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22 December 2014
California Man Sentenced for Possession of an Unregistered FirearmRead the Press Release
United States Attorney Brendan V. Johnson announced that a Fontana, California, man convicted of Possession of an Unregistered Firearm was sentenced on December 16, 2014, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Gregorio Aguirre, age 26, was sentenced to 24 months in custody, 3 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Aguirre pled guilty to the charge on August 22, 2014. The charge related to Aguirre knowingly being in possession of an unregistered, sawed-off Remington .22 caliber rifle when he was pulled over by the South Dakota Highway Patrol on April 12, 2014.
This case was investigated by the Unified Narcotics Enforcement Team, the South Dakota Highway Patrol, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorney Eric Kelderman prosecuted the case.
Aguirre was immediately turned over to the custody of the U.S. Marshals Service.
Buffalo Woman Sentenced for Bank FraudRead 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 Nichole Dean, 27, of Buffalo, NY, who was convicted of bank fraud, was sentenced to time served and two years supervised release by Chief U.S. District Judge William M. Skretny. The defendant was also ordered to pay $7,612.73 in restitution.Assistant U.S. Attorney Russell T. Ippolito, Jr., who handled the case, stated that the defendant was part of a conspiracy to defraud local area banks by participating in a scheme sometimes referred to as “Check Kiting.” Dean would open bank accounts and deposit large checks to the accounts. The deposited checks were written on accounts that had insufficient funds or on accounts that had been closed. Before the banks could determine that the checks were not supported by any funds, the defendant withdrew smaller amounts from the accounts. Although Dean made away with $7,612.73, the amount of the intended loss was more than $36,000.
Co-conspirators Carlique Deberry, Sade Heath and Sayonara Heath have all been convicted of similar charges.
The sentencing is the culmination of an investigation by the United States Secret Service, under the direction of Acting Special Agent in Charge Michael Adelizzio.
Buffalo Woman Arrested, Charged with FraudRead 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 Kalah O. Bishop, 25, of Buffalo, NY, was arrested and charged by criminal complaint with fraud in connection with the use of access devices. The charge carries a maximum penalty of 15 years in prison, and a fine of $250,000.Assistant U.S. Attorney Maura K. O’Donnell, who is handling the case, stated that the defendant participated in a scheme involving the filing of fraudulent Federal income tax returns via the internet with the Internal Revenue Service. According to the complaint, approximately 49 fraudulent returns were filed for the tax year 2013 with requested refunds totaling more than $200,000.
The complaint further states that the IRS issued refunds to prepaid debit cards in the names of numerous individuals. Bishop subsequently used the cards to make cash withdrawals at local automated teller machines.
Bishop made an initial appearance before U.S. Magistrate Judge H. Kenneth Schroeder and was released.
The criminal complaint is the culmination of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Acting Special Agent in Charge, New York Field Office.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Buffalo Man Sentenced on Drug ChargesRead 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 John J. Myers, 41, of Buffalo, NY, who was convicted of possession with intent to distribute 28 grams or more of crack cocaine, was sentenced to 60 months in prison by Chief U.S. District Court Judge William M. Skretny.
Assistant U.S. Attorney George C. Burgasser, who handled the case, stated that on November 15, 2012, law enforcement officers executed a search warrant at the defendant’s residence in the City of Buffalo. During the search, officers recovered 241 grams of crack cocaine.
The plea was the culmination of an investigation on the part of Special Agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Office.
Buffalo Man Pleads Guilty to Cocaine 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 Charles Palmer, Sr., 51, of Buffalo, NY, pleaded guilty to conspiracy to possess with intent to distribute, and to distribute, five kilograms or more of cocaine before Chief U.S. District Judge William M. Skretny. The charge carries a mandatory minimum penalty of 10 years in prison and a maximum of life.Assistant U.S. Attorney Frank T. Pimentel, who is handling the case, stated that between November 2010 and June 2011, the defendant conspired with others to distribute cocaine in the City of Buffalo. On May 20, 2011, June 2, 2011 and June 7, 2011, Palmer sold cocaine to a confidential source working with the Federal Bureau of Investigation.
Charles Palmer, Jr. has been convicted of possession with intent to distribute, and to distribute, marijuana and will be sentenced in April 2015.
The plea is the culmination of an investigation by the Federal Bureau of Investigation.
Sentencing is scheduled for April 22, 2015 at 10:00 a.m. before Judge Skretny.
Buffalo Man Indicted on Sex Trafficking ChargesRead 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 a federal grand jury in Buffalo has returned a three-count indictment charging Anthony Thompson, a/k/a Fresh Tone, 34, of Buffalo, NY, with sex trafficking by force, fraud, or coercion and sex trafficking of a minor. The charges carry a maximum penalty of life in prison, and a fine of $250,000.Assistant U.S. Attorney Maura K. O'Donnell, who is handling the case, stated that according to the indictment, Thompson is accused of the sex trafficking of two adults and one minor, between November 2012 and September 2014. The indictment further states that the defendant used force, fraud, or coercion to cause the victims to engage in commercial sex acts and would receive financial benefit from the commercial sex acts in which the victims engaged.
The defendant was arraigned on December 19, 2014. Thompson pleaded not guilty before U.S. Magistrate Judge H. Kenneth Schroeder and is being held pending a detention hearing on December 29 at 10:30 a.m.
The Indictment is the culmination of an investigation on the part of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero and the Cheektowaga Police Department, under the direction of Chief David Zack.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Bridgeport Man Sentenced to Two Years in Federal Prison for Illegally Possessing FirearmRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOHNATHAN REYES, also known as “Whitey,” 24, of Bridgeport, was sentenced today by Senior U.S. District Judge Warren W. Eginton in Bridgeport to 24 months of imprisonment, followed by two years of supervised release, for illegally possessing a firearm.
This matter stems from an FBI Bridgeport Safe Streets Task Force into narcotics trafficking activity and violent criminal activity in and around the Trumbull Gardens housing complex in Bridgeport. On December 18, 2013, a federal grand jury returned an 18-count indictment charging 14 individuals, including Ronell Hanks, also known as “Biz” and “Ace,” with various narcotics and firearms offenses.
When Hanks was arrested on December 5, 2013, task force officers seized from him an Apple iPad that contained numerous videos, including three that depicted both Hanks and REYES at the Bridgeport Shooting Range firing a long gun and a handgun. The investigation revealed that the videos were recorded on February 27, 2013.
In February 2007, REYES was convicted in state court of first degree burglary, reckless endangerment, risk of injury and possessing a pistol without having a permit. For these offenses he was sentenced to eight years of imprisonment, execution suspended after four years, and three years of probation.
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.
REYES has been detained since his arrest on May 1, 2014. On September 30, 2014, he pleaded guilty to one count possession of a firearm by a previously convicted felon.
Hanks has pleaded guilty and awaits sentencing.
This matter has been investigated by the FBI’s Bridgeport Safe Streets Task Force, in coordination with the Bridgeport Police Department, Norwalk Police Department, Trumbull Police Department and Connecticut State Police Statewide Narcotics Task Force. The case is being prosecuted by Assistant U.S. Attorneys Tracy Lee Dayton and Rahul Kale.
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(203) 821-3722 [email protected]Bloomfield Man Pleads Guilty to Federal Involuntary Manslaughter ChargeRead the Press Release
Defendant Prosecuted as Part of Federal Initiative to Address the Epidemic Incidence of Violence Against Native Women
ALBUQUERQUE – Jasper Fernandez, 40, an enrolled member of the Navajo Nation who resides in Bloomfield, N.M., entered a guilty plea this morning to a felony information charging him with involuntary manslaughter. Under the terms of his plea agreement, Fernandez will be sentenced to a prison term within the range of 37 and 46 months followed by a term of supervised release to be determined by the court.
Fernandez was arrested on Feb. 22, 2012, on a criminal complaint charging him with the Nov. 4, 2011, murder of a 36-year-old Navajo woman on the Navajo Indian Reservation.During today’s plea hearing, Fernandez admitted that he killed the victim while defending himself from a physical assault by the victim. According to the plea agreement, Fernandez and the victim were both intoxicated when the victim began kicking and punching Fernandez because he criticized her. Fernandez, who lost a tooth as a result of the assault, pushed the victim away too hard and caused her to hit her head against the door pillar of a vehicle and die. Fernandez acknowledged that instead of seeking medical attention for the victim or contacting the police, he attempted to conceal his crime by burying the victim’s remains.
Fernandez remains in custody pending his sentencing hearing, which has yet to be scheduled.
The case was investigated by the Albuquerque and Farmington offices of the FBI, the Navajo Nation Department of Public Safety and San Juan County Sheriff’s Office, and is being prosecuted by Assistant U.S. Attorney Paul H. Spiers.The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Bank Leumi Admits to Assisting U.S. Taxpayers in Hiding Assets in Offshore Bank AccountsRead the Press Release
A major Israeli international bank admitted that it conspired to aid and assist U.S. taxpayers to prepare and present false tax returns to the Internal Revenue Service (IRS) by hiding income and assets in offshore bank accounts in Israel and elsewhere around the world. A deferred prosecution agreement between the Bank Leumi Group and the Department of Justice was filed today in the Central District of California that defers prosecution on a criminal information charging the bank with conspiracy to aid and assist in the preparation and presentation of false tax returns and other documents to the Internal Revenue Service. This unprecedented agreement marks the first time an Israeli bank has admitted to such criminal conduct which spanned over a 10 year period and included an array of services and products designed to keep U.S. taxpayer accounts concealed at Bank Leumi Group’s locations in Israel, Switzerland, Luxembourg and the United States.
The Bank Leumi Group’s parent company is Bank Leumi le-Israel, B.M. Bank Leumi le-Israel is one of Israel’s largest banks, with subsidiaries in seven countries and more than 13,000 employees. Other subsidiary banks entering into this deferred prosecution agreement include The Bank Leumi le-Israel Trust Company Ltd., the oldest and largest of all bank trust companies in Israel; Leumi Private Bank S.A., a Switzerland-based subsidiary; Bank Leumi (Luxembourg) S.A., a Luxembourg-based subsidiary; and Bank Leumi USA, a FDIC-insured, full-service commercial bank with offices in California, Florida, Illinois and New York.
According to documents filed in the case, to account for their criminal conduct, Bank Leumi Group will pay the United States a total of $270 million. Of this total payment, $157 million represents a penalty for U.S. taxpayer accounts held at Leumi Private Bank in Switzerland. This $157 million penalty is consistent with the department’s Swiss Bank Program, which permits certain Swiss Banks to avoid prosecution by making a full and complete disclosure of their U.S. taxpayer-held accounts and paying substantial penalties. The agreement further provides that Bank Leumi Luxembourg and Leumi Private Bank will cease to provide banking and investment services for all accounts held or beneficially owned by U.S. taxpayers.
“The Bank Leumi Group recognized that the writing is on the wall for offshore banking, and cooperating with the government’s investigation was the only way to proceed,” said Deputy Attorney General James M. Cole. “This deferred prosecution agreement demonstrates both that the Justice Department will hold financial institutions accountable for their crimes, and that we will be fair in recognizing extraordinary cooperation.”
According to the filed statement of facts, from at least 2000 until early 2011, the Bank Leumi Group took affirmative and extensive steps to assist U.S. clients in concealing their assets offshore, including:
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surreptiously sending private bankers from Israel and elsewhere around the world to the United States to meet secretly with U.S. clients at hotels, parks and coffee shops to discuss their offshore account activity;
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assisting U.S. clients in using nominee corporate entities created in Belize and other foreign jurisdictions to hide their undeclared accounts by concealing the U.S. client as the true beneficial owner of the account;
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using the Bank Leumi le-Israel Trust Company as a nominee account holder for U.S. clients with accounts in Israel to conceal the U.S. client as the true beneficial owner of the account;
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maintaining U.S. clients’ undeclared offshore accounts under assumed names or numbered accounts to conceal the U.S. client as the true beneficial owner of the account;
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providing hold mail services so that correspondence and other account information would not go directly to the U.S. client to make it more difficult to connect the client to the secret offshore account;
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extending loans to U.S. clients from Bank Leumi USA that were collateralized by the assets in those clients’ offshore accounts, so that the clients could leverage their offshore assets to obtain and use capital in the United States while keeping their foreign accounts secret and undetected from the U.S. government; and
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after the department’s investigation into UBS and other Swiss banks’ criminal conduct in aiding U.S. taxpayers to evade their taxes became public, the Bank Leumi Group opened and maintained accounts for U.S. taxpayers who left UBS and other Swiss banks due to the investigation in an effort to continue to avoid detection by the U.S. government.
“The Bank Leumi Group’s admission of guilt to knowingly conspiring to assist U.S. taxpayers in filing false income tax returns and other documents with the Internal Revenue Service (IRS) represents the Department of Justice’s next step in its worldwide efforts to hold banks and other financial institutions responsible for their criminal conduct,” said the Tax Division’s Acting Deputy Assistant Attorney General Larry J. Wszalek. “Those institutions that have engaged, or continue to engage, in conduct similar to that of Bank Leumi Group are well advised that the Tax Division will continue to extend its global reach in enforcing this nation’s criminal tax laws.”
According to documents filed in the case, as part of its agreement with the department, the Bank Leumi Group provided the names of more than 1,500 of its U.S. account holders. As part of the agreement, the Bank Leumi Group will continue to disclose information to the government regarding its cross-border business and provide testimony and information regarding other investigations.
“There are many provisions of federal law that can benefit taxpayers, but maintaining secret offshore accounts to conceal assets is not a legal method of lowering one’s tax liability,” said Acting U.S. Attorney Stephanie Yonekura for the Central District of California. “Any financial institution – no matter where it operates – will be held accountable if it helps U.S. residents dodge their tax responsibilities. This agreement with Leumi Bank is the latest notice to American taxpayers who might flout the law that we can and will uncover your hidden assets.”
