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Tuesday 21 October 2014
Ocala Man Pleads Guilty to Theft of Military EquipmentRead the Press Release
Ocala, Florida – United States Attorney A. Lee Bentley, III announces that Pedro Luis Infantes (47, Ocala) today pleaded guilty to theft of government property. He faces a maximum penalty of 10 years in federal prison. A sentencing date has not yet been set.
According to the plea agreement, on July 11, 2014, Infantes and his son unwittingly met with a confidential source, who was working in cooperation with law enforcement. Infantes believed that the source had connections to potential buyers who were affiliated with Mexican drug trafficking organizations. Ultimately, he negotiated a sale price of $153,500 for 17 military-grade thermal-imaging monoculars, rifle cleaning kits, and other assorted military equipment that had been stolen from the government.
When arrested and interviewed by the FBI, Infantes provided false statements to agents about how he had acquired the military items and how the serial numbers on the items had been removed. He stated that he had purchased the equipment in that condition at assorted gun shows. In fact, his son, Luis Rafael Infantes (21, Ocala), an active-duty supply sergeant in Fort Knox, Kentucky, had stolen the items from the United States Army. Luis Rafael Infantes was also charged for his role in this case, and is scheduled for trial next month.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.
Newark Man Sentenced to 50 Months in Prison for Multiple Armed Robberies of New Jersey EstablishmentsRead the Press Release
NEWARK, N.J. – A Newark man was sentenced today to 50 months in prison for committing two armed robberies of commercial establishments in Essex County, New Jersey, U.S. Attorney Paul J. Fishman announced.
Antwon Yarbrough, 28, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of conspiring to commit Hobbs Act robberies. Judge Walls also imposed the sentence today in Newark federal court.
According documents filed in this case and statements made in court:
Between April 2013 and May 2013, Yarbrough conspired with others to rob a Krauszers store in West Orange on April 24, 2013, and a Subway restaurant in Verona on May 20, 2013. Yarbrough and his conspirators robbed these establishments at gunpoint. In each robbery, they used plastic zip ties to restrain their victims. The conspirators then stole cash, cigarettes and other items.
In the Krauszers robbery on April 24, 2013, Yarbrough and another robber entered the store wearing dark hoodies, face masks, and gloves. Yarbrough secured the door from the inside using a zip tie, while the other robber pointed a firearm at an employee and forced the employee to the floor. The robber restrained the employee with zip ties and struck the employee in the head with the gun. Yarbrough restrained the hands and feet of two other victims, one of whom he struck in the head with his forearm. Yarbrough and another robber then emptied the cash register of several hundred dollars, stole several cartons of cigarettes, and fled.
In the Subway robbery on May 20, 2013, Yarbrough and two other robbers again entered the restaurant wearing dark hoodies, face masks, and gloves. Both robbers accompanying Yarbrough brandished firearms. After entering the restaurant, the robbers restrained an employee by tying the employee’s hands and feet with zip ties. The robbers then emptied the cash register of several hundred dollars and fled.
Two others involved with these and other robberies – Bobby Dawson, 31, and Jamar Darby, 27, both of Newark – were each sentenced to serve 225 months in prison in July and October 2014, respectively.
In addition to the prison term, Judge Walls sentenced Yarbrough to serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation. He also thanked the Belleville, Bloomfield, Kearny, Linden, Maplewood, Newark, Paramus, Verona and West Orange police departments, along with the New Jersey State Police and the Essex County Prosecutor’s Office, for their work on this case.
The government is represented by Assistant U.S. Attorneys Jamari Buxton and Rahul Agarwal of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Stacy Biancamano Esq., West Orange
New York Man Sentenced to 42 Months Imprisonment in Fraud and Identity Theft CaseRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Tyron Burgess, age 36, of Manhattan, was sentenced today by United States District Court Judge Gregory M. Sleet to 42 months of imprisonment and 3 years of supervised release. Mr. Burgess was also ordered to pay restitution in the amount of $129,985.02 to five different financial institutions.
The sentencing came after Mr. Burgess pleaded guilty on March 25, 2014 to one count of conspiracy to commit mail fraud, in violation of 18 U.S.C. § 1349, one count of wire fraud, in violation of 18 U.S.C. § 1343, one count of bank fraud, in violation of 18 U.S.C. § 1344, and one count of aggravated identity theft, in violation of 18 U.S.C. § 1028A. The aggravated identity theft charge carried a mandatory 24 month term of incarceration.
Between July and November 2011, Mr. Burgess engaged in multiple fraud and identity theft schemes in and around the Dover, Delaware area. Using stolen personal identification information, Mr. Burgess secured financing for the purchase of an ATV and a Corvette. Mr. Burgess also obtained at least a dozen credit cards, in the names of others, from two separate financial institutions and purchased luxury clothing items and electronics with those cards. Mr. Burgess also obtained fraudulent bank loans from another financial institution.
U.S. Attorney Oberly stated, “I am pleased with the sentence Mr. Burgess received. Identity theft is a serious crime that has a very real impact on its victims and society. Those contemplating similar crimes should be reminded of the likely consequences of their actions. This office remains committed to prosecuting these offenses.”
“Whether the schemes involve identity theft or identity fraud, Postal Inspectors will continue to work with our law enforcement partners and the financial institutions to protect consumers, said David Bosch, Inspector-In-Charge of the Philadelphia Division of the US Postal Inspection Service”
The case was investigated by the United States Postal Inspection Service and the Social Security Administration Office of the Inspector General, with the assistance of the United States Secret Service. The case was prosecuted by Assistant United States Attorney Lesley Wolf. U.S. Attorney Oberly thanked the investigators for their hard work in pursuing this investigation.
New Orleans Man, James Conrad, Jr., Charged with Stealing from Two Federal AgenciesRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JAMES CONRAD, JR., age 49, a resident of New Orleans, was charged yesterday in a bill of information with theft of government funds.
According to the bill of information, from 1998 to 2013, CONRAD stole a total of $247,800 from the Social Security Administration and the Office of Personnel Management. If convicted, CONRAD faces up to ten years’ incarceration and a fine of up to twice the theft amount.
U.S. Attorney Polite reiterated that a bill of information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Social Security Administration - Office of Inspector General and the Office of Personnel Management - Office of Inspector General in investigating this matter. Assistant U.S. Attorney Chandra Menon is in charge of this prosecution.
(Download Bill of Information )
National Security Division Announces New Senior Leadership Hires and Restructuring of Counterespionage EffortsRead the Press Release
Moves Allow NSD to Continue Focus on Today’s Threats while Positioning for Tomorrow’s Challenges
John P. Carlin, the Assistant Attorney General for National Security, announced strategic changes within the Justice Department’s National Security Division (NSD) designed to put additional focus on the protection of national assets from the threat of state-sponsored economic espionage and proliferation, including through cyberspace. The announcement included new appointments within the NSD’s senior leadership, the creation of a new Deputy Assistant Attorney General Position focusing on protecting national assets and the re-designation of the Anti-Terrorism and Advisory Council (ATAC) Coordinator program as the National Security Coordinator/ATAC program, to better reflect its ongoing work on the full range of national security threats, and to empower United States Attorneys as they conduct outreach on these issues nationwide.
“The threat landscape we face is ever-changing and evolving, and while our top priority will always be combatting terrorism, we must also sharpen our focus and increase our attention on the emerging threats of economic espionage and proliferation,” said Assistant Attorney General Carlin. “We have assembled a talented, dedicated and experienced team of seasoned professionals to launch this new phase for the National Security Division. These changes will help us continue confronting today’s threats while readying the NSD workforce to engage what we see as the key emerging threats to our national security.”
The changes announced included the appointment of a new Principal Deputy Assistant Attorney General and a new Chief of Staff and Counselor, as well as the creation of a new Deputy Assistant Attorney General position to oversee NSD’s efforts to protect national assets, including its efforts to combat economic espionage, proliferation, and cyber-based national security threats, and its work on the Committee on Foreign Investment in the United States. This position will oversee the work of the National Security Cyber Specialists (NSCS) Network, consisting of prosecutors in each of the U.S. Attorney’s Offices who focus on cyber threats to the national security.
The new NSD leadership team members include Mary B. McCord to serve as the Principal Deputy Assistant Attorney General; Anita M. Singh as Chief of Staff and Counselor; and Luke Dembosky as the newest Deputy Assistant Attorney General.
Mary B. McCord, Principal Deputy Assistant Attorney General: McCord joined NSD from the U.S. Attorney’s Office for the District of Columbia, where she served for nearly 20 years, most recently as the Criminal Division Chief. In that capacity, McCord supervised the prosecution of all criminal matters in federal district court, and is highly regarded for her expertise in this area. McCord also served for more than five years as a Deputy Chief in the Appellate Division, where she supervised and argued hundreds of cases in the U.S. and District of Columbia Courts of Appeals. McCord graduated from Georgetown University Law School, and clerked for Judge Thomas Hogan of the U.S. District Court for the District of Columbia.
Anita M. Singh, Chief of Staff and Counselor: Singh was appointed Chief of Staff and Counselor after serving as the NSD Acting Chief of Staff for nearly a year and a half. Singh joined NSD as Deputy Chief of Staff in 2011 after serving as Director for Intelligence Programs and Reform at the White House on the National Security Council staff, where she focused on cyber-related issues. As NSD’s Chief of Staff, Singh focuses on strategic management issues, including the design of structural changes to support work in emerging threat areas. Singh began her legal career through the DOJ’s Honors Program, serving in the Criminal Division’s Computer Crime and Intellectual Property Section, and later as a Counsel, focused on cybersecurity, to several Assistant Attorneys General. Prior to entering government service, Singh was a management strategy consultant with the Boston Consulting Group. She graduated with her J.D. and A.M. from the University of Pennsylvania Law School.
Luke Dembosky, Deputy Assistant Attorney General: Dembosky joins NSD from DOJ’s Computer Crime and Intellectual Property Section where he served as Deputy Chief for Litigation. Dembosky previously served as the DOJ representative at the U.S. Embassy in Moscow, Russia, where he represented DOJ to Russia on matters of transnational crime, including cybercrime and IP crimes, and worked with Russian law enforcement and other government officials to build cooperation between the two countries. Prior to working in Moscow, Dembosky was based in Pittsburgh as a member of DOJ’s Computer Hacking and Intellectual Property (CHIP) network of federal prosecutors. He has been involved in some of the largest and most groundbreaking cybercrime prosecutions and disruptions in U.S. history, including the recent GameOver Zeus botnet disruption, coordination of the Silk Road takedown, and U.S. v. Max Ray Butler. Prior to entering government service, Dembosky worked in civil practice at a Philadelphia law firm. He graduated from the University of Pittsburgh School of Law and clerked for Judge Richard L. Nygaard of the U.S. Court of Appeals for the Third Circuit. Dembosky will manage NSD’s newly created portfolio covering protection of national assets, including efforts to combat economic espionage, proliferation, and cyber-based national security threats, and its work on the Committee on Foreign Investment in the United States. He will also oversee NSD’s Office for Justice for Victims of Overseas Terrorism.
Re-designation: The Anti-Terrorism and Advisory Council (ATAC) Coordinator program will be re-designated as the National Security Coordinator/ATAC program, to better reflect its ongoing work on the full range of national security threats, including combating economic espionage and counterproliferation.
Miami-Area Physician Assistant Sentenced to 15 Years in Prison for $200 Million Medicare Fraud SchemeRead the Press Release
A Miami licensed physician assistant was sentenced today to serve 15 years in prison for participating in a Medicare fraud scheme involving approximately $200 million in fraudulent billings by American Therapeutic Corporation (ATC), a mental health company that was headquartered in Miami.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Derrick Jackson of the Health and Human Services Office of Inspector General’s (HHS-OIG) Florida region made the announcement.
Roger Bergman, 65, of Miami, was sentenced by U.S. District Judge Jose E. Martinez in the Southern District of Florida. In addition to the prison sentence, Bergman was ordered to pay more than $85.3 million in restitution, both jointly and severally with his co-conspirators.
After a six-day trial, on July 18, 2014, a federal jury in the Southern District of Florida found Bergman guilty of one count of conspiracy to commit health care fraud and wire fraud, and one count of conspiracy to make false statements relating to health care matters.
Evidence at trial demonstrated that Bergman and his co-conspirators submitted false and fraudulent claims to Medicare through ATC, which operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness.
Evidence at trial also demonstrated that Bergman and other medical professionals at ATC fabricated and signed fraudulent medical documentation and patient files in order to justify ATC’s fraudulent billings to Medicare. Included in these false submissions to Medicare were claims for patients who were ineligible for PHP treatment because they were in neuro-vegetative states, in the late stages of diseases causing permanent cognitive memory loss, or had substance abuse issues and were living in halfway houses. Many of these patients were forced by assisted living facility owners and halfway house owners to attend ATC, and they did not receive treatment for their actual medical conditions.
ATC, an associated management company, and more than 20 individuals, including ATC’s owners, have all previously pleaded guilty or been convicted at trial. Bergman has been in federal custody since his conviction.
The case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. The case is being prosecuted by Assistant Chief Robert A. Zink and Trial Attorneys Nicholas E. Surmacz and Kelly Graves of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 1,900 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
Miami-Area Physician Assistant Sentenced to 15 Years in Prison for $200 Million Medicare Fraud SchemeRead the Press Release
A Miami licensed physician assistant was sentenced today to serve 15 years in prison for participating in a Medicare fraud scheme involving approximately $200 million in fraudulent billings by American Therapeutic Corporation (ATC), a mental health company that was headquartered in Miami.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Derrick Jackson of the Health and Human Services Office of Inspector General’s (HHS-OIG) Florida region made the announcement.
Robert Bergman, 65, of Miami, was sentenced by U.S. District Judge Jose E. Martinez in the Southern District of Florida. In addition to the prison sentence, Bergman was ordered to pay more than $85.3 million in restitution, both jointly and severally with his co-conspirators.
After a six-day trial, on July 18, 2014, a federal jury in the Southern District of Florida found Bergman guilty of one count of conspiracy to commit health care fraud and wire fraud, and one count of conspiracy to make false statements relating to health care matters.
Evidence at trial demonstrated that Bergman and his co-conspirators submitted false and fraudulent claims to Medicare through ATC, which operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness.
Evidence at trial also demonstrated that Bergman and other medical professionals at ATC fabricated and signed fraudulent medical documentation and patient files in order to justify ATC’s fraudulent billings to Medicare. Included in these false submissions to Medicare were claims for patients who were ineligible for PHP treatment because they were in neuro-vegetative states, in the late stages of diseases causing permanent cognitive memory loss, or had substance abuse issues and were living in halfway houses. Many of these patients were forced by assisted living facility owners and halfway house owners to attend ATC, and they did not receive treatment for their actual medical conditions.
ATC, an associated management company, and more than 20 individuals, including ATC’s owners, have all previously pleaded guilty or been convicted at trial. Bergman has been in federal custody since his conviction.
The case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. The case is being prosecuted by Assistant Chief Robert A. Zink and Trial Attorneys Nicholas E. Surmacz and Kelly Graves of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 1,900 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov .
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.
Medford Felon Sentenced to 10 Years Federal Prison for Possessing FirearmRead the Press Release
MEDFORD, OREGON— On Monday, October 20, 2014, Senior U.S. District Judge Owen M. Panner sentenced Dennis William Lee, 45, of Medford, Oregon, to 10 years in federal prison for being a felon in possession of a firearm. Lee will be on three years of supervised release after he completes his prison term. Lee’s 10-year sentence is the maximum allowed under federal law.
