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8 December 2014
- Mexican Citizen Pleads Guilty to Role in Organization Responsible for Flying Hundreds of Kilograms of Cocaine to the U.S. and Laundering Money from Its Sales
Member of Marijuana Conspiracy Sentenced to 15 Years in Prison on Drug and Gun ChargesRead the Press Release
Fled to California After 2010 Arrest in Baltimore
Greenbelt, Maryland – U.S. District Judge Roger W. Titus sentenced Joseph Jesus Guadagnoli, age 33, of Baltimore, Maryland, on December 5, 2014, to 15 years in prison, followed by five years of supervised release for conspiracy to distribute and possess with intent to distribute between 1,000 and 4,000 kilograms of marijuana, and possession of a firearm in furtherance of drug trafficking. Judge Titus ordered Guadagnoli to forfeit $6,000 in postal money orders and four guns and ammunition seized from his home, and ordered him to pay a money judgment in the amount of $2,370,000, the value of the property derived from or otherwise involved in the marijuana conspiracy.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; U.S. Marshal Johnny Hughes; Chief James W. Johnson of the Baltimore County Police Department; Chief J. Thomas Manger of the Montgomery County Police Department; and Commissioner Anthony W. Batts of the Baltimore Police Department.
According to his plea agreement, from at least 2008, until September 27, 2012, Guadagnoli conspired with Andrew Sharpeta, and others to distribute and possess with intent to distribute 1,000 kilograms or more of marijuana. Initially, Guadagnoli participated in the conspiracy by unloading shipments of marijuana at various warehouses throughout Baltimore, leasing a warehouse for this purpose, and distributing the bulk marijuana. Guadagnoli also transported marijuana to various locations in the eastern United States.On March 18, 2009, DEA agents executed a search warrant at 3522 Hickory Avenue in Baltimore, Maryland, which was owned, leased, and utilized by members of the conspiracy, and which served as one center of operations for the narcotics trafficking organization. The items seized from the residence included more than 100 pounds of marijuana, $20,000 in cash, 31 cellular telephones, documents regarding the purchase of a Lancair IV-P aircraft for $450,000 by a co-conspirator, four money counters, tally sheets with balances over $1.5 million, and false identification documents. On the day the search warrant was executed, a member of the conspiracy came to the home of Guadagnoli and his then-girlfriend (now wife) Megan Veitch and asked them to go to the Hickory Avenue address to retrieve an airplane seat which had been removed from a plane that was being used to transport money and marijuana. Guadagnoli and Veitch went to the Hickory Avenue address and removed the airplane seat as well as some of the furniture.
On October 4, 2010, members of the Baltimore County Police Department executed a search warrant at a warehouse which had been leased by Guadagnoli. Guadagnoli and Veitch were arrested leaving the warehouse. Inside the warehouse, officers recovered approximately 600 pounds of marijuana in shipping containers which had been sent by a co-conspirator. Officers also discovered a sophisticated marijuana grow operation that involved over 400 marijuana plants.
After making bond, Guadagnoli and Veitch fled to California, where a co-conspirator assisted them in obtaining California driver’s licenses in false names to conceal their identities. Guadagnoli purchased a rural house in Mendocino, California, where he oversaw the cultivation of marijuana on the surrounding property. On September 27, 2012, Veitch and Guadagnoli were arrested on the Mendocino property. A search warrant was executed, and members of law enforcement recovered hundreds of marijuana plants and paraphernalia associated with the cultivation and harvesting of marijuana. In addition, from Guadagnoli’s home officers seized postal money orders totaling $6,000.00, a 9mm Ruger pistol, a Smith & Wesson A&P 15 semi-automatic .223 caliber rifle, a Marlin .22 caliber rifle, a Remington Arms Co. 12 gauge shotgun, a box of 9mm ammunition, a box of .22 caliber ammunition, marijuana, jars with concentrated cannabis, digital scales, five cellular telephones, a money counting machine and other drug paraphernalia.Megan Veitch, age 32, of Baltimore and Andrew Sharpeta, age 39, of Avondale, Pennsylvania, previously pleaded guilty and were sentenced to 34 months and 63 months in prison, respectively
United States Attorney Rod J. Rosenstein praised the DEA, Montgomery County Police Department, Baltimore County Police Department, and Baltimore City Police Department for their work in the investigation, and thanked the Mendocino County, California Sheriff’s Office for its assistance. Mr. Rosenstein thanked Assistant U.S. Attorneys Deborah A. Johnston and Mara Zusman Greenberg, who prosecuted the case.Member of Guinea Bissau-Based International Narcotics Trafficking Conspiracy Sentenced in Manhattan Federal Court to Five Years in PrisonRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that TCHAMY YALA, a citizen of Guinea Bissau, was sentenced today in Manhattan federal court to five years in prison for participating in a conspiracy to import narcotics into the United States. YALA was arrested on April 2, 2013, by the Drug Enforcement Administration’s (“DEA”) Special Operations Division, Bilateral Investigative Unit Narco-Terrorism Group, and the DEA’s Foreign-deployed Advisory Support Team (“FAST”) off the coast of West Africa while onboard a vessel under DEA control in international waters. On April 28, 2014, YALA pled guilty before U.S. District Judge Richard M. Berman.
Manhattan U.S. Attorney Preet Bharara stated: “With his sentence today, Yala is being held responsible for his integral role in an international scheme to traffic narcotics into the United States. I would like to thank the Drug Enforcement Administration for their outstanding work on this case.”
According to the Indictment, other documents filed in Manhattan federal court, and statements made at YALA’s guilty plea and today’s sentencing:
Beginning in the summer of 2012, YALA and his co-defendants, former Guinea Bissau Naval Admiral Jose Americo Bubo Natchuto and Papis Djeme, engaged in a series of recorded meetings in Guinea Bissau with confidential sources (the “CSs”) working with the DEA, who purported to be representatives and associates of South American-based narcotics traffickers.
In an early meeting in which Nachuto and YALA discussed the shipment of ton-quantities of cocaine from South America to Guinea Bissau by sea, Nachuto noted that the Guinea Bissau government was weak in light of the recent coup d’etat, and that it was therefore an ideal time for the proposed cocaine transaction. YALA indicated that the boat carrying the cocaine would unload at a secure location in Guinea Bissau that could not be detected. At an October 2012 meeting at which YALA was present, Djeme advocated using “go-fast” boats to transport the cocaine into Guinea Bissau, because such boats could more easily navigate the waters of Guinea Bissau, and provided a photograph of the type of “go-fast” boat that could be used to transport the cocaine as well as information for the purchase of such boats.
In further meetings, YALA, Nachuto, and Djeme agreed to assist the CSs by receiving a two-ton load of cocaine that would be transported to Guinea Bissau by boat and stored in Guinea Bissau for distribution to Europe and the United States. In one November 2012 meeting, YALA and his co-defendants met with two of the CSs in Guinea Bissau and discussed importing large quantities of cocaine into the United States. During that meeting, Nachuto offered to utilize a company that he owned to facilitate the shipment of cocaine out of Guinea Bissau. Natchuto indicated that YALA and Djeme would be responsible for handling the security of the drugs while they remained in Guinea Bissau, with only Djeme, Nachuto, and YALA knowing the precise location of the drugs.
At a meeting the following day at which YALA was present, Nachuto confirmed that he would charge a fee of $1,000,000 per 1,000 kilograms of cocaine received in Guinea Bissau. In February 2013, YALA escorted one of the CSs to a location in Guinea Bissau where the narcotics were to be stored and hidden. The following month, YALA purchased two cisterns, which were intended to be filled with the narcotics and buried underground for safe-keeping, as well as additional equipment for the storage of the narcotics.
In addition to his prison term, YALA, 42, was sentenced to three years of supervised release and was ordered to pay a $100 special assessment.
On April 29, 2014, YALA’s co-defendant, Papis Djeme, pled guilty to participating in a conspiracy to import narcotics into the United States. On September 3, 2014, Djeme was sentenced by Judge Berman to 78 months in prison.
Mr. Bharara praised the outstanding efforts of the Special Operations Division of the DEA. Mr. Bharara also thanked DEA’s FAST, Lisbon Country Office, and Bogota Country Office, as well as the U.S. Department of Justice’s Office of International Affairs.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorney Aimee Hector is in charge of the prosecution.
Manhattan U.S. Attorney Files Lawsuit Against Deutsche Bank and Other Entities for Engaging in an Abusive Scheme to Avoid Federal Income TaxesRead the Press Release
Suit Seeks to Recover More than $190 Million in Taxes, Penalties, and Interest
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States has filed a lawsuit against DEUTSCHE BANK, A.G., DB U.S. FINANCIAL MARKETS HOLDING CORP., DEUTSCHE BANK SECURITIES, INC., BMY ACQUISITION CORP., BMY ACQUISITION LLC, BMY STATUTORY TRUST, and FIRST UNION NATIONAL BANK, now known as WELLS FARGO BANK, N.A., as trustee of BMY STATUTORY TRUST, alleging that these parties participated in a series of transactions that amounted to fraudulent conveyances done with the purpose and effect of leaving the United States Treasury with a significant, uncollectable tax bill. The lawsuit seeks to recover those funds, along with appropriate penalties and interest.
Manhattan U.S. Attorney Preet Bharara said: “Through fraudulent conveyances involving shell companies, Deutsche Bank tried to make its potential tax liabilities disappear. This was nothing more than a shell game. This lawsuit seeks to hold Deutsche Bank and the other defendants liable for $190 million in taxes, penalties, and interest owed to the United States taxpayers.”
The following allegations are based on the Complaint filed today in Manhattan Federal court:
Deutsche Bank acquired a corporation in the fall of 1999 that held stock with a very low cost-basis, such that the sale of this stock would trigger more than $100 million in taxable gain as a result of the appreciation in value of the stock. In order to avoid paying taxes on the stock’s built-in gain, Deutsche Bank entered into an arrangement with a firm that created three shell companies: defendants BMY Acquisition Corp. (“BMY Corp.”), BMY Acquisition LLC (“BMY LLC”), and BMY Statutory Trust (“BMY Trust” and, collectively with BMY Corp. and BMY LLC, “BMY”). These shell corporations collectively served as an underfunded special-purpose vehicle with no function other than to be stuck with a tax bill that it could never pay.
To carry out the scheme, the Deutsche Bank and BMY entities executed a series of pre-planned transactions in the spring of 2000. First, a Deutsche Bank entity sold the corporation holding the appreciated stock to BMY for a price that did not represent fair value for it in light of, at a minimum, the tens of millions of dollars of tax liabilities on the built-in gains. BMY paid for the stock using a short-term loan conditioned on the completion of the pre-planned transaction. Immediately after purchasing the stock, BMY sold it to a different Deutsche Bank entity. At the time of this sale, the tax liability on the built-in gains of the stock was triggered on the part of BMY. BMY then paid back its loan and other expenses, leaving it with insufficient funds to pay the tax liability. Meanwhile, Deutsche Bank profited from this transaction by selling the stock with a stepped-up cost basis and without paying the resulting tax liability.
The Internal Revenue Service (“IRS”) has determined that as a result of these transactions the current unpaid federal tax liability, with penalties and interest that resided with the BMY shell company, is greater than $190 million.
The Complaint seeks recovery of the full amount of the unpaid federal tax liability.
The case is being handled by the Tax and Bankruptcy Unit of the Office’s Civil Division. Assistant U.S. Attorneys Robert William Yalen and Ellen London are in charge of the litigation.
U.S.. v. Deutsche Bank (Tax Case) 14 Civ 9669 Complaint
Man Sentenced to Prison for Illegal Re-EntryRead the Press Release
A man who re-entered the United States illegally after being removed as a felon was sentenced on November 21, 2014, to 5 months’ imprisonment.
Francisco Ramirez-Duran, age 42, from Mexico, received the prison term after an August 15, 2014, guilty plea to one count of illegal re-entry as a felon.
At the guilty plea, Ramirez-Duran admitted he had re-entered the United States without permission after being removed from the country on August 19, 2005. Ramirez-Duran came to the attention of Homeland Security Investigations’ (HSI) on July 6, 2014, after he was arrested for in Webster County, Iowa, for fishing without a license.
Ramirez-Duran was sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Ramirez-Duran was sentenced to 5 months’ imprisonment. He must also serve a 1-year term of supervised release. There is no parole in the federal system.
The case was prosecuted by Assistant United States Attorney Kevin C. Fletcher and investigated by HSI and the Enforcement and Removal Office of the Immigration and Customs Enforcement Bureau.
Court file information is available at https//ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-CR-3040.
Man Pleads Guilty in Multi-Agency Investigation into Heroin TraffickingRead the Press Release
PITTSBURGH – Donnell Morris, of Allegheny County, Pennsylvania, was convicted of conspiring to distribute at least one kilogram of heroin, United States Attorney David J. Hickton announced today.
Morris, age 30, pled guilty before United States District Judge Nora Barry Fischer. Judge Fischer scheduled sentencing to occur on April 10, 2015, at 9 a.m.
In support of the guilty plea, the Court was informed that, between 2011 and 2013, Morris invested thousands of dollars into the interstate heroin re-supply ventures of a large-scale heroin trafficking organization with several members from or associated with Pittsburgh’s Larimer neighborhood. In doing so, Morris obtained hundreds of bricks of heroin at a time. He then repeatedly supplied other dealers in Western Pennsylvania with heroin.
The law provides for a maximum total sentence of at least 10 and up to life in prison, a fine of up to $10,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Craig W. Haller is prosecuting this case on behalf of the United States.
The Drug Enforcement Administration in Pittsburgh and New York, the Pennsylvania State Police, the Pittsburgh Bureau of Police, the United States Marshals Service, the Allegheny County Police Department, the Pennsylvania Attorney General's Office, the Wilkins Township Police Department, the East Pittsburgh Police Department, the New York Police Department, the Blair County District Attorney's Office and the Allegheny County District Attorney's Office conducted the investigation leading to the conviction in this case.
M.D.B Gang Member Sentenced on Drug and Weapons ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Kevin Feliciano, a/k/a “Nash,” 20, who was convicted of conspiracy to distribute more than 280 grams of crack cocaine and possession of a firearm in furtherance of drug trafficking activities, was sentenced to 195 months in prison by U.S. District Judge Frank P. Geraci.
“As we’ve said in the past, this Office will not tolerate any group or gang attempting to hold residents hostage to their criminal activities,” said U.S. Attorney Hochul. “As this case demonstrates, punishment for federal crime is both certain and substantial once a conviction is obtained.”
Assistant U.S. Attorney Douglas E. Gregory, who is handling the case, stated that Feliciano was part of a violent, street level drug trafficking organization that referred to themselves as “M.D.B.” or “The Broezel Boys.” From 2010 until June 2013, members and associates of M.D.B. controlled the open air drug market in a multi block area near the intersection of Dewey and Lexington Avenues, including all of Broezel Street, the north end of Maryland Street, portions of Driving Park and portions of Lakeview Park, in Rochester. M.D.B. members and associates also maintained and operated several drug houses at locations in Rochester including the duplex residence at 325/327 Lexington Avenue, the upstairs apartment at 171 Maryland Street, the upstairs apartment at 316 Lakeview Park and 672 West Main Street, each for the purpose of possessing, manufacturing, distributing, and using controlled substances.
In his plea before the court, Felciano also admitted that he possessed firearms in furtherance of his drug trafficking activities and that he used violence and threats of violence against unaffiliated persons who attempted to sell illegal controlled substances within their territory and against certain witnesses who were viewed as hostile to the interests of M.D.B.
Feliciano was arrested in June 2013 along with two other defendants.
The sentencing is the culmination of an investigation on the part of the Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Acting Special Agent in Charge James S. Higgins, New York Field Office, the Rochester Police Department, under the direction of Acting Chief Michael Ciminelli, the Federal Bureau of Investigation, and the Drug Enforcement Administration, under the direction of Jamie J. Hunt, Special Agent in Charge, New York Field Division.
Leader of Fraudulent Internet Firm and Longtime International Fugitive Sentenced to 10 Years in Federal PrisonRead the Press Release
SANTA ANA, California – A former Newport Beach resident who was a fugitive for well over a decade was sentenced today to 120 months in federal prison for running a fraudulent Internet company that bilked hundreds of victims out of approximately $13 million.
James Eberhart, 73, was sentenced this morning by United States District Judge Cormac J. Carney. In addition to the prison term, Judge Carney ordered Eberhart to pay $12,838,045 in restitution to more than 800 victims across the United States.
Eberhart pleaded guilty in September to two counts of mail fraud. His prosecution in United States District Court follows Eberhart's arrest in Malaysia in 2012 after he was a fugitive for more than 12 years.
In the late 1990s, Eberhart and co-defendant Eugene M. Carriere operated a fraudulent Newport Beach company called YES Entertainment Network, Inc. According to court documents, they used dozens of “boiler room” telemarketing firms and a Hollywood celebrity spokesman to raise millions of dollars by telling investors that YES was creating an 18-channel, multimedia, family-oriented website that would carry various forms of entertainment programs.
Investors were told that YES would generate profits through the sale of advertising on the website, and that their investment funds would be used to build and market the website. Eberhart and Carriere also told investors that the company planned an initial public offering of its stock for the fall of 1999, which would potentially make early investments worth millions of dollars.
These claims were false. Only 1 percent of investor funds were used to build the YES website, which was little more than a façade used to reassure investors. No money was used for advertising, but approximately 45 percent of the funds were used to pay sales commissions to the telemarketers. Most of the rest of the money was wired to bank accounts in Hong Kong and Singapore that Eberhart had formed with the help of an attorney.
In late 1999, while Eberhart was under investigation by the U.S. Securities and Exchange Commission for an earlier investment fraud scheme, and shortly after FBI agents had executed search warrants at the offices of telemarketing companies affiliated with YES, Eberhart, Carriere, and another employee destroyed company documents and fled the country. Carriere was a fugitive for six years before being arrested in Thailand in April 2005. In 2007, Carriere pleaded guilty to two counts of mail fraud and was sentenced to three years in federal prison and ordered to pay $12,838,045 in restitution.
