklahoma insurance regulators that Park Avenue Bank – not the investment firm – was funding the purchase of Providence P&C.
After deceiving Oklahoma regulators into approving the sale of Providence P&C, Huff took $4 million of the company’s assets, which he used to continue the scheme to defraud O2HR’s clients. Ultimately, in November 2009, the insurance company became insolvent and was placed in receivership after Huff, Morris, and Antonucci had pilfered its remaining assets.
* * *
Charles Antonucci, who was charged separately by complaint on March 15, 2010, pleaded guilty to his role in the crimes described above on Oct. 8, 2010. Matthew L. Morris and Allen Reichman were charged by Indictment with Huff on Oct. 1, 2012. Morris pleaded guilty in connection with the case on Oct.17.
Reichman is currently scheduled to go to trial March 2, 2015 before Judge Buchwald. The charges against Reichman are allegations and he is presumed innocent unless and until proven guilty beyond a reasonable doubt.
U.S. Attorney Bharara praised the investigative work of the Special Inspector General for the Troubled Asset Relief Program, the FBI, the IRS, the New York State Department of Financial Services, Immigration and Customs Enforcement (ICE)’s Homeland Security Investigations (HSI), and the Office of Inspector General of the FDIC. Mr. Bharara also thanked the Department of Justice’s Tax Division and the U.S. Attorney’s Office for the Southern District of Florida for their assistance.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Janis Echenberg and Daniel Tehrani and Special Assistant U.S. Attorney Tino Lisella are in charge of the criminal case.
Kentucky Businessman Pleads Guilty in Manhattan Federal Court to $53 Million Tax Scheme and Massive Fraud That Involved the Bribery of Bank OfficialsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and David A. Hubbert, Deputy Assistant Attorney General for the Tax Division of the Department of Justice, announced that WILBUR ANTHONY HUFF, a Kentucky businessman, pled guilty today in Manhattan federal court to various tax crimes that caused more than $50 million in losses to the Internal Revenue Service (“IRS”), and a massive fraud that involved the bribery of bank officials, the fraudulent purchase of an insurance company, and the defrauding of insurance regulators. HUFF pled guilty this afternoon before U.S. District Judge Naomi Reice Buchwald.
Manhattan U.S. Attorney Preet Bharara said: “Today’s guilty plea ensures that Wilbur Huff will be punished for perpetuating a vortex of fraud – complete with bribery, tax crimes that caused $53 million in losses to the IRS, the fraudulent purchase of a company, and the defrauding of insurance regulators. Those who might be tempted to follow in Huff’s criminal footsteps should understand that this Office and our law enforcement partners will aggressively pursue and root out fraud wherever we find it.”
According to the information, plea agreement, and statements made during court proceedings:
HUFF was a businessman who controlled numerous entities located throughout the United States (“HUFF-Controlled Entities”). HUFF controlled the companies and their finances, using them to orchestrate a $53 million fraud on the IRS as well as other illegal schemes. However, rather than exercise control of these companies openly, HUFF concealed his control by installing other individuals to oversee the companies’ day-to-day functions and to serve as the companies’ titular owners, directors, or officers. HUFF also maintained a corrupt relationship with Park Avenue Bank and its executives, Charles J. Antonucci, Sr., the President and Chief Executive Officer, and Matthew L. Morris, the Senior Vice President.
Tax Crimes
From 2008 to 2010, HUFF controlled O2HR, a professional employer organization (“PEO”) located in Tampa, Florida. Like other PEOs, O2HR was paid to manage the payroll, tax, and workers’ compensation insurance obligations of its client companies. However, instead of paying $53 million in taxes that O2HR’s clients owed the IRS, and instead of paying $5 million to Providence Property and Casualty Insurance Company (“Providence P&C”) – an Oklahoma-based insurance company – for workers’ compensation coverage expenses for O2HR clients, HUFF stole the money that his client companies had paid O2HR for those purposes. Among other things, HUFF diverted millions of dollars from O2HR to fund his investments in unrelated business ventures, and to pay his family members’ personal expenses. The expenses included mortgages on HUFF’s homes, rent payments for his children’s apartments, staff and equipment for HUFF’s farm, designer clothing, jewelry, and luxury cars.
Conspiracy to Commit Bank Bribery, Defraud Bank Regulators, and Fraudulently Purchase an Oklahoma Insurance Company
From 2007 up to and including 2010, HUFF engaged in a massive multi-faceted conspiracy, in which he schemed to (i) bribe executives of Park Avenue Bank, (ii) defraud bank regulators and the board and shareholders of a publicly-traded company and (iii) fraudulently purchase an Oklahoma insurance company. As described in more detail below, HUFF paid bribes totaling hundreds of thousands of dollars in cash and other items to Morris and Antonucci, in exchange for their favorable treatment at Park Avenue Bank.
As part of the corrupt relationship between HUFF and the bank executives, HUFF, Morris, Antonucci, and others conspired to defraud various entities and regulators during the relevant time period. Specifically, Huff conspired with Morris and Antonucci to falsely bolster Park Avenue Bank’s capital, by orchestrating a series of fraudulent transactions to make it appear that Park Avenue Bank had received an outside infusion of $6.5 million, and engaged in a series of further fraudulent actions to conceal from bank regulators the true source of the funds.
HUFF further conspired with Morris, Antonucci, and others to defraud Oklahoma insurance regulators and others by making material misrepresentations and omissions regarding the source of $37.5 million used to purchase Providence Property and Casualty Insurance Company, an Oklahoma insurance company that provided workers’ compensation insurance for O2HR’s clients, and to whom O2HR owed a significant debt.
Bribery of Park Avenue Bank Executives
From 2007 to 2009, HUFF paid Morris and Antonucci at least $400,000 in exchange for which they: (1) provided HUFF with fraudulent letters of credit obligating Park Avenue Bank to pay an investor in one of HUFF’s businesses $1.75 million if HUFF failed to pay the investor back himself; (2) allowed the HUFF-Controlled Entities to accrue $9 million in overdrafts; (3) facilitated intra-bank transfers in furtherance of HUFF’s frauds; and (4) fraudulently caused Park Avenue Bank to issue at least $4.5 million in loans to the HUFF-Controlled Entities.
Fraud on Bank Regulators and a Publicly-Traded Company
From 2008 to 2009, HUFF, Morris, and Antonucci engaged in a scheme to prevent Park Avenue Bank from being designated as “undercapitalized” by regulators – a designation that would prohibit the Bank from engaging in certain types of banking transactions, and that would subject the Bank to a range of potential enforcement actions by regulators. Specifically, they engaged in a series of deceptive, “round-trip” financial transactions to make it appear that Antonucci had infused the Bank with $6.5 million in new capital when, in actuality, the $6.5 million was part of the Bank’s pre-existing capital. HUFF, Morris, and Antonucci funneled the $6.5 million from the Bank through accounts controlled by HUFF to Antonucci. This was done to make it appear as though Antonucci was helping to stabilize the Bank’s capitalization problem, so the Bank could continue engaging in certain banking transactions that it would otherwise have been prohibited from doing, and to put the Bank in a better posture to receive $11 million from the Troubled Asset Relief Program. To conceal their unlawful financial maneuvering, HUFF created, or directed the creation of, documents falsely suggesting that Antonucci had earned the $6.5 million through a bogus transaction involving another company Antonucci owned. HUFF, Morris, and Antonucci further concealed their scheme by stealing $2.3 million from General Employment Enterprises, Inc., a publicly-traded temporary staffing company, in order to pay Park Avenue Bank back for monies used in connection with the $6.5 million transaction.
Fraud on Insurance Regulators and the Investment Firm
From July 2008 to November 2009, HUFF, Morris, Antonucci, and Allen Reichman, an executive at an investment bank and financial services company headquartered in New York, New York (the “Investment Firm”), conspired to (i) defraud Oklahoma insurance regulators into allowing Antonucci to purchase the assets of Providence P&C – the Oklahoma insurance company that was owed $5 million by O2HR and (ii) defraud the Investment firm into providing a $30 million loan to finance the purchase. Specifically, HUFF and Antonucci devised a scheme in which Antonucci would purchase Providence P&C’s assets by obtaining a $30 million loan from the “Investment Firm,” which used Providence P&C’s own assets as collateral for the loan. However, because Oklahoma insurance regulators had to approve any sale of Providence P&C, and because Oklahoma law forbade the use of Providence P&C’s assets as collateral for such a loan, HUFF, Morris, Antonucci, and Reichman made, and conspired to make, a number of material misstatements and material omissions to the Investment Firm and Oklahoma insurance regulators concerning the true nature of the financing for Antonucci’s purchase of Providence P&C. Among other things, Reichman directed Antonucci to sign a letter that provided false information regarding the collateral that would be used for the loan, and HUFF, Morris, and Antonucci conspired to falsely represent to Oklahoma insurance regulators that Park Avenue Bank – not the Investment Firm – was funding the purchase of Providence P&C.
After deceiving Oklahoma regulators into approving the sale of Providence P&C, HUFF took $4 million dollars of the company’s assets, which he used to continue the scheme to defraud O2HR’s clients. Ultimately, in November 2009, the insurance company became insolvent and was placed in receivership after HUFF, Morris, and Antonucci had pilfered its remaining assets.
HUFF, 53, of Caneyville and Louisville, Kentucky, pleaded guilty to one count of corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws, which carries a maximum penalty of three years in prison, one count of aiding and assisting with the preparation and presentation of false and fraudulent tax returns, which carries a maximum penalty of three years in prison, one count of failing and causing the failure to pay taxes to the IRS, which carries a maximum penalty of one year in prison, and one count of conspiracy to (a) commit bank bribery, (b) commit fraud on bank regulators and the board and shareholders of a publicly-traded company, and (c) fraudulently purchase an Oklahoma insurance company, which carries a maximum penalty of five years in prison. He is scheduled to be sentenced by Judge Buchwald on April 8, 2015, at 2:30 p.m. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. As part of his plea, Huff also agreed to forfeit $10.8 million to the United States and to provide restitution in the following amounts to victims of his crimes: $70,100,000 to the Receiver for Park Avenue Property and Casualty Insurance Company; $4,857,266.62 to the Federal Deposit Insurance Corporation (“FDIC”); $597,420.29 to Valley National Bank (the successor of Park Avenue Bank); and $53,094,219 to the Internal Revenue Service.
Charles Antonucci, who was charged separately by complaint on March 15, 2010, pleaded guilty to his role in the crimes described above on October 8, 2010. Matthew L. Morris and Allen Reichman were charged by Indictment with HUFF on October 1, 2012. Morris pleaded guilty in connection with the case on October 17, 2014.