On November 12, 2013, the Medford Area Drug and Gang Enforcement team (MADGE) served a search warrant at defendant’s residence after developing probable cause through surveillance and controlled heroin purchases from Lee. Lee was standing outside when police approached and he grabbed a female standing next to him, shoved her at the police, and turned to flee, only to encounter two MADGE detectives approaching from behind. Lee threw a cup of alcoholic beverage into one detective’s face and then collided into him. Officers wrestled Lee to the ground, where he continued fighting until he was tased and taken into custody.
Officers found a loaded 9mm handgun in Lee’s pocket and $2,616 cash. Detectives searched Lee’s trailer and found digital scales, a half-pound marijuana, $6,975 cash, and assorted drug packaging materials that smelled of heroin, and a small amount of methamphetamine.
Lee recently moved to Medford from Sacramento, California. His criminal history shows 40 arrests, with felony convictions for obstruct/resisting executive officer in 2007 (16 months prison), possession of heroin for sale in 2005 (four years prison), possession of methamphetamine for sale in 1997 (five years prison), sale of rock cocaine in 1990 (three years prison), possession of a controlled substance in 1993 (three years prison), and receiving stolen property in 2010 (16 months prison). In addition, Lee has misdemeanor convictions for assault with a weapon, resisting arrest, possession of burglary tools and reckless driving.
This case was investigated jointly by the Medford Area Drug and Gang Enforcement Team and the Bureau of Alcohol, Tobacco, and Firearms, and was prosecuted by Assistant U.S. Attorney Douglas W. Fong.
Manhattan U.S. Attorney Announces Charges Against Two Individuals for Participating in Large-Scale Stolen Identity Refund Fraud Tax Scheme Involving in Excess of 40,000 Stolen IdentitiesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Shantelle P. Kitchen, the Acting Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation Division (“IRS-CI”), today announced charges against two individuals for participating in a large-scale tax refund scheme that used tens of thousands of stolen identities to file fraudulent returns to obtain fraudulent tax refund checks. GERARDO ENMANUEL LUNA MARMOLEJOS, a/k/a “Jorge Rodriguez Burgos,” and YOHAURIS RODRIGUEZ HERNANDEZ, a/k/a “Joana Esquilin,” a/k/a “Joana Esquilin Ramirez,” a/k/a “Carla Nunos,” citizens of the Dominican Republic, are charged in a tax fraud scheme involving in excess of 40,000 stolen identities and millions of dollars in fraudulent returns. LUNA MARMOLEJOS and RODRIGUEZ HERNANDEZ were charged in a superseding indictment today and will appear in Manhattan federal court before U.S. District Judge Naomi Reice Buchwald at 3:30 p.m.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Luna Marmolejos and Rodriguez Hernandez conspired to steal tens of thousands of identities in order to file fraudulent tax returns and collect millions of dollars in fraudulent refunds. Tax fraud amounts to theft from the general treasury; and in effect, these defendants allegedly conspired to steal money that belongs to the public. I commend IRS-CI and our other law enforcement partners on this case.”
IRS-CI Acting Special Agent-in-Charge Shantelle P. Kitchen said: “One of the ways the Internal Revenue Service is addressing the identity theft problem is through the vigorous investigation of stolen identity tax refund fraud schemes. These investigations send a clear message about the consequences of filing tax refunds using stolen information, as those involved expose themselves to criminal prosecution and sentences of imprisonment.”
According to the Superseding Indictment filed today in Manhattan federal court:
From at least December 2011 through September 29, 2014, LUNA MARMOLEJOS and RODRIGUEZ HERNANDEZ conspired and engaged in a scheme to steal the names, dates of birth, and Social Security Numbers of individuals, which the defendants then used to file fraudulent income tax returns that claimed tax refunds to which the defendants were not entitled.
LUNA MARMOLEJOS, 23, and RODRIGUEZ HERNANDEZ, 33, both citizens of the Dominican Republic and residing in New Jersey at the time of their arrest, are each charged with one count of conspiracy to steal government funds, which carries a maximum sentence of 5 years in prison, one count of conspiracy to file false claims, which carries a maximum sentence of 10 years in prison, one count of conspiracy to engage in wire fraud, which carries a maximum sentence of 20 years in prison, and one count of aggravated identity theft in connection with the tax fraud scheme, which carries a mandatory sentence of 2 years in prison, to be served consecutively to any other sentence imposed. In addition, LUNA MARMOLEJOS is charged with one count of bail jumping, which carries a maximum sentence of 5 years in prison, to be served consecutively to any other sentence, and one count of visa fraud, which carries a maximum sentence of 10 years in prison. RODRIGUEZ is also charged with one count of visa fraud, which carries a maximum sentence of 10 years in prison, and one count of passport fraud, which carries a maximum sentence of 10 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the Court.
Mr. Bharara praised the outstanding investigative work of IRS-CI, the United States Postal Inspection Service, Immigration and Customs Enforcement’s Homeland Security Investigations, the United States Marshals Service, and the U.S. Department of State’s Diplomatic Security Service.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Carolina A. Fornos is in charge of the prosecutions.
The charges and allegations contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. v. Gerardo Enmanuel Luna Marmolejos & Yohauris Rodriguez Hernandez S1 Indictment
Manhattan U.S. Attorney and EPA Announce Settlement of Superfund Claims Against Getty Relating to Newtown Creek Superfund Site in Brooklyn and QueensRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Judith A. Enck, Regional Administrator for the U.S. Environmental Protection Agency (“EPA”), announced today that the United States has entered into a settlement agreement with a bankruptcy trust on behalf of GETTY PETROLEUM MARKETING INC. (“GPMI”) and GETTY TERMINALS CORP. (“GETTY TERMINALS”) (collectively, “GETTY”), which filed for bankruptcy on December 5, 2011. The settlement resolves Getty’s liabilities at Newtown Creek, a Superfund Site in Brooklyn and Queens, New York, and one of the nation’s most polluted waterways. Pursuant to the settlement agreement, which addresses Getty’s liability under the Comprehensive Environmental Response, Compensation and Liability Act (also known as the Superfund law) and the federal Oil Pollution Act, Getty agrees that the United States will receive an allowed $16 million claim in the bankruptcy process.
U.S. Attorney Preet Bharara said: “For more than a century, irresponsible industrial activities turned Newtown Creek into a tributary of toxic waste. Today’s settlement ensures that Getty takes responsibility for its contribution to that sad legacy, and pays a fair share of clean-up costs at the site. This Office is committed to holding those who contaminate our nation’s lands and waterways accountable for their actions, and bankruptcy is not a free pass for polluters.”
EPA Regional Administrator Judith Enck said: “The Superfund program operates on the principle that polluters should pay for the cleanups, rather than passing the costs to taxpayers. Getty’s decades of irresponsibility and indifference to the environment could pose significant environmental risks to Newtown Creek communities and must be addressed. EPA added Newtown Creek to its Superfund National Priorities List of the country’s most hazardous waste sites in September 2010 because its water and sediment contain a range of contaminants including pesticides, heavy metals, polychlorinated biphenyls (PCBs) and volatile organic compounds. EPA is dedicated to cleaning up this area and will hold all responsible parties accountable.”
In its proof of claim, the United States asserted claims against Getty on behalf of the EPA for clean-up costs at the Newtown Creek Superfund Site and on behalf of the U.S. Department of the Interior (“DOI”) and the National Oceanic and Atmospheric Administration (“NOAA”) of the U.S. Department of Commerce for injuries to natural resources at the site. The proof of claim alleged, among other things, that Getty Terminals operated a facility adjacent to Newtown Creek that stored, blended, and distributed gasoline, fuel oil, and gasoline blending additives, and that Getty Terminals utilized underground and aboveground tanks at the facility for the storage of gasoline, diesel, and fuel oil. As alleged in the proof of claim, during the course of operations of the facility, Getty Terminals discharged contaminants from the facility to Newtown Creek, including effluent with lead concentrations and other hazardous substances.
In the settlement agreement filed in bankruptcy court today, the bankruptcy trustee acknowledges Getty’s admission that GPMI was formed to run the marketing and sales business of the former Getty Petroleum Corporation, including the Newtown Creek facility, and that GPMI leased the facility. The bankruptcy trustee also acknowledges Getty’s admission that Getty Terminals operated the facility and exercised actual control or held significant authority to control activities at the facility. Further, the trustee acknowledges in the settlement agreement that Getty has admitted that a spill occurred at the facility in October 2005.
Under the settlement agreement, the United States will receive an allowed general unsecured claim in the amount of $14,844,800 for EPA in settlement of the United States’ claim for the costs of clean-up at the Newtown Creek Superfund Site, and an additional allowed general unsecured claim in the amount of $1,155,200 for claims by DOI and NOAA relating to natural resource damages and costs of assessment at the Newtown Creek Superfund Site. The allowed claims will be paid in an amount to be determined through the bankruptcy process.
The settlement agreement will be lodged with the Bankruptcy Court for a period of at least 30 days before it is submitted for the Court’s approval, to provide public notice and to afford members of the public the opportunity to comment on the consent decree.
Mr. Bharara praised the efforts of EPA, DOI, and NOAA in this case.
This case is being handled by the Office’s Environmental Protection Unit and Tax and Bankruptcy Unit. Assistant United States Attorney Joseph N. Cordaro is in charge of the case.
In Re Getty Notice of Lodging
Louisville Man Sentenced to 15 Years in Prison for Producing Child PornographyRead the Press Release
LOUISVILLE, Ky. – Senior United States District Court Judge Charles R. Simpson III, sentenced Craig Ian Elliott, age 47, to 15 years in prison followed by 20 years of Supervised Release for violating federal child pornography laws, namely, the production of child pornography, announced David J. Hale, United States Attorney for the Western District of Kentucky.
According to a written Plea Agreement previously filed in open court, on April 2, 2010, the defendant was living at a residence on Algonquin Parkway in Jefferson County, Kentucky, with his girlfriend. On that date, his girlfriend was at work, but her 17-year-old daughter was at home with Elliott after she finished school for the day. Elliott used his girlfriend’s cell phone - a Boostmobile Sanyo Mirro Model SCP 3810 - to take sexually explicit photos of the girl. The cell phone was manufactured outside the Commonwealth of Kentucky. The metadata from the images showed that the pictures were taken at approximately 4:08 P.M.
After Elliott took the photos of the girl, he used the cell phone to transmit the images, via the Internet, to his Yahoo! account. There is no evidence that he distributed the images to anyone else.
Assistant United States Attorney Jo E. Lawless prosecuted the case. The Louisville Metro Police Department’s Crimes Against Children Unit, in conjunction with the Federal Bureau of Investigation, conducted the investigation as part of Kentucky’s Internet Crimes Against Children Task Force.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Lewiston Man Sentenced to 18 Years for Being a Felon in Possession of AmmunitionRead the Press Release
Contact: Darcie N. McElwee
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Jerome
Hudson, 44, of Lewiston, Maine, and formerly of Danvers, Massachusetts, was sentenced
yesterday in U.S. District Court by Judge Jon D. Levy to 18 years in prison and five years of
supervised release for being a felon in possession of ammunition. Hudson pleaded guilty to the
charge on June 11, 2014.Court records and evidence presented at the sentencing hearing reveal that on January 13,
2014, Hudson was living in a Lewiston townhouse apartment with his girlfriend and her young
children. Shortly before 8:00a.m., he got into an argument with the father of those children when
the father arrived to help them get on the school bus, as he did daily. Hudson retrieved a 9 mm
handgun from the apartment, ran outside, chased and fired multiple shots at the father as nearby
school children began filing outside to catch their bus. Hudson then fled the scene on foot.A search of Hudson’s bedroom revealed a safe containing 38 rounds of ammunition,
some of which matched that used to shoot at the father. Hudson hid from the police for several
hours in a neighbor’s townhouse. He was captured three hours after the shooting. He refused to
tell investigators where the handgun was hidden and it remains unrecovered.As a result of prior convictions for drug trafficking offenses and violent felonies in
Massachusetts between 1997 and 2005, Hudson was subject to an enhanced sentence as an
Armed Career Criminal requiring a mandatory minimum of 15 years in prison.Judge Levy said that his main focus in imposing the lengthy sentence was the need to
protect the public from further crimes by Hudson.The investigation was conducted by the Lewiston Police Department, the Central Maine
Violent Crime Task Force and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives.Lewis County Man Sentenced for Painkiller DistributionRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – Shane Brantley, 38, of Lewis County, West Virginia, was sentenced for his role in distributing prescription painkillers through the office of Dr. Edita Milan, United States Attorney William J. Ihlenfeld, II, announced today.
Brantley, who is currently serving a 51 month sentence for unlawful possession of a firearm, was sentenced to an additional 8 months in prison.
Brantley pled guilty in June 201 4 to one count of “Conspiracy to use the DEA Registration Number of Another Person” after a Greater Harrison County Drug Task Force investigation revealed that he used Dr. Milan’s DEA registration number to obtain oxycodone, hydrocodone, and alprazolam. The investigation began with citizen complaints surrounding prescription writing practices in Dr. Milan’s Bridgeport, West Virginia office. Milan is scheduled for trial on November 5, 2014.
Assistant U.S. Attorney John Parr prosecuted the case on behalf of the government.
U.S. District Judge Irene M. Keeley presided
Las Vegas Man Sentenced to Prison for Conspiring to Submit False Federal Income Tax ReturnsRead the Press Release
A Las Vegas man was sentenced to serve 15 months in prison to be followed by three years of supervised release and ordered to pay $192,632 in restitution to the Internal Revenue Service (IRS), announced Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department’s Tax Division and U.S. Attorney Daniel G. Bogden for the District of Nevada.
Damon Boswell pleaded guilty to conspiracy to submit false claims for federal income tax refunds on May 29. He was sentenced yesterday by U.S. District Court Judge Jennifer A. Dorsey.
According to the plea agreement, between April 2009 and May 2009, Boswell, along with others, conspired to defraud the United States by assisting in the filing of federal tax returns falsely claiming refunds based on the First-Time Home Buyers Credit.
Boswell obtained personal identifying information from individuals by falsely telling them that if they had not filed their 2008 federal income tax returns and did not owe back taxes, they were entitled to receive “Obama Stimulus” money. The personal information, including names, dates of birth and social security numbers, was then used to file federal income tax returns claiming refunds to which the individuals were not entitled. The individuals did not authorize Boswell or anyone else to file or cause the filing of tax returns in their names. Boswell’s co-conspirator, Cheryl Ramos, pleaded guilty on Jan. 24 and has been sentenced.
The case was investigated by IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorney Christina Brown and Trial Attorney Sonia M. Owens of the Tax Division.
Klamath Falls Felon Sentenced to 15 Years Federal Prison for Possessing FirearmsRead the Press Release
MEDFORD, Ore. - Today Senior U.S. District Judge Owen M. Panner sentenced Vincent Sanchez, Jr., 37, of Klamath Falls, Oregon, to 15 years in federal prison for being a felon in possession of a firearm. Sanchez will be on five years of supervised release after he completes his prison term. The maximum sentence he faced was life in prison.
