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19 December 2014
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.
14-454
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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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.
Albany Oregon Man Sentenced to 60 Months in Federal Prison for $5 Million Securities FraudRead the Press Release
EUGENE, Ore. –U.S. District Court Judge Ann Aiken sentenced Joseph Anthony LaCoste, 50, of Albany, Oregon, to 60 months in prison and ordered him to pay $1.6 million in restitution for securities fraud violations. LaCoste, the former chief executive officer of Willamette Development Services (WDS), a real estate development company based in Albany, Oregon, had previously pleaded guilty to conspiracy to commit securities fraud for his conduct associated with WDS.
According to court documents, LaCoste, a former high school teacher and coach, lured individuals to invest with him and WDS be telling a series of lies: he lied about his educational background; he lied about the financial condition of WDS; he lied about the rate of return on the investments; and he lied about the nature and use of the investments. LaCoste also failed to inform his investors that he had been fired from U.S. Bank for dishonest and unethical conduct and that he had previously filed for bankruptcy. Based on his misrepresentations, LaCoste, between 2006 and 2008, duped more than 50 people to invest more than $5.2 million with him and WDS.
In reality, WDS and its alleged real estate projects were undercapitalized, and the projects were not progressing. To avoid detection and to further the scheme, LaCoste and others commingled investor money and transferred investor money between various projects and businesses to make it appear as if the projects were on schedule and the company was profitable. In 2008, LaCoste’s scheme collapsed. At that time, he had failed to complete a single project, and the investors lost their money.
After his WDS scheme collapsed, LaCoste engaged in a new scheme to induce four property owners in Washington to transfer ownership of their property to his control by falsely representing that he had the experience and skills to develop their property into a profitable real estate venture. Similar to his WDS investors, LaCoste falsely promised these property owners a huge return and failed to tell them that he had been fired from U.S. Bank for dishonest and unethical conduct and that he had previously filed for bankruptcy. In the end, this scheme also collapsed, and the property owners lost more than $150,000.
LaCoste’s codefendants, Angela McCoy and Anthony Tuomi, are scheduled to be sentenced on January 28, 2015, at 1:30 pm before the Honorable Thomas M. Coffin.
This case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation, and the Oregon Division of Finance and Corporate Securities.
Alabama Medical Clerk Sentenced to Prison Tax Refund Fraud Scheme that Involved U.S. Postal Service EmployeeRead the Press Release
Montgomery, Alabama - A Prattville, Alabama woman was sentenced yesterday to serve 70 months in prison for her involvement in a stolen identity tax refund fraud (SIRF) scheme, announced U.S. Attorney George L. Beck Jr. for the Middle District of Alabama, and Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department's Tax Division.
Sasha Webb, 26, was also ordered to serve three years of supervised release following her prison sentence and to pay $528,823 in restitution.
According to court documents and court proceedings in this and related cases, Webb worked as a medical records clerk at an Alabama Department of Corrections facility in Elmore County, Alabama, where she had access to the means of identification of inmates from databases maintained by the Alabama Department of Corrections. On several occasions in 2009 and 2010, Webb stole identities from those databases and sold them to Harvey James and his sister, Jacqueline Slaton, for the purpose of filing false tax returns.
Between 2010 and 2012, James and Slaton used those stolen identities to file false federal and state tax returns. James and Slaton directed some of the false refunds to be sent to either prepaid debit cards or issued via check. James’s brother-in-law, Gregory Slaton, recruited Vernon Harrison, a U.S. Postal Service employee, to the scheme. James directed prepaid debit cards and state tax refund checks to be mailed to addresses that Harrison provided from his postal route. Harrison collected the debit cards and checks and provided them to Gregory Slaton who in turn gave them to James and Jacqueline Slaton. In total, James and Slaton filed more than 1,000 federal and state income tax returns that claimed more than $1 million in fraudulent tax refunds.
On Oct. 31, 2013, Harrison was sentenced to serve 111 months in prison. James was sentenced on April 29, 2014, to serve 110 months in prison and Jacqueline Slaton was sentenced on Oct. 23, 2012, to serve 70 months in prison. Gregory Slaton was sentenced on Oct. 28, 2014, to serve 70 months in prison.
The case was investigated by special agents of the Internal Revenue Service - Criminal Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the U.S. Postal Service’s Office of the Inspector General. Trial Attorneys Jason H. Poole and Michael C. Boteler of the Tax Division are prosecuting the case with the assistance of Assistant U.S. Attorney Todd Brown for the Middle District of Alabama.
Additional information about the Tax Division and its enforcement efforts may be found at the division website at justice.gov/tax.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-761718 South Florida Residents Sentenced for Their Role in Accessing AT&T and Verizon Subscriber Accounts with Stolen Personal Identifying Information to Purchase iPhonesRead the Press Release
Eighteen South Florida residents were sentenced in connection with their role in a scheme that used fraudulently obtained personal identifying information (PII) of AT&T and Verizon mobile telephone plan subscribers to purchase iPhones as a discounted rate. Three of the individuals sentenced stole the PII from their respective employers, including Verizon.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Paula A. Reid, Special Agent in Charge, United States Secret Service (USSS), and J.D. Patterson, Jr., Director, Miami-Dade Police Department (MDPD), made the announcement.
Between August 2012 and July 2013, Alexander Nicholas Katsabanis, Jr., 23, Dimitris Nicholas Katsabanis, 25, and Christian Fernando Dume, 32, each of Miami, secured and caused co-conspirators, including Daniel Allen Limbacher, 31, Yurien Martinez Gallardo, 34, and Jade Amber Garcia, 27, all of Miami, to secure the PII of mobile telephone plan subscribers, including subscribers with AT&T and Verizon. In particular, Gallardo, who worked for Verizon, Limbacher, who worked for Cellular Sales, and Garcia, who worked for Baptist Hospital, stole from their respective employers PII that was used to facilitate the fraudulent scheme. The customers’ PII included the customer’s name, mobile telephone number, date of birth, and last four digits of such customer’s Social Security Number.
After obtaining the PII, A. Katsabanis, D. Katsabanis, Dume, and their co-conspirators, called, or caused others to call, AT&T and Verizon, and used the unlawfully acquired PII, to add additional users on the existing, legitimate customer accounts without the customer’s knowledge or authorization. These individuals also used the PII to purchase iPhones at a discounted price of approximately $200.00, which discount was only available to customers and their authorized users. The retail price for each iPhone ranged from $550.00 to $649.00.
A. Katsabanis, D. Katsabanis, Dume, and others, also recruited various individuals to serve as “runners.” These “runners” were added as purported “authorized users” on the existing, legitimate accounts of AT&T and Verizon subscribers, and also purchased iPhones at discounted prices. The purchases were made in the Southern District of Florida, as well as, other locations in Florida, California, and Nevada. Christine Eliz Marrero, 24, Dietter Navarro, 32, Keilyn Nicole Gonzalez, 21, Felix Marino Garcia Custodio, 32, Desiree Marie Basanta, 29, Jonathan Gabriel Gonzalez, 24, Dominga Ivett Guerrero, 50, Melissa Rivas, 25, Johan Alvarez, 20, Gustavo Andres Jimenez, 26, Javier Osvaldo Labrador, 26, each of Miami, Florida, Mirelys Reyes, 19, of Hialeah, Florida, Yasael Aquit, 29, now of Tampa, Florida, together with Garcia and Limbacher served as “runners” for the above-described fraudulent scheme. The runners would deliver their purchases to A. Katsabanis, D. Katsabanis, Dume, and others, and were paid approximately $100.00, for each fraudulently acquired iPhone.
During the course of the scheme, approximately 860 Verizon customer accounts were fraudulently accessed in order to purchase approximately 1,200 iPhones at a discounted price. As a result of the scheme, Verizon incurred a loss of more than $400,000 based on the difference between the retail price of the iPhone and the discounted price allowed to its subscribers.
Judge Scola imposed the following sentences:
D. Katsabanis was sentenced 60 months imprisonment; A. Katsabanis Jr. was sentenced to 48 months imprisonment; Dume was sentenced to 78 months imprisonment; Navarro was sentenced to 15 months imprisonment; Limbacher was sentenced to 12 months and one day imprisonment; Marrero was sentenced to two years of probation; Labrador was sentenced to six months imprisonment; K. Gonzalez was sentenced to 20 days imprisonment and two years of probation; Custodio was sentenced to eight months imprisonment; Basanta was sentenced to one year of probation; J. Gonzalez was sentenced to two months imprisonment and two years of probation; Rivas was sentenced to one year of probation; Guerrero was sentenced to two years of probation; Alvarez was sentenced to 10 days imprisonment and two years of probation; Jimenez was sentenced to 30 days imprisonment and two years of probation; Reyes was sentenced to two years of probation; Aquit was sentenced to one year of probation and four months home confinement; and Gallardo was sentenced to four months imprisonment, to be followed by four months of home confinement.
