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17 December 2014
Buncombe Co. Man Pleads Guilty to Armed Robbery and Gun ChargesRead the Press Release
ASHEVILLE, N.C. – Anthony Lamont Hill, 31, of Fletcher, NC, appeared before U.S. Magistrate Judge Dennis L. Howell on Tuesday, December 16, 2014 and pleaded guilty to armed robbery and gun charges in connection with a 2013 armed robbery of a Dollar General store in Woodfin, N.C., announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Tompkins is joined in making today’s announcement by Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, and Chief Brett Holloman of the Woodfin Police Department.
At today’s plea hearing, Hill admitted to committing the armed robbery of the Dollar General Store located at 458 Weaverville Road on August 2, 2013. Court records show that Hill by actual and threatened force took money from the store while it was occupied by only two employees. Hill pleaded guilty to one count of Hobbs Act robbery and one count of possessing and brandishing a firearm during and in relation to a crime of violence.
Hill remains in federal custody. He faces a maximum prison sentence of 20 years and a $250,000 fine for the armed robbery charge and a minimum of seven years and a maximum of life imprisonment for the gun charge. A sentencing date for Hill has not been set yet.
The investigation was handled by ATF and the Woodfin Police Department. The prosecution for the government was handled by Assistant U.S. Attorney John D. Pritchard of the U.S. Attorney’s Office in Asheville.
Buffalo Woman Sentenced for Tax FraudRead the Press Release
CONTACT: BARBARA BURNS
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. – U.S. Attorney William J. Hochul, Jr. announced today that Dominique Taylor, 29, of Buffalo, NY, who was convicted of conspiracy to defraud the Internal Revenue Service, was sentenced to time served and six months of electronic monitoring by Chief U.S. District Judge William M. Skretny. The defendant was also ordered to pay restitution totaling $54,316.
Assistant U.S. Attorney Trini E. Ross, who handled the case, stated that the defendant conspired with others and submitted false claims for fraudulent income tax refunds. Taylor had others obtain legitimate W-2 forms from actual employers and then altered the forms to create new W-2s by changing income and withholding information so as to maximize the refund to be obtained. The defendant kept a portion of the fraudulent refund received.
Co-defendant Keianna Jones was also convicted and is awaiting sentencing.
The conviction is the result of an investigation on the part of Special Agents of the Internal Revenue Service, Criminal Investigation Division under the direction of Acting Agent-In-Charge Shantelle Kitchen.
Buffalo Man Sentenced for Bank FraudRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. – U.S. Attorney William J. Hochul announced today that Tarrek Williams, 27, of Buffalo, NY, who was convicted of bank fraud, was sentenced to time served by U.S. District Court Chief Judge William M. Skretny.Assistant U.S. Attorney Marie P. Grisanti, who handled the case, stated that between September 21, 2011 and July 28, 2013, the defendant, was involved in a scheme to defraud First Niagara Bank. As part of the scheme, Williams deposited false and fraudulent checks so others involved in the scheme could withdraw proceeds from that check before the bank realized that there were insufficient funds to cover that check. The total loss to First Niagara for these checks is $14,185.06.
The sentencing is the culmination of an investigation on the part of Special Agents of the Postal Inspection Service, under the direction of Shelly Binkowski, the Inspector in Charge of the Boston Division.
Brothers Plead Guilty to $6.1 Million Tax FraudRead the Press Release
Peoria, Ill. – Two brothers, who formerly owned and operated a Fast Stop service station in Peoria, Ill., entered pleas of guilty today to conspiracy to defraud, as announced by U.S. Attorney Jim Lewis, Central District of Illinois. Sentencing is scheduled on April 27, 2015, for Shaher M. Mizyed, 50, of Naperville, Ill., and Mohammad M. Mizyed, 46, of the 2800 block of West Playden, Peoria, Ill.
At the time of the offenses, Shaher and Mohammad Mizyed had ownership interest and were involved in the management of Tira Oil LLC, which operated the Fast Stop gas station and convenience store located at 3606 N. Prospect Road in Peoria. Both men were active in the daily operations and record keeping of Tira Oil which did a large amount of cash business.During today’s hearing, before U.S. District Judge Michael M. Mihm, and according to court documents, both men admitted that from 2006 through 2010, they conspired to file false federal corporate income tax returns. Based on information provided by the brothers to their accountant, the false tax returns under-reported the gross receipts of their company in the amount of approximately $6.1 million, which the brothers split between them. As a result of its failure to report the additional gross receipts to the IRS, Tira Oil owes approximately $171,000 in corporate income taxes.
Shaher Mizyed admitted that from January 2006 to about January 2012, false information was provided in the company’s monthly Illinois State Sales and Use Tax Returns. The false returns under-reported approximately $4.3 million in sales and defrauded the state of approximately $347,000 in state tax revenues.
Mohammad Mizyed entered a plea of guilty to conspiracy to commit mail fraud. He admitted that false income information was provided to the state of Illinois to receive approximately $163,000 in state medical benefits. Shaher Mizyed also provided false information about his income to obtain food stamp benefits totaling approximately $36,000. The same year that Shaher purchased a home for $581,000, he falsely claimed a gross monthly income of $800.00 in his application for food stamps
Shaher Mizyed further admitted that when he refinanced his home, he provided the bank with a 2007 tax return that was different from what was filed with the IRS. The return provided to the bank, in support of an application to refinance his home mortgage, showed a gross income of $95,056, when the return filed with the IRS falsely reflected a deficit of nearly $80,000.Mohammad Mizyed also pled guilty to one count of mail fraud for providing false 2007 and 2008 tax returns to the bank in support of his request for a mortgage. The tax returns Mohammad provided to the bank reflected income of $70,956 in 2007 and $79,109 in 2008; however, returns filed with the IRS reflected income of $3,900 in 2007 and $13,000 in 2008. Prior to the bank’s approval of the loan, he bank learned of the false information and denied the loan to Mohammad.
The maximum statutory penalty for conspiracy to defraud the United States and to violate tax laws is up to five years in prison; for mail fraud and for conspiracy to commit mail fraud the penalty is up to 20 years in prison. The offenses carry fines of up to $250,000.
The case is being prosecuted by Supervisory Assistant U.S. Attorney Darilynn J. Knauss and Special Assistant U.S. Attorney Eugene Bian of the Office of the Illinois Attorney General. The charges are the result of investigation by Internal Revenue Service Criminal Investigation, the Federal Bureau of Investigation and the Illinois Department of Revenue.
Bridgeport Grocery Store Operator Pleads Guilty to Illegal Use of Food Stamp BenefitsRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that KHALID ABOUTAYEB, 46, of Bridgeport, pleaded guilty today in Hartford federal court to one count of unlawful use of food stamp benefits.
On May 14, 2014, a grand jury in New Haven returned an indictment charging ABOUTAYEB with engaging in food stamp fraud at the M&J Deli Market, a grocery and convenience store he operated at 988 State Street in Bridgeport.
The federal Supplemental Nutrition and Assistance Program (“SNAP”) is administered by the USDA’s Food and Nutrition Service and utilizes federal tax dollars to subsidize low-income households to provide them with the opportunity to achieve a more nutritious diet by increasing their food-purchasing power. SNAP recipients purchase eligible food items at retail food stores through the use of an Electronic Benefits Transfer (EBT) card, and SNAP benefits may be accepted by authorized retailers only in exchange for eligible items. Items such as alcoholic beverages, cigarettes, paper goods and soaps are not eligible for purchase with Food Stamp benefits, and it is a violation of the rules and regulations governing the food stamp program to allow benefits to be used to purchase ineligible items. SNAP benefits may not lawfully be exchanged for cash under any circumstances. The program is designed so that the total amount of each purchase is electronically transferred to the retailer’s designated bank account.
In pleading guilty, ABOUTABYEB admitted that he and others unlawfully exchanged customers’ food stamp benefits for ineligible items and cash at M&J Deli Market between approximately December 2011 and February 2013. The investigation has revealed that more than $285,000 in illegal SNAP benefits were redeemed at the store.
ABOUTAYEB is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on March 11, 2015, at which time he faces a maximum term of imprisonment of five years, a fine and restitution of approximately $199,000.
This matter is being investigated by the U.S. Department of Agriculture, Office of Inspector General, and is being prosecuted by Assistant U.S. Attorney Felice M. Duffy.
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(203) 821-3722 [email protected]Billerica Woman Sentenced to 30 Months in Loan ScamRead the Press Release
BOSTON – A Billerica woman was sentenced yesterday for wire fraud charges in connection with a bogus bank guaranty program.
Diane Glatfelter, 48, was sentenced by U.S. District Judge Douglas P. Woodlock to 30 months in prison, three years of supervised release, and ordered to pay $1,575,000 in restitution. In September 2014, Glatfelter was found guilty following a five-day jury trial of four counts of wire fraud.
In 2007 and 2008, Glatfelter engaged in a scheme to defraud a young real estate businessman from California who was seeking funding for a development project. Glatfelter promised to secure a $20 million loan for him, but required him to pay $125,000 in up-front fees. The loan never materialized. Glatfelter used the money for various purposes other than to secure any funding. As part of her scam, Glatfelter set up two bogus front companies and used her unsuspecting sister to make these fronts appear legitimate.
At sentencing, Glatfelter was also held accountable for an additional $1,450,000 in fraud against four other victims in connection with three transactions during the same time period. Glatfelter promised all of the victims that through the efforts of K2 Unlimited and 211 Ventures, she could procure huge sums of money for their projects (up to $100 million), but they would need to pay a percentage of the amount sought up-front in order for her to procure the bank guarantee or the loan, or to participate in the trade program. The victims wired their payments to Glatfelter’s 211 Ventures and K2 bank accounts, in one instance to her lawyer’s bank account, and thereafter, Glatfelter disbursed the funds to her business partner and to her own temporary staffing agency. She never procured the funding. Glatfelter also provided false reasons for the delays in funding.United States Attorney Carmen M. Ortiz; Lisa A. Quinn, Special Agent in Charge of the U.S. Secret Service; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement. The case was prosecuted by Assistant U.S. Attorneys Sandra S. Bower and Christine J. Wichers of Ortiz’s Economic Crimes Unit and Civil Division, respectively.
Baltimore Man Exiled to 12 Years in Prison for an Armed Commercial Robbery in which he Brandished a GunRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell III, sentenced Frank Hill, age 30, of Baltimore, today to 12 years in prison followed by five years of supervised release for an armed commercial robbery and brandishing a firearm in relation to a crime of violence.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; Commissioner Anthony W. Batts of the Baltimore Police Department; Anne Arundel County Police Chief Tim Altomare; and Baltimore City State’s Attorney Gregg L. Bernstein.
According to his plea agreement, on April 7, 2013, Hill and two co-conspirators went into a pizza restaurant in Severn, Maryland, with guns drawn. The three robbers each had a firearm, which they pointed at the employees, and demanded money. One of the robbers struck an employee in the back of the head with a firearm. The employees were then placed in a back room or the walk-in freezer, and their hands and feet were bound with duct tape. The robbers took approximately $2,078 in cash belonging to the restaurant. The business was shut down for a brief period of time in connection with the police department’s investigation of the robbery.
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On April 26, 2013, Hill provided two men with a car, as well as a handgun and a pistol grip shotgun, which the men then used to rob a liquor store on Bowleys Lane in Baltimore. The robbers approached an employee of the store and forced him inside the business. Once inside the liquor store, the robbers demanded money and the employee, in fear for his life, provided approximately $70,000 in cash and goods. Hill admitted he received proceeds from this robbery.United States Attorney Rod J. Rosenstein commended the FBI, Baltimore County Police Department, Baltimore City Police Department, Anne Arundel County Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Bonnie S. Greenberg, who prosecuted the case.
Avon Subsidiary Pleads Guilty in Manhattan Federal Court to Conspiring to Violate the Foreign Corrupt Practices ActRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Leslie R. Caldwell, the Assistant Attorney General for the Criminal Division of the Department of Justice (“DOJ”), and Andrew G. McCabe, Assistant Director-in-Charge of the Washington Field Office of the Federal Bureau of Investigation (“FBI”), announced today the guilty plea of Avon Products (China) Co. Ltd. (“Avon China”), a wholly owned subsidiary of the New York-based cosmetics company, Avon Products, Inc. (“Avon”), to a criminal Information charging Avon China with conspiring to violate the accounting provisions of the Foreign Corrupt Practices Act (“FCPA”) by concealing and disguising gifts, cash, non-business meals, travel, and entertainment it gave to Chinese government officials in order to obtain and retain certain business benefits for Avon China. In addition, the U.S. Attorney’s Office and DOJ entered into a deferred prosecution agreement (“DPA”) with Avon, relating to Avon’s role in the conspiracy and its failure to implement internal controls. Pursuant to the DPA with Avon, a criminal Information has been filed charging Avon with conspiring to violate the books and records provisions of the FCPA and with violating the internal controls provisions of the FCPA. In a proceeding today before United States District Judge George B. Daniels, the criminal Informations were filed against Avon and Avon China, and Avon China entered its guilty plea and was sentenced.
In total, Avon and Avon China have agreed to pay $67,648,000 in criminal penalties. Avon has also agreed to implement rigorous internal controls, cooperate fully with the Government, and retain a compliance monitor for at least 18 months.
In a related matter, Avon reached a settlement with the U.S. Securities and Exchange Commission (“SEC”) and will pay an additional $67,365,013 in disgorgement and prejudgment interest, bringing the total amount of U.S. criminal and regulatory penalties paid by Avon and Avon China to $135,013,013.
Manhattan U.S. Attorney Preet Bharara said: “For years in China it was ‘Avon calling,’ as Avon bestowed millions of dollars in gifts and other things on Chinese government officials in return for business benefits. Avon China was in the door-to-door influence-peddling business, and for years its corporate parent, rather than putting an end to the practice, conspired to cover it up. Avon has now agreed to adopt rigorous internal controls and to the appointment of a monitor to ensure that reforms are instituted and maintained.”
Assistant Attorney General Leslie R. Caldwell said: “Companies that cook their books to hide improper payments will face criminal penalties, as Avon China’s guilty plea demonstrates. Public companies that discover bribes paid to foreign officials, fail to stop them, and cover them up do so at their own peril.”