Reichman is currently scheduled to go to trial before Judge Buchwald beginning on March 2, 2015. The charges against Reichman are allegations and he is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Mr. Bharara praised the investigative work of the Special Inspector General for the Troubled Asset Relief Program, the Federal Bureau of Investigation, the IRS, the New York State Department of Financial Services, Immigration and Customs Enforcement’s Homeland Security Investigations, and the Office of Inspector General of the FDIC. Mr. Bharara also thanked the Department of Justice’s Tax Division and the United States Attorney’s Office for the Southern District of Florida for their assistance.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Janis Echenberg and Daniel Tehrani and Special Assistant U.S. Attorney Tino Lisella are in charge of the criminal case.
Justice Department Reaches Settlement with the County of Erie, New York to Prevent Disability Discrimination at the Erie County JailRead the Press Release
The Justice Department announced today that it reached a settlement agreement with the County of Erie, New York, to ensure equal access to the facilities and services of the Erie County Holding Center and the Erie County Correctional Facility, collectively referred to as the Erie County Jail. The Erie County Holding Center, located in Buffalo, New York, is primarily a pretrial detention facility and is the second largest detention facility in New York State. The Erie County Correctional Facility, located in Alden, New York, holds inmates of various classifications and processes more than 20,000 inmates annually.
The Justice Department initiated a compliance review of the Erie County Jail under the Americans with Disabilities Act (ADA) and the Rehabilitation Act of 1973 after receiving complaints alleging that, because the Erie County Jail did not have a sufficient number of accessible cells and shower facilities, the jail housed inmates with mobility disabilities in its medical unit even though they did not require medical treatment. The department determined that the jail’s medical unit also did not have accessible features. In resolution of the department’s findings, the agreement requires the Erie County Jail to:
- Complete specified accessibility modifications to its facilities within four years, including providing accessible cells in various classifications and housing units, providing accessible showers and toilet facilities, and providing accessible features in the medical unit.
- Ensure that a minimum of three percent, but no fewer than one, of the total number of cells in its newly constructed and altered facilities are accessible to inmates with mobility disabilities.
- Ensure that inmates with disabilities are not housed in designated medical areas unless they are receiving medical care or treatment.
- Ensure that wheelchairs and other adaptive equipment used by inmates with disabilities are routinely maintained, repaired, and generally kept in safe, operable condition.
- Provide appropriate devices, such as medical trapezes, hearing aid batteries, or special shoes, as required to meet the needs of inmates with disabilities.
- Ensure that when inmates who are deaf or have hearing loss are handcuffed or restrained, they are handcuffed or restrained in a manner that permits effective communication (e.g., handcuffing detainees in the front so they can sign) unless legitimate security concerns dictate otherwise.
- Ensure that when inmates who are blind or have low vision are handcuffed or restrained, they are handcuffed or restrained in a manner that permits safe mobility, including the use of a cane or sighted guide.
- Designate a disabilities coordinator who coordinates ADA access at the Erie County Holding Center and the Erie County Correctional Facility.
- Develop and implement an ADA grievance policy for resolving inmate ADA complaints.
- Develop and implement an effective communication policy for inmates who are deaf, have hearing loss, blind or have low vision.
“The ADA prohibits discrimination by public entities on the basis of disability, including the denial by correctional facilities and jails of equal services to individuals with disabilities,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “With this agreement, the Erie County Jail is taking important steps to ensure that people incarcerated in the jail are not endangered or discriminated against because of their disabilities.”
To read the settlement agreement or for more information on the ADA, visit the ADA website at www.ada.gov. Those interested in finding out more about this settlement or the obligations of public entities under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website. ADA complaints may be filed by email to [email protected].
Justice Department Files Pregnancy Discrimination Lawsuit Against the Chicago Board of EducationRead the Press Release
The Justice Department today announced the filing of a lawsuit against the Chicago Board of Education, alleging that the board discriminated against pregnant teachers at Scammon Elementary School by subjecting them to adverse personnel actions, including termination in some instances, after they announced their pregnancies. According to the complaint, these adverse personnel actions were in violation of Title VII of the Civil Rights Act of 1964. Title VII is a federal statute that prohibits employment discrimination on the basis of sex, race, color, national origin and religion. The statute explicitly prohibits employers from discriminating against female employees due to pregnancy, childbirth or related medical conditions.
The suit, filed in the United States District Court for the Northern District of Illinois, alleges that, starting in 2009, the principal at Scammon subjected female teachers to lower performance evaluations, discipline, threatened termination and/or termination because of their pregnancies. The complaint further alleges that the board approved the firing of six recently pregnant teachers employed at Scammon and forced two other recently pregnant teachers to leave Scammon. The department’s complaint seeks a court order that would require the board to develop and implement policies that would prevent its employees from being subjected to discrimination due to their pregnancies. The relief sought also includes monetary damages as compensation for those teachers who were harmed by the alleged discrimination.
Two teachers who had been pregnant while working at Scammon filed charges of sex discrimination with the Chicago District Office of the Equal Employment Opportunity Commission (EEOC). The EEOC investigated the charges and determined that there was reasonable cause to believe discrimination occurred against the two charging parties as well as against other pregnant teachers. The EEOC was unsuccessful in its attempts to conciliate the matter before referring it to the Department of Justice.
“No woman should have to make a choice between her job and having a family,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “Federal law requires employers to maintain a workplace free of discrimination on the basis of sex.”
“Despite much progress, we continue to see the persistence of overt pregnancy discrimination, as well as the emergence of more subtle discriminatory practices in the workplace,” said EEOC Chair Jenny R. Yang.
“The EEOC will continue to vigorously enforce Title VII’s prohibition of discrimination against pregnant employees,” said John P. Rowe, former District Director of the EEOC’s Chicago District Office. Rowe led the EEOC’s administrative investigation of the charges filed by the two teachers.
This lawsuit is brought by the Department of Justice as a result of a joint effort to enhance collaboration between the EEOC and the Justice Department’s Civil Rights Division for vigorous enforcement of Title VII.
More information about Title VII and other federal employment laws is available on the website of the Employment Litigation Section of the Civil Rights Division (www.justice.gov/crt/about/emp/).
The continued enforcement of Title VII has been a priority of the Justice Department’s Civil Rights Division. Additional information on the Civil Rights Division’s work is available on its website at www.justice.gov/crt/. Pregnancy discrimination, in particular, has been identified by the EEOC as a strategic enforcement priority, and earlier this year, the agency issued updated guidance, which is available at www.eeoc.gov/laws/types/pregnancy_guidance.cfm
Identifying new law enforcement tools to enhance asset tracing and recovery focus of INTERPOL meetingRead the Press Release
UNITED NATIONS, New York – Identifying new mechanisms to assist law enforcement efforts in identifying and seizing criminal assets was the focus of an INTERPOL meeting at the United Nations headquarters.
During the three-day (17 – 19 December) working group meeting some 90 experts from 32 countries and six international organizations, including a number of UN agencies, the International Criminal Court and the World Bank, discussed the creation of operational tools through which INTERPOL could assist in asset tracing and recovery.
Organized by the INTERPOL General Secretariat in cooperation with the US National Central Bureau in Washington DC, the aim of the second session of the Expert Working Group on the Identification, Location and Seizure of Assets was to provide practitioners with new insight and instruments to enhance law enforcement and judicial cooperation.
Headed by chairman Ambassador Eugenio María Curia and Joël Sollier, INTERPOL General Counsel, the group recommended the creation of a new INTERPOL notice to locate, identify and obtain information on, seize or freeze criminal assets in compliance with national and international laws and obligations, supported by the establishment of an operational database.
The experts also recommended further consideration of developing mechanisms to simplify and expedite the transmission of mutual legal assistance requests using the secured INTERPOL communications channel (e-MLA). Rapid law enforcement action is particularly important to bridge the gap between lengthy legal assistance procedures and the high speed at which criminals move and hide proceeds.
With studies showing less than 10 percent of all criminal gains are being recovered, one of the key drivers behind the creation of the expert working group is to increase the number of criminal assets being frozen, confiscated for the benefit of society or given back to original owners.
The working group session was addressed by New York City Police Commissioner William Bratton who highlighted the important role of asset recovery in daily police work.
The meeting, attended by three INTERPOL Executive Committee members, Vice President for the Americas, Alan Bersin and Delegates for Europe, Filippo Dispenza and Alexander Prokopchuk, followed the recent briefing to the UN Security Council by INTERPOL Secretary General Jürgen Stock.
In his address to the Security Council, Mr Stock emphasized INTERPOL’s important role in providing assistance for the implementation of UN sanctions, and highlighted the work of the expert working group in supporting the coordination of international law enforcement efforts in asset tracing and freezing.
Howard County Man Exiled to 8 Years in Prison for Illegally Possessing Firearms in a School ZoneRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Terrance Milik Marshall, age 41, of Scaggsville, Maryland, yesterday to eight years in prison, followed by three years of supervised release, for illegally possessing two firearms in a school zone.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; and Chief Mark A. Magaw of the Prince George’s County Police Department.
According to Marshall=s plea agreement, on February 7, 2014, during a routine patrol, law enforcement observed Marshall’s vehicle idling an a non-residential area in Hyattsville, within 1,000 feet of a school. Marshall was sitting in the vehicle smoking a cigar. When the officer got out and approached Marshall’s vehicle, Marshall jumped out and refused to return to his vehicle. Marshall told the officer “I don’t want to talk to you. I’m leaving,” then locked his car using the key-fob, and took off running. The officer caught up with Marshall and detained him.
Upon returning to the vehicle, the officer shined his flashlight into the vehicle and saw a 9mm firearm with an extended magazine in an orange bag on the front passenger seat. Marshall was then placed under arrest. On February 6, 2014, Marshall had been parked in the school zone at the same location and had in his possession at that time a semiautomatic firearm. Both firearms were recovered from the orange bag, loaded with 30 and 15 rounds of 9mm ammunition, respectively.United States Attorney Rod J. Rosenstein commended the ATF and Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney David I. Salem and Special Assistant U.S. Attorney Jennifer Sykes, of the U.S. Department of Justice, Organized Crime and Gang Section, who prosecuted the case.
Georgia Woman Sentenced for Writing Fraudulent Painkiller PrescriptionsRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – April Davis, 23, of Marietta, Georgia, was sentenced today for her role in a scheme to fraudulently obtain prescription painkillers, United States Attorney William J. Ihlenfeld, II, announced.
An investigation by the Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, revealed that Davis participated in a scheme to obtain prescription painkillers using fraudulent prescriptions. Davis would forge prescriptions from an emergency room doctor in Georgia. She would then provide the falsified prescriptions to her mother to fill at a pharmacy in Bridgeport, West Virginia. Her mother would then ship painkillers from West Virginia to Davis in Georgia.
Davis pled guilty in September 2014 to one count of “Aiding and Abetting the Fraudulent Obtaining Possession of a Controlled Substance.” She was sentenced today to five years of probation.