On December 12, 2013, Klamath County Sheriff’s detectives observed Sanchez in the front passenger’s seat of a vehicle. Sanchez had an outstanding felony arrest warrant, and deputies had information that he was carrying a firearm. Deputies stopped the vehicle, ordered defendant out, searched him, and found a loaded 9mm handgun in a shoulder holster concealed under his sweatshirt. A black zippered bag in the front passenger’s seat contained three baggies of methamphetamine (62 grams actual meth), drug notes, and digital scales. Deputies then searched the home where Sanchez was staying and retrieved a loaded SKS assault rifle and a Ruger 7mm bolt action rifle Sanchez had stored at the residence.
Under federal law, any person who possesses a firearm or ammunition after being previously convicted of three violent felonies or drug trafficking crimes qualifies as an Armed Career Criminal and faces a 15 year mandatory minimum prison sentence. Based upon defendant’s prior felony convictions for felony attempt to elude, assault on a police officer (three counts), conspiracy to delivery methamphetamine, and burglary, Sanchez was sentenced as an Armed Career Criminal. His criminal history also includes felony convictions for supplying contraband, transportation of a controlled substance, tampering with a witness, and possession of a methamphetamine, and misdemeanor convictions for strangulation, possessing a switchblade knife, interfering with police, false information to police, theft and disorderly conduct.
This case was investigated jointly by the Klamath County Sheriff’s Office and the Bureau of Alcohol, Tobacco, and Firearms, and was prosecuted by Assistant U.S. Attorney Douglas W. Fong.
Kentucky Cardiologists Agree to Pay $380,000 to Settle False Claims Act Allegations Based on Illegal ReferralsRead the Press Release
The Department of Justice announced today that two cardiologists based in London, Kentucky, have agreed to pay $380,000 to resolve allegations that they violated the False Claims Act by entering into sham management agreements with Saint Joseph Hospital, also based in London, Kentucky, in exchange for the referral of cardiology procedures and other healthcare services to Saint Joseph.
“Physicians who place their financial interests above the well-being of their patients will be held accountable,” said Acting Assistant Attorney General Joyce R. Branda for the Civil Division. “The Department of Justice is committed to preventing illegal financial relationships that undermine the integrity of our public healthcare programs.”
Satyabrata Chatterjee and Ashwini Anand jointly owned Cumberland Clinic, a physician group that provided cardiology services. The government alleged that St. Joseph Hospital entered into sham agreements with Chatterjee and Anand, under which the physicians were paid to provide management services but did not in fact do so. The government further alleged that, in exchange for the sham agreements, Chatterjee and Anand agreed to enter into an exclusive agreement with St. Joseph to refer Cumberland Clinic patients to the hospital for cardiology and other services in violation of the Stark Law and the Anti-Kickback Statute. The Stark Law forbids a hospital from billing Medicare for certain services referred by physicians who have a financial relationship with the entity. The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare.
“Financial relationships between healthcare providers that put profits over patients are a threat to the programs upon which millions of Americans depend,” said U.S. Attorney Kerry Harvey for the Eastern District of Kentucky. “We will continue to use all the tools available to us to safeguard our federally funded healthcare programs from those who seek to profit from them through illegal means.”
In addition to payment of the settlement amount, which was based on Chatterjee and Anand’s financial ability to pay, Chatterjee and Anand have agreed to enter into integrity agreements with the Department of Health and Human Services-Office of Inspector General (HHS-OIG), which obligate them to undertake substantial internal compliance reforms and to commit to a third-party review of their claims to federal health care programs for the next three years.
“Physicians who accept kickbacks in exchange for referrals undermine the integrity of the medical profession," said Special Agent in Charge Derrick L. Jackson of the HHS-OIG Atlanta region. “OIG will continue to protect both patients and taxpayers by holding physicians and hospitals accountable for improper claims."
The government previously entered into a $16.5 million settlement with Saint Joseph Hospital for the allegedly sham management contracts the hospital executed with Chatterjee and Anand, as well as for allegedly billing for unnecessary and excessive cardiology procedures by other members of Chatterjee and Anand’s cardiology practice.
The settlement announced today stems from a complaint filed by three Lexington, Kentucky, cardiologists pursuant to the whistleblower provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the United States. The act permits the United States to intervene in the lawsuit and take over the allegations, as the government did in this case. The three whistleblowers, Drs. Michael Jones, Paula Hollingsworth and Michael Rukavina, will collectively receive $68,400.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $22.5 billion through False Claims Act cases, with more than $14.3 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation was conducted by the FBI, HHS-OIG, the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Eastern District of Kentucky. The claims settled by this agreement are allegations only and there has been no determination of liability.
The lawsuit is captioned United States ex rel. Jones, Hollingsworth, and Rukavina v. St. Joseph Health System et al., no. 11-cv-81-GFVT (E.D.Ky.)
Kenner Man, Jose Rafael Hiraldo-suarez, Sentenced for Unlawful Transfer of Identification DocumentRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JOSE RAFAEL HIRALDO-SUAREZ, age 35, a resident of Kenner, was sentenced today after having previously pled guilty to a one-count indictment for the unlawful transfer of identification document.
U.S. District Judge Jay C. Zainey sentenced HIRALDO-SUAREZ to 2 years probation to include 3-months of home confinement.
According to court documents, on or about February 18, 2014, HIRALDO-SUAREZ transferred, without lawful authority, a means of identification of another person, to wit, a Social Security card, with the intent to commit, or to aid or abet, or in connection with, unlawful activity that constitutes social security fraud.
U.S. Attorney Polite praised the work of the Department of Homeland Security Investigations and Immigration and Customs Enforcement Agencies in investigating this matter. Assistant United States Attorney Irene Gonzàlez is in charge of the prosecution.
Javier Pleads Guilty to Theft and Forgery of Social Security BenefitsRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that FRANCISCO A. JAVIER, age 50, of Waianae (Honolulu County), Hawaii, pled guilty on October 17, 2014, in the U.S. District Court, District of Hawaii, to one count of Theft of Government Money and one count of Forging Endorsements on Treasury Checks. For each count, the maximum sentence under the statute is 10 years in prison and a $250,000 fine. JAVIER had been previously charged on April 30, 2014 by a federal grand jury in the District of Guam with multiple counts of the above referenced offenses. JAVIER self-surrendered May 2, 2014 at the Federal Bureau of Investigation (“FBI”) Honolulu Division field office. Sentencing for JAVIER in the District of Hawaii is scheduled for February 12, 2015.
According to court documents, JAVIER’s mother died in April 2002, but JAVIER, from June 2002 to May 2010, received Social Security retirement insurance and other related benefits intended for his mother. The Social Security Administration, an agency of the United States, was unaware of the beneficiary’s death and continued to mail U.S. Treasury checks to the beneficiary at a post office box address in Guam. JAVIER forged his mother’s signature and fraudulently endorsed the checks, cashed them and received payments totaling $80,343.
Alicia A.G. Limtiaco stated “the United States Attorney’s Office is committed to working with its law enforcement partners to help maintain the integrity of the Social Security Program for seniors and other beneficiaries who have rightfully earned these benefits.” This case is the result of an investigation conducted by the Social Security Administration, Office of the Inspector General and the FBI Guam Resident Agency. The prosecution was handled by Assistant U.S. Attorney Marivic David.Head of the Gulf Cartel Appears in Beaumont Federal Court on Drug Trafficking ChargesRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas - U.S. Attorney John M. Bales announced today that the current head of the Mexican drug trafficking organization, the Gulf Cartel, or Cartel del Golfo, has made an initial appearance in the Eastern District of Texas on drug trafficking charges.
Juan Francisco Saenz-Tamez, 23, of Camargo, Tamaulipas, Mexico, was arrested by federal agents on Oct. 9, 2014 while shopping in Edinburg, Texas.
A federal investigation into the large-scale trafficking of illegal drugs from Mexico into the Eastern District of Texas led to the identity of Saenz-Tamez. The investigation revealed thousands of kilograms of cocaine and marijuana were shipped into the Eastern District of Texas and then to locations across the nation, including Florida, Ohio, Michigan, Mississippi, Louisiana, Washington D.C., Pennsylvania, Tennessee, Maryland and Georgia.
Saenz-Tamez was indicted by a federal grand jury on Sep. 5, 2013 and charged with conspiracy with intent to distribute cocaine, conspiracy with intent to distribute marijuana, and conspiracy to money launder. Saenz-Tamez was transported from McAllen, Texas to Beaumont where he appeared before U.S. Magistrate Judge Zack Hawthorn for a detention hearing and initial appearance today.
If convicted, Saenz-Tamez faces a minimum of 10 years and up to life in federal prison for the drug charges and up to 20 years in federal prison for the money laundering charge.
"The news that Juan Saenz-Tamez has been arrested is further proof that justice is prevailing in Mexico,” said U.S. Attorney Bales. “I am encouraged that the efforts of so many law enforcement officers are now paying off. Congratulations to them and I look forward to seeing Saenz-Tamez answer for his crimes in a Beaumont courtroom."
“Juan Francisco Saenz-Tamez became the head of the Gulf Cartel following the 2013 arrest of former leader Mario Ramirez-Trevino,” said DEA Administrator Michele M. Leonhart. “He moved steadily up the cartel ranks, working as a lookout, record keeper, plaza boss, and finally its leader. Thanks to the quick actions of DEA and our local partners, we were able to identify and safely arrest Saenz-Tamez while he was in the United States. He oversaw much of the violence and bloodshed that has plagued Mexico and DEA is pleased he will face justice in the United States.”“The arrest of Juan Francisco Saenz-Tamez, will put a stop to his role in the distribution of illegal drugs and the laundering of drug proceeds,” said IRS-CI Special Agent in Charge Lucy Cruz. “Laundering their profits is as important and essential to drug traffickers as the distribution of their illegal drugs. IRS CI is proud to provide assistance as we work alongside our law enforcement partners to bring these criminals to justice."
This case is the result of ongoing Organized Crime Drug Enforcement Task Force (OCDETF) joint investigations, Operation South Park, Operation La Mano Negra, Operation Frontera Chica and Operation Iceberg. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
This joint law enforcement investigation was led by the U.S. Drug Enforcement Administration and Homeland Security Investigations, Internal Revenue Service – Criminal Investigation, United States Marshals Service, Texas Department of Public Safety, Texas Attorney General’s Office, National Guard of Texas – Joint Counterdrug, Beaumont Police Department, Houston Police Department, Nacogdoches Police Department, Jefferson County Sheriff’s Office, and the Harris County Sheriff’s Office. This case is being prosecuted by Assistant U.S. Attorney John Craft.
A grand jury indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Haroon Aswat Extradited from the United Kingdom to the Southern District of New York to Face Terrorism ChargesRead the Press Release
Assistant Attorney General for National Security John Carlin, United States Attorney Preet Bharara for the Southern District of New York, Assistant Director-in-Charge George Venizelos of the New York Field Office of the Federal Bureau of Investigation (FBI), and Commissioner William J. Bratton of the New York City Police Department (NYPD), announced the extradition of Haroon Aswat from the United Kingdom to face charges of conspiring to provide and providing material support to al Qaeda and terrorists for attempting to establish a terrorist training camp in the United States.
Aswat was arrested in Zambia in July 2005, and in August 2005, Aswat was deported from Zambia to the United Kingdom, where he was arrested pursuant to a provisional warrant that was issued in response to a request by the U.S. government in connection with this case. On Sept. 4, 2014, the United Kingdom ordered Aswat extradited to the United States on the charges described below. In coordination with British authorities, Aswat was extradited from the United Kingdom to the Southern District of New York on Oct. 21, 2014. Aswat will make his first court appearance later today before U.S. District Judge Katherine B. Forrest.
According to the allegations contained in the Indictment, statements made at related court proceedings, and evidence presented at prior trials:
In late 1999, Aswat, along with co-defendants Mustafa Kamel Mustafa, aka Abu Hamza (Abu Hamza), Ouassama Kassir, and Earnest James Ujaama, attempted to create a terrorist training camp in the United States to support al Qaeda, which has been designated by the United States Secretary of State as a foreign terrorist organization. Aswat conspired with Abu Hamza, Kassir and Ujaama to establish the terrorist training camp on a rural parcel of property located in Bly, Oregon. The purpose of the Bly, Oregon, camp was for Muslims to receive various types of training – including military-style jihad training – in preparation to fight jihad in Afghanistan. As used by the conspirators in this case, the term “jihad” meant defending Islam against purported enemies through violence and armed aggression, including, if necessary, by using murder to expel non-believers from Muslim holy lands.
In a letter faxed from Ujaama, in the United States, to Abu Hamza, in the United Kingdom, the property in Bly was described as a place that “looks just like Afghanistan,” and the letter noted that the men at Bly were “stock-piling weapons and ammunition.” In late 1999, after transmission of the faxed letter, Abu Hamza directed Aswat and Kassir, both of whom resided in London, England, and attended Abu Hamza’s mosque there, to travel to Oregon to assist in establishing the camp. On Nov. 26, 1999, Aswat and Kassir arrived in New York, and then traveled to Bly.
Aswat and Kassir traveled to Bly for the purpose of training men to fight jihad. Kassir told witnesses that he supported Usama Bin Laden and al Qaeda, and that he had previously received jihad training in Pakistan. Kassir also possessed a compact disc that contained instructions on how to make bombs and poisons. After leaving Bly, Aswat and Kassir traveled to Seattle, Washington, where they resided at a mosque for approximately two months. While in Seattle, Kassir, in Aswat’s presence, provided men from the mosque with additional terrorist training lessons – including instructions on different types of weapons, how to construct a homemade silencer for a firearm, how to assemble and disassemble an AK-47, and how an AK-47 could be altered to be fully automatic and to launch a grenade. On another occasion, with Aswat sitting by his side, Kassir announced to the men in Seattle that he had come to the United States for martyrdom and to destroy, and he informed his audience that some of them could die or get hurt.
In September 2002, special agents from the FBI recovered a ledger, among other items, from an al Qaeda safe house in Karachi, Pakistan. The ledger listed a number of individuals associated with al Qaeda, including Aswat. The al Qaeda safe house was used by Khalid Sheikh Mohammed, al Qaeda’s chief operational planner and the alleged planner of the terrorist attacks of Sept. 11, 2001.
* * *
The indictment charges Aswat, 40, a British citizen, with four offenses that carry the following maximum penalties:
Charge
Statutory Violation
Maximum Prison Term
Conspiracy to provide material support to terrorists
18 U.S.C. § 371
Five years
Providing material support to terrorists
18 U.S.C. §§ 2339A, 2
10 years
Conspiracy to provide material support to a foreign terrorist organization (al Qaeda)
18 U.S.C. §2339B
10 years
Providing material support to a foreign terrorist organization (al Qaeda)
18 U.S.C. §§ 2339B, 2
10 years
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
On May 12, 2009, after a four-week jury trial in the Southern District of New York, Kassir was found guilty of charges relating to his efforts to establish the terrorist training camp in Bly, and his operation of several terrorist websites. On Sept. 15, 2009, U.S. District Judge John F. Keenan sentenced Kassir to life in prison.
On May 19, 2014, after a four-week jury trial in the Southern District of New York, Abu Hamza was found guilty of charges relating to his role in the conspiracy to establish the terrorist training camp in Bly, as well as his role in a hostage-taking in Yemen in 1998 that resulted in four deaths, and his support of violent jihad in Afghanistan in 2000 and 2001. Abu Hamza is scheduled to be sentenced on Jan. 9, 2015, before U.S. District Judge Katherine B. Forrest.
