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19 December 2014
Manhattan U.S. Attorney Announces Charges Against Manager of Commodities Pool for Defrauding Investors of More Than $5 MillionRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Philip R. Bartlett, the Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today the unsealing of an indictment in Manhattan federal court against WHILEON CHAY for his alleged management of several fraudulent commodities pools, generally operating under the name “4X Solutions” or a variation thereof. Beginning in or about 2007, CHAY solicited more than $5 million from investors in commodities pools that purported to engage principally in foreign exchange (“forex”) trading, promising approximate annual returns of 24% and claiming that “[t]here is no risk in this activity.” In fact, however, CHAY lost more than $2 million in forex and other commodities trading, and misappropriated a significant portion of the remaining investor funds for his personal use, including to pay for luxury cars and for his deceased wife to be cryogenically frozen. CHAY fled the United States during the course of the investigation. The case has been assigned to United States District Judge Kimba M. Wood.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Whileon Chay deceived investors about the commodities pools he managed, claiming to be a successful trader when he in fact was losing millions and misappropriating investors’ money for his own use. Although he has fled the country, these charges against him will persist and so will our efforts to bring him back to face them.”
USPIS Inspector-in-Charge Bartlett said: “Over the past five years Postal Inspectors have investigated hundreds of investment fraud schemes. In each case there are misrepresentations made to investors and the misuse of funds entrusted to the companies. As alleged here, Mr. Chay betrayed the trust of his clients when he misappropriated their investments to fund his lavish lifestyle.”
According to the allegations in the Indictment unsealed yesterday in Manhattan federal court and other court documents:
In approximately 2007, CHAY began operating the first of several unregistered commodities pools operating under the name “4X Solutions,” collectively referred to in the Indictment as the “4X Entities,” and began to solicit investors. CHAY represented to investors, orally and through written materials, that he had “been successfully trading the 4x for 15 years. During this period [CHAY’s] clients have never experienced a month that did not make money.” CHAY also caused monthly account statements to be sent to investors, which represented that the 4X Entities were producing steady returns. By 2011, the 4X Entities purported to have more than $16.5 million in assets under management.
In fact, CHAY did not invest the money as promised, and to the extent that he did invest it at all, he lost it. Between 2007 and 2011, CHAY lost approximately $2.3 million in forex and other commodities and securities trading, even as he continued to represent to investors and potential investors that the 4X Entities were profitable and that “[w]e have never had a loosing [sic] month.” Materials distributed to investors also claimed that “[t]here is no risk in this activity.” CHAY perpetuated the fraud by disseminating fraudulent account statements that represented that investors were receiving consistent positive returns, and by using new investors’ funds to pay purported returns to existing investors. He also misappropriated a significant portion of the funds invested in the 4X Entities for his personal use, including to pay his personal expenses and to maintain a lavish lifestyle, which he flaunted to potential investors. For example, CHAY drove a different luxury car virtually every time he met with one particular investor. CHAY also misappropriated investor funds for other purposes, including more than $150,000 to pay for his deceased wife to be cryogenically frozen.
In October 2011, during the course of the investigation, CHAY departed from New York to Lima, Peru, and has not returned to the United States.
CHAY, 38, formerly of New York, New York, is charged in the Indictment with commodities fraud (Count One), wire fraud (Count Two), and mail fraud (Count Three). The mail and wire fraud charge each carries a maximum term of 20 years in prison, and the commodities fraud charge carries a maximum term of 10 years in prison. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Separately, the United States Commodities Futures Trading Commission (“CFTC”) has sued CHAY and 4X Solutions, Inc., in an action filed in United States District Court for the Southern District of New York. CHAY has not appeared in that case, and the Clerk of Court has issued a certificate of default against CHAY.
Mr. Bharara praised the investigative work of the USPIS. He also thanked the CFTC for its assistance.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Matthew L. Schwartz and Katherine Reilly are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Chay, Whileon Indictment
Lubbock Man Faces up to 20 Years in Federal Prison for Possessing Prepubescent Child PornographyRead the Press Release
LUBBOCK, Texas — A 54-year-old Lubbock man appeared in federal court today and pleaded guilty to one count of possession of prepubescent child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Roberto Garcia, who is on bond, faces a maximum statutory penalty of 20 years in federal prison, a $250,000 fine and a lifetime of supervised release. U.S. District Judge Sam R. Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report.
According to plea documents filed in the case, Garcia used a computer at his residence to, among other things, search for images and videos of child pornography. In the course of his searches, Garcia located, downloaded and viewed numerous images and videos constituting child pornography. He saved the material onto the computer’s hard disk drive. Some of the numerous images of child pornography that Garcia saved involved prepubescent minors.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The Department of Homeland Security, Homeland Security Investigations, investigated. Assistant U.S. Attorney Steven M. Sucsy is prosecuting.
Lubbock County Man Faces up to 20 Years in Federal Prison for Possessing Prepubescent Child PornographyRead the Press Release
LUBBOCK, Texas — A 27-year-old Shallowater, Texas, man appeared in federal court today and pleaded guilty to one count of possession of prepubescent child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Michael Wayne Brown, who is in custody, faces a maximum statutory penalty of 20 years in federal prison, a $250,000 fine and a lifetime of supervised release. U.S. District Judge Sam R. Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report. Brown was taken into custody last month during the investigation of the case, and remains in custody pending sentencing.
According to documents filed in the case, Brown owned various telephones and electronic devices, and he stored pornographic images on some of them, including an 8GB Sandisk memory card. On that memory card, Brown stored numerous images of child pornography, some of which involved prepubescent minors.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The Lubbock Police Department Internet Crimes Against Children (ICAC) Task Force and the FBI investigated. Assistant U.S. Attorney Steven M. Sucsy is prosecuting.
- Local Tax Return Preparer Sentenced for Filing False Tax Returns
Loan Officer Pleads Guilty to $2.5 Million Mortgage FraudRead the Press Release
RICHMOND, Va. – Brenda Ann Blair, 36, of Bonita Springs, Florida, formerly of Goochland County, Virginia, pleaded guilty today to participating in a fraud scheme that obtained approximately $2.4 million worth of mortgage loans from federally backed financial institutions.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Cary Rubenstein, Special Agent in Charge, Mid Atlantic Region of the Office of Inspector General of HUD; Gary Barksdale, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service; and Adam S. Lee, Special Agent in Charge of the Richmond Division of the FBI, made the announcement after the plea was accepted by U.S. Magistrate Judge David J. Novak.Blair, who was charged in a Criminal Information on December 4, 2014, faces a maximum penalty of 30 years in prison when she is sentenced on March 17, 2015, by United States District Judge James R. Spencer. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
In a statement of facts filed with the plea agreement, Blair admitted that she participated with others in a scheme from 2006 to 2008 to fraudulently obtain $2.42 million worth of mortgage backed loans from Washington Mutual Bank, SunTrust Bank, Fannie Mae and Freddie Mac. The mortgage loans were obtained in approximately 16 different real estate transactions, and produced actual losses of approximately $916,700. This scheme also defrauded HUD, which lost an additional $63,964, for a total loss of $980,664.The essence of the scheme was to mislead the lender about the true creditworthiness of the borrowers and the true value of the properties securing the loan. For example, members of the organization made various misrepresentations on loan applications about such topics as the employment status, income, assets and debts of the buyers. They would also falsify information to make it appear that the buyer had made a down payment, when, in fact, he or she had not.
In addition, some borrowers purchased more than one property in a short period of time, so that some mortgage loan liabilities did not appear on the borrowers’ credit reports and the mortgage loan applications. Even though Blair was the loan officer for all of the transactions, she failed to report to the lenders that the borrowers had obtained other outstanding mortgage loans that affected their debt-to-income ratios, and would have affected the lenders’ decision to approve the loans.
This case was investigated by the Office of the Inspector General of HUD, the U.S. Postal Inspection Service and the FBI. Assistant U.S. Attorney David T. Maguire is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:14-cr-172.Limousine Company Owner Pleads Guilty to Racketeering ChargeRead the Press Release
LAS VEGAS, Nev. – The owner of CLS Transportation, a Las Vegas, Nev. limousine company, has pleaded guilty to a federal racketeering charge for using the company to commit and promote criminal activities, including prostitution, drug trafficking, and financial fraud, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.
Charles Horky, 54, of Las Vegas, pleaded guilty on Thursday, Dec. 18, before U.S. District Judge Robert C. Jones to one count of conspiracy to conduct or participate in an enterprise engaged in a pattern of racketeering activity. Horky faces up to 20 years in prison and a $250,000 fine, and is scheduled to be sentenced on April 16, 2015.
“As this case demonstrates, persons who commit serious criminal offenses as part of an organized criminal enterprise, including prostitution, drug dealing and credit card and bank fraud, will be charged with federal racketeering crimes,” said U.S. Attorney Bogden. “Through the guilty pleas of these defendants and the dismantling of their racketeering organization, law enforcement has closed the books on Charles Horky and his coconspirators and the limousine service used to further a number of criminal activities and schemes.”
Five others charged in the scheme have also pleaded guilty, including CLS office manager Kimberly Flores, CLS accountant and financial advisor Archie Granata, two limousine drivers, James Reda and Clarence Adams, and Solomon Zemedhun, who was supplying controlled substances to the organization. Two other limousine drivers and a drug supplier are pending trial.
According to Horky’s plea agreement, Horky owned a controlling interest in and was the managing member of CLS Nevada, LLC, which operated as CLS Transportation, Las Vegas. Beginning no later than September 2008 and continuing through November 2012, Horky and his co-defendants used the limousine service to conduct and facilitate a broad range of criminal activities, including selling controlled substances, facilitating illegal prostitution, credit card fraud, bank fraud and check-kiting. Horky encouraged and directed the criminal activity, and required drivers to pay him a cut of the money they were receiving from the criminal activities.
In addition to distributing illegal drugs from CLS limousines and procuring prostitutes for CLS customers, Horky, Flores, and Granata devised and executed a scheme to defraud American Express by placing fraudulent unauthorized transactions on the American Express accounts of CLS customers. Many of the customers disputed the charges, and American Express notified CLS of the fraudulent transactions and executed charge-backs. American Express eventually cancelled the CLS Transportation account, but the defendants perpetuated the fraudulent scheme by opening successive additional American Express merchant accounts under false names, aliases and nominees. In this manner, Horky, Flores, Granata and others, fraudulently obtained more than $2.8 million from American Express. Horky, Flores and Granata also devised a check-kiting scheme in which they drew checks on CLS Transportation’s payroll account knowing that the account did not contain sufficient funds. Horky, Flores, and Granata knowingly issued themselves and their associates thousands of checks on the account without sufficient funds to honor the checks.
The plea agreement also states that Horky agreed to the entry of a criminal forfeiture money judgment of $5.2 million. He is released on a personal recognizance bond pending sentencing.
The case is being investigated by the FBI and the Las Vegas Metropolitan Police Department through the Safe Streets Task Force.Leaders of Honduran Drug Cartel Face Federal Drug and Money Laundering Charges in the Eastern District of VirginiaRead the Press Release
ALEXANDRIA, Va. – Miguel Arnulfo Valle Valle, 42 and his brother, Luis Alonso Valle Valle, 45, both Honduran nationals, were extradited yesterday from Honduras to face federal criminal charges in the Eastern District of Virginia and the Southern District of Florida. On June 19, 2014, a federal grand jury in the Eastern District of Virginia returned a superseding indictment charging the brothers and 13 other individuals with committing drug and money laundering crimes from 2005 through June 2014.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Karl C. Colder, Special Agent in Charge of the Drug Enforcement Administration’s Washington Field Division; and Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the defendants’ initial appearance before U.S. District Judge Ivan Davis.
“As leaders of one of the world’s largest drug trafficking organizations, the Valle Valle brothers are responsible for importing tons of cocaine into the United States each year,” said U.S. Attorney Boente. “Their arrest and extradition is the result of terrific work by our investigating agencies and respective federal governments. I would like to thank the President of the Honduran Republic, Juan Orlando Hernàndez Alvarado, for the assistance and cooperation of the Honduran government during this investigation.”
“The success of this international investigation is a great example of coordination and cooperation between the DEA, FBI, Virginia State Police, and the Government of Honduras” said DEA Special Agent in Charge Colder. “We look forward to the continued Bi-lateral cooperation in addressing the significant threat of these international drug trafficking organizations.”“The arrest and extradition of these Honduran drug kingpins is a major step in the international cooperation to combat international narcotics traffickers,” said Assistant Director in Charge McCabe. “Special Agents and intelligence analysts at the FBI Washington Field Office in coordination with DEA, Fairfax County Police Department and our counterparts in Honduras worked diligently to investigate this case and bring these two to the United States to face justice.”
Both defendants face a maximum penalty of life in prison if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendants will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
According to court documents, the defendants lead one of the largest drug trafficking organizations in Honduras, the “VALLE DTO”, responsible for the importation and distribution of multi-ton quantities of cocaine into the United States, valued at millions of dollars. Honduras is a major transit country for Colombian cocaine and other controlled substances. The VALLE DTO is based in Copan, located in the northwest region of the country along the border of Guatemala. The defendants worked with other members of their organization to transport cocaine from Honduras through Guatemala to Mexico, and into the United States. Additionally, members of the VALLE DTO sent smaller quantities of cocaine directly into the Eastern District of Virginia, and other parts of the United States, using human couriers.
Drug proceeds were laundered from the United States and elsewhere to members of the VALLE DTO in Honduras through wire transfers, bulk cash payments, and deposits into Honduran banking institutions. The VALLE DTO relied on violence and public corruption to further the objectives of the organization.
On August 20, 2014, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) designated the VALLE DTO, or the “Los Valles Drug Trafficking Organization,” and the defendants individually, under the Kingpin Act as significant foreign narcotics traffickers.
This case was investigated by the DEA, FBI Washington Field Office, Fairfax County Police Department, and the Virginia State Police as part of the Organized Crime Drug Enforcement Task Forces (OCDETF), Operation “Javelin.” The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
Mr. Boente would like thank the Office of International Affairs, Criminal Division, U.S. Department of Justice; the FBI’s Washington Field Office; the DEA’s Tegucigalpa Country Office in Tegucigalpa, Honduras; the Fairfax County Police Department; and the Virginia State Police for their efforts in the investigation.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-135.
