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Tuesday 14 October 2014
Baltimore Couple Plead Guilty to Armed Robbery of A Convenience StoreRead the Press Release
Also Admitted to Robbing Three More Convenience Stores at Gunpoint
Baltimore, Maryland – Brandon Ferrell, age 23, and Stephanie Amber Smith, age 24, both of Baltimore, pleaded guilty today to an armed robbery of a convenience store on September 27, 2013, and possession of a firearm in furtherance of a crime of violence. The couple admitted that they also committed three other armed convenience store robberies two days later.The guilty pleas were 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; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Gregg L. Bernstein.
According to their plea agreements, on September 27, 2013, Ferrell and Smith stole approximately $160 from a convenience store located in the 3500 block of Boston Street in Baltimore. Ferrell entered the store first, grabbed an iced-tea and walked to the counter. Then Smith entered the store, pointed a semi-automatic pistol at the clerk, and demanded money. Ferrell removed the money from the cash drawer located behind the counter. Ferrell and Smith then fled the store.
Ferrell and Smith robbed three other convenience stores at gunpoint on September 29, 2013.
Ferrell, Smith and the government have agreed that if the Court accepts their plea agreements, Ferrell will be sentenced to 22 years in prison, and Smith will be sentenced to 13 years in prison. U.S. District Judge William D. Quarles, Jr. has scheduled sentencing for Ferrell on December 17 and Smith on December 18, 2014, both at 10:00 a.m.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney James G. Warwick, who is prosecuting the case.
Attorney General Holder Announces New Policy to Enhance Justice Department's Commitment to Support Defendants' Right to CounselRead the Press Release
Attorney General Eric Holder, along with Deputy Attorney General James M. Cole, announced today that the Department of Justice will no longer ask criminal defendants who plead guilty to waive their right to bring future claims of ineffective assistance of counsel. The new policy bolsters the department’s commitment to ensuring that individuals are ably represented as they face criminal charges and marks the Attorney General’s latest step to reform the criminal justice system.
“Everyone in this country who faces criminal legal action deserves the opportunity to make decisions with the assistance of effective legal counsel,” said Attorney General Holder. “Under this policy, no defendant will have to forego their right to able representation in the course of pleading guilty to a crime. I am confident in the ability of our outstanding prosecutors to ably and successfully perform their duties without the use of these waivers, as the vast majority of them already do. Moving forward, I am certain that this more consistent policy will help to bring our system of justice closer in line with our most fundamental values and highest ideals.”
“This new policy reaffirms the commitment by the department’s prosecutors to protecting the right to counsel and enhancing due process,” said Deputy Attorney General Cole. “As reflected in our recent intervention to secure greater public defender services in New York, the criminal justice system is best served when parties have competent and unbiased legal representation.”
Deputy Attorney General Cole unveiled the new policy through a memorandum to all federal prosecutors and through a conference call today. Prior to today’s action, 35 of the department’s 94 U.S. Attorney’s Offices sought waivers of future claims that included claims of ineffective assistance of counsel. While the department believes such waivers are legal and ethical, the new policy will create a uniform policy for all U.S. Attorneys to follow.
The memo directs federal prosecutors to no longer ask defendants to waive future claims of ineffective assistance of counsel in plea agreements. It also instructs prosecutors to decline to enforce waivers that have already been signed in cases where defense counsel provided ineffective assistance resulting in prejudice or where the defendant’s ineffective assistance claim raises a serious issue that a court should resolve.
Armed Career Offender Sentenced to Fifteen Years in Prison for Violating Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Alfonso Thompson, 38, of Albuquerque, N.M.., was sentenced today in federal court to 15 years in federal prison followed by three years of supervised release for being an armed career offender. The sentence was announced by U.S. Attorney Damon P. Martinez, 2ndJudicial District Attorney Kari E. Brandenburg and Special Agent in Charge Thomas Atteberry of the Phoenix Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives and Chief Gorden Eden of the Albuquerque Police Department.
U.S. Attorney Damon P. Martinez said that Thompson was prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
Thompson was federally indicted on Nov. 27, 2012, and subsequently arrested in Dec. 2012 for unlawfully possessing a handgun and ammunition in Bernalillo County, N.M., on July 12, 2012. According to court filings, Thompson was prohibited from possessing firearms and ammunition in July 2012 because he was a convicted felon. Despite numerous prior felony convictions, Thompson possessed thirteen firearms and approximately 474 rounds of ammunition in July 2012.
Thompson entered a guilty plea to an indictment charging him with being a felon in possession of a firearm and ammunition on Jan. 14, 2014. Thompson received an enhanced sentence of 15 years in prison due to his status as an armed career offender.
Thompson’s criminal history consists of nine convictions, including seven felony convictions, accumulated since 1997, of which three were drug-related, five involved violence (including two for attempted murder), and four involved the presence of a firearm. Thompson currently is facing charges in state court for a double homicide and the non-fatal shooting of a third victim. Thompson has entered a not guilty plea in the state case and is presumed innocent of those charges unless found guilty in a court of law.
Thompson’s federal conviction in this case arose from facts separate from his pending state charges. If Thompson is convicted on the pending state charges, any sentence imposed on Thompson in the state case must be served consecutive to the sentence imposed in this federal case.
This case was investigated by the Albuquerque office of ATF, the Albuquerque Police Department, and was prosecuted by Assistant U.S. Attorney C. Paige Messec of the U.S. Attorney’s Office.
Armed Career Criminal Sentenced to 25 Years in Federal PrisonRead the Press Release
NEW BERN – United States Attorney Thomas G. Walker announced that in federal court, United States District Judge Louise W. Flanagan sentenced gary starkie , 52, of Greenville to 25 years in federal prison, followed by 5 years of supervised release.
STARKIE had been indicted by a federal grand jury for being a felon in possession of a firearm. These charges stemmed from an incident on June 28, 2012, when two patrol officers with the Greenville Police Department intercepted STARKIE as he was about to commit an armed robbery of a convenience store and sweepstakes location in Greenville. Upon arresting STARKIE, the arresting officers found him in possession of a semiautomatic pistol.
STARKIE pleaded not guilty to the charge, and the matter went to trial. After a trial in January 2014, before Judge Flanagan, a jury found STARKIE guilty of being a felon in possession of a firearm.