FBI Assistant Director-In-Charge Andrew G. McCabe said: “When corporations knowingly engage in bribery in order to obtain and retain contracts, it disrupts the level playing field to which all businesses are entitled. Companies who attempt to advance their businesses through foreign bribery should be on notice. The FBI, with our law enforcement partners, is continuing to push this unacceptable practice out of the business playbook by investigating companies that ignore the law.”
According to the allegations contained in the criminal Informations, which were filed today in Manhattan federal court, and other publicly available information:
From at least 2004 through late 2008, Avon and Avon China conspired to falsify Avon’s books and records by falsely and misleadingly describing the nature and purpose of certain Avon China transactions in order to disguise things of value that Avon China executives and employees gave to government officials in China. Specifically, Avon China disguised over $8 million in gifts, cash, non-business travel, meals, and entertainment it gave to Chinese government officials in order to obtain and retain business benefits for Avon China. Avon China attempted to disguise the payments and benefits through various means, including by falsely or misleadingly describing the nature or purpose of, or participants associated with, such expenses, and falsely recording payments to a third-party consultant as payments for legitimate services.
Moreover, in late 2005, Avon learned that Avon China was routinely providing things of value to Chinese government officials and failing to properly document them. Instead of ensuring the practice was halted, disciplining the culpable individuals, and implementing appropriate controls to address this problem, Avon and Avon China took steps to conceal the conduct, despite knowing that Avon’s books and records would continue to be inaccurate if steps were not taken to correct the conduct. Avon China thus continued operating in the same improper manner, until late 2008.
Avon has since cooperated with the Government, including by conducting an extensive internal investigation, voluntarily making U.S. and foreign employees available for interviews, and collecting, analyzing, translating, and organizing voluminous evidence. Avon has also undertaken extensive anti-corruption remedial efforts, including taking appropriate disciplinary action against culpable employees, and continuing to enhance Avon’s internal accounting, reporting, and compliance functions.
Mr. Bharara praised the outstanding efforts of the FBI in the investigation. He also thanked the SEC’s Division of Enforcement for its significant assistance in the investigation.
The case is being handled by the Complex Frauds and Cybercrime Unit and the Fraud Section of the DOJ’s Criminal Division. Assistant U.S. Attorney Sarah E. Paul, and Senior Trial Attorney Laura Perkins of the Criminal Division’s Fraud Section, are in charge of the prosecution.
Avon Products Information
Avon China Information
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Avon China Plea Agreement
Avon China Pleads Guilty to Violating the FCPA by Concealing More Than $8 Million in Gifts to Chinese OfficialsRead the Press Release
Avon Products Inc. and Avon Products (China) Co. Ltd. Will Pay More than $135 Million in Criminal and Regulatory Penalties
Avon Products (China) Co. Ltd. (Avon China), a wholly owned subsidiary of the New York-based cosmetics company, Avon Products Inc. (Avon), pleaded guilty today to conspiring to violate the accounting provisions of the Foreign Corrupt Practices Act (FCPA) to conceal more than $8 million in gifts, cash and non-business meals, travel and entertainment it gave to Chinese government officials in order to obtain and retain business benefits for Avon China. Avon China and Avon admitted the improper accounting and payments and Avon entered into a deferred prosecution agreement to resolve the investigation. In a proceeding today before United States District Judge George B. Daniels, the criminal Informations were filed against Avon and Avon China, and Avon China entered its guilty plea and was sentenced.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara of the Southern District of New York and Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington Field Office made the announcement.
“Companies that cook their books to hide improper payments will face criminal penalties, as Avon China's guilty plea demonstrates,” said Assistant Attorney General Caldwell. “Public companies that discover bribes paid to foreign officials, fail to stop them, and cover them up do so at their own peril.”
“For years in China it was ‘Avon calling,’ as Avon bestowed millions of dollars in gifts and other things on Chinese government officials in return for business benefits,” said U.S. Attorney Bharara. “Avon China was in the door-to-door influence-peddling business, and for years its corporate parent, rather than putting an end to the practice, conspired to cover it up. Avon has now agreed to adopt rigorous internal controls and to the appointment of a monitor to ensure that reforms are instituted and maintained.”
“When corporations knowingly engage in bribery in order to obtain and retain contracts, it disrupts the level playing field to which all businesses are entitled,” said FBI Assistant Director in Charge McCabe. “Companies who attempt to advance their businesses through foreign bribery should be on notice. The FBI, with our law enforcement partners, is continuing to push this unacceptable practice out of the business playbook by investigating companies who ignore the law.”
Avon China pleaded guilty to a criminal information filed today in the U.S. District Court for the Southern District of New York charging the company with conspiring to violate the books and records provisions of the FCPA. Avon, the parent company, entered into a deferred prosecution agreement today and admitted its criminal conduct, including its role in the conspiracy and its failure to implement internal controls. Pursuant to the deferred prosecution agreement, the department filed a criminal information charging Avon with conspiring to violate the books and records provisions of the FCPA and violating the internal controls provisions of the FCPA. In total, the Avon entities will pay $67,648,000 in criminal penalties. Avon also agreed to implement rigorous internal controls, cooperate fully with the department and retain a compliance monitor for at least 18 months.
Avon settled a related FCPA matter with the U.S. Securities and Exchange Commission (SEC) today, and will pay an additional $67,365,013 in disgorgement and prejudgment interest, bringing the total amount of U.S. criminal and regulatory penalties paid by Avon and Avon China to $135,013,013.
According to court documents, from at least 2004 through 2008, Avon and Avon China conspired to falsify Avon’s books and records by falsely describing the nature and purpose of certain Avon China transactions. Specifically, the companies sought to disguise over $8 million in gifts, cash and non-business travel, meals and entertainment that Avon China executives and employees gave to government officials in China in order to obtain and retain business benefits for Avon China. Avon China attempted to disguise the payments and benefits through various means, including falsely describing the nature or purpose of, or participants associated with such expenses, and falsely recording payments to a third party intermediary as payments for legitimate consulting services.
The companies also admitted that in late 2005 Avon learned that Avon China was routinely providing things of value to Chinese government officials and failing to properly document them. Instead of ensuring the practice was halted, fixing the false books and records, disciplining the culpable individuals, and implementing appropriate controls to address this problem, the companies took steps to conceal the conduct, despite knowing that Avon China’s books and records, and ultimately Avon’s books and records, would continue to be inaccurate.
Court filings acknowledge Avon’s cooperation with the department, including conducting an extensive internal investigation, voluntarily making U.S. and foreign employees available for interviews, and collecting, analyzing, translating and organizing voluminous evidence.
The case is being investigated by the FBI’s Washington Field Office, and prosecuted by Senior Trial Attorney Laura Perkins of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Sarah Paul of the Southern District of New York. The Justice Department expresses its appreciation for the significant assistance provided by the SEC’s Division of Enforcement in this investigation.
Ashburn Resident Pleads Guilty to Filing Fraudulent Tax ReturnsRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that Timothy D. Wilburn, aged 32, of Ashburn, Georgia, entered a guilty plea to wire fraud and aggravated identity theft on December 15, 2014, before the Honorable W. Louis Sands, U.S. District Court Judge, in Albany, Georgia.Mr. Wilburn pled guilty to one count of wire fraud and one count of aggravated identity theft. The former carries a maximum sentence of 20 years imprisonment and a $250,000 fine or both, while the latter requires a sentence of at least two years imprisonment consecutive to any other sentence and a fine of up to $250,000, or both. He will be sentenced in about 60 days.
Mr. Wilburn devised and executed a scheme whereby he submitted over seventy false income tax returns involving the names and identities of actual persons. He received the refunds from these returns and converted same to his own use. His scheme was uncovered when officers of the Albany Police Department, responding to a burglary report at his house, found evidence of the false returns in the house during the course of their investigation of the purported burglary. Evidence of illegal refunds of over $120,000 was found.
“Mr. Wilburn essentially engaged in an identity fraud scheme to cheat the government, without regard to the pain and financial hardship it would and did bring to the persons whose identities he usurped. Only the alertness of the law enforcement officers who went to his residence in response to an unrelated burglary report brought this devious scheme to an end. My office will continue to vigorously prosecute cases such as this which victimize both the tax paying public and the innocent individuals who have their lives disrupted through the theft of their identities,” said U.S. Attorney Michael Moore.The case was investigated by the Internal Revenue Service, Criminal Investigation and the Ashburn Police Department. Assistant United States Attorney Jim Crane is prosecuting 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.
Armed Robber Gets Lengthy Prison TermRead the Press Release
PHILADELPHIA – Derrick Godfrey, 45, of Philadelphia, was sentenced today to 509 months in prison, for an armed robbery spree over two days in June 2012, involving three communities. Godfrey was convicted June 27, 2014 of three counts of Hobbs Act Robbery and one count of brandishing a handgun during the second robbery. In addition to the prison term, U.S. District Court Judge J. Curtis Joyner ordered five years of supervised release, a $500 special assessment and restitution of $860.
On June 1, 2012, shortly before 5:00 p.m., Godfrey robbed the Pennsylvania Wine & Spirits Shoppe, at 7146 Ridge Ave, in Philadelphia. He ordered the employees to turn over the cash contained in the store’s three registers. He stole $1,074 from the store which he placed in a multi-colored bag he was carrying. The next day, shortly before noon, Godfrey robbed the Pennsylvania Wine & Spirits Store at 504 West Marshall Street, Norristown, Pennsylvania. The store manager reported that the robber, wearing a black hooded sweatshirt and brandishing a gun, entered the office area of the store and ordered the store clerk to empty the contents of the store safe into a multi-colored bag that he was carrying. That robbery netted Godfrey approximately $400 from the safe and another $200 from the cash registers. About 20 minutes later, Godfrey robbed the Dunkin’ Donuts store at 1941 West Main Street, West Norriton, Pennsylvania. He walked into the store and ordered employees to empty contents of the cash registers into a multi-colored bag that he was carrying. Godfrey stole approximately $318 in that robbery.A short time later, East Norriton Township Police officers stopped the getaway car several miles from the Dunkin’ Donuts. Eyewitnesses identified Godfrey as the gunman and the car in which he was a passenger as the getaway car. Police searched the car and found the handgun which bore Godfrey’s DNA, several changes of clothing, a multi-colored shopping bag as described by the victims of the three armed robberies, and a black plastic bag with more cash.
The case was investigated by the FBI, the East Norriton Township Police Department, the Norristown Police Department, the Philadelphia Police Department, the West Norriton Township Police Department, the Montgomery County District Attorney’s Office, and the Montgomery County Detective Bureau. It was prosecuted by Special Assistant United States Attorneys Rebecca Strubel and Matthew Quigg.
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PATTY HARTMAN, Media Contact, 215-861-8525Albuquerque Man Sentenced to Ten Years for Using a Firearm in Furtherance of Drug Trafficking CrimeRead the Press Release
Chavez Prosecuted as Part of Federal “Worst of the Worst” Anti-Violence Initiative
ALBUQUERQUE – Ronald Lewis Chavez, 46, of Albuquerque, N.M., was sentenced yesterday afternoon to ten years in federal prison for his conviction for using a firearm in furtherance of a drug trafficking crime. He will be on supervised release for five years after he completes his prison sentence.
Chavez was arrested on Jan. 27, 2014, on a criminal complaint charging him with possession of methamphetamine with intent to distribute and possession of a firearm by a convicted felon. Chavez subsequently was indicted in Feb. 2014, charging him with possession with intent to distribute methamphetamine, using a firearm in furtherance of a drug trafficking crime, and being a felon in possession of a firearm and ammunition.
According to court filings, law enforcement officers seized a handgun found underneath the mattress of Chavez’ bed and ammunition concealed in two black boxes next to the bed when they executed a search warrant at his residence in southwest Albuquerque on Jan. 24, 2014. Officers also seized plastic bags containing methamphetamine from a fanny pack buckled around Chavez’ torso.
Chavez pled guilty on Sept. 15, 2014, to using a firearm in furtherance of a drug trafficking crime. He admitted possessing a semiautomatic pistol during and in relation to a drug trafficking crime. Chavez also admitted to possessing methamphetamine with intent to distribute.
Chavez was prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
This case was investigated by the Albuquerque offices of the DEA and the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Bernalillo County Sheriff’s Office. Assistant U.S. Attorney Louis E. Valencia prosecuted the case.
14 Indicted in Connection with New England Compounding Center and Nationwide Fungal Meningitis OutbreakRead the Press Release
A 131-count criminal indictment was unsealed today in Boston in connection with the 2012 nationwide fungal meningitis outbreak, the Justice Department announced. Barry J. Cadden, owner and head pharmacist of New England Compounding Center (NECC) and NECC’s supervisory pharmacist Glenn A. Chin were charged with 25 acts of second-degree murder in Florida, Indiana, Maryland, Michigan, North Carolina, Tennessee and Virginia.
The outbreak was caused by contaminated vials of preservative-free methylprednisolone acetate (MPA) manufactured by NECC, located in Framingham, Massachusetts. The U.S. Centers for Disease Control and Prevention (CDC) reported that 751 patients in 20 states were diagnosed with a fungal infection after receiving injections of NECC’s MPA. Of those 751 patients, the CDC reported that 64 patients in nine states died.
Twelve other individuals, all associated with NECC, including six other pharmacists, the director of operations, the national sales director, an unlicensed pharmacy technician, two of NECC’s owners, and one other individual were charged with additional crimes including racketeering, mail fraud, conspiracy, contempt, structuring, and violations of the Food, Drug and Cosmetic Act.
“As alleged in the indictment, these employees knew they were producing their medication in an unsafe manner and in insanitary conditions, and authorized it to be shipped out anyway, with fatal results,” said Attorney General Eric Holder. “With the indictment and these arrests, the Department of Justice is taking decisive action to hold these individuals accountable for their alleged participation in grievous wrongdoing. Actions like the ones alleged in this case display not only a reckless disregard for health and safety regulations, but also an extreme and appalling indifference to human life. American consumers have a right to know that their medications are safe to use, and this case proves that the Department of Justice will always stand resolute to ensure that right, to protect the American people, and to hold wrongdoers accountable to the fullest extent of the law.”