“Today’s deferred prosecution announcement against Leumi Bank is yet another historical event in the international tax arena,” said Commissioner John Koskinen of the IRS. “IRS will not tolerate the use of offshore accounts to illegally escape paying taxes and we will continue to focus on this priority area.”
“This case shows that banks who promote the use of offshore tax schemes against the United States will be held accountable and face substantial fines and penalties,” said Chief Richard Weber of IRS-Criminal Investigation. “This investigation involved untangling a complex web of financial transactions where Bank Leumi assisted U.S. taxpayers in concealing undeclared bank accounts. As the premier financial investigators in the world, and the only law enforcement agency to investigate tax cases, our special agents will continue to investigate banks and individuals who violate the U.S. tax laws no matter where they reside.”
This case was prosecuted by Trial Attorneys Christopher S. Strauss, Ellen M. Quattrucci and Dennis R. Kihm for the Tax Division. The Tax Division expressed gratitude to Assistant U.S. Attorney Sandra R. Brown and the U.S. Attorney’s Office for the Central District of California for their invaluable assistance in the investigation and prosecution of this case. The case was investigated by IRS-Criminal Investigation.
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Attorney General Holder Statement on President Obama's Intent to Nominate US Attorney Sally Yates to be Deputy Attorney GeneralRead the Press Release
WASHINGTON—Attorney General Eric Holder released the following statement Monday in response to President Obama’s announcement of his intent to nominate Sally Yates, the U.S. Attorney for the Northern District of Georgia, to serve as the next Deputy Attorney General, succeeding James M. Cole:
"I congratulate Sally Yates on her forthcoming nomination as Deputy Attorney General -- an important and demanding office in which she will most certainly excel.
"Over the years, I have come to know, admire, and rely on Sally as an essential leader of the U.S. Attorney community. As a longtime career prosecutor, she has handled a wide range of complex and high-profile cases with remarkable skill and poise.
"Sally's leadership in combating public corruption has rightfully earned the accolades of her colleagues at every level of law enforcement. Her successful prosecution of Eric Rudolph for the Centennial Olympic Park bombing cemented her sterling reputation as a tough, and extremely talented, attorney. And her distinguished tenure as U.S. Attorney, and service as vice chair of the Attorney General's Advisory Committee, have been marked by indelible contributions in advancing the Justice Department's Smart on Crime initiative and other important policies.
“As Deputy Attorney General, Sally will play a critical role in leading the Department of Justice, building on our Smart on Crime reforms, and expanding on the record of achievement we have established during the last six years. I know her tenure will be defined by the same standard of excellence that has guided her throughout her career, and I am proud to join President Obama in congratulating her, once again, on her planned nomination."
Anchorage Woman Indicted for Making False Tax Claims Against the GovernmentRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that Pepe Anetipa, 58, was indicted on 28 counts of making false, fictitious, and fraudulent claims against the government. According to the indictment, for tax year 2011, Pepe Anetipa filed falsified tax returns claiming total refunds of at least $202,859.00. Anetipa was arrested in Washington State on December 2, 2014, and arraigned in federal court in Anchorage, on December 18, 2014. She pleaded not guilty. Trial is set for February 9, 2015.
According to the Indictment, Anetipa moved from American Samoa to Anchorage, Alaska, in approximately July 2011. Anetipa obtained a State of Alaska business license on February 6, 2012, for Triple-H Tax and Services. Citizens of the United States Territory of American Samoa are issued social security numbers by the Social Security Administration; however, they are not required to file tax returns with the Internal Revenue Service if all of their income was derived from sources in American Samoa.
Allegedly, Anetipa used wage information and tax withholding reported to residents of American Samoa on a “Form W-2AS American Samoa Wage and Tax Statement” and transferred the information to a regular “Form W-2 Wage and Tax Statement”. Anetipa also changed the addresses on the Forms W-2 to be either Texas or Alaska addresses instead of the Pago Pago, American Samoa addresses. The altered Forms W-2 gave the tax returns the false appearance that the income was earned in the United States rather than America Samoa and that federal tax withholding was paid into the U.S. system. Anetipa then submitted the altered Forms W-2 with tax returns she prepared. Anetipa submitted these false tax returns knowing that none of the individuals who had tax returns prepared by Anetipa earned wages outside of America Samoa. The refund claims were materially false because, in fact, no federal taxes had been withheld, no credits were due, and therefore no refund was due and owing.
An indictment is merely an accusation of charges and the defendant is presumed innocent until proven guilty. The defendant is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt. Making false claims against the government carries a sentence of up to five years for each false return.
The case is being prosecuted by Assistant U.S. Attorney Thomas Bradley of the U. S. Attorney’s Office for the District of Alaska. The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI).
Alstom Pleads Guilty and Agrees to Pay $772 Million Criminal Penalty to Resolve Foreign Bribery ChargesRead the Press Release
Alstom S.A. (Alstom), a French power and transportation company, pleaded guilty today and agreed to pay a $772,290,000 fine to resolve charges related to a widespread scheme involving tens of millions of dollars in bribes in countries around the world, including Indonesia, Saudi Arabia, Egypt and the Bahamas.
Deputy Attorney General James M. Cole, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Michael J. Gustafson of the District of Connecticut and FBI Executive Assistant Director Robert Anderson Jr. made the announcement.
“Alstom’s corruption scheme was sustained over more than a decade and across several continents,” said Deputy Attorney General Cole. “It was astounding in its breadth, its brazenness and its worldwide consequences. And it is both my expectation – and my intention – that the comprehensive resolution we are announcing today will send an unmistakable message to other companies around the world: that this Department of Justice will be relentless in rooting out and punishing corruption to the fullest extent of the law, no matter how sweeping its scale or how daunting its prosecution.”
“This case is emblematic of how the Department of Justice will investigate and prosecute FCPA cases – and other corporate crimes,” said Assistant Attorney General Caldwell. “We encourage companies to maintain robust compliance programs, to voluntarily disclose and eradicate misconduct when it is detected, and to cooperate in the government’s investigation. But we will not wait for companies to act responsibly. With cooperation or without it, the department will identify criminal activity at corporations and investigate the conduct ourselves, using all of our resources, employing every law enforcement tool, and considering all possible actions, including charges against both corporations and individuals.”
“Today’s historic resolution is an important reminder that our moral and legal mandate to stamp out corruption does not stop at any border, whether city, state or national,” said First Assistant U.S. Attorney Gustafson. “A significant part of this illicit work was unfortunately carried out from Alstom Power’s offices in Windsor, Connecticut. I am hopeful that this resolution, and in particular the deferred prosecution agreement with Alstom Power, will provide the company an opportunity to reshape its culture and restore its place as a respected corporate citizen.”
“This investigation spanned years and crossed continents, as agents from the FBI Washington and New Haven field offices conducted interviews and collected evidence in every corner of the globe,” said FBI Executive Assistant Director Anderson. “The record dollar amount of the fine is a clear deterrent to companies who would engage in foreign bribery, but an even better deterrent is that we are sending executives who commit these crimes to prison.”
Alstom pleaded guilty to a two-count criminal information filed today in the U.S. District Court for the District of Connecticut, charging the company with violating the Foreign Corrupt Practices Act (FCPA) by falsifying its books and records and failing to implement adequate internal controls. Alstom admitted its criminal conduct and agreed to pay a criminal penalty of $772,290,000. U.S. District Judge Janet B. Arterton of the District of Connecticut scheduled a sentencing hearing for June 23, 2015 at 3pm.
In addition, Alstom Network Schweiz AG, formerly Alstom Prom (Alstom Prom), Alstom’s Swiss subsidiary, pleaded guilty to a criminal information charging the company with conspiracy to violate the anti-bribery provisions of the FCPA. Alstom Power Inc. (Alstom Power) and Alstom Grid Inc. (Alstom Grid), two U.S. subsidiaries, both entered into deferred prosecution agreements, admitting that they conspired to violate the anti-bribery provisions of the FCPA. Alstom Power is headquartered in Windsor, Connecticut, and Alstom Grid, formerly Alstom T&D, was headquartered in New Jersey.
According to the companies’ admissions, Alstom, Alstom Prom, Alstom Power and Alstom Grid, through various executives and employees, paid bribes to government officials and falsified books and records in connection with power, grid and transportation projects for state-owned entities around the world, including in Indonesia, Egypt, Saudi Arabia, the Bahamas and Taiwan. In Indonesia, for example, Alstom, Alstom Prom, and Alstom Power paid bribes to government officials – including a high-ranking member of the Indonesian Parliament and high-ranking members of Perusahaan Listrik Negara, the state-owned electricity company in Indonesia – in exchange for assistance in securing several contracts to provide power-related services valued at approximately $375 million. In total, Alstom paid more than $75 million to secure $4 billion in projects around the world, with a profit to the company of approximately $300 million.
Alstom and its subsidiaries also attempted to conceal the bribery scheme by retaining consultants purportedly to provide consulting services on behalf of the companies, but who actually served as conduits for corrupt payments to the government officials. Internal Alstom documents refer to some of the consultants in code, including “Mr. Geneva,” “Mr. Paris,” “London,” “Quiet Man” and “Old Friend.”
The plea agreement cites many factors considered by the department in reaching the appropriate resolution, including: Alstom’s failure to voluntarily disclose the misconduct even though it was aware of related misconduct at a U.S. subsidiary that previously resolved corruption charges with the department in connection with a power project in Italy; Alstom’s refusal to fully cooperate with the department’s investigation for several years; the breadth of the companies’ misconduct, which spanned many years, occurred in countries around the globe and in several business lines, and involved sophisticated schemes to bribe high-level government officials; Alstom’s lack of an effective compliance and ethics program at the time of the conduct; and Alstom’s prior criminal misconduct, including conduct that led to resolutions with various other governments and the World Bank.
After the department publicly charged several Alstom executives, however, Alstom began providing thorough cooperation, including assisting the department’s prosecution of other companies and individuals.
To date, the department has announced charges against five individuals, including four corporate executives of Alstom and its subsidiaries, for alleged corrupt conduct involving Alstom. Frederic Pierucci, Alstom’s former vice president of global boiler sales, pleaded guilty on July 29, 2013, to conspiring to violate the FCPA and a charge of violating the FCPA for his role in the Indonesia bribery scheme. David Rothschild, Alstom Power’s former vice president of regional sales, pleaded guilty on Nov. 2, 2012, to conspiracy to violate the FCPA. William Pomponi, Alstom Power’s former vice president of regional sales, pleaded guilty on July 17, 2014, to conspiracy to violate the FCPA. Lawrence Hoskins, Alstom’s former senior vice president for the Asia region, was charged in a second superseding indictment on July 30, 2013, and is pending trial in the District of Connecticut in June 2015. The charges against Hoskins are merely allegations, and he is presumed innocent unless and until proven guilty. The high-ranking member of Indonesian Parliament was also convicted in Indonesia of accepting bribes from Alstom, and is currently serving a three-year term of imprisonment.
In connection with a corrupt scheme in Egypt, Asem Elgawhary, the general manager of an entity working on behalf of the Egyptian Electricity Holding Company, a state-owned electricity company, pleaded guilty on Dec. 4, 2014, in federal court in the District of Maryland to mail fraud, conspiring to launder money, and tax fraud for accepting kickbacks from Alstom and other companies. In his plea agreement, Elgawhary agreed to serve 42 months in prison and forfeit approximately $5.2 million in proceeds.
This case is being investigated by the FBI’s Washington Field Office, with assistance from the FBI’s Meriden, Connecticut Resident Agency, and the FBI’s Newark and Baltimore Divisions. The department appreciates the significant cooperation provided by its law enforcement colleagues in Indonesia at the Komisi Pemberantasan Korupsi (Corruption Eradication Commission), the Office of the Attorney General in Switzerland, the Serious Fraud Office in the United Kingdom, as well as authorities in Germany, Italy, Singapore, Saudi Arabia, Cyprus and Taiwan.
The case is being prosecuted by Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David E. Novick of the District of Connecticut, together with Assistant U.S. Attorney Zach Intrater of the District of New Jersey on the investigation of Alstom Grid and Assistant U.S. Attorney David I. Salem of the District of Maryland on the investigation of Asem Elgawhary. The Criminal Division’s Office of International Affairs also provided substantial assistance.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
21 December 2014
Rigoberto Schmidt of Grand Island IndictedRead the Press Release
United States Attorney Deborah R. Gilg announced the federal Grand Jury for the District of Nebraska has returned a five-count indictment against Rigoberto Schmidt, 22, of Grand Island. The Indictment charges Schmidt with four counts of selling a firearm to a felon resulting from two incidents in April, 2014, and two incidents in May, 2014. The fifth count charges Schmidt with the sale of a stolen firearm from an incident in May, 2014.
The maximum possible penalty for each charge if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release and a $100 special assessment for each count.
Indictments are charging documents that contain one or more individual counts that are merely accusations, and every defendant is presumed innocent unless and until proven guilty.
This case was investigated by the Central Nebraska Drug and Safe Streets Task Force.
Harvey Fuller and Christina Doyle of Grand Island IndictedRead the Press Release
United States Attorney Deborah R. Gilg announced the federal Grand Jury for the District of Nebraska has returned a two-count indictment against Harvey Fuller, 48, and Christina Doyle, 47, both of Grand Island. The Indictment charges Fuller and Doyle with one count each of distribution of methamphetamine in March, 2014.
Fuller faces a maximum possible penalty if convicted of 20 years imprisonment, a $1,000,000 fine, a 3 year term of supervised release and a $100 special assessment for each count.
Doyle faces a maximum possible penalty if convicted of 40 years imprisonment, a $5,000,000 fine, a 4 year term of supervised release and a $100 special assessment for each count.
Indictments are charging documents that contain one or more individual counts that are merely accusations, and every defendant is presumed innocent unless and until proven guilty.
This case was investigated by the Central Nebraska Drug and Safe Streets Task Force.