As an Armed Career Criminal, with prior convictions for first degree rape and first degree kidnapping, STARKIE faced a mandatory minimum sentence of 15 years imprisonment. After carefully reviewing STARKIE’S history and characteristics, as well as assessing the nature and circumstances of his offense, Judge Flanagan sentenced STARKIE to serve 300 months (25 years) in federal prison.
“Gary Starkie has a criminal history, punctuated by acts of violence and sexual violence perpetrated against women,” said Assistant United States Attorney Evan Rikhye. “We are grateful to the jury in New Bern that convicted him and we believe that the tough sentence meted out by Judge Flanagan will ensure that the residents of Greenville and Pitt County will no longer have to suffer the depredations of this violent felon.”
Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and the Greenville Police Department. Assistant United States Attorney Evan Rikhye represented the government. United States Attorney Walker commended the work of Keith Sawyer and Brian Negue, the Greenville Police Department officers who apprehended STARKIE.
Anderson County Man Guilty of Child Pornography ViolationsRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A 25-year-old Palestine, Texas man has pleaded guilty to child pornography charges in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Joshua Quick pleaded guilty to receiving child pornography today before U.S. Magistrate Judge K. Nicole Mitchell.According to information presented in court, on Sep. 14, 2013, Quick received child pornography on a computer after using the computer to solicit the participation of a minor to engage in sexually explicit conduct persuading the minor to produce images depicting child pornography. Quick was indicted by a federal grand jury on Feb. 26, 2014.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by 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.
Quick faces a minimum of five years and up to 20 years in federal prison. A sentencing date has not been set.
This case is being investigated by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Anderson County Sheriff’s Office and the Urbandale, Iowa Police Department and prosecuted by Assistant U.S. Attorney Nathaniel C. Kummerfeld.Ahmed Abu Khatallah Indicted on Additional Charges for September 2012 Attack in Benghazi, LibyaRead the Press Release
A federal grand jury in the District of Columbia returned a superseding indictment today charging Ahmed Abu Khatallah, aka Ahmed Mukatallah, with numerous additional offenses arising from his alleged participation in the Sept. 11 through 12, 2012, terrorist attacks in Benghazi, Libya, which resulted in the deaths of Ambassador J. Christopher Stevens and U.S. government personnel Sean Smith, Tyrone Woods and Glen Doherty.
Khatallah, 43, a Libyan national, was initially indicted on June 26, 2014, on the charge of conspiracy to provide material support and resources to terrorists resulting in death. That charge, which is included in the superseding indictment, carries a potential life sentence. The superseding indictment includes a total of 17 new charges, including some that could be punishable by death.
“These additional charges reflect Ahmed Abu Khattalah’s integral role in the attack on U.S. facilities in Benghazi, which led to the deaths of four brave Americans,” said Attorney General Eric Holder. “We will never relent in pursuing justice against those who commit heinous acts of terrorism against the United States. Those who would do harm to our citizens—no matter how far away—should understand that our nation’s memory is long and our reach is far.”
“This superseding indictment charges Ahmed Abu Khatallah for his role in the attacks on U.S. facilities in Benghazi, Libya that resulted in the deaths of four U.S. government personnel,” said Assistant Attorney General for National Security John Carlin. “This case reminds us of the continued threat the United States faces abroad from terrorism, but it also highlights our resolve to find and hold terrorists accountable wherever they may hide.”
“We have no higher priority than bringing to justice terrorists who kill U.S. citizens serving our country on foreign soil,” said U.S. Attorney Ronald C. Machen Jr. for the District of Columbia. “With this 18-count indictment, a grand jury in our nation’s capital has charged Ahmed Abu Khatallah with the murders of four brave Americans in Benghazi. We will press forward with our efforts to hold accountable all those who are responsible for this cowardly act.”
“With additional charges being announced today, Ahmed Abu Khatallah’s role in the Benghazi attack is even clearer,” said Assistant Director in Charge George Venizelos of the FBI’s New York Field Office. “As the charges allege, he was the leader of an extremist militia group who carried out this brutal act of violence that took the lives of four honorable Americans. The Benghazi investigation remains one of the FBI’s top priorities and we will work tirelessly until all of those responsible are brought to justice.”
The superseding indictment describes Khatallah’s alleged role in the attacks at a U.S. diplomatic mission in Benghazi and a second U.S. facility there, known as the annex. According to the superseding indictment, Khatallah was a leader of an extremist militia group and he conspired with others to attack the facilities, kill U.S. citizens, destroy buildings and other property, and plunder materials, including documents, maps and computers containing sensitive information.
The offenses that could carry death sentences include one count of murder of an internationally protected person; three counts of murder of an officer and employee of the United States; four counts of killing a person in the course of an attack on a federal facility involving the use of a firearm and a dangerous weapon; and two counts of maliciously damaging and destroying U.S. property by means of fire and an explosive causing death.
The seven other new charges in the superseding indictment include one count of providing material support and resources to terrorists resulting in death; three counts of attempted murder of an officer and employee of the United States; two counts of maliciously destroying and injuring dwellings and property, and placing lives in jeopardy within the special maritime and territorial jurisdiction of the United States, and attempting to do the same; and one count of using, carrying, brandishing and discharging a firearm during a crime of violence, which carries a mandatory minimum sentence of 30 years in prison.
Khatallah will be arraigned on the new charges at a hearing Oct. 20, 2014, before the Honorable Christopher R. Cooper in the U.S. District Court for the District of Columbia. At an earlier hearing, he pleaded not guilty to the terrorism conspiracy charge.
The investigation is continuing.
According to the superseding indictment, Khatallah was the commander of Ubaydah Bin Jarrah (UBJ), an Islamist extremist militia in Benghazi, which had the goal of establishing Sharia law in Libya. In approximately 2011, UBJ merged with Ansar al-Sharia (AAS), another Islamist extremist group in Libya with the same goal of establishing Sharia law in the country. Khatallah was a Benghazi-based leader of AAS.
The attack at the diplomatic mission, which took place on the night of Sept. 11, 2012, led to the deaths of Ambassador Stevens and Smith, who was an Information Management Officer for the U.S. Department of State; a second State Department employee was injured in this violence. The attack at the annex took place early Sept. 12, 2012. Woods and Doherty, who were security officers working on the U.S. government’s behalf, were killed in the attack at the annex, and another security officer and a State Department employee were wounded in the violence there.