In addition to Carriere, five other defendants – including the owners of telemarketing operations used by YES – were indicted, pleaded guilty, and were sentenced to as much as 142 months in federal prison.
Eberhart remained a fugitive until May 2012, when the FBI Legal Attaché in Kuala Lumpur, acting on a tip that Eberhart was residing in Malaysia, coordinated with Malysian authorities to arrest him. At the time of his arrest, Eberhart was living on a custom-built, 58-foot yacht, which he has entered into sailboat races. Prosecutors said that after Eberhart fled, he asked a Costa Rican family to legally adopt him – at age 58 – so that he could become a Costa Rican citizen, which would prevent the Costa Rican government from extraditing him to the United States.
The criminal case against Eberhart and the other defendants is the result of an investigation by the Federal Bureau of Investigation and the U.S Postal Inspection Service. The SEC provided substantial assistance on the case.
Release No. 14-158
KC Truck Driver Sentenced to 21 Years for $1 Million Conspiracy to Steal Trucks and Trailers, CargoRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., truck driver was sentenced in federal court today for his role in a 14-year-long conspiracy to steal more than $1 million worth of trucks and trailers and their cargo.
Kenneth Ray Borders, 43, of Kansas City, Mo., was sentenced by U.S. Chief District Judge Greg Kays to 21 years and10 months in federal prison without parole. The court also ordered Borders to pay $1,270,089 in restitution to 27 victims. Borders’ sentence takes into account his previous criminal history of theft of a truck, trailer and cargo in this district and the District of Nebraska. He also has numerous instances of driving without a license or with a suspended license and was under a criminal sentence for driving while revoked during the conspiracy.
On Feb. 28, 2014, Borders was found guilty at trial of participating in a conspiracy that involved the theft of commercial trucks and trailers and their cargo in Missouri, Kansas, Florida, Arkansas, Oklahoma, and Nebraska from 1998 to December 2013. Co-defendants Jon Dirk Dickerson, 56, of Raytown, Mo., and his son, Kyle Wayne Dickerson, 32, of Holden, Mo., were also convicted for their roles in the conspiracy and await sentencing. They worked together to steal trucks, trailers, and cargo and then dispose of them. Sometimes they used the trucks and trailers themselves to make money by hauling loads for customers and sometimes they sold the stolen trucks and trailers.
In addition to the conspiracy, Borders was found guilty of four counts of aiding and abetting the possession of stolen goods, one count of aiding and abetting the transportation of stolen goods and one count of aiding and abetting the possession of stolen vehicles.
Evidence presented at trial focused on the thefts of five Freightliner trucks and 17 trailers between 2005 and 2011. The stolen trailers included refrigerated trailers containing such cargo as 39,000 pounds of meat, 565 boxes of beef valued at $149,790, $125,000 worth of frozen ribs, and several refrigerated trailers that each contained tens of thousands of dollars’ worth of frozen chicken, including a load of frozen chicken wings valued at $59,706. Also stolen were utility trailers containing such cargo as Budweiser beer valued at $16,657, Nike shoes valued at $217,353 and 21,018 pounds of Little Sizzler sausages.
Hundreds of thousands of dollars of stolen cargo was sold cheaply to anyone who would buy it. Some of the cargo was sold out of the back of the trailer; some of it was sold to a tow truck driver or a convenience store operator to resell. For example, co-defendant Myron Piggie, 53, of Kansas City, Mo., pleaded guilty to possessing stolen property. Piggie admitted that he accepted 12 pallets of stolen Budweiser beer products (valued at approximately $7,566). Piggie agreed to sell the beer at his store, MP Convenience Store in Kansas City, and split the profits with conspirators. Piggie, however, learned that the police were aware he had the stolen beer, so he gave it all away, selling little or none of it, because he did not want to be found to be in possession of the stolen beer. Several additional co-defendants have pleaded guilty in this case and in related cases.
Borders was involved in stealing the trucks, trailers, and cargo. He sold the cargo to others to resell, sometimes fronting the money by allowing his “customer” to pay him after they sold the product. Borders used some of the stolen trucks and trailers himself to make money by delivering cargo.
Jon Dickerson often had the first right to purchase stolen trucks and trailers. In fact, Borders actually had a “shopping list” from Dickerson listing the trucks and trailers that he wanted, so that Borders could keep an eye out for them and steal them if the opportunity presented itself.
Jon Dickerson and his son, Kyle Dickerson, also were involved in stealing trucks and trailers. They used them in their own trucking business, sometimes just for replacement parts with the remains sold for scrap. Kyle Dickerson had the tools, ability, and willingness to disguise the stolen nature of the trucks and trailers by altering their Vehicle Identification Numbers (VINs) so that they could be used in their trucking business without alerting authorities when they were stopped or inspected.
Jon Dickerson was also found guilty of three counts of aiding and abetting the possession of stolen goods and one count of aiding and abetting the possession of stolen vehicles.
Kyle Dickerson was also found guilty of one count of aiding and abetting the transportation of stolen vehicles, two counts of aiding and abetting the possession of stolen goods and one count of aiding and abetting the possession of stolen vehicles.
This case is being prosecuted by Senior Litigation Counsel Gregg R. Coonrod and Assistant U.S. Attorney Cindi S. Woolery. It was investigated by the Department of Agriculture – Office of Inspector General, the FBI, the Kansas City, Mo., Police Department, the National Insurance Crime Bureau, the National White Collar Crime Center, the Mid-States Organized Crime Information Center, Travelers Investigative Services, the Missouri State Highway Patrol, the Florida State Highway Patrol, and the U.S. Department of Transportation, Federal Motor Carrier Safety Administration.Jury Convicts Former Detroit City Treasurer,Pension Officials of Conspiring to DefraudPensioners Through BriberyRead the Press Release
The former Treasurer of the City of Detroit and two former pension officials were convicted by a federal jury of conspiring to defraud retirees through bribery and kickbacks, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement was Paul M. Abbate, Special Agent in Charge of the Federal Bureau of Investigation in Detroit, Jarod Koopman, Special Agent in Charge of the Internal Revenue Service, Criminal Investigations, and James Vanderberg, Special Agent in Charge, Department of Labor, Office of Labor Racketeering and Fraud Investigations, Chicago Regional Office.
Jeffrey Beasley, 45, of Chicago, Illinois, the former Treasurer of the City of Detroit, Ronald Zajac, 70, of Northville, Michigan, the former General Counsel of Detroit's two pension systems for more than 30 years, and Paul Stewart, 57 of Detroit, a trustee of Detroit's Police and Fire Retirement System, were convicted following a two-month jury trial before U.S. District Judge Nancy G. Edmunds. All three defendants were convicted of conspiring to defraud the city's pensioners of the honest services to which they were entitled by accepting bribes. In addition, Beasley was convicted of two counts of extortion and one count of bribery. Beasley was acquitted on three other counts of extortion.
The evidence at trial showed that Detroit’s two retirement systems lost more $97 million on pension deals corrupted by bribes and kickbacks taken or paid by the defendants. Beasley, Zajac, and Stewart conspired with each other and with former Detroit Mayor Kwame Kilpatrick and others to take bribes and kickbacks in return for votes on investment decisions made by the boards of trustees of Detroit’s two pension systems.
Beasley forced investment sponsors and consultants to pay Bernard Kilpatrick hundreds of thousands of dollars in exchange for his support of their proposed pension investments. Beasley also accepted tens of thousands of dollars in cash from investment sponsors and consultants in exchange for his support of their pension deals.
As part of the conspiracy, Zajac organized so-called “birthday parties” for Beasley, Stewart, and another trustees. At the parties, people having business before the pension systems gave each trustee thousands of dollars in cash. Zajac also directed investment sponsors and pension consultants to give thousands of dollars in cash and entertainment to Beasley and Stewart. Zajac also demanded that an investment sponsor pay for a trip to London for Zajac and a pension trustee in exchange for a $10 million investment in Detroit pension money.
During the conspiracy, Stewart accepted more than $48,000 in cash, trips, meals, drinks and other things of value in return for his support on pension deals proposed by the givers of the bribes. Among other things, Stewart accepted a Christmas basket stuffed with cash, a $5,000 Greektown casino chip, and a $4,000 trip to the Ritz-Carlton in Naples, Florida.
McQuade said, “These defendants breached their duties to retirees by basing their investment decisions on bribes. Their greed cost retirees almost $100 million in losses to pension funds. In light of all of the sacrifices made by Detroit retirees, we are gratified that the jury has brought these corrupt pension officials to justice.”
“The perpetrators in this case criminally conspired with one another to sell their influence over the city’s pension systems,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Their breach of the public’s faith and their fiduciary responsibilities to Detroit retirees resulted in nearly $100 million in losses. The FBI, along with its law enforcement partners, will continue to aggressively pursue and bring to justice those who abuse the public’s trust and enrich themselves at the cost of our communities.”
Based on the jury’s guilty verdicts for conspiring to engage in honest services mail and wire fraud, Beasley, Zajac, and Stewart each face a maximum of twenty years in prison and a fine of up to $250,000. In addition, Beasley also faces an additional twenty years in prison and a fine of $250,000 for each of his two convictions for extortion, and an additional ten years in prison and a fine of $250,000 for his bribery conviction. Their sentences will be based on sentencing guidelines and other statutory factors.
In addition, a number of other defendants have been convicted in relation to the pension fund investigation, including:
- Roy Dixon, an investment sponsor convicted of conspiring with Beasley, Zajac, and Stewart to pay bribes;
- Monica Conyers, a former Trustee of the General Retirement System and former member of the Detroit City Council, for conspiracy to take bribes, including bribes relating to a proposed multi-million dollar pension fund investment in Wireless Resources and a $10,000 extortion payment relating to the Police and Fire Retirement System's investment in the Romulus Deep Injection Waste Well;
- Samuel L. Riddle, Conyers' Chief of Staff, for conspiracy to commit bribery and extortion relating to the Wireless Resources and Romulus Deep Injection Well investments;
- DeDan Milton, a former Trustee of Detroit's two pension funds;
- Andrew Park, an owner of Asian Village, who paid a bribe to obtain a $2.75 million loan from Detroit's General Retirement System;
- Derrick Miller, former Chief Information Officer of Detroit, who accepted the bribe from Park and who took a kickback of more than $500,000 on a $44 million investment by Detroit's two pension funds;
- Chauncey Mayfield, for conspiracy to commit bribery with Treasurer Beasley by supplying Beasley and Kwame Kilpatrick with tens of thousands of dollars in hotel, entertainment, and private jet flights, as well as a job for Beasley's paramour and significant contributions to the Kilpatrick Civic Fund, all in return for maintaining Mayfield's position as an investment advisor controlling more than $200 million in pension fund money; and
- George Stanton, the former Chief of Staff of a pension trustee, who accepted a $15,000 cash bribe from Dixon relating to a proposed investment in the Turks and Caicos Islands.
The case was investigated by agents of the Federal Bureau of Investigation, the Internal Revenue Service, and the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations. It is being prosecuted by Assistant United States Attorneys Robert Cares, David A. Gardey, and Stephanie Dawkins Davis.
Joint Statement from the Office of the Attorney General and the Office of the Director of National Intelligence on the Declassification of Renewal of Collection Under Section 501 of the Foreign Intelligence Surveillance ActRead the Press Release
Earlier this year in a speech at the Department of Justice, President Obama announced a transition that would end the Section 215 bulk telephony metadata program as it previously existed, and that the government would establish a mechanism that preserves the capabilities we need without the government holding this bulk data. As a first step in that transition, the President directed the Attorney General to work with the Foreign Intelligence Surveillance Court (FISC) to ensure that, absent a true emergency, telephony metadata can only be queried after a judicial finding that there is a reasonable, articulable suspicion that the selection term is associated with an approved international terrorist organization. The President also directed that the query results must be limited to metadata within two hops of the selection term instead of three. These two changes have been in effect since February 2014.
In addition, the President also directed the Intelligence Community and the Attorney General to develop options for a new approach to match the capabilities and fill gaps that the Section 215 program was designed to address without the government holding this metadata. After carefully considering the available options, the President announced in March that the best path forward is that the government should not hold this data in bulk, and that the data should remain at the telephone companies with a legal mechanism in place that would allow the government to obtain data pursuant to individual orders from the FISC approving the use of specific numbers for such queries. The President also noted that legislation would be required to implement this option, and he has called on Congress to enact this important change.
The Administration welcomes the opportunity to work with the new Congress to implement the changes the President has called for. Given that legislation has not yet been enacted, and given the importance of maintaining the capabilities of the telephony metadata program, the government has sought a 90-day reauthorization of the existing program, as modified by the changes the President directed in January.
Consistent with prior declassification decisions and in light of the significant and continuing public interest in the telephony metadata collection program, Director of National Intelligence James R. Clapper declassified the fact that the government filed an application with the FISC to reauthorize the existing program for 90 days, and that the FISC issued an order approving the government’s application. The order issued on Dec. 4, 2014, expires on Feb. 27, 2015. The Administration is undertaking a declassification review of this most recent court order, and when complete, the Office of the Director of National Intelligence will post the document to its website and icontherecord.tumblr.com.
Johnstown Man Sentenced to 2 Years in Prison for Filing False Income Tax ReturnRead the Press Release
JOHNSTOWN, Pa. - A resident of Johnstown, Pa., has been sentenced in federal court to 24 months incarceration and ordered to pay restitution to the Internal Revenue Service in the amount of $132,868.00, on his conviction of filing a false tax return, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Keith D. Nash.
According to information presented to the court, Nash filed an individual income tax return for the calendar year 2009, whereby he failed to report $161,267 in taxable income, resulting in an underpayment of $52,466 in income tax owed to the United States.
Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Internal Revenue Service - Criminal Investigation for the investigation leading to the successful prosecution of Nash.
Fresno Man Sentenced to 25 Years in Prison for Child Pornography TraffickingRead the Press Release
FRESNO, Calif. — United States District Judge Lawrence J. O’Neill today sentenced Bradley Allen Vaine, 28, of Fresno, to 25 years in prison, to be followed by a lifetime term of supervised release, for receiving and distributing child pornography, United States Attorney Benjamin B. Wagner announced.
According to the plea agreement, on October 25 and 27, 2012, Vaine received and distributed images of child pornography over the Internet. He transmitted more than 600 images of child pornography, some of the images depicted prepubescent minors, and some were of violence or sadistic or masochistic conduct. He has been detained as a danger to the community and a flight risk since his arrest on November 6, 2012.
This case is the product of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorney David Gappa prosecuted the case.
“Individuals involved in receiving and distributing child pornography cause severe and lasting damage to their vulnerable victims,” said Michael J. Toms, the acting assistant special agent in charge who oversees HSI Fresno. “Fortunately, the lengthy sentence imposed today virtually assures that no additional children will be harmed by this defendant.”
This case was brought as part of Operation Sunflower, an international enforcement action, which ran from November 1 through December 7, 2012, spearheaded by HSI and aimed at rescuing victims and targeting individuals who own, trade, and produce child pornography. Operation Sunflower commemorated the one-year anniversary of a Kansas preteen victim who was located based upon a sunflower-shaped highway sign in the background of a picture. The prosecution was also part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. Click on the “resources” tab for information about Internet safety education
Former IRS Employee Convicted of Tax FraudRead the Press Release
PHILADELPHIA – A federal jury, today, found Sherelle Pratt, 41, of Philadelphia, PA, guilty of filing false tax returns, aiding and assisting other individuals in preparing and filing false tax returns, theft of government property. Pratt was an IRS employee at the time of her crimes. She prepared federal income tax returns for a number of individuals during tax years through 2006 through 2008. She caused the refunds, and stimulus payments that the filers were supposed to receive, to be deposited into her personal bank account. In some cases, Pratt gave the filers a portion of the refunds and stimulus payments. In other instances, she kept the refund and stimulus payments.
Pratt faces a maximum possible sentence of 28 years in prison, a fine of up to $1.75 million dollars, a special assessment of $700, and two years of supervised release. U.S. District Court Judge Cynthia Rufe will schedule a sentencing hearing at a later date.
The case was investigated by the Treasury Inspector General for Tax Administration, Philadelphia Field Office and the Internal Revenue Service’s Criminal Investigations and is being prosecuted by Assistant United States Attorney Floyd J. Miller.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Former Director of Operations for Bernard L. Madoff Investment Securities, Daniel Bonventre, Sentenced in Manhattan Federal Court to 10 Years in Prison for His Role in the Massive FraudRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that DANIEL BONVENTRE, the former Director of Operations for Bernard L. Madoff Investment Securities LLC, was sentenced in Manhattan federal court today to 10 years in prison for his role in Madoff’s multibillion-dollar Ponzi scheme, the largest in history. BONVENTRE was also ordered to forfeit more than $155.5 billion. After a nearly six-month trial before U.S. District Judge Laura Taylor Swain, BONVENTRE was convicted in March 2014 of 22 counts of securities fraud, bank fraud, tax fraud, falsifying the books and records of Madoff Securities, making false filings with the United States Securities and Exchange Commission, and conspiracy.
Manhattan U.S. Attorney Preet Bharara said: “Daniel Bonventre was Bernard Madoff’s Director of Operations, and his partner in crime. For decades, Bonventre used his skills to help hide Madoff’s massive Ponzi scheme, and to funnel stolen customer money out of the fraudulent investment business. Today, Bonventre was sentenced to 10 years in prison and financial penalties that will rob him of his ill-gotten wealth – a punishment that fits Bonventre’s central role in the biggest financial fraud in history.”
According to the allegations in the Superseding Indictment filed in Manhattan federal court, other court documents, and the evidence presented at trial:
BONVENTRE was employed at Bernard L. Madoff Investment Securities (“Madoff Securities”) for 40 years and served as its Director of Operations since approximately 1978. BONVENTRE was responsible for maintaining and supervising the production of the principal internal accounting documents for Madoff Securities, including its general ledger, financial statements, and stock record. BONVENTRE directed that false entries be made in the general ledger that concealed the scope of Madoff Securities’ fraudulent investment advisory operations and understated Madoff Securities’ liabilities by billions of dollars. For example, from 1997 to 2008, more than $750 million of investment advisory investor funds were used to support Madoff Securities’ Market Making and Proprietary Trading operations, but were not accounted for on Madoff Securities’ books and records, including the general ledger, so as to conceal the true source of the funds. Moreover, as BONVENTRE knew, the general ledger did not accurately reflect the assets contained in the bank and brokerage accounts into which investment advisory investor funds were deposited, and likewise did not reflect the liability of Madoff Securities to its investment advisory clients that arose from the custody of investment advisory client funds in those accounts. The assets and associated liabilities of Madoff Securities’ investment advisory operations, which were omitted from the general ledger, ranged from millions to billions of dollars.