Grand Island Man Sentenced to 262 Months Imprisonment for Drug TraffickingRead the Press Release
United States Attorney Deborah R. Gilg announced that Fernando Martinez, 26 years old, was sentenced on December 18, 2014, to serve 262 months imprisonment, and 5 years of supervised release after his prison sentence is complete, by the Honorable Richard G. Kopf, Senior United States District Court Judge. An indictment filed in May of 2014 charged Martinez with possessing 50 grams or more of methamphetamine, with the intent to distribute. Martinez pleaded guilty to that charge on August 28, 2014.
Evidence at the sentencing hearing showed that Martinez was a member of a street gang known as the “East Side Locos” in Grand Island. An investigator with the Grand Island Police Department, and who is also a member of the Central Nebraska Drug and Safe Streets Task Force, testified that Martinez is known to use the moniker “Silent.” The Court received into evidence copies of two music videos produced by members of the East Side Locos gang. The videos credited “Silent” as performing some of the songs. The lyrics in the songs promoted drugs, violence and gang membership. The investigator also testified about an incident where Martinez was previously convicted for unlawful discharge of a firearm for a drive-by-shooting incident which occurred in Grand Island in March of 2007. The house targeted in that drive-by-shooting was the home of two rival gang members.
This case was investigated by the Grand Island Police Department, and the Central Nebraska Drug and Safe Streets Task Force.
20 December 2014
Attorney General Holder Statement on Assassination of Two New York City Police Officers in Line of DutyRead the Press Release
Attorney General Eric Holder released the following statement Saturday regarding the fatal shootings of two New York City police officers:
“I condemn this afternoon's senseless shooting of two New York City police officers in the strongest possible terms. This was an unspeakable act of barbarism, and I was deeply saddened to hear of the loss of these two brave officers in the line of duty.
“On behalf of all those who serve in the United States Department of Justice, I want to express my heartfelt condolences to the officers' loved ones and colleagues. I will make available all of the resources of the Department to aid the NYPD in investigating this tragedy.
"This cowardly attack underscores the dangers that are routinely faced by those who protect and serve their fellow citizens. As a nation we must not forget this as we discuss the events of the recent past. These courageous men and women routinely incur tremendous personal risks, and place their lives on the line each and every day, in order to preserve public safety. We are forever in their debt.
"Our nation must always honor the valor -- and the sacrifices -- of all law enforcement officers with a steadfast commitment to keeping them safe. This means forging closer bonds between officers and the communities they serve, so that public safety is not a cause that is served by a courageous few, but a promise that's fulfilled by police officials and citizens working side by side."
19 December 2014
Week in Review – South BendRead the Press Release
South Bend, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITIONS
- Steven M. McCloughan, 56, of Elkhart, Indiana was sentenced to 126 months imprisonment with 5 years supervised release after pleading guilty to the felony offense of transportation of child pornography. According to documents filed in this case, on or about July 4, 2013, McCloughan possessed a computer onto which he had downloaded from the internet numerous images and videos that depicted minors engaged in sexually explicit conduct (“child pornography”). McCloughan also admitted emailing a short video file that depicted sadistic conduct. This case was the result of an investigation by the Federal Bureau of Investigation. This case was prosecuted by Assistant United States Attorney John M. Maciejczyk.
- John D. Burke, of Mishawaka, Indiana was sentenced to 79 months imprisonment with 15 years supervised release after pleading guilty to the felony offense of possession of child pornography. According to documents filed in this case, on January 30, 2014, Burke possessed a computer onto which he had downloaded numerous images and videos that depicted minors engaged in sexually explicit conduct (“child pornography”). He knew the images were child pornography as defined by 18 U.S.C. 2256, which defines child pornography as a depiction which “involves the use of a minor engaging in sexually explicit conduct.” Burke also admitted that some of these depictions were of prepubescent minors or minors who had not attained the age of 12 years, and that some images depicted sadistic conduct. This case was the result of an investigation by the Federal Bureau of Investigation. This case was prosecuted by Assistant United States Attorney John M. Maciejczyk.
- Jeremy L. Hall, 38, of Warsaw, Indiana was sentenced to 97 months imprisonment with 15 years supervised release after pleading guilty to the felony offense of distribution of child pornography. According to documents filed in this case, on February 27, 2014, Hall possessed a computer onto which he had downloaded numerous images and videos that depicted minors engaged in sexually explicit conduct (“child pornography”). He knew the images were child pornography as defined by 18 U.S.C. 2256, which defines child pornography as a depiction which “involves the use of a minor engaging in sexually explicit conduct.” Hall also admitted that some of the images and videos were depictions of prepubescent minors or minors who had not attained the age of 12 years, and that some images depicted sadistic conduct. This case was the result of an investigation by the Federal Bureau of Investigation This case was prosecuted by Assistant United States Attorney John M. Maciejczyk.
- Carlis Young, 36, of Indianapolis, Indiana was sentenced to 37 months imprisonment with 3 years supervised release after pleading guilty to the felony offense of being an unlawful user of a controlled substance in possession of a firearm. According to documents filed in this case, on April 22, 2014, Young was arrested for domestic violence against his girlfriend. Before he was taken to jail, Young stated the apartment was his and denied consent to search. His girlfriend, however, gave consent to search. Inside the apartment, which smelled of burning marijuana, a loaded .22 caliber revolver was found within reach of the couch officers had Young sit. A shotgun was also found in the closet of Young and his girlfriend’s bedroom, in addition to marijuana, crack cocaine and cocaine. Young admitted that the drugs were his and that the he was a regular cocaine user. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Jesse M. Barrett.
Week in Review – HammondRead the Press Release
Hammond, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITIONS
- Creekside at Meadowbrook, LLC and Creekside at Meadowbrook West, LLC, two Indiana corporations with properties located in Lowell, Indiana, were ordered to authorize the release of assets totaling $189,953.24 dollars to the U.S. Department of Housing and Urban Development as restitution, as well as pay a special assessment of $800, after pleading guilty to submitting false statements to HUD. According to documents filed in this case, between March 2009 and continuing through March 2010, the defendants submitted materially false and fraudulent statements to HUD in that the submissions inflated their financial status in order to obtain a HUD mortgage. This case was the result of an investigation the U.S. Department of Housing and Urban Development-Office of Inspector General. This case was prosecuted by Assistant United States Attorney Toi Denise Houston.
- Tambra Ducker, 26, of Indianapolis, Indiana was sentenced to three (3) years probation after pleading guilty to the felony offense of possession with intent to distribute heroin. According to documents filed in this case, Ducker was one of the passengers in a vehicle stopped by the Jasper County Sheriff’s Department on February 25, 2013. Ducker consented to a search of her purse and officers found 150 grams of heroin which she admitted belonged to her. This case was the result of an investigation by the DEA. This case was prosecuted by Assistant United States Attorney Jennifer Chang.
- Jamol Hardin, 41, of Columbus, Ohio was sentenced to probation for 3 years after pleading guilty to the felony offense of being a felon in possession of a firearm. According to documents filed in this case, on April 9, 2009, Harding, having been convicted of a crime punishable by a term of imprisonment exceeding one year, knowingly possessed, in and affecting commerce, a firearm. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Nicholas Padilla.
- Jeremy Lamar Lloyd, 23, of Gary, Indiana was sentenced to 46 months imprisonment with 3 years supervised release after pleading guilty to the felony offense of being a felon in possession of a firearm. According to documents filed in this case, on July 21, 2011, Lloyd knowingly possessed, in and affecting commerce, a .25 caliber semi-automatic pistol after previously having been convicted of a crime punishable by imprisonment exceeding one year. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Nicholas Padilla.
- John Lytle, 37, of Gary, IN was sentenced to 100 months imprisonment with 3 years of supervised release after pleading guilty to the felony offenses of being a felon in possession of a firearm and distribution of cocaine base. According to documents filed in the cases, in May of 2013, an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives revealed that Lytle was selling both cocaine base and firearms within Gary, Indiana. This case was prosecuted by Assistant United States Attorney Thomas McGrath.
- Carey Ray, 31, of Chicago, Illinois was sentenced to 320 months’ imprisonment followed by 15 years of supervised release after being found guilty at trial of the felony offense of transporting a minor child across state lines with intent to engage in criminal sexual activity. According to documents filed in the case, on October 8, 2012, Carey Ray picked up a child he knew to be 14 years old and transported her from Hammond, Indiana to a hotel in Lansing, Illinois. Once there, Carey Ray provided the minor child with alcohol and marijuana. Thereafter, Carey Ray made a sexual advance and, when rebuffed, forcibly committed a sex act on the child. This case was the result of an investigation by the Federal Bureau of Investigation and the Lansing Police Department. This case was prosecuted by Assistant United States Attorneys Jill Koster and Joshua Kolar.
- David Alan Resnick, 35, of Port St. Lucie, Florida was sentenced, following his convictions at trial of the federal felony offenses of transporting a minor under age 12 across state lines with intent to engage in a sexual (Count 1) of the indictment, transporting child pornography across state lines (Count 2), brandishing a firearm in furtherance of a crime of violence ( that violent crime being the act alleged in Count 1 of the indictment) (Count 3) and possessing a firearm despite a prior felony conviction (Count 4). Resnick was sentenced to life in prison on Count 1, twenty (20) years of incarceration on Count 2, seven (7) years of incarceration on Count 3 and ten (10) years of incarceration on Count 4, with the sentences on Counts 1, 2 and 4 to run concurrently and the sentence on Count 3 to run consecutively, for a combined total prison sentence of life plus seven years. If released from prison, Resnick will also have to serve a 15 year term of supervised release, during which time he will be required to register as a sex offender. According to documents filed in this case, in the summer of 2008, Resnick, who was employed as a commercial truck driver, took the 9 year-old victim from Indiana to various states on a two-week road trip. During the trip, Resnick showed the victim child pornography featuring other prepubescent children and forced the minor to engage in sexual acts. At one point when Defendant, a previously convicted felon, was pulled over by police for failing to stop at a truck weigh station, he brandished a firearm and pointed it at the child victim’s head, threatening to kill the child if he disclosed the sexual abuse. The child did not speak to police and the trip continued. A second child victim testified at trial that he was later invited to attend an overnight pool party with Resnick at a local Indiana hotel and he awoke to find Resnick fondling his genitals. This case was the result of an investigation by the Federal Bureau of Investigation. This case was prosecuted by Assistant United States Attorneys Jill R. Koster and Thomas M. McGrath.
- Percy Spurlock, 60, of Gary, Indiana was sentenced to 151 months imprisonment with 3 years supervised release after pleading guilty to the felony offense of possession with intent to distribute crack cocaine. According to documents filed in this case, a federal search warrant was executed at Spurlock’s residence located at in the 1900 block of Central Drive, Gary, Indiana on October 4, 2012. Agents recovered five (5) firearms, crack cocaine, and drug paraphernalia from the residence. This case was the result of an investigation by the Federal Bureau of Investigation GRIT task force. This case was prosecuted by Assistant United States Attorney Jennifer Chang.
Week in Review – Fort WayneRead the Press Release
Fort Wayne, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEA
- Maurice Watts, 36, of Fort Wayne, Indiana pled guilty to the felony offense of knowingly and intentionally manufacturing marijuana. The magistrate judge is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Fort Wayne Police Department. Sentencing has not been set. This case is being prosecuted by Assistant United States Attorneys Nathaniel C. Henson, and Tina L. Nommay.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS
- Tyson Allen, 27, of Bluffton, Indiana was sentenced to 46 months imprisonment with 2 years supervised release after pleading guilty to the felony offense of retaliating against a witness, victim, or an informant. According to documents filed in this case, as evidenced on surveillance camera at the Wells County Jail, on June 5, 2013, Allen was the lookout while an assault took place. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, United States Marshal’s Service and the Wells County Sheriff’s Department. This case was prosecuted by Assistant United States Attorney Anthony W. Geller.
- Charles Walker, Jr., 40, of Fort Wayne, Indiana was sentenced to 37 months imprisonment with 2 years supervised release after pleading guilty to the felony offenses of maintaining a drug-involved premise and being a convicted felon in possession of a firearm. According to documents filed in this case, several controlled purchases for narcotics were made from Walker. On July 8, 2014, a State Search Warrant was executed on Walker’s residence, wherein a firearm and controlled substances were found. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Drug Enforcement Administration, and the Allen County Police Department. This case was prosecuted by Assistant United States Attorney Anthony W. Geller.
Webster Accountant Sentenced for Bank Fraud and Identity TheftRead the Press Release
CONTACT:Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Joseph Karl Muller, 54, of Webster, NY, who was convicted of bank fraud and aggravated identity theft, was sentenced to 54 months in prison and ordered to pay restitution of $127,287 by U.S. District Judge David G. Larimer.Assistant U.S. Attorney John J. Field, who is handling the matter, stated that Muller was an accountant in Webster who provided services to clients, including preparing tax returns. From April 2012 to August 2013, the defendant used personal identifying information that he stole from a client to prepare 46 fraudulent checks drawn on the client’s bank accounts. Muller then deposited the fraudulent checks into an account that he controlled, reaping a total of $127,287.
This plea is the culmination of an investigation by Special Agents of the Secret Service, under the direction of Acting Special Agent in Charge Michael Adelizzio.
Utility Company Sentenced in Wyoming for Killing Protected Birds at Wind ProjectsRead the Press Release
PacifiCorp Energy, a subsidiary of PacifiCorp, based in Portland, Oregon, pleaded guilty in U.S. District Court in Wyoming today to violating the federal Migratory Bird Treaty Act (MBTA) in connection with the deaths of protected birds, including golden eagles, at two of the company’s wind projects in Wyoming.