U.S. Attorney Bharara praised the outstanding efforts of the FBI’s Manhattan-based Joint Terrorism Task Force, which principally consists of agents and detectives of the FBI and the NYPD, the United States Marshals Service, and the Metropolitan Police Department of London, England. U.S. Attorney Bharara also thanked the U.S. Department of Justice’s National Security Division and Office of International Affairs, and the United States Department of State for their ongoing assistance.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys John P. Cronan and Ian McGinley are in charge of the prosecution.
The allegations contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Haroon Aswat Extradited from the United Kingdom to the Southern District of New York to Face Terrorism ChargesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and William J. Bratton, Commissioner of the New York City Police Department (“NYPD”), announced the extradition of HAROON ASWAT from the United Kingdom to face charges of conspiring to provide and providing material support to al Qaeda and terrorists for attempting to establish a terrorist training camp in the United States.
ASWAT was arrested in Zambia in July 2005, and in August 2005, ASWAT was deported from Zambia to the United Kingdom, where he was arrested pursuant to a provisional warrant that was issued in response to a request by the U.S. Government in connection with this case. On September 4, 2014, the United Kingdom ordered ASWAT extradited to the United States on the charges described below. In coordination with British authorities, ASWAT was extradited from the United Kingdom to the Southern District of New York on October 21, 2014. ASWAT will make his first court appearance later today before U.S. District Judge Katherine B. Forrest.
According to the allegations contained in the Indictment, statements made at related court proceedings, and evidence presented at prior trials:
In late 1999, ASWAT, along with co-defendants Mustafa Kamel Mustafa, a/k/a “Abu Hamza” (“Abu Hamza”), Ouassama Kassir, and Earnest James Ujaama, attempted to create a terrorist training camp in the United States to support al Qaeda, which has been designated by the United States Secretary of State as a foreign terrorist organization. ASWAT conspired with Abu Hamza, Kassir, and Ujaama to establish the terrorist training camp on a rural parcel of property located in Bly, Oregon. The purpose of the Bly, Oregon camp was for Muslims to receive various types of training – including military-style jihad training – in preparation to fight jihad in Afghanistan. As used by the conspirators in this case, the term “jihad” meant defending Islam against purported enemies through violence and armed aggression, including, if necessary, by using murder to expel non-believers from Muslim holy lands.
In a letter faxed from Ujaama, in the United States, to Abu Hamza, in the United Kingdom, the property in Bly was described as a place that “looks just like Afghanistan,” and the letter noted that the men at Bly were “stock-piling weapons and ammunition.” In late 1999, after transmission of the faxed letter, Abu Hamza directed ASWAT and Kassir, both of whom resided in London, England, and attended Abu Hamza’s mosque there, to travel to Oregon to assist in establishing the camp. On November 26, 1999, ASWAT and Kassir arrived in New York, and then traveled to Bly.
ASWAT and Kassir traveled to Bly for the purpose of training men to fight jihad. Kassir told witnesses that he supported Usama Bin Laden and al Qaeda, and that he had previously received jihad training in Pakistan. Kassir also possessed a compact disc that contained instructions on how to make bombs and poisons. After leaving Bly, ASWAT and Kassir traveled to Seattle, Washington, where they resided at a mosque for approximately two months. While in Seattle, Kassir, in ASWAT’s presence, provided men from the mosque with additional terrorist training lessons – including instructions on different types of weapons, how to construct a homemade silencer for a firearm, how to assemble and disassemble an AK-47, and how an AK-47 could be altered to be fully automatic and to launch a grenade. On another occasion, with ASWAT sitting by his side, Kassir announced to the men in Seattle that he had come to the United States for martyrdom and to destroy, and he informed his audience that some of them could die or get hurt.
In September 2002, special agents from the FBI recovered a ledger, among other items, from an al Qaeda safe house in Karachi, Pakistan. The ledger listed a number of individuals associated with al Qaeda, including ASWAT. The al Qaeda safe house was used by Khalid Sheikh Mohammed, al Qaeda’s chief operational planner and the alleged planner of the terrorist attacks of September 11, 2001.
The Indictment charges ASWAT, 40, a British citizen, with four offenses that carry the following maximum penalties:
1) Conspiracy to provide material support to terrorists (18 U.S.C. § 371): Five years
2) Providing material support to terrorists (18 U.S.C. §§ 2339A, 2): 10 years
3) Conspiracy to provide material support to a foreign terrorist organization (al Qaeda) (18 U.S.C. §2339B): 10 years
4) Providing material support to a foreign terrorist organization (al Qaeda) (18 U.S.C. §§ 2339B, 2): 10 years
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
On May 12, 2009, after a four-week jury trial in the Southern District of New York, Kassir was found guilty of charges relating to his efforts to establish the terrorist training camp in Bly, and his operation of several terrorist websites. On September 15, 2009, U.S. District Judge John F. Keenan sentenced Kassir to life in prison.
On May 19, 2014, after a four-week jury trial in the Southern District of New York, Abu Hamza was found guilty of charges relating to his role in the conspiracy to establish the terrorist training camp in Bly, as well as his role in a hostage-taking in Yemen in 1998 that resulted in four deaths, and his support of violent jihad in Afghanistan in 2000 and 2001. Abu Hamza is scheduled to be sentenced on January 9, 2015, before U.S. District Judge Katherine B. Forrest.
Mr. Bharara praised the outstanding efforts of the FBI’s Manhattan-based Joint Terrorism Task Force, which principally consists of agents and detectives of the FBI and the NYPD, the United States Marshals Service, and the Metropolitan Police Department of London, England. Mr. Bharara also thanked the U.S. Department of Justice’s National Security Division and Office of International Affairs for their ongoing assistance.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys John P. Cronan and Ian McGinley are in charge of the prosecution.
The allegations contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
HIDTA Front Range Drug Task Force Takes Down Major Heroin Drug Trafficking Organization with A Connection to MexicoRead the Press Release
DENVER – The Front Range Task Force, working with the U.S. Marshals Service, U.S. Attorney’s Office, Drug Enforcement Administration, Denver Police Department, Arapahoe County Sheriff’s Office, Aurora Police Department, Internal Revenue Service – Criminal Investigation, U.S. Immigration and Customs Enforcement, and the Bureau of Alcohol, Tobacco, Firearms & Explosives, has dismantled a major Denver Metropolitan Area heroin trafficking organization with roots in Sinaloa, Mexico, authorities announced today. A total of 50 defendants were arrested over the course of this investigation on either federal or state charges. During the final phase of the investigation 28 additional arrests were made during an operation conducted last week in the Denver area. Thirteen of the defendants were indicted by a federal grand jury in Denver. Some of the federally indicted defendants remain at large. Also, a total of 16 search warrants were executed during the latter part of the investigation.
During the course of this multi-state investigation, which began in October 2012, over 23 pounds of heroin, 4 firearms, $300,000 in currency and 7 vehicles were seized.
The underlying investigation disclosed that the target drug organization has a source of supply echelon with roots in Sinaloa, Mexico. In the Denver metropolitan area, in the last several years, the most plentiful kind of heroin has been “black tar heroin” originating in Mexico. A substantial portion of the black tar heroin distributed in the Denver metropolitan area originates in the State of Sinaloa, Mexico.Source of supply echelon members arranged to have large amounts of black tar heroin brought to Colorado on a periodic basis. Using their inventory of heroin, the source of supply members provided ounce sized portions of heroin to street level dealers in the Denver metropolitan area on a regular basis. The underlying investigation showed the source of supply level members would charge the street level dealer members approximately $700.00 an ounce for heroin. The street level dealers, in turn would sell heroin in gram and half gram quantities to customers, users, and lower level re-distributors, generally charging $60.00 for a gram of heroin.
The source of supply echelon members in the Denver metro area during the period of the underlying investigation generally consisted of three or four adult males at any given time. The source of supply echelon members apparently remained in the Denver metropolitan area for a period of time on assignment, and periodically returned to Mexico. One of the three to four males would act as the primary contact for communications with the street level dealers, setting appointments, handling potential issues of suitable quality or proper quantity, timely payment, operational security, etc.
“Trafficking and abuse of heroin in Colorado has skyrocketed,” said U.S. Attorney John Walsh. “With no way for users to determine purity, heroin has the potential of not only making people sick, but killing them outright, as rising overdose death statistics tragically demonstrate. The Front Range Task Force’s work to get this staggering amount of high grade heroin off the street makes our communities safer, and makes it harder for those who use heroin to find the drug.”
The Special Agent in Charge of the Drug Enforcement Administration for the Denver area, Barbra M. Roach, said that “This sustained investigation and enforcement has disrupted a well-entrenched heroin distribution cell in the Denver Metro area controlled by a Sinaloa, Mexico Cartel”
Denver Police Chief White stated that “The Front Range Task Force is proud to have partnered with the U.S. Attorney’s Office, DEA and several local and state law enforcement entities to investigate this drug trafficking group. The investigation of the DTO involved a two year investigation targeting street level heroin dealers and working the case up to an international drug organization. With the amount of heroin seizures, assets and weapons, the investigation dismantled the Denver cell of this Drug Organization. This case was unique because it required investigators to work with several different levels of drug dealers, including street deals, mid-level operations and ultimately, a major drug trafficking organization. The Front Range Task Force relied heavily on other jurisdictions and DEA Groups in dismantling the Denver Cell of this Drug Trafficking Organization and is proud of the fact the case was able to reduce the amount of heroin on the streets today.”
The defendants charged in the federal case each face conspiracy to distribute and possess with intent to distribute a quantity of a mixture and substance containing a detectable amount of heroin. If convicted, each defendant faces not more than 20 years in federal prison, and up to a $1,000,000 fine.The Front Range Task Force is comprised of the DEA, the Denver Police Department, the Arapahoe County Sheriff’s Office, the Aurora Police Department, and the Douglas County Sheriff’s Office. The Internal Revenue Service – Criminal Investigation (IRS CI) participated in this investigation as well.
This case is being prosecuted by Assistant U.S. Attorney Guy Till, with the U.S. Attorney’s Office Organized Crime Drug Enforcement Task Force.
The charges contained in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty
Georgia Convicted Felon Sentenced in El Paso to Seven Years in Federal Prison for Possessing A Firearm During Interstate KidnappingRead the Press Release
In El Paso today, 27-year-old Wano McSwain of Dahlonega, Georgia, was sentenced to seven years in federal prison for being a convicted felon in possession of a firearm during an interstate kidnapping announced United States Attorney Robert Pitman and Douglas E. Lindquist, Federal Bureau of Investigation (FBI) Special Agent in Charge of the El Paso Division.
In addition to the prison term, United States District Judge Philip R. Martinez ordered that McSwain be placed under supervised release for a period of three years after completing his prison term and forfeit two firearms and an assortment of ammunition seized by law enforcement at the time of his arrest.
According to court records, on February 5, 2014, a 78-year-old man reported to a store clerk at the Love’s Truck Stop on Interstate 10 in Anthony, TX, that he was in fear of his life. The man told the clerk that two days prior, while in Georgia, McSwain forced him at gunpoint to drive McSwain to Albuquerque, NM. Anthony police officers arrived on the scene and began searching for McSwain. They subsequently arrested McSwain nearby and recovered a .25 caliber pistol and a .20 gauge shotgun belonging to McSwain.
McSwain’s criminal history reveals that he was convicted of Pandering of a Child on April 19, 2005 in Clark County, NV, and subsequently sentenced to two to eight years in the Nevada Department of Corrections. Further investigation revealed a police report on file in Lumpkin County, GA, which alleged that McSwain stole the .20 gauge shotgun recovered by authorities on February 5, 2014. On August 29, 2014, McSwain pleaded guilty to the federal felon-in-possession charge in El Paso.
This case was investigated by special agents with the Federal Bureau of Investigation together with the Anthony Police Department. Assistant United States Attorney Rifian Newaz prosecuted this case on behalf of the Government.Gaston Man Pleads Guilty to Federal Firearms and Ammunition ChargeRead the Press Release
Contact Person: Beth Drake (803) 929-3000
Columbia, South Carolina ---- United States Attorney Bill Nettles stated today that Warren Dominique McDaniel, age 28, of Gaston, South Carolina pled guilty as charged today in federal court. McDaniel plead guilty to two (2) counts of being a felon in possession of firearms and ammunition, in violation of Title 18, United States Code, Sections 922(g)(1), 924(a)(2), and 924(e). McDaniel plead straight up to both charges in the federal indictment without a plea agreement. United States District Judge Michelle Childs accepted the plea and will impose a sentence after she has reviewed the presentence report, which will be prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that on July 22, 2010, officers with the Columbia Police Department executed a state search warrant at a Columbia residence following the controlled purchase of a small amount of marijuana from a male inside the residence. During a search of the residence, officers recovered a Romarm 7.62x39mm rifle with a 30-round high capacity magazine, a Taurus .45 caliber pistol, rounds of .45 caliber ammunition, a digital scale, a box of ziplock bags, and a marijuana blunt. McDaniel, who lived at the residence at the time, admitted that the guns and marijuana belonged to him and that he bought the guns off the street because he was a felon. McDaniel was charged by state authorities and plead guilty to simple possession of marijuana and paid a fine. Evidence presented at the change of plea hearing today further established that on April 12, 2014, officers with the Lexington County Sheriff’s Department responded to a shooting at a birthday party in Gaston, South Carolina and found that a 7 year-old female had been shot and killed and a 5 year-old male had been shot in the arm. The investigation revealed that during the party, McDaniel’s girlfriend had unlocked the trunk of McDaniel’s vehicle to allow a child to retrieve a toy. Unbeknownst to her, while looking for the toy, the child found a loaded FEG 7.62x39mm rifle with a 30-round high capacity magazine in the trunk of the vehicle and pulled the trigger, causing the rifle to fire while inside the trunk, striking the other two (2) children who were standing outside the vehicle. The investigation revealed that the firearm belonged to McDaniel, who admitted that he had purchased it off the street approximately 4 ½ years earlier. McDaniel further admitted that he sold marijuana and that he kept the gun for protection.
The investigation revealed that McDaniel is prohibited under federal law from possessing firearms and/or ammunition based upon his prior state convictions for unlawful carrying of a weapon (two separate counts), possession of a stolen pistol, possession of marijuana, possession of a stolen pistol, possession of less than 1 gram of crack cocaine, giving false information, possession with intent to distribute marijuana, and simple possession of marijuana.