As a registered broker-dealer, Madoff Securities was required to file Financial and Operational Combined Uniform Single Reports (“FOCUS Reports”) with the SEC. Those FOCUS Reports require the production of basic information that amounts to a condensed version of a broker-dealer’s general ledger. Because the general ledger was inaccurate, as BONVENTRE well knew, the FOCUS Reports were likewise false because they failed to accurately reflect Madoff Securities’ assets and liabilities. For example, one such report, for the month of April 2006, in the midst of a liquidity crisis in the Ponzi scheme, failed to reflect at least $299 million in Madoff Securities liabilities related to $154 million of an investment advisory client’s bonds and the $145 million that Madoff Securities had borrowed using those bonds as collateral.
During one of those liquidity crises, in late 2005, BONVENTRE used falsified financial statements, false FOCUS Reports, and other fraudulent documents to obtain hundreds of millions of dollars in loans and lines of credit from federally insured financial institutions. Madoff Securities used the proceeds of those fraudulently obtained loans to pay back redemptions to customers of the investment advisory business, thereby prolonging the Ponzi scheme.
Further, between 2004 and 2008, Madoff Securities was subject to at least five reviews by the United States Securities and Exchange Commission (“SEC”) and a European accounting firm which was conducting a review of Madoff Securities’ operations on behalf of investment advisory clients. As part of a concerted effort overseen by Madoff to deceive both the SEC and the European accounting firm, BONVENTRE participated in creating numerous false and fraudulent books and records, including counterfeit Depository Trust Company (“DTC”) reports, which falsely reflected billions of dollars in non-existent securities held on behalf of Madoff Securities clients at the DTC, a third-party clearinghouse.
In addition, between 2004 and 2007, in connection with audits of Bernard L. Madoff’s U.S. Individual Income Tax Returns, Forms 1040, BONVENTRE created false, backdated Madoff Securities records to show the tax auditors. Because Madoff had under-reported his income by tens of millions of dollars each year, BONVENTRE created false documents that appeared consistent with Madoff’s tax returns for the purposes of maintaining the falsity of Madoff’s tax returns and deceiving the auditors.
Likewise, BONVENTRE filed false Income Tax Returns on his own behalf, in which he failed to report cash and other benefits he received from Madoff Securities. Specifically, BONVENTRE was convicted of failing to report millions of dollars in cash and other benefits, including payments on his behalf for his membership in a country club, his son’s private high school tuition, common charges for his Upper East Side cooperative apartment, thousands of dollars in cigars and other luxury items charged to BONVENTRE’s personal credit card, and cash.
In addition to the millions of dollars of off-the-books income that BONVENTRE took from Madoff Securities, he also had his own investment advisory account, through which he received the benefit of more than $1.8 million in at least three fictitious backdated trades that appeared in his account between 2002 and 2006. The trade that appeared in BONVENTRE’s account in 2002 included a purchase that was backdated 12 years, to 1990, and generated fraudulent long-term capital gains of nearly $1 million. The trade that appeared in BONVENTRE’s account in 2006 was entered following his handwritten instructions directing another Madoff Securities employee to generate a fraudulent long-term capital gain of $449,000.
In imposing the 10-year sentence, Judge Swain observed that by “agree[ing] to facilitate the conduct of business ‘Madoff-style,’” BONVENTRE committed “despicable” and “literally, devastatingly serious crimes,” that were “at all times a key to [Madoff’s] success,” and which caused “financial devastation of unprecedented magnitude.” Bonventre was denied bail pending appeal and has been ordered to surrender and begin serving his term on February 19, 2015.
BONVENTRE, 67, was also ordered to forfeit $155.5 billion, including specific bank accounts and real estate, representing property traceable to the massive Ponzi scheme, as well as a related $457 million bank fraud. Judge Swain also imposed a term of two years of supervised release following BONVENTRE’s completion of this sentence.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Securities and Exchange Commission, the Internal Revenue Service and the U.S. Department of Labor for their assistance.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Assistant United States Attorneys Matthew L. Schwartz, John T. Zach, and Randall W. Jackson are in charge of the prosecution. Assistant United States Attorneys Matthew L. Schwartz and Paul M. Monteleoni are in charge of the forfeiture aspects of the case.
Former Chippewa Cree Tribal Chairman Pleads Guilty to Bribery, Embezzlement, Obstruction of Justice and Tax EvasionRead the Press Release
GREAT FALLS – Former Chippewa Cree Tribal Chairman John Chance Houle, 50, of Box Elder, pleaded guilty today to four felonies involving bribery, embezzlement, obstruction of justice, and tax evasion, according to the United States Attorney’s Office. Houle had been charged in four indictments handed down by a federal Grand Jury investigating corruption in Indian Country. Houle appeared before U.S. District Judge Brian Morris in Great Falls to enter the guilty pleas.
Houle’s sentencing on the four felonies is set for March 19, 2015, at the Missouri River Courthouse in Great Falls.
Houle pleaded guilty to accepting kick-back payments from Hunter Burns Construction in exchange for facilitating the award and payment on tribal contracts. In an offer of proof filed by the United States Attorney’s Office, prosecutors told the court that if they had taken the case to trial the evidence would have shown that in the 28 month period between July 28, 2009, through November 30, 2011, Houle received $306,987 from the construction company and James Eastlick, Jr., a clinical psychologist with the Rocky Boy Health Clinic who was a 49% owner of the construction business.
In another indictment Houle pleaded guilty to embezzling hundreds of thousands of dollars from the Chippewa Cree Rodeo Association. As President of the Rodeo Association, prosecutors told the court, Houle arranged to have payments made to nominee vendors with the understanding that a large portion of the payment would be kicked back to Houle. According to court records, the government would have proven that in 2009, Mark Leischner, Eastlick’s brother-in-law received $135,000 in checks from Houle and Colliflower, and kicked back to Eastlick approximately $53,000. For 2010, Leischner received $133,000 in checks from Houle and the CCRA, from which $62,000 was provided to Tony Belcourt for purchase of a residence in Box Elder. Leischner’s “cut,” as agreed to by Houle, was to be $45,000. In 2010, and then in 2011, Houle also used Bear Paw Indian Rodeo Association President Wade Colliflower as a beneficiary of Chippewa Cree Tribe Rodeo Association payments, a portion of which were then paid back to Houle in cash. Colliflower is scheduled to enter a guilty plea tomorrow for his role in the embezzlement scheme.
In that same indictment Houle was also charged with and pleaded guilty to obstruction of a federal grand jury investigation. The offer of proof filed by the government indicated that when investigation into the payments to Leischner began, Houle, Eastlick and Mark and Tammy Leischner met on several occasions to manufacture documents that would give the appearance of legitimacy to the payments to Leischner. In 2013, a federal grand jury subpoenaed Leischner’s records and he provided the fraudulent documents in response to the subpoena.
In the third indictment, Houle pleaded guilty to one of four counts of tax evasion. As part of his plea agreement with the United States, Houle agreed to pay the taxes on his undeclared income from Hunter Burns Construction, Eastlick, Leischner, and Colliflower. In the four tax years 2009 through 2012, Houle had over $412,000 in undeclared income from those sources, and agreed to pay $121,219 to the Internal Revenue Service as part of the plea agreement. The United States advised the court that there was almost $230,000 in undisclosed income from other sources on which tax liability may have been evaded, but that the investigation was halted when the agreement was reached.
The case was brought by the federal agents of the Guardians Project and was investigated by the agents of the Offices of Inspector General of the Departments of Interior, Health and Human Services, and Environmental Protection Agency, as well as by the Internal Revenue Service Criminal Investigation Division.
Florida Man Sentenced to 160 Months in Prison for Drug ConspiracyRead the Press Release
NORFOLK, Va. – Ronald Lamont Wilson, a/k/a “Papa Ron,” 41, a longtime resident of Norfolk, Virginia, who was recently living in Orlando, Florida, was sentenced today to 160 months in prison, followed by five years of supervised release for conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine.
Dana J. Boente, United States Attorney for the Eastern District of Virginia and Royce E. Curtin, Special Agent in Charge of the Federal Bureau of Investigation’s Norfolk Field Office, made the announcement after sentencing by United States District Judge Raymond A. Jackson.
Wilson pleaded guilty to the drug conspiracy charge on May 20, 2014. According to court documents,Wilson conspired with others to distribute hundreds of kilograms of cocaine transported from Atlanta, Georgia to the Tidewater area between approximately 2002 and 2013. The cocaine was transported in hidden compartments in vehicles and cash proceeds were sent back to Atlanta using the same method. Wilson used the proceeds of his drug trafficking sales to purchase and make subsequent payments on a residence in Dacula, Georgia. He also used the proceeds to purchase vacation property in Florida, a 2004 Hummer, a 2008 Maserati and a 2002 Porsche. The Florida property and vehicles will be forfeited.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Sherrie S. Capotosto and Special Assistant United States Attorney Amy Cross-Rochefort prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:11-cr-180.Tweet
Florida Dealer Enters Guilty Plea to Illegally Trafficking in Marine LifeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Ed Grace, Deputy Associate Director, U.S. Fish & Wildlife Service (FWS), Office of Law Enforcement, and Tracey Dunn, Assistant Director, NOAA Fisheries Office of Law Enforcement, announce that Curtis W. Waters, 53, of Weeki Wachee, Florida, pled guilty today in U.S. District Court in Key West for engaging in conduct that involved the sale and purchase of, and intent to sell and purchase, wildlife with a market value in excess of $350.00, that is, approximately 150 specimens of Ricordea florida, and did knowingly sell said wildlife in interstate commerce, knowing it was taken, possessed, transported, and sold in violation of and in a manner unlawful under the laws of the State of Florida, specifically, Florida Statute Section 379.361(2)(f), in violation of the Lacey Act, Title 16, United States Code, Sections 3372(a)(2)(A) and 3373(d)(1)(B), and Title 18, United States Code, Section 2.
Waters entered his plea before U.S. Magistrate Judge Lurana Snow, who was assigned to conduct the hearing by U.S. District Court Judge James Lawrence King. Magistrate Judge Snow announced that she would issue a Report and Recommendation to Judge King urging the acceptance of the guilty plea and the adjudication of the defendant.
According to the allegations of the Information filed against him, and a Joint Factual Statement submitted by the parties, at the relevant times, Waters was a resident of Hernando County, Florida, and the holder of a Saltwater Products License (SPL) issued by the Florida Fish & Wildlife Conservation Commission (FWCC). The SPL authorized him, among other things, to harvest live Ricordea florida, a corallimorph species native to the salt water reefs of South Florida.
In August 2013, Waters called an individual in Colorado and advised the individual that Waters would be in the Florida Keys collecting marine specimens and offering to sell “more” Ricordea florida. At the direction of FWS agents, the cooperator ordered 150 ricordea. Waters advised he planned to ship the ricordea by September 3, 2013, at a price of $4.00 each.
Based on surveillance and information provided by witnesses, the investigating agents determined that in order to conduct the harvest of ricordea, Waters employed a white, 16’ open, center-console Boston Whaler, FL1900AK, which he towed from his residence to the Keys.
On September 2, 2013, Waters called the buyer, confirming the order of 150 ricordea would be sent via Federal Express. On September 4, the package of ricordea from Waters was delivered to the Colorado address. Included in the shipment was an invoice for 150 ricordea at $4.00 each, for a total of $600.00, and a pre-completed bank deposit slip for Waters’ bank account for a deposit of $600.00. FWS Agents deposited $600.00 cash into the bank account associated with the deposit slip.
Waters is scheduled to be sentenced on March 10, 2015 at 1:30 p.m. Waters faces a possible sentence of up to 5 years imprisonment, a term of supervised release of up to three years, and a criminal fine of up to $250,000. He also faces forfeiture of the vessel, engine, trailer, tackle, and gear used in the commission of the Lacey Act violation.
Mr. Ferrer commended the joint investigative efforts of the Special Agents of the FWS Office of Law Enforcement and the NOAA Office of Law Enforcement who participated in the long-term investigation into the illegal harvesting and sale of marine life resources from the Florida Keys known as Operation Rock Bottom. This matter is being prosecuted by Assistant U.S. Attorneys Thomas Watts-FitzGerald and Antonia Barnes.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Entertainment Promoter Extradited from Brazil to Face Charges in $300 Million Securities Fraud SchemeRead the Press Release
John P. (Jack) Utsick, who in 2005, according to Billboard Magazine, was the third-largest concert promoter and entertainment manager, made his initial appearance today. Utsick was extradited from Brazil to the United States as a result of his alleged involvement in a Ponzi scheme that defrauded investors out of approximately $300 million.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
In 2006, John P. (Jack) Utsick, 72, formerly of Miami Beach, fled South Florida to Brazil after the U.S. Securities and Exchange Commission (SEC) filed civil securities fraud charges against him, and after he became aware of a related FBI investigation.
According to a Superseding Indictment filed November 30, 2010, that was unsealed by court order on August 26, 2014, and documents filed in the SEC’s fraud case:
Utsick engaged in a scheme that defrauded more than 3,300 investors out of approximately $300 million. These investors believed that their monies were used to fund Utsick’s concert promotion business, Worldwide Entertainment, Inc. and The Entertainment Group Fund, Inc. (Worldwide), which Utsick operated from at least 1998 through late 2005. As alleged in court documents, Utsick promised investors fixed rates of return ranging from 15% to 25% and, in some instances, an additional percentage of the profits generated by Utsick and his companies related to specific concert events or tours of specific artists. Many investors were encouraged to roll over their principal and purported “profits” from project to project.
As alleged in court documents, most of the entertainment projects lost money and, as a result, Utsick paid earlier investors with funds raised from new investors. Utsick also used investor funds for other activities that were not disclosed to investors, including for his own personal stock and options trading, the purchase of two multimillion dollar condominiums in Miami Beach, a yacht, and to fund a motion picture, “National Lampoon’s Pledge This!,” starring Paris Hilton.
Utsick produced events and concert tours for numerous artists, including Coldplay, The Rolling Stones, Elton John, Aerosmith, Luis Miguel, and Juanes.
After the SEC filed its securities fraud action in 2006, and Utsick was made aware of the criminal investigation, he fled to Brazil. According to court filings in the SEC case, Utsick went to great lengths to avoid providing evidence to the SEC or accounting for the disappearance of millions of dollars that had been raised from investors.
After the U.S. Department of Justice initiated extradition proceedings in Brazil, Utsick challenged the validity of the indictment in the Brazilian courts. In August 2014, the Supreme Court of Brazil ordered that Utsick be extradited to the United States. Utsick was extradited from Brazil on December 6, 2014, and was taken into custody by the U.S. Marshal’s Service and transported to Miami. He made his initial appearance today before U.S. Magistrate Judge Jonathan Goodman.
Utsick is charged with eight counts of mail fraud, in violation of Title 18 United States Code, Section 1341. He faces a statutory maximum term of twenty years in prison as to each count. The case is assigned to U.S. District Judge Cecilia M. Altonaga for further proceedings.
Mr. Ferrer commended the investigative efforts of the FBI, the assistance provided by the SEC’s Miami Regional Office, and the efforts of the U.S. Marshal’s Service to assist with the arrest of the defendant. The matter is being prosecuted by Assistant U.S. Attorney Jerrob Duffy.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Drug Gang Operating in the Lackawanna Housing Project DismantledRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned two separate indictments charging a total of 20 defendants with engaging in narcotics trafficking in the Gates Housing Project, a housing facility owned and operated by the Lackawanna Municipal Housing Authority.
“Residents of a public housing neighborhood in Lackawanna deserve the same sense of security as residents of a private housing neighborhood in others parts of our community,” said U.S. Attorney Hochul. “As these defendants will soon learn, by attempting to turn a public housing project into their personal drug trafficking headquarters, they will face increased sentences if convicted.”
“Today’s arrests will have a resounding impact on the Gates housing community residents who already face daily struggles,” said Holly L. Hubert, Assistant Special Agent in Charge of the FBI’s Buffalo Office. “Our Safe Streets Task Force has joined with the Lackawanna Police Department to remove the ‘Project Boys’ gang that perpetrated acts of violence and conducted narcotics trafficking in the resident housing where vulnerable families live. After 10 months of dogged investigation, the citizens of Lackawanna are safer in their community.”
“The City of Lackawanna is a much safer place today because of the cooperative efforts of our officers and our law enforcement partners,” said Lackawanna Police Chief James Michel. “Most of these residents are fine upstanding people looking to live and raise their families in a safe environment. With today’s arrests, this should greatly curtail the distribution of drugs and the violence within this community.”
Charged in the two indictments are:
• Jeffrey Graham, 29, of Buffalo, NY
• Rueben Fears, 31, of Lackawanna, NY
• Craig Eldridge, 25, of Lackawanna, NY
• Terry Williams, 32, of Cheektowaga, NY
• Sharon Thompson, 22, of Lackawanna, NY
• Laron Thompson, 28, of Buffalo, NY
• James Sullivan, 26, of Buffalo, NY
• Charisma Royster, 24, of Buffalo, NY
• Shavon Royal, 20, of Lackawanna, NY
• Reginald Royal, Jr., 22, of Lackawanna, NY
• Charles Rose, 35, of Lackawanna, NY
• Derrick Patterson, 39, of Lackawanna, NY
• Waldemar Pabon, 27, of Buffalo, NY
• Theodore Hines, 29, of Lackawanna, NY
• Laferald Hines, 25, of Tonawanda, NY
• Tarrell Hendrix, 31, of Lackawanna NY
• Thomas Hakeem, 68, of Lackawanna, NY
• Edward Green, 28, of Lackawanna, NY
• Jeanette Knightner, 32, of Buffalo
• Reginald Royal, Sr., 43, of Kenmore, NY
Charges include conspiracy, possession with intent to distribute and distribution of crack cocaine within 1,000 feet of public housing property, and possession with intent to distribute and distribution of crack cocaine. The various charges have penalties that include a mandatory minimum of 10 years in prison and a maximum of life.