In June 2014, Khatallah was taken into custody, and he initially was charged in a criminal complaint that was filed under seal on July 15, 2013, which became public on June 17, 2014. The earlier indictment became public on June 28, 2014, the date of his first court appearance.
An indictment is merely a formal allegation that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
The case is being investigated by the FBI New York Field Office's Joint Terrorism Task Force with substantial assistance from various other government agencies. The case is being prosecuted by the U.S. Attorney’s Office for the District of Columbia and the Counterterrorism Section of the National Security Division.
Ahmed Abu Khatallah Indicted on Additional Charges for September 2012 Attack in Benghazi, LibyaRead the Press Release
WASHINGTON – A federal grand jury in the District of Columbia returned a superseding indictment today charging Ahmed Abu Khatallah, aka Ahmed Mukatallah, with numerous additional offenses arising from his alleged participation in the September 11 through 12, 2012, terrorist attacks in Benghazi, Libya, which resulted in the deaths of Ambassador J. Christopher Stevens and U.S. government personnel Sean Smith, Tyrone Woods and Glen Doherty.
Khatallah, 43, a Libyan national, was initially indicted on June 26, 2014, on the charge of conspiracy to provide material support and resources to terrorists resulting in death. That charge, which is included in the superseding indictment, carries a potential life sentence. The superseding indictment includes a total of 17 new charges, including some that could be punishable by death.
“These additional charges reflect Ahmed Abu Khattalah’s integral role in the attack on U.S. facilities in Benghazi, which led to the deaths of four brave Americans,” said Attorney General Eric Holder. “We will never relent in pursuing justice against those who commit heinous acts of terrorism against the United States. Those who would do harm to our citizens—no matter how far away—should understand that our nation’s memory is long and our reach is far.”
“This superseding indictment charges Ahmed Abu Khatallah for his role in the attacks on U.S. facilities in Benghazi, Libya that resulted in the deaths of four U.S. government personnel,” said Assistant Attorney General for National Security John Carlin. “This case reminds us of the continued threat the United States faces abroad from terrorism, but it also highlights our resolve to find and hold terrorists accountable wherever they may hide.”
“We have no higher priority than bringing to justice terrorists who kill U.S. citizens serving our country on foreign soil,” said U.S. Attorney Ronald C. Machen Jr. for the District of Columbia. “With this 18-count indictment, a grand jury in our nation’s capital has charged Ahmed Abu Khatallah with the murders of four brave Americans in Benghazi. We will press forward with our efforts to hold accountable all those who are responsible for this cowardly act.”
“With additional charges being announced today, Ahmed Abu Khatallah’s role in the Benghazi attack is even clearer,” said Assistant Director in Charge George Venizelos of the FBI’s New York Field Office. “As the charges allege, he was the leader of an extremist militia group who carried out this brutal act of violence that took the lives of four honorable Americans. The Benghazi investigation remains one of the FBI’s top priorities and we will work tirelessly until all of those responsible are brought to justice.”
The superseding indictment describes Khatallah’s alleged role in the attacks at a U.S. diplomatic mission in Benghazi and a second U.S. facility there, known as the annex. According to the superseding indictment, Khatallah was a leader of an extremist militia group and he conspired with others to attack the facilities, kill U.S. citizens, destroy buildings and other property, and plunder materials, including documents, maps and computers containing sensitive information.
The offenses that could carry death sentences include one count of murder of an internationally protected person; three counts of murder of an officer and employee of the United States; four counts of killing a person in the course of an attack on a federal facility involving the use of a firearm and a dangerous weapon; and two counts of maliciously damaging and destroying U.S. property by means of fire and an explosive causing death.
The seven other new charges in the superseding indictment include one count of providing material support and resources to terrorists resulting in death; three counts of attempted murder of an officer and employee of the United States; two counts of maliciously destroying and injuring dwellings and property, and placing lives in jeopardy within the special maritime and territorial jurisdiction of the United States, and attempting to do the same; and one count of using, carrying, brandishing and discharging a firearm during a crime of violence, which carries a mandatory minimum sentence of 30 years in prison.
Khatallah will be arraigned on the new charges at a hearing Oct. 20, 2014, before the Honorable Christopher R. Cooper in the U.S. District Court for the District of Columbia. At an earlier hearing, he pleaded not guilty to the terrorism conspiracy charge.
The investigation is continuing.
According to the superseding indictment, Khatallah was the commander of Ubaydah Bin Jarrah (UBJ), an Islamist extremist militia in Benghazi, which had the goal of establishing Sharia law in Libya. In approximately 2011, UBJ merged with Ansar al-Sharia (AAS), another Islamist extremist group in Libya with the same goal of establishing Sharia law in the country. Khatallah was a Benghazi-based leader of AAS.
The attack at the diplomatic mission, which took place on the night of Sept. 11, 2012, led to the deaths of Ambassador Stevens and Smith, who was an Information Management Officer for the U.S. Department of State; a second State Department employee was injured in this violence. The attack at the annex took place early Sept. 12, 2012. Woods and Doherty, who were security officers working on the U.S. government’s behalf, were killed in the attack at the annex, and another security officer and a State Department employee were wounded in the violence there.
In June 2014, Khatallah was taken into custody, and he initially was charged in a criminal complaint that was filed under seal on July 15, 2013, which became public on June 17, 2014. The earlier indictment became public on June 28, 2014, the date of his first court appearance.
An indictment is merely a formal allegation that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
The case is being investigated by the FBI New York Field Office's Joint Terrorism Task Force with substantial assistance from various other government agencies. The case is being prosecuted by the U.S. Attorney’s Office for the District of Columbia and the Counterterrorism Section of the National Security Division.
14-230- 3 Charged in A Conspiracy to Traffic Minors for Sex
Friday 10 October 2014
Week in Review – South BendRead the Press Release
South Bend, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITIONS
- Willie Long, 23, of Elkhart, Indiana was sentenced to 51 months imprisonment with 18 months supervised release after pleading guilty to the felony offense of being a felon in possession of a firearm. According to documents filed in this case, Long was driving an automobile in St. Joseph County, Indiana with a Smith & Wesson handgun in the car. Long had been convicted of a felony in Elkhart County in 2007 in Circuit Court. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Frank Schaffer.