“Every patient receiving treatment deserves the peace of mind and knowledge that the medicine they are receiving is safe,” said Acting Associate Attorney General Stuart Delery. “When people and companies violate that trust and break the law, the consequences to patients and their families can be catastrophic. That’s why it remains a priority of the Department to use every tool at our disposal to protect patients’ safety and hold bad actors accountable.”
“Those who produce and sell the drugs that we take have a special responsibility to make sure that they prepare those drugs under suitable conditions, and that what leaves their facilities is safe,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “The indictment charges that the defendants’ conduct in this case was corrupt and carried out with a complete disregard to the public’s health. The department‘s Consumer Protection Branch along with our law enforcement partners is steadfast in our commitment to use every criminal and civil tool at our disposal to hold accountable those who are willing to put our lives at risk in the reckless pursuit of their profits.”
“Ever since the outbreak occurred, we have been committed to bringing to justice the individuals responsible for the deaths and suffering of so many innocent victims,” said U.S. Attorney Carmen Ortiz for the District of Massachusetts. “The indictment announced today is the first step in that process which addresses alleged criminal wrongdoing at NECC, a business that prioritized production and profit over safety. We will make every effort to ensure that licensed pharmacists, and those working with them, are held to a standard of care that protects the public from unsafe and dangerous medications.”
“Two years after the fungal meningitis outbreak, our hearts continue to go out to the victims of this tragedy and to their families,” said FDA Commissioner Margaret A. Hamburg M.D. “Our work on behalf of all patients who want and deserve medicines that do not subject them to undue risk is far from done. The FDA will continue to work aggressively on many fronts with the states, the Department of Justice, and others to protect the American public from unsafe compounded drug products.”
“Threats to public health, as alleged in today's indictment, are a priority for the FBI,” said Assistant Director Joseph S. Campbell of the FBI’s Criminal Division. “Together with our law enforcement and regulatory agency partners, we are determined to stop practices that jeopardize patients' health and violate the public trust. These types of investigations are complex and resource intensive. We greatly appreciate the efforts of our partners in this case and look forward to working with them to effectively identify criminal activities and combat fraudulent and abusive health practices in the future.”
The 14 individuals charged in the indictment are Barry J. Cadden, 48, of Wrentham, Massachusetts; Glenn A. Chin, 46, of Canton, Massachusetts; Gene Svirskiy, 33, of Ashland, Massachusetts; Christopher M. Leary, 30, of Shrewsbury, Massachusetts; Joseph M. Evanosky, 42, of Westford, Massachusetts; Scott M. Connolly, 42, of East Greenwich, Rhode Island; Sharon P. Carter, 50, of Hopkinton, Massachusetts; Alla V. Stepanets, 34, of Framingham, Massachusetts; Gregory A. Conigliaro, 49 of Southborough, Massachusetts; Robert A. Ronzio, 40, of North Providence, Rhode Island; Kathy Chin, 42, of Canton, Massachusetts; Michelle Thomas, 31 of Cumberland, Rhode Island; Carla Conigliaro, 51, of Dedham, Massachusetts and Douglas A. Conigliaro, 53, of Dedham, Massachusetts.
The 25 second-degree murders are included in the indictment as predicate racketeering acts under the Racketeer Influenced and Corrupt Organizations Act (RICO). These charges relate to patients who received NECC MPA and died in Florida, Indiana, Maryland, Michigan, North Carolina, Tennessee and Virginia. As a general matter, and depending on particular state law, second-degree murder does not require the government to prove Cadden and Chin had specific intent to kill the 25 patients, but rather that Cadden and Chin acted with extreme indifference to human life. According to the indictment, Cadden and Chin knew that NECC was making MPA in a manner and in an environment in which they could not assure that the drug was sterile as it was identified to be. Despite knowing that they were making the MPA in an unsafe manner and in insanitary conditions, Cadden and Chin nonetheless allegedly directed and authorized the shipping of MPA to NECC customers nationwide. It is alleged that Cadden and Chin were aware that doctors would inject MPA into their patients’ bodies, and that if the MPA was not in fact sterile, it could kill them.
The 25 murder racketeering acts comprise only a portion of the broad racketeering scheme charged in the indictment. The indictment also alleges that NECC’s other pharmacists knowingly made and sold numerous drugs in a similar unsafe manner and in insanitary conditions. The unsafe manner alleged in the indictment includes, among other things, the pharmacists’ failure to properly sterilize NECC’s drugs, failure to properly test NECC’s drugs for sterility, and failure to wait for test results before sending the drugs to customers. The insanitary conditions alleged in the indictment include, among other things, NECC’s lack of proper cleaning and NECC’s failure to take any action when its own environmental monitoring repeatedly detected mold and bacteria within NECC’s clean room suite of rooms throughout 2012.
It is further alleged that NECC repeatedly took steps to shield its operations from regulatory oversight by the FDA by claiming to be a pharmacy dispensing drugs pursuant to valid, patient-specific prescriptions. In fact, NECC routinely dispensed drugs in bulk without valid prescriptions. The indictment alleges that NECC even used fictional and celebrity names on fake prescriptions to dispense drugs.
Finally, the indictment charges Carla Conigliaro, the majority shareholder of NECC, and her husband Douglas Conigliaro with transferring assets following the fungal meningitis outbreak. Specifically, the indictment charges that after NECC declared bankruptcy, and the bankruptcy court ordered the shareholders not to transfer assets, Carla and Doug Conigliaro transferred approximately $33.3 million to eight different bank accounts opened after the NECC bankruptcy.
Cadden and Chin face a maximum of up to life in prison if convicted on all counts.
“Although no VA patients were affected by the fungal meningitis outbreak, VA unknowingly purchased a variety of pharmaceutical products over a three year period from NECC that were intentionally produced in an unsafe manner under insanitary conditions,” said Assistant Inspector General for Investigations James J. O’Neill for the Office of Inspector General, Department of Veterans Affairs. “We are pleased to have contributed to this outstanding multi-agency criminal investigation.”
“Today's results are part of an ongoing effort by the Defense Criminal Investigative Service and its law enforcement partners to protect the integrity of the Department of Defense's health care program and the quality of care our service members receive,” said Deputy Inspector General for Investigations James B. Burch for the U.S. Department of Defense Office of the Inspector General. “The Defense Criminal Investigative Service will continue to pursue allegations of health care fraud that put the Warfighter at risk.”
“The U.S. Postal Inspection Service is pleased to join our federal partners in this announcement” said Postal Inspector in Charge Shelly A. Binkowski of the Boston Division. “What's particularly disturbing about this case is that through their alleged misrepresentation and greed, these defendants put the health and well-being of others at a high level of risk. This criminal action today demonstrates the commitment and vigilance of postal inspectors and other federal agents to pursue criminals who prey on the public in such an egregious way.”
In announcing the indictment today, Attorney General Holder and U.S. Attorney Ortiz acknowledged the assistance and cooperation of Michigan State Attorney General Bill Schuette. The state of Michigan had the most deaths during the outbreak.
The investigation was conducted by the FDA Office of Criminal Investigations and the FBI with assistance by the Defense Criminal Investigative Service, U.S. Department of Defense, Office of Inspector General; Department of Veterans Affairs Office of Inspector General and U.S. Postal Inspection Service. The case is being prosecuted by Assistant U.S. Attorneys George P. Varghese and Amanda P.M. Strachan of the Health Care Fraud Unit for the U.S. Attorney’s Office in the District of Massachusetts, and Trial Attorney John W.M. Claud of the Civil Division’s Consumer Protection Branch.
The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
Victims with questions about today’s charges may call 1-888-221-6023 or email [email protected].
14 Indicted in Connection with New England Compounding Center and Nationwide Fungal Meningitis OutbreakRead the Press Release
WASHINGTON – A 131-count criminal indictment was unsealed today in Boston in connection with the 2012 nationwide fungal meningitis outbreak, the Justice Department announced. Barry J. Cadden, owner and head pharmacist of New England Compounding Center (NECC) and NECC’s supervisory pharmacist Glenn A. Chin were charged with 25 acts of second-degree murder in Florida, Indiana, Maryland, Michigan, North Carolina, Tennessee and Virginia.
The outbreak was caused by contaminated vials of preservative-free methylprednisolone acetate (MPA) manufactured by NECC, located in Framingham, Massachusetts. The U.S. Centers for Disease Control and Prevention (CDC) reported that 751 patients in 20 states were diagnosed with a fungal infection after receiving injections of NECC’s MPA. Of those 751 patients, the CDC reported that 64 patients in nine states died.
Twelve other individuals, all associated with NECC, including six other pharmacists, the director of operations, the national sales director, an unlicensed pharmacy technician, two of NECC’s owners, and one other individual were charged with additional crimes including racketeering, mail fraud, conspiracy, contempt, structuring, and violations of the Food, Drug and Cosmetic Act.
“As alleged in the indictment, these employees knew they were producing their medication in an unsafe manner and in insanitary conditions, and authorized it to be shipped out anyway, with fatal results,” said Attorney General Eric Holder. “With the indictment and these arrests, the Department of Justice is taking decisive action to hold these individuals accountable for their alleged participation in grievous wrongdoing. Actions like the ones alleged in this case display not only a reckless disregard for health and safety regulations, but also an extreme and appalling indifference to human life. American consumers have a right to know that their medications are safe to use, and this case proves that the Department of Justice will always stand resolute to ensure that right, to protect the American people, and to hold wrongdoers accountable to the fullest extent of the law.”
“Every patient receiving treatment deserves the peace of mind and knowledge that the medicine they are receiving is safe,” said Acting Associate Attorney General Stuart Delery. “When people and companies violate that trust and break the law, the consequences to patients and their families can be catastrophic. That’s why it remains a priority of the Department to use every tool at our disposal to protect patients’ safety and hold bad actors accountable.”
“Those who produce and sell the drugs that we take have a special responsibility to make sure that they prepare those drugs under suitable conditions, and that what leaves their facilities is safe,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “The indictment charges that the defendants’ conduct in this case was corrupt and carried out with a complete disregard to the public’s health. The department‘s Consumer Protection Branch along with our law enforcement partners is steadfast in our commitment to use every criminal and civil tool at our disposal to hold accountable those who are willing to put our lives at risk in the reckless pursuit of their profits.”“Ever since the outbreak occurred, we have been committed to bringing to justice the individuals responsible for the deaths and suffering of so many innocent victims,” said U.S. Attorney Carmen Ortiz for the District of Massachusetts. “The indictment announced today is the first step in that process which addresses alleged criminal wrongdoing at NECC, a business that prioritized production and profit over safety. We will make every effort to ensure that licensed pharmacists, and those working with them, are held to a standard of care that protects the public from unsafe and dangerous medications.”
“Two years after the fungal meningitis outbreak, our hearts continue to go out to the victims of this tragedy and to their families,” said FDA Commissioner Margaret A. Hamburg M.D. “Our work on behalf of all patients who want and deserve medicines that do not subject them to undue risk is far from done. The FDA will continue to work aggressively on many fronts with the states, the Department of Justice, and others to protect the American public from unsafe compounded drug products.”
“Threats to public health, as alleged in today's indictment, are a priority for the FBI,” said Assistant Director Joseph S. Campbell of the FBI’s Criminal Division. “Together with our law enforcement and regulatory agency partners, we are determined to stop practices that jeopardize patients' health and violate the public trust. These types of investigations are complex and resource intensive. We greatly appreciate the efforts of our partners in this case and look forward to working with them to effectively identify criminal activities and combat fraudulent and abusive health practices in the future.”
The 14 individuals charged in the indictment are Barry J. Cadden, 48, of Wrentham, Massachusetts; Glenn A. Chin, 46, of Canton, Massachusetts; Gene Svirskiy, 33, of Ashland, Massachusetts; Christopher M. Leary, 30, of Shrewsbury, Massachusetts; Joseph M. Evanosky, 42, of Westford, Massachusetts; Scott M. Connolly, 42, of East Greenwich, Rhode Island; Sharon P. Carter, 50, of Hopkinton, Massachusetts; Alla V. Stepanets, 34, of Framingham, Massachusetts; Gregory A. Conigliaro, 49 of Southborough, Massachusetts; Robert A. Ronzio, 40, of North Providence, Rhode Island; Kathy Chin, 42, of Canton, Massachusetts; Michelle Thomas, 31 of Cumberland, Rhode Island; Carla Conigliaro, 51, of Dedham, Massachusetts and Douglas A. Conigliaro, 53, of Dedham, Massachusetts.
The 25 second-degree murders are included in the indictment as predicate racketeering acts under the Racketeer Influenced and Corrupt Organizations Act (RICO). These charges relate to patients who received NECC MPA and died in Florida, Indiana, Maryland, Michigan, North Carolina, Tennessee and Virginia. As a general matter, and depending on particular state law, second-degree murder does not require the government to prove Cadden and Chin had specific intent to kill the 25 patients, but rather that Cadden and Chin acted with extreme indifference to human life. According to the indictment, Cadden and Chin knew that NECC was making MPA in a manner and in an environment in which they could not assure that the drug was sterile as it was identified to be. Despite knowing that they were making the MPA in an unsafe manner and in insanitary conditions, Cadden and Chin nonetheless allegedly directed and authorized the shipping of MPA to NECC customers nationwide. It is alleged that Cadden and Chin were aware that doctors would inject MPA into their patients’ bodies, and that if the MPA was not in fact sterile, it could kill them.
The 25 murder racketeering acts comprise only a portion of the broad racketeering scheme charged in the indictment. The indictment also alleges that NECC’s other pharmacists knowingly made and sold numerous drugs in a similar unsafe manner and in insanitary conditions. The unsafe manner alleged in the indictment includes, among other things, the pharmacists’ failure to properly sterilize NECC’s drugs, failure to properly test NECC’s drugs for sterility, and failure to wait for test results before sending the drugs to customers. The insanitary conditions alleged in the indictment include, among other things, NECC’s lack of proper cleaning and NECC’s failure to take any action when its own environmental monitoring repeatedly detected mold and bacteria within NECC’s clean room suite of rooms throughout 2012.
It is further alleged that NECC repeatedly took steps to shield its operations from regulatory oversight by the FDA by claiming to be a pharmacy dispensing drugs pursuant to valid, patient-specific prescriptions. In fact, NECC routinely dispensed drugs in bulk without valid prescriptions. The indictment alleges that NECC even used fictional and celebrity names on fake prescriptions to dispense drugs.