According to Assistant U.S. Attorney Edward H. White, who is handling the case, during the course of the drug trafficking operation, the defendants are alleged to have conducted open air drug sales in and around the public housing project including hand to hand transactions. This was done in close proximity to playgrounds and recreational areas where children living in the housing project would play.
The Government is also seeking the forfeiture of any property derived from the proceeds of narcotics trafficking.
The indictments are the culmination of an investigation by the Lackawanna Police Department, under the direction of Chief James Michel and the Federal Bureau of Investigation’s Safe Street’s Task Force, which includes the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge James S. Higgins, New York Field Division, Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero. U.S. Border Patrol, under the direction of Patrol Agent in Charge Tom Pocorobba, the New York State Police, under the direction of Major Michael Cerretto, the Cheektowaga Police Department, under the direction of Chief David Zack, the Erie County Sheriff’s Department, under the direction of Timothy Howard, the Hamburg Police Department, under the direction of Chief Michael Williams, the Amherst Police Department, under the direction of Chief John Askey, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, the Lancaster Police Department, under the direction of Chief Gerald Gill, the Niagara Frontier Transportation Authority Police, under the direction of Chief George Gast, and the New York State Department of Correctional Services, under the direction of Acting Commissioner Anthony J. Annucci. Additional assistance was provided by the U.S. Marshall Service, under the direction of Charles Salina and the Tonawanda Police Department, under the direction of Chief Anthony Palombo.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Drilling Company Charged with Environmental and Maritime Crimes in AlaskaRead the Press Release
Noble Drilling (U.S.) LLC was charged with environmental and maritime crimes for operating the drill ship Noble Discoverer and the drilling unit Kulluk in violation of federal law in Alaska in 2012, the Department of Justice announced.
Under the terms of a plea agreement filed in federal court today, Noble will plead guilty to eight felony offenses, pay $12.2 million dollars in fines and community service payments, implement a comprehensive Environmental Compliance Plan, and will be placed on probation for four years. In addition, Noble’s parent corporation, Noble Corporation plc, headquartered in London, England, will implement an Environmental Management System for all Mobile Offshore Drilling Units (MODUs) owned or operated by Noble Corporation plc and its direct and indirect subsidiaries worldwide.
Noble Drilling (U.S.) LLC was charged in an eight-count Information with knowingly failing to maintain an accurate Oil Record Book and an accurate International Oil Pollution Prevention certificate, knowingly failing to maintain a ballast water record book, and knowingly and willfully failing to notify the U.S. Coast Guard of hazardous conditions aboard the drill ship Noble Discoverer. At the time of the offenses, the Noble Discoverer was operating under contract with Shell Offshore, Inc. and Shell Development, Ltd. for the purpose of drilling in the arctic in Alaska.
During the 2012 drilling season, Noble was the operator and bare boat charterer of the motor vessel Noble Discoverer and the drilling operator of the MODU Kulluk. The Kulluk was a conical-shaped vessel, weighing 27,968 gross tons, and measuring 265.7 feet in diameter. The Kulluk was not self-propelled, but rather had to be towed. The Noble Discoverer, a mobile drill ship, weighed approximately 15,296 gross tons, measured 572 feet long, and was propelled by a single main engine. In 2012, the Kulluk and the Noble Discoverer made several U.S. port calls in Washington and Alaska on their way to the Shell drilling site off the coast of Alaska. After leaving the drill site, the Kulluk ultimately ran aground off the coast of Unalaska when it broke free from its tow in bad weather, and the Noble Discoverer was dead-ship towed from Dutch Harbor to Seward due to failures with its main engine and other equipment.
Under the terms of the plea agreement, Noble admits that it knowingly made false entries and failed to record its collection, transfer, storage, and disposal of oil in the Noble Discoverer’s and the Kulluk’s oil record books in 2012. Oil record book entries falsely reflected that the Noble Discoverer’s Oil Water Separator (OWS) was used during periods of time when in fact the OWS was inoperable. Under the International MARPOL protocol and the Act to Prevent Pollution from Ships, all overboard discharges must pass through an operating OWS to insure that water pumped overboard does not contain more than 15ppm of oil.
Noble also admits that it failed to log numerous transfers and storage of machinery space bilge water and waste oil and failed to log that the Noble Discoverer’s oil content meter audible alarm was nonfunctional. Noble also made modifications to the Noble Discoverer’s new OWS system after the OWS system passed inspections by the Classification Society and the U.S. Coast Guard. Noble did not inform the U.S. Coast Guard or the Classification Society of the modifications and did not receive an International Oil Pollution Prevention certificate that documented the unapproved decanting system, the increased storage, or the new OWS piping arrangement.
Noble had problems managing the bilge and wastewater that was accumulating in the engine room spaces of the Noble Discoverer. This and other conditions led to a number of problems. Noble devised a makeshift barrel and pump system to discharge water that had entered the vessel’s engine room machinery spaces directly overboard from the Noble Discoverer without processing it through the required pollution prevention equipment as required by law. Noble failed to notify the Coast Guard about this system, and took steps to actively hide the fact that it was being used. These false and missing record entries and the use of the illegal overboard discharge system all violated the Act to Prevent Pollution from Ships.
In the factual basis of the plea agreement, Noble also admits that it negligently discharged machinery space bilge water from the Noble Discoverer into Broad Bay, Unalaska, on July 22, 2012. While anchored in Dutch Harbor, the Noble Discoverer’s bilge holding tank 27S overflowed and went overboard, creating a sheen in Broad Bay.
The Nonindigenous Aquatic Nuisance Prevention and Control Act requires vessels to maintain accurate ballast records reflecting the source of ballast water in the ballast water tanks, discharges from the tanks, and the total volume of ballast water onboard. By design, water ballast tanks should only contain uncontaminated seawater. Noble pumped oily skimmer tank fluids and deck water with a sheen into several ballast tanks on the Noble Discoverer. Noble then discharged those ballast tanks directly overboard instead of properly discharging the water through the OWS or transferring to a shore-side facility. Noble failed to record the transfers to the ballast tanks and the subsequent discharges in the ballast log.
The Ports and Waterways Safety Act regulations require that the owner, operator, or person in charge of a vessel must immediately notify the nearest Coast Guard office whenever there is a hazardous condition, either aboard a vessel or caused by the vessel or its operation. Noble knowingly and willfully failed on several occasions in 2012 to notify the U.S. Coast Guard of hazardous conditions aboard the Noble Discoverer. There were conditions aboard the Noble Discoverer that may have adversely affected the safety of the Noble Discoverer, other vessels, and the environmental quality of ports, harbors, and navigable waterways of the United States. During 2012, the Noble Discoverer experienced numerous problems with its main propulsion system, including its main engine and its propeller shaft, resulting in engine shut-downs, equipment failures, and unsafe conditions. At times, the condition of the Noble Discoverer’s main engine also created high levels of exhaust in the engine room, multiple sources of fuel and oil leaks, and backfires. Noble acknowledges that it failed to report any of these hazardous conditions to the U.S. Coast Guard.
The Noble Discoverer was initially detained in Seward by the Officer in Charge, Marine Inspection for the Western Alaska zone, following a Coast Guard Port State Control examination on November 29, 2012. This case was investigated by the U.S. Coast Guard Investigative Service and the U.S. Environmental Protection Agency Criminal Investigation Division and is being prosecuted by the Department of Justice’s Environmental Crimes Section and the United States Attorney’s Office for the District of Alaska.
Drilling Company Charged with Environmental and Maritime Crimes in AlaskaRead the Press Release
Anchorage, Alaska - Noble Drilling (U.S.) LLC was charged with environmental and maritime crimes for operating the drill ship Noble Discoverer and the drilling unit Kulluk in violation of federal law in Alaska in 2012, announced Karen L. Loeffler, U.S. Attorney for the District of Alaska, and Sam Hirsch, Acting Assistant Attorney General for the Environment and Natural Resources Division of the U.S. Department of Justice.
Under the terms of a plea agreement filed in federal court today, Noble will plead guilty to eight felony offenses, pay $12.2 million dollars in fines and community service payments, implement a comprehensive Environmental Compliance Plan, and will be placed on probation for four years. In addition, Noble’s parent corporation, Noble Corporation plc, headquartered in London, England, will implement an Environmental Management System for all Mobile Offshore Drilling Units (MODUs) owned or operated by Noble Corporation plc and its direct and indirect subsidiaries worldwide.
Noble Drilling (U.S.) LLC was charged in an eight-count Information with knowingly failing to maintain an accurate Oil Record Book and an accurate International Oil Pollution Prevention certificate, knowingly failing to maintain a ballast water record book, and knowingly and willfully failing to notify the U.S. Coast Guard of hazardous conditions aboard the drill ship Noble Discoverer. At the time of the offenses, the Noble Discoverer was operating under contract with Shell Offshore, Inc. and Shell Development, Ltd. for the purpose of drilling in the arctic in Alaska.
During the 2012 drilling season, Noble was the operator and bare boat charterer of the motor vessel Noble Discoverer and the drilling operator of the MODU Kulluk. The Kulluk was a conical-shaped vessel, weighing 27,968 gross tons, and measuring 265.7 feet in diameter. The Kulluk was not self-propelled, but rather had to be towed. The Noble Discoverer, a mobile drill ship, weighed approximately 15,296 gross tons, measured 572 feet long, and was propelled by a single main engine. In 2012, the Kulluk and the Noble Discoverer made several U.S. port calls in Washington and Alaska on their way to the Shell drilling site off the coast of Alaska. After leaving the drill site, the Kulluk ultimately ran aground off the coast of Unalaska when it broke free from its tow in bad weather, and the Noble Discoverer was dead-ship towed from Dutch Harbor to Seward due to failures with its main engine and other equipment.
Under the terms of the plea agreement, Noble admits that it knowingly made false entries and failed to record its collection, transfer, storage, and disposal of oil in the Noble Discoverer’s and the Kulluk’s Oil Record Books in 2012. Oil Record Book entries falsely reflected that the Noble Discoverer’s Oil Water Separator (OWS) was used during periods of time when in fact the OWS was inoperable. Under the International MARPOL protocol and the Act to Prevent Pollution from Ships, all overboard discharges must pass through an operating OWS to insure that water pumped overboard does not contain more than 15ppm of oil.
Noble also admits that it failed to log numerous transfers and storage of machinery space bilge water and waste oil and failed to log that the Noble Discoverer’s oil content meter audible alarm was nonfunctional. Noble also made modifications to the Noble Discoverer’s new OWS system after the OWS system passed inspections by the Classification Society and the U.S. Coast Guard. Noble did not inform the U.S. Coast Guard or the Classification Society of the modifications and did not receive an International Oil Pollution Prevention certificate that documented the unapproved decanting system, the increased storage, or the new OWS piping arrangement.
Noble had problems managing the bilge and wastewater that was accumulating in the engine room spaces of the Noble Discoverer. This and other conditions led to a number of problems. Noble devised a makeshift barrel and pump system to discharge water that had entered the vessel’s engine room machinery spaces directly overboard from the Noble Discoverer without processing it through the required pollution prevention equipment as required by law. Noble failed to notify the Coast Guard about this system, and took steps to actively hide the fact that it was being used. These false and missing record entries and the use of the illegal overboard discharge system all violated the Act to Prevent Pollution from Ships.
In the factual basis of the plea agreement, Noble also admits that it negligently discharged machinery space bilge water from the Noble Discoverer into Broad Bay, Unalaska, on July 22, 2012. While anchored in Dutch Harbor, the Noble Discoverer’s bilge holding tank 27S overflowed and went overboard, creating a sheen in Broad Bay.
The Nonindigenous Aquatic Nuisance Prevention and Control Act requires vessels to maintain accurate ballast records reflecting the source of ballast water in the ballast water tanks, discharges from the tanks, and the total volume of ballast water onboard. By design, water ballast tanks should only contain uncontaminated seawater. Noble pumped oily skimmer tank fluids and deck water with a sheen into several ballast tanks on the Noble Discoverer. Noble then discharged those ballast tanks directly overboard instead of properly discharging the water through the OWS or transferring to a shore-side facility. Noble failed to record the transfers to the ballast tanks and the subsequent discharges in the ballast log.
The Ports and Waterways Safety Act regulations require that the owner, operator, or person in charge of a vessel must immediately notify the nearest Coast Guard office whenever there is a hazardous condition, either aboard a vessel or caused by the vessel or its operation. Noble knowingly and willfully failed on several occasions in 2012 to notify the U.S. Coast Guard of hazardous conditions aboard the Noble Discoverer. There were conditions aboard the Noble Discoverer that may have adversely affected the safety of the Noble Discoverer, other vessels, and the environmental quality of ports, harbors, and navigable waterways of the United States. During 2012, the Noble Discoverer experienced numerous problems with its main propulsion system, including its main engine and its propeller shaft, resulting in engine shut-downs, equipment failures, and unsafe conditions. At times, the condition of the Noble Discoverer’s main engine also created high levels of exhaust in the engine room, multiple sources of fuel and oil leaks, and backfires. Noble acknowledges that it failed to report any of these hazardous conditions to the U.S. Coast Guard.
The Noble Discoverer was initially detained in Seward by the Officer In Charge, Marine Inspection for the Western Alaska zone, following a Coast Guard Port State Control examination on November 29, 2012. This case was investigated by the U.S. Coast Guard Investigative Service and the U.S. Environmental Protection Agency Criminal Investigation Division and is being prosecuted by the Department of Justice’s Environmental Crimes Section and the United States Attorney’s Office for the District of Alaska.Documents and Resources from the December 8, 2014, OtisMed and Charlie Chi Press ConferenceRead the Press Release
Press Release
OtisMed News Release
Court Documents:OtisMed
OtisMed Information
OtisMed Plea Agreement with Attachments
Stryker Side Letter Agreement
OtisMed Civil Settlement Agreement
Charlie Chi
Charlie Chi Information
Charlie Chi Plea Agreement
Government Exhibits from OtisMed Sentencing:Exhibit 1
Exhibit 2
Exhibit 3 - Video with no audio. Video description: The bones of the diseased preoperative knee joint rotate on the left side of the screen. On the right, a progressive series of magnetic resonance imaging (MRI) images of the same knee are displayed. The MRI images are transformed into a computer-generated three dimensional model of the knee that rotates in the center of the screen. A computer-generated yellow grid is superimposed over the surfaces of the rotating computer model, illustrating the contours of the bone structure. As it rotates, the prosthetic knee implant appears, affixed to the articular surfaces of the bones. The screen then returns to the depiction of the diseased knee, and the OtisKnee cutting guide is affixed to the surface of the femoral condyles. A bone saw is inserted through the cutting guide and cuts through the bone. The guide and cut surface are removed to reveal the prepared femoral surface, following the completion of the femoral cuts. The metallic femoral knee prosthesis is affixed to the femur. The same cutting process is illustrated with regard to the tibia: the OtisKnee cutting guide is placed over the diseased tibial end, the bone saw is inserted through the slot in the cutting guide, removing the articular surface, and the tibial prosthetic implant is placed on the cut surface.
Doctor Sentenced to 57 Months in Prison for Selling Oxycodone Prescriptions to Addicts and Dealers for Cash and GiftsRead the Press Release
SAN DIEGO – Del Mar physician William Joseph Watson today became the first doctor in the Southern District of California in recent memory to be sentenced to federal prison for prescribing thousands of Oxycodone pills and other highly addictive painkillers without any legitimate medical purpose.
U.S. District Judge James M. Lorenz sentenced Watson to almost five years in custody at a hearing this morning in federal court. Watson pleaded guilty in August - the morning his trial was set to begin - to one count of conspiracy to distribute and dispense oxycodone, known by the brand name of OxyContin, without a legitimate medical purpose.
Watson admitted that he sold the prescriptions to addicts, who then used them recreationally or sold them on the street. According to court records, Watson accepted thousands of dollars in cash or luxury goods, such as designer handbags, jewelry and fine wines, in exchange for the Oxycodone prescriptions.
“This is a sentence that sends a very strong message to doctors,” said U.S. Attorney Laura Duffy. “If you disregard your sacred duty as a physician to do no harm, and you use your prescription pad to fuel the painkiller epidemic gripping this country, you do so at your own peril, with the very real prospect of going to prison.”
“The sentencing of former doctor Joseph Watson today demonstrates the seriousness of the crimes involving prescription drugs,” said San Diego DEA Special Agent in Charge William R. Sherman. “Mr. Watson went from being a physician to a drug dealer for the simple reason that any criminal resorts to drug trafficking: Greed. The diversion of prescription drugs from their intended use continues to be a serious issue and DEA is committed to investigating and arresting anyone who diverts prescription drugs for illegal use.”
At today’s sentencing hearing, Assistant U.S. Attorney Fred Sheppard urged the court to impose a significant sentence as a warning to other doctors. Sheppard noted that Watson’s actions contributed to the overdose death of one of his young patients.
“Let it ring from this court room: If you take that oath to do no harm and sell it for a couple hundred dollars, you're going to prison,” Sheppard said.
Watson was ordered to surrender on January 8, 2015, to begin serving his sentence. He was also sentenced to three years of supervised release.
DEFENDANTS Case Number: 13cr2988 William Joseph Watson Age: 59 Del Mar, California CHARGESTitle 21, United States Code, Sections 841(a)(1)
INVESTIGATING AGENCYU.S. Drug Enforcement Administration
Doctor Sentenced to 2 Years in Prison in Medicare Fraud SchemeRead the Press Release
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USDOJ: US Attorney's Office - CENTRAL DISTRICT OF CALIFORNIA - 159LOS ANGELES – A Los Angeles-area physician whose referrals led to more than $1.7 million in fraudulent Medicare billings was sentenced this afternoon to 24 months in federal prison for his role in a conspiracy to defraud Medicare related to medically unnecessary power wheelchairs and other durable medical equipment.