- John Carlisle, 50, of New Haven, Indiana was sentenced to 37 months imprisonments to be followed by two years of supervised release after pleading guilty to the felony offense of making false statements in connection with a mortgage loan and mortgage insurance. According to documents filed in this case, during the period 2008 through 2010, John Carlisle was a licensed loan originator in Fort Wayne, Indiana. Ryan Webb, in conjunction with Johnny Stine and others, purchased low-end homes in the Fort Wayne area, often using an entity called Sunset Properties of NI, LLC. Through the use of advertising and a website, Webb and Stine attracted buyers for these properties. Webb and Stine would then sell these low end homes to these buyers, most often for a sales price of two or three times what had been paid for the homes. Oftentimes, the purchasers of the homes were of very modest financial means and could not, on their own, qualify for the needed mortgage loan. As part of a fraud scheme, Webb and Stine provided monies to the home buyers/borrowers to cover loan closing costs and to give the appearance that the buyers had assets in reserve. To hide the fact that all of the monies for closing and reserves had come from Webb/Stine (monies that were supposed to come from the buyers/borrowers or persons who were relatives of them but in fact came from the seller/real estate broker), Webb and Stine with the knowledge and help of Carlisle prepared phony “gift letters” documenting falsely that the monies Webb and Stine provided had come from family or relatives of the buyers/borrowers. These sham gift letters with false representations violated applicable HUD/FHA mortgage insurance regulations and in fact deceived HUD/FHA. Because these buyers/borrowers could not on their own qualify for the mortgage loans, they frequently defaulted soon after getting the mortgage loans and the homes went into foreclosure, which caused substantial losses to the mortgage lenders and mortgage insurance provider HUD/FHA. This case was the result of an investigation by the FBI. This case was prosecuted by Assistant United States Attorney Donald Schmid.
Week in Review – HammondRead the Press Release
Hammond, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS
- Dexter Eugene Howard, 38, of Gary, Indiana pled guilty to the felony offense of bank robbery by force or violence. The magistrate judge is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by Federal Bureau of Investigation. Sentencing has been set for 1/14/2015. This case is being prosecuted by Assistant United States Attorney Jennifer Chang-Adiga.
- Elbert Johnson, 37, of Crown Point, Indiana pled guilty to the felony offenses of conspiracy to commit identity theft, false claims, aggravated identity theft, and filing a false tax return. This charge was filed as a result of an investigation by Internal Revenue Service. Sentencing has not been set. This case is being prosecuted by Assistant United States Attorney Toi Houston.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
Week in Review – Fort WayneRead the Press Release
Fort Wayne, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEA
- Korean Daniels, 38, of Fort Wayne, Indiana pled guilty to the felony offense of being a felon in possession of a firearm. The magistrate judge is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by Bureau of Alcohol, Tobacco, Firearms & Explosives and the Fort Wayne Police Department. Sentencing will be set by separate order by the district court. This case is being prosecuted by Assistant United States Attorney Anthony W. Geller.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS
- Nathan Hasty, 36, of Huntington, Indiana was sentenced to 180 months imprisonment, 5 years supervised release after pleading guilty to the felony offense of sexual exploitation of children. According to documents filed in this case, Hasty had been using fake identities in Facebook posing as a female and flirting with boys in attempt to gain their trust and began to talk sexually with them. Hasty admitted to being a Campus Life Director for Youth for Christ and admitted to using false Facebook accounts in which he posed as a juvenile female to communicate with the boys in his youth group. Hasty admitted to having sexual conversations with the young boys, asked them to send nude pictures of themselves, and to skype in a one way conversation. This case was the result of an investigation by the Federal Bureau of Investigation-Cyber Squad. This case was prosecuted by Assistant United States Attorney Lesley J. Miller Lowery.
- Jose A. Soto, 31, of Fort Wayne, Indiana was sentenced to 92 months imprisonment, 4 years supervised release, and ordered to pay a $100 special assessment after pleading guilty to the felony offense of knowingly or intentionally conspiring to distribute and possess with the intent to distribute controlled substances. According to documents filed in the case, this investigation began with controlled buys of powder and crack cocaine and progressed with wiretaps of several cocaine suppliers. Jose Soto was identified as distributor of one of the conspiracies. This case was the result of an investigation by Federal Bureau of Investigation, Fort Wayne Safe Streets Task Force, G-Net, Indiana State Police, Fort Wayne Police Department, Allen County Police Department, Allen County Drug Task Force, and the New Haven Police Department. This case was prosecuted by Assistant United States Attorney Anthony W. Geller.
- Charley J. Gonzalez, III, 43, of Fort Wayne, Indiana, was sentenced to 300 months imprisonment with 10 years of supervised release after pleading guilty to the felony offenses of knowingly conspiring to distribute and possess with intent to distribute cocaine, and possessing a firearm in furtherance of a drug trafficking crime. According to documents filed in this case, this investigation began with controlled buys of powder and crack cocaine and progressed with wiretaps of several cocaine suppliers. Charley Gonzalez was identified as the leader of one of the drug supply networks. This case was the result of an investigation by Federal Bureau of Investigation, Fort Wayne Safe Streets Task Force, Indiana State Police, Fort Wayne Police Department, Allen County Police Department, Allen County Drug Task Force and the New Haven Police Department. This case was prosecuted by Assistant United States Attorney Anthony W. Geller.
- Julius W. Lawson, 36, of Fort Wayne, Indiana was sentenced to 84 months imprisonment after being found guilty by a jury of the felony offenses of attempted robbery of a person having custody of mail matter, money or property of the United States and interfering with the performance of the official duties of a postal employee which sentence is to run consecutively to 60 months for the felony offense of using a firearm during and in relation to the robbery offense. A 3 year term of supervised release was also imposed. According to documents filed in this case, on December 19, 2012, Lawson and an unknown accomplice entered the United States Postal Office located in Diplomat Plaza wearing hoodies. A postal employee, while hidden in the manager’s office, watching the surveillance monitor, observed Lawson jump the counter located behind the window of the clerks’ stations where cash money, bonds and other valuables were kept. Lawson’s cell phone and fingerprint were recovered from the customer counter in the postal station and his accomplice was observed in possession of a firearm while inside the station that was pointed at a customer. One of the individuals in the post office called 911 to report the crime after Lawson and his accomplice had fled the building. This case was the result of an investigation by the United States Postal Inspection Service, and the Fort Wayne Police Department. This case was prosecuted by Assistant United States Attorney Lovita Morris King.