Mr. Nettles stated that McDaniel faces a statutory maximum sentence of ten (10) years, a fine of $250,000 and a term of supervised release of up to three (3) years following the term of imprisonment. However, if McDaniel were found to have three (3) prior violent felony convictions and/or serious drug convictions, he would be deemed an armed career criminal under federal law and face a statutory mandatory minimum of fifteen (15) years imprisonment with a maximum of life, a fine of $250,000 and a term of supervised release of up to five (5) years following the term of imprisonment.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Lexington County Sheriff’s Department, and the Columbia Police Department, and was prosecuted as part of the joint federal, state and local Project CeaseFire initiative, which aggressively prosecutes firearm cases. Assistant United States Attorney Stacey D. Haynes of the Columbia office handled the case.Gardiner Man Pleads Guilty to Pharmacy RobberyRead the Press Release
Contact: Julia M. Lipez
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Robert
Richard, 26, of Gardiner, Maine, pleaded guilty today in U.S. District Court to Interference with
Commerce by Robbery, in connection with the November 28, 2013 (Thanksgiving Day) robbery
of the Rite Aid pharmacy in Bridgton, Maine.Court records reveal that on Thanksgiving in 2013, Richard entered the Rite Aid in
Bridgton wearing a hooded sweatshirt, sunglasses, and a bandana, and handed the pharmacist a
note that read, “All your oxycodone now!” The pharmacist handed Richard a bag containing
oxycodone pills and Richard fled from the pharmacy in a car with a concealed license plate.Richard faces up to 20 years in prison and a $250,000 fine. He will be sentenced after
completion of a presentence investigation report by the U.S. Probation Office.The investigation was conducted by the Federal Bureau of Investigation and the Bridgton
Police Department, with additional assistance provided by the Augusta and Gardiner Police
Departments, and the Kennebec County Sheriff’s Department.Fraudster Homebuilder Sentenced to 15 Years in Prison for Defrauding Investors of $19.805 Million and Evading $2.6 Million in TaxesRead the Press Release
“The Sentence Fits the Crime”
Baltimore, Maryland - U.S. District Judge J. Frederick Motz today sentenced Patrick J. Belzner, a/k/a “Patrick McCloskey,” age 45, of Selbyville, Delaware to 15 years in prison followed, by three years of supervised release, on charges of wire fraud conspiracy, wire fraud and tax evasion. Judge Motz also entered an order that Belzner pay $19.805 million in restitution.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
“This lengthy sentence fits the crime," said U.S. Attorney Rod J. Rosenstein. "This was a longstanding and complex fraud scheme perpetrated by experienced con artists.”
According to Belzner’s plea agreement and court documents, from the fall of 2009 through August 2011, Belzner, a home builder, worked for a real estate development business known as the McCloskey Group, which was owned by another home builder named Brian McCloskey. During that time, Belzner conspired with McCloskey; Kevin Sniffen, a Maryland title company attorney; Mervyn Phelan, who held the title of “Senior Underwriter” with a California loan brokerage company named IAG; and Gregory Grantham, a California attorney who was the legal counsel of IAG, to defraud investors through a fraudulent investment scheme.
Specifically, Belzner and the conspirators advised wealthy individuals and investment advisers that in order for the McCloskey Group to obtain large loans for various real estate projects through IAG, it was necessary for the McCloskey Group to deposit substantial sums of money in an escrow bank account to establish that it had cash reserves or “liquidity.” Belzner and his co-conspirators, including Phelan and Grantham, further represented to potential lenders that it was acceptable for the McCloskey Group to borrow these funds. They also represented that the funds would be maintained under the control of Sniffen, a licensed attorney and escrow agent; would not be used for any other purpose; and that the money would be returned to the investor, either upon the funding of the loan or after a specified (and usually relatively short) period of time if the loan did not fund by the expected date. In return for this temporary use of the investor's funds, Belzner and McCloskey promised to pay potential lenders substantial fees or interest.
Contrary to these representations, Belzner admitted that he instead directed McCloskey to remove the investors’ funds soon after they had been deposited into the escrow account. Belzner and McCloskey then used the stolen funds to pay for their personal and business expenses, as well as to make partial repayments to earlier lenders, to pay fees to some of the victim investors to keep them from demanding the return of their money, and to pay IAG for its supposed work and expenses in attempting to locate financing sources. Belzner also directed McCloskey and others to use some of the stolen escrow funds to make payments to other individuals from whom Belzner alone had borrowed money in the past.
Belzner and his co-conspirators attempted to conceal the fraud by providing lenders with false bank statements reflecting that the funds received were still being held in the escrow account; falsely representing in emails and in telephone conversations that the funding of the loans sought by the McCloskey Group and the return of the lenders’ funds was imminent; or by making “extension” payments to lenders in return for being allowed to hold their funds for a longer period than originally promised. Belzner also wrote scripts for other conspirators to use in telephone conversations or written or email communications with the escrow account lenders and their counsel in order to lull them into believing that their funds were safe and would be returned to them as promised.
The court determined today that Belzner and his conspirators' fraudulent scheme caused losses in excess of $19.805 million to more than 26 victim investors.
“Many people think financial crime is victimless, but this case proves that is simply not true. What makes this investigation particularly disturbing is that Mr. Belzner manipulated, lied to and stole from his friends and next-door neighbors. He took money from hardworking, trusting people and then heartlessly flaunted his theft in front of his victims,” stated Steve Vogt, FBI Special Agent in Charge of the Baltimore Division. “Mr. Belzner has shown no remorse for his crimes, and deserves to sit in prison reflecting on what his own greed cost his family and friends.”
Belzner also pleaded guilty to evasion of assessed tax payments. In 1995, 1996 and 1998, Belzner stole $1,111,304.78 from his employer at the time, and in 1998, he stole $186,146.71 from another employer, none of which he reported as income on his tax returns for those years. A subsequent IRS audit of those tax years resulted in the assessment of additional taxes, interest and penalties against Belzner of $1,150,935.25 for the 1995 and 1996 tax years and $246,424.50 for the 1998 and 1999 tax years.
To avoid paying those taxes, Belzner admitted that between January 2006 and June 2011, he intentionally concealed income and assets from the IRS and made no payments on his tax debt. For example, Belzner placed his residences, other real estate and automobiles in the names of corporations that he formed. Belzner paid his personal expenses, including his mortgage, ground rent for a vacation home, construction costs on a house that he built, car payments, Ravens season tickets, and private school tuition from bank accounts he opened in the names of the corporations or from payments out of McCloskey Group accounts. Belzner used individuals to act as “straw purchasers” for property that he acquired and to conduct financial and other transactions on his behalf. At Belzner’s direction, McCloskey Group employees and others also cashed more than $175,870 in company checks made payable to them, returning the cash to Belzner or using the cash to pay Belzner's creditors. Belzner also arranged for the McCloskey Group to pay many of his personal living expenses, rather than issuing him salary checks. For example, between January 2009 and June 2011, the McCloskey Group paid more than $1.5 million of Belzner’s personal expenses, including health and life insurance premiums, car, personal loan and mortgage payments, and utility and cable bills. In February 2006 and again in January 2009, Belzner submitted forms to the IRS falsely claiming that he did not have sufficient income to make any payments on the assessed back taxes, penalties and interest. The total amount of assessed tax, interest and penalties owed by Belzner as of August 2013 was $2,619,870.
"Throughout a decade of deceit, Patrick Belzner not only defrauded his investors, but also the American tax system, said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office. “Motivated by pure greed, Belzner created an elaborate scheme to hide his stolen funds and evade paying his tax liability. In cooperation with our federal partners, IRS-CI is committed to holding thieves, such as Belzner, accountable for their misdeeds."
Brian McCloskey, age 44, of Baltimore; Kevin Sniffen, age 53, of Phoenix, Maryland; Mervyn A. Phelan, Sr., age 74, of Newport Beach, California; and Gregory E. Grantham, age 57, of Oceanside, California, have each pleaded guilty to their roles in the conspiracy. In addition, Sean Krondak, of Irvine, California, another IAG employee, has pled guilty to a charge of obstruction of justice arising out of IAG’s destruction of incriminating emails in response to a federal grand jury subpoena. Grantham and Phelan are respectively scheduled to be sentenced on November 14, 2014 and December 5, 2014, while Krondak and McCloskey are both scheduled to be sentenced on December 12, 2014. Sniffen is scheduled to be sentenced on December 19, 2014.
Today’s announcement is part of efforts undertaken 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 FBI and IRS – Criminal Investigation for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Jefferson M. Gray and Kathleen O. Gavin, who prosecuted the case.
- Four Laredoans Arrested in Money Laundering Conspiracy
Former USP Hazelton Inmates Sentenced for Assaulting Inmate and Correctional OfficerRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – Two former inmates at the United States Penitentiary in Hazelton, West Virginia were sentenced to additional time in prison for assaulting a fellow inmate and a correctional officer, United States Attorney William J. Ihlenfeld, II, announced today.
John David Pinke, 36, and Edward C. Crow, 44, were each sentenced to an additional 275 months in prison and ordered to pay $281,548.47 in restitution for assaulting a fellow inmate. Crow was also sentenced to an additional 240 months in prison for assaulting a correctional officer. Crow’s sentences will run consecutively. Both Pinke and Crow are currently incarcerated at the Federal Correctional Institution, Gilmer.
In January 2013, Pinke and Crow assaulted a fellow USP Hazelton inmate in one of the prison’s recreational areas. The victim suffered stab wounds from razor blades, broken bones, and cognitive impairment. A federal jury found both Pinke and Crow guilty of one count of “Conspiracy to Commit Assault with Intent to Commit Murder,” one count of “Assault with Intent to Commit Murder – Aiding and Abetting,” one count of “Assault with a Dangerous Weapon with Intent to do Bodily Harm,” and one count of “Assault Resulting in Serious Bodily Injury.” The jury also found Crow guilty of one count of “Possession of a Prohibited Object – Weapon.”
In a separate April 2013 incident, Crow used a handcrafted spear to stab a correctional officer through the food slot in his cell door. A federal jury found Crow guilty of one count of “Assaulting, Resisting, and Impeding Certain Officers or Employees,” one count of “Assault With a Dangerous Weapon With Intent to Do Bodily Harm,” and one count of “Possession of a Prohibited Object – Weapon.”
Assistant U.S. Attorney Andrew Cogar and former Assistant United States Attorney Brandon Flower prosecuted the cases on behalf of the government. The Federal Bureau of Prisons and the Special Investigative Staff at USP Hazelton led the investigations.
U.S. District Judge Irene M. Keeley presided.
Former Tutoring Company Owners Admit Defrauding Dallas and Fort Worth Independent School DistrictsRead the Press Release
DALLAS — Two individuals who ran a tutoring business from offices located in Hurst, Texas, appeared in federal court today, before U.S. Magistrate Judge Paul D. Stickney, and pleaded guilty to federal offenses stemming from their fraudulent operation of that business, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Flori Mati, aka “Florine Shaw,” 42, and David Mbugua, 43, each pleaded guilty to one count of conspiracy to make false, fictitious or fraudulent claims. Each faces a statutory maximum penalty of five years in federal prison, a $250,000 fine and restitution. Following their arrests in March 2014, the Court determined they were flight risks and ordered them to remain in federal custody. Sentencing is set for February 20, 2015, before U.S. District Judge Barbara M. G. Lynn.
Under the No Child Left Behind Act of 2001, federal funds were distributed to state educational agencies, which in turn distributed them to school districts in the form of sub-grants. School districts used a portion of these federal dollars to fund a Supplemental Education Services (SES) program. That SES program provided extra academic assistance, such as tutoring, for eligible students at no cost. Tutoring providers billed the local school districts for the hours of tutoring provided and the school district paid for the tutoring with federal grant money.
For the 2011-2012 and 2012-2013 school years, the Dallas Independent School District (DISD) and the Fort Worth Independent School District (FWISD) each received sub-grants and offered an SES program to eligible students at eligible schools.
From 2011 through the beginning of August 2012, Mati, a former DISD teacher, and Mbugua formed four tutoring companies: Wise Links, LLC; Diverse Links, Inc.; Boost Academy and Avenue Academy. They operated all four entities as one business from offices located on West Bedford Euless Road in Hurst. Beginning in September 2011 and continuing through the end of May 2013, Mati and Mbugua contracted with DISD and FWISD, as well as other school districts in Texas, to provide tutoring services under the SES program.
Mati and Mbugua formed these four separate companies to hide their true ownership and mislead the Texas Education Agency into believing they were unrelated companies, and thus, obtain more SES business than a single company could obtain from the various school districts.
They also obtained as many student names as possible. Mati obtained student identifying information by using her online teacher access to the DISD network. Mati, Mbugua and their employees would also go door-to-door with gifts and prizes to induce students to sign up for their tutoring services, regardless of the students’ intent to attend. Mati, Mbugua and their empoyees would then use student information to mass enroll students, via the Internet, from their residence, their Hurst offices and even from Kenya. They falsified documentation supporting their fraudulent claims by inducing students to sign attendance logs for tutoring sessions they did not receive. They even recruited a friend and her children to complete false and forged attendance sheets.
During the course of their conspiracy, Mati, Mbugua and others submitted false claims to DISD, FWISD and other school districts in Texas, for tutoring services under the SES program that were not provided to students. They billed DISD $2,730,389, and they were paid $1,523,079. They billed FWISD $1,430,687, and they were paid $1,003,318. Approximately 75% of the total amounts billed – approximately $3,120,807 – was for services not provided. Mati and Mbugua wired some of the proceeds they received from these false claims to Kenya, beyond the reach of U.S. authorities.
The FBI and U.S. Department of Education – Office of Inspector General investigated. Assistant U.S. Attorneys Nancy Larson and Megan Fahey are prosecuting.
Former Rocky Boy Health Clinic Ceo Sentenced to One Year in PrisonRead the Press Release
GREAT FALLS - The United States Attorney's Office today announced that Fawn Patricia Ann Tadios, 52, of Box Elder, the former Chief Executive Officer of the Rocky Boy Health Board Clinic, was sentenced to one year and one day in prison, $15,000 in restitution, and two years on supervised release by U.S. District Brian Morris of Great Falls.
Tadios was convicted by a federal jury in June of using tribal travel funds from the health clinic to visit her husband, former Chippewa Cree Tribal Chairman Raymond "Jake" Parker, in federal prison in Yankton, South Dakota. Parker was incarcerated at the federal facility in Yankton from December 2011 through November 2012 following his conviction for theft from the Chippewa Cree Tribe using a tribal credit card for personal purchases and cash advances.
Tadios was allowed to voluntarily surrender to prison when a facility is designated.
Former Pasco Teacher Pleads Guilty to Online Enticement of A MinorRead the Press Release
Tampa, FL – United States Attorney A. Lee Bentley, III announces that David Wendel Thompson (49, Seffner) pleaded guilty yesterday to online enticement of a minor. He faces a mandatory minimum penalty of 10 years, up to life, in federal prison and a potential life term of supervision. His sentencing hearing is set for January 20, 2015. According to the plea agreement, between December 14, 2013, and March 14, 2014, Thompson used Facebook to attempt to persuade two minor females in Belize, ages 13 and 15, to engage in sexual intercourse with him. He did so using his own Facebook account and a fake Facebook account that he had set up to appear as though it belonged to a female teenager in Belize.
On March 14, 2014, Thompson flew from Tampa to Belize, with a layover in Miami, to meet the minors with the intent of engaging in sexual activity. He was arrested in Miami and has remained in federal custody since that time. Thompson admitted to communicating with the females on Facebook and to knowing that they were underage. Prior to his arrest, Thompson was a social studies teacher at Centennial Middle School in Dade City.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, in conjunction with the U.S. Department of State. It is being prosecuted by Assistant United States Attorney Jennifer L. Peresie.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Former Immigration Officer Who Took Bribes from Immigrants Sentenced to 51 Months in Federal PrisonRead the Press Release
Ex-Federal Employee and His Wife Were Also Found Guilty of Witness Tampering
SANTA ANA, California – A former immigration officer who was found guilty of taking bribes from Cambodian immigrants in exchange for immigration benefits, including granting the immigrants temporary legal status, has been sentenced to more than four years in federal prison.
Billy Louis Nelms Sr., 54, of Los Angeles, was sentenced to 51 months in prison late Monday afternoon by United States District Judge Andrew J. Guildford.