Las Vegas Man Pleads Guilty to Wire 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 John Nielsen, 42, of Las Vegas, Nevada, pleaded guilty before U.S. District Court Judge Richard J. Arcara, to wire fraud. The charge carries a maximum penalty of 20 years in prison, a fine of $250,000, or both.Assistant U.S. Attorney Russell T. Ippolito, Jr., who is handling the case, stated that the defendant was involved in an investment loan scheme which resulted in $175,000 dollars in financial losses to an investment company, Preston Waters Corp., located in the Western District of New York. Nielsen represented to the company that he could obtain a standby letter of credit from banks outside the United States. The defendant assured representatives that he could monetize the stand by letter of credit which would provide the investment company with $100 million dollars in loans. As part of the scheme, Nielsen required the investment company to provide him with $175,000 which would purportedly cover the costs associated with the financial transaction. The investment company provided the funds but instead of using the money to obtain financing, the defendant, and his co-conspirator, used the funds for their own purposes.
The plea was the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation.
Sentencing is scheduled for March 19, 2015 at 1:00 p.m. before Judge Arcara.
Jury Convicts Dominican Drug Trafficker Following Seven-Day TrialRead the Press Release
BOSTON – A Dominican man, who most recently resided in Salem, was convicted yesterday of participating in a North Shore drug trafficking conspiracy.
Jaime Aristy, a/k/a Junito, 29, was convicted following a seven-day jury trial for conspiracy to possess with intent to distribute and distribution of cocaine, a Schedule II controlled substance. In November 2012, Aristy was indicted. U.S. District Court Judge Denise J. Casper scheduled sentencing for March 25, 2015.
Aristy was one of eleven defendants charged with participation in a large-scale cocaine trafficking conspiracy between 2009 and 2012. The conspiracy included several members of the same family, including Jaime Aristy, who were involved in the distribution of multi-kilogram quantities of cocaine in Lynn, Salem, and Peabody. The investigation included court-authorized wiretaps as well as the seizure of kilograms of cocaine, more than $100,000 in currency, and drug paraphernalia used by the criminal organization. On Sept. 1, 2011, Aristy was arrested following a motor vehicle stop in Salem during which law enforcement officers recovered more than $93,000 in cash that was stashed in a shoe box on the back seat of the car, two cell phones used by the drug organization, and a drug ledger that reflected a series of drug transactions involving multiple kilograms of cocaine and tens of thousands of dollars.
The charging statute provides a sentence of no greater than 20 years in prison and a minimum of three years of supervised release. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division, made the announcement today. The Salem Police Department and the Massachusetts State Police also assisted with the investigation. The case was tried by Linda M. Ricci and David J. D'Addio of Ortiz’s Drug Task Force Unit.
Jefferson County, Kentucky, Man Sentenced to 37 Years and 10 Months in Prison and Ordered to Pay Restitution for Multiple RobberiesRead the Press Release
LOUISVILLE, Ky. – A Louisville man was sentenced on December 16, 2014, by Senior U.S. District Judge John G, Heyburn II, to serve 37 years and 10 months in prison for the robbery of a bank and a neighborhood business located in Jefferson County, Kentucky, and ordered to pay restitution in the amount of $120, 714.62 announced John E. Kuhn, Jr., Acting United States Attorney for the Western District of Kentucky. There is no parole in the federal correctional system.
John R. Hatton, age 31, was found guilty by a federal jury in Louisville, on November 20, 2013, of robbing the East Pointe Branch of Your Community Bank on September 23, 2011, and of robbing the M & I Smoke Shop, located on Preston Highway, in Louisville, Kentucky on October 26, 2011. Evidence at trial established that Mr. Hatton and an accomplice, Jillian Wojciechowski, entered the Your Community Bank branch wearing masks and armed with pistols. Once inside, Mr. Hatton and Ms. Wojciechowski held the bank employees at gunpoint and took $120, 714.62 in cash from the bank. At the time of the robbery, the bank’s deposits were insured by the Federal Deposit Insurance Corporation (FDIC).
During the robbery of the M & I Smoke Shop, Mr. Hatton entered the business alone and demanded cash from the store owner at gunpoint. After Mr. Hatton had taken a small amount of cash, the store owner took Mr. Hatton’s pistol away from him and shot Mr. Hatton as Mr. Hatton was trying to escape from the store.
This case was prosecuted by Assistant United States Attorneys Thomas W. Dyke and Stephanie Zimdahl, and was investigated by Louisville Metro Police Department Robbery Unit.
Jamaican Ecstasy Trafficker Convicted Following Jury TrialRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Carlos McKenzie, a/k/a Charles Williams, a/k/a General, 36, of Jamaica, was convicted by a federal jury of conspiracy to possess with intent to distribute and to distribute 500 grams or more of methamphetamine. McKenzie faces a mandatory minimum penalty of 10 years in prison, a maximum of life, a fine of $5,000,000 or both.
Assistant U.S. Attorneys Robert A. Marangola and Everardo A. Rodriguez, who are handling the case, stated that McKenzie and others obtained ecstasy tablets smuggled from Canada, which were then sold by multiple distributors in Rochester and other locations.
McKenzie was charged in 2009 along with 28 other defendants. The defendant was not arrested until 2013, when he was taken into custody in Phoenix, Arizona under an assumed name. All other defendants have been convicted and sentenced. The investigation resulted in the seizure of approximately $230,000 in U.S. currency from drug proceeds, 290 pounds of marijuana, 3,000 ecstasy tablets, 11 firearms and two automobiles.
The conviction was supported by the Department of Justice Organized Crime Drug Enforcement Task Force (OCDETF) program. It is the culmination of a federal wiretap investigation led by Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero and the New York State Police, under the direction of Major Scott Crosier. The investigation was part of the then-recently created Border Enforcement Security Task Force (BEST), which is comprised of local, state, and federal law enforcement organizations from Canada and the United States. Other assisting agencies the U.S. Drug Enforcement Administration, under the direction of Special Agent in Charge James J. hunt, New York Field Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Acting Special Agent in Charge James S. Higgins, U.S. Customs and Border Protection, under the direction of Director of Field Operations Randy Howe, the Rochester Police Department, Chief Michael Ciminelli, and the Canadian BEST task force members which include the Ontario Provincial Police, Toronto Police Services, Canada Border Services Agency, Niagara Regional Police Services, and the Royal Canadian Mounted Police.
Sentencing will be scheduled at a later date.
Iron Mountain Companies Pay $44.5 Million to Settle Alleged False Billings for Storing Government Documents and DataRead the Press Release
Iron Mountain Incorporated and Iron Mountain Information Management LLC (collectively Iron Mountain) has paid $44.5 million to resolve allegations under the False Claims Act that Iron Mountain overcharged federal agencies for record storage services under General Services Administration (GSA) contracts, the Department of Justice announced today. Iron Mountain is a records storage company headquartered in Boston.
“Protecting the federal procurement process from false claims is central to the mission of the Department of Justice,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “We will continue to ensure that when federal monies are used to purchase commercial services the government receives the prices and services to which it is entitled.”
“This settlement illustrates our commitment to protecting the integrity of federal contracting programs,” said U.S. Attorney Benjamin B. Wagner for the Eastern District of California. “Federal agencies rely on pricing information under the Multiple Award Schedule program in particular, and deserve the full benefit of applicable contract terms.”
This settlement relates to contracts under which Iron Mountain provided record storage services to government entities from 2001 to 2014 through GSA’s Multiple Award Schedule (MAS) program. The MAS program provides the government with a streamlined process for procurement of commonly used commercial goods and services. The settlement resolves allegations that Iron Mountain failed to meet its contractual obligations to provide GSA with accurate information about its commercial sales practices during contract negotiations, and failed to comply with the price reduction clause of the GSA contracts by not extending lower prices to government customers during its performance of the contracts. It also resolves an allegation that Iron Mountain charged the United States for storage meeting National Archives and Records Administration requirements when the storage provided did not meet such requirements.
“My office will continue working diligently to make sure American taxpayers are getting the best value for every dollar spent,” said Acting Inspector General Robert C. Erickson for GSA.
The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. The civil lawsuit was filed in the Eastern District of California by Brent Stanley, a former Iron Mountain employee, and Patrick McKillop, who worked in the records management industry. Collectively, they will receive $8,010,000.
The settlement with Iron Mountain was the result of a coordinated effort among the U.S. Attorney’s Office for the Eastern District of California, the Civil Division’s Commercial Litigation Branch, the GSA’s Office of the Inspector General, the Defense Criminal Investigative Service, the Defense Contract Audit Agency, the NASA Office of Inspector General, the U.S. Department of Veterans Affairs’ Office of Inspector General, the U.S. Department of Agriculture’s Office of Inspector General, U.S. Army Criminal Investigation Command, and the U.S. Department of Housing and Urban Development’s Office of Inspector General.
The lawsuit is captioned United States ex rel. Brent Stanley and Patrick McKillop v. Iron Mountain Incorporated, Civil Action No. 11-3260 (E.D. Cal.). The claims resolved by this settlement are allegations only, and there has been no determination of liability.
- Iron Mountain Companies Agree to Pay $44.5 Million to Settle Alleged False Billing for Storing Government Documents and Data
Independence Business Owner Pleads Guilty to Contraband Cigarette TraffickingRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Independence, Mo., business owner pleaded guilty in federal court today to his role in a multi-million dollar, multi-state conspiracy to transport hundreds of thousands of cartons of contraband cigarettes from the Kansas City, Mo., area to the state of New York, where they were sold primarily on Indian reservations.
Craig Sheffler, 45, of Independence, pleaded guilty before U.S. District Judge Brian C. Wimes to participating in a conspiracy to commit wire fraud and contraband cigarette trafficking from July 2010 to Jan. 26, 2012. Sheffler has forfeited $599,206 to the government from his company, Cheap Tobacco Wholesale in Independence.
The state of New York imposes excise taxes on all cigarettes sold in the state, unless expressly exempted by law or by private agreement between the state and an Indian nation or tribe. Only licensed wholesalers may purchase unstamped cigarettes, either through the cigarette manufacturer or through other wholesalers. Under New York state law, it is the obligation of state-licensed stamping agents to prepay the excise tax and affix stamps on all cigarette packs. Tobacco wholesalers must report the sales of cigarettes to the state.
Sheffler admitted that he made regular purchases of contraband cigarettes from undercover agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives. The contraband cigarettes were transported to New York without prior approval by the New York Department of Taxation and Finance and without first paying the required $4.35 per pack excise tax. The unstamped, untaxed cigarettes were then sold to other smoke shops on the reservations in New York by several co-conspirators, including AJ’s Candy & Tobacco, LLC, a tobacco wholesaler located on a reservation in Irving, N.Y., to other smoke shops on the reservations in New York, thus allowing the sale of the cigarettes at a considerable discount and depriving the state of its tax revenue.
AJ’s Candy & Tobacco was sentenced for its role in the conspiracy on Aug. 1, 2014, and ordered to pay a $1 million fine. The company also must forfeit to the government $221,550, which represents the proceeds of the offense. The court also ordered the company to pay an additional $535,050 in restitution to the state of New York. Under the terms of the company’s plea agreement, AJ’s is prohibited from selling premium cigarettes for two years.
According to the indictment, conspirators purchased more than $17 million worth of contraband cigarettes from ATF agents during an undercover operation. Sheffler admitted in today’s plea agreement that the amount of loss exceeded $7 million. Approximately 620,600 cartons of cigarettes – containing 10 packs per carton – were transported to New York without paying the required $4.35 per pack excise tax. The untaxed cigarettes were sold by New York retailers and smoke shops on the reservations in the state of New York. The total state excise tax lost to the state of New York was more than $8 million.
Under federal statutes, Sheffler is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorneys Paul S. Becker and Justin G. Davids. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, IRS – Criminal Investigation, the Federal Deposit Insurance Corporation – Office of Inspector General and the Kansas City, Mo., Police Department.
Greenwood Woman Sentenced for Millions in Hospice FraudRead the Press Release
OXFORD, Miss. - Felicia C. Adams, United States Attorney for the Northern District of Mississippi; Donald Always, Special Agent in Charge at the Federal Bureau of InvestigationDerrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General; and Mississippi Attorney General Jim Hood announced that:
Regina Swims-King, 54, of Greenwood, Mississippi, was sentenced on December 18, 2014 by United States District Judge Michael Mills in Oxford, Mississippi, to seventy (70) months imprisonment to be followed by three (3) years of supervised release. Swims-King will report to the Federal Bureau of Prisons on February 23, 2015.
Swims-King previously pled guilty in February 2014 to conspiracy to commit healthcare fraud in violation of 18 U.S.C. §§ 1347 & 1349. Swims-King admitted to submitting fraudulent charges to Medicare and receiving millions of dollars in Medicare funds based on alleged hospice services for patients that were not eligible for hospice services; services that were never provided; or claims based on the forged signatures of physicians. In addition to her prison sentence, Swims-King was ordered to pay $7,941,335.26 in restitution to the Medicare program. Swims-King also forfeited seventeen (17) vehicles worth over $600,000 and twelve (12) pieces of real property valued at over $700,000.
Felicia C. Adams, United States Attorney, said, “Health care fraud affects every citizen because it takes critical resources out of our health care system. The United States Attorney’s Office for the Northern District of Mississippi is working aggressively to pursue health care fraud criminals and bring them to justice. Today’s sentence ensures that these illegal practices will not be tolerated in our district. We are grateful for the hard work of all the federal, state and local agencies who worked tirelessly to bring this investigation to a successful conclusion.”
“Rooting out health care fraud is essential to the well being of both our citizens and our economy,” said Donald Alway, Special Agent in Charge of the FBI in Mississippi. “The teamwork of each agency involved in this investigation helps to keep programs like these in place for the most vulnerable of our residents who need it the most. I want to thank the investigators who worked this case and look forward to continued partnerships to combat crime in the Magnolia State.”
“Hospice fraud is a serious problem in Mississippi,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General in Atlanta. “There are several sham providers that are billing for patients who are not terminally ill and paying kickbacks to doctors and patient recruiters. We plan to identify the individuals committing these crimes and to put them in prison just like we did in this case.”
“Healthcare fraud is a serious crime which not only steals money from government programs, but has a lasting effect on benefits available to our State’s most vulnerable citizens. We will continue to work with our federal partners to fight healthcare fraud in our state,” said Attorney General Jim Hood.
This case was investigated by Special Agents of the Department of Health and Human Services, Office of Inspector General, the Federal Bureau of Investigation, and the Mississippi State Attorney General’s Office - Medicaid Fraud Control Unit, and was prosecuted by the United States Attorney’s Office for the Northern District of Mississippi.
Genovese Organized Crime Family Soldier and Two Crime Family Associates Admit Racketeering ConspiracyRead the Press Release
Union Officials Admit Extorting Port Workers for Christmastime Tribute Payments
NEWARK, N.J. – Three North Jersey men today admitted conspiring to conduct or participate in the affairs of the Genovese organized crime family of La Cosa Nostra (the “Genovese family”) through a pattern of racketeering activity, including a conspiracy to extort members of the International Longshoremen’s Association (ILA) for Christmastime tribute payments, New Jersey U.S. Attorney Paul J. Fishman and Eastern District of New York U.S. Attorney Loretta E. Lynch announced.