- Korean Daniels, 38, of Fort Wayne, Indiana pled guilty to the felony offense of being a felon in possession of a firearm. The magistrate judge is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by Bureau of Alcohol, Tobacco, Firearms & Explosives and the Fort Wayne Police Department. Sentencing will be set by separate order by the district court. This case is being prosecuted by Assistant United States Attorney Anthony W. Geller.
U.S. Attorney Names First Assistant, Criminal Division AppointmentsRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced several leadership and supervisory appointments within the U.S. Attorney’s Office.
Michael J. Gustafson has been named First Assistant U.S. Attorney. Mr. Gustafson has been with the U.S. Attorney’s Office since 1997. For the last four years, he served as Chief of the Criminal Division, and previously as Supervisor of the District’s Hartford Office and Chief of the Organized Crime Strike Force. Prior to joining the Department of Justice, Mr. Gustafson was in private practice for eight years, and served as a law clerk to both Senior U.S. District Judge T. Emmet Clarie and U.S. Magistrate Judge F. Owen Eagan. Mr. Gustafson is a 1983 graduate of Amherst College and a 1986 graduate of the University of Connecticut School of Law.
“In his long tenure in the Office, Mike has distinguished himself as someone with excellent judgment and outstanding character,” stated U.S. Attorney Daly. “A terrific prosecutor and enormously dedicated public servant, Mike is an invaluable asset to me and everyone who works here. Never seeking credit or recognition, Mike works tirelessly to help others while also prosecuting some of our most important and challenging cases. In his new role, we will have the benefit of his advice and counsel on all significant matters within the Office.”
William J. Nardini has been named Chief of the Criminal Division. Mr. Nardini joined the U.S. Attorney’s Office in 2000, and previously served as Chief of Appeals. He recently completed a four-year assignment as the Department of Justice Attaché at the U.S. Embassy in Rome where he coordinated requests for extradition and mutual legal assistance in criminal matters between American and Italian legal authorities. Prior to joining the U.S. Attorney’s Office, Mr. Nardini served as a law clerk for Justice Sandra Day O’Connor of the U.S. Supreme Court as well as Judges José Cabranes and Guido Calabresi of the U.S. Court of Appeals for the Second Circuit. Mr. Nardini is a 1990 graduate of Georgetown University and a 1994 graduate of Yale Law School. He also received an LL.M from the European University Institute in 1999 as a Fulbright Scholar.
“We are excited and very fortunate to have Bill returning to the Office after his distinguished service as the Justice Department’s Attaché in Italy,” stated U.S. Attorney Daly. “Bill’s legal acumen, wise counsel and management skills make him a great fit for the critically important position of Criminal Chief. We are confident that he will provide valuable guidance to our talented AUSAs.”
The Criminal Division, which is responsible for enforcing federal criminal laws, comprises three program-based units: National Security and Major Crimes, Violent Crimes and Narcotics, and Financial Fraud and Public Corruption.
The National Security and Major Crimes Unit is responsible for prosecuting matters involving international and domestic terrorism, civil rights and hate crimes, human trafficking and child exploitation, cybercrime and identity theft, organized crime, immigration and customs enforcement, government program and defense contractor fraud, and environmental crimes. Raymond F. Miller is the Chief of the Unit. Stephen B. Reynolds and Krishna R. Patel are the Deputy Chiefs. AUSA Reynolds also supervises the Office’s national security work and coordinates the District’s Anti-Terrorism Advisory Committee (ATAC).
The Violent Crimes and Narcotics Unit includes the District’s Organized Crime and Drug Enforcement Task Force (OCDETF), Project Safe Neighborhoods (PSN) prosecutions, and violent crime, gangs and narcotics investigations. S. Dave Vatti is the Chief of the Unit, and AUSAs Robert M. Spector and Brian P. Leaming are the Deputy Chiefs. AUSA Spector is the District’s OCDETF Coordinator, which targets major drug trafficking operations responsible for the distribution of large quantities of narcotics by violent drug organizations, and AUSA Leaming serves as PSN Coordinator, overseeing firearms prosecutions that seek to deter the illegal possession of guns and reduce gun and gang violence.
The Financial Fraud and Public Corruption Unit includes securities, commodities and investor fraud, public corruption, bank fraud and embezzlement, mortgage fraud, tax fraud, health care fraud, bankruptcy fraud and Foreign Corrupt Practices Act violations. Christopher M. Mattei is the newly appointed Chief of the Unit, and Michael S. McGarry and David E. Novick are the Deputy Chiefs. This Unit includes the Connecticut Securities Fraud Task Force.
In addition, The District of Connecticut’s Appellate Unit is led by Sandra S. Glover, who serves as Chief of Appeals, and Marc H. Silverman, who serves as Deputy Chief.
John H. Durham continues to serve as Counsel to the United States Attorney, John B. Hughes remains the longstanding Chief of the Civil Division and Peter S. Jongbloed continues as the Executive United States Attorney.
“This supervisory team is a talented and experienced group of public servants who are driven by the cause of justice,” stated U.S. Attorney Daly. “Their dedicated efforts make Connecticut a safer and more secure place to live. I am fortunate and proud to be working by their side.”
The U.S. Attorney’s Office is charged with enforcing federal criminal laws in Connecticut, and with representing the federal government in civil litigation in the District. The District is composed of approximately 64 Assistant U.S. Attorneys and approximately 60 staff members at offices in New Haven, Hartford and Bridgeport.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Three Florida Residents Are Charged with Health Care Fraud, Money Laundering and Drug TraffickingRead the Press Release
Three Miami residents have been charged in a superseding indictment with health care fraud violations stemming from a $23 million Medicare fraud scheme. Two of the defendants are also charged with drug trafficking for submitting fraudulent prescriptions for oxycodone and other drugs to pharmacies.
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 Acting Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (OIG-HHS) Miami Regional Office made the announcement.
On Oct. 9, 2014, a grand jury sitting in the Southern District of Florida returned a 16-count superseding indictment, charging Guillermo Delgado, 45; Gabriel Delgado, 42; and Emerson Carmona, 43, with conspiracy to pay and receive health care kickbacks and the receipt of kickbacks. Guillermo Delgado and Gabriel Delgado were also charged with conspiracy to commit money laundering, and Gabriel Delgado was charged with four money laundering counts. In addition, Guillermo Delgado and Emerson Carmona were charged with conspiracy to commit health care fraud and conspiracy to possess with intent to distribute a controlled substance.