Garcia is scheduled to be sentenced on January 21, 2015, at 8:30 a.m., before Judge Scola.
Noel Sebastian Cisneros, 23, of Homestead, Florida, who was charged with wire fraud and aggravated identity theft for his role in this scheme as an alleged runner, is scheduled to commence trial before Judge Scola, on March 9, 2015, at 9:00 a.m.
Mr. Ferrer commended the investigative efforts of the USSS and MDPD Economic Crimes Bureau. The case is being prosecuted by Assistant U.S. Attorney Sarah J. Schall.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
18 December 2014
Woman Sentenced for Stealing Grandmother's Retirement BenefitsRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that Vanessa Scott-Washington, 45, of Leesburg, Georgia, was sentenced on December 17, 2014 to serve 6 months in prison and pay restitution for making false statements to the Railroad Retirement Board. The sentence was handed down by Senior U.S. District Court Judge W. Louis Sands in Albany, Georgia.Ms. Scott-Washington entered a plea of guilty to the charge on August 13, 2014. As a part of her plea agreement, she admitted that on June 27, 2009, she signed a substitution of payee form with the Railroad Retirement Board (RRB) on her grandmother’s retirement benefits agreeing to use the RRB annuity for the benefit of her grandmother and to notify RRB promptly if her grandmother died.
Her grandmother died in May 2010 but Ms. Scott-Washington deceived the RRB into believing that she was still living in order to continue receiving her benefits. Even after the Social Security Administration notified the RRB of her grandmother’s death, Ms. Scott-Washington made a number of calls and sent an e-mail claiming that her grandmother was still alive.
Ms. Scott-Washington also admitted to causing a fraudulent letter, drafted on Bank of America letterhead, to be sent to the RRB stating that her grandmother had been seen in the bank that day and was identified by two forms of identification. The RRB re-commenced the benefits to Ms. Scott-Washington. In all, the RRB paid a total of $13,679 in benefits to her between June 1, 2010 and February 1, 2011.
“When you try to profit by committing fraud, you should keep looking over your shoulder because you are going to get caught,” said U.S. Attorney Michael Moore.
The case was investigated by agents with the Railroad Retirement Board. Assistant United States Attorney Jim Crane prosecuted the case for the Government. Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.
Wichita Man Pleads Guilty in Armed RobberyRead the Press Release
WICHITA, KAN. – A Wichita man pleaded guilty Thursday to robbing a drug store in east Wichita, U.S. Attorney Barry Grissom said.
Ryan B. Schmidt, 34, Wichita, Kan., pleaded guilty to one count of commercial robbery and one count of brandishing a firearm during the robbery. In his plea, he admitted that on Sept. 4, 2014, he entered Gessler’s Drug Store at 4817 E. Douglas in Wichita, brandished a gun and told an employee to give him prescription drugs. He fled the store with seven bottles of hydrocodone and three bottles of promethazine in a plastic bag.
Schmidt was involved in a high speed chase with police before hitting a utility pole and another vehicle and coming to a stop.
Sentencing is set for March 9. Both parties have agreed to recommend to the judge a sentence between 14 and 25 years in federal prison.
Grissom commended the Wichita Police Department and Assistant U.S. Attorney Alan Metzger for their work on the case.
Wichita Man Pleads Guilty in Armed RobberyRead the Press Release
WICHITA, KAN. – A Wichita man pleaded guilty Thursday to robbing a drug store in east Wichita, U.S. Attorney Barry Grissom said.
Ryan B. Schmidt, 34, Wichita, Kan., pleaded guilty to one count of commercial robbery and one count of brandishing a firearm during the robbery. In his plea, he admitted that on Sept. 4, 2014, he entered Gessler’s Drug Store at 4817 E. Douglas in Wichita, brandished a gun and told an employee to give him prescription drugs. He fled the store with seven bottles of hydrocodone and three bottles of promethazine in a plastic bag.
Schmidt was involved in a high speed chase with police before hitting a utility pole and another vehicle and coming to a stop.
Sentencing is set for March 9. Both parties have agreed to recommend to the judge a sentence between 14 and 25 years in federal prison.
Grissom commended the Wichita Police Department and Assistant U.S. Attorney Alan Metzger for their work on the case.
Tygart Valley Inmate Convicted of Threatening the PresidentRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – Robert Dale Tasker, 44, an inmate at the Tygart Valley Regional Jail in Belington, West Virginia, was convicted in federal court today for threatening the President, United States Attorney William J. Ihlenfeld, II, announced.
An investigation by the United States Secret Service revealed that in December 2013, while incarcerated at the Tygart Valley Regional Jail, Tasker wrote a letter threatening to kill the President of the United States.
Tasker pled guilty today to one count of “Threats Against the President of the United States.” He faces up to five years in prison and fine of up to $250,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Randy Bernard prosecuted the case on behalf of the government.
U.S. Magistrate Judge John S. Kaull presided.
Two Plea Guilty to the Unlawful Employment of AliensRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JOHNNIE SANTANGELO, III, age 29, of Tangipahoa Parish, and OBER FARFAN BRAVO, age 34, an undocumented alien living in Tangipahoa Parish, pled guilty today to a one-count Bill of Information charging them with a pattern and practice of unlawfully employing aliens.
According to court documents, SANTANGELO and BRAVO knowingly and unlawfully engaged in a pattern and practice of hiring aliens for employment, knowing that said aliens were unauthorized to work in the United States.
SANTANGELO and BRAVO each face a maximum term of six months incarceration and/or a fine of $3,000 for each unauthorized alien or twice the gross loss to any person. U.S. District Judge Jay C. Zainey set sentencing for March 17, 2015.
U.S. Attorney Polite praised the work of the Homeland Security Investigations in investigating this matter. Assistant United States Attorney David Haller is in charge of the prosecution.
Two New Haven Men Involved in Gang-related Drug Ring Are SentencedRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that two New Haven men were sentenced yesterday by Senior U.S. District Judge Warren W. Eginton in Bridgeport for their involvement in a gang-related narcotics distribution ring. KENNETH STURDIVANT, also known as “Slay,” 29, was sentenced to 120 months of imprisonment and five years of supervised release, and JAROD AARON, 31, was sentenced to 60 months of imprisonment and four years of supervised release.
According to court documents and statements made in court, this matter stems from an investigation conducted by the FBI New Haven Safe Streets Task Force and the New Haven Police Department that was initiated in the wake of repeated shootings and other violence between members of the Bloods and members of the Grape Street Crips in the Hill section of New Haven. The investigation resulted in the arrests of members of both the Bloods and the Grape Street Crips.
STURDIVANT and AARON were associates of Donald Ogman, who has been identified in court proceedings as a leader of the Grape Street Crips. STURDIVANT, also a member of the Crips, and AARON distributed crack cocaine with Ogman in and around New Haven.
On March 10, 2014, STURDIVANT pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, 280 grams or more of cocaine base (“crack cocaine”). On March 21, 2014, AARON pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, 28 grams or more of cocaine base. STURDIVANT and AARON are both previously convicted felons.
A total of 20 individuals were charged as a result of this investigation, and all have pleaded guilty. Ogman awaits sentencing.
This matter was investigated by the FBI’s New Haven Safe Streets Task Force, which includes the New Haven, Hamden and Milford Police Departments, the Connecticut State Police and the State of Connecticut Department of Correction. The investigation has been assisted by the U.S. Marshals Service and the Westerly (R.I.) Police Department.
This case is being prosecuted by Assistant U.S. Attorneys Anthony E. Kaplan and H. Gordon Hall.
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Tom Carson
(203) 821-3722 [email protected]Two Members of Drug Trafficking Organization Admit Conspiring to Sell Heroin in South JerseyRead the Press Release
TRENTON, N.J. – Two members of a large-scale drug trafficking organization have admitted conspiring to distribute hundreds of grams of heroin throughout Monmouth and Ocean counties, U.S. Attorney Paul J. Fishman announced.