Finally, the indictment charges Carla Conigliaro, the majority shareholder of NECC, and her husband Douglas Conigliaro with transferring assets following the fungal meningitis outbreak. Specifically, the indictment charges that after NECC declared bankruptcy, and the bankruptcy court ordered the shareholders not to transfer assets, Carla and Doug Conigliaro transferred approximately $33.3 million to eight different bank accounts opened after the NECC bankruptcy.
Cadden and Chin face a maximum of up to life in prison if convicted on all counts.
“Although no VA patients were affected by the fungal meningitis outbreak, VA unknowingly purchased a variety of pharmaceutical products over a three year period from NECC that were intentionally produced in an unsafe manner under insanitary conditions,” said Assistant Inspector General for Investigations James J. O’Neill for the Office of Inspector General, Department of Veterans Affairs. “We are pleased to have contributed to this outstanding multi-agency criminal investigation.”
“Today's results are part of an ongoing effort by the Defense Criminal Investigative Service and its law enforcement partners to protect the integrity of the Department of Defense's health care program and the quality of care our service members receive,” said Deputy Inspector General for Investigations James B. Burch for the U.S. Department of Defense Office of the Inspector General. “The Defense Criminal Investigative Service will continue to pursue allegations of health care fraud that put the Warfighter at risk.”
“The U.S. Postal Inspection Service is pleased to join our federal partners in this announcement” said Postal Inspector in Charge Shelly A. Binkowski of the Boston Division. “What's particularly disturbing about this case is that through their alleged misrepresentation and greed, these defendants put the health and well-being of others at a high level of risk. This criminal action today demonstrates the commitment and vigilance of postal inspectors and other federal agents to pursue criminals who prey on the public in such an egregious way.”
In announcing the indictment today, Attorney General Holder and U.S. Attorney Ortiz acknowledged the assistance and cooperation of Michigan State Attorney General Bill Schuette. The state of Michigan had the most deaths during the outbreak.
The investigation was conducted by the FDA Office of Criminal Investigations and the FBI with assistance by the Defense Criminal Investigative Service, U.S. Department of Defense, Office of Inspector General; Department of Veterans Affairs Office of Inspector General and U.S. Postal Inspection Service. The case is being prosecuted by Assistant U.S. Attorneys George P. Varghese and Amanda P.M. Strachan of the Health Care Fraud Unit for the U.S. Attorney’s Office in the District of Massachusetts, and Trial Attorney John W.M. Claud of the Civil Division’s Consumer Protection Branch.
The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
Victims with questions about today’s charges may call 1-888-221-6023 or email [email protected].
16 December 2014
“Molly” Trafficking Ring Dismantled, Leader Sentenced to More Than Twelve Years in PrisonRead the Press Release
Orlando, Florida – U.S. District Judge G. Kendall Sharp today sentenced Justin Brian Smith (28, Orlando) to 12 years and 7 months in federal prison for conspiracy to distribute Methylone. He pleaded guilty on July 7, 2014. Six additional members of the drug trafficking ring previously pleaded guilty and were also sentenced today for the same offense. Dylan Tash (21, Orlando) was sentenced to seven years and four months in federal prison. Janette Leonard (34, Orlando) was sentenced to five years and three months in federal prison. Takayuki Sakairi (28, Orlando) and Nathalie Zuanetti (27, Orlando) each received a sentence of four years and nine months’ imprisonment. Brian Marmorstone (26, Orlando) was sentenced to two years and nine months in federal prison, and Paul Stebenne (42, Oviedo) was sentenced to two years and six months in federal prison.
According to court documents, in 2011, Smith began purchasing Methylone, a club drug often referred to as “Molly,” in bulk from a source in China. Smith would arrange for the drug packages to be shipped to him and to other co-conspirators, including Sakairi, Marmorstone, Zuanetti, Tash, and Leonard. Zuanetti, Tash, Leonard, and Stebenne then assisted Smith in distributing the drugs to other individuals.
The investigation culminated with a controlled delivery of approximately 72 kilograms of Methylone to Tash on January 10, 2014. In addition, agents seized and administratively forfeited approximately $42,000 in cash from Smith’s residence. During the course of the investigation, agents seized a total of approximately 280 kilograms of Methylone that had been ordered by Smith and sent to him and his accomplices.
DEA Acting Special Agent in Charge A.D. Wright stated, “Today’s actions should be a warning call to those who peddle these dangerous drugs to make a quick buck by preying on party-goers. The DEA remains focused on keeping our citizens safe and these dangerous drugs out of our communities.”
This case was investigated by the Drug Enforcement Administration. It was prosecuted by Assistant United States Attorney Vincent S. Chiu.
Wyoming Businessman Sentenced for Obstructing the Internal Revenue ServiceRead the Press Release
On Dec. 15, 2014, a Casper, Wyoming, man was sentenced to serve one year and one day in prison for tax fraud by U.S. District Court Judge Alan B. Johnson in the District of Wyoming.
Sonny Pilcher pleaded guilty on June 2, 2014, to one count of obstructing the administration of the internal revenue laws. During his guilty plea hearing, Pilcher admitted that he claimed a false expense of $258,000 for a repaid business loan on his tax return for 2008, and, over several years, he paid his employees in cash to evade employment taxes.
At the sentencing hearing, the government’s evidence showed that Pilcher impeded the Internal Revenue Service (IRS) by destroying income records for his business, CC Cowboys, commingling money between bank accounts of separate businesses, and creating 242 fraudulent invoices totaling $3.9 million. The evidence showed that in 2007 and 2008, Pilcher received approximately $750,000 from the fraudulent invoices, which was not reported on his income tax returns. In a previous interview with the IRS special agent investigating the case, Pilcher admitted that he did not have a personal bank account and that he only ever used cash to pay for his living expenses.
Pilcher was also sentenced to one year of supervised release following his prison term and required to pay a $10,000 fine.
This case was investigated by special agents in the Cheyenne, Wyoming, office of IRS-Criminal Investigation and was prosecuted by Trial Attorneys Lori A. Hendrickson and Ignacio Perez de la Cruz of the Justice Department’s Tax Division.
Wheeling Businessman Convicted of Defrauding Mortgage CustomersRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistWHEELING, WEST VIRGINIA – Wheeling businessman Mark C. Busack was convicted today on charges that the defrauded customers of his mortgage brokerage business, United States Attorney William J. Ihlenfeld, II, announced.
Busack, age 51, pled guilty this morning to four counts of “Use of an Unauthorized Access Device” and one count of “Filing a False S Corporation Income Tax Return.” He faces up to ten years in prison and fine of up to $250,000.00 on each of the four access device counts and up to three years in prison and fine of up to $100,000.00 on the tax charge. 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.
By pleading guilty, Busack admitted to a scheme to defraud his mortgage customers by making hundreds of unauthorized charges to credit and debit accounts amounting to hundreds of thousands of dollars in fraudulent activity. He also admitted to underreporting his income in 2012 by $309,949.42.
The matter was investigated by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation Section, the Ohio County Sheriff’s Department and the Wheeling Police Department.
United States Attorney Ihlenfeld and Assistant U.S. Attorney Jarod J. Douglas are prosecuting the case on behalf of the federal government.
Senior U.S. District Judge Frederick P. Stamp presided.
Waterloo Man Sentenced on Methamphetamine ChargesRead the Press Release
Follow @SDILNewsStephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that a Waterloo, Illinois, man, convicted of Conspiracy to Distribute Methamphetamine and Distribution of Methamphetamine, was sentenced to 70 months in federal prison on December 11, 2014. Shawn Buckley, 32, received his 70 month sentence for offenses which occurred in St. Clair County, IL, and in St. Louis, MO. Buckley pled guilty to those offenses on August 20, 2014. Following release from imprisonment, Buckley will serve a 4 year term of supervised release. Buckley was also ordered to pay a $200 fine and a $200 special assessment. Buckley has been in custody since his arraignment on September 25, 2013.
Evidence in support of this prosecution was obtained in an investigation which was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF initiative is designed to bring federal, state, and local law enforcement agencies and resources together to identify, target and dismantle large national and international drug trafficking organizations. Agencies participating in this case include the Drug Enforcement Administration, Federal Bureau of Investigation, Internal Revenue Service, Criminal Investigations, Bureau of Alcohol, Tobacco, Firearms, and Explosives, and U.S. Marshal Service. This case was prosecuted by Assistant United States Attorney Donald S. Boyce.
US Attorney Goodwin to announce development in the federal investigation into the Jan 9 chemical leak into the Elk RiverRead the Press Release
WHO: United States Attorney Booth Goodwin, officials with the Federal Bureau of Investigation and the Environmental Protection Agency.
WHEN: 1:30 p.m. Wednesday, Dec. 17, 2014.
WHERE: Robert C. Byrd United States Courthouse, Charleston, West Virginia, Fifth Floor
Members of the media will need to present photo ID. Media with cameras will require escort to the press conference location. The event will be available through conference call by dialing 888-606-9549 and entering passcode 3543992. The conference call window will open at 1 p.m.
Two Woodland Hills Men Charged with Running Ponzi Scheme Involving ATMs That Caused Investors to Lose Well over $100 MillionRead the Press Release
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USDOJ: US Attorney's Office - CENTRAL DISTRICT OF CALIFORNIA - 163LOS ANGELES – Two San Fernando Valley men were charged today in a federal fraud case that alleges they ran a 15-year-long Ponzi scheme that collected hundreds of millions from investors who were told their money would be used to purchase profitable automated teller machines.
Joel Barry Gillis, 74, of Woodland Hills, and Edward Wishner, 76, also of Woodland Hills, were charged today with mail fraud and wire fraud in a case that caused well over $100 million in losses to nearly 2,000 investors.
According to the criminal information filed today in United States District Court, Gillis and Wishner operated the Calabasas-based Nationwide Automated Systems, Inc. (NASI), which purported to place, operate and maintain ATMs in high-traffic locations, such as hotels, casinos and convenience stores. NASI claimed that it operated over 30,000 ATMs and was involved in more than $1 billion in ATM transactions every month.
The information further alleges that Gillis and Wishner told victim-investors that NASI would lease back the ATMs and pay investors 50 cents for each transaction performed at their particular ATM, guaranteeing annual returns of 20 percent on each ATM. In addition to these high-yields, NASI and its salespeople urged some investors to use their retirement savings “by claiming that investments in NASI’s sale/leaseback program would outperform most traditional retirement investment accounts,” according to the information.
NASI did make monthly payments to investors, but that money came from other investors. While NASI did operate a small number of ATMs – no more than 250, which were owned by the company and not investors – the overall operation was a sham hidden under the veil of a Ponzi scheme. Gillis and Wishner prevented investors from discovering the fraudulent nature of the business by providing bogus monthly reports to the investors that falsely detailed the performance of the investors’ ATMs. In reality, the purpose of these reports was to conceal that the true source of the payments sent to investors were monies received from other investors. Gillis and Wishner also included a “non-interference” provision in the lease agreements that prohibited victim-investors from visiting the locations where their ATMs were supposedly located.
The scheme unraveled this past summer. In August, “NASI bounced approximately $3 million in checks that had been sent by NASI as monthly returns to victim-investors,” according to the criminal information. “By the end of the month, NASI had drained its bank account, drawing it down to a balance of less than $200,000.”
In response to hundreds of calls from victim-investors, Gillis and Wishner “falsely sought to reassure the victim-investors that NASI was only suffering from accounting problems and technical delays relating to system upgrades, and that timely payment of investor returns would likely resume by the beginning of October 2014.” Even as the Ponzi was collapsing, Gillis and Wishner allegedly continued to raise another $4 million from victim-investors.
The information filed today charged Gillis and Wishner with conspiracy, two counts of mail fraud and one count of wire fraud. If they are convicted, Gillis and Wishner each would face a statutory maximum sentence of 20 years in federal prison for each of the four charges.
Gillis and Wishner are expected to make their initial court appearances tomorrow afternoon in United States District Court.
This case was investigated by the Federal Bureau of Investigation. The U.S. Securities and Exchange Commission provided substantial assistance in the matter.
The SEC filed a civil lawsuit in relation to the NASI scheme in September, which resulted in a court order freezing the company’s assets and having a receiver appointed to oversee the assets (see: http://www.sec.gov/litigation/litreleases/2014/lr23106.htm).
Release No. 14-163
Two Sentenced for Fraudulent PracticesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA – Two West Virginia residents were sentenced in federal court for fraudulent activities, United States Attorney William J. Ihlenfeld, II, announced today.
Brenda Kaye Stamper, 46, of Martinsburg, West Virginia, was sentenced for stealing her deceased mother’s Social Security Administration Widow Benefits. Stamper’s mother, Nola Wilson, passed away in February 2012. At the time of her death, Wilson was collecting Widow Benefits in the amount of $651.00 per month. An investigation by the Social Security Administration revealed that from February 2012 through December 2013, Stamper failed to report her mother’s death and, instead, used the monthly payments for her own personal expenses. She pled guilty in September 2014 to one count of “Theft of Government Money.” She was sentenced today to five years of probation and ordered to pay restitution in the amount of $15,312.00.
Marta Ramos, 43, of Hedgesville, West Virginia, was sentenced for fraudulently using the social security number of another individual to open multiple bank accounts, utility accounts, and lines of credit. Ramos pled guilty in September 2014 to one count of “Fraudulent Use of a Social Security Number” following an investigation by the United States Secret Service. She was sentenced today to three years of probation and ordered to pay restitution in the amount of $4,322.70.
Assistant U.S. Attorney Jarod Douglas prosecuted Stamper and Assistant U.S. Attorney Andrew Cogar prosecuted Ramos on behalf of the government.
U.S. District Judge Gina M. Groh presided.
Two Newark Men Charged with Two Armed Carjackings and One Attempted Armed CarjackingRead the Press Release
NEWARK, N.J. – Two Newark men will make their initial appearance in court today on charges they carried out two armed carjackings and one attempted carjacking during a five-day span in September 2013, U.S. Attorney Paul J. Fishman announced.