Assistant U.S. Attorney John Parr prosecuted the case on behalf of the government.
U.S. District Judge Irene M. Keeley presided.
Fort Campbell, Kentucky, Resident Charged with Felony Murder Resulting from Child AbuseRead the Press Release
PADUCAH, Ky. – A Fort Campbell, Kentucky, woman remains in federal custody today charged with felony murder related to the death of an infant, announced Acting U.S. Attorney John E. Kuhn, Jr.
Sheilla E. Linares, was indicted by a federal grand jury on December 18, 2014. Linares was specifically charged with unlawfully killing an infant, T.R.C., Jr., committed in the perpetration of child abuse.
The incident occurred December 3, 2013, in the Linares home on the Fort Campbell military base. Linares was providing child care for T.R.C., Jr., who died four days later on December 7, 2013.
The Federal Bureau of Investigation arrested Linares on Friday, December 19, 2014, and her arraignment was held the same day before United States Magistrate Judge Lanny King. A detention hearing was held today before Judge King and was continued without a decision on bond. Until further order of the court, Linares will remain in the custody of the United States Marshals Service.
If convicted at trial, Linares faces a sentence of life in prison and a $250,000 fine.
This case is being prosecuted by Assistant United States Attorney Jo E. Lawless and is being investigated by the Federal Bureau of Investigation with assistance from the United States Army Criminal Investigation Division, and the Clarksville Tennessee Police Department.
***
The indictment of a person by a Grand Jury is an accusation only and that person is presumed innocent until and unless proven guilty.
Former Talbot County Attorney Pleads Guilty to Real Estate Investment Fraud Scheme Wwth over $768,000 in LossesRead the Press Release
Baltimore, Maryland –Aaron G. Seltzer, age 38, of Trappe, Maryland, pleaded guilty today to wire fraud in connection with a scheme in which he converted funds intended for real estate investments to his personal use.The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to his plea agreement and court documents, Seltzer was a licensed Maryland attorney who handled real estate transactions and maintained an office in Crofton, Maryland. From January 2008, through 2010, Seltzer offered victims fraudulent investment opportunities then diverted the money intended for the investments for his own benefit. Seltzer obtained a total of $768,242 through seven fraudulent transactions. As part of his plea agreement, Seltzer is required to pay restitution in that amount.
For example, Seltzer offered to sell an investor 45% of an Anne Arundel County real estate company, claiming that he owned 100% of the stock, assets and liabilities of the company, when in fact, he did not. The investor sent a total of $92,000 to Seltzer, which Seltzer used for his own benefit. During the summer of 2009, Seltzer contacted a lawyer in New York and represented that a client of Seltzer’s was seeking a business loan. Seltzer proposed that the loan be secured by a mortgage on three commercial properties located in Virginia, purportedly owned by Seltzer’s client. The New York attorney assembled a group of investors to fund the loan. Seltzer presented the attorney with a fraudulent promissory note, which Seltzer falsely claimed was signed by a representative of his client. Seltzer further falsely represented that he had conducted the closing for the loan and presented the attorney with fabricated closing documents. On behalf of the investors, the attorney wired Seltzer $497,527 to fund the loan, which Seltzer diverted to his own benefit.
Seltzer was investigated by the Maryland Attorney Grievance Commission for his conduct in the scheme and was subsequently disbarred.
Seltzer faces a maximum sentence of 20 years in prison for wire fraud. U.S. District Judge J. Frederick Motz has scheduled Seltzer’s sentencing for April 10, 2015, at 10:00 a.m.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein praised HSI Baltimore, and the FBI and for their work in the investigation and recognized the Maryland Attorney Grievance Commission and Bar Counsel Glenn Grossman for their assistance. Mr. Rosenstein thanked Assistant U.S. Attorney Leo J. Wise, who is prosecuting the case.
Former FBI Special Agent Pleads Guilty to Bribery SchemeRead the Press Release
A former FBI special agent pleaded guilty today to bribery charges, admitting that he provided internal law enforcement documents and other confidential information about a prominent citizen of Bangladesh for use by a political rival in exchange for cash.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara of the Southern District of New York and Justice Department Inspector General Michael E. Horowitz made the announcement.
“Robert Lustyik discarded the FBI’s principles of ‘fidelity, bravery, and integrity,’ and sold his badge to the highest bidder,” said Assistant Attorney General Caldwell. “Greed has no place in public service or law enforcement. The Department of Justice will root out corruption wherever it takes hold, and hold accountable those who abuse the public’s trust for personal gain.”
“Robert Lustyik today admitted to conducting a bribery scheme in which, for his own personal gain, he secretly sold information and documents to which he had access as an FBI agent,” said U.S. Attorney Bharara. “Lustyik betrayed our system of justice: he breached not only the law, but also his sworn oath, and the great trust and confidence placed in him by citizens and colleagues. For his criminal conduct he now faces, as he must, serious, commensurate penalties.”
“The Department of Justice Office of the Inspector General is committed to working with our law enforcement partners to identify, investigate, and bring to justice all DOJ employees who engage misconduct,” said Inspector General Horowitz.
Robert Lustyik, 52, of Westchester County, New York, pleaded guilty to all five counts in the indictment against him, including conspiracy to engage in a bribery scheme, soliciting bribes by a public official, conspiracy to defraud the citizens of the United States and the FBI, theft of government property, and unauthorized disclosure of a Suspicious Activity Report. Lustyik is scheduled to be sentenced by U.S. District Court Judge Vincent L. Briccetti of the Southern District of New York on April 30, 2015.
According to the complaint, indictment, court hearings, and today’s plea proceeding, Lustyik was an FBI special agent who worked on the counterintelligence squad in the White Plains Resident Agency. Johannes Thaler was Lustyik’s friend, and Rizve Ahmed, aka, “Caesar,” was an acquaintance of Thaler. From September 2011 through March 2012, Lustyik, Thaler and Ahmed engaged in a bribery scheme. As part of the scheme, Lustyik and Thaler solicited payments from Ahmed, in exchange for Lustyik’s agreement to provide internal, confidential documents and other confidential information to which Lustyik had access by virtue of his position as an FBI special agent. The documents and information pertained to a prominent citizen of Bangladesh (Individual 1), who Ahmed perceived as a political rival. Ahmed sought, among other things, to obtain information about Individual 1, to locate and harm Individual 1 and others associated with Individual 1.
As part of the scheme, Lustyik and Thaler exchanged text messages, including messages about how to pressure Ahmed to pay them additional money in exchange for confidential information. For example, in text messages, Lustyik told Thaler, “we need to push [Ahmed] for this meeting and get that 40 gs quick . . . . I will talk us into getting the cash . . . . I will work my magic . . . . We r sooooooo close.” Thaler responded, “I know. It’s all right there in front of us. Pretty soon we’ll be having lunch in our oceanfront restaurant . . . .”
As another example, in late January 2012, Lustyik, upon learning that Ahmed was considering using a different source to obtain confidential information about Individual 1, sent a text message to Thaler stating, “I want to kill C . . . . I hung my ass out the window n we got nothing? . . . . Tell [Ahmed], I’ve got [Individual 1’s] number and I’m pissed. . . . I will put a wire on n get [Ahmed and his associates] to admit they want [a Bangladeshi political figure] offed n we sell it to Individual 1].” Lustyik further stated, “So bottom line. I need ten gs asap. We gotta squeeze C.”
Thaler and Ahmed previously pleaded guilty to bribery and conspiracy to commit fraud, and are scheduled to be sentenced on Jan. 23, 2015.
The case was investigated by the Department of Justice Office of the Inspector General, and prosecuted by Trial Attorney Emily Rae Woods of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Benjamin Allee of the Southern District of New York.
Former Daycare Provider Arrested for Making False Statements During Child Exploitation InvestigationRead the Press Release
BOSTON - A Worcester woman was charged in federal court in Worcester today with lying to federal agents investigating child exploitation offenses which occurred at her home daycare.
Donna Belanger, 49, was charged with making false statements to the FBI about her son’s prior sexual assaults against children and about whether her son had been allowed unsupervised contact with the children in her home daycare center.
According to the criminal complaint affidavit, in February of this year FBI and Worcester Police executed a federal search warrant at the home of Donna Belanger, in connection with the arrest of her son, Brian Belanger, on charges of producing child pornography. During the execution of that warrant, the FBI interviewed Donna Belanger about her knowledge of her son’s prior sexual assaults against children and whether her son had been allowed unsupervised contact with the children in her home day care.
While Donna admitted that her daycare had been shut down in June 2012 after an investigation of claims that her son Brian had sexually assaulted a child attending the daycare, Donna allegedly denied any other knowledge of her son sexually assaulting a child. It further alleges that Donna repeatedly denied that Brian had ever been allowed unsupervised contact with the children in her day care.
According to the affidavit, a subsequent investigation, including interviews of Brian and other witnesses, revealed that Donna knew that her son Brian had previously sexually assaulted a six-year-old neighbor in 2005 and that she had allowed her son to have unsupervised access to the children in her home daycare.
According to the affidavit, Brian Belanger has admitted to sexually assaulting multiple children, both male and female, who had attended his mother’s home daycare center.
Members of the public who have questions, concerns or information regarding this case should call 617-748-3274.
The charging statute provides for a sentence of no more than eight years in prison, to be followed by three years of supervised release and a $250,000 fine. Actual sentences for federal crimes are typically less than the statutory maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.United States Attorney Carmen M. Ortiz; Vincent Lisi, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Field Division; and Chief Gary J. Gemme of the Worcester Police Department; made the announcement today. The case is being prosecuted by Mark J. Grady and Karin M. Bell of Ortiz’s Worcester Branch Office.
The details contained in the complaint and its supporting affidavit are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Former Chatham County Deputy Sheriff Pleads Guilty to Federal Charge of Producing Child PornographyRead the Press Release
Savannah, GA: Richard Adam Hall, 52, a former Chatham County Deputy Sheriff from Savannah, Georgia, pled guilty yesterday before United States District Court Judge William T. Moore, Jr. to producing child pornography. Yesterday’s plea resolves federal charges brought against Hall, which alleged that Hall coerced a minor to engage in sexually explicit conduct for the purpose of producing child pornography.
According to evidence presented at the guilty plea hearing, Hall’s residence was searched by law enforcement officials as part of an investigation into allegations that, while he was a deputy sheriff, Hall had had molested a child. During the search of Hall’s residence, law enforcement officials recovered numerous sexually explicit photographs of a juvenile male. Further investigation revealed that the minor depicted in the photographs traveled with Hall to Tennessee and Florida, where the minor was molested by Hall on multiple occasions. The sexually explicit photographs of the minor were taken by Hall when the victim was approximately 12 years old.