Charles Okoye, a 52-year-old Carson resident who formerly operated a medical clinic in South Los Angeles, was sentenced by United States District Court Judge Michael W. Fitzgerald, who also ordered the defendant to pay $931,118 in restitution.
Okoye pleaded guilty in August and admitted that he referred Medicare beneficiaries to a Gardena durable medical equipment supply company for power wheelchairs and other durable medical equipment (DME). These beneficiaries had been recruited by employees of Adelco Medical Distributors, Inc. and taken to see Okoye for a single, cursory examination, after which Okoye made the referrals to Adelco.
Adelco’s owner, Adeline Ekwebelem, paid Okoye an illegal kickback for every referral, and then billed Medicare more than $1.7 million for providing the DME, which the beneficiaries did not need or want and often never used. Medicare paid Adelco more than $820,000 on those claims. Ekwebelem was found guilty in September of conspiracy to commit health care fraud, health care fraud, and the payment of illegal kickbacks (see: http://www.justice.gov/usao/cac/Pressroom/2014/122.html). Judge Fitzgerald is scheduled to sentence Ekwebelem on January 15.
Okoye admitted that he engaged in a similar unlawful arrangement with another DME company, Esteem Medical Supply.
As a result of his guilty plea and conviction, Okoye’s medical license will likely be suspended for at least three years, and he will likely lose his ability to bill Medicare and Medi-Cal for patient services in the future.
The investigation into Okoye, Ekwebelem, and others involved with Adelco’s fraudulent scheme to defraud Medicare was conducted by the U.S. Department of Health and Human Services, Office of the Inspector General, and the Federal Bureau of Investigation.
Release No. 14-159
Detroit One Collaboration Leads to Convictions of Violent Drug Gang in Northwest DetroitRead the Press Release
The collaboration of local, state and federal law enforcement under the Detroit One program led to convictions of three individuals who were involved in a violent, armed drug gang located in northwest Detroit, United States Attorney Barbara L. McQuade announced.
Mohamed Faraj, Fouad Faraj, and Mohamed Ayoub, were convicted of a variety of charges after a six-week trial before U.S. District Judge Stephen J. Murphy, III. The drug crew had been distributing marijuana and prescription pills in the Warrendale neighborhood in Detroit from 2009 until their arrests in August 2013. The criminal enterprise led by the two Faraj brothers employed teenagers and young men to act as their street level distributors. These young workers regularly had access to firearms supplied by the leaders. The group committed arson to create stash houses and to further the enterprise=s narcotics distribution activities.
The investigation was coordinated by the Detroit One Initiative, through the lead efforts of the Comprehensive Violence Reduction Partnership, consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Detroit Police Department, Michigan State Police, Michigan Department of Corrections, and assisted by the Federal Bureau of Investigation, Homeland Security Investigations, and the Internal Revenue Service, Criminal Investigations. By sharing information and coordinating efforts, investigators were able to link suspects and incidents to uncover the scope of the organization and identify its members. Seven members of the group now stand convicted of federal charges.The three men convicted at trial were:
- Mohamed Faraj, 31, of Dearborn Heights, who was found guilty of continuing criminal enterprise, conspiracy to possess with intent to distribute controlled substances, and use of a telecommunications device in furtherance of narcotics trafficking;
- Fouad Faraj, 44, of Dearborn Heights, who was found guilty of continuing criminal enterprise and conspiracy to possess with intent to distribute controlled substances; and
- Mohamed Ayoub, 32, of Dearborn Heights, was found guilty of conspiracy to possess with intent to distribute controlled substances.
These convictions follow the guilty pleas of the following members of the crew:
- Mohammed Abdul Alhakami, 23, of Detroit, who pleaded guilty to possession of firearms in furtherance of narcotics trafficking;
- Ali Al-Hisnawi, 22, of Detroit, who pleaded guilty to conspiracy to possess with intent to distribute controlled substances; and
- Zaidon Al-Beheia, 26, of Dearborn, who pleaded guilty to conspiracy to possess with intent to distribute controlled substances; and
- Adnan Bazzi, 28, of Dearborn, who pleaded guilty to conspiracy to possess with intent to distribute controlled substances.
- Abed Faraj, 40, of Detroit was acquitted of the charges against him.
“The convictions of this drug trafficking organization is the direct result of the collaboration of the Detroit One effort, where we are sharing information and working together to connect the dots between federal, state and local investigations,” McQuade said. “This group caused significant damage to the Warrendale community, exploiting teenage boys to do their dirty work on the street as drug runners and burning homes to use as stash houses.”
Detroit One is a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit. By working collaboratively, local, state, and federal law enforcement is striving to maximize its ability to identify and arrest the persons and groups initiating the violence in Detroit.
Delaware Man Convicted of Heroin TraffickingRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – Clarksburg, West Virginia resident Antonio DeJesus, 28, originally of Delaware, was convicted today in federal court on heroin trafficking charges, United States Attorney William J. Ihlenfeld, II announced.
An investigation by the Clarksburg, West Virginia Police Department and the Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, revealed that DeJesus was involved in heroin trafficking throughout August and September 2014.
DeJesus pled guilty today to one count of “Conspiracy to Possess with Intent to Distribute and to Distribute Heroin.” He faces up to 20 years in prison and a fine of up to $1,000,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Shawn Morgan is prosecuting the case on behalf of the government.
U.S. Magistrate Judge John S. Kaull presided.
Defense Contractor Pleads Guilty to Major Fraud in Provision of Supplies to U.S. Troops in AfghanistanRead the Press Release
Supreme Foodservice GmbH, a privately held Swiss company, and Supreme Foodservice FZE, a privately-held United Arab Emirates (UAE) company, pleaded guilty today to major fraud against the United States and agreed to resolve civil violations of the False Claims Act, in connection with a contract to provide food and water to the U.S. troops serving in Afghanistan, the Justice Department announced today. The companies pleaded guilty in the Eastern District of Pennsylvania (EDPA) and paid $288.36 million in the criminal case, a sum that includes the maximum criminal fine allowed.
In addition, Supreme Group B.V. and several of its subsidiaries have agreed to pay an additional $146 million to resolve a related civil lawsuit, as well as two separate civil matters, alleging false billings to the Department of Defense (DoD) for fuel and transporting cargo to American soldiers in Afghanistan. The lawsuit was filed in the EDPA, and the fuel and transportation allegations were investigated by the Southern District of Illinois and the Eastern District of Virginia, respectively, along with the Department’s Civil Division.
“The civil resolutions and agreements reflect the Justice Department’s continuing efforts to hold accountable contractors that have engaged in war profiteering,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “The department will pursue contractors that knowingly seek taxpayer funds to which they are not entitled.”
“These companies chose to commit their fraud in connection with a contract to supply food and water to our nation’s fighting men and women serving in Afghanistan,” said U.S. Attorney Zane David Memeger for the Eastern District of Pennsylvania. “That kind of conduct is repugnant, and we will use every available resource to punish such illegal war profiteering.”
The Criminal Fraud
In 2005, Supreme Foodservice AG, now called Supreme Foodservice GmbH, entered into a contract with the Defense Supply Center of Philadelphia (DSCP, now called Defense Logistics Agency – Troop Support) to provide food and water for the U.S. forces serving in Afghanistan. According to court documents, between July 2005 and April 2009, Supreme Foodservice AG, together with Supreme Foodservice KG, now called Supreme Foodservice FZE, devised and implemented a scheme to overcharge the United States in order to make profits over and above those provided in the $8.8 billion subsistence prime vendor (SPV) contract. The companies fraudulently inflated the price charged for local market ready goods (LMR) and bottled water sold to the United States under the SPV contract. The Supreme companies did this by using a UAE company it controlled, Jamal Ahli Foods Co. LLC (JAFCO), as a middleman to mark up prices for fresh fruits and vegetables and other locally-produced products sold to the U.S. government, and to obscure the inflated price the Supreme companies were charging for bottled water. The fraud resulted in a loss to the government of $48 million.
Supreme AG, Supreme FZE and Supreme’s owners (referred to in court documents as Supreme Owners #1 and #2) made concentrated efforts to conceal Supreme’s true relationship with JAFCO, and to make JAFCO appear to be an independent company. They also took steps to make JAFCO’s mark-up on LMR look legitimate, and persisted in the fraudulent mark-ups even in the face of questions from DSCP about the pricing of LMR.
Even though the SPV contract stated that the Supreme food companies should charge the government the supplier’s price for the goods, emails between executives at the companies (referred to as Supreme Executive #1, #2, etc) reveal the companies’ deliberate decision to inflate the prices. Among other things, Supreme Owner #1 increased the mark-up that JAFCO would impose on non-alcoholic beer from 25 percent to 125 percent. On or about Feb. 16, 2006, during a discussion about supplying a new product to the U.S. government, one Supreme executive wrote to another, “I am very sure the best option is to buy it from Germany and mark up via [JAFCO], like [non-alcoholic] beer.”
In early March 2006, after a DSCP contracting officer told the Supreme food companies that she wanted to see a manufacturer’s invoice for specific frozen products, Supreme Foodservice GmbH lowered its prices for those products to prices that did not include a JAFCO mark-up. On March 14, 2006, instead of disclosing that the initial pricing had included a mark-up, a Supreme executive misled the DSCP representative by saying, “Based on more realistic quantities, we have been able to negotiate a better price,” to explain the change in pricing.
In June 2006, when a DSCP contracting officer raised questions about pricing focusing on four specific items, Supreme executives again misled the DSCP, claiming that the high prices were for a high quality of product, and offering to sell lower quality products for lower prices. Supreme Foodservice GmbH did this even after analyzing its JAFCO margin on the four items in question and finding its profit margins were between 41 and 56 percent.
In September 2007, after a fired Supreme executive threatened to tell the DSCP about the fraud, his former employer entered into negotiation of a “separation agreement” with that executive to induce that executive not to disclose the ways in which the Supreme food companies were overcharging the DSCP. The agreement stated that the executive would receive, among other things, a payment of 400,000 euros in September 2010, provided that the executive did not cause: a deterioration in the economic situation linked to the SPV contract; the termination of the SPV contract; or a decrease in the price levels for products, specifically including LMR and bottled water provided to the U.S. government.
Defendant Supreme GmbH pleaded guilty to major fraud against the United States, conspiracy to commit major fraud and wire fraud. Supreme FZE, which owns JAFCO, pleaded guilty to major fraud against the United States. The Supreme companies agreed to jointly pay $48 million in restitution and $10 million in criminal forfeiture. Each company also agreed to pay $96 million in criminal fines. In addition, as a result of the criminal investigation, the Supreme companies paid $38.3 million directly to the DSCP as a refund for separate overpayments on bottled water.
The Civil Settlements
In a related civil settlement, Supreme Group agreed to pay another $101 million to settle a whistleblower lawsuit, filed in the U.S. District Court for the EDPA by a former executive, which alleged that Supreme Group, and its food subsidiaries, violated the False Claims Act by knowingly overcharging for supplying food and water under the SPV contract. The payment also resolves claims that, from June 2005 to December 2010, the Supreme food companies failed to disclose and pass through to the government rebates and discounts it obtained from its suppliers, as required by its SPV contract with the United States.
“Today’s results are part of an ongoing effort by the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to protect the integrity of the Department of Defense's acquisition process from personal and corporate greed,” said Deputy Inspector General for Investigations James B. Burch for the U.S. Department of Defense’s Office of the Inspector General. “The Defense Criminal Investigative Service will continue to pursue allegations of fraud and corruption that puts the Warfighter at risk.”
“We are very pleased with this resolution, and are gratified that the public can now see what we've been aggressively investigating,” said Director Frank Robey of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit (MPFU). “Companies that do business with the government must comply with all of their obligations, and if they overcharge for supplying our men and women in uniform who are bravely serving this nation, they must be held accountable for their actions.”
Separately, Supreme Site Services GmbH, a Supreme Group subsidiary, agreed to pay $20 million to settle allegations that they overbilled for fuel purchased by the Defense Logistics Agency (DLA) for Kandahar Air Field (KAF) in Afghanistan under a NATO Basic Ordering Agreement. The government alleged that Supreme Site Services’ drivers were stealing fuel destined for KAF generators while en route for which the company falsely billed DLA.
“It is important that government contractors supporting conflicts abroad be held accountable for their billings to the government,” said U.S. Attorney Dana J. Boente for the Eastern District of Virginia. “The DoD investigating components are instrumental in protecting the interests of the government, and their efforts in this investigation are to be commended.”
Supreme Group’s subsidiary Supreme Logistics FZE also has agreed to pay $25 million to resolve alleged false billings by Supreme Logistics in connection with shipping contracts between the U.S. Transportation Command (USTRANSCOM), located at Scott Air Force Base in Illinois, and various shipping carriers to transport food to U.S. troops in Afghanistan during Operation Enduring Freedom. The shipping carriers transported cargo destined for U.S. troops from the United States to Latvia or other intermediate ports, and then arranged with logistics vendors, including Supreme Logistics, to carry the cargo the rest of the way to Afghanistan. The United States alleged that Supreme Logistics falsely billed USTRANSCOM for higher-priced refrigerated trucks when it actually used lower-priced non-refrigerated trucks to transport the cargo.
“The U.S. Attorney’s Office for the Southern District of Illinois is committed to protecting the integrity of all of the vital missions carried out at Scott Air Force Base, including the mission of the U.S. Transportation Command,” said U.S. Attorney Stephen R. Wigginton for the Southern District of Illinois. “These vital services carried out by the brave men and women of the armed forces of the United States deserve, and will receive, our full support, and this office will do everything possible to protect their missions.”
“These settlements are victories for American taxpayers,” said Special Inspector General John F. Sopko for Afghanistan Reconstruction. “It sends a clear signal that whether a case involves a mom and pop outfit or a major multinational corporation, we will work tirelessly with our investigative partners to pursue justice any time U.S. dollars supporting the mission in Afghanistan are misused.”
The EDPA lawsuit was initially filed under the qui tam or whistleblower provisions of the False Claims Act, by Michael Epp, Supreme GmbH’s former Director, Commercial Division and Supply Chain. The False Claims Act prohibits the submission of false claims for government money or property and allows the United States to recover treble damages and penalties for a violation. Under the Act’s whistleblower provisions, a private party may file suit on behalf of the United States and share in any recovery. The case remained under seal to permit the United States to investigate the allegations and decide whether to intervene and take over the case. Epp will receive $16.16 million as his share of the government’s settlement of the lawsuit.
The criminal and civil matters in the EDPA were the result of a coordinated effort by the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Pennsylvania, DCIS, U.S. Army’s Criminal Investigative Command’s MPFU and the FBI.
The investigation of Supreme Site Services ’ alleged false billings for fuel was conducted by the Civil Division and the U.S. Attorney’s Office for the Eastern District of Virginia, and the investigation of Supreme Logistics’ alleged false invoices for transportation was handled by the Civil Division and the U.S. Attorney’s Office for the Southern District of Illinois. Both matters were investigated by the Defense Contract Audit Agency Office of Investigative Support, the Army Audit Agency, the International Contract Corruption Task Force, the U.S. Army’s Criminal Investigative Command’s Major Procurement Fraud Unit, the DoD Office of Inspector General’s DCIS, the Special Inspector General for Afghan Reconstruction, the U.S. Air Force Office of Special Investigations and the Naval Criminal Investigative Service.
The claims resolved by the civil settlements are allegations only, except for the conduct for which the Supreme food companies have pleaded guilty.
Defense Contractor Pleads Guilty to Major Fraud in the Provision of Supplies to U.S. Troops in AfghanistanRead the Press Release
Supreme Foodservice Agrees To Pay $389 Million In Fines, Damages and Penalties
PHILADELPHIA – The United States announced today the resolution of criminal fraud and civil False Claims Act cases against Supreme Foodservice GmbH, a privately-held Swiss company, and Supreme Foodservice FZE, a privately-held United Arab Emirates (“UAE”) company, in connection with a contract to provide food and water to the U.S. troops serving in Afghanistan. The companies pleaded guilty to major fraud against the United States and paid $288.36 million in the criminal case, a sum which includes the maximum criminal fines allowed. In addition, Supreme Group B.V., a privately held Dutch corporation, and its subsidiaries, Supreme Foodservice GmbH and Supreme Foodservice FZE, have agreed to pay $101 million to resolve allegations in a whistleblower lawsuit that Supreme violated the False Claims Act. The plea and settlement were announced by United States Attorney Zane David Memeger.
The Criminal Fraud
In 2005, Supreme Foodservice AG (which is now called Supreme Foodservice GmbH) entered into a contract with the Defense Supply Center of Philadelphia (“DSCP,” now called Defense Logistics Agency – Troop Support), to provide food and water for the U.S. forces serving in Afghanistan. According to court documents, between July 2005 and April 2009, Supreme Foodservice AG together with Supreme Foodservice KG (which is now called Supreme Foodservice FZE) devised and implemented a scheme to overcharge the United States in order to make profits over and above those provided in the $8.8 billion Subsistence Prime Vendor Contract (“the SPV contract”). The companies fraudulently inflated the price charged for Local Market Ready goods (or LMR) and bottled water sold to the United States under the SPV contract. Supreme did this by using a UAE company it controlled, called Jamal Ahli Foods Co., LLC (“JAFCO”), as a middleman to mark up prices for fresh fruits and vegetables and other locally-produced products sold to the U.S. government, and to obscure the inflated price Supreme was charging for bottled water. The fraud resulted in a loss to the government of $48 million. In addition, as a result of the criminal investigation, Supreme paid $38.3 million directly to the DSCP as a refund for separate overpayments on bottled water.
Supreme AG, Supreme FZE, and Supreme’s owners (referred to in court documents as Supreme Owners #1 and #2) made concerted efforts to conceal Supreme’s true relationship with JAFCO, and to make JAFCO appear to be an independent company. They also took steps to make JAFCO’s mark-up on LMR look legitimate, and persisted in the fraudulent mark-ups even in the face of questions from DSCP about the pricing of LMR.