Dion Hines, 21, is charged by complaint with two counts of carjacking, one count of attempted carjacking, and one count of using and carrying a firearm during a crime of violence. Roosevelt Robinson, 23, is charged by complaint with one count of carjacking, one count of attempted carjacking, and one count of using and carrying a firearm during a crime of violence. Both defendants are expected to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to documents filed in this case and statements made in court:
At 10:30 p.m. on Sept. 22, 2013, Hines, Robinson, and another male conspirator allegedly approached a Mercedes Benz sedan that was parked in a residential driveway in Newark. Hines brandished a silver revolver and ordered the driver to get out of the vehicle. Hines, Robinson, and the other conspirator pulled on the driver’s side door, but the victim resisted. Robinson allegedly said: “Shoot that [expletive].” The victim eventually got out of the Mercedes Benz and Robinson sat in the driver’s seat.
After Hines and the other conspirator fled on foot, the victim pulled Robinson from the Mercedes Benz, got back into the vehicle and reversed the car. Hines allegedly returned and fired two shots at the Mercedes Benz, striking the rear driver side door. Hines, Robinson, and the other conspirator then ran down the block and jumped into a car waiting nearby. The victim pursued them in the Mercedes Benz, striking both the getaway car and Robinson before Robinson entered the vehicle. A car chase ensued, during which Hines fired two additional shots at the Mercedes Benz.
At 9:25 p.m. on Sept. 26, 2013, Hines allegedly approached a vehicle parked in a lot near a Newark residence. After the driver exited the vehicle, Hines allegedly pointed a black revolver and stated: “Give me your car keys or I’ll shoot.” Around this time, another victim, who had just parked a late-model Acura sedan in the parking lot, walked over to where Hines and the other victim were standing. Hines then pointed the revolver at owner of the Acura and demanded the car keys. The owner of the Acura complied and Hines got into the car and fled.
At 4:45 a.m. on Sept. 27, 2013, a dark-colored SUV driven by an unknown person pulled in front of a Range Rover stopped at an intersection in Belleville, New Jersey, blocking the Range Rover’s path. Hines allegedly jumped out of the passenger side of the dark-colored SUV and pointed a black handgun at the victim. Hines then approached the driver’s door, pulled the victim out of the vehicle and demanded the car keys. The victim complied and Hines then got into the Range Rover and fled, followed by the dark-colored SUV.
At 2:20 p.m. that day, law enforcement located the Range Rover in Newark. A brief car chase ensued, during which the Range Rover rammed multiple police vehicles before getting trapped and stopping. Law enforcement officers surrounded the Range Rover with their guns drawn. Hines and Robinson both exited the Range Rover and ran. Law enforcement officers arrested them shortly thereafter. The third occupant was taken into custody immediately. After arresting the three men, law enforcement officers searched the Range Rover and discovered a loaded black revolver in the vehicle.
U.S. Attorney Fishman credited special agents of the U.S. Department of Homeland Security, Homeland Security Investigations, under the direction of Acting Special Agent in Charge John P. Woods in Newark; and the Newark, Elizabeth and Belleville police departments with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney J. Jamari Buxton of the U.S. Attorney’s Office Organized Crime/Gangs in Newark.
14-444
Hines, Dion, and Robinson, Roosevelt Complaint
Two Convicted for Selling Cocaine Near Local SchoolRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistWHEELING, WEST VIRGINIA – Samuel J. Pete, 28, of Youngstown, Ohio, and Patrick A. Groves, 24, of Wheeling, West Virginia, were convicted in federal court today for distributing crack cocaine near a local elementary school, United States Attorney William J. Ihlenfeld, II, announced.
An investigation by the Marshall County Drug and Violent Crime Task Force and the Ohio Valley Drug and Violent Crime Task Force revealed that Pete and Groves sold crack cocaine in July 2014 near Ritchie Elementary School in Wheeling. Both task forces are HIDTA-funded initiatives.
The defendants each pled guilty today to one count of “Distribution of Cocaine Base Near a Protected Location.” They each face up to forty years in prison and a fine of up to $2,000,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Assistant U.S. Attorney Robert McWilliams is prosecuting the cases on behalf of the government.
Senior U.S. District Judge Frederick P. Stamp presided.
Three Enter Guilty Pleas in Shaw Air Force Base SchemeRead the Press Release
Contact Person: DeWayne Pearson (803) 929-3000
Columbia, South Carolina ----United States Attorney Bill Nettles stated today that James Autry “Audi” Clemens, age 60 of Johnston, SC, Larry Baker, age 64 of Cameron, SC and Steven Crandall, age 59 of Salisbury, NC were sentenced for their connection to a scheme to defraud Shaw Air Force Base through various construction contracts. Clemens was also sentenced for an additional count of money laundering. According to facts presented during the guilty plea hearing, the men inflated costs of construction projects by submitting invoices that falsely claimed that additional workers and resources were used to complete construction jobs on the base. The men would then split the fraudulent payments between themselves. Clemens received a sentence of 48 months of incarceration, Baker received a sentence of 15 months and Crandall received 5 months.
“These conspirators took funds away from the warfighter,” stated Special Agent in Charge John F. Khin with the Defense Criminal Investigative Service (DCIS), Southeast Field Office. “The DCIS remains committed to investigating and bringing to justice those individuals who attempt to manipulate the procurement process for their own gain.”
“Mr. Clemens guilty plea is significant in sending a message that while fraud involving government contracts may be initially lucrative, nothing lasts forever and the consequences are serious.” “We and our law enforcement partners will work continuously to uncover this type of criminal activity.” Said Thomas J. Holloman III, Special Agent in Charge, IRS Criminal Investigation. The case was prosecuted by Assistant United States Attorney T. DeWayne Pearson of the Columbia office.Ten Defendants Charged with Unlawfully Using over 3,800 Credit Card NumbersRead the Press Release
United States Attorney James L. Santelle of the Eastern District of Wisconsin announced that a federal grand jury recently returned a 33-count indictment charging ten defendants with various credit card fraud and identity theft offenses, including a conspiracy to use stolen credit card information to make over $1.7 million in fraudulent transactions.
The defendants are identified as Ashley Dover (age: 24), Danny Jones (age: 33), Cornelius Mitchell (age: 40), Henry Jackson (age: 54), Kevin Wright (age: 40), Anthony Turner (age: 48), Kevin Ware (age: 51), Alonzo Gray (age: 49), Tyree Williams (age: 22), and Earl Rawls (age: 39). Mitchell, Wright, Turner and Gray reside in Milwaukee. Jones, Williams and Rawls live in Chicago, Illinois. Jackson resides in Minneapolis, Minnesota. Ware lives in Houston, Texas. Dover resides in Kentucky.
The last of the defendants charged in the indictment was arrested last week in Chicago, which prompted the unsealing of the case and this announcement of the charges against all defendants.
According to the indictment, the coconspirators obtained and distributed over 3,800 stolen credit card numbers, as well as the names and other identifying information that were associated with those credit card accounts. The defendants would then use the stolen credit card information to purchase tickets primarily to sporting and entertainment events throughout the United States. The defendants and those under their direction and control would then “scalp” the tickets that they purchased fraudulently outside of a variety of sporting and entertainment venues.
The venue outside of which the defendants sold tickets obtained with stolen credit card information included Miller Park, the Bradley Center, the Rave Eagles Club, the Marcus Center, the Pabst Theater, the Riverside Theater, Camp Randall Stadium, the Resch Center, and Lambeau Field. They also sold tickets obtained with stolen credit card information in other states, including in Illinois, Minnesota, Michigan, California, Missouri, Utah, Nebraska, Florida, Texas and Maine. The defendants additionally used the stolen credit card information to fund their travel.
All of the defendants face a maximum of 7.5 years in prison, a $250,000 fine, and up to 3 years of supervised release if convicted of the conspiracy, as charged in Count One of the indictment.
Additionally, defendants Mitchell, Wright, Turner, Ware and Gray face an additional maximum of 10 years in prison, a $250,000 fine, and up to 3 years of supervised release for each count of access device fraud, as charged in Counts Two and Three of the indictment. Defendants Mitchell, Jones, Dover, Jackson, Ware, and Williams also were charged for aggravated identity theft in Counts Four through Thirty-Three, which carry a mandatory minimum of 2 years in prison, as well as up to a $250,000 fine and 1 year of supervised release.In announcing this indictment, United States Attorney Santelle stated: “As this significant, multi-defendant case reflects, the Justice Department here in Eastern Wisconsin and nationwide continues its acutely targeted work in addressing the terrible economic consequences of identity theft on behalf of its many victims and the community at large. People and organizations that engage in financial crimes of this sort will not only be prevented from profiting further from it but will also face serious incarceration and monetary penalties.” Santelle commended the focused, productive investigative work of both the United States Secret Service, including especially its Financial Crimes Task Force and the Milwaukee Police Department in pursuing and completing effectively this long-term criminal investigation.
"This investigation is a fine example of alert police work where asking the next question can lead to the uncovering of more serious crimes and proves there's no such thing as a routine call for service,” stated Milwaukee Police Chief Edward Flynn.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilty beyond a reasonable doubt.
Tampa Man Sentenced to 15 Years in Federal Prison for Unlawfully Possessing A FirearmRead the Press Release
Tampa, Florida – U.S. District Judge Elizabeth A. Kovachevich has sentenced Courtney Garner (31, Tampa) to 15 years in federal prison for being a felon in possession of a firearm. Garner pleaded guilty on September 11, 2014.
According to court documents, on November 22, 2013, probation officers conducted a “compliance search” of Garner’s residence. In the master bedroom, they found a loaded firearm and 126 grams of marijuana. During a further search of the residence, law enforcement officers recovered a second firearm, 64 grams of marijuana, baggies, and a digital scale. At the time, Garner was a convicted felon and was therefore prohibited from possessing a firearm or ammunition under federal law.
This case was jointly investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Sarasota Police Department, and the Sarasota County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Carlton C. Gammons.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Regina Lombardo, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials. It is also a part of ATF’s Frontline Strategy to impact violent crime within our communities.
Statement by Attorney General Holder on the Senate Confirmation of John Cruden as the Assistant Attorney General of the Environment and Natural Resources DivisionRead the Press Release
“I am delighted to welcome John Cruden back to the Department of Justice as Assistant Attorney General for the Environment and Natural Resources Division.
“John has already devoted more than two decades of his life and service to the department – enforcing our nation’s environmental laws; protecting our air, water, land, and wildlife; defending federal agencies; and honoring U.S. treaty rights and obligations to Native Americans. From Exxon Valdez to Love Canal to the Deepwater Horizon oil spill, John Cruden has consistently demonstrated the tenacity, the leadership, and the strength of character that represents the very best that this Department of Justice has to offer. He is uniquely qualified to lead this division’s efforts to meet the challenges posed by climate change, illegal wildlife trafficking, pollution, and natural resource management, among many other pressing issues.
“I also want to express my deep gratitude to Sam Hirsch and Bob Dreher, who have led ENRD with great distinction in a time of significant challenges. Their stewardship has been invaluable to the division’s mission and people. Their service has helped make the division one of the best places to work in the federal government. And their outstanding leadership has been vital in advancing our efforts to protect the American people and our environment.”Springfield Father, Son Plead Guilty to $6.7 Million K2 Distribution ConspiracyRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., man pleaded guilty in federal court today to his role in a $6.7 million scheme that involved the distribution of approximately 2,253 kilograms of synthetic marijuana, commonly referred to as K2.
Douglas K. Franklin, 56, of Springfield, pleaded guilty before U.S. District Judge M. Douglas Harpool to conspiracy to commit mail fraud and to conspiracy to commit money laundering.
Franklin’s son and co-defendant, Brandon D. Franklin, 28, of Springfield, pleaded guilty to the same charges on Sept. 17, 2014. Charges against Douglas Franklin’s daughter, Caitlyn E. Franklin, 26, of Springfield, were dismissed following a pre-trial diversion agreement. Co-defendant DeWayne T. Barnhart, 37, of Joplin, pleaded guilty to receiving and distributing misbranded drugs and was sentenced to a term of probation.
Both Douglas and Brandon Franklin admitted they engaged in a mail fraud scheme by selling and shipping (via FedEx) Kryp2nite products, which were falsely labeled as “incense” and “not for human consumption,” but in reality contained a synthetic cannabinoid that was intended for human consumption as a drug. They manufactured and distributed K2 to retail outlets in Springfield, Joplin and elsewhere through their Springfield business, ThirdEye.
Douglas and Brandon Franklin deposited $2,933,854 in proceeds from the distribution of synthetic marijuana into bank accounts between Oct. 29, 2009, and April 30, 2011, when Douglas Franklin left the conspiracy. Brandon Franklin continued to distribute synthetic marijuana and deposited an additional $3,826,187 in proceeds into his bank accounts until Nov. 6, 2012 (for total deposits of $6,760,041). Based upon a review of invoices seized during the investigation, the Franklins charged approximately $3 per gram of synthetic cannabinoid. Therefore, Douglas Franklin distributed approximately 977 kilograms of synthetic cannabinoids during the time he participated in the conspiracy and Brandon Franklin distributed a total of approximately 2,253 kilograms of synthetic cannabinoids.
Douglas and Brandon Franklin also admitted to their roles in a money laundering conspiracy related to conducting financial transactions involving the proceeds of unlawful activity, which were designed to conceal or disguise the nature, location, source, ownership and control of the proceeds.
Under the terms of their plea agreements, Douglas and Brandon Franklin must forfeit to the government real estate in Springfield, Mo., Rogersville, Mo., Springfield, Ore., and Redding, Calif. Douglas Franklin must also forfeit to the government $802,632 as well as an unspecified amount of funds and monetary instruments contained in several bank accounts. Brandon Franklin also must forfeit to the government a money judgment of $6,760,041; the funds contained in several bank accounts totaling more than $535,000; and investment funds totaling $267,632.