As a result of his plea to a federal charge, Hall faces a statutory penalty of not less than 15 years nor more than 30 years in a federal prison; a fine up to $250,000; and 5 years of supervised release. United States Attorney Edward Tarver noted that there is no parole in the federal system. Hall’s sentencing will be scheduled upon the completion of a presentence investigation conducted by the United States Probation Office.
Earlier this year, a Chatham County grand jury indicted Hall on 25 counts of child molestation and related offenses. State charges against Hall remain pending.
The federal charges against Hall arose out of a joint investigation by Homeland Security Investigations, the Chatham County District Attorney’s Office, the Chatham County Sheriff’s Office, and the Savannah-Chatham Metropolitan Police Department. Assistant United States Attorneys Brian T. Rafferty and Daniel R. Crumby are prosecuting the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Former Buffalo Man Pleads Guilty to Bank Robbery and Witness TamperingRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.–U.S. Attorney William J. Hochul, Jr. announced today that Clifford B. Smith, 34, formerly of Buffalo, pleaded guilty before U.S. District Court Chief Judge William M. Skretny, to bank robbery and tampering with a witness. The charges carry a maximum sentence of 25 years in prison and a fine of $250,000.Assistant U.S. Attorney Marie P. Grisanti, who is handling the case, stated that between September 2011 and November 2011, Smith robbed four HSBC Bank locations throughout the City of Buffalo. On each occasion, the defendant presented the teller with a note and threatened a gun. During the last robbery, Smith brandished a gun and robbed three tellers.
One of the HSBC branches was robbed twice within two weeks and one of the tellers recognized Smith from the earlier robbery. In both robberies, the defendant wore disguises including large glasses. Smith also tampered with a witness by contacting a person from prison and encouraging her to lie to and say that she was with Smith when the robberies occurred. The defendant later sent the woman a letter providing her with some of the dates that he wanted her to use for his failed alibi.
The investigation is the culmination of an investigation on the part of the Buffalo Office of the Federal Bureau of Investigation, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, and the Philadelphia Office of the FBI, under the direction of Special Agent in Charge Edward J. Hanko.
Sentencing is scheduled for May 6, 2015, at 9:00 a.m. before Judge Skretny.
Fairmont, WV Convicted for Role in Manufacturing MethamphetamineRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – Timothy, Wayne Ferrell, Jr., 33, of Fairmont, West Virginia, was convicted today in federal court for his role in manufacturing methamphetamine, United States Attorney William J. Ihlenfeld, II, announced.
Ferrell was discovered in May 2014 in possession of medication pseudoephedrine, a common ingredient in methamphetamine. He was also discovered in September 2014 in unlawful possession of a rifle.
Ferrell pled guilty today to one count of “Possession of Pseudoephedrine to be used in the Manufacture of Methamphetamine, for which he faces up to 20 years in prison and a fine of up to $250,000.00. He also pled guilty to one count of “Possession of Firearm by Unlawful User/Drug Addict to Controlled Substance,” for which he faces up to ten years in prison and fine of up to $250,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Shawn Morgan is prosecuting the case on behalf of the government. The Three Rivers Drug and Violent Crime Task Force is leading the investigation.
U.S. Magistrate Judge John S. Kaull presided.
FCI Hazelton Inmate Sentenced for Assaulting, Injuring Correctional OfficerRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – Carlos Lupercio, a 30-year-old inmate at the Federal Correctional Institution at Hazelton, was convicted and sentenced today for assaulting a correctional officer, United States Attorney William J. Ihlenfeld, II, announced.
In July 2014, another FCI Hazelton inmate was involved in a dispute with a correctional officer. Lupercio joined in the dispute, striking the officer in the head and torso and jumping on his back. He pled guilty today to one count of “Assault of a Correctional Officer Resulting in Injury.” He was sentenced to an additional 24 months in prison.
Assistant U.S. Attorney Andrew Cogar iprosecuted the case on behalf of the government. The Federal Bureau of Prisons and the Special Investigative Services Unit at FCI Hazelton led the investigation.
U.S. District Judge Irene M. Keeley presided.
Dubque Man Again Sentenced to 30 Years in Federal Prison for Distributing Heroin Resulting in Overdose DeathRead the Press Release
A man whose conviction for distributing heroin to a person who died of a heroin overdose was overturned earlier this year was sentenced yesterday in federal court to serve 30 years in prison.
Alvin Stanley Briggs, Jr., age 51, from Dubuque, Iowa, received the prison term after a October 30, 2014, guilty plea to distribution of heroin resulting in death. Briggs initially pled guilty to the charge in June 2013, and was sentenced to 30 years’ imprisonment in September 2013. His conviction was overturned after the United States Supreme Court ruled in Burrage v. United States that individuals could not be convicted of distributing drugs where death resulted unless the government proved the drugs were the “but for” cause of the death. During his initial plea, Briggs had admitted only that the drugs were a contributing factor in the death of S.R. At the plea hearing in October he admitted that S.R. would have lived but for using the heroin distributed by Briggs.
Briggs was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Briggs was sentenced to 360 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a 5-year term of supervised release after the prison term. There is no parole in the federal system.
Briggs is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Dan Chatham and was investigated by the Platteville, Wisconsin, Police Department, and the Dubuque, Iowa, Drug Task Force.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 2:13-CR-01004-LRR.
Dominican Man Arrested on Conspiracy ChargesRead the Press Release
BOSTON – An illegal alien residing in Chelsea was arrested last night on a complaint charging conspiracy to fraudulently issue identification documents.
Edwin Amaurys Parra Suarez (Parra), 37, was arrested in connection with a scheme to produce false identification documents. The complaint affidavit alleges that from December 2012 through January 2013, Parra bribed an employee of the Revere office of the Massachusetts Registry of Motor Vehicles (RMV) in connection with a scheme to issue Massachusetts driver’s licenses to individuals who were not eligible to obtain such documentation.
According to the affidavit, Parra conspired with a RMV clerk to produce at least 29 Massachusetts drivers’ licenses for individuals who are not entitled to them. Parra allegedly paid the clerk between $100 and $1,000 in cash for each of the fraudulent licenses.
This arrest is the most recent development in investigations involving identity theft and public corruption relating to the Massachusetts Registry of Motor Vehicles.
A probable cause hearing will be held on Jan. 7, 2015 at 2:15. The charging statutes provide for a sentence of no more than five years in prison, three years of supervised release and a $250,000 fine. Actual sentences for federal crimes are typically less than the statutory maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston; Colonel Timothy P. Alben, Superintendent of the Massachusetts States Police; David W. Hall, Special Agent in Charge of the U.S. Department of State, Bureau of Diplomatic Security, Boston Field Office; and Cheryl Garcia, Acting Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, New York Regional Office, made the announcement today. The case is being prosecuted by Eugenia M. Carris of Ortiz’s Public Corruption Unit.
District Woman Found Guilty of Federal Charges for Illegally Collecting Unemployment BenefitsDefendant Submitted Claims While Working at A Government AgencyRead the Press Release
WASHINGTON – Brianna Meadows, 32, of Washington, D.C., has been found guilty by a jury of federal charges stemming from a scheme to defraud the District of Columbia Department of Employment Services of more than $14,000 in unemployment benefits, announced U.S. Attorney Ronald C. Machen Jr. and Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office.
Meadows was found guilty on Dec. 22, 2014 of four counts of wire fraud, one count of theft of government funds, and one count of first-degree theft. The verdict followed a trial in the U.S. District Court for the District of Columbia. The Honorable Amy Berman Jackson scheduled sentencing for March 11, 2015.
The government’s evidence at trial established that Meadows submitted 49 false claims to the District of Columbia Department of Employment Services from May 2009 through April 2010, indicating that she was unemployed, when, in fact, she was working full time for a private contractor doing work at a government agency in Maryland. She submitted more than two dozen of those claims from a computer terminal at the agency, the evidence showed.
In announcing the verdict, U.S. Attorney Machen and Assistant Director in Charge McCabe commended the work of those who investigated the case from the FBI’s Washington Field Office. They expressed appreciation for the assistance provided by the District of Columbia Department of Employment Services. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Donna Galindo and Lesley Slade; Information Technology Specialist Jeanie Latimore-Brown, and Assistant U.S. Attorney Jelahn Stewart, who assisted in the investigation. Finally, they commended the work of Assistant U.S. Attorneys Seth B. Waxman and Mervin A. Bourne, Jr., who prosecuted the case.
14-286Detroit Man Indicted on Robbery ChargesRead the Press Release
A Detroit man was indicted today for his role in the armed robbery of a pharmacy in Detroit, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Division.
Kavin Stinson, 19, was charged with robbery and with using a firearm during a crime of violence.
The investigation determined that on August 22, 2014, three men armed with handguns entered the Rite Aid store at 1900 East Eight Mile Road in Detroit at approximately 3:00 p.m. The men stole liquor and threatened the Rite Aid employees, forcing some at gunpoint to the back of the store to open a safe. The robbers also forced employees to open cash registers and give them money. One of the assailants pistol-whipped a male and a female employee as they were handing over money.
Johnny Johnson was indicted in September by a federal grand jury for his role in the robbery. Additional investigation by the FBI led to the identification of Kavin Stinson as the second suspect. The third suspect remains at large.
If convicted, Johnny Johnson and Kavin Stinson will face a minimum of seven years in prison with the possibility of 27 years in prison for their participation in the crimes.
“We take armed robberies very seriously because armed robbers put residents at risk and create fear in our neighborhoods,” McQuade said. “We hope that criminals will take note that committing crimes with guns will bring charges with severe consequences.”
“Mr. Stinson and the other perpetrators in this case are alleged to have violently robbed a neighborhood pharmacy at gunpoint,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Gun-related violence injects fear into the lives of law abiding citizens and wreaks havoc upon our communities. The FBI, along with its local, state and federal partners, remains committed to rooting out these violent offenders and maintaining the safety of our neighborhoods.”
The cooperative efforts of the Detroit Police Department and the Federal Bureau of Investigation's Violent Crime Task Force resulted in the charges against these two defendants.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Colorado Springs Man Arrested After Posting Internet Threat to Kill Police Officers in ColoradoRead the Press Release
UPDATE: December 29, 2014
DENVER – Jeremiah M. Perez, age 33, of Colorado Springs, Colorado, appeared this afternoon before U.S. Magistrate Judge Boyd N. Boland for a preliminary hearing and a detention hearing. Perez through his attorney waived his right to a preliminary hearing (a probable cause finding hearing). During the detention hearing, the government asked that Perez be held without bond based on an argument that he was a danger to the community. After hearing prosecution and defense arguments, Magistrate Judge Boland ordered Perez released on a $25,000 unsecured bond to a halfway house, when bed space becomes available. Magistrate Judge Boland also ordered Perez not to have any contact with computers. Perez was also ordered to follow the standard conditions of release, which include no access to firearms and no possession or use of marijuana.