Even though the SPV contract stated that Supreme should charge the government the supplier’s price for the goods, emails between executives at Supreme (referred to as Supreme Executive #1, #2, etc) reveal Supreme’s deliberate decision to inflate the prices. For example, on or about August 22, 2005, a Supreme Executive sent an email to Supreme Owner#1 saying that the prices he proposed for certain items already included margins of “approximately 57-60%” over the price from the supplier. Another Supreme Executive sent a reply email recommending that Supreme not raise the prices further because “we would like to stay credible with the customer,” and would not want to invite a “challenge” from the DSCP. In September of 2005, Supreme Owner#1 specifically instructed other top management within Supreme that he would personally “review the LMR mark-up before [JAFCO] makes its first shipment.” Among other things, Supreme Owner#1 increased the markup that JAFCO would impose on non-alcoholic beer from 25 percent to 125 percent. On or about February 16, 2006, during a discussion about supplying a new product to the U.S. government, one Supreme Executive wrote to another: “I am very sure the best option is to buy it from Germany and Mark up via [JAFCO], like [non-alcoholic] beer.”
On or about March 18, 2006, in discussing whether they could inflate the price for ice cubes to be sold to the DSCP, a Supreme Executive wrote to Supreme Owner#1, among others: “I don’t think we can mark up through [JAFCO] since DSCP knows price from [the supplier].” That same day, Supreme Owner#1 forwarded that March 18, 2006 email to Supreme Owner#2, commenting “There are dozens of emails like that one.”
In early March 2006, after a DSCP contracting officer told Supreme that she wanted to see a manufacturer’s invoice for specific frozen products, Supreme lowered its prices for those products to prices that did not include a JAFCO mark-up. On March 14, 2006, instead of disclosing that the initial pricing had included a mark-up, a Supreme Executive misled the DSCP representative by explaining the change in pricing as follows: “Based on more realistic quantities, we have been able to negotiate a better price.”
In June 2006, when a DSCP contracting officer raised questions about pricing, focusing on four specific items, Supreme Executives again misled the DSCP, claiming that the high prices were for a high quality of product, and offering to sell lower quality products for lower prices. Supreme did this even after analyzing its JAFCO margin on the four items in question and finding its profit margins were between 41 and 56 percent.
In September 2007, after a fired Supreme Executive threatened to tell the DSCP about the fraud, Supreme entered into negotiation of a “Separation Agreement” with that executive to induce that executive not to disclose the ways in which Supreme was overcharging the DSCP. That agreement stated that the executive would receive, among other things, a payment of EUR 400,000 in September of 2010, provided that the executive did not cause: a deterioration in the economic situation linked to the SPV Contract; the termination of the SPV Contract; or a decrease in the price levels for products, specifically including both LMR and bottled water provided to the U.S. government.
Supreme’s overcharging was exposed in early March 2009, when a former Supreme employee notified the DSCP that Supreme owned and controlled JAFCO, and that JAFCO was adding a mark-up to the Delivered Price of goods. The DSCP contacted Supreme and ordered the mark-ups stopped. The mark-ups ceased as of April 1, 2009.
Defendant Supreme GmbH pleaded guilty to Major Fraud Against the United States, Conspiracy to Commit Major Fraud, and Wire Fraud. Defendant Supreme FZE, which owns JAFCO, pleaded guilty to Major Fraud Against the United States. The Supreme companies agreed to jointly pay $48 million in restitution, and $10 million in criminal forfeiture. Each company also agreed to pay $96 million in criminal fines. In addition, U.S. District Court Judge Gene E.K. Pratter ordered Supreme AG, as a condition of the five years’ probation she imposed, to hold an annual service event to honor or assist veterans and/or the families of veteran.The Civil Settlement
In a separate civil settlement agreement, Supreme agreed to pay another $101 million to settle a whistleblower lawsuit filed in the U.S. District Court for the Eastern District of Pennsylvania, before U.S. District Court Judge Mary McLaughlin. The suit was filed by a former executive alleging that Supreme violated the False Claims Act by knowingly overcharging for supplying food and water under the SPV contract. The payment also resolves claims that, from June 2005 to December 2010, Supreme failed to disclose and pass through to the government rebates and discounts it obtained from its suppliers, as required by its SPV contract with the United States.
“These companies chose to commit their fraud in connection with a contract to supply food and water to our Nation’s fighting men and women serving in the desert,” said Memeger. “That kind of conduct is repugnant, and we will use every available resource to punish such illegal war profiteering.”
“These cases demonstrate the continued commitment of the Defense Criminal Investigative Service (DCIS) and our partner agencies to protect the integrity of the Department of Defense's acquisition process from personal and corporate greed,” said Craig W. Rupert, Special Agent in Charge, DCIS Northeast Field Office. “Each dollar lost to fraud is a taxpayer dollar unavailable to protect our warfighters. Ensuring the proper use of U.S. taxpayers' dollars and preventing contract fraud is in our nations' security interest and remains a DCIS priority.”
“We are very pleased with this resolution, and are gratified that the public can now see what we've been aggressively investigating,” said Frank Robey, the Director of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit. “Companies that do business with the government must comply with all of their obligations, and if they overcharge for supplying our men and women in uniform who are bravely serving this nation, they must be held accountable for their actions.”
The criminal and civil matters were the result of a coordinated effort by the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the Civil Division of the United States Department of Justice, the Department of Defense Office of Inspector General’s Defense Criminal Investigative Service, U.S. Army’s Criminal Investigative Command’s Major Procurement Fraud Unit, and the Federal Bureau of Investigation.
The criminal matter is being handled by Assistant United States Attorney Bea L. Witzleben. The civil matter is being handled by Assistant United States Attorneys Colin M. Cherico and Joel Sweet, along with Art Coulter, Trial Attorney for the Civil Frauds Section of the Department of Justice.
The company's owners and assets are outside the reach of the United States.Click here to view the information.
Click here to view the settlement agreement.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Defendant Sentenced for Money Laundering Charge Involving Tax FraudRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Paula Reid, Special Agent in Charge, United States Secret Service (USSS), Miami Field Office, announce that Price Jules, 41, of Miami, was sentenced to 57 months in prison, to be followed by three years of supervised release. Jules previously pled guilty to one count of money laundering, in violation of Title 18, United States Code, Section 1957, for knowingly laundering the proceeds of tax fraud.
According to court documents, the IRS uncovered a pattern of approximately 1,285 attempted fraudulent tax claims seeking approximately $5.7 million in refunds. The IRS paid out $2.74 million in refunds to accounts controlled by another individual, but then approximately $2.3 million left these accounts and was deposited into accounts controlled by Jules and other individuals. There were approximately $629,942 in cash withdrawals and approximately $34,000 in ATM withdrawals from the bank accounts that Jules controlled.
Jules knew that the laundered money was the proceeds of tax fraud because he received approximately $180,000 of tax fraud directly into his personal E-Trade account and approximately $73,000 into his personal bank account. In addition, Jules spoke about engaging in tax fraud and offered to launder the proceeds of tax fraud for a fee.
None of the individuals or estates of individuals listed on the tax returns received any money.
Mr. Ferrer commended the investigative efforts of IRS-CI and the USSS. The case was prosecuted by Assistant U.S. Attorneys H. Ron Davidson and Susan Osborne.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Copley Man Charged for Role in $17 Million Investment FraudRead the Press Release
A Copley man was charged in federal court with defrauding about 70 investors out of approximately $17 million, law enforcement officials said.
Kenneth A. Grant, 66, was charged in a criminal information with one count of conspiracy to commit wire fraud and securities fraud and one count of money laundering.
The charges were announced by Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office, and Kathy Enstrom, Special Agent in Charge, IRS-Criminal Investigations, Cincinnati Field Office.
“This case is another sad reminder that so-called investment gurus who make promises of big guaranteed returns should send up red flags,” Dettelbach said. “If something seems too good to be true, it usually is.”
“Ken Grant callously preyed on the desires of many to make wise investments for a secure future and duped them out of their life savings,” Anthony said. “Fraudsters such as Mr. Grant remain a top priority of the FBI.”
“Mr. Grant overpromised and then stole his investors’ funds. Investment fraud is not a victimless crime,” Enstrom said. “IRS Criminal Investigation is proud to bring our forensic accounting skills to this joint venture and help put a stop to this and other types of white collar crime.”
Grant and another individual owned and operated KGTA Petroleum, Ltd. Grant and others marketed KGTA as a company that earned profits from buying and selling crude oil and refined fuel products. Grant and others represented to investors that they had relationships with third-party purchasers and investor funds would be used to purchase fuel products at a discount and then resold at substantial profit, according to the information.
KGTA issued investment agreements and promissory notes which offered guaranteed monthly payments up to 5 percent per month or annual payments of approximately 60 percent per year, according to the information. Grant and others – including three registered representatives with PrimeSolutions Securities Inc. in the Akron area – never filed documentation about KGTA with the Securities and Exchange Commission, according to the information.
Grant and others obtained approximately $31 million from about 70 investors between 2010 and 2014 through false and fraudulent pretenses. Grant and others knew KGTA did not have agreements in place to sell oil and fuel, and that investors would not earn 5 percent per month on their investments, according to the information.
Grant and others used investor money for personal expenditures and luxury items including a Mercedes Benz, a boat and mortgage payments on high-end residential property. As a result of the conspiracy, Grant and others defrauded the investors out of approximately $17 million, according to the information.
This case is being prosecuted by Assistant U.S. Attorney Mark S. Bennett and Special Assistant U.S. Attorney Derek Kleinmann following an investigation by the Federal Bureau of Investigation and Internal Revenue Service – Criminal Investigations.
If convicted, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
A criminal information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Conspirator Pleads Guilty on Eve of Trial in Car Dealership Fraud SchemeRead the Press Release
Used Stolen Identities to Purchase Expensive Cars
Greenbelt, Maryland – Juan Carlos Willis, age 41, of Hyattsville, Maryland pleaded guilty today to conspiring to commit wire fraud and aggravated identity theft in connection with a scheme to use the stolen identity of others to purchase expensive cars. Willis was scheduled to begin trial tomorrow.The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kathy A. Michalko of the United States Secret Service B Washington Field Office; Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division; and Chief J. Thomas Manger of the Montgomery County Police Department.
According to his plea agreement, Willis, Flinton Newton and others obtained the identity information of credit-worthy individuals, created false identity documents in the names of those individuals, then posed as those individuals at automotive dealerships in order to apply for vehicle financing. Willis and his coconspirators filled out credit applications and obtained loans in the names of the identity theft victims to purchase, or attempt to purchase, expensive cars from dealers in Maryland and Virginia. They intended to either use the luxury vehicles themselves, or rent or sell them.
On July 19, 2012, Willis and Newton went to Capitol Cadillac in Greenbelt. Newton posed as another person whose identity he had fraudulently obtained, to apply for $80,663 in financing to purchase a 2013 Cadillac Escalade in the victim’s name. Willis used online access to an insurance policy written on a co-conspirator’s business to obtain proof of insurance in support of the vehicle purchase.
Later that evening, Willis and Newton drove to Mercedes-Benz of Silver Spring where Newton again posed as the victim. The men attempted to purchase a 2012 Mercedes-Benz CL550 and a 2009 Mercedez-Benz S550 for a total of $120,056. They filled out credit applications to finance the entire purchase price, again using the victim’s identity and credit. Willis again presented the auto insurance policy in a co-conspirator’s business name in support of the vehicle purchases.
The dealership manager saw that the victim’s credit had just been used to purchase the Cadillac Escalade, so he notified Montgomery County Police, who responded and arrested Willis and Newton. Willis acknowledged that his role in the scheme was to locate vehicles and provide insurance information.
The total attempted loss as a result of the fraudulent scheme was between $400,000 and $1 million.
Willis faces a maximum sentence of 30 years in prison for the conspiracy and a mandatory minimum of two years in prison consecutive to any other sentence for aggravated identity theft. U.S. District Judge Peter J. Messitte scheduled sentencing for April 8, 2015, at 9:30 a.m.
Flinton Newton, age 34, of Bartlett, Tennessee previously pleaded guilty and was sentenced to 42 months in prison in connection with the scheme.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.United States Attorney Rod J. Rosenstein praised the Secret Service, U.S. Postal Inspection Service and Montgomery County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Adam K. Ake and Special Assistant United States Attorney James Pearce, who are prosecuting the case.
Canton Man Charged with Transportation of Stolen Property, Wire Fraud, and Money LaunderingRead the Press Release
United States Attorney Brendan V. Johnson announced that a Canton, South Dakota, man has been indicted by a federal grand jury for Interstate Transportation of Stolen Property, Wire Fraud, and Money Laundering.
Kenneth Hunsucker, age 49, was indicted on December 2, 2014. He appeared before U.S. Magistrate Judge Veronica L. Duffy on December 4, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 20 years in custody and/or a $250,000 fine, 2 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges are merely accusations and Hunsucker is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Internal Revenue Service Criminal Investigation, and the Federal Bureau of Investigation. Assistant U.S. Attorney Jeffrey C. Clapper is prosecuting the case. Hunsucker was released on bond pending trial. A trial date has not been set.
Attorney General Holder, Secretary Duncan, Announce Guidance Package on Providing Quality Education Services to America's Confined YouthRead the Press Release
Attorney General Eric Holder and Secretary of Education Arne Duncan today announced a Correctional Education Guidance Package aimed at helping states and local agencies strengthen the quality of education services provided to America’s estimated 60,000 young people in confinement every day.
This guidance package builds on recommendations in the My Brother’s Keeper Task Force report released in May to “reform the juvenile and criminal justice systems to reduce unnecessary interactions for youth and to enforce the rights of incarcerated youth to a quality education.” Today’s guidance package is a roadmap that states and local agencies can use to improve the quality of educational services for confined youth.
“In this great country, all children deserve equal access to a high-quality public education - and this is no less true for children in the juvenile justice system,” said Attorney General Holder. “At the Department of Justice, we are working tirelessly to ensure that every young person who's involved in the system retains access to the quality education they need to rebuild their lives and reclaim their futures. We hope and expect this guidance will offer a roadmap for enhancing these young people's academic and social skills, and reducing the likelihood of recidivism.”
“Students in juvenile justice facilities need a world-class education and rigorous coursework to help them successfully transition out of facilities and back into the classroom or the workforce becoming productive members of society,” said Secretary Duncan. “Young people should not fall off track for life just because they come into contact with the justice system.”
“Today's announcement directly responds to the call to action made by President Obama's My Brother's Keeper Initiative,” said Broderick Johnson, White House Cabinet Secretary and Chair of the My Brother’s Keeper Task Force. “It is imperative that we ensure that incarcerated youth are receiving a quality education and provide them with the necessary tools for a second chance. I applaud Attorney General Eric Holder and Secretary Arne Duncan for highlighting this critical issue.”
The guidance package includes four components:
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A set of Guiding Principles for Providing High-Quality Education in Juvenile Justice Secure Care Settings, outlines five principles and supporting core activities to improve education practices, or implement new ones. Authored jointly by the U.S. Departments of Education and Justice, the guide is meant to help agencies and facilities serving youth in correctional education provide education services comparable to those available to students in community schools.
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A Dear Colleague Letter on the Individuals with Disabilities Education Act for Students with Disabilities in Correctional Facilities from Education’s Office of Special Education and Rehabilitative Services to clarify state and public agency obligations to ensure the provision of a free appropriate public education to eligible students with disabilities in correctional facilities.
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A Dear Colleague Letter on the Civil Rights of Students in Juvenile Justice Residential Facilities clarifying how the Federal civil rights laws that prohibit race, color, national origin, sex, religion and disability discrimination against students in traditional public schools also apply to educational services and supports provided to youth in juvenile justice residential facilities.
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A Dear Colleague Letter on Access to Federal Pell Grants for Students in Juvenile Justice Facilities explains the extent to which confined youth may be eligible for the Federal Pell Grant Program, and is accompanied by a fact sheet for students and a detailed set of questions and answers for institutions of higher education
“High-quality correctional education is thus one of the most effective crime-prevention tools we have,” Attorney General Holder and Secretary Duncan wrote in a dear colleague letter to chief state school officers and state attorneys general. “High-quality Correctional education – including postsecondary correctional education, which can be supported by Federal Pell Grants – has been shown to measurably reduce re-incarceration rates. Less crime means not only lower prison costs – it also means safer communities.”
The President has set a goal that, by 2020, our nation will have the highest proportion of college graduates in the world and that all Americans complete at least one year or more of college or career training. The Administration believes that even youth in correctional facilities can play their part in helping us achieve that vision.
Providing young people in confinement with access to the education they need is one of the most powerful and cost-effectives strategies for ensuring they become productive members of their communities. The average cost to confine a juvenile is $88,000 per year – and a recent study showed that about 55 percent of youth were rearrested within 12 months of release. Inmates of all ages are half as likely to go back to jail if they participate in higher education – even compared to inmates with similar histories.
This joint effort by the Departments of Education and Justice is one of a number of notable actions that they have taken to ensure that education programming in juvenile justice residential facilities is comparable to services provided in any school. The departments have been working together to help communities reduce the number of youth entering the justice system and to ensure that those in the system return to their communities with dignity, skills and viable education and employment opportunities including the following efforts this year:
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Justice and Education jointly released a School Climate and Discipline Guidance Package to provide schools with a roadmap to reduce the usage of exclusionary discipline practice and clarify schools’ civil rights obligation to not discriminate on the basis of race, color, or national origin in the administration of school discipline.
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Education released the results of the 2011-2012 Civil Rights Data Collection, which includes school discipline data from most every school in the country and certain juvenile justice facilities.
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Justice and Education filed a joint Statement of Interest in the G.F. v. Contra Costa County lawsuit in support of confined youth with disabilities who alleged that they were placed in solitary confinement for 22 hours or more per day, discriminated against on the basis of their disability, and denied their right to a free, appropriate public education.
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Attorney General Holder and Secretary Duncan met with leaders from 22 agencies for a Federal Interagency Reentry Council meeting to discuss actions to reduce reentry barriers to employment, health, housing and education for individuals who are transitioning from incarceration to community.
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Justice and Education engaged with various philanthropies to commission a School Discipline Consensus Project, led by the Council of State Governments, to bring together practitioners from the fields of education, juvenile justice, behavioral health and law enforcement to develop recommendations to address the school-to-prison pipeline, including recommendations for strengthening services to youth in confinement.