Stephen Depiro, 59, of Kenilworth, New Jersey, a Genovese family soldier, and two other Genovese family associates – Albert Cernadas, 79, of Union, New Jersey, former president of ILA Local 1235 and former ILA executive vice president; and Nunzio LaGrasso, 64, of Florham Park, New Jersey, former vice president of ILA Local 1478 and ILA representative – pleaded guilty today before U.S. District Judge Claire C. Cecchi in Newark federal court. All three pleaded guilty to Count One of the second superseding indictment charging them with racketeering conspiracy. Depiro admitted to predicate acts involving conspiracy to commit extortion and bookmaking. Cernadas and LaGrasso admitted to predicate acts involving conspiracy to commit extortion and multiple extortions.According to documents filed in this case and statements made in court:
Since at least 2005, Depiro has managed the Genovese family’s control over the New Jersey waterfront – including the nearly three-decades-long extortion of port workers in ILA Local 1, ILA Local 1235 and ILA Local 1478. Members of the Genovese family, including Depiro, are charged with conspiring to collect tribute payments from New Jersey port workers at Christmastime each year through their corrupt influence over union officials, including the last three presidents of Local 1235 and vice president of ILA Local 1478. Depiro also controlled a sports betting package that was managed by several others, through the use of an overseas sports betting operation.
During their guilty plea proceedings, Depiro, Cernadas and LaGrasso admitted their involvement in the Genovese family, including conspiring to compel tribute payments from ILA union members, who made the payments based on actual and threatened force, violence and fear. Cernadas and LaGrasso admitted to carrying out multiple extortions of dockworkers. The timing of the extortions typically coincided with the receipt by certain ILA members of “Container Royalty Fund” checks, a form of year-end compensation.
The racketeering charge to which Depiro, Cernadas and LaGrasso pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is currently scheduled as follows: Cernadas, Jan. 16, 2015; LaGrasso, March 9, 2015; and Depiro, March 10, 2015.U.S. Attorneys Fishman and Lynch credited the FBI in New Jersey, under the direction of Special Agent in Charge Aaron T. Ford, and in New York, under the direction of Assistant Director in Charge George Venizelos, as well as the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Cheryl Garcia, with the investigation leading to today’s guilty pleas. They also thanked the Waterfront Commission of New York Harbor for its cooperation and assistance in the investigation.
The government is represented by Assistant U.S. Attorney Jacquelyn M. Kasulis of the U.S. Attorney’s Office, Eastern District of New York, and Assistant U.S. Attorney Anthony Mahajan, of the U.S. Attorney’s Office, District of New Jersey.
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Defense counsel: Depiro: Alyssa Cimino Esq., Fairfield, New Jersey
Cernadas: Joseph Hayden Esq., Roseland, New Jersey
LaGrasso: Michael Critchley, Sr., Esq., RoselandDepiro, Stephen et al. S2 Indictment
Genovese Organized Crime Family Soldier and Two Crime Family Associates Admit Racketeering ConspiracyRead the Press Release
NEWARK, N.J. – Three North Jersey men today admitted conspiring to conduct or participate in the affairs of the Genovese organized crime family of La Cosa Nostra (the “Genovese family”) through a pattern of racketeering activity, including a conspiracy to extort members of the International Longshoremen’s Association (ILA) for Christmastime tribute payments, New Jersey U.S. Attorney Paul J. Fishman and Eastern District of New York U.S. Attorney Loretta E. Lynch announced.
Stephen Depiro, 59, of Kenilworth, New Jersey, a Genovese family soldier, and two other Genovese family associates – Albert Cernadas, 79, of Union, New Jersey, former president of ILA Local 1235 and former ILA executive vice president; and Nunzio LaGrasso, 64, of Florham Park, New Jersey, former vice president of ILA Local 1478 and ILA representative – pleaded guilty today before U.S. District Judge Claire C. Cecchi in Newark federal court. All three pleaded guilty to Count One of the second superseding indictment charging them with racketeering conspiracy. Depiro admitted to predicate acts involving conspiracy to commit extortion and bookmaking. Cernadas and LaGrasso admitted to predicate acts involving conspiracy to commit extortion and multiple extortions.
According to documents filed in this case and statements made in court:
Since at least 2005, Depiro has managed the Genovese family’s control over the New Jersey waterfront – including the nearly three-decades-long extortion of port workers in ILA Local 1, ILA Local 1235 and ILA Local 1478. Members of the Genovese family, including Depiro, are charged with conspiring to collect tribute payments from New Jersey port workers at Christmastime each year through their corrupt influence over union officials, including the last three presidents of Local 1235 and vice president of ILA Local 1478. Depiro also controlled a sports betting package that was managed by several others, through the use of an overseas sports betting operation.
During their guilty plea proceedings, Depiro, Cernadas and LaGrasso admitted their involvement in the Genovese family, including conspiring to compel tribute payments from ILA union members, who made the payments based on actual and threatened force, violence and fear. Cernadas and LaGrasso admitted to carrying out multiple extortions of dockworkers. The timing of the extortions typically coincided with the receipt by certain ILA members of “Container Royalty Fund” checks, a form of year-end compensation.
The racketeering charge to which Depiro, Cernadas and LaGrasso pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is currently scheduled as follows: Cernadas, Jan. 16, 2015; LaGrasso, March 9, 2015; and Depiro, March 10, 2015.
U.S. Attorneys Fishman and Lynch credited the FBI in New Jersey, under the direction of Special Agent in Charge Aaron T. Ford, and in New York, under the direction of Assistant Director in Charge George Venizelos, as well as the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Cheryl Garcia, with the investigation leading to today’s guilty pleas. They also thanked the Waterfront Commission of New York Harbor for its cooperation and assistance in the investigation.
The government is represented by Assistant U.S. Attorney Jacquelyn M. Kasulis of the U.S. Attorney’s Office, Eastern District of New York, and Assistant U.S. Attorney Anthony Mahajan, of the U.S. Attorney’s Office, District of New Jersey.
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Defense counsel:
Depiro: Alyssa Cimino Esq., Fairfield, New Jersey
Cernadas: Joseph Hayden Esq., Roseland, New Jersey
LaGrasso: Michael Critchley, Sr., Esq., Roseland
Former University of Louisville Executive Pleads Guilty to Tax Fraud and Embezzling Funds Tied to UofL Medical GroupsRead the Press Release
- Diverted $2.8 million for his personal use
- Failed to report $2,470,735 to Internal Revenue Service
LOUISVILLE, Ky. – A former University of Louisville accountant, promoted to Executive Director of the Department of Family & Geriatric Medicine at the University of Louisville School of Medicine (DFGM) pleaded guilty today, in U.S. District Court, to a seven-count federal indictment including charges of theft and bribery in programs that receive federal funds, money laundering, mail fraud, and filing false federal income tax returns, announced Acting U.S. Attorney John E. Kuhn, Jr.
As part of the nearly six year scheme, Perry Chadwick Vaughn, 36, of Sellersburg, Indiana, admitted to diverting contractual checks and patient payments to the University Family and Geriatric Medicine Associates account then withdrew $2,809,489 for his personal use and benefit.
In court, Vaughn admitted to the following - from January 2007 through August 2013 he defrauded the Department of Family and Geriatric Medicine at the University of Louisville School of Medicine (DFGM-UofL) and its affiliated private physician practice groups (collectively “DFGM-Practice Groups”). While working as the executive director for DFGM-UofL and the business manager form DFGM-Practice Groups Vaughn stole approximately $2,810,201.53 through the use of the United States mail. Vaughn fraudulently stole contractual checks issued to DFGM-UofL totaling $666,810.11. Vaughn also stole $604,025.57 in patients payments to DFGM-UofL. In addition Vaughn directly stole another $1,538,654.24 directly from DFGM-Practice Groups’ accounts. During the scheme Vaughn caused T.J. Samson Community Hospital to mail a check for $37,750 that he ultimately stole. In addition, Vaughn submitted $711 in fraudulent travel expenses during the course of the scheme.
During the course of the scheme to defraud both DFGM-UofL and DFGM-Practice Groups Vaughn concealed his theft through a number of means including the following: he created false bank reconciliations to hide the issuance of checks to himself and he created false bank statements to hide the issuance of checks to himself. In all instances, the financial transactions were conducted with Republic Bank and Chase Bank, federally insured financial intuitions.
On February 19, 2009, Vaughn knowingly filed a false U.S. Individual Tax return for calendar year 2008 in that it failed to report $377,492 in total income. On January 31, 2010, Vaughn knowingly filed a false U.S. Individual Tax return for calendar year 2009 in that it failed to report $610,470 in total income. On February 22, 2011, Vaughn knowingly filed a false U.S. Individual Tax return for calendar year 2010 in that it failed to report $160,121 in total income. On January 23, 2012, Vaughn knowingly filed a false U.S. Individual Tax return for calendar year 2011 in that it failed to report $546,022 in total income. On March 21, 2013, Vaughn knowingly filed a false U.S. Individual Tax return for calendar year 2012 in that it failed to report $776,660 in total income. Each of the returns was verified by a written declaration that it was made under the penalty of perjury and Vaughn knew in each instance that he was omitting reportable taxable income.
In addition, on September 3, 2013, U.S. District Judge John G. Heyburn II granted the United States’ motion for Temporary Restraining Order enjoining and prohibiting Vaughn, (including family members, financial institutions, and other entities having possession or control of Vaughn's assets), from transferring, selling, dissipating, concealing, or otherwise disposing of, in any manner, his assets in real or personal property, owned, gained or acquired by him or on behalf of his ex-wife.
If convicted at trial, Vaughn faced up to 55 years in prison, a 16 year period of supervised release, and a fine of $1,250,000.
This case is being prosecuted by Assistant United States Attorney Bryan Calhoun and is being investigated by the University of Louisville Police Department, the United States Secret Service, the Internal Revenue Service, Criminal Investigations, and the United States Postal Inspection Service.
Former School Employee Pleads Guilty to Enticing A MinorCharge Involves Series of Facebook MessagesRead the Press Release
WASHINGTON – Joseph A. Morales, 27, a former teacher’s aide at Cardozo Education Campus in the District of Columbia, pled guilty today to enticing a minor in violation of District of Columbia law, announced U.S. Attorney Ronald C. Machen Jr., Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Morales, now of Brooklyn, N.Y., entered the guilty plea in the Superior Court of the District of Columbia. The Honorable Rhonda Reid Winston is to sentence him on Feb. 27, 2015. The charge carries a statutory maximum of five years in prison and a fine of up to $12,500.
According to the government's evidence, between May 2013 and May 2014, Morales engaged in a series of Facebook messaging sessions with a 16-year old student at the high school. During those sessions, Morales was employed as a teacher’s aide and substitute teacher, and had administrative duties at the school. He repeatedly asked the student for images of the student’s penis and asked that the student engage in sexual acts with him.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
In announcing the guilty plea, U.S. Attorney Machen, Assistant Director in Charge McCabe and Chief Lanier praised the work of the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also commended the efforts of Assistant U.S. Attorney Ari Redbord, who is prosecuting the case.
14-283Former Hanover Post Office Employee Charged for Mail TheftRead the Press Release
BOSTON – Amber Lopresti, 28, of Taunton, was indicted for embezzling the U.S. mail and stealing the contents of the U.S. mail while she was an employee of the United States Postal Service in Hanover.
The charging statutes provide a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Rafael Medina, Special Agent In Charge of the U.S. Postal Service, Office of Inspector General, Northeast Area Field Office; and Hanover Police Chief Walter Sweeney, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.
Former Employee at Ft. Meade Youth Center Sentenced to 8 Years in Prison for Sexually Abusing a MinorRead the Press Release
U.S. Attorney Warns that “Parents Must Be Relentless About Reading Children’s Text Messages and Checking Their Social Media Accounts
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Anthony Dennis Williams II, age 28, of Severn, Maryland, a former employee at the Fort Meade Youth Center, to eights years in prison, followed by three years of supervised release, for abusive sexual contact, and sexually abusing a minor.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Frank Robey, Director, U.S. Army Criminal Investigation Command (CID), Major Procurement Fraud Unit.“Parents must to be relentless about reading children’s text messages and checking their social media accounts,” said U.S. Attorney Rod J. Rosenstein. “Keep your children’s passwords, read all of their incoming and outgoing messages, and take immediate action if they send or receive inappropriate messages.”
"We are very pleased with today's sentencing and will continue to do everything in our power to see predators like this brought to justice," said Special Agent Ed Collins with the U.S. Army Criminal Investigation Command. "We will continue to aggressively work shoulder to shoulder with our fellow law enforcement agencies to protect our most valuable and precious resource for the future -- our children."
According to his plea agreement, for about eight years prior to 2013, Williams was a counselor at the Fort Meade Child and Youth Services center. Williams also taught a program at the center called Passport to Manhood (P2M) which was a life course for juvenile males attending CYS. In this program, he went on annual overnight trips with some of the youth members.
During the summer of 2013, CID investigators learned that Williams may have had illegal sexual contact with at least one boy he met at the center. The boy’s mother found text messages between her son and Williams referencing sexual acts. When interviewed by officers of the Citrus County, Florida, Sheriff’s Office, and later by CID, the boy said he attended the center while in 7th grade and participated in the P2M programs. One day while at the center, Williams asked the boy to go to the attic of the center to get equipment. Once there, Williams asked the boy to take his clothes off. The boy refused. Williams put the boy’s hands on Williams’ genital area, and Williams then touched the boy’s genital area. Williams was about 25 years old, and the boy 12 years old, during this incident. Williams also sent the boy at least one photo of his exposed genital area.
In October 2013, FBI and CID agents interviewed Williams. Williams identified a second boy with whom he had contact at the center. This additional victim was interviewed, and stated that Williams took him to the center’s attic and solicited oral sex from him. They had oral sex on one occasion in the attic when the victim was in eighth grade. They also had anal sex on another occasion outside of Ft. Meade, when the victim was about 16 years old.
FBI and CID agents canvassed other patrons of the center and friends of Williams. One individual, who had worked with Williams at the center, advised that in years past her children hung out with Williams, and slept over at Williams’ house. The woman’s oldest son reported that some years earlier, when he was in elementary school and spent a night at Williams’ apartment in Odenton, Maryland, he woke in the middle of the night to what he thought was Williams grabbing him in the genital area. During another sleep-over at Williams’ house, the boy said he fell asleep on the floor, and woke up in a bed, and his bottom felt funny.United States Attorney Rod J. Rosenstein praised the FBI and Army CID for their work in the investigation and thanked the Citrus County, Florida Sheriff’s Office for their assistance. Mr. Rosenstein thanked Assistant United States Attorney P. Michael Cunningham, who prosecuted the case.