Click here to access the Complaint and Affidavit in the Perez case
DENVER – Jeremiah M. Perez, age 33, of Colorado Springs, Colorado, was arrested yesterday without incident for posting online threats advocating the killing of police officers and retired police officers in Colorado, United States Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. Perez made his initial appearance before U.S. Magistrate Judge Kristen L. Mix this afternoon, where he was advised of his rights, as well as the charges pending against him. Perez will be held in custody pending a detention hearing and preliminary hearing scheduled for Monday, December 29, 2014 at 1:30 p.m.
On December 17, 2014, Google urgently contacted the FBI San Francisco Office to report what they perceived as a threat, which consisted of a comment posted in association with a YouTube video. The FBI San Francisco Office immediately initiated an investigation into the threat, posted by user name “Vets Hunting Cops,” which was focused on killing police officers, and ultimately learned that the posting came from an IP address in Colorado. The FBI in Colorado was notified and continued the investigation, which revealed that the IP address was assigned to Century Link and resolved at a specific address in Colorado Springs. The FBI and Colorado Springs Police Department then began surveillance of those who lived at that address.
The following day the FBI and Colorado Springs Police Department served a federal search warrant on Perez’s address. The threat Perez allegedly posted stated, in part: “SINCE DARREN WILSON our group has killed 6 retired sheriffs and cops......because of this event we will hunt two more in colorado this week.....for every innocent citizen that cops kill WE, VETERANS WILL KILL RETIRED HELPLESS COPS.” The threat further said, “COPS ARE THE REAL ENEMIES OF FREEDOM LOVING AMERICANS and TIME TO STRIKE BACK IN ALL OUT WAR IS NOW.”
On December 22, 2014, the FBI contacted Perez. At that time they determined that he knew that law enforcement officers would see the post and his intent was for them to be fearful after reading it. He was then arrested. A forensic examination of Perez’s computer confirmed that the posting in question, along with other postings, came from his device.
“If you threaten to kill – or incite others to kill – police officers, you will get some very serious attention from this office, the FBI, and other appropriate authorities,” said U.S. Attorney John Walsh.
“Those who threaten the lives of law enforcement officers through interstate communications will be fully investigated by the FBI and our partners,” said FBI Denver Special Agent in Charge Thomas Ravenelle. “The perceived anonymity of the Internet will not serve as a shield for espousing violence in violation of federal law. In conducting this investigation, we would like to thank the Colorado Springs Police Department and the U.S. Attorney’s Office for their invaluable assistance.”
If convicted, Perez faces up to 5 years in federal prison, and not more than a $250,000 fine, for transmitting a threat in interstate and foreign commerce.
This case was investigated by the Federal Bureau of Investigation (FBI) in Colorado Springs, Denver, and San Francisco, with support from the Colorado Springs Police Department.
The defendant is being prosecuted by Assistant U.S. Attorney Judith Smith.
A Criminal Complaint is a probable cause charging document. Anyone accused of committing a federal felony offense has a Constitutional right to be indicted by a federal grand jury.
The charges contained in the Complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
Canisteo Man Sentenced on Drug ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that David Jackson, 41, of Canisteo, N.Y., who was convicted of conspiracy to import alpha-PVP, a synthetic narcotic, was sentenced to 27 months in prison by U.S. District Judge Richard J. Arcara.Assistant U.S Attorney Mary Catherine Baumgarten, who handled the case, stated that between September 2013, and January 16, 2014, the defendant, along with co-defendants Erin Dwyer and Richard Dwyer, conspired to import the synthetic narcotics from China using the Internet. The packages were then delivered to Richard Dwyer via the United States Postal Service.
Richard Dwyer was sentenced to 33 months in prison. Erin Dwyer has been convicted and will be sentenced on January 29, 2015.
The sentencing is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, and the United States Postal Inspection Service, under the direction of Special Agent in Charge Shelly Binkowski.
Candy Store Owner to Federal Prison for Selling CrackRead the Press Release
A man who sold crack cocaine out of his Dubuque, Iowa candy store was sentenced today to just under 6 years in federal prison.
Dwayne Howard, 36, from Dubuque, received the prison term after an October 6, 2014 guilty plea to one count of distribution of crack cocaine near a playground.
In a plea agreement, Howard admitted he sold crack cocaine to an undercover police officer on multiple occasions in January and February 2014. All but one of the sales took place inside his business, “Wayne’s Candy.” According to information disclosed at the sentencing hearing, the candy store was located at 1965 Central Avenue in Dubuque. While Howard maintained the candy store also served a legitimate function, he admitted that he used drug money to fund the business and used his store inventory to facilitate his drug sales. For instance, during two of the undercover purchases, Howard told the undercover officer to take items from the shelf in order to make the transaction look “legit.” Investigators noticed that the business did not maintain normal business hours, and bank records showed that the business carried a $5.00 bank account balance. During a search of the business, investigators discovered little to no money in the cash register. The candy store was located within 1,000 feet of two separate playgrounds.
Howard was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Howard was sentenced to 71 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a 6-year term of supervised release after the prison term. There is no parole in the federal system.
Howard is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Justin Lightfoot and investigated by the Iowa Division of Narcotics Enforcement (DNE) and the Dubuque Drug Task Force, which is comprised of representatives from the Dubuque Police Department and the Dubuque County Sheriff’s Office.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/ login.pl. The case file number is 14-CR-1013.
Canadian Man Pleads Guilty in A Smuggling Attempt at the BorderRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Tonin Ndoja, 50, a citizen of Canada, pleaded guilty to making a false statement to a U.S. Customs and Border Protection Officer involving his attempt to smuggle aliens into the United States before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of five years in prison and a $250,000 fine.Assistant U.S Attorney Scott S. Allen, Jr., who is handling the case, stated that on November 12, 2014, Ndoja attempted to enter the United States from Canada at the Peace Bridge. The defendant, a Free and Secure Trade (FAST) card holder and member of the trusted traveler program, was driving a tractor trailer carrying rolled steel. During a secondary inspection, officers with Customs and Border Protection discovered defendants Bardok and Kleda Tusha, both citizens of Albania, hidden inside the cab of the tractor trailer under a blanket.
“This shows the continuing need for vigilance in protecting our nation's borders,” said U.S. Attorney Hochul. “As this case demonstrates, law enforcement is well prepared to protect our country-even where the defendant is anything but trustworthy.”
Defendants Bardok and Kleda Tusha pleaded guilty to a misdemeanor charge of illegal entry and were sentenced to time served.
The case is the result of an investigation by Customs and Border Protection, under the direction of Director of Field Operations Randy Howe.
Sentencing is scheduled for March 30, 2015 at 1:00 p.m. before Judge Arcara.
Buffalo Woman Pleads Guilty to Violating Supervised ReleaseRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.–U.S. Attorney William J. Hochul, Jr. announced today that Latisha Siplin, 32, of Buffalo, NY, pleaded guilty before U.S. District Court Chief Judge William M. Skretny to violating terms of her supervised release. The charge carries a maximum sentence of three years in prison.Assistant U.S. Attorney Marie P. Grisanti, who handled the case, stated that Siplin was previously convicted of bank fraud and sentenced to eight months in prison. Following her release, the defendant violated conditions of supervised release by testing positive for drugs.
The investigation is the culmination of an investigation on the part of officers of United States Probation Service, under the direction of Chief Anthony SanGiacomo.
Sentencing is scheduled for December 30, 2014, at 9:00 a.m. before Judge Skretny.
Brooklyn Tax Return Preparer Indicted for Preparing Six Years of False Tax ReturnsRead the Press Release
A Brooklyn, New York, tax preparer was indicted by a federal grand jury in the Eastern District of New York and charged with 30 counts of aiding in the preparation of false income tax returns, the Justice Department and Internal Revenue Service (IRS) announced following her Dec. 22 arrest and the unsealing of the indictment.
Awilda Rosario owned and operated a Brooklyn-based tax preparation business called Edujas Multiservices Corporation, according to the indictment. The indictment charges that Rosario prepared false individual income tax returns for taxpayer-clients for at least six years, spanning tax years 2008 through 2013. Rosario allegedly attached false schedules that reported business losses the taxpayers did not incur and attached schedules that reported inflated or fictitious deductions. Rosario also attached forms claiming fictitious education and fuel tax credits that the taxpayers were not entitled to receive.
The indictment further alleges that after the IRS revoked the electronic filing number for Edujas Multiservices Corporation, Rosario obtained at least two different e-file provider numbers and continued to prepare and submit false tax returns for her clients, listing a different paid tax return preparer and tax preparer firm to conceal her involvement.
If convicted, Rosario faces a statutory maximum sentence of three years in prison and a fine of up to $250,000 for each count.
The case was investigated by special agents of IRS-Criminal Investigation. Assistant Chief Jorge Almonte and Trial Attorney Shawn T. Noud of the Justice Department’s Tax Division are prosecuting the case.
An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Bridgeport, WV Doctor Convicted in Painkiller Distribution NetworkRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – Dr. Edita Milan, 75, of Fairmont, West Virginia, was convicted today in federal court on charges that she unlawfully distributed prescription painkillers through her Bridgeport, West Virginia medical practice, United States Attorney William J. Ihlenfeld, II, announced.
“Today’s hearing is the end game for Dr. Milan, who let her greed overcome her morals and common sense and whose prescribing practices led to multiple overdose deaths,” said Ihlenfeld. “The U.S. Attorney’s Office remains committed to working with our state and local partners to ensure that pharmaceutical drugs are being used for legitimate medical needs, and I commend the Greater Harrison County Drug & Violent Crimes Task Force for helping to bring this doctor to justice. I’m hopeful that prosecutions like this one will lead to a reduction in prescription drug overdoses in North Central West Virginia.”
The prescribing practices of Dr. Milan first came under suspicion through various citizen complaints. An investigation revealed that Dr. Milan repeatedly prescribed excessive amounts of prescription painkillers outside the course of professional conduct for no legitimate medical reason.
Dr. Milan pled no contest to the following charges:• One count of “Maintaining a Drug Involved Premises,” for which she faces up to 20 years in prison and a fine of up to $200,000.00.
• One count of “Distribution of Schedule III and IV Substances.” She faces up to ten years in prison and a fine of up to $500,000.00 on the Schedule III charge and up to five years in prison and fine of up to $250,000.00 on the Schedule IV charge.
• One count of “Distribution of Schedule II and IV Substances.” She faces up to 20 years in prison and a fine of up to $1,000,000.00 on the Schedule II charge and up to five years in prison and a fine of up to $250,000.00 on the Schedule IV charge.