The superseding indictment alleges that Jose Carlos Morales, 57, co-owned two pharmacies, Pharmovisa Inc., Pharmovisa Limited, and PharmovisaMD Inc. Between March 2006 and September 2012, Morales paid kickbacks to brothers Guillermo Delgado and Gabriel Delgado, as well as Carmona, for Medicare beneficiary information, which Morales then used to submit more than $23 million in fraudulent claims to Medicare and Medicaid. The Delgado brothers allegedly concealed the kickbacks by disguising them as legitimate payments for services purportedly provided by shell companies under their control.
The superseding indictment also alleges that from June 2010 through September 2011, Guillermo Delgado and Carmona delivered or caused the delivery of fraudulent prescriptions for oxycodone, oxymorphone and other prescription drugs to Morales’s pharmacies. Morales filled the fraudulent prescriptions and submitted fraudulent claims for reimbursement to Medicare. Guillermo Delgado and Carmona allegedly gave the drugs to other co-conspirators for resale.
On Dec. 7, 2012, Morales pleaded guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and pay illegal health care kickbacks. On Feb. 26, 2013, he was sentenced to serve 14 years in prison.
The charges contained in the superseding indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
This case was 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. This case is being prosecuted by Trial Attorney Allan J. Medina 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 2,000 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.
Taiwanese Businessman Pleads Guilty to Conspiring to Violate U.S. Laws Preventing Proliferation of Weapons of Mass DestructionRead the Press Release
A former resident of Taiwan, who the United States has linked to the supply of weapons manufacturing machinery to North Korea, pleaded guilty today to conspiracy to violate U.S. regulations regarding the proliferation of weapons of mass destruction, announced Assistant Attorney General John Carlin for the National Security Division and U.S. Attorney Zachary T. Fardon for the Northern District of Illinois. The defendant, Hsien Tai Tsai, admitted that he engaged in illegal business transactions involving the export of U.S. origin goods and machinery.
Tsai, 69, also known as “Alex Tsai,” was arrested in May 2013 in Tallinn, Estonia, and later was extradited to the United States, where he remains in federal custody.
Tsai pleaded guilty to conspiracy to defraud the United States in its enforcement of regulations targeting proliferators of weapons of mass destruction before U.S. District Judge Charles Norgle in Federal Court in Chicago. Sentencing was set for Dec. 5, 2014. Tsai faces a maximum sentence of five years in prison and a $250,000 fine. Under the terms of his plea agreement, the government will recommend a sentence of approximately 30 months in prison provided Tsai continues to fully cooperate with the United States.
According to court documents, Tsai was associated with at least three companies based in Taiwan – Global Interface Company Inc., Trans Merits Co. Ltd., and Trans Multi Mechanics Co. Ltd. – that purchased and then exported, and attempted to purchase and then export, from the United States and other countries machinery used to fabricate metals and other materials with a high degree of precision.
In January 2009, under Executive Order 13382 which sanctions proliferators of weapons of mass destruction and their supporters, the Treasury Department’s Office of Foreign Assets Control (OFAC) designated Tsai, Global Interface, and Trans Merits as proliferators of weapons of mass destruction, isolating them from the U.S. financial and commercial systems and prohibiting any person or company in the United States from knowingly engaging in any transaction or dealing with them.
The Treasury Department said at the time that Tsai was designated for providing, or attempting to provide, financial, technological, or other support for, or goods or services in support of the Korea Mining Development Trading Corporation (KOMID), which was designated as a proliferator by President George W. Bush in June 2005. The Treasury Department asserted that Tsai “has been supplying goods with weapons production capabilities to KOMID and its subordinates since the late 1990s, and he has been involved in shipping items to North Korea that could be used to support North Korea’s advanced weapons program.” The Treasury Department further said that Global Interface was designated “for being owned or controlled by Tsai,” who was a shareholder of the company and acted as its president. Tsai was also the general manager of Trans Merits Co. Ltd., which was designated for being a subsidiary owned or controlled by Global Interface Company Inc. http://www.treasury.gov/press-center/press-releases/Pages/hp1359.aspx
After the OFAC designations, Tsai and others allegedly continued to conduct business together, but attempted to hide Tsai’s and Trans Merit’s involvement in those transactions by conducting business under different company names, including Trans Multi Mechanics. For example, by August 2009 – approximately eight months after the OFAC designations –Tsai and others allegedly began using Trans Multi Mechanics to purchase and export machinery on behalf of Trans Merits and Tsai.
In pleading guilty, Tsai admitted that in September 2009 he was involved in the purchase of a Bryant center hole grinder from a U.S. company based in suburban Chicago, and exported it to Taiwan using the company Trans Multi Mechanics. A Bryant center hole grinder is a machine tool used to grind a center hole, with precisely smooth sides, through the length of a material. Tsai also admitted a role in Trans Merits’ transaction involving LED road lights and an oil pump.
Charges remain pending against Tsai’s son, Yueh-Hsun Tsai, 37, of Glenview, Ill., also known as “Gary” Tsai. He was released on bond after he was arrested in May 2013 and has pleaded not guilty.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Gary Hartwig, Special Agent-in-Charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) in Chicago; and Ronald B. Orzel, Special Agent-in-Charge for the Chicago Field Office of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement. The Justice Department’s National Security Division and Office International Affairs assisted with the investigation. The Estonian Internal Security Service and the Estonian Prosecutor’s Office cooperated with the United States.
The government is being represented by Assistant U.S. Attorney Brian Hayes and Justice Department Trial Attorney Brandon L. Van Grack.
Taiwanese Businessman Pleads Guilty to Conspiring to Violate U.S. Laws Preventing Proliferation of Weapons of Mass DestructionRead the Press Release
CHICAGO — A former resident of Taiwan, who the United States has linked to the supply of weapons manufacturing machinery to North Korea, pleaded guilty today to conspiracy to violate U.S. regulations regarding the proliferation of weapons of mass destruction. The defendant, HSIEN TAI TSAI, admitted that he engaged in illegal business transactions involving the export of U.S. origin goods and machinery.
Tsai, 69, also known as “Alex Tsai,” was arrested in May 2013 in Tallinn, Estonia, and later was extradited to the United States, where he remains in federal custody.