Under a plea agreement with the government, the company was sentenced to pay fines, restitution and community service totaling $2.5 million and was placed on probation for five years, during which it must implement an environmental compliance plan aimed at preventing bird deaths at the company’s four commercial wind projects in the state. The company is also required to apply for Eagle Take Permits which, if granted, will provide a framework for minimizing and mitigating the deaths of golden eagles at the wind projects.
The charges stem from the discovery of the carcasses of 38 golden eagles and 336 other protected birds, including hawks, blackbirds, larks, wrens and sparrows by the company at its “Seven Mile Hill” and “Glenrock/Rolling Hills” wind projects in Carbon and Converse Counties between 2009 and the present. The two wind projects are comprised of 237 large wind turbines sited on private and company-owned land.
“PacifiCorp Energy built two of its Wyoming wind projects in a manner it knew would likely result in the deaths of eagles and other protected birds,” said Sam Hirsch, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “PacifiCorp has taken steps to minimize the hazard, and with this plea agreement has committed to a comprehensive plan to continue such efforts in partnership with the U.S. Fish and Wildlife Service, to seek eagle take permits for each project, and to work to prevent future eagle deaths.”
In documents presented in court, the government alleged that PacifiCorp Energy failed to make all reasonable efforts to build the projects in a way that would avoid the risk of avian deaths by collision with turbine blades, despite prior guidance from the U.S. Fish and Wildlife Service (FWS). However, the company cooperated with the FWS investigation and has already implemented measures aimed at minimizing avian deaths at the sites.
“Improperly sited and operated wind energy facilities can kill significant numbers of federally protected birds and other species,” said U.S. Fish and Wildlife Service Director Dan Ashe, urging developers to follow the Service’s Land-based Wind Energy Guidelines. “That’s why it’s imperative that wind energy developers work with the Fish and Wildlife Service to minimize these impacts at every stage in the process.”
More than 1,000 species of birds, including bald and golden eagles, are protected under the Migratory Bird Treaty Act (MBTA). The MBTA, enacted in 1918, implements this country’s commitments under avian protection treaties with Great Britain (for Canada), Mexico, Japan and Russia. The MBTA provides a misdemeanor criminal sanction for the unpermitted taking of a listed species by any means and in any manner, regardless of fault. The maximum penalty for an unpermitted corporate taking under the MBTA is $15,000 or twice the gross gain or loss resulting from the offense, and five years’ probation.
Commercial wind power projects can cause the deaths of federally protected birds in four primary ways: collision with wind turbines, collision with associated meteorological towers, collision with, or electrocution by, associated electrical power facilities, and nest abandonment or behavior avoidance from habitat modification. Collision and electrocution risks from power lines (collisions and electrocutions) and guyed structures (collision) have been known to the utility and communication industries for decades, and specific methods of minimizing and avoiding the risks have been developed, in conjunction with the FWS. The FWS issued its first interim guidance about how wind project developers could avoid impacts to wildlife from wind turbines in 2003, and replaced these with a “tiered” approach outlined in the Land-Based Wind Energy Guidelines (2012 LBWEGs), developed with the wind industry starting in 2007 and released in final form by the USFWS on March 23, 2012. The Service also released Eagle Conservation Plan Guidance in April 2013 and strongly recommends that companies planning or operating wind power facilities in areas where eagles occur work with the agency to implement that guidance completely.
For wind projects, due diligence during the pre-construction stage—as described in the 2003 Interim Guidance and tiers I through III in the 2012 LBWEGs— requires surveying the wildlife present in the proposed project area, consulting with agency professionals, determining whether the risk to wildlife is too high to justify proceeding and, if not, carefully siting turbines so as to avoid and minimize the risk as much as possible. This is critically important because no post-construction remedies, known as “advanced conservation practices” have been developed that can “render safe” a wind turbine placed in a location of high avian collision risk. Other experimental measures such as prey reduction, and devices that detect and deter avian proximity to turbines are being tested. In the western United States, golden eagles may be particularly susceptible to wind turbine blade collision by wind power facilities constructed in areas of high eagle use.
The $400,000 fine imposed in the case will be directed to the federally-administered North American Wetlands Conservation Fund. The company will also pay $200,000 in restitution to the State of Wyoming, and perform community service by making a $1.9 million payment to the congressionally-chartered National Fish and Wildlife Foundation, designated for projects aimed at preserving golden eagles and increasing the understanding of ways to minimize and monitor interactions between eagles and commercial wind power facilities, as well as enhance eagle rehabilitation and conservation efforts in Wyoming. The company must implement a migratory bird compliance plan containing specific measures to avoid and minimize golden eagle and other avian wildlife mortalities at the company’s four commercial wind projects in Wyoming.
According to papers filed with the court, PacifiCorp will spend approximately $600,000 per year implementing the compliance plan. The company must also apply to the U.S. Fish and Wildlife Service for a Programmatic Eagle Take Permit at each of the four wind projects cited in the case.
The case was investigated by Special Agents of the U.S. Fish and Wildlife Service and prosecuted by Senior Counsel Robert S. Anderson of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division and Assistant U.S. Attorney Jason Conder of the District of Wyoming.
Update in Sony InvestigationRead the Press Release
Today, the FBI would like to provide an update on the status of our investigation into the cyber attack targeting Sony Pictures Entertainment (SPE). In late November, SPE confirmed that it was the victim of a cyber attack that destroyed systems and stole large quantities of personal and commercial data. A group calling itself the “Guardians of Peace” claimed responsibility for the attack and subsequently issued threats against SPE, its employees, and theaters that distribute its movies.
The FBI has determined that the intrusion into SPE’s network consisted of the deployment of destructive malware and the theft of proprietary information as well as employees’ personally identifiable information and confidential communications. The attacks also rendered thousands of SPE’s computers inoperable, forced SPE to take its entire computer network offline, and significantly disrupted the company’s business operations.
After discovering the intrusion into its network, SPE requested the FBI’s assistance. Since then, the FBI has been working closely with the company throughout the investigation. Sony has been a great partner in the investigation, and continues to work closely with the FBI. Sony reported this incident within hours, which is what the FBI hopes all companies will do when facing a cyber attack. Sony’s quick reporting facilitated the investigators’ ability to do their jobs, and ultimately to identify the source of these attacks.
As a result of our investigation, and in close collaboration with other U.S. Government departments and agencies, the FBI now has enough information to conclude that the North Korean government is responsible for these actions. While the need to protect sensitive sources and methods precludes us from sharing all of this information, our conclusion is based, in part, on the following:
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Technical analysis of the data deletion malware used in this attack revealed links to other malware that the FBI knows North Korean actors previously developed. For example, there were similarities in specific lines of code, encryption algorithms, data deletion methods, and compromised networks.
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The FBI also observed significant overlap between the infrastructure used in this attack and other malicious cyber activity the U.S. Government has previously linked directly to North Korea. For example, the FBI discovered that several Internet protocol (IP) addresses associated with known North Korean infrastructure communicated with IP addresses that were hardcoded into the data deletion malware used in this attack.
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Separately, the tools used in the SPE attack have similarities to a cyber attack in March of last year against South Korean banks and media outlets, which was carried out by North Korea.
We are deeply concerned about the destructive nature of this attack on a private sector entity and the ordinary citizens who worked there. Further, North Korea’s attack on SPE reaffirms that cyber threats pose one of the gravest national security dangers to the United States. Though the FBI has seen a wide variety and increasing number of cyber intrusions, the destructive nature of this attack, coupled with its coercive nature, sets it apart. North Korea’s actions were intended to inflict significant harm on a U.S. business and suppress the right of American citizens to express themselves. Such acts of intimidation fall outside the bounds of acceptable state behavior. The FBI takes seriously any attempt – whether through cyber-enabled means, threats of violence, or otherwise – to undermine the economic and social prosperity of our citizens.
The FBI stands ready to assist any U.S. company that is the victim of a destructive cyber attack or breach of confidential business information. Further, the FBI will continue to work closely with multiple departments and agencies as well as with domestic, foreign, and private sector partners who have played a critical role in our ability to trace this and other cyber threats to their source. Working together, the FBI will identify, pursue, and impose costs and consequences on individuals, groups, or nation states who use cyber means to threaten the United States or U.S. interests.
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United States Attorney’s Office Announces Sentencing of Local Businessman on Identity Theft ChargesRead the Press Release
Indianapolis man defrauded taxpayers and government of nearly $890,000
INDIANAPOLIS – Josh J. Minkler, Acting United States Attorney, announced today the sentencing of an Indianapolis businessman found guilty of theft of government money and aggravated identity theft. Basilio Estevez, 61, was sentenced 36 months in federal prison by U.S. District Judge Richard L. Young.
“Identity theft is one of the fasting growing crimes in our country, said Minkler. “When you our social security numbers and dates of birth are stolen by people like today’s defendant, we feel personally violated.”
In February 2012, Estevez purchased a check cashing business called Rodriguez Check Cashing (RCC) in Indianapolis. Estevez then opened several bank accounts under the business name RCC. From February 2012 through April 2013, investigators identified 84 fraudulent tax refund checks deposited into the RCC account totaling over $889,000. Half of the checks were directed to addresses in New York and New Jersey; the other 42 were directed to addresses in Indianapolis.
Background investigations of the individuals listed as tax payers were revealed to be residents of Puerto Rico and never lived at the address where the fraudulent refund checks were mailed. All the refund checks used Form W-2’s using false wages and federal withholding information. Estevez withdrew a large amount of money from the RCC account in cash for his personal use.
A “decoy” IRS refund check was sent to Estevez’s Indianapolis residence in April 2013, and deposited into the RCC account which eventually led to his arrest.
This case is the result of a collaborative effort by the United States Postal Inspection Service and the U.S. Attorney’s Office. Investigators with the Postal Inspection Service provided key information in securing Estevez’s conviction and sentencing today.
According to Assistant U.S. Attorney Winfield D. Ong, who prosecuted the case for the government, Estevez faces three years of supervised release after his sentence and must pay $889, 000 in restitution to the U.S. Government.
United States Attorney Tristram J. Coffin Submits ResignationRead the Press Release
United States Attorney Tristram J. Coffin submitted his letter of resignation to President Obama today, effective January 12, 2015.
Mr. Coffin was among the first of the U.S. Attorneys appointed by President Obama, serving since August 2009. Mr. Coffin stated that he was incredibly grateful to President Obama for the opportunity to serve in his administration, and very proud of the accomplishments and transition the Department of Justice made under Attorney General Eric Holder. Mr. Coffin also thanked Senator Patrick Leahy for his trust and steadfast support during his tenure.
“It has been the highest honor of my professional career to serve the people of Vermont and the United States seeking justice under the leadership of Attorney General Holder and President Obama,” Coffin said. “I am also so grateful for the trust Senator Leahy placed in me by recommending me for this position, and by his support for our efforts throughout my time in the job.”
Mr. Coffin also commended his colleagues at the U.S. Attorney’s Office, where he served as a line prosecutor for twelve years prior to his appointment. “The prosecutors and staff of this office are second-to-none in the country,” Coffin said. “Leaving such a dedicated and talented team of colleagues and friends is definitely bitter-sweet.” Coffin also wished to thank the many federal, state and local law enforcement agencies, as well as community groups from outside of law enforcement, who provided pivotal assistance to the efforts of the United States Attorney’s Office. “Partnerships and collaboration are absolutely essential to effective law enforcement in the modern era. I am so thankful for our terrific partners throughout the state.”
During his time as Vermont’s head federal prosecutor, Mr. Coffin prioritized combatting Vermont’s expanding opiate problem using a multi-faceted approach that combined aggressive law enforcement with greater emphasis on treatment and prevention. Along with dedicating substantial federal resources to heroin prosecutions, this effort began with convening a statewide conference of law enforcement, treatment and prevention experts in Montpelier in September 2010, keynoted by Attorney General Holder and Senate Judiciary Committee Chairman Leahy. Coffin also worked with Skip Gates, the father of a fatal heroin overdose victim, to produce the award-winning film “The Opiate Effect.” Together they spoke at scores of Vermont high schools, middle schools and parent groups about the risks of opiate use and other high risk behaviors.
On the enforcement side, Coffin advocated expanding heroin investigations and prosecutions to areas outside of Chittenden County newly afflicted by heroin trafficking, emphasizing the importance of federal collaboration with partners from state and local law enforcement throughout the state. The United States Attorney’s Office is currently developing a plan to dedicate four of its strongest narcotics prosecutors specifically to combatting heroin trafficking.
In addition, Coffin emphasized prosecution of financial crimes, child exploitation cases and serious violent crimes during his tenure. On the civil litigation side, Coffin worked to expand litigation to recover money for taxpayers from government contractors and the recipients of federal funds, and to expand federal civil rights work in Vermont. “I am particularly proud of the work our office has done on increasing access for Americans with disabilities through our accommodations work and our interventions in cases such as the Deanna Jones case.” Jones was a visually impaired law student who successfully challenged, with assistance from the Department of Justice, bar exam testing requirements for the visually impaired.
On the national policy front, Coffin co-chaired the Criminal Practice Subcommittee of the Attorney General’s Advisory Committee from the earliest days of the administration up to the time of his resignation. This subcommittee advised the Attorney General on a number of key issues relating to charging and sentencing reform, improving the Department of Justice’s discovery practice, and helped develop a new protocol for taping of custodial interrogations and a new process for handling witness information of government witnesses. Coffin also served on the Attorney General’s Health Care Fraud Working Group and the Environmental Enforcement subcommittee.
After his resignation in January, Coffin will join the partnership of a local Vermont law firm. His practice will consist of representing clients in Vermont and regionally in complex civil litigation and government enforcement matters.
Two Remaining Colombian Nationals Involved in the Kidnapping and Murder of DEA Agent Terry Watson Plead GuiltyRead the Press Release
All Seven Defendants Charged Have Now Been Convicted
Two Colombian nationals pleaded guilty today to second degree murder and conspiracy to kidnap an internationally protected person for their roles in the kidnapping and murder of Drug Enforcement Administration (DEA) Special Agent James “Terry” Watson in Bogotá, Colombia, on June 20, 2013.