• Two counts of “Distribution of Schedule II Controlled Substances.” She faces up to 20 years in prison and a fine of up to $1,000,000.00 on each count.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.
Dr. Milan’s plea of no contest, which has the same legal effect as a guilty plea, was accepted over the objection of the government.
Assistant U.S. Attorneys John Parr, Andrew Cogar, and Sarah Montoro prosecuted the case on behalf of the government. The U.S. Drug Enforcement Administration 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.
Benwood, WV Man Convicted of Heroin, Cocaine TraffickingRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistWHEELING, WEST VIRGINIA – Howard Dabrawsky, II, 43, of Benwood, West Vrigina, was convicted today in federal court for his role in an Ohio to West Virginia heroin and cocaine trafficking operation, United States Attorney William J. Ihlenfeld, II, announced.
An investigation by the Ohio Valley Drug and Violent Crime Task Force and the Marshall County Drug and Violent Crime Task Force, both HIDTA-funded initiatives, revealed that Dabrawsky participated in a drug distribution network that transported heroin, cocaine base, and cocaine from Cleveland, Ohio to Wheeling, West Virginia for distribution throughout the Northern District of West Virginia. Specifically, Dabrawsky acted as a driver during multiple heroin sales in early 2014.
Dabrawsky pled guilty today to one count of conspiring to distribute Schedule I and Schedule II controlled substances, including heroin, cocaine base, and cocaine. He faces up to 20 years in prison and a fine of up to $1,000,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Randy Bernard is prosecuting the case on behalf of the government.
Senior U.S. District Judge Frederick P. Stamp presided.
Baltimore Man Pleads Guilty to Receipt of Child PornographyRead the Press Release
Also Admits Facilitating a 16 Year Old Girl to Engage in Prostitution
Baltimore, Maryland –Richard Ho Lee, age 32, of Baltimore, pleaded guilty today to receipt of child pornography.The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Gregg L. Bernstein .
According to Lee’s plea agreement, on five occasions in September and October of 2011, while Lee and the victim were in Baltimore, Lee purchased sex from T.F. At the time, T.F. was representing to patrons that she was 19 when, in fact, she was 16. On October 31, 2011, Lee paid for a bus ticket for T.F. to travel to Panama City, Florida, where Lee met her. Lee took the victim to a condo he had rented in Panama City. Upon arriving in Panama City, T.F. told Lee that she was only 16 years old. According to the statement of facts, Lee continued to have sex with T.F., and encouraged her to engage in prostitution. From about December 22, 2011 to January 4, 2012, Lee placed at least 15 advertisements for the victim in the “escorts” and “body rubs” sections of an adult website. Lee used his personal credit card to pay for the advertisements. Lee took provocative photographs of T.F. in lingerie and underwear that he had purchased for her and attached some of the photos to the advertisements. Lee rented a second condominium where T.F. had sex with customers and agreed to provide Lee with a percentage of her earnings.
On January 9, 2012, Lee purchased a bus ticket for T.F., which she used to travel from Florida back to Maryland. In January 2012, Lee produced a counterfeit North Dakota state driver’s license for T.F., which indicated that she was 22 years old. In May 2012, Lee took provocative photographs of T.F. inside his residence in Baltimore.
In June 2012, federal agents recovered Lee’s laptop computers and an external hard drive which contained over 600 images of child pornography, including images that depicted minors that are less than twelve years old and portrayed sadistic and masochistic conduct. Further, the laptop contained templates designed to be used for the production of counterfeit state driver’s licenses.
As part of his plea agreement, Lee must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
Lee and the government have agreed that if the Court accepts the plea agreement Lee will be sentenced to between five and 11 years in prison, followed by supervised release of between five and 11 years. As part of his plea agreement, Lee is required to forfeit property that was used or intended to be used to commit or to promote the commission of the offenses to which Lee has pleaded guilty. The property to be forfeited includes Lee’s home in the 600 block of South Wolf Street in Baltimore, two laptop computers and an external hard drive. District Judge J. Frederick Motz has scheduled sentencing for March 20, 2015, at 11:00 a.m.
The case was investigated by the FBI-led Maryland Child Exploitation Task Force (MCETF), created in 2010 to combat child prostitution, with members from10 state and federal law enforcement agencies. The Task Force coordinates with the National Center for Missing and Exploited Children and the Maryland State Police Child Recovery Unit to identify missing children being advertised online for prostitution.
MCETF partners with the Maryland Human Trafficking Task Force, formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders. Members include federal, state and local law enforcement, as well as victim service providers and local community members. For more information about the Maryland Human Trafficking Task Force, please visit http://www.justice.gov/usao/md/priorities_human.html.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore County Police Department, Baltimore City Police Department and the Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Mark W. Crooks, who is prosecuting the case.
Baltimore Man Pleads Guilty to Fraud Scheme with Losses of more than $600,000Read the Press Release
Baltimore, Maryland – Curlee Smittie, age 42, of Baltimore, pleaded guilty today to wire fraud in connection with a scheme to defraud his bank and an automobile auction house of more than $600,000.The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to Smittie’s plea agreement, from April 2008 until January 2009, Smittie engaged in a scheme to fraudulently obtain checks from an automobile auction company, by buying cars he already owned, using the company’s short-term credit program.
The company operates auction houses for automobile dealers at locations throughout the United States. Automobile dealers must be registered with the company to buy or sell automobiles at its locations. An individual who wishes to sell an automobile must list the car for sale under the name of a registered automobile dealer. Smittie was registered as a buyer and seller under the company name Smittie Auto Brokers.
For buyers with an established track record of timely payment, which included Smittie Auto Brokers and Curlee Smittie, the company extended short term credit for purchases. Under this arrangement, the company issued a check for the proceeds of the automobile sale to the seller of the automobile on the day of sale. The buyer was allowed to take the automobile, with the promise to pay the purchase price to the auction company within two weeks.
Smittie admitted that to perpetrate the scheme, he would list an automobile that he already owned for sale under the name of another registered automobile dealer. Smittie then purchased the automobile in his own name or the name of Smittie Auto Brokers, using the auction company’s short term credit program. This created the appearance of an arm’s length transaction, when in fact, Smittie was merely “selling” the car to himself using the company’s money.
As the person who had listed the car for auction, Smittie accepted the seller proceeds check from the company, which was made out in the name of the automobile dealer that Smittie had used to list the automobile for auction. Smittie deposited those checks into his business checking account, held in the name of Smittie Enterprises, Inc. When the time came for Smittie to repay the short term loan from the auction company, Smittie sold another car to himself in the same manner, and used the seller proceeds to pay the previous debt.
As a result of the scheme, from April 2008 until January 2009, Smittie received a total of $2,126,997.50 in seller checks from the auction company and deposited them into the Smittie Enterprises account.
In January 2009, employees at the auction company learned of Smittie’s scheme and ordered its bank to stop payment on all checks to sellers from whom Smittie had purchased automobiles. Once all of the checks that had been recently deposited into the Smittie Enterprises checking account were reversed, the bank was left with a loss of $166,500.16 because the balance in the Smittie Enterprises account was not sufficient to cover the reversed checks.
When the auction company discovered Smittie’s scheme, Smittie owed the company a total of $702,956.28 for automobiles that he had purchased using the company’s short term credit. The company was able to recover $236,606.20 by repossessing some of the automobiles Smittie had purchased, but was left with a loss of $466,350.08.
Smittie and the government have agreed that if the Court accepts the plea agreement Smittie will be sentenced to 18 months in prison. As part of his plea agreement, Smittie will also be required to pay restitution of $632,850.24. Chief U.S. District Judge Catherine C. Blake has scheduled sentencing for March 27, 2015 at 2:00 p.m.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Jefferson M. Gray, who is prosecuting the case.
Baggage Handler at Hartsfield-Jackson Airport Arrested for Smuggling Guns into Airport by Evading SecurityRead the Press Release
ATLANTA - Eugene Harvey, a baggage handler at Hartsfield-Jackson International Airport, has been arrested on a federal complaint charging him with trafficking in firearms and entering the secure areas of the airport in violation of security requirements.
“The complaint alleges that Harvey repeatedly evaded airport security with bags of firearms, some of which were loaded,” said United States Attorney Sally Quillian Yates. “He then passed the guns off to an accomplice who transported them as carry-on luggage to New York, where they were illegally sold.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “The FBI has dedicated significant investigative resources at our nation’s airports to not only address those special jurisdiction cases involving air travel itself, but also to provide assistance to those agencies responsible for the security of those airports and all that travel through them. This case represents a serious security breach at Atlanta's Hartsfield Jackson airport and the FBI's Atlanta Field Office continues to work with its various law enforcement partners in addressing this breach and preventing future ones.”
According to United States Attorney Yates, the charges, and other information presented in court: On at least five occasions in 2014, Harvey, a baggage handler for Delta Air Lines, worked with another former Delta employee to smuggle firearms through airport-controlled security checkpoints for Delta employees, and thus he was not required to go through the screening performed for passengers by TSA. Once through the airport-controlled security checkpoints, the firearms were carried in carry-on baggage into the passenger cabins of aircraft. Each time, Harvey’s accomplice flew to New York with the guns, where they were illegally sold.
The federal investigation into Harvey began when the New York Police Department and the Kings County District Attorney’s Office notified the FBI that a then-unidentified individual was helping a gun-trafficker move guns illegally from Georgia into New York. By that time, the New York Police Department had identified and arrested the New York seller of the illegal firearms, and was investigating how the guns were being smuggled into New York. Since January 2014, Harvey’s accomplice has trafficked approximately 129 firearms between Georgia and New York. The last shipment on December 10, 2014, contained 18 firearms, 7 of which were loaded.
Upon learning of the information, Delta Air Lines worked closely with law enforcement to identify Harvey and immediately terminated him.
Eugene Harvey, 31, of College Park, Ga., made his initial appearance Monday before Linda T. Walker, United States Magistrate Judge. Harvey was arrested Saturday on federal charges of trafficking in firearms and entering the secure areas of the airport in violation of security requirements. He was released on bond.
Members of the public are reminded that the criminal complaint only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation, the U.S. Federal Air Marshal Service, and the Transportation Security Administration.
Assistant United States Attorney L. Skye Davis is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
22 December 2014
- “Shrek” Receives Significant Sentence in Operation El Patron
XTO Energy Inc. to Restore Areas Damaged by Natural Gas Extraction ActivitiesRead the Press Release
The Department of Justice and the U.S. Environmental Protection Agency announced today that XTO Energy Inc. (XTO), a subsidiary of ExxonMobil and the nation’s largest holder of natural gas reserves, will spend an estimated $3 million to restore eight sites damaged by unauthorized discharges of fill material into streams and wetlands in connection with hydraulic fracturing operations. XTO will also implement a comprehensive plan to comply with federal and state water protection laws at the company’s oil and gas extraction facilities in West Virginia that use horizontal drilling methods.