Valerie Resendes, 27, of Beachwood, New Jersey, and Rashawn Ramos, 37, of Perth Amboy, New Jersey, both pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court. Resendes pleaded guilty today to an information charging her with one count of conspiring to distribute heroin. On Dec. 16, 2014, Ramos pleaded guilty to an information charging him with one count of conspiring to distribute 100 grams or more of heroin and 500 grams or more of cocaine.In March 2014, 21 alleged members of the “Britt-Young DTO,” a drug trafficking organization named after its leaders Robert Britt and Rufus Young, were charged by criminal complaint with conspiring to distribute heroin. Of those 21 individuals, 10 have pleaded guilty.
According to documents filed in this case and statements made in court:
Resendes admitted that between February 2013 and March 2014, she conspired with Young and others to distribute heroin in Ocean and Monmouth counties. During this time, Resendes possessed and sold more than 400 grams of heroin.
Ramos admitted that from November 2013 through March 2014, he received numerous packages of heroin and cocaine at his residence in Perth Amboy. The packages were sent from California via the U.S. Mail. Ramos later transferred the packages to another conspirator, who distributed the narcotics to others in New Jersey, including members of the Britt-Young DTO. Altogether, Ramos received at least 1,000 grams of heroin and 1,500 grams of cocaine.
The narcotics conspiracy charge to which Resendes pleaded guilty carries a maximum penalty of 20 years in prison and $1 million fine. The narcotics conspiracy charge to which Ramos pleaded guilty carries a mandatory minimum penalty of five years in prison, a maximum of 40 years in prison and a $5 million fine. Sentencing for Resendes and Ramos is set for March 10, 2015, and March 24, 2015, respectively.
U.S. Attorney Fishman credited special agents of the FBI, Red Bank Resident Office, under the direction of Special Agent in Charge Aaron T. Ford; officers of the Brick Township Police Department, under the direction of Chief Nils R. Bergquist: and officers of the Toms River Police Department, under the direction of Chief Mitchell Little, with the investigation leading to today’s guilty pleas. He also thanked special agents of the Bureau of Alcohol Tobacco Firearms and Explosives, under the direction of Acting Special Agent in Charge George Belsky; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; officers of the Monmouth County Prosecutor’s Office, under the direction of acting Prosecutor Christopher J. Gramiccioni; and officers of the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato, for their work on the investigation. He also thanked the Monmouth County Sheriff’s Office and the Neptune Township, Asbury Park, Marlboro, Long Branch and Freehold police departments for their roles in the case.
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Defense Counsel:
Ramos: Anthony Simonetti Esq., Hightstown, New Jersey
Resendes: Lawrence G. Welle Esq., Wall, New JerseyResendes, Valerie Information
Ramos, Rashawn InformationTwo Florida Women Plead Guilty to Bank Fraud and Aggravated Identity Theft for Check Cashing SchemeRead the Press Release
BOISE – Jennifer A. Gallagher, 31, of Margate, Florida, and Danielle M. Cook, 28, of Pembrooke Pines, Florida, both pleaded guilty today in United States District Court to one count of bank fraud and one count of aggravated identity theft, U.S. Attorney Wendy J. Olson announced. Sentencing for both defendants is set for March 9, 2015, before U.S. District Judge Edward J. Lodge.
Cook and Gallagher were indicted in October 2014, for bank fraud and aggravated identity theft. According to the plea agreements, Cook and Gallagher admitted that, between August 9th and 13th, 2014, they traveled to the District of Idaho to participate in a scheme to defraud financial institutions by cashing stolen checks. In particular, Cook and Gallagher admitted to obtaining stolen checks and driver's licenses, altering their appearances, including by the use of wigs, such that they would closely resemble the photographs on the stolen driver's licenses, then cashing the stolen checks through the far lane of numerous banks in the Treasure Valley. At least twelve such checks were cashed by Cook and Gallagher.
Bank Fraud is punishable by up to 30 years imprisonment, a $1,000,000 fine, a term of supervised release of not more than five years, and a $100 special assessment. Aggravated Identity Theft is punishable by a mandatory minimum term of imprisonment of two years, a term of supervised release of not more than one year, a maximum fine of $250,000, and a special assessment of $100.
The case was investigated by the FBI, the Ada County Sheriff's Office, the Meridian Police Department, and the Boise Police Department.
Toledo Man Indicted for Heroin ConspiracyRead the Press Release
A six-count federal indictment was filed charging a Toledo man with conspiracy to possess with intent to distribute a kilogram of heroin, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Lee T. Turner, 29, was indicted on one count of conspiracy to possess with intent to distribute at least one kilogram of heroin, two counts of possession with intent to distribute heroin, two counts of operating a drug house and one count of being a felon in possession of a firearm.
“This defendant used firearms and homes in Toledo neighborhoods in his business the way others might use computers and calculators,” Dettelbach said. “He made his living dealing large amounts of heroin and now must face the consequences.”
“I would personally like to thank the Detectives and Agents from the Toledo Metro Drug Task Force for their hard work on this case,” said Toledo Police Chief William Moton. “The arrest of drug traffickers like Mr. Turner is an important piece in our strategy to significantly reduce the amount of heroin being sold in the Toledo area.”
Turner conspired to with others from November 2103 through Nov. 20, 2014 to possess heroin. Turner used 2830 Powhattan Parkway and 707 Phillips Avenue, both in Toledo, for the unlawful purpose of storing and distributing heroin, according to the indictment.
On Nov. 20, 2014, Turner possessed approximately 1,077 grams of heroin and a 9 mm pistol, despite previous convictions for bank robbery, robbery, kidnapping and other felony convictions, according to court documents.
Prosecutors are seeking to forfeit the two Toledo properties, as well as a 2009 Mercedes, a 1991 Chevrolet and a 2002 Mini Cooper, according to the indictment.
The case is being prosecuted by Assistant U.S. Attorney Alyssa Sterling following an investigation by the Toledo Metro Drug Task Force, which is made up of representatives from the Toledo Police Department, Federal Bureau of Investigation, Lucas County Sheriff’s Office and other law enforcement agencies.
If convicted, the defendant’s sentence will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record, the defendant’s role in the offense and the characteristics of the violation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Three Men Indicted by A Federal Grand Jury for Conspiracy to Distribute over 10 Pounds of HeroinRead the Press Release
FRESNO, Calif. — A federal grand jury returned a two-count indictment today against Julio Perez, 32; Rafael Legorreta, 34, both of Bakersfield; and Francisco Rivera, 29 of Palmdale, charging them with conspiracy to distribute heroin and possession with intent to distribute heroin, United States Attorney Benjamin B. Wagner announced.
According to court documents, on December 2, 2014, law enforcement officers conducted an authorized search of Perez’s home, and found Perez, Legorreta, and Rivera in the locked basement of the residence with approximately 12 lbs. of heroin, packaging material, zip lock bags, digital scales, metal strainers, a blender, drug paraphernalia, and other items.
This case was the product of an investigation by the Federal Bureau of Investigation and the Kern County Sheriff’s Office Gang Suppression Unit. Assistant United States Attorney Brian K. Delaney is prosecuting the case.
If convicted, each defendant faces a maximum statutory penalty of life in prison and a $10 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Three Individuals Indicted in Federal Feeding Program ConspiracyRead the Press Release
LITTLE ROCK – A former and one current Arkansas Department of Human Services (DHS) employee and one feeding program sponsor have been indicted for their roles in a conspiracy to steal federal money. Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced unsealing of an indictment and the arrest Thursday morning of Gladys Elise King, age 34, of England; Tonique D. Hatton, age 37 of North Little Rock; and Jacqueline D. Mills, age 39 of Helena on a 76-count Indictment.
The Indictment, returned by a Federal Grand Jury on December 11, 2014, charges Hatton, King, and Mills with conspiracy to fraudulently obtain United States Department of Agriculture (USDA) program funds. Additionally, Mills is charged with wire fraud, paying bribes, and engaging in money laundering. King and Hatton are also charged with accepting bribes.
According to the indictment, the USDA funds the Child and Adult Care Feeding Program, which includes an at-risk afterschool component. USDA also funds the Summer Food Service Program. In Arkansas, the feeding programs are administered by DHS. Sponsors who want to participate in the feeding programs must submit an application to DHS for approval. Once approved, they can provide meals as part of the feeding program and be reimbursed based on the number of eligible meals they serve.
The indictment states that Tonique Hatton and Gladys King worked for DHS, and part of their job was to determine eligibility of sponsors to participate in the feeding programs. Mills operated as a sponsor for feeding program. Hatton and King were responsible for approving Mills’ programs at various times.