Attorney General Eric H. Holder, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, DEA Administrator Michele M. Leonhart and Bill A. Miller, Director, U.S. State Department’s Diplomatic Security Service made the announcement.
“The Department of Justice has now obtained pleas for all seven individuals charged with the kidnapping and murder of Special Agent Watson, as well as the attempt to cover up the crime,” said Attorney General Eric Holder. “Although this marks an important milestone in our effort to achieve justice for a fallen hero, our work is far from over. The Justice Department will never rest in its commitment to honor the service, and the profound sacrifice, of Special Agent Watson and so many other courageous men and women in federal law enforcement. And we will never waver in our pursuit of criminals who target or seek to harm Americans anywhere in the world.”
“Special Agent Terry Watson’s kidnapping and murder resulted in a loss that will always be felt by the men and women of DEA,” said DEA Administrator Michele M. Leonhart. “Today’s admission of guilt brings us closer to ensuring that justice is served in this tragedy. DEA will never forget Terry’s outstanding career and the work he did with our global partners in the shared fight against international drug traffickers.”
In the statements of facts filed with their plea agreements, Omar Fabián Valdes Gualtero, 28, and Édgar Javier Bello Murillo, 28, both of Bogotá, admitted that they conspired with four other individuals— Edwin Gerardo Figueroa Sepúlveda, Julio Estiven Gracia Ramírez, Héctor Leonardo López, and Andrés Álvaro Oviedo García—to conduct “paseo milionarios” or “millionaire’s rides” in which victims were lured into taxi cabs, kidnapped, and then robbed. Valdez Gualtero admitted that he was responsible for helping to organize the robbery crew and obtaining disposable cell phones for use during the robberies. Both defendants admitted that on the evening of June 20, 2013, their robbery crew targeted Special Agent Watson outside of a restaurant in Bogotá. Gracia Ramírez picked up Special Agent Watson in his taxi, while López drove a second taxi carrying Valdes Gualtero, Bello Murillo and Figueroa Sepúlveda. After Gracia Ramírez pretended to have mechanical trouble and stopped the taxi, Bello Murillo and Figueroa Sepúlveda entered the back seat with Special Agent Watson. A struggle ensued and Figueroa Sepúlveda shocked Special Agent Watson with a stun gun while Bello Murillo stabbed him at least four times. Special Agent Watson was able to escape from the taxi, but he later collapsed and died from his injuries.
In total, seven defendants were arrested and extradited from Colombia to the United States to face charges in connection with Special Agent Watson’s murder and the subsequent attempt to cover up the crime. Six defendants were charged with murder and conspiracy to kidnap. A seventh defendant, Wilson Daniel Peralta-Bocachica, was charged with obstruction of justice for his role in cleaning the victim’s blood from the backseat of the taxi. All of the defendants have pleaded guilty for their roles in this incident. Gracia Ramírez, López, and Oviedo García were sentenced on Dec. 14, 2014, to 20 years, 25 years, and 27 years, in prison respectively. Figueroa Sepúlveda and Peralta-Bocachica are scheduled to be sentenced on Feb. 18, 2015. Valdes Gualtero and Bello Murillo are scheduled to be sentenced on April 10, 2015.
This case was investigated by the FBI, DEA and the Diplomatic Security Service, in close cooperation with Colombian authorities and with assistance from INTERPOL and the Justice Department’s Office of International Affairs. The case is being prosecuted by Special Counsel Stacey Luck of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Michael P. Ben’Ary of the U.S. Attorney’s Office of the Eastern District of Virginia.
The Department of Justice gratefully acknowledges the Colombian Attorney General’s Office, Colombian National Police, Colombian Directorate of Criminal Investigation and Interpol (DIJIN), DIJIN Special Investigative Unit, Bogotá Metropolitan Police, Bogotá Police Intelligence Body (CIPOL) Unit and Colombian Technical Investigation Team for their extraordinary efforts, support and professionalism in responding to this incident.
Two Fresno Men Indicted for Firearm Possession After Being Convicted of A FelonyRead the Press Release
FRESNO, Calif. — A federal grand jury in Fresno returned two indictments yesterday charging two defendants with possessing a firearm after being convicted of a felony, United States Attorney Benjamin B. Wagner announced.
According to the first indictment, officers conducted a probation search at the residence of Kenneth Benton, 26, of Fresno, and found a loaded 9mm Luger firearm on a shelf next to a bag containing 13 rounds of ammunition. Benton was convicted of felonies in Fresno County Superior Court in 2007, 2008, and 2014, and is prohibited from possessing a firearm. This case is the product of an investigation by the Fresno Police Department’s Violent Crime Impact Team (VCIT).
According to the second indictment, officers conducted a probation search of the residence of Juan Carlos Negrete, 23, of Fresno, and found a loaded 40‑caliber semi‑automatic handgun. Negrete was convicted of felonies in Fresno County Superior Court in 2011 and 2012 and is prohibited from possessing a firearm. This case is the product of an investigation by the Multi-Agency Gang Enforcement Consortium (MAGEC).
If convicted, Benton and Negrete each face up to 10 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt. Assistant United States Attorney Laurel J. Montoya is prosecuting both cases.
Two Clarksburg Men Arrested for Heroin TraffickingRead the Press Release
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(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – Authorities in Harrison County recovered large quantities of heroin and U.S. currency, along with marijuana, numerous prescription pills, and firearms, during law enforcement operations yesterday, United States Attorney William J. Ihlenfeld, II, announced.
While executing two federal search warrants obtained by the Greater Harrison County Drug Task Force for residences in Clarksburg, the West Virginia State Police recovered nearly 400 stamp bags of heroin and U.S. currency from 30-year-old Jason Grant. The Task Force is a HIDTA-funded initiative.
Additionally, officers from the Clarksburg Police Department, including one assigned to the Mountaineer Highway Interdiction Team (“MHIT South”), recovered approximately 400 stamp bags of heroin, ammunition, and a cellular telephone from 33-year-old Al Teric Garrett.
Grant and Garrett, both Clarksburg, West Virginia residents, are in federal custody after being named in separate criminal complaints charging them each with “Possession with Intent to Distribute Heroin.” A complaint is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Traveler who Admitted to Threatening to Blow up MIA Pleads GuiltyRead the Press Release
Philadelphia resident who traveled to Miami pled guilty today for making false threats to blow up Miami International Airpot (MIA).
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and J.D. Patterson, Jr., Director, Miami-Dade Police Department (MDPD), made the announcement.
According to court documents, on September 2, 2014, Joseph Reyes Rivera, 23, of Philadelphia Pennsylvania, and his stepfather were traveling from Puerto Rico to Philadelphia, with a connecting flight through MIA. As Rivera walked through Concourse E, the he shouted, “I am going to blow this place up!”
A schoolteacher and a law enforcement officer from London, England overheard Rivera. Concerned for the safety of fellow travelers, the law enforcement officer from London sought out local officials. As he did, the officer noticed a hysterical woman speaking to law enforcement and pointing towards Rivera. Law enforcement officers from FBI and Miami-Dade Police Department made contact with Rivera and his companion who both stated that Rivera threatened to blow up the airport in the presence of several people who appeared to hear the statement. Law enforcement officers searched Rivera and did not find any firearms, explosive devices, or other materials that could be used to effectuate his threat. For that reason, his statement was deemed to be a false threat.
When questioned, Rivera told law enforcement officers that he started yelling at some children who were “disrespecting” him. Rivera indicated that a woman he did not know approached him and told him to leave the children alone. Rivera said he felt disrespected and yelled, “I am going to blow this place up.”
Rivera is scheduled to be sentenced on March 3, 2015, at 9:00 a.m., before U.S. District Judge Cecilia M. Altonaga. At sentencing, he faces up to five years imprisonment.
Mr. Ferrer commended the investigative efforts of the FBI and Miami-Dade Police Department, who are members of the Miami Joint Terrorism Task Force. The matter is being prosecuted by Assistant U.S. Attorney Brooke C. Watson.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Tax Return Preparers Convicted of Assisting Wealthy Clients Hide Millions in Secret Offshore Accounts at Israeli BanksRead the Press Release
A federal jury sitting in Los Angeles today convicted two California tax return preparers of one count of conspiracy to defraud the Internal Revenue Service (IRS) and two counts of willfully failing to file a Report of Foreign Bank and Financial Accounts (FBAR) announced Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department’s Tax Division, Acting U.S. Attorney Stephanie Yonekura for the Central District of California, and Chief of the IRS-Criminal Investigation Rich Weber.
According to the second superseding indictment and evidence introduced at trial, David Kalai and Nadav Kalai were principals of United Revenue Service Inc. (URS), a tax preparation business with 12 offices located throughout the United States. David Kalai worked primarily at URS’s former headquarters in Newport Beach, California, and later at URS’s location in Costa Mesa, California. Nadav Kalai, who is David Kalai’s son, worked out of URS’s headquarters in Bethesda, Maryland, as well as the URS locations in Newport Beach and Costa Mesa. David Almog was the branch manager of the New York office of URS and supervised tax return preparers for URS’s East Coast locations.
U.S. citizens, resident aliens and legal permanent residents have an obligation to report to the IRS on Schedule B of the U.S. Individual Income Tax Return, Form 1040, whether they had a financial interest in, or signature authority over, a financial account in a foreign country in a particular year by checking “yes” or “no” in the appropriate box and identifying the country where the account is maintained. They further have an obligation to report all income earned from the foreign financial account on the tax returns. Separately, U.S. citizens, resident aliens and legal permanent residents with a foreign financial interest in, or signatory authority over, a foreign financial account worth more than $10,000 in a particular year must also file an FBAR with the U.S. Treasury disclosing such an account by June 30th of the following year.
“As the defendants in this case have learned, hiding income and assets offshore is not tax planning; it’s tax fraud,” said Chief Richard Weber IRS-Criminal Investigation. “There is no secret formula that can eliminate an individual’s tax obligations. Today’s verdict reinforces our commitment to every American taxpayer that we will identify and prosecute those who implement off-shore tax schemes designed to evade the payment of taxes.”
The second superseding indictment and the evidence introduced at trial established that the co-conspirators prepared false individual income tax returns that did not disclose the clients’ foreign financial accounts nor report the income earned from those accounts. In order to conceal the clients’ ownership and control of assets and to conceal the clients’ income from the IRS, the co-conspirators incorporated offshore companies in Belize and elsewhere and helped clients open secret bank accounts at the Luxembourg locations of two Israeli banks, Bank A and Bank B. Bank A is a large financial institution headquartered in Tel -Aviv, Israel, with branches worldwide. Bank B is a mid-size financial institution, also headquartered in Tel Aviv, with a presence on four continents.
As further proven at trial, the co-conspirators incorporated offshore companies in Belize and elsewhere to act as named account holders on the secret accounts at the Israeli banks. The co-conspirators then facilitated the transfer of client funds to the secret accounts and prepared and filed tax returns that falsely reported the money sent offshore as a false investment loss or a false business expense. The co-conspirators also failed to disclose the existence of, and the clients’ financial interest in and authority over, the secret accounts and caused the clients to fail to file FBARs with the U.S. Treasury.
“The Kalais created sham foreign corporate entities and used banks in Luxembourg and Israel as havens for hiding their U.S. clients’ money from the U.S. government,” said Acting Deputy Assistant Attorney General Wszalek. “Today’s guilty verdict sends a clear message that those professionals who facilitate tax evasion through the use of offshore bank accounts will be held accountable for their criminal conduct. The Tax Division will continue its vigorous tax enforcement efforts in prosecuting return preparers, bankers, and other facilitators who assist clients in concealing assets offshore.”
The evidence at trial established that David Kalai and Nadav Kalai each failed to file FBARs for calendar years 2008 and 2009 concerning a foreign account held at Bank A in Luxembourg. The bank account was held in the name of a nominee corporation in Belize and held over $300,000.
Sentencing is scheduled for March 16, 2015.
This case was prosecuted by Trial Attorneys Christopher S. Strauss and Ellen M. Quattrucci of Tax Division, with the assistance of Assistant U.S. Attorney Sandra R. Brown for the Central District of California, and was investigated with the assistance of the IRS.
St. Helena Hospital Agrees to Pay $2.25 Million to Settle False Claims Act AllegationsRead the Press Release
SAN FRANCISCO – St. Helena Hospital, an acute care hospital within the Adventist Health System, has agreed to pay the United States $2,250,000 to settle allegations that it submitted false claims to Medicare for certain cardiac procedures and related inpatient admissions, United States Attorney Melinda Haag announced today.
The settlement resolves allegations that St. Helena Hospital knowingly charged Medicare for medically unnecessary percutaneous coronary interventions during the period Jan. 1, 2008 through July 31, 2011. Percutaneous coronary intervention, commonly referred to as angioplasty, is a procedure to open narrowed or blocked blood vessels that supply blood to the heart. The United States also alleged that St. Helena Hospital unnecessarily admitted angioplasty patients who should have been treated on a less costly, outpatient basis.
This settlement resolves a lawsuit filed in the U.S. District Court for the Northern District of California by Kacie Carroll, a former employee of St. Helena Hospital, under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens to bring lawsuits on behalf of the United States and obtain a portion of the government’s recovery. Carroll will receive $450,000.
Assistant U.S. Attorney Steven J. Saltiel handled the matter on behalf of the U.S. Attorney?s Office, with the assistance of Michael Zehr and Kathy Terry.
The case is captioned United States ex rel. Carroll v. Adventist Health Systems, et al., Case No. CV-10-4925 DMR. The claims resolved by this settlement are allegations only and there has been no determination of liability.