Under federal statutes, Douglas and Brandon Franklin are each subject to a sentence of up to 40 years in federal prison without parole, plus a fine up to $750,000. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
These convictions are the result of a large-scale investigation by local, state and federal law enforcement agencies into the distribution of K2, the slang term for synthetic cannabinoid products. K2 is a mixture of plant material that has been sprayed or mixed with a synthetic chemical compound similar to THC (tetrahydrocannabinol), the psychoactive ingredient in marijuana. K2 products are often labeled as “incense,” but in reality are intended for human consumption as a drug.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Drug Enforcement Administration, the FDA Office of Criminal Investigations, IRS-Criminal Investigation, the Jasper County Drug Task Force, the Jasper County, Mo., Sheriff’s Department, the Joplin, Mo., Police Department, the Webb City, Mo., Police Department, the South Central Drug Task Force, the Missouri State Highway Patrol, the Springfield, Mo., Police Department, the Newton County, Mo., Sheriff’s Department and the Greene County, Mo., Prosecuting Attorney’s Office.Spirit Lake Woman Sentenced for Child Abuse or NeglectRead the Press Release
FARGO - U. S. Attorney Timothy Q. Purdon announced that on Dec. 16, 2014, Geraldine Dumarce, 33, St. Michael, N.D., was sentenced before U. S. District Judge Ralph R Erickson to serve six months in prison for child abuse or neglect.
On May 14, 2010, Dumarce operated a motor vehicle under the influence of alcohol while her 17 month old child was unrestrained in the vehicle. Dumarce had numerous convictions in Spirit Lake Tribal Court that detailed a history of her abusing alcohol and subsequently neglecting her children. On August 4, 2011, police officers were called about three small children aged 4, 3, and 1 years wandering outside unsupervised. Officers found Dumarce in the home intoxicated and passed out causing her to become incapable of exercising parental control and supervision. On May 8, 2012 in Cannonball, N.D., police responding to a call for assistance made by Dumarce’s 14 year old son, found Dumarce so intoxicated she was incapable of exercising proper parental control over her minor children aged 6, 4, 3, 2, and 6 months. On April 4, 2013, officers were called to a home on the Spirit Lake Indian Reservation where Dumarce was found unresponsive due to intoxication as her five minor children wandered inside and outside the home unsupervised and not clothed for the 30 degree weather conditions. The children were subsequently removed from Dumarce’s custody. The children suffered untreated medical conditions, malnourishment, and dental neglect.
Judge Erickson also sentenced Dumarce to 3 years of supervised release with the condition that up to 12 months be placement in a residential re-entry center and a $100 special assessment that is to be paid to the Crime Victims Fund.
The case was investigated by the Federal Bureau of Investigation and Bureau of Indian Affairs-Fort Totten.
Assistant U. S. Attorney Janice Morley prosecuted the case.
Shreveport Man Pleads Guilty to Firearms ChargesRead the Press Release
SHREVEPORT, La. –United States Attorney Stephanie A. Finley announcedthat aShreveport man pleaded guilty Monday to possessing firearms and ammunition after being convicted of multiple felonies.
Donzell Joseph Samuels Jr., 35, of Shreveport, pleaded guilty before U.S. District Judge Donald E. Walter to one count of possessing a firearm after being convicted of a felony. According to evidence presented at the guilty plea, Samuels was on probation when law enforcement received information that he had a firearm at his residence. The Caddo Parish Sheriff’s Office contacted Samuels at his house and found him in possession of a .380 caliber pistol, a .357 caliber revolver, two 9 mm pistols, and a 16 gauge shotgun. They also found ammunition with each firearm in addition to 16 rounds of 9 mm ammunition in an extended magazine and 33 rounds of .22 caliber ammunition.
Samuels has three prior felony convictions in the First Judicial District Court for Caddo Parish. In 2008 he was convicted of possession of a Schedule II controlled substance, cocaine, and was sentenced to three and a half years at hard labor. In 2001 he was convicted of accessory after the fact – manslaughter and criminal conspiracy to commit a simple burglary and was sentenced to four years at hard labor. In 2000 he was convicted of simple burglary and was sentenced to two years at hard labor, suspended with one year of supervised probation.
Samuels faces up to 10 years in prison and one to three years supervised release. He also faces a $250,000 fine. A sentencing date of March 19, 2015 was set.
The ATF and the Caddo Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Robert W. Gillespie Jr. is prosecuting the case as part of the Project Safe Neighborhoods Program, which is a Department of Justice initiative designed to prosecute those who are prohibited from possessing firearms and those who use firearms to commit violent crimes.
Sex Offender Charged with Failure to Update RegistrationRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistELKINS, WEST VIRGINIA – A federal grand jury returned an indictment today charging Charles D. Blackwell Jr., 57, of Morgantown, West Virginia, with failing to register as a sex offender, United States Attorney William J. Ihlenfeld, II, announced.
Blackwell was previously convicted of “Rape” in November 1975 in the Court of Common Pleas of Clinton County, Pennsylvania. He was also convicted of “Attempt to Commit Rape” in October 1983 in the Court of Common Pleas of Lycoming County, Pennsylvania. As a result of these convictions, he is required to register as a sex offender.
An investigation by the West Virginia State Police and the United States Marshals Service revealed that in approximately October 2014, Blackwell moved from West Virginia to Pennsylvania without updating his sex offender registration.
Blackwell is charged with one count of “Failure to Update Sex Offender Registration.” He faces up to ten years in prison and a fine of up to $250,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Shawn Morgan is prosecuting the case on behalf of the government.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Seven Sentenced for Heroin TraffickingRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA – Seven individuals were sentenced in federal court for their role in heroin trafficking, United States Attorney William J. Ihlenfeld, II, announced today.
Irvin Jayoine Lee Baker, 35, of Herndon, Virginia, was sentenced to 63 months in prison for selling heroin in December 2013. He pled guilty in September 2014 to one count of “Distribution of Heroin.”
Aaron Daniel Rose, 29, of Kearneysville, West Virginia, was sentenced to 46 months in prison for selling heroin in April 2014. He pled guilty in September 2014 to one count of “Distribution of Heroin.”
Melissa Bailey, 35, of Shanks, West Virginia, was sentenced to 15 months in prison for selling heroin in January 2014. She pled guilty in September 2014 to one count of “Aiding and Abetting Distribution of Heroin.”
Courtney Danielle McDonald, 24, of Hedgesville, West Virginia, was sentenced to six months in prison for selling heroin in April 2014. She pled guilty in September 2014 to one count of “Aiding and Abetting Distribution of Heroin.”
Shawn Michael Loudan, 39, of Ranson, West Virginia, was sentenced five years of probation. In May 2011, Loudan purchased a used 1999 Infiniti Q45 using nearly $4,000.00 in proceeds from the sale of heroin. He pled guilty in September 2014 to one count of “Aiding and Abetting Money Laundering.”
Susan Renee Underwood, 31, of Martinsburg, was sentenced to five years of probation for selling heroin in April 2014. She pled guilty in September 2014 to one count of “Aiding and Abetting the Distribution of Heroin.”
Bradley French, 45, of Hedgesville, West Virginia, was sentenced to time served since June 2014. An investigation revealed that he sold heroin in April 2014. He pled guilty in September 2014 to one count of “Distribution of Heroin.”
In another matter, Sierran Dontae Banks, 24, of Charles Town, West Virginia, was sentenced to 21 monthsin prison for selling crack cocaine in January 2013. He pled guilty in September 2014 to one count of “Distribution of Cocaine Base.”
Assistant U.S. Attorney Paul Camilletti prosecuted French and Assistant U.S. Attorney Jarod Douglas prosecuted the remaining cases on behalf of the government. The Potomac Highlands Drug and Violent Crime Task Force investigated Bailey. The Eastern Panhandle Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated the remaining cases.
U.S. District Judge Gina M. Groh presided.
Sandia Pueblo Man Pleads Guilty to Assaulting Tribal Police OfficerRead the Press Release
ALBUQUERQUE – Ricardo Lamagna, 21, a member and resident of Sandia Pueblo, N.M., pleaded guilty this morning to a felony information charging him with an assault with a dangerous weapon charge under a plea agreement with the U.S. Attorney’s Office.
Lamagna was arrested on Aug. 8, 2014, on a criminal complaint charging him with assaulting a tribal police officer with a deadly weapon. According to the criminal complaint, Lamagna assaulted an officer of the Pueblo of Sandia Tribal Police Department in the early hours of Aug. 5, 2014, by firing a gun in the vicinity of the tribal police officer. The assault occurred on Sandia Pueblo in Bernalillo County, N.M., after the tribal officer responded to a domestic violence call from Lamagna’s residence. The tribal police officer was not injured.
During today’s proceedings, Lamagna entered a guilty plea to an assault with a deadly weapon charge, and admitted assaulting a tribal police officer with a handgun on Aug. 5, 2014. At sentencing, Lamagna faces a statutory maximum penalty of ten years in federal prison. His sentencing hearing has yet to be scheduled.
This case was investigated by the Albuquerque office of the FBI with assistance from the Pueblo of Sandia Tribal Police Department, and is being prosecuted by Assistant U.S. Attorney David Adams.
Salem, Virginia Police Officer Pleads Guilty to BriberyRead the Press Release
Admits to Soliciting Sexual Favors in Exchange for Potential Lenient Treatment
A police officer employed by the City of Salem, Virginia, and assigned to a U.S. Drug Enforcement Administration (DEA) task force pleaded guilty today for soliciting and receiving sexual favors from a cooperating defendant in exchange for agreeing to recommend a favorable sentence to a federal prosecutor on the defendant’s behalf.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Adam S. Lee of the FBI’s Richmond Division and Special Agent in Charge Michael Tompkins of the Department of Justice Office of the Inspector General’s Washington Field Office made the announcement.
“Kevin Moore took a solemn oath to protect and serve the public, but then abused the authority of his badge by sexually exploiting a federal witness,” said Assistant Attorney General Caldwell. “When Moore crossed the line from enforcing the law to breaking it, his actions cast an unfortunate shadow over the selfless and courageous work of his fellow officers. Working with our law enforcement partners, the Department of Justice will expose and prosecute all such abuses of authority, in order to restore and maintain the public’s trust.”
“Cases involving corruption of law enforcement officials are among the FBI’s highest priority criminal investigations. The public should expect integrity from those sworn to uphold the law. Mr. Moore’s breach of his sworn duty in this case is particularly pernicious as he exploited his victims in the most personal way. The Richmond Division of the FBI continues to have confidence in the City of Salem Police Department. We value our partnership with the Department and the proud men and women who serve their community with distinction everyday,” said Special Agent in Charge Lee.
“The OIG will aggressively investigate with its law enforcement partners allegations of misconduct among Department employees, contractors, and deputized task force officers to help ensure the Department of Justice performs its critical work with integrity,” said Special Agent in Charge Tompkins.
Kevin C. Moore, 42, of Roanoke, Virginia, was a Salem Police Department officer and was assigned to the DEA task force in Roanoke, Virginia. According to his plea agreement and accompanying statement of facts, between June and September 2014, Moore informed a female cooperating defendant that he was in a position to help her with her pending federal methamphetamine trafficking case. In August 2014, for example, in a series of text messages with the cooperating defendant, Moore made clear that he could recommend a favorable sentence to the prosecutor on the cooperating defendant’s behalf in exchange for sexual favors. Moore then convinced the cooperating defendant to go for a ride in his official vehicle where she performed a sexual act with Moore.
As part of his guilty plea, Moore admitted to engaging in similar conduct with two other female cooperating witnesses in federal drug investigations dating back to 2009. According to the statement of facts, Moore falsely informed these witnesses that he had convinced federal prosecutors not to charge them with federal criminal offenses that would carry significant prison sentences. Moore then solicited and received sexual favors from the witnesses in exchange for his purported assistance.
Moore pleaded guilty to a one-count information charging him with bribery before Chief U.S. District Judge Glen E. Conrad of the Western District of Virginia. In cooperation with the City of Salem Police Department and DEA, Moore was arrested on Oct. 10, 2014, without incident, after being charged by complaint, and was suspended from the police department and DEA task force the same day. His sentencing is scheduled for February 9, 2015.
This case was investigated by the FBI and the Department of Justice Office of the Inspector General, and is being prosecuted by Trial Attorneys Charles R. Walsh and Robert J. Heberle of the Criminal Division’s Public Integrity Section.
Sacramento Pimp Sentenced to More Than 10 Years in Prison for Sex Trafficking of A MinorRead the Press Release
SACRAMENTO, Calif. — Keon Jamar Nunnelly, 30, of Sacramento, was sentenced today by United States District Judge John A. Mendez to 10 years and five months in prison, to be followed by a 10-year period of supervised release where he is required to register as a sex offender, for sex trafficking of a minor, United States Attorney Benjamin B. Wagner announced.
According to court documents, from January 13, 2013, until June 17, 2013, Nunnelly caused a 16-year-old girl to engage in commercial sex acts in Sacramento and Anaheim. He provided directions on when and where she should work, transported her to customers, and provided security. Nunnelly and two co-defendants rented hotel rooms to be used for prostitution and placed ads with the victim’s picture on the Internet.
This case was the product of an investigation by the Federal Bureau of Investigation’s Sacramento Child Exploitation Task Force, the Anaheim Police Department, and the Orange County District Attorney’s Office. The task force works to identify and recover minors involved in the commercial sex trade and to investigate and prosecute those who profit from that trade. Assistant United States Attorney Christiaan Highsmith prosecuted the case.
On August 12, 2014, Nunnelly pleaded guilty to sex trafficking of a minor by force fraud and coercion. Co-defendants Kia Moore, 30, and Sharon King, 31, pleaded guilty to concealing a felony and were sentenced earlier this year to time served.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
Saco Attorney Sentenced to Two Years for Money Laundering ConspiracyRead the Press Release
Contact: Daniel J. Perry
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Gary
Prolman, Esq., 52, of Saco, was sentenced today in U.S. District Court by Judge George Z.
Singal to two years in prison and two years of supervised release for conspiracy to launder
$177,500 worth of marijuana trafficking proceeds. Prolman pled guilty on April 29, 2014.According to court records, between 2011 and October 2013, David Jones and others illegally distributed hundreds of pounds of marijuana in Maine and elsewhere. Between June and
September 2012, Prolman laundered about $177,500 worth of those drug proceeds by: (1) taking cash from Jones to purchase an interest in Prolman’s sports agency business; (2) illegally structuring cash deposits and cashier’s check purchases to avoid federal currency reporting requirements; and (3) using structured cashier’s checks to jointly purchase real estate with Jones in a transaction where only Prolman’s name appeared on the deed as the owner.Prolman received three separate $50,000 cash installment payments, largely consisting of low denomination bills delivered in a backpack. When Prolman attempted to deposit more than
$10,000 from the first $50,000 installment into bank accounts he controlled, a bank teller advised him of the federal currency reporting requirement for deposits exceeding $10,000. Under federal law, financial institutions that receive more than $10,000 in cash from a customer are required to report the transaction to the Internal Revenue Service (IRS). Structuring occurs when a customer breaks up cash transactions into multiple increments of less than $10,000 to avoid this cash transaction reporting requirement. Structuring is illegal under federal law and is commonly associated with the laundering of drug proceeds. After being advised of the reporting requirement by the bank teller, Prolman structured numerous cash deposits and paid $60,409 to close the joint real estate purchase using seven structured cashier’s checks.