Former Corrections Officer Sentenced for Accepting BribesRead the Press Release
Ocala, Florida – Senior U.S. District Judge Wm. Terrell Hodges today sentenced Antoine D. Clark (30, Orlando) to three years and one month in federal prison for receipt of a bribe by a public official. The Court also entered a money judgment against him in the amount of $28,450, which represents the proceeds of the offense. Clark pleaded guilty on September 23, 2014.
According to court documents, Clark was employed as a Corrections Officer at the Coleman Federal Correctional Complex (USP-2) in Sumter County. Based on information from inmates at the facility, agents discovered that Clark had been smuggling tobacco products, alcoholic beverages, cell phones, and pornography into the prison. In exchange for these items, inmates had arranged for Clark to be paid by cash or wire transfers from third parties.
Following his arrest on June 26, 2014, Clark admitted that he had smuggled contraband into the prison in exchange for bribes. He received $28,450.00 in illegal payments, all of which is being forfeited.
This case was investigated by the Department of Justice, Office of the Inspector General. It was prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.
Former Consultant to New York Democratic Senate Campaign Committee Sentenced in White Plains Federal Court to Three Years in Prison for Tax and Fraud ConvictionsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MELVIN LOWE, a former consultant to the New York State Democratic Senate Campaign Committee ("DSCC"), was sentenced today to 36 months in prison for conspiring with New York State Senator John Sampson to defraud the DSCC of $100,000, and for personal income tax offenses. LOWE was convicted by a jury in September 2014. United States District Judge Vincent L. Briccetti imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “Melvin Lowe’s corrupt actions were another example of a political figure in New York State putting his own personal greed ahead of the public’s trust. I hope that today’s sentence will send yet another powerful signal to any public official who questions the resolve of this office to root out public corruption.”
According to the Complaint, the Indictment filed in federal court and the evidence presented at trial:
LOWE was retained as a consultant by the DSCC after New York State Senator John Sampson was appointed as the Senate's Democratic Conference Leader following the June 2009 "coup" that temporarily shifted the balance of power in the New York Senate from the Democrats to the Republicans. In early June 2010, Sampson asked LOWE to arrange for a covert payment of $20,000 to Michael Nieves, a Queens-based political operative who had previously worked for former New York State Senator Hiram Monserrate and who had helped engineer the resolution of the Senate coup that had brought Sampson to power. LOWE then arranged for a New Jersey-based political consultant to submit a false invoice to the DSCC for $100,000 in printing services. Sampson approved payment of the invoice and the DSCC sent $100,000 to the New Jersey-based consultant. LOWE instructed the consultant to send $20,000 of the proceeds to Nieves, $75,000 of the proceeds to LOWE's consulting company, and to keep $5,000 for himself. The jury heard evidence that LOWE and Senator Sampson had a close relationship of trust that included LOWE giving Sampson an envelope of cash.
LOWE received more than $2.1 million in consulting income from 2007 to 2012. He reported less than $25,000 in income in each of his federal income tax returns for 2007 through 2009, which he did not file until late 2010. LOWE never filed tax returns for 2010 through 2012. He never made any payments toward his taxes for the years 2000 through 2012.
LOWE also caused a bank to make a false statement to his mortgage lender regarding the balance in his checking account. When the mortgage lender sent LOWE’s bank a Verification of Deposit form to verify LOWE's claim that he had $65,000 in his checking account, LOWE caused the assistant manager to claim that LOWE's account had a balance of more than $80,000. At that time, the balance in LOWE's checking account was $2,156.
In addition to the prison sentence, LOWE, 53, of Manhattan, was sentenced to three years’ supervised release.
Mr. Bharara praised the outstanding investigative work of the Internal Revenue Service - Criminal Investigation and the investigators from the U.S. Attorney's Office for the Southern District of New York.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Perry A. Carbone and James McMahon are in charge of the prosecution.
Former Chief Lending Officer Sentenced for Bank FraudRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that Larry Malone, age 59, from Bainbridge, Georgia, was sentenced on December 16, 2014, to serve 48 months imprisonment and pay restitution in the amount of $ 25,540,896 to the Southwest Georgia Farm Credit and its insurers. The sentences were handed down by the Honorable W. Louis Sands, Senior United States District Judge, in Albany, Georgia.Mr. Malone was charged by both the United States Attorney for the Middle District of Georgia and the United States Attorney for Northern District of Florida with conspiracy to commit bank fraud and with accepting bribes and kickbacks. Both cases were consolidated in the Middle District of Georgia and heard by Judge Sands. Mr. Malone entered a guilty plea to the charges on September 22, 2011.
Malone was employed as Chief Lending Officer with Southwest Georgia Farm Credit for over 20 years, and was the Chief Lending Officer at the time of the offenses. From approximately 2001 to 2008, Mr. Malone made fraudulent loans to a variety of borrowers in both the Middle District of Georgia and the Northern District of Florida in the total amount of $25,540,896. Malone received a total of approximately $900,000.00in bribes and kickbacks from these borrowers.
Inquiries regarding the case should be directed to Pamela Lightsey at the United States Attorney’s Office (478/621-2603).
“After the financial crisis we experienced, no one can legitimately question the importance of pursuing people like Mr. Malone, who commit bank fraud,” said United States Attorney Michael J. Moore.
The case was investigated by the Federal Bureau of Investigation and the United States Secret Service. Assistant United States Attorney Jim Crane, for the Middle District of Georgia, prosecuted the case.Former Ceo of Bitcoin Exchange Company Sentenced in Manhattan Federal Court to Two Years in Prison for Helping to Sell Nearly $1 Million in Bitcoins for Drug Buys on Silk RoadRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that CHARLIE SHREM, the former Chief Executive Officer and Compliance Officer of BitInstant, a Bitcoin exchange company, and the former Vice Chairman of the Bitcoin Foundation, was sentenced today to two years in prison for his role in knowingly transmitting nearly $1 million in Bitcoins intended to facilitate drug trafficking on “Silk Road,” a black-market website designed to enable users to buy and sell illegal drugs anonymously and beyond the reach of law enforcement. SHREM pled guilty in September 2014 before U.S. District Judge Jed S. Rakoff, who also imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “Charlie Shrem knowingly facilitated the purchase and use of Bitcoins by others to buy illegal drugs on the Silk Road site. He willfully abdicated his duties as compliance officer of BitInstant, putting illegal profit ahead of legal and ethical responsibility. Now Shrem has been made to answer for his crimes.”
According to the allegations contained in the Complaint, the Indictment, the Superseding Information, and statements made in other documents filed in Manhattan federal court and related court proceedings:
From about December 2011 to October 2013, SHREM’s co-defendant, Robert M. Faiella, ran an underground Bitcoin exchange on the Silk Road website, a website that served as a sprawling and anonymous black market bazaar where illegal drugs of virtually every variety were bought and sold regularly by the site’s users. Operating under the username “BTCKing,” Faiella sold Bitcoins – the only form of payment accepted on Silk Road – to users seeking to buy illegal drugs on the site. Upon receiving orders for Bitcoins from Silk Road users, he filled the orders through BitInstant, a company based in New York, New York. BitInstant was designed to enable customers to exchange cash for Bitcoins anonymously, that is, without providing any personal identifying information, and charged a fee for its service. Faiella obtained Bitcoins with BitInstant’s assistance, and then sold the Bitcoins to Silk Road users at a markup.
SHREM was the Chief Executive Officer of BitInstant, and from about August 2011 until about July 2013, when BitInstant ceased operating, he was also its Compliance Officer, in charge of ensuring BitInstant’s compliance with federal and other anti-money laundering (“AML”) laws. SHREM was also the Vice Chairman of the Bitcoin Foundation, a foundation dedicated to promoting the Bitcoin virtual currency system.
SHREM, who allegedly bought drugs on Silk Road himself, was fully aware that Silk Road was a drug-trafficking website, and through his communications with Faiella, SHREM also knew that Faiella was operating a Bitcoin exchange service for Silk Road users. Nevertheless, SHREM knowingly facilitated Faiella’s business with BitInstant in order to maintain Faiella’s business as a lucrative source of revenue. SHREM knowingly allowed Faiella to use BitInstant’s services to buy Bitcoins for his Silk Road customers; personally processed Faiella’s orders; gave Faiella discounts on his high-volume transactions; failed to file a single suspicious activity report with the United States Treasury Department about Faiella’s illicit activity, as he was otherwise required to do in his role as BitInstant’s Compliance Officer; and deliberately helped Faiella circumvent BitInstant’s AML restrictions, even though it was SHREM’s job to enforce them and even though BitInstant had registered with the Treasury Department as a money services business.
Working together, SHREM and Faiella exchanged nearly $1 million in cash for Bitcoins for the benefit of Silk Road users, so that the users could, in turn, make illegal purchases on Silk Road.
In imposing the sentence, Judge Rakoff remarked: "There's no question that Mr. Shrem, over a period of many months, was knowingly, willfully, and to some extent excitedly, even passionately involved in activity that he knew was a serious violation of the law and that was promoting the evil business of trafficking in drugs."
In addition to the prison sentence, SHREM, 24, of New York, New York, was sentenced to three years of supervised release and was ordered to forfeit $950,000, representing the amount of funds involved in the offense that were intended to promote illegal activity.
Mr. Bharara praised the outstanding investigative work of the DEA’s New York Organized Crime Drug Enforcement Strike Force, which is comprised of agents and officers of the U. S. Drug Enforcement Administration, the New York City Police Department, Immigration and Customs Enforcement - Homeland Security Investigations, the New York State Police, the U. S. Internal Revenue Service Criminal Investigation Division, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Secret Service, the U.S. Marshal Service, New York National Guard, Office of Foreign Assets Control and the New York Department of Taxation and Finance. Mr. Bharara also thanked the FBI’s New York Field Office.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Serrin Turner is in charge of the prosecution, and Assistant United States Attorney Andrew Adams of the Money Laundering and Asset Forfeiture Unit is in charge of the forfeiture aspects of the case.
SHREM’s co-defendant, Faiella, pled guilty in September 2014, along with SHREM, and is scheduled to be sentenced before Judge Rakoff on January 20, 2015.
Florida Telemarketer Pleads Guilty to Timeshare Resale ScamRead the Press Release
Follow @SDILNewsStephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced that Leandro Velazquez pleaded guilty today to conspiracy to commit mail and wire fraud. The plea was entered at the United States District Court in East St. Louis, Illinois. Sentencing is set for Friday, April 3, 2015 at 10:00 AM, at which time Velazquez faces a term in prison of up to twenty five (25) years, a $250,000 fine and five years’ supervised release.
Facts revealed in Court showed that on February 20, 2014, a grand jury returned a one count indictment charging Velazquez with conspiracy to commit mail fraud and wire fraud in connection with telemarketing. The indictment alleged that Velazquez and others were engaged in an extensive telemarketing scam which operated in Orlando, Florida, that bilked thousands of victims of approximately $6 million dollars, victimizing consumers throughout the United States and Canada. There were victims in seven of the thirty eight (38) counties comprising the Southern District of Illinois.
The criminal indictment alleged that Velazquez was a co-owner of National Solutions and related companies located in Orlando, Florida. The scheme operated under more than a dozen business names including Bluescape Timeshares International, Country Wide Timeshares, Countrywide Timesharesales MA, Landmark Timeshares, Propertys Direct, Quicksale Propertys, Sun Property Networks, Sun Property’s, Universal Propertys, VIM Timeshares, Propertys DRK, Quick Sale Advisers, Quick Sale International, City Resorts, Resort Advisers, American Timeshares, Exit Week, and Resort Advisors International. The indictment alleged that Velazquez’ participation in the scheme began on or about December 5, 2007, and continued through July 13, 2011. The indictment alleged that telemarketers for National Solutions placed cold calls to timeshare owners and then falsely represented that their company had actual buyers for the owners’ timeshare property. Telemarketers then solicited advanced fees of up to several thousand dollars from each victim in purported closing costs that they promised would be refunded to the owner once the closing on the property occurred. Many timeshare owners were told that their closings were scheduled within a number of days. Despite collecting fees from these victims, these companies were not successful in selling a single timeshare unit, the indictment alleged. Velazquez and his co-conspirators, the indictment alleged, simply pocketed these supposed closing costs.
The Federal Trade Commission investigated the National Solutions businesses and brought a civil complaint in the United States District Court for the Middle District of Florida in Orlando. In that action the FTC seized the offices and records of National Solutions on July 13, 2011, pursuant to Court Order.
This prosecution follows 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 Inspection Service. The prosecution of the case was handled by Assistant U.S. Attorneys Bruce E. Reppert and Michael J. Quinley.
Consumers who believe that they have been the victim of a consumer fraud should call the Federal Trade Commission 1-877-FTC-HELP (1-877-382-4357) or file an online complaint at https://www.ftccomplaintassistant.gov.
Federal Jury Convicts Michigan Man on All Charges for Armed Robbery at AT&T StoreRead the Press Release
PITTSBURGH – Brandon Kennedy, a resident of Inkster, Michigan, was convicted at the conclusion of a federal jury trial of committing an interstate armed robbery, of using and carrying a firearm during and in relation to a crime of violence, and of being a convicted felon in possession of a firearm, United States Attorney David J. Hickton announced today.
The jury convicted Kennedy after a three-day trial that concluded on December 18, 2014, and that was presided over by United States District Judge Nora Barry Fischer. The jury was presented with evidence that Kennedy, on November 26, 2012, traveled from the Detroit, Michigan, area to the AT&T retail store located at 970 Greentree Road, Pittsburgh, Pennsylvania, and robbed the store at gunpoint. Kennedy brandished a loaded .45 caliber Ruger pistol at the store employees during the robbery and after he had already been convicted of a felony crime in a prior case. The robbery resulted in the forcible theft of 12 iPads and 14 iPhones as well as other electronic devices and cash.
Kennedy was previously prosecuted in state court in Michigan for committing an armed robbery at an AT&T retail store in Oakland County, Michigan, in September 2011. Kennedy was acquitted at the conclusion of a state jury trial in March 2012. Kennedy committed the armed robbery at the Pittsburgh AT&T store following the acquittal.
The law provides for a maximum total sentence of at least seven years and up to life in prison, a fine of up to $750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history of the defendant.
Assistant United States Attorney Craig W. Haller is prosecuting this case on behalf of the United States.
The Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Green Tree Police Department, the South Rockwood (Michigan) Police Department, and the Inkster (Michigan) Police Department investigated this case. This case is being prosecuted under Project Safe Neighborhoods, a collaborative effort by federal, state, and local law enforcement agencies, prosecutors, and communities to prevent, deter, and prosecute gun crime.
Drilling Operator Sentenced for Environmental and Maritime Crimes in AlaskaRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced that Noble Drilling (U.S.) LLC was sentenced today for committing eight felony environmental and maritime crimes arising out of its operation of the drill ship Noble Discoverer and the drilling unit Kulluk in violation of federal law in Alaska in 2012. These convictions are the result of a joint investigation between the U.S. Coast Guard Investigative Service and the U.S. Environmental Protection Agency Criminal Investigation Division. The case was prosecuted by the United States Attorney’s Office for the District of Alaska and the Department of Justice’s Environmental Crimes Section.
Noble was sentenced to pay $12.2 million dollars in fines and community service payments and to serve a four year period of probation during which time it must implement a comprehensive Environmental Compliance Plan. In addition, Noble’s parent corporation, Noble Corporation plc, headquartered in London, England, has agreed to implement an Environmental Management System for all Mobile Offshore Drilling Units (MODUs) owned or operated by Noble Corporation plc and its direct and indirect subsidiaries worldwide.Noble Drilling (U.S.) LLC was convicted of five counts of knowingly violating the Act to Prevent Pollution from Ships (APPS), one count of knowing violating the Nonindigenous Aquatic Nuisance Prevention and Control Act, and two counts of willfully violating the Ports and Waterways Safety Act. Seven of these counts are for Noble’s operation of the Noble Discoverer, and one count for the operation of the MODU Kulluk.
At the time of the offenses, the Noble Discoverer was operating under contract with Shell Offshore, Inc. and Shell Development, Ltd. for the purpose of drilling in the arctic in Alaska. During the 2012 drilling season, Noble was the operator and bare boat charterer of the motor vessel Noble Discoverer and the drilling operator of the MODU Kulluk. In 2012, the Kulluk and the Noble Discoverer made several U.S. port calls in Washington and Alaska on their way to the Shell drilling site in the Chukchi Sea off the coast of Alaska. After leaving the drill site, the Kulluk ultimately ran aground off the coast of Unalaska when it broke free from its tow in bad weather, and the Noble Discoverer was dead-ship towed from Dutch Harbor to Seward due to failures with its main engine and other equipment.
A total of $4 million was paid by Noble in the form of community service payments; $2,500,000 will go to the International Arctic Research Center located at the University of Alaska Fairbanks, $1,000,000 will go to the National Fish and Wildlife Foundation, Alaskan Arctic Fund, and $500,000 will go to the Arctic Research Consortium of the United States. All of these funds will be used for research and projects designed to study and/or benefit the Arctic and/or the natural resources or wildlife contained therein near Alaska.
In addition, the Court has ordered that $512,500 of the $8.2 million fine be awarded to a person who provided substantial information leading the conviction of Noble in this case. This award was made under the provisions of the Act to Prevent Pollution from Ships, which provides that the Court may award an amount equal to not more than ½ of the fine imposed for a conviction of that statute to the person giving information leading to conviction. In this case, the United States notified the Court that there was an individual who provided information that resulted in Noble’s conviction on Count 1 of the Information, and requested that the Court award one-half of the fine for that count to this individual.
The APPS award provision serves a valuable law enforcement purpose by encouraging those most likely to know of the illegal conduct to report it and cooperate with law enforcement. Because the discharge of oily waste typically takes place in the middle of the ocean in international waters, the only persons likely to know about the conduct and the falsification of the ORB are the crew members. Absent crew members with firsthand knowledge of the illegal conduct coming forward, APPS violations are otherwise extremely difficult to uncover. The government’s success in detecting the illegal activity and obtaining sufficient evidence to support investigations and prosecutions is dependent upon the willingness of a crew member to step forward. In turn, a crew member must assess the risks associated with coming forward, such as the possibility that the crew member will lose relatively lucrative employment and be blacklisted and barred from working in the marine shipping industry in the future. A substantial monetary award, as provided by APPS, both rewards the crew member for taking those risks and provides an incentive for other crew members to come forward and report illegal conduct on vessels in the future.
Chief Judge Ralph R. Beistline accepted the plea agreement entered into between the parties, and sentenced Noble consistent with that agreement. As special condition of the plea agreement, Judge Beistline ordered that Noble implement the Environmental Compliance Plan, including the third party and independent auditing requirements. Judge Beistline noted that all of us are victims of these crimes, and that we all have to do everything we can as a community to protect the environment.
Ms. Loeffler commended the U.S. Coast Guard Investigative Service and the U.S. Environmental Protection Agency Criminal Investigation Division for the investigation leading to the successful prosecution of this case.Dominican Doctor and Assistant Sentenced for Conspiring to Alter Fingerprints of Criminal AliensRead the Press Release
BOSTON – A Dominican doctor and his assistant were sentenced today for their roles in altering the fingerprints of illegal aliens through a surgical process.
Danilo Ramon Martinez, 61, was sentenced by U.S. District Court Judge Richard G. Stearns to 27 months in prison, three years of supervised release, and a fine of $5,000. Martinez’s assistant, Teresa Araujo Ramirez, 40, was sentenced to 18 months in prison, and three years of supervised release. It is anticipated that, upon completion of their sentences, Martinez and Ramirez will be deported to the Dominican Republic. In December 2013, Ramon Martinez and Araujo Ramirez were indicted for conspiring to harbor illegal aliens by altering their fingerprints and to distribute controlled substances.
Martinez, a licensed medical doctor in the Dominican Republic, performed surgery that altered the fingerprints of aliens illegally in the United States, thereby assisting in the concealment of their true identities and criminal histories. Ramirez charged $4,000 for this service. Araujo Ramirez assisted and supplied pain medications, including Oxycodone and other controlled substances, to the patients following the procedures.
United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. The case was prosecuted prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.District Man Sentenced to 14 Years in Prison for 2013 Murder in Southeast WashingtonShot Fired in Confrontation over Defendant’s WeaponRead the Press Release
WASHINGTON – Don Page, 24, of Washington, D.C., has been sentenced to a 14-year prison term for killing a man in June 2013 in Southeast Washington, U.S. Attorney Ronald C. Machen Jr. announced today.
Page pled guilty in October 2014, in the Superior Court of the District of Columbia, to a charge of second-degree murder while armed. The plea, which was contingent upon the Court’s approval, called for a sentence within the range of 12 to 15 years. The Honorable Rhonda Reid Winston accepted the plea and sentenced Page on Dec. 18, 2014. Upon completion of his prison term, Page will be placed on five years of supervised release.
According to the government’s evidence, in the early morning hours of June 22, 2013, Page and the victim, Quentin White, 28, were each outside in the 3500 block of East Capitol Street SE with their respective groups of friends. A fight ensued when members of the group with Mr. White began chanting, “Free Khari,” a reference to Khari Williams, then 18, who at the time was in custody and awaiting trial for the murder of Angelo Payne. Mr. Payne, 23, was killed on Dec. 30, 2012 in Southeast Washington.
Mr. Payne and Page had been very close friends. Mr. White and Khari Williams were close friends. Page’s friends became involved in a physical altercation with friends of Mr. White. During the fight, Page retrieved a silver revolver and fired one shot into the air. Mr. White approached Page, with his hands up, and told Page to put the gun down and fight like a man. Page then pointed the gun at Mr. White and fired one shot at his chest, killing him. Page then fled in his car. He was arrested nearly two weeks later in Martinsburg, W. Va.
Khari Williams pled guilty in April 2014 to a charge of voluntary manslaughter for the slaying of Angelo Payne. He was sentenced in June 2014 to a 12-year prison term.
In announcing this week’s sentence, U.S. Attorney Machen commended the Metropolitan Police Department for its work on the investigation. He also commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Debra Joyner and Victim/Witness Advocate Marcia Rinker. Finally, he expressed appreciation for the work of Assistant U.S. Attorney Michelle Bradford, who investigated and indicted the case.
14-282Department of Justice Completes Collaborative Reform Review of Spokane Police Department's Use of Force Policies and PracticesRead the Press Release
COPS Office Releases 42 Findings and Recommendations to Implement Best Practice at the Spokane Police Department
The U.S. Department of Justice Office of Community Oriented Policing Services (COPS) announced today the completion of a Collaborative Reform Review of the Spokane Police Department’s use of force policies and practices. The new report, funded by a grant from the COPS Office’s Collaborative Reform Initiative for Technical Assistance, lists 42 findings and recommendations to address use of force practices, improve tactical policing strategies and build stronger collaborative relationships between local police and the communities they protect.
“The COPS office is confident in the Spokane Police Department’s capability to implement these evidence based recommendations and build on their commitment to building a stronger community,” said Director Ronald Davis of the COPS Office. “We look forward to strengthening the collaborative relationship between the community and law enforcement to ensure that this process remains expansive, transparent and inclusive.”
The COPS office first announced the beginning of the Collaborative Reform Review in February 2013. The scope of the work announced today reviewed the use of force over the last five years, including an analysis of policies, training, investigation and community outreach efforts. Interviews were conducted with 140 area stakeholders, including community members, current and former officers and prosecutors, community organizations and police union officials. The 11-month assessment concluded that police officers in the Spokane Police Department do not routinely and deliberately engage in excessive use of force or deadly force. The report also did not find a biased application of use of force. Other findings and recommendations include the need for improvements in use of force documentation and investigation practices used by the police department. The review also outlined the need to formalize the roles and responsibilities of the ombudsman and the commission members.
“I want to thank the COPS Office for engaging in the collaborative reform process,” said Chief Frank G. Straub of the Spokane Police Department. “I believe the findings and recommendations provide an important road map for us to improve our internal business practices and more importantly better engage with the community we serve. We are fully committed to implementing all of the recommendations within the 18-month timeframe and continuing to serve all members of the Spokane community with dignity, integrity and respect.”
The report was administered as part of the COPS Office’s Collaborative Reform Initiative for Technical Assistance, designed to provide technical assistance to agencies facing significant law enforcement-related issues. Using subject matter experts, interviews and direct observations, as well as conducting extensive research and analysis, the COPS Office assists law enforcement agencies with enhancing and improving their policies and procedures, their operating systems and their professional culture. The COPS Office can issue a series of recommendations and be instrumental in assisting agencies with the implementation of those recommendations.
The report, The Collaborative Reform Model: A Review of Use of Force Policies, Processes, and Practices in the Spokane Police Department, can be found online here.
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The COPS Office, headed by Director Davis, is a federal agency responsible for advancing community policing nationwide. Since 1995, COPS has awarded over $14 billion to advance community policing, including grants awarded to more than 13,000 state, local, and tribal law enforcement agencies to fund the hiring and redeployment of approximately 125,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance. For additional information about COPS, please visit www.cops.usdoj.gov.
Defense Contractor Agrees to Pay $27.5 Million to Settle Overbilling AllegationsRead the Press Release
Lockheed Martin Integrated Systems (LMIS) has agreed to pay $27.5 million to resolve allegations that it violated the False Claims Act by knowingly overbilling the government for work performed by LMIS employees who lacked required job qualifications.
The settlement was announced today by Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division and U.S. Attorney Paul J. Fishman for the District of New Jersey.
“Contractors that knowingly bill the government in violation of contract terms will face serious consequences,” said Acting Assistant Attorney General Branda. “The department will ensure that those who do business with the government, and seek taxpayer funds, do so fairly and in accordance with the applicable rules.”
“U.S. forces rely on the goods and services provided by defense contractors, so it is imperative the government be able to rely on those contractors to adhere to the rules,” said U.S. Attorney Fishman. “This settlement should remind all who do business with the government that there is a price to pay for fudging the math.”
LMIS is a subsidiary of Lockheed Martin Inc., which is headquartered in Bethesda, Maryland. The alleged labor mischarging occurred on the Rapid Response (CR2) contract and the Strategic Services Sourcing (S3) contract, both issued by the U.S. Army Communication and Electronics Command (CECOM). CECOM is located at Fort Monmouth, New Jersey, and at the Aberdeen Proving Group in Maryland. The purpose of the CR2 and S3 contracts is to provide rapid access to products and services to be provided to the Army in Iraq and Afghanistan. Individual task orders then are separately negotiated, based on these contracts, to quickly meet the needs of CECOM. LMIS allegedly violated the terms of the contracts by using under-qualified employees who were billed to the United States at the rates of more qualified employees. The overbilling allegedly resulted in greater profit for LMIS.
“This settlement demonstrates the commitment of the Defense Criminal Investigative Service (DCIS) and our partners to vigorously pursue alleged violations of the False Claims Act,” said Special Agent in Charge Craig W. Rupert of the DCIS Northeast Field Office. “All contractors doing business with the federal government are expected to abide by the acquisition rules no matter who they are. Investigations of such allegations are necessary to protect American taxpayers and our warfighters.”
This settlement was the result of a coordinated effort by the Civil Division, the U.S. Attorney’s Office for the District of New Jersey, the Southern New Jersey Branch of the Defense Contract Audit Agency (DCAA) and the DCAA’s Mid-Atlantic Region's Comprehensive Labor Team and Investigative Support Team, the U.S. Army’s Criminal Investigative Command’s Major Procurement Fraud Unit and the DCIS.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
Defense Contractor Agrees to Pay $27.5 Million to Settle Overbilling AllegationsRead the Press Release
NEWARK, N.J. – Lockheed Martin Integrated Systems (LMIS) has agreed to pay $27.5 million to resolve allegations that it violated the False Claims Act by knowingly overbilling the government for work performed by LMIS employees who lacked required job qualifications.
The settlement was announced today by U.S. Attorney Paul J. Fishman for the District of New Jersey and Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.
“U.S. forces rely on the goods and services provided by defense contractors, so it is imperative the government be able to rely on those contractors to adhere to the rules,” said U.S. Attorney Fishman. “This settlement should remind all who do business with the government that there is a price to pay for fudging the math.”
“Contractors that knowingly bill the government in violation of contract terms will face serious consequences,” said Acting Assistant Attorney General Branda. “The department will ensure that those who do business with the government, and seek taxpayer funds, do so fairly and in accordance with the applicable rules.”
LMIS is a subsidiary of Lockheed Martin Inc., which is headquartered in Bethesda, Maryland. The alleged labor mischarging occurred on the Rapid Response (CR2) contract and the Strategic Services Sourcing (S3) contract, both issued by the U.S. Army Communication and Electronics Command (CECOM). CECOM is located at Fort Monmouth, New Jersey, and at the Aberdeen Proving Group in Maryland. The purpose of the CR2 and S3 contracts is to provide rapid access to products and services to be provided to the Army in Iraq and Afghanistan. Individual task orders then are separately negotiated, based on these contracts, to quickly meet the needs of CECOM. LMIS allegedly violated the terms of the contracts by using under-qualified employees who were billed to the United States at the rates of more qualified employees. The overbilling allegedly resulted in greater profit for LMIS.