Tsai pleaded guilty to conspiracy to defraud the United States in its enforcement of regulations targeting proliferators of weapons of mass destruction before U.S. District Judge Charles Norgle in Federal Court in Chicago. A sentencing status hearing was set for Dec. 5. Tsai faces a maximum sentence of five years in prison and a $250,000 fine. Under the terms of his plea agreement, the government will recommend a sentence of approximately 30 months in prison provided Tsai continues to fully cooperate with the United States.
According to court documents, Tsai was associated with at least three companies based in Taiwan – Global Interface Company, Inc., Trans Merits Co., Ltd., and Trans Multi Mechanics Co., Ltd. – that purchased and then exported, and attempted to purchase and then export, from the United States and other countries machinery used to fabricate metals and other materials with a high degree of precision.
In January 2009, under Executive Order 13382 which sanctions proliferators of weapons of mass destruction and their supporters, the Treasury Department’s Office of Foreign Assets Control (OFAC) designated Tsai, Global Interface, and Trans Merits as proliferators of weapons of mass destruction, isolating them from the U.S. financial and commercial systems and prohibiting any person or company in the United States from knowingly engaging in any transaction or dealing with them.
The Treasury Department said at the time that Tsai was designated for providing, or attempting to provide, financial, technological, or other support for, or goods or services in support of the Korea Mining Development Trading Corporation (KOMID), which was designated as a proliferator by President George W. Bush in June 2005. The Treasury Department asserted that Tsai “has been supplying goods with weapons production capabilities to KOMID and its subordinates since the late 1990s, and he has been involved in shipping items to North Korea that could be used to support North Korea’s advanced weapons program.” The Treasury Department further said that Global Interface was designated “for being owned or controlled by Tsai,” who was a shareholder of the company and acted as its president. Tsai was also the general manager of Trans Merits Co. Ltd., which was designated for being a subsidiary owned or controlled by Global Interface Company Inc. www.treasury.gov/press-center/press-releases/Pages/hp1359.aspx
After the OFAC designations, Tsai and others allegedly continued to conduct business together, but attempted to hide Tsai’s and Trans Merit’s involvement in those transactions by conducting business under different company names, including Trans Multi Mechanics. For example, by August 2009 – approximately eight months after the OFAC designations –Tsai and others allegedly began using Trans Multi Mechanics to purchase and export machinery on behalf of Trans Merits and Tsai.
In pleading guilty, Tsai admitted that in September 2009 he was involved in the purchase of a Bryant center hole grinder from a U.S. company based in suburban Chicago, and exported it to Taiwan using the company Trans Multi Mechanics. A Bryant center hole grinder is a machine tool used to grind a center hole, with precisely smooth sides, through the length of a material. Tsai also admitted a role in Trans Merits’ transaction involving LED road lights and an oil pump.
Charges remain pending against Tsai’s son, YUEH-HSUN TSAI, 37, of Glenview, Ill., also known as “Gary” Tsai. He was released on bond after he was arrested in May 2013 and has pleaded not guilty.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Gary Hartwig, Special Agent-in-Charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) in Chicago; and Ronald B. Orzel, Special Agent-in-Charge for the Chicago Field Office of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement. The Justice Department’s National Security Division and Office International Affairs assisted with the investigation. The Estonian Internal Security Service and the Estonian Prosecutor’s Office cooperated with the United States.
The government is being represented by Assistant U.S. Attorney Brian Hayes and Justice Department Trial Attorney Brandon L. Van Grack.
Plea Agreement
Springfield Man Pleads to Firearms and Drug Charges Agrees to 10 Year Prison SentenceRead the Press Release
BOSTON – A Springfield man pleaded guilty on Oct. 8, 2014 in U.S. District Court in Worcester with conspiring to illegally possessing a firearm and ammunition and with conspiring to distribute cocaine.
Kevin Sligar, 30, pleaded guilty to a superseding information charging him with conspiring to possess a firearm and ammunition after being previously convicted of a crime punishable by more than one year in prison and with conspiring to possess with the intent to distribute, and to distribute cocaine.
According to the facts agreed to by the parties, from approximately April 1, 2012 through July 21, 2012, Sligar operated a narcotics distribution operation, in and around Springfield, with three co-conspirators in which they distributed at least 300 grams of cocaine and an indeterminate amount of marijuana. In furtherance of their narcotics distribution operation, Sligar and a co-conspirator (“co-conspirator A”) jointly possessed a Hi-Point Model C9, 9mm pistol, even though both Sligar and the co-conspirator A had been convicted of a crime punishable by more than one year in prison.
During the evening of July 21, 2012, Sligar and his co-conspirators traveled to the Polish Festival in Ludlow in a Dodge Neon (the “Neon”). After leaving the festival, they encountered another car occupied by three individuals who were later identified by the police. While both cars were stopped at a traffic light, an argument broke out between the occupants of the other car and the occupants of the Neon. During the course of the argument, Sligar brandished the pistol. Shortly thereafter, the other car drove away, and the occupants called 911. The Neon attempted to escape the Springfield Police by driving at very high rates of speed, but ultimately crashed at an intersection, injuring Sligar and all of his co-conspirators A, B and C. During the search of the Neon, the SPD pistol, which was fully loaded with 9mm ammunition, was recovered.
According to Sligar’s Plea Agreement, Sligar has also agreed to plead guilty to assault with a dangerous weapon in a related case in Hampden Superior Court.
Sligar is scheduled to be sentenced on Jan. 12, 2015. According to the Plea Agreement, Sligar has agreed to be sentenced to 10 years in prison to be followed by six years of supervised release.
United States Attorney Carmen M. Ortiz, Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Boston Field Office, and Springfield Police Department Commissioner William John Barbieri made the announcement. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
Sixty People Indicted, 110 Firearms Seized as Part of Summer Enforcement Action in Greater ClevelandRead the Press Release
Sixty people were indicted and 110 firearms were seized as part of a months-long enhanced enforcement initiative targeting the criminal possession, use and sale of firearms in Greater Cleveland, law enforcement officials announced.
The indictments were announced by ATF Director B. Todd Jones, U.S. Attorney Steven M. Dettelbach, Cleveland Mayor Frank G. Jackson, ATF Special Agent in Charge Michael Boxler, Cleveland Police Chief Calvin Williams and Cuyahoga County Prosecutor Timothy J. McGinty.