“The extraction of domestic energy resources is vitally important, and so it is equally important that companies ensure that all such activities comply with the nation’s environmental laws,” said Acting Assistant Attorney General Sam Hirsch for the Justice Department’s Environment and Natural Resources Division. “This settlement will resolve allegations that XTO’s illegal discharges of fill materials damaged streams and wetlands, by requiring the company to pay a penalty, restore the damaged resources where possible and take other mitigation and compliance measures.”
The company will pay a civil penalty of $2.3 million for violations of Section 404 of the Clean Water Act and West Virginia law. Section 404 of the Clean Water Act prohibits the filling or damming of wetlands, rivers, streams, and other waters of the United States without a permit from the U.S. Army Corps of Engineers (Corps). The Clean Water Act requires a company to obtain a permit prior to discharging dredge or fill material into wetlands, rivers, streams, and other waters of the United States.
The settlement also resolves alleged violations of state law asserted by WVDEP. The state of West Virginia is a co-plaintiff in the settlement and will receive half of the $2.3 million civil penalty.
“American communities expect EPA and our state partners to make sure energy development is done responsibly,” said Assistant Administrator Cynthia Giles of EPA’s Office of Enforcement and Compliance Assurance. “This case will help to protect clean water in West Virginia, and support a level playing field for energy developers that play by the rules.”
The federal government and the West Virginia Department of Environmental Protection (WVDEP) allege that the company impacted streams and discharged sand, dirt, rocks and other fill material into streams and wetlands without a federal permit in order to construct well pads, road crossings, freshwater pits, and other facilities related to natural gas extraction. The alleged violations being resolved by today’s settlement occurred at eight sites located in the West Virginia Counties of Harrison, Marion and Upshur. The federal government and WVDEP allege that the violations impacted more than 5,300 linear feet of stream, and 3.38 acres of wetlands.
The settlement requires that the company fully restore the wetlands and streams wherever feasible, monitor the restored sites to assure the success of the restoration, and implement a comprehensive compliance program to ensure future compliance with the Clean Water Act and applicable state law.
EPA discovered some of the violations through information provided by the state and through routine joint inspections conducted with the Corps, who actively supported the EPA and the Justice Department in this case. In addition, the company voluntarily disclosed potential violations at five of the sites following an internal audit. Beginning in 2011, EPA issued administrative compliance orders for violations at all eight sites. Since that time, the company has been working with EPA to correct the violations and restore those sites in full compliance with EPA’s orders.
In July 2013, the United States concluded a settlement with XTO to resolve an alleged violation of the Clean Water Act related to the discharge of wastewater from XTO’s Penn Township, Lycoming County, Pennsylvania, facility used for the storage of wastewater generated by hydraulic fracturing operations.
Filling wetlands illegally and damming streams can result in serious environmental consequences. Streams, rivers, and wetlands benefit the environment by reducing flood risks, filtering pollutants, recharging groundwater and drinking water supplies, and providing food and habitat for aquatic species. Any person, firm or agency planning to work in, or discharge dredged or fill material into waters of the U.S., including wetlands, must first obtain a permit from the Corps. Compliance with the Corps’ permit process and regulations helps to ensure that enforcement actions like this one do not occur. For more information about the permitting process under Section 404 of the Clean Water Act, contact: [email protected].
XTO engages in the exploration and production of natural gas in the Appalachian Basin. The company has Marcellus Shale holdings in Pennsylvania, New York, Ohio and West Virginia.
The consent decree, lodged today in the Northern District of West Virginia, is subject to a 30-day public comment period and court approval. The consent decree is available for review at www.justice.gov/enrd/Consent_Decrees.html.
Wilson Cooperators Receive Home Confinement, Probation, and Community ServiceRead the Press Release
Contact Person: Bill Watkins (864) 282-2100
Columbia, South Carolina ----United States Attorney Bill Nettles stated today that Cassandra Kendall Wilson, age 66, of Woodruff, South Carolina, and Timothy L. Wilson, age 60, of Martin, Tennessee, were sentenced today in federal court in Greenville for their involvement in a conspiracy to obstruct justice, a violation of Title 18, United States Code, Section 371. United States District Judge J. Michelle Childs of Greenville imposed a period of 9 months of home confinement, 1 year of probation, a community service requirement (200 hours for Timothy and 225 hours for Cassandra), and a curfew on both defendants. In passing sentence, Judge Childs granted a motion from the Government to depart downward because of substantial assistance in the prosecution and investigation of Ronnie Gene Wilson.
Evidence presented at the change of plea hearing established that in late 2011 and early 2012, agents with Secret Service and state law enforcement officers began to investigate Atlantic Bullion and Coin and Ronnie Gene Wilson. It was discovered that Wilson operated what is generally described as a “Ponzi scheme.” In April 2012, Wilson confessed to operating the Ponzi.
On April 27, 2012, the United States District Court—with the consent of Wilson and the Government—appointed a Federal Receiver. The Court’s Order directed the Receiver to take immediate possession of all property, assets and estates owned, controlled, used, or in the possession of Wilson.
During the course of the investigation, the Secret Service talked with Wilson on multiple occasions. On or about September 20, 2012, agents interviewed Wilson about possible hidden assets and cash. Wilson was adamant that there were no hidden assets or cash. He stated that he had turned everything over to the Government.
On November 13, 2012 the District Court ordered Wilson to pay approximately $57 million in restitution to the 798 victims of the Ponzi Scheme. He was sentenced to 235 months in prison.
In April 2014, the Government recovered approximately $164,300. This money had been hidden in an ammunition can. Ron Wilson gave this money to Timothy L. Wilson member to keep for Ron Wilson so he would have something if he was ever released from the Bureau of Prisons.
The evening before Ron Wilson was sentenced in November 2012, evidence established that Ron Wilson visited the hotel room of Timothy L. Wilson in Greenville and gave him $7000 in cash in an envelope.
In March 2014, Secret Service and the Receiver recovered another ammunition can of money ($172,859). Ron Wilson had given this canister to Cassandra K. Wilson prior to his sentencing hearing.
The case was investigated by agents of the United States Secret Service. Assistant United States Attorney Bill Watkins of the Greenville office handled the case.Waterbury Man Sentenced to 42 Months in Federal Prison for Illegal Gun PossessionRead the Press Release
Follow @USAO_CT
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that CHRISTOPHER BRYAN COLEMAN, 25, of Waterbury, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to 42 months of imprisonment, followed by two years of supervised release, for illegally possessing a firearm.
According to court documents and statements made in court, on April 22, 2014, officers from the Waterbury Police Department responded to a complaint of a disturbance at 1298 N. Main Street in Waterbury. There, the complainant told police that her car had broken down and, while she was awaiting assistance, a male had attempted to gain entry to her vehicle. As one of the officers drove up to the male, who was later identified as COLEMAN, the officer observed COLEMAN remove a firearm from his waist area and throw it over a chain link fence. Officers then recovered an RG14 .22 caliber revolver with an obliterated serial number, loaded with six rounds, three of which were live and three of which were expended.
Prior to that date, COLEMAN had been convicted of sale of controlled substance, escape in the first degree, and possession of a controlled substance with intent to distribute.
It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
COLEMAN has been detained since his arrest on April 22. On September 23, he pleaded guilty to one count of possession of a firearm by a previously convicted felon.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Waterbury Police Department. The case was prosecuted by Assistant U.S. Attorney Anthony E. Kaplan.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Venango County Man Sentenced for Safe Drinking Water Act ViolationsRead the Press Release
ERIE, Pa. - A resident of Pleasantville, Pennsylvania, has been sentenced in federal court to 6 months in jail, 12 months home detention, 3 years supervised release and ordered to make restitution in the amount of $236,524.73 on his conviction of making false statements in matters relevant to permits issued under the Safe Drinking Water Act, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Ronald A. Wright, 45.
According to information presented to the court, between in and around September 2009, to in and around April 2011, Wright falsified certificates of well plugging, falsely claiming that he had properly plugged abandoned oil wells, when he had not properly done so. These forms were relied upon by the EPA in regard to permits issued for Class II injection wells. These injection wells were to be used for the injection of oil production brine fluid and for the enhanced recovery process of oil extraction. The approval process for these injection wells required all abandoned wells within a quarter mile of the injection well site to have first been properly plugged. On January 12, 2012, inspectors with the Environmental Protection Agency (EPA), were on site to conduct a mechanical integrity test of the injection well when it was discovered that injected fluid had entered the bottom of an abandoned well because it had not been properly plugged to the bottom. According to the information presented in court, further investigation revealed that many of the wells that were plugged by Wright were not plugged as he claimed in the certificates of well plugging. In some instances, the certificates of well plugging falsely claimed that wells were properly plugged at depths greater than 2,000 feet when, in fact, the wells were only plugged at depths of less than 1,000 feet. According to the information presented in court, the discovery of Wright’s falsification of the plugging reports has required the re-inspection, and likely re-drilling and re-plugging, of 95 wells.
“EPA’s mission of protecting human health and the environment is dependent, in large part, on the veracity of the information it receives,” said David G. McLeod, Jr., Special Agent in Charge of EPA’s criminal enforcement program in the Middle Atlantic States. “Today’s sentencing should send a strong message that EPA and its partners will hold those accountable, who knowingly submit false reports and undermine our efforts to protect human health and the environment.”
Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Environmental Protection Agency – Criminal Investigation Division, the Pennsylvania Office of Attorney General – Environmental Crimes Section, and the U.S. Forest Service – Law Enforcement and Investigations for the investigation leading to the successful prosecution of Wright.
United States Files Suit Against Omnicare Inc. for Accepting Kickbacks from Drug Manufacturer to Promote an Anti-Epileptic Drug in Nursing HomesRead the Press Release
The United States has filed a civil False Claims Act complaint against Omnicare Inc. alleging that it solicited and received millions of dollars in kickbacks from pharmaceutical manufacturer Abbott Laboratories, the Justice Department announced today. Omnicare is the nation’s largest provider of pharmaceuticals and pharmacy consulting services to nursing homes. Federal regulations designed to protect nursing home residents from unnecessary drugs require nursing homes to retain consulting pharmacists such as those provided by Omnicare to ensure that residents’ drug prescriptions are appropriate.
In its complaint, the United States alleges that Omnicare solicited and received kickbacks from Abbott in exchange for purchasing and recommending the prescription drug Depakote for controlling behavioral disturbances exhibited by dementia patients residing in nursing homes serviced by Omnicare. According to the complaint, Omnicare’s pharmacists reviewed nursing home patients’ charts at least monthly and made recommendations to physicians on what drugs should be prescribed for those patients. The government alleges that Omnicare touted its influence over physicians in nursing homes in order to secure kickbacks from pharmaceutical companies such as Abbott.