This case was investigated by the U.S. Drug Enforcement Administration, and the IRS, and resulted from the ongoing effort of the Organized Crime Drug Enforcement Task Forces
(OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.Rhode Island Woman Charged with Sex Trafficking of MinorsRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced the unsealing of an indictment charging KAIEEMA GADSON, 25, or Providence, R.I., with two counts of sex trafficking of a minor.
The indictment was returned by a grand jury in Hartford on November 19, 2014, and GADSON was arrested yesterday in Providence. Following her arrest, she appeared before U.S. Magistrate Judge Donna F. Martinez in Hartford and was ordered detained.
The indictment alleges that, in December 2013, GADSON recruited, harbored and transported two minors to engage in commercial acts.
The charge of sex trafficking of a minor carries mandatory minimum term of imprisonment of 10 years and a maximum term of imprisonment of life.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by Homeland Security Investigations and the Connecticut State Police, with the assistance of the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys Sarala V. Nagala and David E. Novick.
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(203) 821-3722 [email protected]Prior Felon from Roswell Sentenced to Nine Years for Conviction on Federal Firearms and Drug Trafficking ChargesRead the Press Release
Lariva Prosecuted as Part of Federal “Worst of the Worst” Anti-Violence Initiative
ALBUQUERQUE – Raymond Lariva, 31, of Roswell, N.M., was sentenced late yesterday afternoon in federal court in Las Cruces, N.M., to 111 months (9.25 years) in prison followed by three years of supervised release for his conviction on firearms and drug trafficking charges. The sentence was announced by U.S. Attorney Damon P. Martinez, 5th Judicial District Attorney Janetta B. Hicks, Special Agent in Charge Thomas G. Atteberry of the Phoenix Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Chief Phil Smith of the Roswell Police Department.Lariva was prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
Court records reflect that Lariva was arrested in Roswell on state charges on Dec. 31, 2012, after he attempted to avoid capture on an outstanding state warrant. On Oct. 15, 2013, Lariva was transferred to federal custody to face related federal charges in a criminal complaint that had been filed in Jan. 2013. The state charges subsequently were dismissed in favor of federal prosecution.
According to court filings, on Dec. 31, 2012, an officer of the Roswell Police Department came upon Lariva while responding to a call. The officer, who recognized Lariva and was aware of a pending warrant for his arrest, attempted to make contact with Lariva. Lariva took off running and a foot chase ensued. During the chase, Lariva threw a small black pouch over his shoulder followed by a phone case, identification card and other items. After Lariva was arrested, officers retrieved the black pouch which held numerous small baggies containing methamphetamine. On Jan. 3, 2013, after reviewing recorded telephone calls made by Lariva while in state custody, officers found a loaded pistol and Lariva’s cellphone on the rooftop of a building in the area in which the pursuit had taken place.
Lariva was indicted on Jan. 15, 2014, and charged with (1) being a felon in possession of a firearm and ammunition; (2) using and carrying a firearm during and in relation to a drug trafficking crime; and (3) possession of methamphetamine with intent to distribute. The indictment alleged that Lariva committed the offenses charged in Chaves County, N.M., on Dec. 31, 2012. At the time, Lariva was prohibited from possessing firearms or ammunition because he previously had been convicted of robbery, possession of a controlled substance, conspiracy to commit burglary, and being a felon in possession of a firearm.
On July 29, 2014, Lariva entered a guilty plea to the three-count indictment. The guilty plea was entered without the benefit of a plea agreement.This case was investigated by the Roswell office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Roswell Police Department with assistance from the 5th Judicial District Attorney’s Office. Assistant U.S. Attorney Maria Y. Armijo of the U.S. Attorney’s Las Cruces Branch Office prosecuted the case.
Pickerington Man Indicted on Drug, Gun, Money Laundering ChargesRead the Press Release
COLUMBUS – A federal grand jury has charged Andre W. Byrd, A.K.A. “Fat Dre”, 39, of Pickerington, Ohio, with one count of the possession of a firearm, one count of the possession of heroin, one count of conspiracy to distribute and possess with the intent to distribute heroin and cocaine, two counts of money laundering and one count of conspiracy to commit money laundering in a superseding indictment returned in Columbus.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation and Columbus Police Chief Kim Jacobs announced the superseding indictment returned today.
The superseding indictment alleges that on or about October 23, 2014, Byrd, a convicted felon, possessed two firearms and also heroin. The defendant also allegedly conspired to distribute and possess with the intent to distribute heroin and cocaine from 2011 until October of this year. The superseding indictment alleges that Byrd laundered money through the purchase of vehicles (a 2007 Chevrolet Tahoe and a 2013 Toyota Tundra) for himself.. Byrd also allegedly deposited large sums of money into a family member’s bank account that was used to rent residences and pay bills and credit card expenses.
The superseding indictment also seeks the forfeiture of two firearms and ammunition, $10,000 in currency that was seized from his residence, a 1969 Oldsmobile Cutlass, and jewelry.
Possession of a firearm of a convicted felon is punishable by up to 10 years in prison. Heroin and cocaine conspiracy charges can include a sentence of up to 40 years imprisonment. Money laundering and conspiracy to commit money laundering carries a potential sentence of up to 20 years in prison.
Byrd was arrested on November 3, 2014 by IRS and Columbus Division of Police. He remains in custody.
“The laundering of illegal drug profits is as important and essential to drug traffickers as the very distribution of their illegal drugs. Without these ill-gotten gains, the traffickers could not finance their organizations,” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “IRS Criminal Investigation is committed with taking the profit away from the drug traffickers and putting those individuals in jail.”
U.S. Attorney Stewart commended the investigation of this case by the IRS Criminal Investigation, including Special Agent Robert Bogner, and the Columbus Division of Police, as well as Assistant U.S. Attorney Kevin Kelley, who is prosecuting the case.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
Owner and Operator of Wolf Creek Ski Area Sentenced for Conducting Work Activity in the Forest Without A PermitRead the Press Release
DENVER – Randall D. Pitcher, age 52, of Pagosa Springs, Colorado, who owns and operates the Wolf Creek Ski Area within the confines of the Rio Grande National Forest, was sentenced today in Durango by U.S. Magistrate Judge David L. West to serve five years on supervised probation, including 500 hours of community service, to be performed 100 hours per year for each of the five years of probation, U.S. Attorney John Walsh and U.S. Forest Service Special Agent in Charge Laura Mark announced. The community service is to be served with the Sheriff’s Departments of Archuleta, Hinsdale and Mineral Counties together with the U.S. Forest Service. Pitcher was also ordered to pay a $5,000 fine.
Pitcher was previously charged and pled guilty to conducting work in the Forest without a permit,. Pitcher entered his guilty plea before U.S. Magistrate Judge David L. West in Durango on November 24, 2014.
According to the stipulated facts contained in the plea agreement, on February 11th, March 3rd, and March 4th, defendant Pitcher hired a commercial helicopter service to transport himself and his Wolf Creek Ski Area employees on to the Rio Grande National Forest for the purpose of engaging in avalanche training and search and rescue training. On all three occasions, Pitcher did not have a permit to conduct such work activities nor did he have the necessary authorization of the Forest Service to conduct such work activities.
“The permitting process for those working in the Forest serves many important functions, including protecting those doing the work as well as those who may be in the area,” said U.S. Attorney John Walsh. “In this instance, the defendant was engaged in avalanche mitigation and response training. That activity is inherently dangerous, thus amplifying the need for a permit. Thanks to the investigative work of the U.S. Forest Service, Mr. Pitcher was held accountable for failing to obtain the necessary authorization before conducting the activities. Such failure in this instance led to serious consequences.”
“The Forest Service takes permitting for services seriously on National Forest System lands because it is an integral part of managing for public safety and resource protection,” said Laura Mark, Special Agent in Charge, U.S. Forest Service, Rocky Mountain Region. “We feel that the sentence in this case adequately reflects the serious nature of this matter.”
This case was investigated by the U.S. Forest Service, and prosecuted by Durango Branch Office Chief James Candelaria.
Oregon Man Sentenced to Prison Term for Role in Lowmaster Drug Distribution RingRead the Press Release
JOHNSTOWN, Pa. – An Oregon man has been sentenced in federal court to nine months in prison and four years supervised release on his conviction of conspiracy to distribute and possess with the intent to distribute marijuana, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Brian V. Knee, 43, of Eugene, Oregon.
According to information presented to the court, from March 2009 to May 9, 2011, Knee conspired to distribute and possess with the intent to distribute 100 kilograms or more of marijuana in order to facilitate and promote George M. Lowmaster's drug distribution organization.
Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the joint task force, headed by the Laurel Highlands Resident Agency of the Federal Bureau of Investigation, for the investigation leading to the successful prosecution of Knee. Other agencies participating on the task force include the Internal Revenue Service-Criminal Investigation, Pennsylvania State Police, Pennsylvania Attorney General's Office, Cambria County District Attorney's Office, Carrolltown Police Department, Patton Police Department, Ebensburg Police Department, Portage Police Department and Paint Township Police Department.
Oklahoma Man Sentenced to 84 Months for Threatening to Kill Sheriff Joseph Arpaio with A BombRead the Press Release
PHOENIX – Gregory Lynn Shrader, 56, of Jay, Okla., was sentenced to 84 months of imprisonment by Judge Neil V. Wake, on Dec. 16, 2014. Shrader had been convicted by a federal jury on Sept, 11, 2014, for willfully making a threat to kill Sheriff Joe Arpaio by means of an explosive, transport of explosive material with the intent to intimidate Sheriff Arpaio, mailing injurious articles, and possession of explosive material by a prohibited possessor.
The evidence at trial showed that Shrader constructed an improvised explosive device that had the appearance of a functioning explosive containing working components and explosive smokeless powder. Shrader addressed a package containing the device to Sheriff Arpaio, with a return address belonging to a former business partner. Shrader deposited his package in a remote Flagstaff collection box on April 10, 2013.
Additionally, the evidence at trial showed that Shrader threatened to kill Sheriff Arpaio with a mail bomb as an act of revenge hoping that law enforcement would take the threat seriously and investigate his former business partner.
The investigation in this case was conducted by the United States Postal Inspection Service and the Federal Bureau of Investigation. The prosecution was handled by Assistant United States Attorneys Raymond K. Woo and Paul Stearns.CASE NUMBER: CR-14-0355-PHX-NVW
RELEASE NUMBER: 2014-074_Shrader
# # #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.Novato Resident Pleaded Guilty to Tax EvasionRead the Press Release
SAN FRANCISCO – Scott Charles McCauley pleaded guilty in federal court in San Francisco today, to tax evasion, announced United States Attorney Melinda Haag and Acting IRS Criminal Investigation in Charge Thomas McMahon.
In pleading guilty, McCauley admitted that he was General Partner and 80% owner of McCauley & Father Construction. During 2007 and 2008, McCauley oversaw all the aspects of McCauley & Father Construction, from the day-to-day field operations to financial matters, including the creation of invoices and cashing of checks.
McCauley admitted he filed false 2007 and 2008 federal income tax returns on which he did not report income that he received and wrongfully took from McCauley & Father Construction. During these years, McCauley provided the business bank account statements to a tax return preparer. The tax return preparer relied on the bank statements to prepare the federal income tax returns for the business and for McCauley. Each time McCauley deposited checks into the business bank account, he also withdrew cash. McCauley knew that the bank statements he provided to the tax preparer only showed the net deposit, that is, the sum of the deposited checks less the simultaneous cash withdrawals. In 2007 and 2008, McCauley deposited $516,592 and $422,142, respectively, in business receipts into his personal bank account, which resulted in additional taxes due in the amount of $117,994 and $31,519, respectively.
McCauley’s personal income tax returns and McCauley Construction’s partnership tax returns for 2007 through 2009 were the subject of a routine civil audit in 2010. During the audit, McCauley falsely told a revenue agent that he deposited all the business receipts into the business bank account and provided the revenue agent with an incomplete set of the company’s invoices and business receipts.
McCauley, 50, of Novato, was charged on Dec. 12, 2014, with two counts of tax evasion, in violation of 26 U.S.C. § 7201. McCauley made his first appearance today, before the Honorable Laurel Beeler, United States Magistrate Court Judge, in San Francisco, and pleaded guilty to both counts in the Information before the Honorable Richard Seeborg, United States District Court Judge.
McCauley is scheduled to be sentenced on April 14, 2015 at 2:30 p.m. before Judge Seeborg. The maximum statutory penalty for each count, in violation of 26 U.S.C. § 7201, is five years in prison and a fine of $250,000 or twice the gross gain or loss, whichever is greater, and up to three years of supervised release. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Colin Sampson is the Assistant U.S. Attorney who is prosecuting the case. The prosecution is the result of an investigation by the IRS – Criminal Investigation.
North Slope Worker Sentenced for Tax CrimesRead the Press Release
Anchorage, Alaska – United States Attorney Karen L. Loeffler announced today that James R. Back, 60, of Soldotna, was sentenced in U.S. District Court in Anchorage. Chief Judge Ralph Beistline sentenced Back to 16 months in prison and a $10,000 fine, to be followed by one year of supervised release. In addition, Back paid over $17,000 for the cost of prosecution and paid back taxes in the amount of $113,286.
During the sentencing, Judge Beistline commented that, “Back wanted all of the privileges and none of the responsibilities of being a citizen.” He called Back’s tax avoidance arguments “senseless,” “frivolous,” and “groundless.”