The indictment alleges that Mills made bribe payments to DHS employees Hatton and King. In exchange for those bribes, Mills would submit inflated numbers of meals purportedly served from her sites. Hatton and King would provide protection from DHS scrutiny.
“As alleged in the Indictment, these three individuals and others were literally stealing money that was supposed to be used to feed poor and hungry children,” stated Thyer. “While I am pleased that we were able to uncover and prosecute this behavior, I am at the same time sickened that it could happen at all.”
“The Secret Service is committed to aggressively investigating those associated with this type of financially motivated crime,” stated Special Agent in Charge Brian Marr. “To steal from the mouths of hungry children in this state is unacceptable.”
“This crime directly targeted funds designated to feed disadvantaged children in Arkansas,” stated David T. Resch, Special Agent in Charge of the Little Rock FBI. “The partnership of the IRS, USDA, USSS and the FBI are committed to investigating and prosecuting these crimes to the fullest extent of the law.”
Special Agent in Charge Mary L. Lewis, Southwest Region of the United States Department of Agriculture – Office of the Inspector General stated, “I want to thank the U.S. Attorney’s Office, OIG special agents, and our investigative partners for their hard work on this investigation. When the integrity of nutrition programs for needy children is violated by criminal conduct, the Office of Inspector General will pursue justice to the fullest extent of the law.”
“These programs are designed to ensure financially disadvantaged children are provided with good nutritious meals throughout the year, they are not designed to enrich the program administrators,” stated Christopher A. Henry, Special Agent in Charge of the IRS- Criminal Investigation Nashville Field Office. “Individuals who engage in this type of fraud to line their own pockets with public funds should know they will not go undetected and will be held accountable.”
The statutory penalty for wire fraud and conspiracy to commit wire fraud is not more than 20 years imprisonment, not more than a $250,000 fine, or both, and not more than 3 years supervised release. The statutory penalty for receipt of bribes, paying bribes, and money laundering is not more than 10 years imprisonment, not more than a $250,000 fine, or both, and not more than 3 years supervised release.
The investigation is ongoing and is conducted by the United States Secret Service, Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigations, United States Department of Agriculture – Office of the Inspector General, and United States Marshals Service. Assisting with the arrests this morning were deputies from the Lonoke County Sheriff’s Office and officers and detectives from the North Little Rock Police Department. The case is being prosecuted by Assistant United States Attorneys Jana K. Harris and Allison W. Bragg.
An indictment contains only allegations. Defendants are presumed innocent until proven guilty.
Three Indicted in Conspiracy to Distribute Oxycodone Through Fraudulent PrescriptionsRead the Press Release
BOSTON – Three individuals were charged today in U.S. District Court in Boston with distributing oxycodone via false prescriptions.
Leslie Credle, a/k/a Chanel, 48, of Jamaica Plain; William Ford, a/k/a Billy, 33, of Winthrop; and Lisette Carrasquillo, a/k/a Jacqueline, 37, of Allston were indicted on conspiracy to possess oxycodone with intent to distribute and conspiracy to obtain possession of oxycodone by misrepresentation, fraud, forgery, deception, or subterfuge. On June 30, 2014, the defendants were originally charged by criminal complaint at which time Credle and Ford were arrested and have since been held in custody. Carrasquillo was arrested on July 1, 2014 and was released on bond and pre-trial conditions.
According to court documents, beginning in November 2013, DEA investigators detected the diversion of a large amount of Oxycodone pills through fraudulent prescriptions filled at various pharmacies in eastern Massachusetts. Through the investigation, law enforcement discovered that Credle forged multiple prescriptions, after which Ford, Carrasquillo, and others passed the created prescriptions for Oxycodone at Boston-area pharmacies.
For Credle, the charging statute provides a sentence of no greater than 30 years in prison, a lifetime of supervised release, and a fine $2 million. For Ford and Carrasquillo, the charging statute provides a sentence of no greater than 20 years in prison, a lifetime of supervised release, and a fine of $1 million. 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 and Michael J. Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division made the announcement today. The case was investigated by the DEA, Massachusetts State Police, Billerica Police Department, Boston Police Department, Dedham Police Department, Quincy Police Department, and Waltham Police Department; and in coordination with the Norfolk County District Attorney’s Office and the Suffolk County District Attorney’s Office. The case is being prosecuted by Michael I. Yoon of Ortiz’s Organized Crime Drug Enforcement Task Force.The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Three Colorado River Indian Tribes (crit) Tribal Members Sentenced to Federal Prison for RobberyRead the Press Release
PHOENIX – On Dec. 17, 2014, Aaron Keith Drennan, 21, of Parker, Ariz., was sentenced by Judge Roslyn O. Silver to 57 months in prison, followed by three years of supervised release. Drennan previously pleaded guilty to robbery.
On Dec. 15, 2014, co-defendant, Mickey Roy Anderson, Sr., 26, of Parker, Ariz. was sentenced by U.S. District Judge Roslyn O. Silverto 60 months in prison, followed by three years of supervised release, and co-defendant Joshua Ryan Mike, Sr., 22, of Parker, Ariz., was sentenced to 60 months in prison to run consecutive to the 21-month sentence imposed in CR-14-0758-PHX-ROS. Co-defendants Anderson and Mike also previously pleaded guilty to robbery. Mike also pleaded guilty to assault resulting in serious bodily injury in another case before U.S. District Judge Roslyn O. Silver.
According to court documents, on March 9, 2014, Drennan, Anderson, and Mike were being housed as inmates in a community cell at the Colorado River Indian Tribes Adult Detention Center. The victim, a detention officer at the facility, opened their cell door to drop off laundry and was assaulted by Mike. As Mike assaulted the detention officer, Drennan and Anderson took the victim’s cell phone and the keys to the detention facility, and all three subsequently fled from the facility.
According to the plea agreement in Mike’s assault case, on March 1, 2014, Mike assaulted another inmate at the La Paz County Jail by striking him repeatedly in the face causing the victim to sustain serious bodily injury, which included fractures to the cheekbones and jaw.
The investigation in these cases was conducted by the Federal Bureau of Investigation, the Colorado River Indian Tribes Police Department, and the La Paz County Sheriff’s Department. The prosecution was handled by Christina J. Reid-Moore, Assistant U.S. Attorney, District of Arizona, Phoenix.CASE NUMBERS: CR-14-0370-PHX-ROS and CR-14-0758-PHX-ROS
RELEASE NUMBER: 2014-076_Drennan et al.For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.Texas Business Executive Sentenced to Prison for Illegally Selling Oxycodone on Silk RoadRead the Press Release
Orlando, FL – Senior U.S. District Judge G. Kendall Sharp has sentenced Matthew Jones, a/k/a “Caligirl,” “Dynamite2k,” “Dynamite,” “Tyler Zeddai,” and “Mateo Jones” (44, Dallas, Texas) to five years and ten months in federal prison for illegally distributing controlled substances. He pleaded guilty on August 26, 2014.
According to court documents, while Jones was working as the Chief Technology Officer for a software consulting company in Dallas, he operated as the vendor “Caligirl” on the Silk Road drug marketplace. Silk Road operated as an online criminal marketplace designed to enable its users to buy and sell drugs and other illegal goods and services anonymously, outside the reach of law enforcement.
Between April 10, 2013, and September 9, 2013, Caligirl’s Silk Road account completed 685 finalized sales of controlled substances. Beginning on July 11, 2013, through March 20, 2014, Drug Enforcement Administration agents purchased and seized more than 400 Oxycodone tablets and more than 900 Hydrocodone tablets from Jones. Jones shipped the drugs from Texas to Central Florida. His sales placed him in the top 5% of all Silk Road vendors.
Authorities arrested Jones while he was travelling back to the United States from Colombia. At the time of his arrest, he was in possession of approximately 8,500 Oxycodone pills. Simultaneous with his arrest, agents executed a federal search warrant at his Texas residence, where they recovered approximately $75,000 in cash and seized a variety of controlled substances, including Oxycodone, Hydrocodone, MDMA, Methamphetamine, Cocaine, and Hashish. A drug lab was also located in the residence.
In addition to operating on Silk Road, Jones conducted his illicit drug trafficking business utilizing an encrypted and anonymized peer-to-peer program.
This case was investigated by the Drug Enforcement Administration’s Orlando District Office, with assistance from the United States Postal Inspection Service in Dallas, Texas. It was prosecuted by Assistant United States Attorney David Haas.