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Justice and Education coordinated and supported the National Leadership Summit on School Climate and Discipline in Washington, D.C. The summit focused on deepening partnerships between local and state education and justice officials, and community stakeholders.
All youth are deserving of an appropriate, high-quality education. This guidance package clarifies that obligation for confined youth, as well as advocating that they have a real chance at a second chance in their lives. A solid education that unleashes and expands their potential to contribute to their communities is a step in the right direction.
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Attorney General Holder Announces Federal Law Enforcement Agencies to Adopt Stricter Policies to Curb ProfilingRead the Press Release
WASHINGTON – U.S. Attorney General Eric Holder announced Monday that the Justice Department will take new steps to bar profiling by federal law enforcement agencies, building upon a 2003 policy that had previously only addressed the consideration of race and ethnicity in conducting federal investigations. The new policy will address the use of other characteristics as well—including national origin, gender, gender identity, religion, and sexual orientation—and applies a uniform standard to all law enforcement, national security, and intelligence activities conducted by the Department’s law enforcement components. The new guidance also applies to state and local law enforcement law officers who participate in federal law enforcement task forces.
The issuance of the new policy completes a thorough review first launched by the Attorney General shortly after taking office, and reaffirms the federal government’s deep commitment to ensuring that its law enforcement agencies conduct their activities in an unbiased manner.
In announcing the new policy, the Attorney General said that biased law enforcement practices not only perpetuate negative stereotypes and promote mistrust of law enforcement, but also are counterproductive to the goal of good policing.
“As Attorney General, I have repeatedly made clear that racial profiling by law enforcement is not only wrong, it is misguided and ineffective – because it can mistakenly focus investigative efforts, waste precious resources and, ultimately, undermine the public trust. Particularly in light of recent incidents we’ve seen at the local level – and the concerns about trust in the criminal justice process which so many have raised throughout the nation – it’s imperative that we take every possible action to institute sound, fair and strong policing practices.”
The Attorney General added: “With this new Guidance, we take a major and important step forward to ensure effective policing by federal law enforcement officials – as well as state and local law enforcement participating in federal task forces throughout the nation. This Guidance is the product of five years of scrupulous review. It codifies important new protections for those who come into contact with federal law enforcement agents and their partners. And it brings enhanced training, oversight, and accountability to federal law enforcement across the country, so that isolated acts do not tarnish the exemplary work that’s performed by the overwhelming majority of America’s hard-working law enforcement officials each and every day."
The new policy, which is spelled out in a memorandum circulated Monday, instructs that, in making routine or spontaneous law enforcement decisions, officers may not use race, ethnicity, gender, national origin, religion, sexual orientation, or gender identity to any degree, unless listed characteristics apply to a suspect description. Under the policy, federal law enforcement officers will be prohibited from acting on the belief that possession of a listed characteristic by itself signals a higher risk of criminality.
In all activities other than routine or spontaneous law enforcement, officers may consider the listed personal characteristics only to the extent there is trustworthy information, relevant to the locality or timeframe, that links individuals with a listed characteristic to a particular criminal incident, criminal scheme, organization, a threat to national or homeland security, a violation of federal immigration law or an authorized intelligence activity. In relying on any of the listed characteristics, an officer must also reasonably believe that the activity to be undertaken is merited under the totality of the circumstances.
A copy of the memorandum outlining the new policy is available here.
Armed Drug Trafficker Sentenced to 57 Years in Prison for Firearms and Narcotics OffensesRead the Press Release
An armed drug trafficker was sentenced today to serve 57 years in prison for his involvement in a decade-long cocaine-trafficking conspiracy in Newport News, Virginia.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Special Agent in Charge Royce E. Curtin of the FBI’s Norfolk Field Office and Chief Richard W. Myers of the Newport News Police Department made the announcement after U.S. District Judge Robert G. Doumar of the Eastern District of Virginia imposed the sentence.
Kelvin L. Brown, aka, “Doom,” 34, of Newport News, was convicted by a jury on July 30, 2014, of participating in a drug conspiracy, distribution of cocaine and crack cocaine, possession with intent to distribute cocaine and crack cocaine, two counts of possession of a firearm in furtherance of a drug trafficking crime, and being a felon in possession of a firearm. Evidence presented at trial detailed various drug sales by Brown and his coconspirators, the use of firearms by Brown and others to protect the drug-trafficking enterprise and its proceeds, and threats made by Brown against a cooperating witness to dissuade him from cooperating with police. In one incident, on Sept. 13, 2013, Newport News Police Department officers entered Brown’s apartment after he barricaded himself inside, and seized a firearm, scale and cocaine.
This investigation was led by the FBI Safe Streets Task Force, Newport News Police Department and Virginia State Police, and was prosecuted by Trial Attorney Joseph K. Wheatley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Howard J. Zlotnick of the Eastern District of Virginia.
Armed Drug Trafficker Sentenced to 57 Years in Prison for Firearms and Narcotics OffensesRead the Press Release
WASHINGTON – An armed drug trafficker was sentenced today to serve 57 years in prison for his involvement in a decade-long cocaine-trafficking conspiracy in Newport News, Virginia.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Special Agent in Charge Royce E. Curtin of the FBI’s Norfolk Field Office and Chief Richard W. Myers of the Newport News Police Department made the announcement after U.S. District Judge Robert G. Doumar of the Eastern District of Virginia imposed the sentence.
Kelvin L. Brown, aka, “Doom,” 34, of Newport News, was convicted by a jury on July 30, 2014, of participating in a drug conspiracy, distribution of cocaine and crack cocaine, possession with intent to distribute cocaine and crack cocaine, two counts of possession of a firearm in furtherance of a drug trafficking crime, and being a felon in possession of a firearm. Evidence presented at trial detailed various drug sales by Brown and his coconspirators, the use of firearms by Brown and others to protect the drug-trafficking enterprise and its proceeds, and threats made by Brown against a cooperating witness to dissuade him from cooperating with police. In one incident, on Sept. 13, 2013, Newport News Police Department officers entered Brown’s apartment after he barricaded himself inside, and seized a firearm, scale and cocaine.
This investigation was led by the FBI Safe Streets Task Force, Newport News Police Department and Virginia State Police, and was prosecuted by Trial Attorney Joseph K. Wheatley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Howard J. Zlotnick of the Eastern District of Virginia.
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Akron Man Sentenced to Nearly 22 Years in Prison for Child EnticementRead the Press Release
An Akron man was sentenced to nearly 22 years in prison for attempting to lure a 12-year-old into having sex with him, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI's Cleveland Office.
Nicholas B. Bowers, 31, was previously found guilty of one count each of enticement and receipt or distribution of visual depictions of minors engaged in sexually explicit conduct.
"This defendant sent obscene images of himself to a pre-teen girl in an effort to get her to meet with him," Dettelbach said. "We will continue to do all we can to protect our children from online predators."
“Attentive parents and swift law enforcement action has ensured that Mr. Bowers will not be trolling for minors on the Internet,” Anthony said. “This international collaborative law enforcement effort demonstrates that preying on our most precious commodity, our children, will not be tolerated.”
“The Springfield Township Police Department is confident that countless children have been saved from the predatory behavior exhibited by Mr. Bowers. This would have never been possible without the collaborative efforts of the FBI, the Toronto Police Department, and our Detective Bureau,” said Sgt. Eric East, Springfield Township Police Spokesperson.
From 2011 through 2014, Bowers knowingly received and distributed in interstate and foreign commerce, by computer, numerous computer files, which files contained visual depictions of real minors engaged in sexually explicit conduct. He also knowingly used a device connected to the Internet, to attempt to persuade, induce, entice and coerce a 12-year-old girl to engage in illegal sexual activity with him.
The investigation began in Toronto, Canada, on January 9, 2014. The parent of a minor female contacted the Toronto Police Service regarding sexually explicit chats and e-mail messages his daughter was receiving. It was determined that the individual resided near Akron. Chats and e-mail exchanges continued with the Toronto Police Service portraying themselves as the minor female. Toronto Police Service contacted the local authorities in Ohio, more specifically, the Springfield Township Police Department, which has jurisdiction over the area where Bowers resided.
The Springfield Township Police Department and the FBI continued the investigation, resulting in a local search warrant being obtained and executed on January 14, 2014, at the location where Bowers resided. During the execution of this search warrant, USB storage devices and CDs were among the items seized. These specific items were labeled with file names suggesting minor ages and the words “child porn pics.”
This case was prosecuted by Assistant United States Attorney Michael A. Sullivan. The case was investigated by the Akron Office of the Federal Bureau of Investigation, the Springfield Township Police Department, and the Toronto Police Service.
8-Year Prison Term for Stanislaus County Man Convicted of Child Pornography OffenseRead the Press Release
FRESNO, Calif. — United States District Judge Lawrence J. O’Neill today sentenced Kevin Ray Adams, 25, of Riverbank, to eight years and one month in prison, to be followed by 15 years of supervised release, for receiving and distributing child pornography, United States Attorney Benjamin B. Wagner announced.
According to the plea agreement, between August 3, 2012, and February 9, 2014, Adams received and distributed images of child pornography over the Internet. The defendant transmitted more than 600 images of child pornography, some of the images depicted prepubescent minors, and some were of violence or sadistic or masochistic conduct. He has been detained as a danger to the community and a flight risk since his initial court appearance on July 7, 2014.
The case was the product of an investigation by the Federal Bureau of Investigation with assistance from the Riverbank and Ceres Police Departments. Assistant United States Attorney David Gappa prosecuted the case.
The case is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. Click on the “resources” tab for information about Internet safety education.
5 December 2014
Woonsocket Drug Trafficker Sentenced to 4 Years in Federal PrisonRead the Press Release
PROVIDENCE, R.I. – – Juan Carlos Renta, 39, of Woonsocket, was sentenced today to 48 months in federal prison for being in possession of crack cocaine with the intent to distribute, announced United States Attorney Peter F. Neronha and Woonsocket Police Chief Thomas S. Carey.
At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Renta to serve 3 years’ supervised release, the first six months in home confinement with electronic monitoring, following completion of his prison term. Renta pleaded guilty on September 15, 2014, to one count of possession of cocaine base with the intent to distribute.
According to court documents and information presented to the court, based on information developed by Woonsocket Police into the drug trafficking activities by Renta, Woonsocket Police sought and executed a court authorized search warrant at Renta’s residence on May 17, 2013. During the search, Woonsocket Police seized nearly 8 grams of cocaine and 41 grams of crack cocaine. Additionally, detectives seized $1,600 in cash and various items used in the packaging and distribution of cocaine and crack cocaine.
Renta has been detained since his arrest on May 17, 2013.
The case was prosecuted by Assistant U.S. Attorney Gerard B. Sullivan and First Assistant U.S. Attorney Stephen G. Dambruch.
The FBI assisted Woonsocket Police in the investigation of this matter.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Wheeling Businessman Charged with 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 – A Wheeling, West Virginia businessman is facing federal charges that he defrauded the customers of his mortgage brokerage business, United States Attorney William J. Ihlenfeld, II announced today.
Mark C. Busack, 51, was charged this morning in U.S. District Court in Wheeling with four counts of “Use of an Unauthorized Access Device” and one count of “Filing a False S Corporation Income Tax Return.” Busack is alleged to have made hundreds of thousands of dollars in unauthorized charges to the credit and debit accounts of the customers of his mortgage company, Major Savings, Inc., also known as ‘A Plus Family Home Mortgage.’ He is also alleged to have understated his gross income in 2012 by more than $300,000.00.
The investigation began in 2013 when customers of Busack voiced concerns about his financial practices. Various federal and local law enforcement agencies then investigated the matter, including the Federal Bureau of Investigation, the Ohio County Sheriff’s Department, the Internal Revenue Service-Criminal Investigation Section, and the Wheeling Police Department. Authorities discovered that Busack had engaged in a practice of repeatedly making unauthorized charges to the credit card accounts of his mortgage customers, and that he failed to report his true income to the IRS.
“Busack was not satisfied with the credit card fraud he committed, deciding to also defraud the American taxpayer by submitting a false corporate tax return. Our tax system is based on each taxpayer paying his or her fair share and Busack intentionally chose not to do so,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office. “Today’s charges reinforce the commitment by law enforcement and the United States Attorney’s Office to hold individuals who commit these types of crimes accountable.”
The West Virginia Attorney General’s Office also became involved in the investigation after being contacted by customers of Busack. The Attorney General’s Office took its own, separate action this week by filing a lawsuit in the Circuit Court of Ohio County, West Virginia.
“As part of our ongoing efforts to protect West Virginia consumers against scammers, our Office has worked closely and collaboratively with law enforcement, including the U.S. Attorney’s Office. Today’s announcement is a reflection of that partnership and our shared goal of protecting West Virginia citizens from anyone who may wish to take advantage of them,” said West Virginia Attorney General Patrick Morrisey. “In addition to the Information filed today, our Office has filed a civil action against Busack and his businesses.”
Busack was charged by Information and 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.
United States Attorney Ihlenfeld and Assistant U.S. Attorney Jarod J. Douglas are prosecuting the criminal case on behalf of the federal government.
An Information is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Week in Review – South BendRead the Press Release
South Bend, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS
- Jared Marshall, 36, of La Porte, Indiana pled guilty to the felony offense of knowingly distributing heroin. The magistrate judge is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by Drug Enforcement Administration. Sentencing has been set for March 12, 2015. This case is being prosecuted by Assistant United States Attorney Frank Schaffer.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS
- Aaron Mendoza, 34, of South Bend, Indiana was sentenced to 37 months imprisonment after pleading guilty to the felony offense of being an illegal alien in possession of a firearm. According to documents filed in this case, on March 4, 2014, Menodza possessed a SCCY 9mmhandgun in his home in St. Joseph County, Indiana. It is undisputed that Mendoza is illegally in the United States and that this firearm had traveled through interstate or foreign commerce. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Frank Schaffer.
- Santiago R. Ortiz-Ruvalcaba, 19, of South Bend, Indiana was sentenced to 16 months imprisonment with 2 years supervised release after pleading guilty to the felony offense of possession of a firearm while under indictment. According to documents filed in this case, on April 2, 2014, the defendant was driving when he was pulled over for not stopping at a stop sign. The defendant fled from police and during the pursuit the defendant jumped out of his vehicle, without putting the car in park, and the car collided with a parked school bus that was dropping off kids. When stopped by police, officers found marijuana on the defendant and a short distance away also found a loaded black semi-automatic handgun with the hammer cocked next to the defendant’s hat. When the defendant was patted down, he had a loaded black gun magazine with live rounds wrapped in a yellow bandana. The defendant admitted he was fleeing from police while he held the loaded weapon he used for protection. This case was the result of an investigation by the South Bend Police Department and Bureau of Alcohol, Tobacco and Explosives. This case was prosecuted by Assistant United States Attorney Frank Schaffer.
- Ryan Dean Smith, 28, of Peru, Indiana was sentenced to 34 months imprisonment with 2 years supervised release after pleading guilty to the felony offense of being a convicted felon in possession of a firearm. According to documents filed in this case, on August 3, 2013, the Wabash Police conducted a traffic stop on a vehicle driven by defendant Ryan Smith. Smith was stopped for exceeding the speed limit and for traveling down a section of roadway that was marked as a closed road. Smith, the sole occupant of the vehicle, was found to a have a shotgun lying on the front passenger seat of the vehicle. The shotgun, and other contents of the truck, belonged to Smith. The officer who stopped Smith asked him if he was a felon. Smith told the officer he had convictions for burglary and theft. Smith was given a ticketed, released at the scene but his vehicle was impounded. During an inventory search of the vehicle prior to it being impounded, officers also found a baggie containing 35 Nucyntra pills, a Schedule II narcotic, in the area of the seat between the front passenger and drivers’ seat. The narcotic pills, plastic baggies, and the shotgun were all collected as evidence by the police. Mr. Smith has prior felony convictions for receiving stolen property (2006), burglary (2006), and residential entry (2014). This case was the result of an investigation by the Bureau of Alcohol, Tobacco and Explosives. This case was prosecuted by Assistant United States Attorney Donald Schmid.
Week in Review – HammondRead the Press Release
Hammond, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITIONS
- Kaled Mohammad, 29, of Cicero was sentenced to 13 months imprisonment with 1 year supervised release and ordered to pay $127,319.85 in restitution after pleading guilty to two felony offenses of wire fraud. The guilty plea involved wire fraud related to the fraudulent redemption of SNAP (supplemental nutrition assistance program) benefits at Mohammad’s store, Kay Mart, Inc. in Gary, Indiana. This case was the result of an investigation by the Federal Bureau of Investigation and the US Department of Agriculture. This case was prosecuted by Assistant United States Attorney Diane Berkowitz.
Week in Review – Fort WayneRead the Press Release
Fort Wayne, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEA
- Ashley Taylor, 26, of Fort Wayne, Indiana, pled guilty to a felony Information (filed on November 19, 2014) which charged her with theft or receipt of stolen mail. The magistrate judge is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the United States Postal Inspection Service and the Allen County Police Department. Sentencing has not been set. This case has been assigned to and will be prosecuted by Assistant United States Attorneys Tina L. Nommay and Nathaniel C. Henson.
- James Thomas, 67, of Dayton, Ohio pled guilty to the felony offense of knowingly or intentionally possessing with the intent to distribute cocaine. The magistrate judge is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Federal Bureau of Investigation, Fort Wayne Safe Streets Task Force, Indiana State Police, Fort Wayne Police Department, Allen County Police Department, Allen County Drug Task Force and the New Haven Police Department. Sentencing has not been set. This case is being prosecuted by Assistant United States Attorney Anthony W. Geller.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS
- Brenton Ennis, 20, of Fort Wayne, Indiana, was sentenced to 166 months imprisonment, 2 years supervised release, a $100 special assessment and ordered to pay $23,672.14 in restitution after pleading guilty to the felony offenses of committing a “Hobbs Act” robbery (i.e. a robbery that affects interstate commerce), and using of a firearm during and in relation to a crime of violence. According to documents filed in this case, on November 13, 2012, Ennis, and a codefendant, committed an armed robbery of a federally-licensed firearms dealer. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Fort Wayne Police Department, Allen County Police Department and the New Haven Police Department. This case was prosecuted by Assistant United States Attorney Tina L. Nommay.