During the federal court proceeding Monday, Judge Guilford called the corruption offenses a “disappointment,” noting that “we live in a cynical time where people are not believing in their government.” Judge Guilford also stated that Nelms’ corrupt actions sent a poor message to immigrants, essentially telling them: “Pay the man, get the result.”
Following a seven-day trial, a federal jury on August 1 found Nelms guilty of conspiracy to commit bribery and defraud the United States, bribery, conspiracy to witness tamper and witness tampering.
“These corrupt actions challenged the integrity of an immigration system Mr. Nelms had sworn to uphold,” said Acting United States Attorney Stephanie Yonekura. “Mr. Nelms may have believed that he was above the law, but the prison sentence imposed today shows that everyone will be held accountable for their illegal actions.”
Nelms’ wife, Sokhon Nelms, 60, also of Los Angeles, also was found guilty of conspiracy to witness tamper and witness tampering for threatening two witnesses at the behest of her husband. Sokhon Nelms is scheduled to be sentenced by Judge Guilford on November 6.
“Maintaining the integrity of our nation’s immigration system remains one of the top priorities for the Department of Homeland Security (DHS), Office of Inspector
General (OIG),” said Roger T. Merchant, Special Agent in Charge of DHS OIG, Los Angeles Field Office. “There is no place within the Department for those who knowingly commit corrupt acts for their own personal gain. The DHS OIG will continue to aggressively pursue, investigate and prosecute those who break the law and violate the public trust.”
The evidence at the couple’s trial showed that, between 2005 and August 2008, Billy Nelms worked in the Santa Ana federal building as an immigration officer in the Fraud Detection and National Security unit, which is part of U.S. Citizenship and Immigration Services (USCIS). As part of his job, Nelms was involved in, among other things, investigating marriage fraud on applications for an immigration benefit.
The bribery scheme involved Cambodian immigrants who were present in the United States without legal status and promised permanent legal status by Nelms. The immigrants paid as much as $5,000 in cash, and, in exchange for this, Nelms stamped immigration documents that gave the immigrants temporary legal status in the United States – but not the permanent status they sought.
After Nelms was indicted on bribery charges in June 2013, Mr. and Mrs. Nelms tampered with two of the witnesses in the bribery case.
This case is the product of an investigation by the Department of Homeland Security’s Office of Inspector General (DHS-OIG).
USCIS’s Fraud Detection and National Security Directorate and Immigration Services and U.S. Immigration and Customs Enforcement’s Homeland Security
Release No. 14-137
Former Credit Union Employee Pleads Guilty to Federal Bank Fraud ChargeRead the Press Release
ALBUQUERQUE – Louisa Gabaldon, 43, of Belen, N.M., pleaded guilty this morning to a federal bank fraud charge under a plea agreement with the U.S. Attorney’s Office.
Gabaldon was indicted on Aug. 7, 2013, and charged with 12 counts of bank fraud. The indictment alleged that from Jan. 2004 through July 2010, Gabaldon engaged in an illegal scheme to defraud her employer, the Belen Railroad Employees Credit Union (Credit Union) by making fraudulent withdrawal of funds from accounts belonging to the Credit Union’s customers.
Today, Gabaldon pled guilty to Count 5 of the indictment charging her with fraudulently withdrawing $31,000 from a customer’s account on July 31, 2006. The plea agreement, however, requires Gabaldon to pay $118,376.56 in restitution to cover losses associated with all 12 counts in the indictment as well as related losses suffered by the Credit Union.
In entering her guilty plea, Gabaldon admitted that, while employed by the Credit Union, she had loan approval which permitted her – when authorized by customers – to make withdrawals from customers’ accounts, transfer funds among their accounts, increase the amount of their loan accounts and open new loans in their names. Gabaldon admitted that, without the knowledge or permission of Credit Union customers, she added amounts to customers’ existing loan accounts and opened new loans in their names and used the funds to pay for her own debts and to make a partial payment for the purchase of a home. In order to conceal her fraudulent activity, Gabaldon moved funds among customers’ accounts to make it appear as if loans had been repaid or funds were replaced.
At sentencing, Gabaldon faces a maximum penalty of 30 years in prison. She remains on conditions of release pending her sentencing hearing, which has yet to be scheduled.
This case was investigated by the Albuquerque office of the FBI and is being prosecuted by Assistant U.S. Attorney Sean J. Sullivan.
Former City Dispatcher Sentenced to 14 Months for Bribery SchemeRead the Press Release
PHILADELPHIA – Dorian Parsley, 44, of Philadelphia, formerly a dispatcher with the Philadelphia Police Department (PPD), was sentenced today to 14 months in prison for conspiracy, solicitation of a bribe, and honest services fraud in connection with a scheme by which she gave an unfair advantage to certain tow truck operators in exchange for cash bribes. Parsley pleaded guilty to the charges on July 21, 2014. In addition to the prison term, U.S. District Court Judge Eduardo C. Robreno ordered a $1,000 fine, one year of supervised release, and a $300 special assessment.
Between February 2011 and December 2013, Parsley operated a bribery scheme through which she collected weekly payments totaling more than $35,000 from three tow truck operators, now her co-defendants, in exchange for providing them with certain confidential information, including accident and disabled vehicle locations, and the personal identifying information of accident victims. Parsley did this by secretly sending text messages from her personal cellphone, in a purposeful end-run around PPD policies and procedures. In this way, the defendant provided an unfair economic advantage to her bribers, at the expense of other tow truck operators who relied on the proper functioning of the PPD’s rotational towing program.
The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department. It is being prosecuted by Assistant United States Attorneys Kevin Brenner and Jennifer Chun Barry.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Former Campaign Coordinator Pleads Guilty to Embezzling from Texas Lieutenant Governor David DewhurstRead the Press Release
In Austin today, 58-year-old political consultant Kenneth Barfield (aka “Buddy Barfield”) pleaded guilty to stealing approximately $1.8 Million in campaign funds from Texas Lieutenant Governor David Dewhurst announced United States Attorney Robert Pitman, Christopher Combs, Federal Bureau of Investigation (FBI) Special Agent in Charge of the San Antonio Division, and IRS Criminal Investigation Acting Special Agent in Charge William Cotter.
Appearing before United States Magistrate Judge Mark Lane, Barfield pleaded guilty to one count of wire fraud, one count of making a false tax return and one count of embezzlement of federal campaign funds. According to court documents, Barfield, and through his Austin-based companies, was a member of the campaign staff and committee for Lieutenant Governor David Dewhurst’s run for the Republican nomination for United States Senate in 2012. Barfield and his companies were responsible for securing, paying, and/or subcontracting legal and legitimate activities on behalf of Dewhurst’s campaign and had a fiduciary duty to act in the best interests of the campaign, including oversight and maintenance of financial records.
By pleading guilty to the charges, Barfield admitted to knowingly engaging in a scheme to steal an estimated $1.8 Million in campaign funds and use it for his own personal expenses including his home mortgage, school tuition for his children, personal investments and other living expenses. Barfield further admitted that on his 2008 Income Tax return, he knowingly stated that his Taxable Income was zero when, in fact, his Taxable Income should have been reported as approximately $582,000. Barfield also admitted that under his direction, fraudulent documentation was submitted in disclosure reports to the Federal Elections Commission (FEC) regarding expenditures for campaign disbursements.
“This case should serve as a reminder of the unfortunate truth that some people abuse positions of trust to enrich themselves at the expense of others, including, in this case, the taxpayers,” stated United States Attorney Robert Pitman.
Barfield is on bond pending sentencing. He faces up to 20 years in federal prison for wire fraud; up to three years in federal prison for making a false tax return; and, up to five years in federal prison for embezzlement of federal campaign funds. Sentencing before United States District Judge Sam Sparks in Austin has yet to be scheduled.
“Whenever an individual utilizes their position to defraud the public for their own personal gain by stealing campaign contributions, it tarnishes our political process. The FBI is committed to working with our law enforcement partners to ensure those who choose to line their pockets with public funds and abuse their positions of trust are held accountable,” stated FBI Special Agent in Charge Christopher Combs.
“The role of IRS Criminal Investigation becomes even more important in embezzlement cases such as this due to the complex financial transactions that must be unraveled. As in the case of Mr. Barfield, federal tax laws are typically violated in connection with this blatant fraud which can result in additional jail time,” stated IRS Criminal Investigation Acting Special Agent in Charge William Cotter. “Honest and law abiding citizens are fed up with greedy individuals who abuse the trust they are granted and use deceit and fraud to line their pockets with other people's money. Today's guilty plea demonstrates the collective efforts of IRS and our partners to enforce the law and ensure public trust.”
This case was investigated by special agents with the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation together with the Travis County District Attorney’s Special Prosecution Division. Assistant United States Attorneys Dan Guess and Ashley Hoff are prosecuting this case on behalf of the Government.Former CEO of Pharmacy Dispensing Service Indicted on Federal Tax ChargesRead the Press Release
NEWARK, N.J. - The former chief executive officer of a New Jersey company that provided pharmacy dispensing services was indicted today by a federal grand jury for allegedly filing false tax returns, U.S. Attorney Paul J. Fishman announced.
Gary J. Sekulski, 67, of Flanders, New Jersey, was charged with the filing of false federal income tax returns for tax years 2007, 2008 and 2009. Sekulski is expected to surrender for an arraignment before a federal judge on a date to be determined.
According to the indictment:
Sekulski was the CEO and President of Healthcare Corporation of America (HCA), a New Jersey company that controlled a pharmacy dispensing service to public and non-profit entities and served as a holding corporation for a number of wholly owned subsidiaries.
For tax years 2007, 2008, and 2009, Sekulski understated the amount of income that he received from HCA and other sources on his federal income tax returns. Sekulski then signed the returns under penalty of perjury and caused them to be filed with the IRS.
During that time, Sekulski sold shares of company stock, received settlement payments, and paid company money into his personal bank account without reporting any of the resulting income. In all, Sekulski failed to report approximately $353,000 in taxable income.
Each of the three tax counts carries a maximum potential penalty of three years in prison and a $250,000 fine together with the costs of prosecution.
U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen for the investigation, and thanked special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for their valuable assistance.The government is represented by Assistant U.S. Attorney Lee M. Cortes Jr., of the U.S. Attorney’s Office in Newark.
14-382
Defense counsel: William C. Cagney Esq., New Brunswick, New Jersey
Sekulski, Gary Indictment
Former Baptist Missionary Pleads Guilty to Wire FraudRead the Press Release
RICHMOND, Va. – Brady Nurse, 38, of Bothell, Washington, pleaded guilty today to wire fraud in connection with the fraudulent reimbursement of expense invoices while he served as a Baptist missionary in Portugal.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; and Adam S. Lee, Special Agent in Charge for the Federal Bureau of Investigation (FBI), Richmond Division, made the announcement after the guilty plea was accepted by United States Magistrate Judge David J. Novak. Nurse faces a maximum penalty of 20 years in prison, a fine of up to $250,000, and full restitution when he is sentenced on January 21, 2015, by United States District Judge James R. Spencer.
In a statement of facts filed in support of his plea agreement, Nurse admitted that from 2008 to 2013, while working in Portugal as a Baptist missionary for the International Mission Board (“IMB”), he fraudulently obtained $285,412.73 through 135 fraudulent reimbursement requests. The IMB is an entity of the Southern Baptist Convention, the nation's largest evangelical denomination, with more than 40,000 churches and nearly 16 million members. It is headquartered in Richmond, Virginia. The IMB is dedicated to evangelizing around the world with approximately 4,800 missionaries worldwide.
Nurse acknowledged that in 2006, he was appointed to Apprentice status (missionary) by the IMB, and assigned to Lisbon, Portugal. In 2009, he was approved for Career status. Nurse served as the Logistics Coordinator (“LC”) in Portugal, responsible for ensuring the payment of certain expenses for himself, other missionaries, and the IMB overall while overseas. He was also responsible for the financial support activities for IMB field personnel assigned to Portugal. As a Logistics Coordinator, Nurse was paid on an as-needed basis, for field personnel housing, car maintenance, applicable taxes, and major purchases.
IMB LC’s located overseas conducted business from both IMB bank accounts and personal accounts. Nurse acknowledged that when an authorized expense was incurred, he would prepare a request for reimbursement, supported by appropriate documentation. He would then submit the reimbursement request by wire transfer/email from Portugal to the IMB offices in London, U.K., which were then routed to IMB offices in Richmond, Virginia. Once the reimbursement requests were approved by the IMB, Nurse was paid by electronic funds transfers to his overseas bank account through on line banking from a Richmond, Virginia. The internal auditing and control staff of the IMB initially detected, and then determined the extent of Nurse’s fraudulent scheme, subsequently reporting it to the F.B.I.
Nurse admitted using a variety of techniques to submit for, and fraudulently receive, funds from IMB. For instance, he increased amounts on valid documents/invoices submitted on expense reports to fraudulently increase his reimbursement; submitted fraudulent, manufactured, and/or duplicated documentation on expense reports for reimbursement; submitted inadequate documentation, such as quotes and estimates for services to be performed by vendors rather than actual paid invoices, but falsely represented them as services actually provided; altered documentation; and was reimbursed for non-reimbursable expenses such as a jewelry purchase disguised as vehicle painting.
On January 30, 2014, Nurse officially resigned from IMB.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney S. David Schiller is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:14-cr-138.
Former Attorney Pleads Guitly to Defrauding Her ClientsRead the Press Release
A former attorney who defrauded over a dozen clients pled guilty today in federal court in Cedar Rapids.
Susan Hense, 54, from Cedar Rapids, Iowa, was convicted of one count of wire fraud.
In a plea agreement, Hense admitted that she knowingly made up a scheme to defraud the clients of her law firm, Hense Law PLC, and to obtain money from her clients under false pretenses and promises. Hense admitted that she falsely represented to her clients that money belonging to them would be held in trust on their behalf in a bank account when, in fact, Hense intended to steal at least a portion of the clients’ money. Hense further admitted that over a three year period, she stole and misappropriated at least $837,011.31 in client funds. Hense has since been disbarred and can no longer practice law in Iowa.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Hense remains free on conditions of release set by the court pending sentencing. Hense faces a possible maximum sentence of 20 years’ imprisonment, a fine, $100 in special assessments, and three years of supervised release following any imprisonment. Hense has also agreed to pay restitution to the victims of her offense.
The case is being prosecuted by Assistant United States Attorney Anthony Morfitt and was investigated by the Cedar Rapids Police Department.
Court file information is available at https://ecf.iand.uscourts.gov. The case file number is 14-CR-109.
Five Northern California Real Estate Investors Indicted for Bid Rigging and Fraud at Public Foreclosure AuctionsRead the Press Release
A federal grand jury in San Francisco returned an eight-count indictment against five real estate investors for their role in bid rigging and fraud schemes at foreclosure auctions in Northern California, the Department of Justice announced.