Ten Sentenced for Involvement in Aryan Brotherhood of Texas Racketeering ConspiracyRead the Press Release
Final 10 of 36 Convicted and Sentenced
Ten Aryan Brotherhood of Texas (ABT) gang members and associates were sentenced to prison this week for their roles in the violent ABT enterprise, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Today, Michael Richard Lamphere, 56, of Houston, Texas, Glen Ray Millican Jr., 41, of Houston, Texas, and Rebecca Johnson Cropp, 46, of Dallas, Texas, were sentenced to serve respective terms of 240 months, 120 months and 36 months in federal prison by U.S. District Judge Sim Lake in the Southern District of Texas. Earlier this week, William David Maynard, 44, of Houston, Texas, Sammy Keith Shipman, 32, of Houston, Texas, Chad Ray Folmsbee, 32, of Houston, Texas, David Orlando Roberts, 36, of Houston, Texas, Justin Christopher Northrup, 29, of Houston, Texas, Tammy Melissa Wall, 45, of Otto, North Carolina, and Benjamin Troy Johnson, 43, of Corpus Christi, Texas, were each sentenced to serve respective terms of 262 months, 188 months, 140 months, 135 months, 130 months, 72 months and 36 months in federal prison.
According to information presented in court, the 10 defendants were admitted members and associates of the ABT, a powerful race-based organization that operates inside and outside of state and federal prisons throughout Texas and the United States. Along with other ABT gang members and associates, they agreed to commit multiple acts of murder, robbery, arson, kidnapping and narcotics trafficking on behalf of the ABT gang. ABT gang members met on a regular basis at various locations throughout Texas to report on gang-related business, collect dues, commit disciplinary assaults against fellow gang members and discuss acts of violence against rival gang members, among other things.
The ABT was established in the early 1980s within the Texas prison system. The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. Previously, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism, but over time, the ABT has expanded its criminal enterprise to include illegal activities for profit, according to court records.
In order to be considered for ABT membership, a person must be sponsored by another gang member. Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by the members of the ABT.
Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, arson, assault, robbery and threats against those who violated the rules or posed a threat to the enterprise. Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”
The defendants sentenced this week represent the final 10 of 36 defendants convicted of conducting racketeering activity through the ABT criminal enterprise, among other charges.
This Organized Crime Drug Enforcement Task Force case was investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement, Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County, Texas, Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice – Office of Inspector General; Harris County, Texas, Sheriff’s Office; Atascosa County, Texas, Sheriff’s Office; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Mesquite, Texas, Police Department; Montgomery County District Attorney’s Office; and the Atascosa County District Attorney’s Office.
The case was prosecuted by Trial Attorney David Karpel of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Ed Gallagher and Tim Braley of the Southern District of Texas.
- Ten Sentenced for Involvement in Aryan Brotherhood of Texas Racketeering Conspiracy
Springfield Resident Sentenced in Child Pornography OffensesRead the Press Release
Defendant Was On State Supervision for Prior Contact Offense
David Rivera, U.S. Attorney for the Middle District of Tennessee, announces that Jason Mikula, 36, of Springfield, Tennessee, was sentenced by United States District Court Judge Kevin Sharp to 20 years in prison. Mikula had pleaded guilty to receipt and possession two child pornography offenses on August 28, 2014.
Mikula was convicted in Nashville, Tennessee, in August 2005 of Aggravated Sexual Battery of a very young child and multiple counts of Sexual Exploitation of a Minor. After serving time in the state penitentiary, he was released in August 2012 onto lifetime supervision with the state. Within seven months of release, however, he had collected a number of sexually explicit images involving children, including images of violence perpetrated against very young children.
Upon his release from federal prison, Mikula will be placed on supervised release for fifteen years and will be required to participate in sex offender treatment, among other conditions.
The defendant also was ordered to pay restitution in the amount of $9300 to a minor victim depicted in some of the images of sexual exploitation he had collected.
This matter was investigated by the Federal Bureau of Investigation and the United States Attorney’s Office for the Middle District of Tennessee. The United States was represented by Assistant U.S. Attorney S. Carran Daughtrey.
Solano County Violent Gang Safe Streets Task Force Efforts Result in Three Federal Indictments for Firearm ChargesRead the Press Release
SSACRAMENTO, Calif. — Michael Quesenberry, 26, of Sacramento; Ignacio Hernandez, 37, of Vallejo; and Rahson Woods, 35, of Vallejo, were charged today by a federal grand jury in separate indictments with being a felon in possession of a firearm, United States Attorney Benjamin B. Wagner announced.
Each defendant was found to be in possession of a firearm after having been convicted of one or more felonies. Hernandez was also charged with possession with intent to distribute methamphetamine.
If convicted, each defendant faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
These cases are the products of investigations by the Solano County Violent Gang Safe Streets Task Force, which includes the Federal Bureau of Investigation, the Solano County Sheriff’s Office, Vallejo Police Department, the California Highway Patrol, and the Solano County District Attorney’s Office. Assistant United States Attorney Olusere Olowoyeye is prosecuting the cases.
The Solano County Violent Gang Safe Streets Task Force is part of the FBI-sponsored Safe Streets Initiative that combines the efforts of federal, state, and local agencies in an effort to stop violent felons from endangering our communities.
Six Fort Worth, Texas, Residents Indicted for Walgreens Burglaries in Texas and OklahomaRead the Press Release
Oklahoma City, Oklahoma – Hylon Joshua Alford-Solomon (23), James Richard Wooden (24), Chris Allen Williams, Jr. (24), Kenneth Wayne Tolbert (23), Kendrick Dwight Marshall (28), and Christopher Benjamin Blanton (21), all from Fort Worth, Texas, were indicted by a federal grand jury for the burglary of Walgreens Pharmacies in Texas and Oklahoma announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
The indictment alleges in count one that from November 2013 through on or about July 19, 2014, the six defendants conspired to burglarize closed Walgreens Pharmacies in Woodway and Southlake, Texas, and Mustang, Oklahoma, in order to steal Hydrocodone, Alprazolam (Xanax), and Promethazine with Codeine cough syrup, all highly abused controlled substances. A second count charges Alford-Solomon, Wooden, Williams, and Tolbert with traveling from Texas to Mustang, Oklahoma on July 19, 2014, and breaking into the Walgreens Pharmacy at 112 East Highway 152. Each defendant faces up to 10 years in prison for the conspiracy charge. If convicted, the defendants will be required to pay restitution to Walgreens in an amount to be determined by the court. Further, if any member of the public knows of the whereabouts of Kendrick Dwight Marshall, they are asked to contact law enforcement.
This case is the result of an investigation by the Drug Enforcement Administration; the Mustang, Oklahoma City, El Reno, Fort Worth, Woodway, Southlake, and Denton Police Departments; and Walgreens Loss Prevention. It is being prosecuted by Assistant U.S. Attorneys Matt Dillon and Mark A.Yancey. The public is reminded that each defendant is presumed innocent until otherwise proven guilty beyond a reasonable doubt.
Sentencings for December 12 - December 18, 2014Read the Press Release
Kara Harper, 31, of Green River, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on December 18, 2014, for conspiracy to possess with intent to distribute heroin resulting in death. Harper was arrested in Green River, Wyoming. She received 72 months imprisonment, to be followed by four years of supervised release, and was ordered to pay a $400.00 fine and a $100.00 special assessment. This case was investigated by the Sweetwater County Sheriff’s Office, the Wyoming Division of Criminal Investigation and the U.S. Drug Enforcement Administration.
Gregg T. Denny, 43, of Rawlins, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on December 17, 2014, for conspiracy to possess with intent to distribute, and to distribute, more than 500 grams of methamphetamine and for conspiracy to launder money. Denny was arrested in Cheyenne, Wyoming. He received 120 months imprisonment, to be followed by eight years of supervised release, and was ordered to pay a $500.00 fine and a $200.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation and the U.S. Drug Enforcement Administration.
Steven D. Webb, 44, of Cheyenne, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on December 17, 2014, for possession of child pornography. Webb was arrested in Cheyenne, Wyoming. He received 36 months imprisonment, to be followed by 15 years of supervised release, and was ordered to pay a $100.00 special assessment and restitution in the amount of $1,250.00. This case was investigated by the Wyoming Division of Criminal Investigation Internet Crimes Against Children Task Force.