“Elderly nursing home residents suffering from dementia are among our nation’s most vulnerable patient populations, and they depend on the independent judgment of healthcare professionals for their daily care,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “Kickbacks to consulting pharmacists compromise their independence and undermine their role in protecting nursing home residents from the use of unnecessary drugs.”
The United States alleges that Omnicare disguised the kickbacks it received from Abbott in a variety of ways. Abbott allegedly made payments to Omnicare described as “grants” and “educational funding,” even though their true purpose was to induce Omnicare to recommend Depakote. For example, according to the complaint, Omnicare solicited substantial contributions from Abbott and other pharmaceutical manufacturers to its “Re*View” program. Although Omnicare claimed that Re*View was a “health management” and “educational” program, the complaint alleges that it was simply a means by which Omnicare solicited kickbacks from pharmaceutical manufacturers in exchange for increasing the utilization of their drugs on elderly nursing home residents. In internal documents, Omnicare allegedly referred to Re*View as its “one extra script per patient” program. The complaint also alleges that Omnicare entered into agreements with Abbott by which Omnicare was entitled to increasing levels of rebates from Abbott based on the number of nursing home residents serviced and the amount of Depakote prescribed per resident. Finally, the complaint alleges that Abbott funded Omnicare management meetings on Amelia Island, Florida, offered tickets to sporting events to Omnicare management, and made other payments to local Omnicare pharmacies.
“Although the United States Attorney’s Office for the Western District of Virginia is small, we will not waver in our pursuit of the largest corporations, like Omnicare and Abbott, who illegally raid the coffers of Medicaid, Medicare, and other healthcare benefit programs,” said Acting U.S. Attorney Anthony P. Giorno for the Western District of Virginia.
“Kickback allegations place elderly nursing home residents at risk that treatment decisions are influenced by improper financial incentives,” said Special Agent in Charge Nicholas DiGiulio for the Department of Health and Human Services’ Office of Inspector General (HHS-OIG) region including Virginia. “We will continually guard government health programs and taxpayers from companies more intent on their bottom lines than on patient care.”
In May 2012, the United States, numerous individual states, and Abbott entered into a $1.5 billion global civil and criminal resolution that, among other things, resolved Abbott’s civil liability under the False Claims Act for paying kickbacks to nursing home pharmacies.
The United States filed its complaint against Omnicare in two consolidated whistleblower lawsuits filed under the False Claims Act in the Western District of Virginia. The whistleblower provisions of the False Claims Act authorize private parties to sue for fraud on behalf of the United States and share in any recovery. The United States is entitled to intervene and take over such lawsuits, as it has done here.
This case illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $23.2 billion through False Claims Act cases, with more than $14.9 billion of that amount recovered in cases involving fraud against federal health care programs.
This investigation was jointly handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of Virginia, HHS-OIG, the Office of the Attorney General for the Commonwealth of Virginia and the National Association of Medicaid Fraud Control Units.
The cases are captioned United States ex rel. Spetter v. Abbott Labs., et al., Case No. 10-cv-00006 (W.D. Va.) and United States ex rel. McCoyd v. Abbott Labs., et al., Case No. 07-cv-00081 (W.D. Va.). The claims asserted in the government’s complaint are allegations only and there has been no determination of liability.
United States Attorney’s Office Announces Child Exploitation Charges Against United Kingdom ManRead the Press Release
Extradited from UK and brought to Indianapolis to faces charges
INDIANAPOLIS – Josh Minkler, Acting United States Attorney, announced today that Domminich Shaw 35, London, England, has been extradited from the United Kingdom to face formal charges involving child pornography.
“Mr. Shaw has been exploiting American children from nearly 4000 miles away for several years,” said Minkler. “His crimes have been stopped and his accountability to the American people begins today.”
Shaw became a target for law enforcement officials from the United States and Europe in 2011. It is alleged that Shaw sexually exploited children and conspired to distribute child pornography from computers near West London. Much of his pornography collection involved very young children, most under the age of five.
He was indicted in the Southern District of Indiana in February 2011, and arrested by UK law enforcement officials at that time. He has been in custody ever since. He was extradited by UK officials and arrived in Indianapolis escorted by local FBI agents early Saturday morning, December 20, 2014. He had his initial appearance before a magistrate judge today and was ordered detained until trial. No trial date has been set.
Several of Shaw’s co-defendants have been convicted in US courts and are now serving decades in federal prison. Shaw has been formally charged with conspiracy to distribute and receive child pornography, conspiracy to commit sexual exploitation of children, distribution of child pornography and sexual exploitation of children.
The investigation is the result of significant efforts of the Federal Bureau of Investigation, with assistance from the Indiana State Police, Kokomo Police Department and Brownsburg Police Department.
FBI Special Agent in Charge W. Jay Abbott stated "this case is an excellent example of the collaborative efforts of law enforcement officers around the world working together to ensure individuals that victimize children are held accountable.”
This case was brought as part of Project Safe Childhood, a larger nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice.
Led nationally by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
According to CEOS trial attorney Michael Grant and Senior Litigation Counsel Steve DeBrota who are prosecuting this case for the government, Shaw could face a lifetime in prison if convicted.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
United States Attorney Announces Federal Civil Rights Review of the Dontre Hamilton MatterRead the Press Release
This morning, the Milwaukee County District Attorney announced his decision, based on his review of the relevant facts and the applicable state law, not to initiate criminal charges against Milwaukee Police Officer Christopher Manney in connection with the death of Mr. Dontre Hamilton in Milwaukee, Wisconsin, on April 30, 2014.
The United States Department of Justice will undertake a federal review of this case to determine if, under federal civil rights law, there is a basis, both legal and factual, upon which a federal civil rights prosecution may be premised. This review will be conducted by the Federal Bureau of Investigation, the Office of the United States Attorney for the Eastern District of Wisconsin, and the Civil Rights Division.
Twelve Former Puerto Rico Police Officers Sentenced to Prison for Running Criminal Organization Out of Police DepartmentRead the Press Release
Twelve former Puerto Rico police officers have been sentenced for using their law enforcement affiliation and equipment to commit robbery and extortion, and to sell illegal narcotics and manipulate court records.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico and Special Agent in Charge Carlos Cases of the FBI’s San Juan Division made the announcement.
The following 12 defendants have been sentenced:
-
Osvaldo Vazquez-Ruiz was sentenced to 138 months in prison.Vazquez-Ruiz pleaded guilty on Aug. 21, 2014, to conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO) and carrying a firearm during and in relation to a crime of violence.
-
Orlando Sierra-Pereira was sentenced to 157 months in prison.Sierra-Pereira pleaded guilty on Aug. 21, 2014, to conspiracy to violate RICO and carrying a firearm during and in relation to a crime of violence.
-
Danny Nieves-Rivera was sentenced to 157 months in prison.Nieves-Rivera pleaded guilty on Aug. 21, 2014, to conspiracy to violate RICO and carrying a firearm during and in relation to a crime of violence.
-
Roberto Ortiz-Cintron was sentenced to 154 months in prison.Ortiz-Cintron pleaded guilty on Aug. 21, 2014, to conspiracy to violate RICO and carrying a firearm during and in relation to a crime of violence.
-
Yovanny Crespo-Candelaria was sentenced to 70 months in prison.Crespo-Candelaria pleaded guilty on Aug. 21, 2014, to conspiracy to violate RICO.
-
Nadab Arroyo-Rosa was sentenced to 78 months in prison.Arroyo-Rosa pleaded guilty on Aug. 21, 2014, to conspiracy to violate RICO.
-
Jose Flores-Villalongo was sentenced to 78 months in prison.Flores-Villalongo pleaded guilty on Aug. 21, 2014, to conspiracy to violate RICO.
-
Eduardo Montañez-Perez was sentenced to 63 months in prison.Montañez-Perez pleaded guilty on Aug. 15, 2014, to conspiracy to violate RICO.
-
Carlos Candelario-Santiago was sentenced to 63 months in prison.Candelario-Santiago pleaded guilty on Aug. 15, 2014, to conspiracy to violate RICO.
-
Ruben Casiano-Pietri was sentenced to 78 months in prison.Casiano-Pietri pleaded guilty on Aug. 21, 2014, to attempted Hobbs Act robbery.
-
Ricardo Rivera-Rodriguez was sentenced to 33 months in prison.Rivera-Rodriguez pleaded guilty on Aug. 25, 2014, to attempted Hobbs Act extortion under color of official right.
-
Christian Valles-Collazo was sentenced to 78 months in prison.Valles-Collazo pleaded guilty on Aug. 21, 2014, to attempted Hobbs Act robbery.
All 12 of the above defendants were sentenced by Senior U.S. District Judge Daniel R. Dominguez of the District of Puerto Rico, and the remaining four defendants convicted in this case are scheduled to be sentenced in January 2015. At the time of the crimes, Flores-Villalongo and Candelario-Santiago were sergeants with the Police of Puerto Rico; the others were police officers.
The officers convicted of the RICO conspiracy admitted to being members of a criminal organization that sought to enrich its members through a pattern of illegal conduct. Over the course of the conspiracy, the officers worked together to conduct traffic stops and enter homes or buildings used by persons suspected of being engaged in criminal activity to steal money, property and narcotics. The officers also planted evidence to make false arrests, and then extorted money in exchange for their victims’ release from custody. In exchange for bribe payments, the officers gave false testimony, manipulated court records and failed to appear in court when required so that cases would be dismissed. Additionally, the officers sold and distributed wholesale quantities of narcotics.
As just a few examples of their criminal conduct, in April 2012, Vazquez-Ruiz and Sierra-Pereira conducted a traffic stop in their capacity as police officers and stole approximately $22,000 they believed to be illegal drug proceeds. Vazquez-Ruiz later attempted to extort approximately $8,000 from an individual he believed to be a drug dealer’s accomplice in exchange for promising to release an alleged prisoner.
Further, in November 2012, Sierra-Pereira, Nieves-Rivera, Ortiz-Cintron and Valles-Collazo illegally entered an apartment and stole approximately $30,000, which they believed was illegal lottery proceeds.
The defendants frequently shared the proceeds they illegally obtained and used their power, authority and official positions as police officers to promote and protect their illegal activity. Among other things, the defendants used their police firearms, badges, patrol cars, tools, uniforms and other equipment to commit the crimes and concealed their illegal activity with fraudulently obtained court documents and falsified police paperwork to make it appear that they were engaged in legitimate police work.
The case was investigated by the FBI’s San Juan Division. The case is being prosecuted by Trial Attorneys Brian K. Kidd, Emily Rae Woods and Menaka Kalaskar of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Mariana E. Bauzá of the District of Puerto Rico.
-