The indictment, filed today in U.S. District Court for the Northern District of California in San Francisco, California, charges Northern California real estate investors Joseph Giraudo, Raymond Grinsell, Kevin Cullinane, James Appenrodt and Abraham Farag with participating in conspiracies to rig bids and schemes to defraud mortgage holders and others. The indictment alleges that the defendants agreed to stop bidding or to refrain from bidding for properties at public foreclosure auctions in San Mateo County, California, in return for payoffs and concealing the fact that monies were diverted from mortgage holders, homeowners and others to co-schemers. Additionally, Giraudo, Grinsell and Appenrodt were charged with bid rigging and fraud in San Francisco County, California. To date, 47 individuals have agreed to plead or have pleaded guilty, as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
“These defendants corrupted the public foreclosure auctions in San Mateo and San Francisco counties, and they did so to line their pockets with money that rightfully belonged to mortgage holders and others,” said Brent Snyder, Deputy Assistant Attorney for the Antitrust Division’s criminal enforcement program. “As these charges demonstrate, the Antitrust Division will continue to pursue bidders at foreclosure auctions who violated the Sherman Act and defrauded mortgage holders and others.”
The indictment alleges, among other things, that beginning no later than August 2008 and continuing until January 2011, the defendants conspired to rig bids to obtain numerous properties sold at foreclosure auctions in San Mateo and San Francisco counties, paid others not to bid, accepted payoffs not to bid and, in the process, defrauded mortgage holders, other holders of debt secured by the auctioned properties and, in some cases, the defaulting homeowners.
“These charges demonstrate our continued commitment to investigate and prosecute individuals and organizations responsible for the corruption of the public foreclosure auction process,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “The FBI is committed to work these important cases and remains unwavering in our dedication to bring the members of these illegal conspiracies to justice.”
Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. Each count of mail fraud carries a maximum sentence of 20 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the mail fraud schemes. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than $1 million.
Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties, California. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300, or call the FBI tip line at 415-553-7400.
Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 93 U.S. Attorneys’ offices and state and local partners, it is 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 nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
Final Defendant and Leader of Burglary Ring Pleads Guilty to Dozens of Commercial Burglaries and to ArsonRead the Press Release
Robbed Businesses in Maryland, Virginia, West Virginia and Pennsylvania
Baltimore, Maryland – Carl Paschall, Sr., age 54, of Halethorpe, pleaded guilty today to conspiring to commit bank burglary and arson of property used in interstate commerce.The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Chief Gary Gardner of the Howard County Police Department; Chief James W. Johnson of the Baltimore County Police Department; Anne Arundel County Police Chief Kevin Davis; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Otis E. Harris, Jr., Special Agent in Charge, Coast Guard Investigative Service, Chesapeake Region; and Commissioner Anthony W. Batts of the Baltimore Police Department.
According to his plea agreement, from at least November 2010 until his arrest in July 2013, Carl Paschall, Sr. was the leader of a group that included his son, Carl Paschall Jr., Chad Paschall, Thomas Ellis, and Michael Johnson, who conspired to commit commercial burglaries in Maryland, Virginia, West Virginia, and Pennsylvania. Paschall, Sr. also conspired with defendants in a related case, David Paschall, Jr., Mark Johnson, Ronald Henderson and others, to commit the robberies. The conspirators stole cash, money orders, stamps, silver bars, jewelry, cigarettes, lottery tickets, prescription drugs, food, beverages, safes, laptop computers, cell phones, electronics, vehicles and other valuable items from gas stations, convenience stores, banks, credit unions and other commercial establishments during the night. The conspirators often stole or attempted to steal cash from ATMs.
The conspirators usually cut power lines, telephone lines, cables and other wires before entering a business. They used vise grips, sledgehammers, chop saws, grinders and blow torches to enter the business, and then often waited – for several minutes or sometimes up to several hours – before ransacking the business of its valuable items.
Carl Paschall, Sr. admitted that he committed, or attempted to commit, dozens of commercial burglaries and that the loss resulting from these burglaries exceeded $800,000.
On May 26, 2012, Carl Paschall, Sr. and his son, Carl Paschall, Jr. stole a white 2012 Ford E250 panel van from a rental car office in Martinsburg, West Virginia, which they used during three commercial burglaries committed on May 26th and 27th at businesses in West Virginia. On May 31, 2012, the conspirators drove the van to Newport Road in Woodbine, Maryland and parked the vehicle on the side of the road. The conspirators left some evidence of their crimes inside the stolen van, including stolen safes and lottery tickets. The applied an ignitable fluid inside the vehicle and set it on fire. Early in the morning on June 1, 2012, Howard County Fire and Rescue Department responded to the scene and encountered the van fully engulfed in flames. After extinguishing the fire, the remaining contents of the van were preserved for law enforcement.
Carl Paschall, Sr. and the government have agreed that if the Court accepts his plea, Paschall, Sr. will be sentenced to 66 months in prison. As part of his plea agreement, Paschall, Sr. will be required to pay restitution in the full amount of the victim’s losses and to forfeit $200,000. U.S. District Judge J. Frederick Motz has scheduled Paschall’s sentencing for December 1, 2015, at 10:30 a.m.
Carl Paschall, Jr., age 32, of Baltimore, previously pleaded guilty and was sentenced to 66 months in prison and was ordered to pay restitution of $200,000. Chad Paschall, age 28, of Baltimore; David Paschall, Jr., age 55, of Catonsville, Maryland; Mark Johnson, age 51, of Baltimore; Ronald Henderson, age 52, of Pasadena, Maryland; Thomas Daniel Ellis, age 24, and Michael Johnson, age 25, both of Baltimore, also pleaded guilty to their participation in the conspiracy. All are awaiting sentencing except Ellis and Michael Johnson, who was sentenced to a year and a day in prison and three years of probation, respectively.United States Attorney Rod J. Rosenstein commended the DEA, Howard County Police Department, Baltimore County Police Department; Anne Arundel County Department, ATF, Department of Health and Human Services - Office of Inspector General; Coast Guard Investigative Service and Baltimore Police Department for their work in the investigation. Mr. Rosenstein also praised the many local and state agencies in Virginia, West Virginia and Pennsylvania for their assistance in the investigation.
Mr. Rosenstein thanked Assistant United States Attorneys David I. Sharfstein and Andrea L. Smith, who are prosecuting this case.
Federal Court Permanently Bars San Antonio Tax Preparer from Preparing Tax Returns for OthersRead the Press Release
A federal court in San Antonio has permanently barred a Texas man and his business, Cardenas Income Tax Service, from preparing federal tax returns for others, the Justice Department announced today.
The civil injunction order, to which John Andrew Cardenas consented, was signed by Judge Orlando L. Garcia of the U.S. District Court for the Western District of Texas.
The complaint alleged that Cardenas individually and through Cardenas Income Tax Service, which had offices in Uvalde, Crystal City, Kingsville and Corpus Christi, Texas, prepared federal tax returns for customers using fraudulent Schedule C businesses on the return to inappropriately reduce customers’ federal tax liabilities. The suit alleges that the harm caused to the U.S. Treasury may exceed $900,000. Cardenas, who previously pleaded guilty to one count of aiding and abetting the preparation of a false and fraudulent tax return, agreed to the permanent injunction and admitted the allegations in the government’s complaint.
Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2014. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. John Andrew Cardenas, etc.
Agreed Stipulated Judgment of Permanent Injunction Against John Andrew CardenasDentist and Wife Charged with Bankruptcy FraudRead the Press Release
ROCKFORD — A husband and wife, both formerly of Barrington Hills, Ill., were indicted today by a federal grand jury in Rockford on separate counts of making false statements in a bankruptcy case. The indictment alleges that DANIEL APOSTOLOPOULOS, 52, and SOULA APOSTOLOPOULOS, 45, each filed a Chapter 7 Bankruptcy Petition, and fraudulently failed to disclose financial interests.
According to the indictment, on Oct. 23, 2009, Daniel Apostolopoulos filed a Chapter 7 bankruptcy Petition, and made false statements on a bankruptcy schedule and a Statement of Financial Affairs, both of which were filed under penalty of perjury. Specifically, it is alleged that Apostolopoulos intentionally concealed his interest in a checking account, a Chicago restaurant, and property located in Wisconsin. It is also alleged that Daniel Apostolopoulos failed to disclose his relationships with his father-in-law and sister-in-law, to whom he had transferred a Volvo and a Mercedes automobile within two years of filing, as well as concealing his prior ownership in other financial accounts.
The indictment further alleges that on March 4, 2010, Soula Apostolopoulos filed a Chapter 7 bankruptcy Petition, and made false statements on her Statement of Financial Affairs, filed under penalty of perjury. According to the indictment, Soula Apostolopoulos fraudulently concealed income she received from her interest in a Chicago restaurant she previously purchased with her husband, as well as her interest in Wisconsin property and in financial accounts during the year preceding the filing of her bankruptcy.
Providing material false statements or documents under penalty of perjury in a bankruptcy case carries a maximum penalty of 5 years in prison, a fine of up to $250,000, or twice the gross gain or gross loss resulting from that offense, whichever is greater. The judge may also impose a sentence of probation of one to five years, and a term of supervised release of up to three years. If convicted, the Court must impose a reasonable sentence under the advisory United States Sentencing Guidelines.
Members of the public are reminded that a criminal indictment contains only charges and is not evidence of guilt. Each defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt of each defendant beyond a reasonable doubt.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.
The government is represented by Assistant U.S. Attorney Michael D. Love.
Indictment
Defendant Pleads Guilty to Email Extortion SchemeRead the Press Release
RICHMOND, Va. – Christopher J. Burruss, 37, of Toano, Virginia, pleaded guilty today to Interstate Threat to Injure the Reputation of Another, in violation of 18 U.S.C. § 875(d). Burruss faces a maximum of 2 years’ imprisonment, a fine of $250,000, and one year of supervised release when he is sentenced on January 21, 2015, by United States District Court Judge James R. Spencer.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; and Adam S. Lee, Special Agent in Charge for the Federal Bureau of Investigation (FBI), Richmond Division, made the announcement after the guilty plea was accepted by Magistrate Judge David J. Novak.
According to court papers, the victim of the scheme, T.N., is an attorney who previously represented Burruss in an Eluding Police and Driving Under the Influence (First Offense) criminal case in New Kent County, Virginia. In November 2010, Burruss went to trial and was ultimately convicted on both offenses. In November 2012, Burruss filed a Habeas Corpus Petition in state court, alleging ineffective assistance of counsel by T.N. After a hearing on the matter, the Virginia Circuit Court with jurisdiction over the case rejected Burruss’s challenge. He appealed and, in early 2014, the case was pending before the Virginia Supreme Court with oral arguments scheduled for February 11, 2014.
As part of the plea, Burruss admitted that on September 12, 2013, he filed a Virginia State Bar complaint against T.N. Among other allegations, Burruss stated that he believed that T.N. had mishandled the New Kent County criminal case and had inappropriate communications and contact with Burruss’s friend, S.B., and another woman leading up to and after the criminal case that affected T.N.’s representation. Included with the complaint, Burruss attached several embarrassing email and text messages between T.N., S.B., and two other women. Also included were affidavits from S.B. and another woman detailing some of their interactions with T.N. before and after the New Kent County criminal case. These emails, text messages, and affidavits later served as the basis for Burruss’s extortionate threats against T.N.
From January 23, 2014, through January 26, 2014, Burruss, with the assistance of S.B., began a direct email exchange with T.N. in which Burruss communicated his extortionate demands. In a series of three emails, his demands evolved and required that to avoid disclosure of the embarrassing communications to the press, T.N. would have to submit an affidavit to the Virginia Supreme Court admitting to mishandling the New Kent County criminal case and repay almost $20,000 in legal fees incurred by Burruss in connection with the case. The one-count information charging Burruss is premised on the following extortionate communication sent by Burruss on January 24, 2014, in response to a series of questions from T.N.:
Hi [T.N.]-
In response to your letter this morning Chris is seeking that you write an affidavit to be submitted to the Supreme Court admitting that you mishandled the case. He is also seeking complete restitution, which would include your retainer and the $20,000 in legal fees since then. In the event that the DUI fine remains in effect he asks that you pay that, as well. Neither of the affidavits from [C.E.] or myself were submitted to the court. They are not yet public record, however Chris intends to move forward on Monday afternoon. As far as the Bar is concerned we all know they would prefer to keep all of this very quiet.
Best regards-
[S.B.]After receiving the final email on the afternoon of January 26, 2014, T.N. had no further communication with Burruss or S.B. T.N. reported this matter to federal and state authorities, which led to the current prosecution.
The case was investigated by the FBI’s Richmond office. Assistant United States Attorneys Michael Gill and Heather Hart are prosecuting the case on behalf of the United States
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-135.
Danville Couple Charged with Tax FraudRead the Press Release
SAN FRANCISCO – Kamran Azizi and Hedyeh Shoar were charged with conspiracy to defraud the United States, announced U.S. Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.
According to the Indictment, during 2005 through 2008, Azizi was responsible for collecting donations at several MTO centers in the Northern District of California. MTO, a Sufi Islamic organization, has members who often make donations to the organization by way of cash or checks. During 2005 through 2008, Shoar was employed by MTO as an accountant. The Indictment alleges that Azizi kept a portion of members’ donations to MTO for his own benefit with the knowledge and assistance of Shoar.
Azizi and Shoar, married at the time, filed joint federal income tax returns for the tax years 2005 and 2006. Azizi filed individual federal income tax returns for the tax years 2007 and 2008. These tax returns omitted the MTO donations Azizi kept for his own benefit during these years, even though these donations were Azizi’s primary source of income. The Indictment also alleges that defendants deceived their tax return preparer by failing to provide that person with complete information regarding Azizi’s income.
Azizi was also charged with 2 counts of filing false federal income tax returns for the 2007 and 2008 filings.
Azizi was arraigned before the Honorable Elizabeth D. Laporte, United States Magistrate Judge, on Oct. 20, 2014. Azizi made his initial appearance before the Honorable Kandis Westmore, United States Magistrate Judge, on Oct. 16, 2014, at which time the Indictment was unsealed. Shoar remains a fugitive.
The maximum statutory penalty for each count of Conspiracy, in violation of 18 U.S.C. § 371, is five years in prison and a $250,000 fine. The maximum statutory penalty for each count of Filing a False Tax Return, in violation of 26 U.S.C. § 7206(1), is three years in prison and a $250,000 fine.
Assistant U.S. Attorney Michael G. Pitman is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Please note, an indictment contains only allegations and, as with all defendants, Azizi and Shoar must be presumed innocent unless and until proven guilty.
(Azizi unsealed indictment )
Dalton Man Sentenced to 52 Months in Prison for Possessing Child PornographyRead the Press Release
BOSTON – A Dalton man was sentenced today in U.S. District Court in Springfield for possessing child pornography.
Jared Sprague, 25, was sentenced by U.S. District Judge Mark G. Mastroianni to 52 months in prison and 10 years of supervised release for possessing child pornography. Sprague pleaded guilty in July 2014.
In 2012, federal agents executed a search warrant at Sprague’s residence and seized a computer that contained approximately 100 files of child pornography, including videos that involved prepubescent minors subjected to sadistic or violent sexual conduct, such as bestiality, rape, and bondage.
United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; and Dalton Police Chief Jeffrey E. Coe, made the announcement. The case was prosecuted by Assistant U.S. Attorneys Steven H. Breslow and Deepika Shukla of Ortiz's Springfield Branch Office.
Corrections Officer and Three Inmates Among Seven Charged in Alleged Plot to Smuggle Contraband into Cook County JailRead the Press Release
CHICAGO — Nearly three ounces of marijuana was confiscated after it was found hidden inside two sandwiches that a Cook County corrections officer allegedly tried to smuggle into the Cook County Jail last year in exchange for a $200 bribe. As a result of that seizure and an allegedly broader conspiracy, the corrections officer, three inmates, two civilians, and a Chicago police dispatcher are facing federal charges in connection with alleged smuggling of marijuana and other contraband into the jail, sheriff’s department and federal law enforcement officials announced today.