Ernie Paul Montoya, Sr., 68, of Coalville, Utah, was sentenced by Federal District Court Judge Scott W. Skavdahl on December 16, 2014, on one count of conspiracy to possess with intent to distribute, and to distribute, more than 500 grams of methamphetamine; one count of possession with intent to distribute methamphetamine; and one count of conspiracy to launder money. Montoya was arrested in Coalville, Utah. He received 87 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $700.00 fine and a $300.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation and the U.S. Drug Enforcement Administration.
David Puhl, 21, of Nunn, Colorado, was sentenced by Federal District Court Judge Alan B. Johnson on December 16, 2014, for conspiracy to possess with intent to distribute, and to distribute, more than 50 grams of methamphetamine. Puhl was arrested in Ault, Colorado. He received 60 months imprisonment, to be followed by four years of supervised release, and was ordered to pay a $400.00 fine and a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.
Christopher Withrow, 44, of Sheridan, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on December 16, 2014, for conspiracy to possess with intent to distribute, and to distribute, more than 50 grams of methamphetamine. Withrow was arrested in Sheridan, Wyoming. He received 70 months of imprisonment, to be followed by four years of supervised release, and was ordered to pay a $900.00 fine and a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.
Delza K. McKannan, 49, of Gillette, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on December 12, 2014, for conspiracy to possess with intent to distribute, and to distribute, more than 50 grams of methamphetamine and conspiracy to launder money. McKannan was arrested in Gillette, Wyoming. She received 84 months imprisonment, to be followed by six years of supervised release, and was ordered to pay a $500.00 fine and a $200.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation and the U.S. Drug Enforcement Administration.
Sentencing Hearings Completed in $600,000 Stolen Identity Tax Refund Fraud SchemeRead the Press Release
PROVIDENCE, R.I. – Five individuals involved in a tax refund fraud scheme which used stolen and fraudulent identifying information of hundreds of individuals and businesses to defraud the Internal Revenue Service of nearly $600,000 have been sentenced in U.S. District Court in Providence, announced United States Attorney Peter F. Neronha.
Government reports indicate that losses due to Stolen Identity Refund Fraud – commonly referred to as SIRF – totals in the billions of dollars. In the last fiscal year alone (2014), the Department of Justice and U.S. Attorney’s offices have charged approximately 896 defendants for their alleged involvement in SIRF schemes.
This SIRF investigation began in January 2013, when Homeland Security Investigations (HSI) agents in Boston conducted a routine border search of Jairo Morales, 29, of Providence, who was flying in from the Dominican Republic. In a laptop computer, HSI agents identified evidence consistent with a tax refund fraud scheme.
According to court records and information presented to the court, an investigation by agents from Internal Revenue Service Criminal Investigation, U.S. Secret Service and HSI determined that Morales and Julianna Martins, 45, of Providence, orchestrated a stolen identity tax refund scheme which resulted in the filing of false federal income tax returns using stolen personal identity information of hundreds of individuals from Puerto Rico and fictitious W-2 forms from various companies. Fraudulently obtained tax refund checks, ranging from approximately $3,000 to $10,000, were sent to multiple Providence addresses under the control of Morales and Martins.
The investigation revealed that Morales, Martins, Lucia Morales, 55, of Providence, and Casimiro Santos, 36, of Providence, and others, deposited United States Treasury checks totaling in excess of $596,000 into various bank accounts controlled by the defendants.
Additionally, according to court documents and information presented to the court, Maria Paulino, 25, of Providence, a bank teller, assisted Martins in opening bank accounts using fraudulent identity information and negotiated checks on behalf of Morales, Martins, and their associates.
Jairo Morales and Julianna Martins pleaded guilty in March 2014 to conspiracy, theft of government property and aggravated identity theft. They were sentenced by U.S. District Court Judge John J. McConnell, Jr., to 48 months in federal prison to be followed by 3 years supervised release, and ordered to pay restitution in the amount of $385,533.58. Morales was sentenced on June 24, 2014. Martins was sentenced on September 29, 2014.
Casimiro Santos pleaded guilty on May 12, 2014, to theft of government property and aggravated identity theft. Santos was sentenced on Wednesday by U.S. District Court Judge John J. McConnell, Jr., to 24 months and one day in federal prison to be followed by 3 years supervised release, and ordered to pay restitution in the amount of $211,141.71.
Maria Paulino pleaded guilty on January 19, 2013 to theft of government property. She was sentenced by U.S. District Court Judge John J. McConnell, Jr., on June 24, 2014, to 3 years probation – the first 6 months to be served in home confinement with electronic monitoring, and ordered to pay restitution in the amount of $92,970.14.
Lucia Morales pleaded guilty on March 31, 2014 to theft of government property. Morales was sentenced by U.S. District Court Judge John J. McConnell, Jr., on June 26, 2014, to 3 years probation and ordered to pay restitution in the amount of $82,183.10.
The cases were prosecuted by Assistant U.S. Attorneys Sandra R. Hebert and John P. McAdams.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. The President established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.
The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Savannah Man Sentenced on False Statement ChargeRead the Press Release
Jackson, Tenn. – Douglas Earl McCasland, 48, of Savannah, Tennessee, was sentenced Monday to serve six months in federal prison after pleading guilty to one count of making false statements in violation of 18 U.S.C. §1001, announced Edward L. Stanton III, United States Attorney for the Western District of Tennessee.
According to the facts presented in the indictment and revealed during sentencing, McCasland, who was certified by the State of Tennessee as a Methamphetamine Remediation Contractor, charged his victims a fee for cleaning up homes that had been contaminated by methamphetamine manufacturing. McCasland knew that after remediation, properties must be certified by an Industrial Hygienist prior to rehabitation. McCasland was not an Industrial Hygienist, but he issued false Certificates of Fitness on the properties.
In addition to the prison sentence, Chief United States District Judge J. Daniel Breen ordered McCasland to serve three years of supervised release and pay restitution in the amount of $102,225 to the victims. The restitution is to be paid at 15% of McCasland's income, or $100 per month. There is no parole in the federal prison system.
This investigation was conducted by the Tennessee Department of Environmental Quality; U.S. Postal Inspection Service; and the Environmental Protection Agency--Office of Inspector General. Assistant U.S. Attorney Victor L. Ivy represented the government.
Santa Fe Man Pleads Guilty to Federal Tax ChargesRead the Press Release
ALBUQUERQUE – Andre Lewis, 33, of Santa Fe, N.M., pleaded guilty this morning to federal tax offenses, announced Acting U.S. Attorney Damon P. Martinez and Dawn Mertz, Special Agent in Charge of the Phoenix Field Office of IRS Criminal Investigation.
Lewis was arrested in May 2014, on an eleven-count indictment. Count 1 of the indictment charged Lewis with conspiracy to defraud the IRS, and Count 2 charged him with making a materially false statement to a federal officer. Counts 3 through 11 charged Lewis with preparing and aiding and abetting the preparation and filing of false tax returns. Lewis committed the offenses between Feb. 2009 and Aug. 2009 in Bernalillo, County, N.M.According to the indictment, from Feb. to July 2009, Lewis conspired with others to defraud the IRS by preparing and filing fraudulent claims for tax refunds. Lewis and his co-conspirators perpetuated the scheme by obtaining the names, identifiers and W-2 Forms for federal taxpayers, and using that information to electronically file federal income tax returns included either false claims for the First Time Home Buyer Credit or false withholding information. Lewis and his conspirators thus obtained tax refunds to which they were not entitled from the IRS.
This morning, Lewis entered guilty pleas to Counts 1 and 3 of the indictment charging him with conspiracy and aiding and abetting the preparation of a false and fraudulent tax return. In his plea agreement, Lewis admitted filing a false tax return in Feb. 2009, by which he fraudulently obtained $16,024.14 from the IRS by misrepresenting his tax withholdings. Lewis also admitted that in 2009 he was involved in filing at least ten false tax returns and fraudulently receiving refunds based on those returns. In his plea agreement, Lewis admitted defrauding the IRS of an aggregate of $118,470.76 through this unlawful scheme.
Lewis has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled. At sentencing, Lewis faces a statutory maximum penalty of five years on Count 1 and a statutory maximum penalty of three years on Count 3.
Two of Lewis’s co-conspirators previously have entered guilty pleas to federal tax charges in related cases. Jerry Gurule, 33, of Albuquerque, N.M., pled guilty on July 24, 2014, to assisting in the preparation of the preparation and filing of a false tax return. Gurule was sentenced on Dec. 10, 2014, to four years of probation with eight months of home confinement and was ordered to pay $69,070.19 in restitution to the IRS. Also on July 24, 2014, Lawrence Jaramillo, 33, of Bosque Farms, N.M., pled guilty to conspiracy and to assisting in the preparation of the preparation and filing of a false tax return. Jaramillo is scheduled for sentencing on Jan. 13, 2015.