In October, Back was convicted by a jury on all seven federal tax crimes for which he was charged. Back, who is employed by Alyeska Pipeline Service Company as a pipeline technician at Pump Station One in Prudhoe Bay, was found guilty of filing false 2006, 2007 and 2008 individual income tax returns, and of failure to file his 2009, 2010, 2011 and 2012 returns. Evidence presented at trial showed that Back earned over $125,000 in wages during each of the prosecution years, yet falsely claimed on the 2006, 2007, and 2008 returns that his wages were zero. For the years 2009-2012, Back simply failed to file.
Other evidence at trial established that Back contributed over $140,000 to a retirement plan during the prosecution years, had investment accounts worth hundreds of thousands of dollars, owned real estate in the Kenai Peninsula Borough, and purchased over $400,000 in gold and silver bullion. Back represented himself at the trial, and argued to the jury that taxation was immoral and unfair, and that he simply refused to submit to it anymore. He argued that the Alaska Permanent Fund Dividend was not taxable, even though he applied for and received it each year. He also argued that there was no evidence that state or federal laws applied to him. Back ignored prior warnings from his employer, his supervisor, the IRS, and a United States Tax Court Judge that his arguments were frivolous.
According to witness testimony, Back used a scheme similar to one promoted by Peter Hendrickson of Michigan. Hendrickson operates a website known as “Lost Horizons” and wrote a book called “Cracking the Code” which promotes the “zero wages” tax evasion scheme. According to federal court records, in 1992 Hendrickson was convicted of failure to file tax returns and firebombing a Michigan post office on April 16, 1990, and served 21 months in prison. In 2010, Hendrickson was sentenced to another 33 months in federal prison for tax crimes, including filing false returns and failure to file.
“This sentence should serve as a warning to those who might think there’s a secret recipe to avoid paying their fair share of taxes, taxes that the vast majority of Americans pay each and every year,” said Assistant Special Agent in Charge Steven Bellis, IRS Criminal Investigation. “IRS CI strives to ensure that those paying their honest share can feel confident that the playing field is level. James Back tried to play by his own set of made-up rules. Time and again, the courts have rejected such frivolous arguments. There is no way to opt out of the tax system.”
Ms. Loeffler commends the Internal Revenue Service, Criminal Investigation, for the investigation and prosecution of this case.New Port Richey Man Pleads Guilty to Income Tax EvasionRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Steven Staltare pleaded guilty today to income tax evasion. He faces a maximum penalty of five years in federal prison. A sentencing date has not yet been set.
According to the plea agreement, Staltare worked in the securities and financial investment business between 1999 and 2009. During that time, he earned income from his business and filed personal income tax returns for most of those years that reflected taxes due to the United States. He failed to pay any of the amounts owed and, instead, diverted income that he had made to maintain his lifestyle and pay for other expenses, including gambling debts. The Internal Revenue Service determined that the taxes owed by Staltare during those years amounted to $1,562,205.00.
This case was investigated by the Internal Revenue Service-Criminal Investigation Division. It is being prosecuted by Assistant United States Attorney Jay L. Hoffer.
New Orleans Sheriff's Deputy Pleads Guilty to Theft of Government FundsRead the Press Release
ATLANTA - Janet Baquet, a former Sheriff's deputy in Orleans Parish, La., has pleaded guilty to charges that the she stole nearly $90,000 in Social Security benefits from the federal government.
“This defendant’s repeated acts of criminal conduct lasted for more than eight years and cost the United States Treasury nearly $90,000,” said United States Attorney Sally Quillian Yates. “She deliberately and methodically broke the law that she swore to uphold as a deputy sheriff.”
“The Social Security Administration, Office of the Inspector is grateful for the support and diligent efforts by the US Attorney’s Office in prosecuting those that seek to defraud the Social Security Administration’s benefit programs,” said Thomas Caul, Special Agent in Charge, of the Office of the Inspector General for the Social Security Administration.
According to United States Attorney Yates, the charges and other information presented in court: Baquet’s father, who was a Social Security retirement benefits recipient, died in May 2006, and her mother died one month later. After her parents death, her father’s Social Security benefits continued to be deposited in a bank account that Baquet’s parents shared. For more than eight years, Baquet stole her deceased father’s benefits by writing checks to herself out of her parents’ joint account, forging her deceased mother’s signature on the checks. In total, she received $89,379.13 of government benefits to which she was not entitled.
Sentencing for Baquet, 56, of New Orleans, La., is scheduled for March, 4, 2015.
This case is being investigated by the Social Security Administration - Office of the Inspector General.
Special Assistant United States Attorney Diane C. Schulman is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
More Guilty Pleas in RICO Case Involving IronworkersRead the Press Release
PHILADELPHIA - Richard Ritchie, 45, of Philadelphia, William O’Donnell, 62, of Cherry Hill, NJ, and Christopher Prophet, 43, of Richboro, PA, pleaded guilty today to RICO conspiracy and other charges in connection with an extortion case in which Ironworkers Local 401 used violence and intimidation to get union members assigned to jobs on non-union worksites. In addition to the RICO conspiracy count, Ritchie and Prophet each pleaded guilty to attempted extortion which interferes with interstate commerce; and Ritchie also pleaded guilty to violent crime in aid of racketeering. United States District Court Judge Michael Baylson scheduled sentencing hearings as follows: Ritchie, April 28, 2015; O’Donnell, April 27, 2015; Prophet, April 17, 2015. The defendants are among 12 defendants charged in the case. All but one have pleaded guilty. Trial for the remaining defendant, Joseph Dougherty, is scheduled to begin January 5, 2015.
The 12 defendants charged had a network of individuals, friendly to the Ironworkers Local 401, to help identify construction projects and job sites where work was being performed without using Local 401 members. The business agents for the union would approach contractors at those work sites and imply or explicitly threaten violence, destruction of property, or other criminal acts unless union members were hired. The defendants relied on a reputation for violence and sabotage, which had been built up in the community over many years, in order to force contractors to hire union members. The defendants created “goon” squads, composed of union members and associates, to commit assaults, arsons, and destruction of property. One such squad referred to itself as the “The Helpful Union Guys,” “T.H.U.G’s.”
Ritchie faces a statutory maximum 60 years in prison; Prophet faces a statutory maximum sentence of 40 years in prison; and O’Donnell faces a statutory maximum sentence of 20 years in prison.
The case was investigated jointly by the Federal Bureau of Investigation and Department of Labor Office of Inspector General, with assistance provided by the Philadelphia Police Department Corruption Task Force, East Whiteland Township Police Department, the Upper Merion Police Department, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Employee Benefit Security Administration. It is being prosecuted by Assistant United States Attorney Robert Livermore with legal assistance provided by Gerald Toner, Acting Deputy Chief for Labor-Management Racketeering, Organized Crime and Gang Section at the Department of Justice.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Monroe County Man Convicted of Multiple Counts of Fraud Relating to False Claims of Owning Billions of Dollars of Oil and Negotiable Bank InstrumentsRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Richard J. Harley, of Shawnee on the Delaware, Pennsylvania, was convicted yesterday after a two-week trial before a federal jury sitting in Wilkes-Barre, Pennsylvania, of 23 counts of wire fraud, bank fraud, bankruptcy fraud, and making false statements on bankruptcy schedules. Harley was continued on bail and no date was set for sentencing. Senior U.S. District Judge A. Richard Caputo presided over the trial.
According to United States Attorney Peter Smith, Harley defrauded investors and attempted to defraud the Federal Reserve Bank of New York and several financial institutions by soliciting money based on false claims that his company, RJH and Co. Inc., owned 10 million barrels of oil in Texas worth over $1 billion and had “unrestricted bond power” over $5 trillion in federal reserve bank instruments supposedly held at the Federal Reserve Bank of New York. As a result of the fraud, investors lost approximately $323,800.
The bank fraud charge relates to Harley’s attempt to deposit two phony $500 million checks purportedly issued by the Federal Reserve Bank of New York into several financial institutions. Harley also filed three fraudulent bankruptcy petitions in 2010, 2011 and 2012 where he attempted to discharge the debt he owed to one of the primary victims of the oil scheme.
Harley was previously convicted of mail and wire fraud and sentenced to five years’ imprisonment in 2001 for a scheme that defrauded patients and investors relating to a fraudulent ozone-enema treatment he claimed cured AIDS. The jury verdict in the latest case relates to activities that occurred after Harley was released from federal prison.
Harley faces up to thirty years’ imprisonment on each wire fraud and bank fraud charge and up to five years’ imprisonment on each bankruptcy fraud and false statements charge, as well as substantial fines and restitution.
The case was investigated by the FBI and was prosecuted by Assistant United States Attorney Bruce Brandler, Chief of the Criminal Division.
Mining Company Sentenced for Epa ViolationsRead the Press Release
COLUMBUS, OHIO – Oxford Mining Company, LLC (Oxford) has been ordered to pay $650,000 in fines and community service for the negligent failure to report violations of the company’s permit in connection with its coal mining operations.
Carter Stewart, U.S. Attorney for the Southern District of Ohio, Randall K. Ashe, Special Agent in Charge of the U.S. Environmental Protection Agency (U.S. EPA), Ohio Attorney General Mike DeWine and Craig W. Butler, Director of the Ohio Environmental Protection Agency (Ohio EPA) announced the sentence imposed today by U.S. District Judge Edmund A. Sargus, Jr.
Oxford was fined $500,000 and ordered to pay $150,000 in community service as part of the sentence. The community service payment will be split equally between the Ohio EPA and the National Park Foundation (NPF). The Ohio EPA will use the money to study the watersheds in Southeast Ohio and the NPF will use the money to improve and restore the waterways that are part of the Hopewell Culture National Historical Park, located near Chillicothe, Ohio.
According to Court documents, Mr. Light was the Director of Environmental Compliance for Oxford and as part of his job duties was responsible for reviewing Oxford’s environmental compliance, including the submittal of reports to the Ohio EPA. As part of their permit, Oxford is required to report to Ohio EPA permit exceedances once they are discovered.
On numerous occasions between November 2007 and November 2011, Light submitted reports to Ohio EPA that showed sampling results that were in compliance with permit limits, although he knew that the sampling results actually showed violations of the applicable permit limits.
Oxford failed to adequately oversee the activities of Light, including those activities related to the submittal of reports to Ohio EPA. Because of this failure, Oxford was unaware that discharges from its surface mines were in excess of the permitted limits and that Light had submitted false statements to the Ohio EPA.
“Energy exploration and development is critical to our country’s future, but it must be done in compliance with the law.” U.S. Attorney Stewart said. “When a company provides false information to the EPA, it undermines our ability to monitor and protect the environment and the public so that we can be sure our waters are healthy and clean.”
“Ohio EPA’s Office of Special Investigations aggressively investigates environmental crimes, and, working with our partners of the Central Ohio Environmental Crimes Task Force, prosecutes those responsible,” said Ohio EPA Director Craig W. Butler. “I’m proud of the work done by our staff and all of the task force members including the U.S. EPA Criminal Investigation Division and the Ohio Bureau of Criminal Identification and Investigation.”
“Receiving accurate and honest information is critical to EPA’s commitment to protect human health and the environment,” said Randall K. Ashe, Special Agent in Charge of EPA’s criminal enforcement program in Ohio. “Authorities must be assured that coal extraction byproducts are treated and disposed of safely and legally. Today’s sentencing demonstrates that companies that fail to comply with environmental regulations, placing the American people at risk, will be held accountable for their actions.”
Stewart commended the joint investigation by the Ohio Bureau of Criminal Investigation, Ohio EPA, the U.S. EPA Criminal Investigation Division and all members of the Central Ohio Environmental Crimes Task Force, as well as Assistant U.S. Attorney J. Michael Marous and Special Assistant U.S. Attorney Brad Beeson who prosecuted the case.Mankato, Minnesota, Woman Sentenced in Forced Labor CaseRead the Press Release
U.S. District Court Judge Susan Richard Nelson sentenced Tieu Tran, 59, of Mankato, Minn., to serve one year and one day in prison followed by 1 year supervised probation upon release, the Justice Department announced today. Tran pleaded guilty to one count of forced labor trafficking on March 25, 2014. Tran is the former owner and manager of Nails By Jordan, a nail salon located in Mankato.
According to evidence presented in court proceedings and documents, in 2008, Tran recruited a woman from Vietnam to travel to the United States using false promises of legal immigration status and a high-paying job. In reality, Tran smuggled the victim and two other Vietnamese nationals across the southern U.S.-Mexico border, imposed a significant debt upon her, and forced her to pay down the smuggling debt by working at Tran’s son’s Vietnamese restaurant, Pho Saigon, in Mankato.
Tran admitted to compelling the victim to work long hours without paying her as promised, using a scheme, plan and pattern of coercion, including manipulation of debts, isolation, and intimidation that held the victim in fear, knowing that the victim was without legal status and money, did not speak English, feared losing her family home in Vietnam to creditors, and had nowhere else to turn for subsistence.
“This defendant callously preyed on the victim’s vulnerabilities and exploited her labor through intimidation, debts, and isolation,” said Deputy Assistant Attorney General Mark Kappelhoff for the Civil Rights Division. “Human trafficking is an affront to human rights and to our nation’s core values, and the Justice Department is committed to vindicating the rights of the victims and to bringing human traffickers to justice.”
“Prosecuting human traffickers is a priority of this Office,” said U.S. Attorney Andrew M. Luger for the District of Minnesota. “Tieu Tran smuggled this victim into the United States who she forced to work long hours in her nail salon by isolating and intimidating her. This kind of abuse simply is unjust. I am proud to work with the Department of Justice and Federal Bureau of Investigation to end human trafficking in Minnesota.”
“The FBI remains committed to ensuring that innocent persons are not exploited by human traffickers,” said Special Agent in Charge Richard T. Thornton for the FBI Minneapolis Division. “There will be no safe harbor granted to those who prey upon vulnerable people. Those who exploit other human beings will continue to be high priority targets for the FBI.”
As part of her plea agreement, Tran agreed to nullify all debts imposed upon the victim, and upon seven other individuals. The Court further ordered that Tran pay 51,844 in restitution to the victim.
This case was investigated by the FBI and is being prosecuted by Trial Attorney William Nolan of the Civil Rights Division’s Human Trafficking Prosecution Unit and Assistant U.S. Attorney David Steinkamp of the U.S. Attorney’s Office for the District of Minnesota.