“This settlement demonstrates the commitment of the Defense Criminal Investigative Service (DCIS) and our partners to vigorously pursue alleged violations of the False Claims Act,” said Special Agent in Charge Craig W. Rupert of the DCIS Northeast Field Office. “All contractors doing business with the federal government are expected to abide by the acquisition rules no matter who they are. Investigations of such allegations are necessary to protect American taxpayers and our warfighters.”
This settlement was the result of a coordinated effort by the Civil Division, the U.S. Attorney’s Office for the District of New Jersey, the Southern New Jersey Branch of the Defense Contract Audit Agency (DCAA) and the DCAA’s Mid-Atlantic Region's Comprehensive Labor Team and Investigative Support Team, the U.S. Army’s Criminal Investigative Command’s Major Procurement Fraud Unit and the DCIS.
The District of New Jersey was represented by Senior Litigation Counsel Anthony J. LaBruna Jr. of the U.S. Attorney’s Office Civil Division in Newark.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
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Defendant in Extensive Marriage Fraud Scheme Pleads GuiltyRead the Press Release
SACRAMENTO, Calif. —Sippy Lal, 61, of Sacramento, pleaded guilty today to conspiring to induce aliens to illegally enter the United States for private financial gain, United States Attorney Benjamin B. Wagner announced.
According to court documents, Lal and his co-defendants Mamta Sharma and Rani Singh-Lal were involved in an elaborate immigration-fraud scheme involving foreign nationals from India who paid to enter into sham engagements or marriages with locally recruited U.S. citizens in an effort to legalize their immigration status. The citizens recruited by Lal were paid thousands of dollars to fly to India, meet and take pictures with a purported spouse, and sometimes enter into actual marriages (albeit often using aliases). Thereafter, fraudulent petitions were filed with the United States seeking visas allowing the Indian citizens to enter and reside within the United States. On at least one occasion, after an alien entered on a fraudulent fiancé visa procured through the scheme, Lal paid a U.S. citizen to further participate by entering into a sham marriage with the alien in Sacramento.
Co-defendant Sharma used various aliases to pose as a U.S. citizen in connection with five different petitions filed since 2008, despite the fact that she is not a U.S. citizen and despite the fact that she was married to Lal throughout that time period. Similarly, co-defendant Singh-Lal posed as the petitioner with respect to three different petitions, all filed with slight variations on her true name.
According to Lal’s plea agreement, well over 25 fraudulent petitions were submitted to immigration authorities as a result of the conspiracy, and at least nine Indian nationals entered the United States and were, at least for some period of time, able to avoid detection.
Co-defendants Sharma and Singh-Lal previously entered guilty pleas and were sentenced to terms of imprisonment of 24 months and 27 months, respectively.
Lal is scheduled to be sentenced by United States District Judge Garland E. Burrell Jr. on March 6, 2015. The plea agreement contemplates a sentence of two years. The actual sentence, however, will be determined at the discretion of the court at the hearing.
This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), United States Citizenship and Immigration Services – Fraud Detection and National Security Unit, and the California Department of Justice – Bureau of Investigation and Intelligence. Assistant United States Attorneys Michele Beckwith and Philip Ferrari are prosecuting the case.Decatur Man Sentenced to 20 Years in Prison for Sexual Exploitation of A Child,enticement of A Minor and Making Interstate ThreatsRead the Press Release
Springfield, Ill. – A Decatur, Ill., man, Jason E. Cooper, 34, of the 4800 block of Martin Luther King, Jr. Drive, has been ordered to serve 20 years in federal prison for sexual exploitation of a minor, enticement of a minor, and making interstate threats, as announced by U.S. Attorney Jim Lewis, Central District of Illinois. U.S. District Judge Sue E. Myerscough sentenced Cooper in federal court in Springfield, Ill. on December 18, 2014. Cooper was ordered to serve 15 years of supervised release following his term of imprisonment, and to register as a sexual predator for the period of his natural life. Cooper was also ordered to forfeit computer material seized as evidence.
Cooper pled guilty on May 8, 2014, to one count each of enticement of a minor, making interstate threats, and sexual exploitation of a minor. According to the factual basis presented by the government at Cooper’s change of plea hearing, in 2013, Cooper used social media and game sites to initiate contact with two different minor females. Cooper then sent graphic sexual texts and emails and threats of violence to the minors and their families if his demands for information and photos of graphic sexual activity were ignored.
Cooper was indicted by a grand jury in April 2013, following his arrest. Cooper has remained in the custody of the U.S. Marshals Service since his arrest.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Assistant U.S. Attorney Elly Peirson. The charges were investigated by U.S. Immigration and Customs Enforcement Homeland Security Investigations and the Decatur Police Department.
David Rivera Confirmed by US Senate as United States Attorney for the Middle District of TennesseeRead the Press Release
David Rivera has been confirmed by the United States Senate to serve as the United States Attorney for the Middle District of Tennessee.
President Barack Obama nominated Rivera for this post June 19, 2014. The President said of Rivera that he had proven himself to be not only a top flight attorney but a dedicated public servant. Mr. Obama went on to say that he was grateful for the work already accomplished on behalf of the American people and confident that Rivera will ensure justice will be served during his tenure as United States Attorney.
The Senate confirmed Rivera’s nomination by unanimous consent during an evening session of the Senate on December 16.
David Rivera has been the Acting United States Attorney for the Middle District of Tennessee since April 2013. He has served as an Assistant United States Attorney in the Middle District of Tennessee since 2004, during which time he has held leadership positions including First Assistant United States Attorney, Chief and Deputy Chief of the Criminal Division. From 1999 to 2004, he worked in the United States Attorney’s Office in the District of Puerto Rico, serving as Deputy Chief of the Criminal Division. Mr. Rivera is a highly decorated prosecutor who has received numerous awards and is twice recipient of the Department of Justice’s prestigious Director’s Award for Superior Performance as an Assistant United States Attorney for his work in the investigation and prosecution of public corruption and financial crimes. Mr. Rivera was an Assistant State Attorney in Broward County, Florida and an Assistant District Attorney in Bronx County, New York. Mr. Rivera also served in the United States Air Force and the United States Air National Guard.
DEA Employee Charged in Credit Card Fraud SchemeRead the Press Release
Allegedly Acquired DEA Government Credit Cards Which She Used to Obtain Over $115,000 in Cash
Greenbelt, Maryland – Keenya Meshell Banks, age 41, of Upper Marlboro, Maryland, was charged by criminal complaint with access device fraud, wire fraud and aggravated identity theft, in connection with a scheme to fraudulently obtain and use DEA government credit cards. Ms. Banks was arrested and had her initial appearance on December 18, 2014, in U.S. District Court in Greenbelt. She was released under the supervision of U.S. Pretrial Services.The charges were announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Michael Tompkins of the Department of Justice Office of the Inspector General.
According to the affidavit filed in support of the criminal complaint, Banks worked as a DEA Program Manager in Northern Virginia, and was responsible for the approval and issuance of government credit cards to DEA employees. The affidavit alleges that from June 2010 through October 2014, Banks fraudulently acquired 33 DEA credit cards.Specifically, Banks allegedly submitted applications that included the names and identifying information of individuals who did not work for DEA and therefore were not eligible to receive DEA government credit cards. On at least one occasion, Banks submitted an application that matched a current DEA employee. The employee never received the card and Banks allegedly used the personal information of the employee without the employee’s knowledge or approval. The credit cards were ordered by Banks via email, and the cards were sent to Banks via Federal Express or other mail, based on her certification on the applications.
The criminal complaint alleges that Banks used the cards at Automated Teller Machines in Maryland and Northern Virginia, withdrawing approximately $115,841.74 over the course of the scheme. No payment was ever made to the credit card issuer.
Banks faces a maximum sentence of 10 years in prison for access device fraud; 20 years in prison for wire fraud; and a mandatory two years in prison, consecutive to any other sentence, for aggravated identity theft.
A criminal complaint is not a finding of guilt. An individual charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised the Department of Justice Office of Inspector General for its work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Thomas P. Windom, and Trial Attorneys Justin Weitz and Richard B. Evans from the U.S. Department of Justice, Public Integrity Section, who are prosecuting the case.
Court Authorizes Internal Revenue Service to Issue Summonses for Records Relating to U.S. Taxpayers Who Used Services of Sovereign Management & Legal Ltd. to Conceal Offshore Accounts, Assets or EntitiesRead the Press Release
Deputy Assistant Attorney General David Hubbert for the Justice Department’s Tax Division Civil Trial Matters, U.S. Attorney Preet Bharara for the Southern District of New York, Commissioner John Koskinen of the Internal Revenue Service (IRS), and Special Agent in Charge Anthony D. Williams of the Drug Enforcement Administration’s (DEA) Los Angeles Field Division announced that U.S. District Judge Vernon S. Broderick entered an order yesterday authorizing the IRS to issue summonses requiring Federal Express Corporation, doing business as FedEx Express, FedEx Ground Package System Inc., aka FedEx Ground, DHL Express (DHL), United Parcel Service Inc. (UPS), Western Union Financial Services Inc., the Federal Reserve Bank of New York (the FRBNY), Clearing House Payments Company LLC, and HSBC Bank USA National Association (HSBC USA) to produce information about U.S. taxpayers who may be evading or have evaded federal taxes by using the services of Sovereign Management & Legal Ltd. (Sovereign) to establish, maintain or conceal foreign accounts, assets and entities.
In this action, the court granted the IRS permission to serve what are known as “John Doe” summonses on FedEx Express, FedEx Ground, DHL, UPS, Western Union, the FRBNY, Clearing House and HSBC USA. The IRS uses John Doe summonses to obtain information about possible tax fraud by individuals whose identities are unknown. The John Doe summonses direct these eight entities to produce records that will assist the IRS in identifying U.S. taxpayers who, from 2005 through 2013, used Sovereign’s services to establish, maintain, operate or control any foreign financial account or other assets; any foreign corporation, company, trust, foundation or other legal entity; or any foreign or domestic financial account in the name of such foreign entity.
“This summons action is but the latest step in the Department of Justice’s efforts to identify and hold fully accountable U.S. taxpayers who have sidestepped their tax obligations by hiding money overseas,” said Deputy Assistant Attorney General Hubbert. “The world is getting smaller for tax cheats, and we will work with our partners at the IRS to vigorously enforce the nation’s tax laws against those who seek to avoid paying their fair share.”
“This action demonstrates our Office’s commitment to pursuing tax evaders who use offshore service providers to avoid their U.S. tax obligations,” said U.S. Attorney Bharara. “By issuing these John Doe summonses, we continue our joint efforts with the IRS to identify and hold accountable those who conceal their foreign assets in order to dodge their legal responsibility to pay taxes.”
“The IRS remains committed to continuing our priority efforts to stop offshore tax evasion wherever it is found,” said Commissioner Koskinen. “We have made tremendous progress in this area, working cooperatively with other agencies. The John Doe summons remains an important tool in our efforts to find international tax evaders and those who help them.”
“The DEA has a longstanding commitment to sharing information with our federal, state, and local partners,” said Special Agent in Charge Anthony D. Williams. “Issuance of these summonses exemplifies how outstanding investigative results can be derived from a culture of interagency cooperation.”
According to the allegations set forth in the documents filed in support of the petition, and other information in the public record:
Sovereign is a multi-jurisdictional offshore services provider that offers clients, among other things, the formation and administration of anonymous corporations and foundations in Panama as well as offshore entities. Related services provided by Sovereign include the maintenance and operation of offshore structures, mail forwarding, the availability of virtual offices, re-invoicing, and the provision of professional managers who appoint themselves directors of the client’s entity while the client maintains ultimate control over the assets.
As a result of a DEA investigation of online narcotics trafficking known as Operation Adam Bomb, the IRS learned that Sovereign was involved in assisting U.S. clients evade their taxes. During the IRS investigation that led to today’s action, one taxpayer, making a voluntary disclosure of tax non-compliance to avoid prosecution, reported that Sovereign helped the taxpayer form an anonymous corporation in Panama that the taxpayer used to control assets without appearing to own them.
The IRS investigation also determined that Sovereign uses Federal Express, UPS and DHL to correspond with U.S. clients, and Western Union to transmit funds to and from clients in the United States. In addition, the IRS learned that the wire services operated by the FRBNY and Clearing House, and the U.S. correspondent bank accounts that HSBC USA holds for Sovereign’s banks in Panama and Hong Kong, are likely to have records of financial transactions between Sovereign and its clients in the United States. By obtaining information from these entities through John Doe summonses, the IRS expects to be able to identify Sovereign’s U.S. clients who may be avoiding or evading taxes.
Federal law requires U.S. taxpayers to pay taxes on all income earned worldwide. U.S. taxpayers must also report foreign financial accounts if the total value of the accounts exceeds $10,000 at any time during the calendar year. Willful failure to report a foreign account can result in a fine of up to 50 percent of the amount in the account at the time of the violation.
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This case is being handled by the U.S. Attorney’s Office for the Southern District of New York Tax and Bankruptcy Unit. Assistant U.S. Attorney Joseph N. Cordaro is in charge of the case.
Court Authorizes IRS to Issue Summonses for Records Relating to U.S. Taxpayers Who Used Services of Sovereign Management & Legal, Ltd., to Conceal Offshore Accounts, Assets, or EntitiesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, David Hubbert, the Deputy Assistant Attorney General for Civil Trial Matters in the Department of Justice’s Tax Division, John Koskinen, the Commissioner of the Internal Revenue Service (“IRS”), and Anthony D. Williams, the Special Agent in Charge of the Drug Enforcement Administration’s Los Angeles Field Division (“DEA”), announced that U.S. District Judge Vernon S. Broderick signed an order yesterday in Manhattan federal court authorizing the IRS to issue summonses requiring Federal Express Corporation a/k/a FedEx Express (“FedEx Express”); FedEx Ground Package System, Inc., a/k/a FedEx Ground (“FedEx Ground”); DHL Express (“DHL”); United Parcel Service, Inc. (“UPS”); Western Union Financial Services, Inc. (“Western Union”); the Federal Reserve Bank of New York (the “FRBNY”); Clearing House Payments Company LLC (“Clearing House”); and HSBC Bank USA, National Association (“HSBC USA”), to produce information about U.S. taxpayers who may be evading or have evaded federal taxes by using the services of SOVEREIGN MANAGEMENT & LEGAL, LTD. (“Sovereign”), to establish, maintain, or conceal foreign accounts, assets, and entities.