These cases were investigated by IRS Criminal Investigation in Albuquerque and are being prosecuted by Assistant U.S. Attorney Sean J. Sullivan.
Rochester Man Sentenced to for Online Enticement of A MinorRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that William Miller, 53, of Rochester, NY, who was convicted of online enticement of a minor, was sentenced to 168 months in prison and 10 years supervised release by U.S. District Court Judge David G. Larimer.“This case illustrates the threats facing our children by people known to the family,” said U.S. Attorney Hochul. “At the same time, it demonstrates the ability of law enforcement to detect crime and then solve it. We will continue to use all of the tools available to us in order to help protect children from violent predators such as this defendant.”
Assistant U.S. Attorney Craig R. Gestring, who handled the case, stated that in August of 2012, Rochester Police responded to the defendant’s Electric Avenue Apartment after Miller claimed to be the victim of a crime. Inside the apartment, officers saw cases of untaxed cigarettes stacked all over, which led them to obtain a search warrant. During their search, officers found a digital camera which contained sexually explicit photos and videos of a young girl which appeared to be taken in Miller’s apartment. At that point, Police contacted the FBI Child Exploitation Task Force for investigative assistance.
Federal agents joined the investigation and identified the child depicted in the sexually explicit videos as a 12 year old girl known to the defendant. Interviews with the child and her mother determined that Miller used threats and bribes to get the child to allow him to produce this material. Federal investigators also determined that Miller used his cellphone to arrange for meetings with the child at which he would produce sexually explicit videos and photos.
At sentencing, Judge Larimer called the defendant a danger to the community. The Judge also referenced the fact that Miller had 80 prior criminal convictions over the past several decades, saying that the defendant should have learned something during all that time. The Court noted that Miller was on probation in Rochester City Court at the time he committed the federal child exploitation crimes for which he was convicted.
The sentencing is the culmination of an investigation on the part of Officers of the Rochester Police Department, under the direction of Chief Michael Ciminelli; and Special Agents of the Federal Bureau of Investigation, Child Exploitation Task Force.
RMD Holdings, LTD D/B/A Nationwide Fence and Supply Co. Settles Alleged False Claims Act Violations Involving Disadvantaged Business Enterprise Requirements in Federally Funded ProjectsRead the Press Release
- Alleged Violations Involved Federally Funded Transportation Projects in Kentucky, Indiana, Illinois, Georgia and New York
LOUISVILLE, Ky. – RMD Holdings, Ltd d/b/a Nationwide Fence and Supply Co. (Nationwide) agreed to pay a $1,750,000 to settle allegations that it circumvented the Disadvantaged Business Enterprise requirements in federally funded construction projects. Of that amount, $416,000 will be paid pursuant to a stipulation of settlement being submitted for Court approval today by the U.S. Attorney’s Office for the Southern District of New York.
Today’s announcement was made by Acting U.S. Attorney John E. Kuhn, Jr., the U.S. Department of Transportation Office of Inspector General (DOT-OIG) and the Federal Highway Administration’s Office of Civil Rights.
“The Disadvantaged Business Enterprise program was created to ensure a level playing field for minority-owned and women-owned companies in federally funded transportation projects,” stated Acting U.S. Attorney Kuhn. “By circumventing the law, RMD undermined the goal of assisting disadvantaged companies in a market where the federal government invests many millions of dollars.”
According to the settlement agreement, beginning in 2008, the DOT-OIG began investigating Nationwide for improperly utilizing Disadvantaged Business Enterprise (DBE) companies as a pass through in order to satisfy the DBE requirements specified in federally funded construction projects. The projects were performed between October 20, 2006, through July 16, 2010, in Kentucky, Indiana, Illinois, Georgia and New York and most involved the installation of guardrails, security fencing, and cable barriers along interstates. In Kentucky, Nationwide installed high tension cable barriers in Barren, Bullitt, Hart and Jefferson Counties in June of 2008.
At the time, Nationwide was co-owned by two brothers: Micheal DeMil and Robert DeMil. The company was a specialty construction group that conducted business in 33 states with its principal office located in Chesterfield Township, Michigan. Many of the transportation projects on which Nationwide worked were funded in whole or in part by the United States, and each project required a certain percentage of DBE participation. Nationwide was not a certified DBE.
The DBE program generally requires that recipients of federal highway funds establish a program to assist women owned or minority owned businesses to compete for work on federally funded construction projects. Recipients of these funds often accomplish this goal by requiring that each construction project include a certain percentage of participation by a DBE company. This percentage can be met by contractors utilizing DBE subcontractors to either perform work on the project or to supply materials.
The United States contends that, during the period from October 20, 2006, through July 16, 2010, Nationwide misrepresented how it utilized Sallie’s Wholesale Construction, Inc. (a DBE company) and Access Control Company, Inc. (a DBE). Nationwide claimed that Sallie’s Wholesale Construction, Inc. (SWC) was a DBE providing materials on projects in Indiana, Kentucky and Georgia. In reality, SWC was not acting as a material supplier and did not have in its possession those materials Nationwide needed for its projects. Instead, Nationwide would negotiate a price with non-DBE material suppliers and then request SWC to contract with the non-DBE material supplier so that it appeared SWC was furnishing the materials to Nationwide=s job site. SWC never touched the material purchased from the true material suppliers and was simply acting as an extra participant in the procurement of materials. In the case of Access Control Company, Inc. (Access), Nationwide represented that Access would furnish materials on a project in Illinois when, in fact, Access never provided materials and never agreed to act as a pass-through for materials. The government’s investigation did not find any wrongdoing by Access and Access cooperated fully with the government’s investigation.
Nationwide has also agreed to enter into an administrative settlement and three year compliance agreement with the United States Department of Transportation, Federal Highway Administration (FHWA). This agreement requires Nationwide, in part, to undertake remedial measures including: (1) the adoption and implementation of an Ethics Code and Corporate Compliance Program; (2) the appointment of a Corporate Compliance Officer ; and (3) the retention of an independent Monitor to evaluate the Company's performance of this Agreement and to submit periodic reports directly to the FHWA.
This settlement agreement is neither an admission of liability by Nationwide or its co-owners, nor a concession by the United States that its claims are not well founded.
This case was investigated by the U.S. Attorney’s Offices for the Western District of Kentucky, Northern District of Georgia, Middle District of Georgia, Southern District of Georgia, Southern District of Indiana, Central District of Illinois, and the Southern District of New York. The matter was prosecuted by Assistant United States Attorney Benjamin S. Schecter in the Western District of Kentucky, Trial Attorney Kelley Hauser with the U.S. Department of Justice, Civil Division, Commercial Litigation Branch, Frauds Section, The U.S. Attorney’s Office for the Southern District of New York and was investigated by U.S. Department of Transportation Office of Inspector General (DOT-OIG) and the Federal Highway Administration’s Office of Civil Rights.
President of Two Minnesota Nonprofits Pleads Guilty to Mail FraudRead the Press Release
United States Attorney Andrew M. Luger today announced the guilty plea of ROBERTA BARNES, 57, for using her nonprofit organizations to defraud two Minnesota state agencies, stealing more than $460,000 in state and federal grant funds. The defendant pleaded guilty on December 15, 2014, before Judge John R. Tunheim in U.S. District Court in Minneapolis, Minn., to one count of Mail Fraud.
“This defendant stole from grant programs designed to help underprivileged communities in Minnesota,” said Assistant U.S. Attorney Benjamin Langner. “She used the guise of two nonprofit entities to steal money that could have been used for philanthropic purposes in order to enrich herself.”
According to her guilty plea and documents filed in court, BARNES was the president of two St. Paul-based nonprofit organizations, Agape House for Mothers (“Agape”) and Sierra Young Family Institute (“Sierra”). Through Agape and Sierra, BARNES obtained approximately $1.7 million in grant funds offered by the Minnesota Department of Health (“MDH”) and the Minnesota Housing Finance Agency (“MHFA”).
From 2002 until May 2012, BARNES applied for and received grant money from MDH and MHFA through promises that the funds would be used for philanthropic purposes such as combating teen pregnancy and providing housing assistance to needy families. Instead, BARNES intended to and did use a significant portion of the grant funds to make mortgage payments, car payments and other unauthorized payments to herself and her family.