Slovakian Man Indicted for Business Directory ScamRead the Press Release
Follow @SDILNewsWolfgang Valvoda, 44, who did business out of Bratislava, Slovakia, was indicted by a federal grand jury for his role in an international mass marketing business directory scheme which defrauded consumers throughout the United States and Canada, including victims in Madison and Richland counties in the Southern District of Illinois, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today. The grand jury charged Valvoda with one count of conspiracy to commit mail fraud and two counts of mail fraud. If convicted, each count subjects Valvoda to a term in federal prison of up to 20 years, a fine of up to $250,000 and three years of supervised release.
As alleged in the Indictment, Valvoda worked for Construct Data Publishers, a.s., a corporation based in Bratislava, Slovakia, and related companies. Using deceptive mailings, Valvoda attempted to deceive businesses and nonprofit organizations in the United States and other countries to pay for unordered listings. Businesses were led to believe that the form sent by Valvoda, then signed and returned by the victim, was only for verification of information in a free listing for a particular trade show that the business regularly attended and not an order for an expensive listing in a different and worthless Internet directory called Fairguide.
On April 17, 2013, the Federal Trade Commission obtained a court-ordered preliminary injunction against Valvoda and Construct Data Publishers, a.s., which prohibited further deceptive mailings. The Federal Trade Commission investigated this scheme and brought a civil complaint in the United States District Court for the Northern District of Illinois in Chicago (Case Number 13 CV 1999). The Indictment also alleges that from 2010 to 2013, over 1000 businesses across the country were scammed by Valvoda and Construct Data Publishers, a.s. out of more than $2 million.
These prosecutions follow an investigation by the Midwest Region Office of the Federal Trade Commission and the St. Louis Field Office of the Chicago Division of the United States Postal Service. This prosecution will be handled by Assistant United States Attorneys Michael J. Quinley and Bruce E. Reppert.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proven guilty beyond a reasonable doubt to the satisfaction of a jury.
Seven Defendants Sentenced Recently for Roles in Nationwide Foreclosure Rescue ScamRead the Press Release
SACRAMENTO, Calif. — Seven defendants were sentenced recently for a huge mortgage fraud scheme that was charged in 2008. A federal grand jury brought two indictments that charged 19 people in a fraud scheme that promised to help homeowners avoid foreclosure and repair their credit. Most defendants have pleaded guilty or have been convicted by juries. The leaders, brothers Charles Head and Jeremy Michael Head, have been sentenced to 35 years and 10 years in prison respectively.
On December 10, 2014, United States District Judge Kimberly J. Mueller sentenced Benjamin Budoff to four years in prison. Judge Mueller sentenced, Leonard Bernot to 18 months in prison on Monday; on Wednesday, sentenced Akemi Bottari, on to three years’ probation; and on Thursday, sentenced Omar Sandoval to four years and 10 months in prison and Lisa Vang to three years’ probation. On Friday, Judge Mueller sentenced Andrew Vu to six months in prison, to be followed by six months of home detention, and Sarah Mattson was sentenced to three months of home detention.
In November, Kou Yang was sentenced to four years in prison, Joshua Coffman was sentenced to 20 months in prison, Justin Wiley was sentenced to 18 months in prison, and Elham Assadi was sentenced to six months of home detention.
According to court documents, the Head brothers and their associates solicited homeowners facing foreclosure, promising them that they would help the homeowners avoid foreclosure and repair their credit. Instead, through misrepresentations, fraud and forgery, the defendants substituted straw buyers for the victim homeowners on the titles of properties without the homeowners’ knowledge. These straw buyers were often friends and family members of the defendants. Once the straw buyers were on title to the homes, the defendants applied for mortgages to extract the maximum available equity from the homes. The defendants then shared the proceeds of the ill-gotten equity and the “rent” that the victim homeowners paid them. Ultimately, the victim homeowners were left with no home, no equity, and with damaged credit ratings. Between January 2004 and March 2006, the scam netted more than $15 million in fraudulently obtained funds from scores of homeowners, many of whom were in California.This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. Assistant United States Attorneys Michael D. Anderson and Matthew G. Morris are prosecuting the case.
To date, all but four of the 19 defendants have been sentenced: Charges were dismissed against one defendant, one defendant is scheduled to be sentenced in January 2015, and charges remain pending against two defendants.
This case was part of the President’s Financial Fraud Enforcement Task Force, established to wage an aggressive, coordinated effort to investigate and prosecute financial crimes. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes. For more information on the task force, please visit www.StopFraud.gov.
San Francisco Man Pleads Guilty to Tax Fraud SchemeRead the Press Release
OAKLAND – Juancho Tango Andres pleaded guilty in federal court today for his role in a false tax refund scheme, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Andrew Toth.
In pleading guilty, Andres admitted that he had a history of problems with substance abuse. To obtain the funds necessary to support his drug problem, Andres intentionally devised a scheme to defraud the United States by filing false tax returns claiming tax refund payments for 2010, 2011 and 2012.
Andres used an identification information form, ID-Doc, created by Sean Cowgill, to obtain the means of identification of actual persons. The ID-Doc required the person’s name, date of birth, and Social Security number. The ID-Doc also sought their income, number of dependents, expenses, and type of work. Andres trained and used recruiters to convince people to complete the ID-Doc by telling them they were being screened for eligibility for a President Obama sponsored stimulus program. Andres explained to his victims that they could qualify for a refund even if they did not work at all during the year.
Andres intentionally sought out homeless and low-income people to complete the ID-Doc, recruiting from various drug rehabilitation centers located throughout the San Francisco Bay Area, such as Hayward Fellowship and the East Oakland Recover Center. Andres also recruited people while they were waiting in a food line outside of St. Vincent DePaul Church, located in Oakland. During the time Andres recruited people for the tax refund scheme, Guadalupe Nieves and Andres were house managers at a halfway house, located in San Leandro. Nieves and Andres recruited members of the halfway house to participate in the tax refund scheme. Andres listed the address of the halfway house as the primary residence address on the false tax returns he prepared, even if purported filer had never lived there.
Andres also opened up a joint Wells Fargo bank account with Nieves for the sole purpose of receiving fraudulent tax refunds. Once the refunds were received in the mail or in the bank account, Andres instructed the people in whose names he filed false tax returns to meet with him so he could provide them with a portion of their fraudulent refund. He met a number of people in the parking lot of a coffee shop located in San Leandro. Andres and Nieves set up a table in the parking lot and passed out money to the people he arranged to meet. Nieves paid an individual with fraudulent tax refund proceeds to provide security while they distributed the money in the coffee shop Starbucks parking lot.
Sean Cowgill provided Andres and Nieves with the blueprint for operating the false tax refund scheme. In return, Andres and Nieves paid Cowgill a $50 “franchise fee” for each fraudulent tax refund.
Andres, 47, of San Francisco, was indicted by a federal Grand Jury on July 23, 2013. He was charged with one count of wire fraud in violation of 18 U.S.C. § 1343 and one count of aggravated identity theft in violation of 18 U.S.C. § 1028A(a)(1) and (c)(5). According to the plea agreement, Andres pleaded guilty to wire fraud. As part of the plea agreement, Andres has agreed to pay restitution in the amount of $444,687.
Andres is scheduled to be sentenced on April 2, 2015 at 3:00 pm before the Honorable Yvonne Gonzalez Rogers, United States District Court Judge, in Oakland. The maximum statutory penalty for each count of wire fraud in violation of 18 U.S.C. § 1343 is 20 years in prison and a fine of $250,000 or twice the gross gain or loss, which is greater. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Thomas Moore is the Assistant U.S. Attorney who is prosecuting the case. The prosecution is the result of an investigation by the IRS, Criminal Investigation.
Rutland Man, Tony Eldien, Sentenced to 36 Months in Jail for Distributing Heroin and Crack Cocaine in Rutland, VermontRead the Press Release
Tristram J. Coffin, the United States Attorney for the District of Vermont, stated that Tony Eldien, 28, of Fairhaven, Vermont was sentenced yesterday by J. Garvan Murtha, United States District Judge, to 36 months in jail for conspiring to distribute heroin and cocaine base. Eldien was also sentenced to a term of supervised release of 3 years once he completes his prison term.
According to Court records, Tony Eldien was working for Melvin George, also sentenced to 60 months in jail today, to distribute crack cocaine and heroin in Vermont. Eldien sold drugs to Melvin George’s drug customers at various locations in Rutland, Vermont. The Southern Vermont Drug Task Force, with the assistance of a confidential informant, made two purchases of controlled substances directly from Eldien at locations in Rutland, Vermont.
Eldien was indicted by a federal grand jury on September 11, 2013 and appeared in U.S. District Court for an arraignment on March 6, 2014. He was detained in prison pending trial. Eldien pled guilty on July 31, 2014 to Count 1 of the Indictment charging him with conspiracy to distribute heroin and cocaine base.
The case was investigated by the Southern Vermont Drug Task Force. The United States Attorney, Tristram J. Coffin, commends the Drug Task Force for their work in this matter. The case was prosecuted by Assistant United States Attorney, Nancy J. Creswell. Eldien was represented by Attorney Jason Sawyer.
Reynoldsburg Man Sentenced for Distributing Child PornographyRead the Press Release
COLUMBUS – James F. Druggan, Jr., 65, of Reynoldsburg, was sentenced in U.S. District Court to 10 years in prison and 10 years of supervised release for distributing child pornography.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, John Barrios, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, Westerville Police Chief Joseph Morbitzer, Reynoldsburg Police Chief Jim O’Neill and Powell Police Chief Gary L. Vest announced the sentence handed down yesterday by U.S. District Judge Peter C. Economus.
According to court documents, Druggan used an e-mail account to communicate with two different undercover agents, one posing as a 13-year-old female and one posing as the parent of three minor children. The defendant sent numerous child pornography files to each of the undercover officers via e-mail.
Druggan pleaded guilty on May 8, 2014, to one count of distributing child pornography.
“Crimes involving child pornography exacerbate the sexual victimization of the most vulnerable members of our society,” Assistant U.S. Attorney Heather A. Hill told the court. “This is not a victimless crime, but a crime that infinitely perpetuates the pain and suffering of the children that were abused to produce the images and videos that the defendant and others like him seek for their own deviant interests.”
This case was brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
U.S. Attorney Stewart commended the cooperative investigation by the FBI Child Exploitation Task Force, as well as Assistant United States Attorney Heather A. Hill, who is representing the United States in this case.Reno Man Pleads Guilty to Possession of Marijuana with Intent to DistributeRead the Press Release
SACRAMENTO, Calif. —Kevin Dennis Golden, 39, of Reno, Nevada, pleaded guilty today to possession of marijuana with intent to distribute, United States Attorney Benjamin B. Wagner announced.
According to court documents, on December 14, 2012, law enforcement agents went to the Lincoln airport as part of an investigation into a suspicious Cessna airplane that had been making frequent flights from California to the Midwest and East Coast. After the plane landed, the pilot was seen going into the pilot’s lounge. Approximately an hour later, Golden drove up to the airplane and removed three black suitcases and a backpack from his vehicle and placed them inside the airplane. Golden then drove to a nearby parking lot, parked, and walked back to the airplane. When agents approached Golden at the plane, they obtained consent from Golden to look inside the suitcases. They discovered multiple vacuum-sealed bags of marijuana. An additional bag of marijuana was found in the smaller backpack that also contained Golden’s identification. A total of 40 kilograms (88 pounds) of marijuana were taken out of the suitcases and backpack.
“The use of private planes and small private airports to distribute controlled substances is a known and continuing problem within the Eastern District of California,” U.S. Attorney Benjamin Wagner stated. “Persons involved in such activity should understand that they face prison, large fines, and, in appropriate cases, forfeiture of vehicles and aircraft used to engage in such activity.”
This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with the assistance of the Lincoln Police Department and the Placer County Sheriff’s Office.
Golden is scheduled to be sentenced by United States District Judge Garland E. Burrell Jr. on March 27, 2015. Golden faces a maximum statutory penalty of five years in prison and a $250,000 fine. The actual sentence, however, will be determined by the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.Pike Road Man Sentenced for Stolen Identity Refund Fraud Using Names Stolen from Nursing HomesRead the Press Release
Montgomery, Alabama - A Pike Road, Alabama man was sentenced to serve 51 months in prison yesterday for committing stolen identity refund fraud (SIRF) crimes, announced U.S. Attorney George L. Beck Jr. for the Middle District of Alabama and Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department’s Tax Division.
Charlie Jackson, 37, pleaded guilty to wire fraud and aggravated identity theft on May 5, 2014. In addition to his prison sentence, Jackson was ordered to serve three years of supervised release following his incarceration and to pay $98,177 in restitution.
According to court documents, from October 2010 up until April 2013, Jackson was involved in SIRF crimes—the use of stolen identities to steal money from the Internal Revenue Service (IRS)—by filing fraudulent tax returns claiming refunds in the victims’ names. He admitted to obtaining stolen identities from various sources, including from nursing homes. Altogether, the false tax returns filed by Jackson fraudulently claimed more than $170,000 in refunds. Many of the returns were detected as fraudulent by the IRS and were not issued; however, Jackson was successful in defrauding the IRS of more than $90,000 in illegitimate refunds.
This case was investigated by special agents of the IRS-Criminal Investigation. Trial Attorneys Michael C. Boteler and Charles M. Edgar Jr. of the Tax Division prosecuted the case with the assistance of Assistant U.S. Attorney Todd Brown of the U.S. Attorney’s Office for the Middle District of Alabama.
Additional information about the Tax Division and its enforcement efforts may be found on the division website at justice.gov/tax.
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Telephone: (334) 551-1755
Fax: (334) 223-7617- Passenger Indicted for Interfering with A Flight Crew
Owner of Three Home Health Care Agencies Indicted on New Charges in Investigation of Medicaid FraudDefendant Was Among Those Arrested Earlier This Year in Largest Health Care Fraud Takedown in D.C. HistoryRead the Press Release
WASHINGTON –Florence Bikundi, the owner of three home care agencies, has been charged in a superseding indictment with six additional offenses related to a scheme to secure more than $75 million in District of Columbia Medicaid payments, even though she was barred from participating in any federal health care programs. The new charges include allegations that Bikundi and others conspired to bill the Medicaid program for services that were not provided.