Vallejo Drug Dealer Sentenced to 14 Years in PrisonRead the Press Release
SACRAMENTO, Calif. —Michael Lott, 39, of Vallejo, was sentenced to 14 years in prison yesterday after entering guilty pleas to drug trafficking charges in a wide-ranging conspiracy to distribute MDMA and crack cocaine, United States Attorney Benjamin B. Wagner announced. In imposing sentence, Chief United States District Judge Morrison C. England, Jr. said the defendant was at the center of a massive drug conspiracy and his conduct warranted a significant sentence.
Lott’s prosecution was part of a major federal investigation into drug trafficking throughout the United States by Vallejo-based rappers and associates of an entertainment label known as “Thizz Entertainment.” In April 2012, as a result of the collaborative law enforcement effort, agents arrested a total of 25 individuals in Vallejo, Stockton, Fairfield, Oakland, Los Angeles, New York, and Oklahoma City. During the investigation, agents seized approximately 45,000 MDMA pills, 4 pounds of crack cocaine, 2 pounds of heroin, and $200,000 in suspected drug proceeds. Fourteen defendants have pleaded guilty, four have been sentenced and the rest are still pending completion.
According to court documents, the DEA-led investigation uncovered a network of drug distributors working in the “Crest” neighborhood of Vallejo, California, along with individuals transporting large quantities of drugs outside of California to realize a larger profit. A number of the participants, including defendants Norton and Franklin, performed as rappers under the entertainment label known as “Thizz Entertainment.” Many songs by artists on the Thizz Entertainment label include lyrics glorifying and promoting the use and distribution of MDMA pills.
This case is the product of an extensive investigation by the DEA Sacramento District Office, the Vallejo Police Department, the El Dorado County Sheriff’s Department, and the Sacramento FBI Safe Streets Task Force. Assistant United States Attorney Jason Hitt is prosecuting the case. It was part of an Organized Crime Drug Enforcement Task Force (“OCDETF”). The OCDETF Program was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
U.S. Attorney's Office, Western District of Louisiana, Joins TwitterRead the Press Release
Information on case verdicts, pleads and other news being tweeted
SHREVEPORT/LAFAYETTE/ALEXANDRIA/MONROE/LAKE CHARLES, La.: United States Attorney Stephanie A. Finley announced today that the U.S. Attorney’s Office has joined Twitter to assist in providing news, announcements and other information to the public. The office will provide information regarding office events, links to press releases, photos and media advisories.
“Twitter is another avenue to provide information to the public,” Finley stated. “Those who follow us on Twitter will receive our Tweets on their mobile devices, desktop computers, electronic tablets and other internet capable devices. We are excited to offer this online service.”
To follow us on Twitter, go to https://twitter.com/USAO_WDLA, or add our Twitter address, @USAO_WDLA, to the Twitter app on your electronic device. In addition to Twitter, the U.S. Attorney’s Office also maintains a website (www.justice.gov/usao/law), which is the primary source of information relating to functions of the office.
Two Tampa Corporations and Four Tampa Residents Sentenced in Connection with Scheme to Unlawfully Sell an Unregistered Pesticide and Obstruct JusticeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Maureen O’Mara, Special Agent in Charge, United States Environmental Protection Agency, Criminal Investigation Division (EPA-CID), Michael A. Hill, Special Agent in Charge, United States Environmental Protection Agency, Office of Inspector General (EPA-OIG), Atlanta Field Office, and Colonel/Director Calvin Adams, Florida Fish and Wildlife Conservation Commission, Division of Law Enforcement (FWCC), announce that New Nautical Coatings, Inc., d/b/a “Sea Hawk Paints,” Sea Hawk Refinish Line, Inc., d/b/a “Refinish Line Auto Supplies,” of Clearwater, Florida, and Hillsborough County residents Erik Norrie, 42, David Norrie, 46, Jason Revie, 44, and Tommy Craft, 46, were sentenced today before U.S. District Judge Ursula Ungaro in Miami, Florida.
New Nautical Coatings, Inc. (New Nautical), which pled guilty to willfully conspiring to obstruct the Environmental Protection Agency, was sentenced to pay a fine of $1,235,315.00, that constituted a disgorgement of the unlawful gains the company derived from the offense. New Nautical was also sentenced to a three year period of probation, which requires the company to complete an Environmental Compliance Program during that period of time. David Norrie, who also pled guilty to willfully conspiring to obstruct the Environmental Protection Agency, was sentenced to five months in prison and six months of home confinement. Erik Norrie, who pled guilty to willfully conspiring to knowingly distribute and sell an unregistered pesticide, was sentenced to 3 months in prison. Sea Hawk Refinish Line, Inc., who pled guilty to the same conspiracy, was sentenced to probation for one year. Jason Revie and Tommy Craft previously pled guilty to knowingly distributing and selling an unregistered pesticide and were each sentenced to a one year period of probation.
According to the Superseding Indictment and other court documents, New Nautical manufactured an antifouling coating called Biocop, which contained tributyltin methacrylate, also known as “TBT,” a chemical compound which was found to have significant harmful effects on marine life. TBT based paints such as Biocop are pesticides subject to registration with the EPA. On or about March 30, 2005, the EPA cancelled New Nautical’s registration for Biocop, making it unlawful for the company to manufacture Biocop for sale in the United States after December 1, 2005, or sell Biocop in the United States after December 31, 2005.
Despite the cancellation order, New Nautical continued to produce Biocop for sale in the United States from 2006 through 2009. In order to conceal this post-cancellation production of Biocop, New Nautical employees were directed to change the batch numbers on cans of Biocop, which previously referenced the date of production, to a series of numbers ending in “9999.” During this time period, New Nautical used its sales team and staff, including David Norrie, Erik Norrie, Jason Revie and Tommy Craft, to sell and distribute unregistered Biocop in the Southern District of Florida and elsewhere in the United States, but invoiced those sales through its sister company, Refinish Line. On May 22, 2009, after David Norrie sold 60 gallons of Biocop to a customer in Broward County, Norrie directed the customer to tell EPA investigators that the customer did not have Biocop, and that New Nautical did not sell Biocop. Roughly six months later, in November 2009, EPA and Florida Fish and Wildlife agents and investigators executed a search warrant on New Nautical’s premises, and seized evidence which led to the indictment and conviction of the defendants.
Mr. Ferrer commended the investigative efforts of EPA-CID, EPA-OIG, and FWCC. The case was prosecuted by Assistant U.S. Attorneys Alejandro O. Soto and Maria Medetis.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Sentenced for Participating in Drug Trafficking ActivitiesRead the Press Release
PITTSBURGH – Two western Pennsylvania men have been sentenced in federal court on their convictions of violating federal drug trafficking laws, United States Attorney David J. Hickton announced today.
United States District Judge Terence F. McVerry sentenced Terrell Williams a/k/a Rel, 35, of McKeesport, Pa., to 72 months imprisonment followed by five years supervised release. Josh Williams (no relation to Terrell Williams), 33, of Aliquippa, Pa., was sentenced to 70 months imprisonment followed by five years supervised release.
According to information presented to the court, from in and around January 2011 and continuing thereafter to in and around June 2012, Terrell Williams and Josh Williams conspired with others to distribute and possess with intent to distribute cocaine. Additionally, from in and around June 2011 and continuing thereafter to in and around May 2012, Terrell Williams also conspired with others to distribute and possess with intent to distribute heroin.
The prosecution of Terrell Williams and JoshWilliams was the result of a long-term investigation that involved wiretaps on cell phones utilized by several members of the conspiracy. At the conclusion of the investigation, twenty defendants (including Terrell and JoshWilliams) were charged in a large-scale cocaine conspiracy that operated between Warren, Ohio, and Washington, Pa. All 20 defendants have since pleaded guilty. The same investigation also resulted in the prosecution of 10 defendants (including Terrell Williams) charged in a large-scale heroin conspiracy that operated between Detroit, Mich., and Washington, Pa. All 10 defendants have likewise pleaded guilty.
Assistant United States Attorneys Charles A. Eberle and Barbara K. Doolittle prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation and the Pennsylvania State Police for the investigation leading to the successful prosecution of Terrell Williams and Josh Williams.
Two San Francisco Police Officers Convicted of Violations of Civil Rights, Theft, and FraudRead the Press Release
SAN FRANCISCO – Ian Furminger, 47, of Pleasant Hill and Edmond Robles, 46, of Danville, both San Francisco Police Department (SFPD) officers, were convicted today by a federal jury of conspiracy to violate civil rights, conspiracy to steal from a federally funded program, and devising a scheme to defraud and obtain money and property through wire fraud. Robles was also convicted of theft from a federally funded program.
The jury found the defendants, who worked in the plain clothes unit of SFPD’s Mission Station, conspired to use their official positions to enrich themselves by stealing money and other valuable items, such as computers, electronic devices, and gift cards that were seized on behalf of the City of San Francisco, and to deprive suspects of due process of law by taking these items without booking them into evidence or including them in their police reports.
The defendants were also convicted of defrauding the City and County of San Francisco by concealing their illegal activities by filing false police reports. Robles was convicted of theft from a federally funded program (the jury was unable to reach a unanimous decision as to Furminger’s participation in this offense). The defendants were acquitted of honest services wire fraud and one count of conspiring to distribute controlled substances. Furminger also was acquitted of extortion. The verdicts followed a nine-day jury trial before the Honorable Charles R. Breyer, United States District Court Judge.
“Constitutional protections extend to each and every person,” said United States Attorney Melinda Haag, “These men victimized those they swore an oath to protect, ruined their own careers, and tarnished the star worn so proudly by other men and women of the San Francisco Police Department. With these convictions, we reaffirm our commitment to prosecuting police officers who choose to violate the civil rights of the people of the Bay Area.”
FBI Special Agent in Charge David J. Johnson said, “Preservation of the rule of law demands that police officers who betray the public trust and violate their oaths be held accountable for their actions. Corruption—with or without a badge—is unacceptable, and today’s verdicts are a reminder that no one is above the law.”
San Francisco Police Department Chief Greg Suhr remarked, “As I said on the day I was sworn in as Chief of Police, and repeated on the day these officers were arrested when asked about his ongoing investigation, ‘There is no place in the San Francisco Police Department and shouldn’t be in any police department for a dishonest cop.’ I meant what I said. I am seeking the immediate termination of these officers and expect that the Police Commission will act expeditiously in making that happen.”
The defendants are currently released on bail pending their sentencing hearings. They have been suspended by SFPD without pay pending further proceedings before the Police Commission. The defendants’ sentencing hearings are scheduled for Feb. 23, 2014, at 10:00 a.m. before Judge Breyer in San Francisco. The maximum statutory penalties for each count of conviction are:
- Wire fraud (Counts 1 and 2), 18 U.S.C. § 1343 – 20 years in prison; $250,000 fine.
- Civil rights conspiracy (Count 5), 18 U.S.C. § 241 – 10 years in prison; $250,000 fine.
- Federal program theft conspiracy (Count 6), 18 U.S.C. §§ 371 and 666(a)(1)(A) – 5 years in prison & $250,000 fine.
- Federal program theft conspiracy (Count 7 – Robles only), 18 U.S.C. § 666(a)(1)(A) – 10 years in prison & $250,000 fine.
Sentence will be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
This case is being prosecuted by Assistant U.S. Attorneys in the Special Prosecutions and National Security Unit of the United States Attorney’s Office. The prosecution is the result of an investigation by agents of the Federal Bureau of Investigation, with assistance from the San Francisco Police Department.
Two More Las Cruces Residents Plead Guilty to Trafficking Heroin in Dona Ana CountyRead the Press Release
Nineteen of Twenty-One Defendants Charged Have Entered Guilty Pleas as a
Result of Cases Generated by Multi-Agency Investigation in 2013ALBUQUERQUE – Two more residents of Las Cruces, N.M., have entered guilty pleas in Las Cruces federal court to heroin trafficking charges in five cases filed in 2013 as the result of a multi-agency investigation into drug trafficking in Doña Ana County, N.M.
Esther Soliz, 50, pled guilty in Las Cruces federal court this morning to participating in a heroin trafficking conspiracy under a plea agreement that requires the imposition of a ten year federal prison sentence. She remains in custody pending her sentencing hearing, which has yet to be scheduled. Angel Ortega, 19, entered a guilty plea yesterday to a heroin trafficking conspiracy charge that exposes her to a sentence of not less than five years and not more than 40 years in prison. She too remains in custody pending her sentencing hearing.Soliz and Ortega, together with a Mexican national and 18 other Las Cruces residents, were charged with heroin trafficking offenses in five indictments filed in Nov. 2013, as a result of a multi-agency investigation led by the FBI that targeted the heroin trafficking activities of Jovita Belmonte-Gonzalez in Doña Ana County. Belmonte-Gonzales, 43, a Mexican national from Ciudad Juarez, Chihuahua, Mexico, was named as the lead defendant in four of five indictments which charged her with supplying heroin to five drug trafficking organizations that distributed heroin in Doña Ana County. To date, 19 of the 21 defendants charged as a result of the investigation have entered guilty pleas.
The lead defendant, Belmonte-Gonzalez, pled guilty to heroin trafficking charges in four of the five cases in June 2014, and admitted conducting frequent heroin transactions with her co-defendants between June 2013 and Oct. 2013. Court records reflect that Belmonte-Gonzalez typically negotiated heroin sales by telephone from Juarez and her co-defendants traveled from Doña Ana County to Juarez where they purchased the heroin from her and later distributed the drugs in Doña Ana County. Belmonte-Gonzales faces a mandatory minimum of ten years in prison and a maximum of life in prison, and will be deported after she completes her prison sentence. She remains in federal custody pending her sentencing hearing, which has yet to be scheduled.
The following defendants also have entered guilty pleas in the cases generated as a result of the multi-agency investigation:
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Nathan Andrew Maestas, 31, entered guilty pleas on June 16, 2014, to heroin trafficking and firearms charges. Under the terms of his plea agreement, Maestas will be sentenced to 72 months in federal prison.
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Aprile Cardon, 36, pled guilty on June 18, 2014 to a misdemeanor information charging her with simple possession of heroin, and was sentenced to time served (48 days).
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Deva Blunt, 20, pled guilty on July 16, 2014, to simple possession of heroin. She faces a maximum statutory penalty of a year in prison.
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Isaac Garces, 29, pled guilty on Aug. 11, 2014, to participating in a heroin distribution conspiracy and to being a felon in possession of a firearm. Garces faces a mandatory minimum of ten years in prison and a maximum of life in prison when he is sentenced.
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Adriana Antillon, 23, pled guilty on Aug. 25, 2014 to participating in a heroin trafficking conspiracy. Antillon faces a mandatory minimum of ten years in prison and a maximum of life in prison when she is sentenced.
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Antonio Dominguez, 20, pled guilty on Aug. 25, 2014, to participating in a heroin trafficking conspiracy. Dominguez faces a statutory maximum penalty of 20 years in prison when he is sentenced.
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Valerie Madrid, 41, pled guilty on Sept. 18, 2014, to participating in a heroin distribution conspiracy. Madrid faces a statutory maximum penalty of 20 years in prison when she is sentenced.
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Crystal Marie Delgado, 28, pled guilty on Sept. 23, 2014, to a heroin distribution conspiracy charge. Delgado faces a statutory maximum penalty of 20 years in prison when she is sentenced.
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Kathye Young, 44, pled guilty on Oct. 7, 2014, to participating in a heroin trafficking conspiracy and possession of heroin with intent to distribute. Young faces a mandatory minimum of five years and a maximum of 40 years in prison when she is sentenced.
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Angel Linares, 20, pled guilty on Oct. 7, 2014, to participating in a heroin trafficking conspiracy. Linares faces a mandatory minimum of five years and a maximum of 40 years in prison when he is sentenced.
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Darlene Gonzalez, 32, pled guilty on Oct. 8, 2014 to participating in a heroin trafficking conspiracy. Gonzalez faces a maximum of 20 years in prison when she is sentenced. She remains in custody.
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Jorge Carrillo, 58, pled guilty to participating in a heroin trafficking conspiracy and being a felon in possession of firearms on Oct. 7, 2014. Carrillo faces a mandatory minimum of five years and a maximum of 40 years in prison when he is sentenced.
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Jeremy Sparks, 23, pled guilty on Oct. 15, 2014, to participating in a heroin trafficking conspiracy. Sparks faces a statutory maximum penalty of 20 years in prison when he is sentenced.
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Michelle Antillon, 20, pled guilty on Nov. 12, 2014, to participating in a heroin trafficking conspiracy. Antillon faces a mandatory minimum of ten years in prison and a maximum of life in prison when she is sentenced.
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Alysha Vargas, 22, pled guilty on Nov. 19, 2014, to participating in a heroin trafficking conspiracy and possession of heroin with intent to distribute. Vargas faces a mandatory minimum of five years and a maximum of 40 years in prison when she is sentenced.
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Andy Nunez, 21, pled guilty on Nov. 19, 2014, to participating in a heroin trafficking conspiracy. Nunez faces a mandatory minimum of five years and a maximum of 40 years in prison when he is sentenced.
Patrick Gonzalez, 39, and Celena Marquez, 26, have entered not guilty pleas. Gonzalez is scheduled for trial on Jan. 20, 2015, and Marquez is scheduled for a change of hearing on Dec. 11, 2014. Charges in indictments are merely accusations and criminal defendants are presumed innocent unless found guilty in a court of law.
These cases are being prosecuted by Assistant U.S. Attorney E. Garreth Winstead, III, of the U.S. Attorney’s Las Cruces Branch Office. The investigation leading to the charges in the four cases was led by the Las Cruces office of the FBI in collaboration with U.S. Customs and Border Protection, the U.S. Border Patrol, the Las Cruces office of the DEA, the U.S. Marshals Service, the Las Cruces Police Department and the Doña Ana County Sheriff’s Office.
The investigation was designated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program, a nationwide Department of Justice program that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.
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