Between 2002 and 2012, BARNES, on behalf of Agape and Sierra, obtained a series of grants from MDH for the purported purpose of operating teen pregnancy programs for minority populations in the St. Paul area. In 2008, BARNES, on behalf of Sierra, applied for and received a grant from MHFA, falsely representing that the funds would be used for finance programs designed to provide assistance to households experiencing long-term homelessness.
According to her guilty plea and documents filed in court, BARNES spent more than $460,000 of the grant funds on personal expenses for herself and her family; she attempted to conceal her fraud scheme by creating fraudulent invoices that reflected false expenses incurred by Agape and Sierra.
This case is the result of an investigation conducted by the Federal Bureau of Investigation and the U.S. Department of Health and Human Services.
Assistant U.S. Attorneys Benjamin Langner is prosecuting the case.
Defendant Information: ROBERTA BARNES, 57
St. Paul, Minn.
Convicted: • Mail Fraud, 1 countPlacerville Business Owner Sentenced for Filing False Tax ReturnsRead the Press Release
SACRAMENTO, Calif. — United States District Judge Morrison C. England Jr. sentenced Thomas W. Stringfellow, 55, of Placerville, today to 18 months in prison and ordered to pay $687,182 in restitution for willfully making false tax returns, United States Attorney Benjamin B. Wagner announced.
According to court documents, from 2006 through 2010, Stringfellow underreported his business income on tax returns by more than $1.1 million, and underreported his personal income on tax returns by more than $1 million. Stringfellow owned New Horizon Painting, and rather than depositing all of the business checks into the appropriate accounts, he cashed some of the checks and did not report those amounts as income. In total, Stringfellow’s underreporting of his business income and his personal income led to a tax loss of more than $687,000.
This case was the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Jean M. Hobler prosecuted the case.Pine Hill Man Sentenced to Federal Prison for Assault ConvictionRead the Press Release
ALBUQUERQUE – Joseph Paddock, 21, an enrolled member of the Navajo Nation who resides in Pine Hill, N.M., was sentenced this morning to a year in federal prison followed by three years of supervised release.
Paddock was arrested on April 28, 2014, on a criminal complaint charging him with assault, and subsequently was charged in an indictment with assault with a dangerous weapon. According to court filings, Paddock assaulted the victim, a security guard employed by the Ramah Navajo School Board, by cutting him with a knife on April 18, 2014, at a location within the Navajo Indian Reservation.
On Aug. 27, 2014, Paddock entered a guilty plea to the indictment and admitted that on April 18, 2014, he assaulted the victim with a knife with the intent of causing bodily harm. Paddock acknowledged that as a result of the assault, the victim sustained injuries that required multiple stitches.
This case was investigated by the Ramah Navajo Police Department and was prosecuted by Assistant U.S. Attorney Jacob A. Wishard.
Pennsylvania Man Charged in White Plains Federal Court with Retaliating Against A Witness and StalkingRead the Press Release
Preet Bharara, 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 arrest of KRIS SERGENTAKIS for retaliating against a witness and stalking. The Complaint alleges that SERGENTAKIS has engaged in a scheme to retaliate against, stalk, and harass an individual (“Victim-1”) who previously provided law enforcement with information relating to SERGENTAKIS’s commission of federal offenses, for which SERGENTAKIS was previously convicted and served a federal prison sentence. SERGENTAKIS was arrested this morning in Pennsylvania and is expected to be presented today in federal court in Allentown, Pennsylvania, before a United States Magistrate Judge.
Manhattan U.S. Attorney Bharara said: “As alleged, after Kris Sergentakis was reported for engaging in kickbacks, convicted, and sentenced to a prison term, he began a campaign of retaliation and stalking in an effort to destroy the life of the former colleague who exposed his criminal conduct. There will be zero tolerance from this Office and our law enforcement partners for witness intimidation and harassment. The criminal justice system relies on witnesses, and they should not suffer for being good citizens who come forward to ensure justice is done.”
USPIS Inspector-in-Charge Bartlett said: “Sergentakis viciously and knowingly attempted to destroy his victim’s reputation and livelihood through letters, emails, and the internet. Law enforcement has a responsibility to protect witnesses against intimidation and will bring to justice anyone who engages in these types of slanderous attacks.”
According to the Complaint unsealed today in White Plains federal court:
SERGENTAKIS was formerly employed in the graphics department of The Leukemia and Lymphoma Society (“LLS”), a charitable non-profit organization that funds cancer research and is headquartered in White Plains. In 2006, SERGENTAKIS pled guilty in Manhattan federal court to commercial bribery and mail fraud charges arising out of his participation in a kickback scheme in which he allocated certain of LLS’s printing contracts to certain vendors in return for payments from the vendors. During the course of that investigation and prosecution, Victim-1, who was LLS’s Chief Financial Officer at the time and subsequently became its Chief Executive Officer, provided information to law enforcement relating to SERGENTAKIS’s conduct at LLS and his violations of federal law.
From at least 2007 to the present, SERGENTAKIS has harassed and threatened Victim-1 through letters, emails, and the Internet. SERGENTAKIS began by sending multiple letters to Victim-1 and other current and former employees at LLS. For example, in 2007, SERGENTAKIS sent a letter to Victim-1 stating, in part, that “[e]very person on the planet will know that you are a dangerous child molester,” and “I’ll be everywhere you are warning people.” SERGENTAKIS’s letter to Victim-1 further stated that “when I am released I will be outside where you live, work, eat, whatever;” “I will never give up;” and “[a]s long as I live this will never end.” The letter concluded with: “This hasn’t even started yet.”
In 2010, shortly after being released from prison, SERGENTAKIS created a website (the “Website”) containing harassing and threatening content regarding Victim-1. On at least two occasions, Internet service providers stopped hosting the Website because of its content, but SERGENTAKIS responded by relaunching the Website with a different service provider. Between 2010 and the present, the Website’s content included, among many other things, the following:
- An image of a guillotine with the title “THE CURE FOR PEDOPHILLIA”[sic] and, immediately below the image, the statement: “We all have a responsibility to keep children safe from pedophiles like [Victim-1] . . . .”
- “[Victim-1] also enjoys beating helpless animals, he had a dalmation [sic] which would have accidents in the house so [Victim-1] would beat the dog to a pulp the same way he abuses cancer patients by denying them the monies the public wants them to have.”
- Photographs of Victim-1 and members of Victim-1’s family that had been posted on the Facebook accounts of certain of Victim-1’s family members.
- The statement that a poster regarding Victim-1 would be produced and that “Manhattan and [the town where Victim-1 lived] would be wallpapered with a 100,000 posters.”
SERGENTAKIS also created a Facebook account on which he posted harassing and threatening content regarding Victim-1. For example, in September 2014, the Facebook account showed a photograph of Victim-1 with the word “CRIMINAL” imposed in all capital letters across the bottom and, in August 2014, SERGENTAKIS posted a comment on the account stating: “I am thinking of running a promotion. What do you prefer a coffee mug or t shirt?” Above this comment was a photograph of a coffee mug bearing the web address of the Website, an image of Victim-1 behind prison bars, and the words “[Victim-1] CEO LLS.” In addition, SERGENTAKIS posted links to and advertisements for the Website on various other websites, including search engine websites, social media websites, news websites, and blogs.
SERGENTAKIS also used email to conduct his campaign of retaliation and harassment. For example, in August 2010, SERGENTAKIS sent an email to the then-principal of the high school where Victim-1’s children were enrolled as students, providing a link to the Website and stating: “this is something u need to know about.” SERGENTAKIS sent numerous emails to the media promoting the Website and making false allegations about Victim-1. For example, in September 2010, SERGENTAKIS sent an email to a TV station in Missouri stating, in part: “the head of a major nonprofit was arrested for child molestation and case fixing see [Website-1].” As another example, in September 2013, SERGENTAKIS sent an email to ABC News with the subject line “please review [Website-1]” and stating: “The CEO is a pedophile and millions of dollars are missing.” SERGENTAKIS further sent multiple emails to donors of LLS promoting the Website, disseminating such allegations about Victim-1, and encouraging the donors to stop supporting LLS.
SERGENTAKIS, 54, of Bangor, Pennsylvania, is charged with one count of retaliating against a witness or informant, which carries a maximum sentence of 10 years in prison, and one count of stalking, which carries a maximum sentence of five years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Bharara thanked and praised the USPIS for its outstanding work in this investigation.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorney George D. Turner is in charge of the prosecution.
The charges contained in the Complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.