In this action, the Court granted the IRS permission to serve what are known as “John Doe” summonses on FedEx Express, FedEx Ground, DHL, UPS, Western Union, the FRBNY, Clearing House, and HSBC USA. The IRS uses John Doe summonses to obtain information about possible tax fraud by individuals whose identities are unknown. The John Doe summonses direct these eight entities to produce records that will assist the IRS in identifying U.S. taxpayers who, from the years 2005 through 2013, used Sovereign’s services to establish, maintain, operate, or control any foreign financial account or other assets; any foreign corporation, company, trust, foundation or other legal entity; or any foreign or domestic financial account in the name of such foreign entity.
Manhattan U.S. Attorney Preet Bharara said: “This action demonstrates our Office’s commitment to pursuing tax evaders who use offshore service providers to avoid their U.S. tax obligations. By issuing these John Doe summonses, we continue our joint efforts with the IRS to identify and hold accountable those who conceal their foreign assets in order to dodge their legal responsibility to pay taxes.”
Deputy Assistant Attorney General David Hubbert said: “This summons action is but the latest step in the Department of Justice’s efforts to identify and hold fully accountable U.S. taxpayers who have sidestepped their tax obligations by hiding money overseas. The world is getting smaller for tax cheats, and we will work with our partners at the IRS to vigorously enforce the nation’s tax laws against those who seek to avoid paying their fair share.”
IRS Commissioner John Koskinen said: “The IRS remains committed to continuing our priority efforts to stop offshore tax evasion wherever it is found. We have made tremendous progress in this area, working cooperatively with other agencies. The John Doe summons remains an important tool in our efforts to find international tax evaders and those who help them.”
DEA Special Agent in Charge Anthony D. Williams said: “The DEA has a longstanding commitment to sharing information with our federal, state, and local partners. Issuance of these summonses exemplifies how outstanding investigative results can be derived from a culture of interagency cooperation.”
According to the allegations set forth in the documents filed in support of the petition, and other information in the public record:
Sovereign is a multi-jurisdictional offshore services provider that offers clients, among other things, the formation and administration of anonymous corporations and foundations in Panama as well as offshore entities. Related services provided by Sovereign include the maintenance and operation of offshore structures, mail forwarding, the availability of virtual offices, re-invoicing, and the provision of professional managers who appoint themselves directors of the client’s entity while the client maintains ultimate control over the assets.
As a result of a DEA investigation of online narcotics trafficking known as OPERATION ADAM BOMB, the IRS learned that Sovereign was involved in assisting U.S. clients with tax evasion. During the IRS’s investigation of Sovereign’s conduct, one taxpayer, making a voluntary disclosure of tax non-compliance to avoid prosecution, reported that Sovereign helped the taxpayer form an anonymous corporation in Panama that the taxpayer used to control assets without appearing to own them.
The IRS investigation also determined that Sovereign uses Federal Express, UPS, and DHL to correspond with U.S. clients, and Western Union to transmit funds to and from clients in the U.S. In addition, the IRS learned that the wire services operated by the FRBNY and Clearing House, and the U.S. correspondent bank accounts that HSBC USA holds for Sovereign’s banks in Panama and Hong Kong, are likely to have records of financial transactions between Sovereign and its clients in the U.S. By obtaining information from these entities through John Doe summonses, the IRS expects to be able to identify Sovereign’s U.S. clients who may be avoiding or evading taxes.
Federal law requires U.S. taxpayers to pay taxes on all income earned worldwide. U.S. taxpayers must also report foreign financial accounts if the total value of the accounts exceeds $10,000 at any time during the calendar year. Willful failure to report a foreign account can result in a fine of up to 50 percent of the amount in the account at the time of the violation.
This case is being handled by the Office’s Tax and Bankruptcy Unit. Assistant United States Attorney Joseph N. Cordaro is in charge of the case.
Sovereign Management John Doe Summonses Order
Coos Bay Company, its Owner and Four Employees Plead Guilty to Fraud on Defense ContractsRead the Press Release
PORTLAND, Ore. — A Coos Bay business, its owner, and four employees were sentenced by the Honorable Michael J. Mosman in federal court on December 12, 2014 for their roles in a conspiracy to defraud the United States by supplying knock-off vehicle and aviation parts to the United States Department of Defense (DOD).
Harold Ray Bettencourt II, 60, of Coos Bay, Oregon and the owner of Kustom Products, Inc.(KPI), was sentenced to 45 months in custody. His sons were also sentenced to prison terms: Nicholas Ryan Bettencourt, 32, was sentenced to 27 month in prison; Bo Bettencourt, 34, was sentenced to a term of 25 months; and Peter Tracy Bettencourt, 28, was sentenced to 12 months in custody. KPI’s office manager, Margo Antoinette Densmore, 43, also of Coos Bay, Oregon, was sentenced to a 12 month prison term. The business, KPI, was sentenced to pay a fine of $150,000. All of the defendants were ordered to pay restitution to the military in the amount of $5,000,000.
The United States Attorney charged that KPI, Bettencourt, and the others conspired to commit wire fraud, money laundering, and trafficking in counterfeit goods and services. As part of the plea, the defendants agreed to forfeit all proceeds traceable to the fraud, including $365,503.26 in funds from 20 bank accounts, eight vehicles, one boat, two boat trailers, two jet skis, and three all-terrain vehicles.
U.S. Attorney, Amanda Marshall, expressed satisfaction with the outcome. “Prison sentences for these defendants are entirely appropriate. They put their own greed before the safety of military personnel. They promised to provide our troops with quality equipment then substituted knock-off parts solely to line their own pockets,” Marshall stated. “The United States will not hesitate to prosecute those who cheat the government, especially when the lives of our service members are at stake.”
The defendants’ scheme, as laid out in Court during the three-day sentencing hearing, related to the defendants’ actions while contracting to provide supplies to the Department of Defense (DOD) from approximately 2006 through 2010. The DOD sought equipment, supplies, and services that were filled through purchase orders awarded to DOD contractors, including KPI. Some of these products were identified as critical application items, meaning that they were items essential to weapons systems performance or operation, or to preserve the life and safety of military personnel. The contracts were awarded through a web-based posting of contract solicitations. Each contained the specific details about the items to be procured, including the requirements related to the specific part desired by Original Equipment Manufacturer (OEM) part number and by approved OEM vendor, whether the part was a critical application, and whether the part was required to be manufactured in the United States. In solicitations for specific products, the contractor was required to supply the “exact product” and to certify that fact by stating that the bid was “without exception.” The solicitation made clear that submitting alternate products could result in criminal and civil penalties.
KPI, acting through the individual defendants, lied to the DOD in order to secure what the government found to include 750 fraudulent contracts with a value in excess of $10,000,000 and used wire communications in interstate and foreign commerce to carry out the scheme. In addition, the defendants knowingly engaged in approximately $8,000,000 in monetary transactions in amounts greater than $10,000 derived from the wire fraud scheme. Finally, in some contracts, the defendants supplied counterfeit Freightliner parts and shipped some parts on pallets that falsely contained the logo and heat treatment certification stamp of Timber Products Inspection, Inc. In essence, the defendants bid to supply a specific OEM part from an approved vendor at a price consistent with an OEM part, but instead knowingly provided a knock-off part from an unapproved vendor that cost them significantly less. This allowed them to under-bid the competition, and generated substantial profits for KPI and the individual defendants.
To highlight one contract, the United States set out the defendants’ actions related to the provision of aviation locknuts. In 2008, KPI was awarded contracts to supply aviation locknuts to the DOD, which were used to secure the blades to the main rotary assembly of the Kiowa Helicopter. The locknuts were flight critical and of proprietary design to be acquired from only two approved manufacturers, SPS or Bristol Industries. Rather than obtain the locknuts from one of the approved sources, Nicholas Bettencourt contacted Coloc Manufacturing in Texas and arranged with them to make and deliver thousands of non-conforming locknuts for fulfillment of the contract. Coloc was unaware that the parts they were contracted to manufacture were proprietary and were to be used in a flight-critical military application. In August 2008, the defective locknuts were detected throughout the military supply chain, which triggered the issuance of a DOD-wide safety alert, a worldwide inspection of all aircraft and stockpiles. After DOD notified KPI about the defective parts, Nicholas Bettencourt provided the DOD officials with false information in an attempt to cover up the acquisition of the defective locknuts.
KPI was also contacted by a DOD inspector, who requested KPI officials provide a written response as to the cause of the deficiency. KPI provided the DOD with a false explanation as to why the locknuts were not in compliance with the contract requirements, explaining that the parts were pulled from the wrong storage bin. Even after the defendants were notified of the deficiency, instead of replacing the defective parts with authentic parts from the approved manufacturers, they went back to Coloc and directed them to re-machine another batch of non-conforming locknuts to more closely resemble the authentic part. The additional defective locknuts were shipped to the DOD, all with complete disregard for the contract specifications on this critical application and the potential for catastrophic failure to the helicopter and injury or death to the occupants as a result.
Again, when the second batch of defective locknuts was detected in the supply chain, DOD officials requested acquisition records from KPI. In response, Nicholas Bettencourt, in conjunction with Margo Densmore, created false records that reflected that the correct parts were ordered by KPI and supplied to the military. Several more requests for records were made by DOD officials, and in response to these requests, Harold Bettencourt II provided the DOD with falsified records and false explanations as to the origin of the defective locknuts. KPI, through Margo Densmore, altered purchase orders to indicate that the correct parts were ordered, and produced those altered documents to DOD officials and investigators. Harold Bettencourt II also provided DOD officials with these false purchase orders and provided DOD officials with a price quote from a parts dealer for authentic conforming parts that KPI never actually ordered. Harold Bettencourt II obtained this quote for the purpose of deceiving the DOD into believing that the correct parts had been ordered.
The United States alleged that these actions by the defendants compromised the integrity of the aviation supply chain and put service members in harm's way by knowingly placing defective and unsafe aviation components into the supply chain and attempting to conceal their actions by falsifying records, and misleading DOD officials and investigators with false statements and information.
Chris Hendrickson, Special Agent in Charge, Defense Criminal Investigative Service, Western Field Office said, “We are extremely pleased at this outcome, which yet again sends the message that fraud and corruption will be vigorously investigated and prosecuted. This is an unfortunate example of a corrupt contractor who recklessly risked the safety of our troops by selling counterfeit and defective parts, including flight critical parts, to the Department of Defense. Cases such as these are not motivated by need or other difficult personal circumstances; they are the product of simple greed. This investigation should serve as a warning for those intent on defrauding the U.S. military and American public that the Defense Criminal Investigative Service (DCIS) and our law enforcement partners will pursue these crimes relentlessly.”
Those with information relating to fraud, corruption or waste in government contracting should contact the DoD Hotline at www.dodig.mil/hotline or should call (800) 424-9098.
Financial fraud is a serious crime and it deserves serious punishment, but the real impact of Kustom Product’s actions could have been disastrous,” stated Special Agent in Charge Teri Alexander of IRS Criminal Investigation. “We are proud to have worked beside our law enforcement partners in this effort to protect our military personnel.”
“While our warfighters were in Iraq and Afghanistan putting their lives on the line and depending on the Bettencourts’ counterfeit parts, the defendants were in Oregon ripping off taxpayers and enjoying the proceeds of their multimillion dollar scam,” said Brad Bench, Special Agent in Charge of Homeland Security Investigations in Seattle, which oversees Oregon investigations. “These prison sentences should make clear, those who violate the public’s trust will be held accountable for their actions.”
“The financial cost of this fraud – more than $10 million – is significant, but the human cost could have been much higher,” said Greg Bretzing, Special Agent in Charge of the FBI in Oregon. “The counterfeit hardware that Kustom Products passed off as real could have led to catastrophic failures of trucks and helicopters used by our military. This case shows that we – with many partners at the Departments of Defense and Homeland Security as well as the IRS – will not allow anyone to make what they believe to be an easy buck on the backs of our service members.”
The case was investigated by the Department of Defense/Office of Inspector General/Defense Criminal Investigative Service, the Army Criminal Investigative Division Major Procurement Fraud Unit, the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation Division, and Immigration and Customs Enforcement. The case was prosecuted by Assistant U.S. Attorney Scott Erik Asphaug.
Comments of United States Attorney General Eric Holder Regarding the Resignation of U.S. Attorney Tristram CoffinRead the Press Release
“During more than five years as United States Attorney for Vermont, Tris Coffin has been an exemplary leader, a committed public servant, and a tireless advocate for the cause of justice.
“Over the course of an illustrious career dedicated to his clients, to the citizens of Vermont, and to the American people – including twelve distinguished years as an Assistant United States Attorney in the Office he returned to lead in 2009 – Tris has demonstrated not only exceptional skill in litigation spanning the entire federal docket, but also consummate judgment. He has played an instrumental role in driving important national policy changes, including commonsense sentencing reforms under the Department's Smart on Crime initiative. And he has been at the forefront of efforts to combat the scourge of opioid addiction, both in Vermont and far beyond.
“Tris Coffin personifies the high standards of integrity and professional excellence that define the very best of this country’s public servants. I will always be grateful for his years of distinguished service. Although I will miss his leadership and wisdom, I thank him for his tireless work and wish him all the best in the next step of his remarkable career.”
Clovis Man Convicted for Trafficking Child PornographyRead the Press Release
FRESNO, Calif. — Senior United States District Judge Anthony W. Ishii today found Todd Douglas Udall, 49, of Clovis, guilty of one count of attempted and actual distribution and receipt of child pornography, United States Attorney Benjamin B. Wagner announced. The guilty verdict came at the conclusion of a trial before Judge Ishii that began earlier this week.
According to a criminal complaint, Udall came to the attention of the Clovis Police Department when a 13-year-old girl disclosed that Udall had been sending her sexually themed electronic text messages. He sent messages to her cellphone and communicated with her through Facebook. Investigators obtained a warrant to search Udall’s residence, and they located a laptop computer, a desktop computer, and an external hard drive. When those items were reviewed, investigators discovered that Udall had been engaging in sexually explicit chat communications with dozens of people, many purporting to be minors, at various locations in and outside of the United States. Many of the chats discussed the receipt and distribution of images of child pornography as well as the desire to engage in sexual activities with children. Judge Ishii found, based on evidence introduced at the trial, that Udall had received and distributed numerous images of child pornography on dates from as early as February 2007 until just prior to the seizure of his computers on September 23, 2009. Udall has been in federal custody since his initial appearance in federal court on July 21, 2010, as both a danger to the community and a flight risk.