In June 2013, three jail inmates allegedly conspired with two civilian women to bribe JASON MAREK, a corrections officer for the Cook County Department of Corrections since May 2011, to bring marijuana, cigarettes, tobacco, alcohol, food and other contraband into the jail for inmates’ consumption and for further distribution within the jail, according to a three-count criminal complaint that was filed yesterday and unsealed today.
According to the charges, an ounce of marijuana, which sells for approximately $200 outside the jail, could be sold for five times as much, or $1,000, inside the jail.
Marek, also known as “Murder” and “Murda,” 29, formerly of Orland Park, was assigned to the 3 to 11 p.m. shift at CCJ, Division 9, Tier 2H, when the alleged marijuana smuggling was thwarted on June 21, 2013. He was arrested this morning and was released on his own recognizance after appearing before U.S. Magistrate Judge Jeffrey T. Gilbert in Federal Court.
Between June 15 and 24, 2013, three jail inmates – THADIEUS GOODS, PRINCE JOHNSON, and LAVANGELIST POWELL – who were housed in the same tier where Marek was assigned, allegedly conspired with two women to bribe Marek to smuggle the marijuana and other contraband into the jail. During a recorded telephone call from the jail on June 15, 2013, Goods told his wife, PEARLISA STEVENSON, that, with her help, he had the opportunity to make some money by selling marijuana inside the jail as long as he also had a corrections officer willing to help him.
“Rooting out corruption in the Cook County Jail is a top priority of mine,” said Cook County Sheriff Thomas J. Dart. “I’m thankful to our federal partners at the FBI and the U.S. Attorney’s Office for working closely with my staff to conduct such a thorough investigation and to charge this far-reaching case.”
The arrests and charges were announced by Sheriff Dart, together with Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The investigation was a joint effort between the FBI and the Sheriff’s Office of Professional Responsibility, with Sheriff Dart’s full support, to improve the security and integrity within the Cook County Jail.
Goods, also known as “Big Weasy,” “Weasy,” and “Wang,” 36, of Calumet Park; Johnson, aka “Primo,” 32; and Powell, aka “JuJu” and “Juicy,” 22, both of Chicago, remain in state custody and will be transferred to face the federal charges on a date yet to be determined.
Stevenson, aka “Wang Wang,” 29, and NATOSHA McCOLLUM, aka “Tasha,” 21, who is Powell’s girlfriend, both of Chicago, were arrested this morning and were released on their own recognizance after appearing before Magistrate Gilbert.
Those six defendants ― Marek, Goods, Johnson, Powell, Stevenson, and McCollum ― were charged with conspiracy to possess with intent to distribute marijuana.
The seventh defendant, STEPHANIE LEWIS, 40, of Chicago, a “supervisor police operations” in the police dispatch group in the city of Chicago’s Office of Emergency Management and Communications, and who is Johnson’s girlfriend, was arrested last night. She was charged with one count of illegally accessing a law enforcement computer to assist the alleged extortion and drug distribution conspiracy. Lewis and three others ― Powell, Johnson, and McCollum ― were also charged with conspiracy to access a law enforcement computer to further extortion and a drug conspiracy.
Lewis was also released on her own recognizance. Marek, Stevenson, McCollum, and Lewis were each ordered to return to court at 9:30 a.m. Friday for a status hearing before Magistrate Gilbert.
According to a 48-page complaint affidavit, Goods and Powell pre-sold marijuana to inmates within the CCJ. In June 2013, inmates transferred funds to Stevenson and McCollum via the jail’s Inmate Trust Account system, allegedly to purchase marijuana and other contraband, which Goods, Powell, and Johnson expected to be brought into the jail. After collecting the money from other inmates, McCollum and Stevenson discussed with Goods and Powell their efforts to purchase marijuana from drug dealers outside the jail. Johnson and Lewis allegedly coordinated the delivery of contraband to Stevenson for delivery into the jail, and on June 21, 2013, Stevenson delivered the marijuana and other banned goods to Marek. At the same time, McCollum and Stevenson paid Marek a $200 bribe to smuggle the contraband into the jail. Marek attempted to deliver the marijuana to Goods but was intercepted by the FBI and the Sheriff’s Department’s Office of Professional Responsibility as he entered the jail.
After Marek failed to deliver the marijuana and contraband, Goods, Powell, and Johnson allegedly worked with McCollum and Lewis to obtain Marek’s home address and information about his family to threaten Marek and convince him to bring additional contraband into the jail. Johnson allegedly contacted Lewis and, after informing her that Marek had accepted a bribe but failed to deliver the goods, asked Lewis to provide Marek’s personal information, including his home address and names of family members because Johnson and Goods planned to send their associates to Marek’s house. After receiving Marek’s license plate number from McCollum, Lewis allegedly conducted an inquiry of Marek’s license plate on an OEMC computer linked to an Illinois State Police database, which queried the National Crime Information Center database, and Lewis then provided Marek’s home address to Johnson, the complaint alleges.
In June 2013, Good, Powell, and Johnson were housed in the jail’s Division 9, Tier 2H, where Marek was assigned for a 90-day rotation. Tier 2H is located on the second floor of the south tower of Division 9, which is located at 2834 West 31st St., Chicago, and is comprised of two interconnected three-story buildings that house general population male inmates with a maximum security classification.
Each count of the complaint carries a maximum penalty of five years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant United States Attorneys Megan Church and Michelle Nasser.
The public is reminded that a complaint contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Complaint
Convicted Felon Sentenced for Firearms and Identity Theft ChargesRead 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), George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Manuel Orosa, Chief, Miami Police Department, announce that Miguel Roman, 22, of Miami, was sentenced today before U.S. District Judge Ursula Ungaro to 102 months in prison, to be followed by three years of supervised release.
Roman previously pled guilty to one count of possession of three firearms and ammunition while a convicted felon, in violation of Title 18, United States Code, Section 922(g)(1), one count of possession of 15 or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(3), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1).
According to court documents, during a search warrant on Roman’s apartment, law enforcement discovered three firearms, several boxes of ammunition, a variety of papers and documents reflecting the personally identifying information (PII) of other individuals, including names, dates of birth, and social security numbers, and several debit cards in other individuals’ names. The PII included a notebook containing many handwritten names, dates of birth, and social security numbers of other individuals, together with notations indicating Roman used the PII for fraudulent purposes. Also found were many documents reflecting PII, a large plastic bag containing notebooks of handwritten PII, forms from the Bureau of Prisons reflecting the PII of prisoners, and an envelope containing three treasury checks in other individuals’ names. In total, 1,114 unique names and social security numbers were discovered. Although not directly attributable to the defendant’s conduct, fraudulent tax returns were filed on behalf of at least sixteen of the individuals whose PII was found in Roman’s residence. The amount of loss resulting from the offense is $507,000.
Mr. Ferrer commended the investigative efforts of IRS-CI, the FBI, and the City of Miami Police Department. This case is being prosecuted by Assistant U.S. Attorney Jamie R. Galvin.
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.
Connecticut Investment Advisor Admits Defrauding Clients Through Cherry-picking SchemeRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that NOAH L. MYERS, 43, of Lyme, waived his right to indictment and pleaded guilty yesterday before U.S. District Judge Stefan R. Underhill in Bridgeport to defrauding investment clients in a “cherry-picking” securities scheme.
“Investors place an extraordinary amount of trust in their investment advisors, and we will always protect their right to the fair and ethical management of their savings,” stated U.S. Attorney Daly. “Investment advisors who breach their clients' trust in violation of federal securities laws will be prosecuted and risk losing both their freedom and their ill-gotten gains. We thank the FBI and the SEC for their diligent work in uncovering this cherry-picking scheme.”
“Noah Myers put his financial self-interest ahead of that of his clients,” stated FBI Special Agent in Charge Ferrick. “This conduct undermines the confidence of the American public in our securities markets. The FBI and the U.S. Attorney's Office, along with our law enforcement partners, will continue to vigorously investigate and prosecute these crimes.”
“Cherry-picking” is a fraudulent securities trading practice in which the responsible individual executes trades without assigning those trades to a particular trading account until the individual determines whether or not the trade has become profitable or suffered losses. The responsible individual then allocates the profitable trades to favored accounts – often the individual’s own account – and assigns unprofitable trades to disfavored client accounts.
According to court documents and statements made in court, MYERS was the sole owner of MiddleCove Capital, LLC (“MiddleCove”), a Connecticut limited liability company with its principal place of business in the Centerbrook section of Essex. MiddleCove had been registered with the U.S. Securities and Exchange Commission (“SEC”) as an investment adviser since 2008, and MYERS was the portfolio manager and managed a number of client accounts with assets of approximately $129 million. MiddleCove used Charles Schwab & Co., Inc. (“Schwab”) to trade securities and as the custodian of the investments held in client accounts. As part of the trading arrangement with Schwab, MYERS was permitted to place block purchases and sales of securities through a master account with Schwab and then, later in the day, allocate the purchases and sales to various accounts, including his personal accounts and various client accounts, all held by Schwab.
Between April 2009 and November 2010, MYERS engaged in “cherry-picking” at MiddleCove by purchasing the leveraged exchange traded fund (ETF) ProShares UltraShort Financials, otherwise known by its ticker symbol “SKF,” as well as other securities. MYERS then disproportionately allocated trades that had appreciated in value during the course of the day to his personal and business accounts and allocated trades that had depreciated in value during the day to the accounts of his advisory clients. As a result, MYERS gained as his clients suffered commensurate trading losses.
For example, in August 2009, on the nine days when MYERS purchased SKF in block trades in the master account and the security was sold as a day trade, MYERS allocated between 9 percent and 32 percent of the profitable block trades to his personal accounts. On three of those days he allocated between 27 percent and 31 percent of the profitable day trades to his personal accounts.
In addition, on September 2, 2009, MYERS purchased SKF in a block trade in the master account and, after the investment increased in value, sold the shares in a day trade and allocated more than 31 percent of the investment to his personal accounts. In sharp contrast, MYERS undertook four additional block purchases in the master account of SKF on September 3, 4, 16 and 28, 2009. On each of these days, when the SKF investment declined in value by the close of trading, MYERS allocated no more than 5 percent of the block trade to his personal accounts and instead allocated the remaining 95 percent of the shares to his clients’ accounts.
In filings with the SEC in April 2009 and March 2010, MYERS and MiddleCove represented that batched trades would be allocated fairly and not unduly favor MYERS or MiddleCove.
MYERS pleaded guilty to one count of security fraud, which carries a maximum term of imprisonment of 20 years and a fine of up to $5 million. Judge Underhill scheduled sentencing for January 12, 2015.
The SEC has revoked the registration of MiddleCove as an investment adviser and barred MYERS from the securities industry.This matter has been investigated by the Federal Bureau of Investigation with the assistance of the U.S. Securities and Exchange Commission. The case is being prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.
Citizens are encouraged to report any financial fraud schemes by calling, toll free, 855-236-9740, or by sending an email to [email protected].
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Chinese Gang Leader Sentenced in Manhattan Federal Court to Life in Prison in Connection with Double Murder and Racketeering ConvictionsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that XING LIN, a/k/a “Ding Pa,” the leader of a gang that operated for nearly 15 years in the Chinatown neighborhood of Manhattan as well as in Queens, Atlanta, and Toronto, was sentenced today in Manhattan federal court to life in prison on murder, extortion, and racketeering charges. Following a three-week trial in April 2013, a jury convicted LIN of engaging in racketeering from 1996 through 2009, murdering two individuals in a Queens nightclub in 2004, operating multiple illegal gambling parlors, and extorting bus company owners. LIN was sentenced today by United States District Judge Miriam Goldman Cedarbaum.
Manhattan U.S. Attorney Preet Bharara said: “With today’s sentence, Xing Lin will finally be punished for ordering the murder of two victims, and for his lengthy criminal career of extortion and racketeering. I would like to thank our law enforcement partners at ICE’s Homeland Security Investigations and the New York City Police Department for their hard work on this case.”
According to the Superseding Indictment, other documents filed in Manhattan federal court, and the evidence presented at trial:
From 1996 until December 2009, LIN was a “Dai Lo” – a Chinese term that refers to the boss of a criminal gang. LIN’s gang operated in the Chinatown neighborhood of Manhattan; Flushing, Queens; Atlanta, Georgia; Toronto, Canada; and elsewhere. The members of LIN’s gang were known as followers. LIN and his followers, including co-defendant Hao Chao, a/k/a “Little Beijing,” engaged in a number of criminal ventures, including the operation of high-stakes illegal gambling parlors, the extortion of business owners, and the beating, stabbing, and murder of rivals.
Beginning in 2002, LIN extorted the owners of a bus company that operated buses between Manhattan and Raleigh, North Carolina. In May 2004, Chang Qin Zhou, one of the bus company shareholders, whom LIN was extorting, refused to pay LIN additional money that he had demanded. During the early morning hours of July 30, 2004, Zhou was with a group of men and women in a private room in a karaoke bar located on Kissena Boulevard in Flushing, Queens. LIN and Chou forced their way into the private room, and LIN ordered Chou to “shoot” Zhou. Chou shot Zhou six times, killing him. One of the bullets also struck and killed Mei Ying Li, a waitress who was working at the karaoke bar and who was in the private room at the time of the shooting. A second waitress was shot in the leg and survived.
Following the shooting in the karaoke bar, LIN relocated his criminal gang to Toronto, Canada, where he continued to run gambling parlors and use violence against his rivals.
LIN was arrested in Toronto, Canada, on April 14, 2011. Following extradition, LIN arrived in the United States on August 19, 2011.
In addition to the prison term, LIN, 42, was also ordered to pay a $25,000 fine, and a $400 special assessment fee.
Chou, who was charged in the Superseding Indictment with murder, extortion, and racketeering offenses, is a fugitive. The allegations against Chou are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Mr. Bharara praised the investigative work of Immigration and Customs Enforcement’s Homeland Security Investigations and the New York City Police Department.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Jennifer Burns and Peter Skinner are in charge of the prosecution.
Chilton Man Sentenced for Federal Wildlife ViolationsRead the Press Release
United States Attorney James L. Santelle, announced that on October 20, 2014, Todd David Doughty (age: 50), owner of the “Thunderbird Game Farm” in Chilton, Wisconsin, was sentenced to five years probation, ordered to pay a $5,000 fine, and had his hunting, fishing and trapping privileges revoked for five years by Chief United States District Court Judge William C. Griesbach. Doughty had previously been convicted for a violation of the Migratory Bird Treaty Act in violation of Title 16, United States Code, Sections 703(a), 707(b)(2) and Title 18, United States Code, Section 2.
According to the plea agreement and other documents filed with the court, Doughty illegally engaged in the sale of sausage containing Snow Goose, a migratory bird. While sentencing the defendant, Chief Judge Griesbach noted a litany of past wildlife offenses which “spoke to the defendant’s character” and his “disregard for wildlife laws” which necessitated the lengthy revocation of hunting privileges. As a convicted felon, Doughty may never again possess a firearm for any purpose.
The case was investigated by the United States Fish and Wildlife Service and the Wisconsin Department of Natural Resources. It was prosecuted by Assistant United States Attorney Daniel R. Humble.