Bikundi, 51, of Bowie, Md., has been in custody since her arrest in February 2014, following her indictment on one count of health care fraud, one count of Medicaid fraud, four counts of money laundering, and three counts of engaging in illegal monetary transactions. The superseding indictment, returned by a grand jury on Dec. 18, 2014, and unsealed today, includes those nine charges and adds six additional offenses against her, including one count of health care fraud; one count of conspiracy to commit health care fraud; one count of conspiracy to commit money laundering, and three additional counts of money laundering.
The superseding indictment charges eight other people with taking part in the fraudulent activities, including Bikundi’s husband, son, and two sisters.
The charges were announced by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office; Nicholas DiGiulio, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), for the region that includes Washington, D.C.; Kathy A. Michalko, Special Agent in Charge, Washington Field Office, U.S. Secret Service; Thomas J. Kelly, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI), and Daniel W. Lucas, Inspector General for the District of Columbia.
Bikundi, also known as Florence Ngwe and Florence Igwacho, is pending trial before the Honorable Beryl A. Howell in the U.S. District Court for the District of Columbia.
Bikundi was among more than 20 people charged in February 2014 following a wide-ranging investigation that uncovered numerous, separate schemes involving fraud, kickbacks, and false billings in the growing field of home care services for D.C. Medicaid beneficiaries. The case so far has generated 16 guilty pleas in the U.S. District Court for the District of Columbia and the Superior Court of the District of Columbia. Those pleading guilty include people who worked as personal care aides in the home care industry, patient recruiters who demanded money for access to Medicaid beneficiaries, and others.
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“This indictment charges Florence Bikundi and eight others with a conspiracy to defraud Medicaid through cash kickbacks, bogus paperwork, and services that were never provided,” said U.S. Attorney Machen. “We are seeking the forfeiture of $75 million in ill-gotten gains, including jewelry, luxury vehicles, and money stashed in dozens of accounts. This indictment is part of a broader crackdown on health care fraud that has resulted in 16 guilty pleas to date. These prosecutions demonstrate our commitment to defending the integrity of a program that serves the most vulnerable members of our community. We will continue to fight to protect taxpayer dollars and conserve resources for those truly in need.”
“The additional charges announced today outline that the owner and eight employees of a home health care company never provided services to residents who were part of the D.C. Medicaid program,” said Assistant Director in Charge McCabe. “This fraud steals from government programs designed to assist deserving patients. The FBI, with our partners at HHS-OIG, U.S. Secret Service, IRS, and D.C. OIG, will continue to investigate the exploitation of our health care system.”
“Our success in this case and similar investigations is a result of our close work with law enforcement partners,” said Special Agent in Charge Michalko. “The Secret Service worked closely with the FBI, the U.S. Department of Health and Human Services, and a variety of other federal and state partners to share information and resources that ultimately led to the indictment of Florence Bikundi. This case demonstrates there is no such thing as anonymity for those engaging in health care fraud and illegal schemes.”
“Health care fraud schemes are complex and involve intense focus on many details, especially when so many wrongdoers are working together to commit fraud,” said Inspector General Lucas. “This scheme perpetuated against the District’s Medicaid program is no different. It is because of our concentrated efforts, working with other law enforcement entities, that we were able to continue the work necessary to bring this superseding indictment. We will continue those efforts after today.”
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Medicaid provides for home care services to be performed by personal care aides, working for eligible home care agencies. The aides assist Medicaid beneficiaries in performing activities of daily living, such as getting in and out of bed, bathing, dressing, keeping track of medication, and so forth. In order to be covered for such benefits, the beneficiaries must get a doctor’s prescription.
According to the superseding indictment, Bikundi owns two entities named Global Healthcare, Inc., and one named Flo-Diamond Inc. In April 2000, according to the indictment, HHS-OIG notified Bikundi in writing that she was excluded from participation in Medicare, Medicaid, and all federal health care programs. This notice was based on the revocation the previous year of Bikundi’s nursing license in Virginia. The exclusion was issued against Bikundi under her name of Florence Igwacho. Bikundi subsequently concealed her past when she secured Medicaid provider numbers for her businesses using the name of Florence Bikundi, the indictment alleges. She also did not disclose that her nursing licenses were revoked in Virginia, South Carolina and the District of Columbia, the indictment alleges.
In violation of the terms of her exclusion, between July 2007 and early 2014, according to the indictment, Bikundi’s entities received more than $78 million in payments from Medicaid; of this, $75 million came from the District of Columbia program and the rest from Maryland.
The new charges against Bikundi include allegations that she also participated in a wide-ranging scheme to defraud the Medicaid program by billing the program for services that were not provided. The indictment alleges that cash payments were made by employees of Bikundi’s companies to Medicaid beneficiaries in exchange for signatures falsely stating that services had been provided. According to the superseding indictment, Bikundi and employees of her companies also falsified patient files and employee files to make it appear as though the claims for payment were legitimate when they were not.
The superseding indictment also alleges that Bikundi and her husband, Michael D. Bikundi, Sr., 52, conspired to launder the proceeds of the illegally obtained Medicaid funds and committed substantive money laundering violations.
In addition to Michael Bikundi, Sr., seven others were charged with health-care related offenses in the superseding indictment. All are employees and administrators of Bikundi’s company. They include three other relatives: Florence Bikundi’s son, Carlson M. Igwacho, 33, and two sisters, Irene M. Igwacho, 49, and Berenice W. Igwacho, 30, all of Bowie, Md.
Others charged include Christian S. Asongcha, 38, of Lanham, Md.; Elvis N. Atabe, 55, of Adelphi, Md.; Atawan Mundu John, 37, of Laurel, Md., and Melissa A. Williams, 31, of Bowie, Md. The indictment alleges that Melissa A. Williams and Atawan Mundu John tampered with witnesses during the law enforcement investigation of health care fraud.
The United States has seized over $11 million in funds and five luxury vehicles from Florence Bikundi and Michael Bikundi. The superseding indictment seeks a forfeiture money judgment of $75 million against the Bikundis and the forfeiture of the funds, vehicles, and the Bikundi residence.
**
The various investigations were conducted by the FBI’s Washington Field Office; the U.S. Department of Health and Human Services, Office of Inspector General; the U.S. Secret Service; the Medicaid Fraud Control Unit of the District of Columbia’s Office of the Inspector General; the Internal Revenue Service-Criminal Investigation; the U.S. Immigration and Customs Enforcement (ICE) Office of Homeland Security Investigations (HSI); the Office of Labor Racketeering and Fraud Investigations, Office of Inspector General, Department of Labor; the Social Security Administration, Office of Inspector General, and the Medicaid Fraud Control Unit of the Maryland Attorney General’s Office. Assistance was provided by the District of Columbia’s Department of Health Care Finance and other agencies.
The FBI has set up a hotline number to report suspected incidents of Medicaid fraud: 855-281-1242. People can also provide information by e-mail to [email protected].
HHS-OIG also has a hotline that can be reached at 800-HHS-TIPS or by clicking the “Report Fraud” tab on the agency’s website: http://oig.hhs.gov
These cases are being prosecuted by Assistant U.S. Attorneys Lionel André, Anthony Saler, Ted Radway, Michael Friedman, and Michelle Zamarin.
Assistance was provided by Forensic Accountant Maria Boodoo; Paralegal Specialists Toni Donato, Donna Galindo, Krishawn Graham, Tasha Harris, and Corinne Kleinman; Legal Assistants Angela Lawrence, Jessica McCormick, and Christopher Samson; Litigation Support Specialist Ron Royal, and Criminal Investigator Nicole Hinson, all of the U.S. Attorney’s Office.
14-284Owner of Seneca Falls Mortgage Brokerage Business Sentenced for Fraud SchemeRead the Press Release
CONTACT:Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Mary Brainard, 62, of Seneca Falls, NY, who was convicted of devising a wire fraud scheme, was sentenced to 46 months in prison U.S. District Judge Frank P. Geraci and ordered to pay restitution totaling $277,456.90.Assistant U.S. Attorney John J. Field, who handled the case, stated that Brainard and her husband, Calvin Brainard, a former attorney, owned and operated BMC Capital, a mortgage brokerage business in Seneca Falls, NY. Through BMC Capital, the couple brokered mortgages for various clients, including private mortgages purportedly made with monies provided to Mary Brainard by various individual investors.
Over the course of a decade or more, Mary Brainard swindled over a dozen investors and clients of BMC Capital out of approximately $762,000 using a variety of schemes. The defendant sought to cover her behavior through lies and deception, including by forging bank records and property records. In the final phase of her fraud, Mary Brainard stole loan proceeds that were supposed to be used to pay off refinancing clients’ mortgage loans. On multiple occasions, Mary Brainard accessed Calvin Brainard's attorney trust account that contained the refinancing money and diverted it to a different account that she controlled. The defendant then used the stolen refinancing money for her own purposes, including paying for personal expenses as well as repaying earlier victims of her frauds.
The sentencing is the culmination of an investigation by Special Agents and Forensic Accountants of the Federal Bureau of Investigation.
Owner of NYC Maintenance and Construction Company Sentenced in Manhattan Federal Court for Failing to Pay Payroll TaxesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Larry Wszalek, Acting Deputy Assistant Attorney General for the Tax Division of the Department of Justice, announced today that THOMAS NASTASI III, was sentenced to 12 months in prison for failing to pay to the Internal Revenue Service (“IRS”) more than $1.7 million in payroll taxes of his companies, Nastasi Maintenance LLC and Nastasi Maintenance & Construction, LLC. NASTASI pled guilty in August 2013 before U.S. District Judge Paul G. Gardephe, who also imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “The crime for which Thomas Nastasi has been sentenced was not a complex scheme. His companies worked on luxury buildings in New York. Rather than remit payroll taxes he owed, Nastasi spent the money buying luxury items for himself. Now, he not only has to pay the taxes he owed, he has to pay for his crime with a prison term as well.”
According to the Indictment and other documents filed in Manhattan federal court, as well as statements made during court proceedings:
From 2001 through 2011, NASTASI owned and operated several Manhattan construction and maintenance companies, including Nastasi Maintenance & Construction, which performs contracting work on such buildings as Rockefeller Center and the Chrysler Building. As the President of the companies, NASTASI was responsible for withholding payroll taxes from his employees and paying those taxes over to the IRS. Those taxes included the employees’ income taxes, Social Security, and Medicare taxes. NASTASI accumulated over $1.7 million in payroll taxes that were owed but never paid to the IRS. Those taxes also included the employer’s portion of Social Security and Medicare taxes for his employees.
Instead of paying the companies’ payroll taxes to the IRS, NASTASI used company funds to pay hundreds of thousands of dollars in personal expenses, including $67,000 in cigar purchases, a house in Mt. Kisco, and expenses related to his boat. NASTASI also made false statements to the IRS in the course of its attempts to obtain delinquent tax returns and collect the corporate and personal taxes owed by NASTASI and his companies.
In addition to his prison sentence, NASTASI, 48, of Mt. Kisco, New York, was sentenced to three years of supervised release, ordered to pay a fine of $60,000, and was also ordered to pay restitution to the IRS of $1,593,414 to be paid within 90 days.
Mr. Bharara thanked the IRS Criminal Investigation Division for its outstanding investigative work in this case.
Department of Justice Tax Division Senior Litigation Counsel Nanette L. Davis is in charge of the prosecution.
Okeechobee Man Pleads Guilty to Preparing False Tax ReturnsRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce that Wyman Pittman, 47, of Okeechobee, Florida, pled guilty today to one count of aiding in the preparation and presentation of false tax returns, in violation of Title 26, United States Code, Section 7206(2). Sentencing is scheduled for March 6, 2015, at 9:30 a.m., before U.S. District Judge Robin L. Rosenberg in Ft. Pierce. At sentencing, Pittman faces up to three years in prison.
According to court documents, Pittman was a paid tax preparer who, together with his former partner Ventrell Bouie, of Fort Pierce, Florida, had prepared individual income tax returns for customers from 2008 through 2012. Pittman assisted in the preparation of multiple, fraudulent tax returns by supplying false income and deduction figures, failing to review them in detail with the taxpayers, and then electronically filing them for the taxpayers.
Specifically, Pittman filed a Form 1040 income tax return for a taxpayer for the 2008 tax filing year. That Form 1040 tax return stated false itemized deductions for, among other things, medical expenses and work expenses. As a result, the taxpayer received an inflated and unmerited tax refund payment. Pittman knew that the taxpayer had not claimed, or provided to Pittman, the information regarding those deductions for inclusion in the tax return.
Bouie had been separately charged and convicted for identical offenses. On December 17, 2013, U.S. District Judge Jose E. Martinez sentenced Bouie to 24 months in prison for his offense.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case was prosecuted by Assistant U.S. Attorney Theodore M. Cooperstein.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Niagara Falls Man Sentenced on Gun 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 Joseph Clayton, 34, of Niagara Falls, NY, who was convicted of transferring a firearm to a prior felon, was sentenced to 24 months in prison by U.S. District Judge Richard J. Arcara.Assistant U.S. Attorney Mary Catherine Baumgarten, who handled the case, stated that from August 2010 through September, 2010, Clayton purchased three semi-automatic rifles and accessories. Documents obtained by law enforcement officers during the investigation demonstrate that the defendant acted as a straw purchaser and made false statements that he was buying the firearms for himself, when in fact he was purchasing the firearms for Daniel Hale, a known prior felon. Hale, as a prior felon, would have been unable to purchase the firearms himself. Clayton also admitted that co-defendant Eric Kaczor used a Dremel tool to obliterate the serial numbers on two of the rifles so the firearm purchases could not be traced back to the defendant.
Eric Kaczor was sentenced to 33 months in prison.