The court has scheduled a sentencing hearing for March 16, 2015, at 10:00 a.m. Udall faces a minimum prison term of five years with a maximum term of 20 years as well as a potential $250,000 fine and a lifetime term of supervised release. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case was the result of an investigation by the Clovis Police Department. Assistant United States Attorneys David Gappa and Megan Richards prosecuted the case.
The case is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. Click on the “resources” tab for information about Internet safety education.Civilian Navy Employee Found Guilty of Obstruction and False Statements After Jury TrialRead the Press Release
A federal jury today returned a guilty verdict against a civilian employee of the U.S. Navy posted at the Capodichino Navy Base near Naples, Italy, for obstructing an investigation and making false statements, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Nicholas A. Klinefeldt of the Southern District of Iowa.
Steven William Ashton, 41, with a last known U.S. residence in Davenport, Iowa, was found guilty after a nine-day jury trial of creating false documents to obstruct the Naval Criminal Investigative Service (NCIS) investigation into Ashton’s private consulting business called BlackGrid Consulting LLC. The jury also found Ashton guilty of making false statements about his tour of duty in order to obtain federal benefits and access to military bases worldwide.
The evidence at trial showed that the NCIS was investigating Ashton for conflicts of interest and using inside government information to advance his business. When Ashton learned about the investigation, he created fraudulent documentation purporting to show that he had fully disclosed his business to Navy authorities and received approval. At Ashton’s direction, his defense counsel unwittingly submitted those false documents to the prosecutors and gave other false explanations to the Justice Department.
According to the evidence presented at trial, from April 2004 to March 2013, Ashton was employed by the Navy as the North Atlantic Treaty Organization and Host Nation Programs Manager for the regions of Europe, Africa and Southwest Asia, responsible for managing contracts and agreements among the Navy and other countries to support the United States’ military efforts.
He was found not guilty on charges of theft of government funds for obtaining housing benefits, called Living Quarters Assistance, to which he was not entitled, and of obstructing that investigation.
This case was investigated by the NCIS and the Air Force Office of Special Investigations. The case is being prosecuted by Director of Procurement Fraud Litigation Catherine Votaw of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Clifford Cronk of the Southern District of Iowa.
Citizen of Guatemala Sentenced to 51 Months in Prison for Illegally Reentering the U.S.Read the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that JAVIER MORENO, 27, a citizen of Guatemala who recently resided in Willimantic, was sentenced yesterday by Senior U.S. District Judge Warren W. Eginton in Bridgeport to 51 months of imprisonment for illegally reentering the United States after being deported, and for violating the conditions of his supervised release that followed a previous term of imprisonment for illegal reentry.
According to court documents and statements made in court, on October 15, 2005, MORENO was arrested in Connecticut on state charges that included assault. On May 26, 2006, he was deported from the U.S. to Guatemala. MORENO reentered the U.S. and, on December 29, 2006, was arrested in Windham. Subsequent to his arrest, MORENO was convicted in state court of assault in the second degree, and also violation of probation. On September 28, 2007, he again was removed to Guatemala.
MORENO reentered the U.S. and, on September 15, 2008, was convicted of criminal impersonation and operation under the influence. On June 12, 2009, MORENO was convicted of assault in the third degree and failure to appear in the first degree, and was sentenced to one year of incarceration. MORENO also was convicted of violation of probation stemming from a prior conviction. MORENO remained in custody from September 8, 2008, until January 29, 2010.
MORENO was charged with illegal reentry, pleaded guilty and, on May 7, 2010, was sentenced by Judge Eginton to 24 months and three years of supervised release. He completed his federal sentence on December 16, 2011, and was deported to Guatemala for the third time on January 18, 2012.
In January 2014, MORENO again illegally reentered the U.S. On April 25, 2014, he was charged in state court with interfering with an officer and resisting arrest for leading Willimantic Police officers on a foot pursuit following a motor vehicle stop four days earlier.
MORENO has been detained since his arrest. On September 24, 2014, he pleaded guilty to reentry of a removed alien.
Judge Eginton sentenced MORENO to 33 months of imprisonment for illegal reentry, and a consecutive 18-month prison term for violating the terms of his supervised release from his previous conviction.
This matter was investigated by U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations. The case was prosecuted by Assistant U.S. Attorney Deborah R. Slater.
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(203) 821-3722 [email protected]Brooklyn Man, Melvin George, Sentenced to 60 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 Melvin George, 27, of Brooklyn, New York was sentenced yesterday by J. Garvan Murtha, United States District Judge, to 60 months in jail for conspiring to distribute heroin and cocaine base between September of 2012 and February, 2013 in the Rutland, Vermont area.
According to Court records, Melvin George, known as “Cliff,” was working with other individuals – some of whom he recruited from Brooklyn, New York – to transport controlled substances to Vermont. Then, he set up meetings with his drug customers by cell phone but sent other individuals, including his codefendants, Tony Eldien and Junior Brooks, to deliver the drugs and to obtain the drug proceeds. The Southern Vermont Drug Task Force, with the assistance of a confidential informant, made six purchases of cocaine base or heroin from George’s associates. The purchases occurred in Castleton, Rutland, and West Rutland. When George was arrested on February 20, 2013, law enforcement found Drug Task Force currency on his person from a drug sale conducted by George that same day.
George was indicted by a federal grand jury on September 11, 2013 and appeared in U.S. District Court on November 7, 2013 for an arraignment. He was detained in prison pending trial. George 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. Melvin George was represented by David McColgin of the Office of the Federal Public Defender.Brooklyn Man, Junior Brooks, Sentenced to 46 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 Junior Brooks, 26, of Brooklyn, New York was sentenced yesterday by J. Garvan Murtha, United States District Judge, to 46 months in jail less credit for 23 months of time served in New York State for a related drug offense. Thus, Brooks will serve 23 months in jail on this federal conviction for conspiracy to distribute heroin and cocaine base. Brooks was also sentenced to a term of supervised release of 3 years once he completes his prison term.
According to Court records, Junior Brooks, known as “Lite,” was working with Melvin George, also sentenced to 60 months in jail today, to distribute crack cocaine and heroin in the Rutland, Vermont area. Brooks acted as a drug courier and transported controlled substances from Brooklyn to Vermont. Once in Vermont, he sold the drugs to Melvin George’s drug customers. The Southern Vermont Drug Task Force, with the assistance of a confidential informant, made two purchases of controlled substances directly from Brooks at locations in Rutland, Vermont.
Brooks was indicted by a federal grand jury on September 11, 2013 and appeared in U.S. District Court on November 26, 2013 for an arraignment. He was detained in prison pending trial. Brooks 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 its work in this matter. The case was prosecuted by Assistant United States Attorney, Nancy J. Creswell. Junior Brooks was represented by Attorney Wayne Young.Beloit Wisconsin Woman Sentenced for Mail FraudRead the Press Release
ROCKFORD — A former shipping manager for American Extrusion International (“AEI”), of South Beloit, Ill., was sentenced today by U.S. District Judge Frederick J. Kapala for mail fraud. REVA K. VERA, 58, of Beloit, Wis., who pled guilty to the charge on Sept. 11, 2014, was sentenced to 29 months in federal prison, to be followed by 3 years of supervised release. In addition, Judge Kapala ordered Vera to pay $352,803.23 in restitution to AEI.
According to the plea agreement, Vera, as the shipping manager, was responsible for authorizing payments to vendors who provided shipping services to AEI. As stated in the plea agreement, Vera created two fraudulent companies, Total Quality Logistics (“TQL”) and Val Tech, Inc., and from May 4, 2012 to Oct. 9, 2013, defrauded AEI out of at least $352,803.23. During that time period, Vera created fictitious invoices from Val Tech, Inc. and TQL for shipping services that those companies had purportedly performed for AEI when in fact, Val Tech, Inc. and TQL provided no such shipping services for AEI. According to the plea agreement, Vera submitted the fictitious invoices to AEI’s accounts payable department causing checks to be issued by AEI payable to Val Tech, Inc. or TQL in the amount of the invoice. The plea agreement further states that after AEI’s accounts payable department generated the checks for the fictitious invoices submitted by Vera, AEI mailed the checks payable to Val Tech, Inc. to an address of Vera’s relative in Beloit, Wis., and the checks payable to TQL to a post office box in Loves Park, Ill. belonging to Vera. According to the plea agreement, as part of the scheme to defraud AEI, Vera obtained $85,993 in checks from AEI payable to Val Tech, Inc., and $266,810.23 in checks from AEI payable to TQL that she either cashed or deposited into her personal bank account. Vera used the money for her personal benefit.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The South Beloit Police Department assisted in the investigation.
The government was represented by Assistant U.S. Attorney Joseph C. Pedersen.
Bank Robber Sentenced to 10 Years in Federal PrisonRead the Press Release
Orlando, FL – Senior U.S. District Judge G. Kendall Sharp has sentenced Duwane Edward Gilmore (27, Mount Dora) to 10 years in federal prison for two counts of bank robbery. The Court also ordered Gilmore to forfeit $4,273.75, the traceable proceeds of the offenses.
According to court documents, on June 4, 2014, Gilmore robbed a Chase Bank in Apopka and obtained $3,273.75. The following week, he robbed a Chase Bank in Sanford and obtained approximately $1,000. Gilmore pleaded guilty to both robberies on September 16, 2014. He received an enhanced penalty as a result of his previous felony convictions for drug offenses and other violent crimes.
This case was investigated by Federal Bureau of Investigation, the Seminole County Sheriff’s Office, the Apopka Police Department, and the Mount Dora Police Department. It was prosecuted by Assistant United States Attorney Embry J. Kidd.
Baltimore Man Sentenced to Eleven Years in Prison for Child Sex TraffickingRead the Press Release
BOSTON – A Baltimore man was sentenced today to 138 months in prison in connection with the sex trafficking of a 15-year-old girl.
Justin Richardson, 22, of Baltimore, Maryland was sentenced by U.S. District Judge Nathaniel M. Gorton to 138 months in prison and five years of supervised release. In August 2014, Richardson pleaded guilty to recruiting and transporting a minor to engage in prostitution. On Dec. 15, 2014, codefendant, Mark Pinnock, of Boston, was sentenced to eight years in prison, and a second codefendant, Martin Pinkney, also of Baltimore, will be sentenced on Dec. 22, 2014.
In late December 2013, officers responded to an emergency call from a Cambridge hotel, where they found the 15-year old victim and Pinnock. The minor stated that Richardson and Pinkney had arranged for her to travel by bus from Baltimore to Boston. Pictures were taken of her in both Baltimore and Boston and used to post ads soliciting prostitution on the websites backpage.com and Craigslist. While in Boston, the minor victim engaged in sex for a fee at the direction of Pinnock at two local hotels.United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; and Cambridge Police Commissioner Robert C. Haas, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Seth Kosto and Carlos López, both members of Ortiz’s Civil Rights Enforcement Team. The U.S. Attorney’s Office also wishes to thank the Middlesex County District Attorney Marian C. Ryan’s Office for its participation in the investigation.
The enforcement of federal civil rights laws is a high priority of the U.S. Attorney’s Office for the District of Massachusetts. Since U.S. Attorney Ortiz created the Civil Rights Enforcement Team in 2010, the Office has substantially increased its efforts in civil and criminal civil rights enforcement actions. In the last four years, the Office has charged an increasing number of defendants with sex trafficking and other criminal civil rights violations.
Attorney General Holder Announces U.S. Adult Correctional System Population Has Dropped to Lowest Level in Nearly a DecadeRead the Press Release
In New Video, Attorney General Hails Finding as ‘Significant Milestone’ That Shows Crime and Incarceration Levels Can Be Reduced at Same Time
Attorney General Eric Holder announced today that the number of persons under the supervision of adult correctional systems in the United States has fallen to its lowest level since 2003. This finding is highlighted in a study to be released today by the Bureau of Justice Statistics.
According to the study, an estimated 6,899,000 persons were under the supervision of adult correctional systems at year end 2013, down from 6,940,500 at year end 2012. The decrease of 41,500 offenders in 2013 resulted in the number of persons under correctional supervision falling below 6.9 million for the first time since 2003.
The Attorney General called the drop a “significant milestone.”
“While we clearly have much more work to do, it is my hope that we are witnessing the start of an overall trend that will continue – and accelerate – as our reform efforts take full effect,” the Attorney General said. “As I have said many times, we cannot incarcerate our way to becoming a safer nation. That’s why we need to focus on commonsense sentencing reforms and on proven, evidence-based solutions like diversion programs for those convicted of low-level, nonviolent offenses.”
The complete text of the Attorney General’s video message is below:
“The Department of Justice is dedicated to ensuring that America’s criminal justice system is as fair, as efficient, and as effective as possible. That’s why, in August of 2013, I launched the “Smart on Crime” Initiative – a targeted effort to enhance the way we charge, sentence, and release individuals in order to end this country’s overreliance on incarceration and to promote efforts that give people the tools they need to return to their communities and lead better and more productive lives.
“In the six years since President Obama took office, we have made important progress in fighting crime and advancing our long-term criminal justice efforts. In fact, during this Administration, overall crime has decreased by over 15 percent, while overall incarceration has decreased by nearly 9 percent – the first time these two critical markers have declined together in more than 40 years. And just two months ago, I was able to report that over the past year, the federal prison population declined by roughly 5,000 inmates – the first decrease we’ve seen in many decades.
“Today, I can announce that the number of persons supervised by U.S. adult correctional systems – in prison or jail, or on probation or parole – fell below 6.9 million individuals at the end of 2013. This drop leaves the United States with the smallest population under the authority of adult correctional supervision in nearly a decade.
“This is a significant milestone. It is highlighted in a study to be released by the Bureau of Justice Statistics. And while we clearly have much more work to do, it is my hope that we are witnessing the start of an overall trend that will continue – and accelerate – as our reform efforts take full effect.
“As I have said many times, we cannot incarcerate our way to becoming a safer nation. That’s why we need to focus on commonsense sentencing reforms and on proven, evidence-based solutions like diversion programs for those convicted of low-level, nonviolent offenses. We are seeing this approach take root in states across the country, as more and more governors and legislatures recognize that incarceration must be used to punish, deter, and rehabilitate—not merely to warehouse and forget. And here in Washington, D.C., I am proud to work with leaders in Congress from both parties to advance this vital conversation and bring about a paradigm shift in the way our nation approaches criminal justice.
“Of course, I recognize that these are challenging issues, and the changes we seek will not occur overnight. But I am dedicated – and the Department of Justice is committed – to an ongoing effort that strengthens our criminal justice system; lives up to our founding ideals; and builds the safer, more just society that all Americans deserve.”
The full video of the Attorney General’s message is available at http://www.justice.gov/agwa.php.