The sentencing is the culmination of an investigation on the part of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Acting Special Agent in Charge James S. Higgins and the Niagara Falls Police Department, under the direction of Chief Bryan DalPorto.
New York Man Sentenced to 24 Months in Prison for Odometer Fraud SchemeRead the Press Release
A Massapequa, New York, man was sentenced in U.S. District Court in Allentown, Pennsylvania, to serve 24 months in prison on charges related to an odometer tampering scheme, the Department of Justice announced today.
Edward Capicchioni, 54, was also ordered to pay $412,880 in restitution to victims who purchased vehicles without knowing the odometers were incorrect. In March 2014, Capicchioni pled guilty to one count of conspiracy to tamper with odometers.
Doing business under the company name of The General’s Auto Sales, Capicchioni sold more than 50 vehicles with rolled back odometers. According to the charges, Capicchioni purchased high-mileage cars, sport-utility vehicles and trucks from individual sellers in Maryland, New York, Pennsylvania, Rhode Island, and other states. Capicchioni then worked with a co-conspirator to roll back and alter the odometers and resold the vehicles at a wholesale auto auction in Pennsylvania. Capicchioni also took steps to hide his odometer fraud scheme. He checked the Carfax public database to see if it included a mileage that was higher than the tampered mileage. If the Carfax mileage was higher, Capicchioni submitted fraudulent documentation in the name of the vehicle’s prior owner in order to have the higher mileage reading removed from the database.
“Odometer tampering is a pervasive consumer fraud,” said Acting Assistant Attorney General Joyce R. Branda for the Department of Justice’s Civil Division. “We will continue to enforce these important consumer protection laws, and we will prosecute people who defraud vehicle purchasers by rolling back odometers on used cars.”
After Carfax discovered Capicchioni’s fraud scheme through an internal investigation, Carfax personnel alerted the National Highway Traffic Safety Administration (NHTSA) Office of Odometer Fraud Investigation. NHTSA conducted additional investigation into the full scope of Capicchioni’s criminal activities.
This case was prosecuted by Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch.
NHTSA estimates that odometer fraud in the U.S. results in consumer losses of more than $1 billion annually and has established a special hotline to handle odometer fraud complaints. Individuals having information relating to odometer tampering should call (800) 424-9393 or (202) 366-4761.
More information on odometer fraud is available on the NHTSA Odometer Fraud website. Tips on detecting and avoiding odometer fraud are available at this NHTSA page.
Monroe County Man Sentenced to Prison for Heroin TraffickingRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 21-year-old Tobyhanna man was sentenced to 10 months in prison today by Senior U.S. District Court Judge James M. Munley for distributing heroin in the Monroe County area between late 2013 and mid-2014.
According to United States Attorney Peter Smith, the defendant, Kyle Westry, previously pleaded guilty to distributing and possessing with intent to distribute multiple bricks of heroin. A brick of heroin consist of 50 small bags.
Westry was charged in a criminal Information filed by the United States Attorney on September 10, 2014, following an investigation by the Drug Enforcement Administration and the Monroe County Drug Task Force.
Judge Munley also ordered Westry to serve three years on supervised release following his prison sentence, and to pay a $100 special assessment.
The case was prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Miami-Dade County Resident Sentenced in Identity Theft Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and J. Scott Dennis, Chief, North Miami Beach Police Department, announce that Frenchy Thermidor, 25, of Miami, Florida, was sentenced today to 24 months in prison, to be followed by three years of supervised release, and was ordered to pay $700.00 in restitution.
Thermidor previously pled guilty to one count of possession of 15 or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(3), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1).
According to court documents, on April 20, 2011, an officer from the North Miami Beach Police Department conducted a traffic stop on a car driven by Thermidor. During a lawful search, the officer found a receipt in the name of another individual for an attempted ATM withdrawal from a checking account. A few days later, this individual told the officer that she did not know Thermidor and had not given him permission to use any card.
Court documents also state that on July 20, 2011, officers arrested the defendant based on suspicion of identity theft. The defendant gave officers consent to search the motel room where he was staying. During the search, police found a laptop computer, three turbo tax cards, various credit cards, four metro PCS phones, $1,400.00 in cash, and a composition notebook with 32 handwritten names. Next to each of these names was a date of birth and social security number. In another part of the notebook there were several different handwritten email addresses, and next to each of these addresses was a dollar figure and the word “accepted” or “rejected.” A fraudulent tax return was filed on behalf of one of the names written in the notebook.
Mr. Ferrer commended the investigative efforts of IRS-CI and the North Miami Beach Police Department. The case was prosecuted by Assistant U.S. Attorney John R. Byrne.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Miami Resident Sentenced for Unauthorized Possession of Stolen IdentitiesRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce that Daniel Ogletree, 25, was sentenced today to 30 months in prison.
Ogletree previously pled guilty to one count of possession of 15 or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(3), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1).
According to court documents, law enforcement accompanied state probation officers during a probation check on the defendant’s residence. The defendant gave verbal consent for a search of his bedroom, and law enforcement found a handwritten sheet of paper containing a list of 15 names, dates of birth, and social security numbers. Law enforcement also found a bank statement in another person’s name that had that person’s social security number and date of birth handwritten on the bank statement. Ogletree admitted that it was his handwriting on the sheet of paper and bank statement, and that he did not personally know the people whose personal identifying information he wrote on the sheet.
Mr. Ferrer commended the investigative efforts of ICE-HSI and IRS-CI. The case was prosecuted by Assistant U.S. Attorneys Timothy J. Abraham and John R. Byrne.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
- Mexican National Indicted in Death of Two Smuggled Aliens
Maryland Attorney and Loan Officer Sentenced in $20 Million Investment SchemeRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Kevin Sniffen, age 53, of Phoenix, Maryland, an attorney licensed in Maryland, today to three years in prison, followed by three years of supervised release, for conspiring to commit wire fraud arising from an investment fraud scheme. Judge Motz also ordered Sniffen to pay restitution of $15.85 million.Judge Motz also sentenced Sean Krondak, age 46, of Irvine California, today to six months of home detention as part of three years’ probation for obstructing justice.
The sentences were 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 their plea agreements and court documents, Sniffen and Krondak were part of a fraudulent scheme carried out by Patrick Belzner and Brian McCloskey. McCloskey owned a real estate development business known as the McCloskey Group, LLC. Belzner, a home builder, began working with McCloskey in late 2008 or early 2009. Krondak was employed as the Vice President – Loan Officer & Underwriting at IAG Underwriters, LLC, (IAGU) run by Mervyn Phelan. IAGU, which maintained an office in Newport Beach, California, was in the business of underwriting loan applications submitted by real estate developers and then locating project financing from banks and other financial entities. Gregory Grantham, an attorney, held the position of IAGU’s general counsel on a part-time basis as a contract employee. IAGU began working with the McCloskey Group trying to locate sources of financing for its projects in about 2009.
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, a licensed attorney and escrow agent in Baltimore County; 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 about 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. In particular, Phelan and Grantham repeatedly advised escrow account lenders that funding for a particular project was imminent when they knew this was not the case, and in one case falsely represented that they were holding millions of dollars in escrow funds tendered by one group of lenders. Krondak knowingly participated in the scheme by sending emails and other communications that he knew contained false information to victim lenders directly, or to Belzner, McCloskey and Sniffen for them to use in their contacts with the victim lenders.
Once the lenders transferred their funds into the escrow accounts, Belzner directed McCloskey, Sniffen, and other conspirators to remove 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.
After the scheme was exposed, Krondak assisted Phelan and Grantham in withholding and destroying relevant emails in response to federal grand jury subpoenas issued to IAGU and to Phelan and Grantham personally.
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. Brian McCloskey, age 42, of Baltimore, and Mervyn A. Phelan, Sr., age 74, of Newport Beach, California, each pleaded guilty to his role in the conspiracy and are both scheduled to be sentenced on December 23, 2014. 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.
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.
Manhattan U.S. Attorney Files and Settles Civil Fraud Lawsuit Against Subcontractor Rmd Holdings, Ltd., for Violating the Disadvantaged Business Enterprise RegulationsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Douglas Shoemaker, the Regional Special Agent-in-Charge for the United States Department of Transportation Office of Inspector General (“USDOT-OIG”), and Michael Nestor, the Inspector General for The Port Authority of New York & New Jersey (“Port Authority”), announced today that the United States has filed, and simultaneously settled, a civil fraud lawsuit against a subcontractor, RMD HOLDINGS, LTD., D/B/A NATIONWIDE CONSTRUCTION (“RMD”), for engaging in fraudulent conduct designed to take advantage of the Disadvantaged Business Enterprise Program in order to secure a subcontract on a federally funded project. Specifically, RMD caused the prime contractor on a project for the design and construction of the LaGuardia Central Terminal building (the “LaGuardia Project”) to falsely represent to the Port Authority of New York and New Jersey (“PANYNJ”) that RMD paid approximately one million dollars to a disadvantaged business enterprise (“DBE”) to perform legitimate work on the contract when, in fact, the DBE did not perform a commercially useful function, but rather received a “commission” from RMD for the fraudulent use of its DBE status. In the settlement, approved yesterday in Manhattan federal court by U.S. District Judge Vernon S. Broderick, RMD admitted and accepted responsibility for violating the DBE regulations governing the LaGuardia Project and agreed to pay $416,000. This is part of a global settlement between RMD and the United States for fraudulent conduct on the part of RMD with regard to DBEs, pursuant to which RMD will pay $1,750,000.
Manhattan U.S. Attorney Preet Bharara said: “The Disadvantaged Business Enterprise program exists to help qualified minority-owned and women-owned businesses succeed. That aim was subverted here. The regulations governing the program must be followed by all contractors working on federally funded contracts – not just prime contractors. Today’s settlement will help ensure that subcontractors as well as prime contractors comply with this important law.”
USDOT-OIG Special Agent-in-Charge Douglas Shoemaker stated: “As evidenced by this settlement agreement, we remain steadfast in our commitment to maintaining the integrity of the U.S. Department of Transportation’s Disadvantaged Business Enterprise program. Working with the Secretary of Transportation and other DOT leaders, and our law enforcement and prosecutorial colleagues, we will continue to protect the taxpayers’ investment in our nation’s infrastructure from fraud, waste, abuse and violations of law.”
Port Authority Inspector General Michael Nestor stated: “This investigation has shown how individuals in the construction industry have manipulated and circumvented the intent of the DBE Program on a Port Authority project by utilizing a firm as a pass-through to satisfy the Program goals. I would hope that this case serves as an incentive to the industry to adhere to the Program’s intent. I urge those with information of instances of other fraudulent practices to report them to law enforcement. Working with our law enforcement partners we will continue to vigilantly investigate allegations of fraud in the construction industry.”
BACKGROUND ON DBEs
In 1980, the USDOT issued regulations in connection with the DBE program, a program to increase the participation of business enterprises owned by socially and economically disadvantaged individuals in federally funded public construction contracts. To become certified as a DBE, a company must:
- be owned and controlled by socially and economically disadvantaged individuals;
- be an independent business whose viability does not depend on its relationship with other firms;
- employ its own work force and own the equipment necessary to perform its work; and
- be able to meet its financial obligations.
Recipients of USDOT construction grants, such as the Port Authority of New York and New Jersey (“PANYNJ”), are required to establish a DBE program that establishes goals for the percentage of a project’s work that should be awarded to DBEs (“DBE goals”). General contractors on construction projects must make good faith efforts to meet the relevant DBE goals. As a condition of receiving USDOT funding for the LaGuardia Project, the PANYNJ established DBE goals for the project and required the general contractor to either meet or make good faith efforts to meet the DBE goal.
General contractors can count funds paid to DBEs toward the attainment of the DBE goals only if the DBEs performed a “commercially useful function.” A DBE subcontractor performs a commercially useful function only when it actually performs, manages, and supervises the work involved. A DBE does not perform a “commercially useful function” if “its role is limited to that of an extra participant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of DBE participation.”
RMD’S FRAUD
According to the allegations in the complaint:
USDOT set the DBE participation goal for the LaGuardia Project at 17% of the project’s cost (or approximately $1.8 million). An intermediary contractor was hired by the prime contractor on the LaGuardia Project to install the bollard structural steel, and this intermediary contractor hired RMD as a subcontractor. The contract between the intermediary and RMD required RMD to provide materials provided by a DBE or woman-owned business, and RMD represented to the intermediary contractor that it would use the DBE MS Construction Co. (“MS”) to supply approximately $1.1 million in bollard structural steel. RMD provided the intermediary contractor with invoices and other documentation purportedly from MS so that the intermediary contractor could claim credit toward its DBE contract requirements. The payments to MS were incorporated into a report signed by the president of the intermediary contractor and submitted to the prime contractor to show that the intermediary contractor was meeting its DBE goals as required by the contract with the prime contractor. In reality, RMD knew that MS was not actually supplying the steel, which instead was supplied by several third-party suppliers, none of which was a DBE. RMD paid MS a percentage of the amount paid to the actual steel suppliers for the sole purpose of fraudulently using MS’s DBE status to earn DBE credit for the prime contractor.
Pursuant to the settlement agreement, RMD admitted, acknowledged, and accepted responsibility for the fact that one of its employees caused false certifications to be submitted to USDOT representing that a DBE performed certain work on, and received certain payments in connection with, the LaGuardia Project, when in fact the DBE never performed any work and merely received a commission from RMD for the fraudulent use of its DBE status. RMD also agreed to pay the United States $416,000 in damages.
Mr. Bharara commended the USDOT Office of Inspector General and the Port Authority Office of Inspector General for their invaluable work on this case. Mr. Bharara also expressed his thanks to the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, New York Region, for its assistance in the case.
The case is being handled by the Office’s Civil Frauds Unit.
Assistant U.S. Attorneys Mara Trager and Ellen London are in charge of the case.
RMD complaint
RMD executed stipulation