Forty-two people were indicted in federal court while 18 people were indicted in state court. Charges include engaging in the business of dealing firearms without a license, being a felon in possession of firearms and ammunition, possession of unregistered firearms that had been modified (sawed-off shotguns), possession and sale of firearms with obliterated serial numbers and related drug counts.
The indictments are the result of “Operation Samson II,” a summer-long initiative organized around three operational groups. The first used undercover operations to investigate people known to criminally possess, use and sell firearms, as well as people possessing firearms while conducting drug activities. The second group, referred to as the “Follow the Gun Group,” used firearms trace data and ballistics information from the National Ballistics Information Network (NIBIN) to pursue leads related to firearms that have been diverted from legal commerce to criminal use. Many of those investigations remain ongoing. The third group involved ATF Industry Operations conducting inspections at Cleveland-area federal firearms licensees to ensure that dealers are selling firearms in accordance with federal law and regulations.
This initiative was a cooperative effort between the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Cleveland Division of Police, the Ohio Adult Parole Authority, the U.S. Marshals Service, the U.S. Attorney’s Office and the Cuyahoga County Prosecutor’s Office.
“Preventing violent crime and apprehending violent offenders are vital components of ATF’s commitment to public safety because firearms-related violence should not be considered part of everyday life. This collective operation is helping make that possible for the citizens of Cleveland,” Director Jones said.
“Gun crime is far too prevalent in our community, and the Department of Justice is working with the City to not just talk about that problem, but to do something about it,” U.S. Attorney Dettelbach said. “This summer, our office and the ATF have doubled down on that commitment here, by targeting some of Cleveland's most violent felons and working with our local partners to take them, and some of their considerable weaponry, off our streets. We need an all-of-the-above approach to fighting gun violence, and today's announcement reminds us that targeted enforcement remains and important part of that approach.”
“Gun violence in Cleveland is often the result of guns in the hands of felons who do not have the right to have a gun. I’d like to thank the Bureau of Alcohol, Tobacco, Firearms and Explosives for working with our Cleveland police this year to take a significant number of these illegal firearms off our streets,” said Mayor Jackson.
“These arrests will destabilize the market in the illegal gun trade,” Prosecutor McGinty said. “These weapons are constantly found to be used by those who deal in illegal drugs and commit other violent offenses. This program is a step toward a safer community.”
Below are details of selected cases:
United States v. Kali Alexander et. al.: An 11-count indictment was filed charging five people with using firearms as part of a drug conspiracy, conspiracy to distribute cocaine and felons in possession of firearms.
Alexander, 24, of Willoughby Hills, recruited Rasheam Nichols, 24, Justin Maxwell, 26, Terrance Chappell, 22, and Kenneth Flowers, 21, all of Cleveland, to steal up to nine kilograms of cocaine from a stash house in Cleveland. The group planned to rob the stash house, then Alexander would sell the stolen cocaine and split the profits, according to the indictment.
Alexander met with an undercover ATF agent in August and expressed an interest and willingness to commit the robbery. “I promise you, I know what I’m doing, I’m about to holler at my big brother, then we going to orchestrate it from there.” On September 3, Alexander, Nichols, Maxwell, Chappell and Flowers met with the ATF undercover and discussed the strategy for the robbery. Then the five men drove to agreed-upon location in anticipation of acquiring a specific vehicle to use during the robbery, at which point they were arrested, according to the indictment.
United States v. Juan Davis: Davis, 25, of Cleveland, was not a licensed firearms dealer but sold five firearms on three dates in August – a Ruger .40-caliber pistol, an HS 9mm pistol, a Chinese SKS 7.62-caliber rifle, a Firearms International .22-caliber pistol and a Bersa .45-caliber pistol, according to the indictment.
United States v. Jesse Pawlak: Pawlak, 32, of Parma, has prior convictions for drug trafficking and burglary, but in July possessed an AK-47 7.62-caliber rifle, a Sar Arms 9mm pistol and a Bersa .380-caliber pistol, and in August possessed a Professional Ordnance 5.56-caliber rifle, according to the indictment.
United States v. Moises Perez: Perez, 45, of Cleveland, had a Ruger 9 mm pistol and H&R .22-caliber revolver and assorted ammunition in August, despite prior felony convictions for burglary, attempted felonious assault, unlawful sexual conduct with a minor, attempted felonious assault with a firearm, attempted intimidation, drug trafficking, robbery and being a felon in possession of a firearm. Perez was indicted as an armed career criminal, which would carry a mandatory minimum sentence of 15 years in prison if convicted, according to the indictment.
United States v. James Smith et. al.: A seven-count indictment was filed charging James Smith, 25, of Cleveland, Brandon Talley, 32, of Garfield Heights, and Lorenzo White, 22, of Cleveland, with multiple offenses. Talley possessed a 12-gauge shotgun in August, despite a previous conviction for rape and aggravated robbery with firearms specifications. Talley, Smith and White aided and abetted each other in the possession of unlicensed shotguns which had been modified (sawed-off), according to the indictment.
United States v. Gilberto Torres, et. al: A six-count indictment was filed charging Gilberto Torres, 33, Juan Hernandez, 23, both of Cleveland, and Antonio Turner, 33, of Shaker Heights, with firearms offenses. All three men at various times sold firearms without a license. Torres and Turner did so despite felony convictions – aggravated assault for Torres and attempted felonious assault, burglary, abduction and robbery with a firearm for Turner. Hernandez also sold a HiPoint .40-caliber pistol with an obliterated serial number, according to the indictment.
State of Ohio v. Michael Lukach: Lukach, 24, of Cleveland, was charged in state court with two counts of carrying a concealed weapon, fourth-degree felonies; two counts of improperly handling firearms in a motor vehicle, also fourth-degree felonies; and unlawful possession of dangerous ordnance, a fifth-degree felony. These charges stem from undercover investigations in which Lukach, also known as “Russian Mike,” sold eight firearms to an agent – six semiautomatic pistols and two shotguns, according to the indictment.
The federal cases were presented for indictment by Assistant U.S. Attorney Kelly Galvin.
An indictment is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilty beyond a reasonable doubt.
Sharon Felon Gets 41-Month Federal Prison Sentence for Illegally Possessing PistolRead the Press Release
PITTSBURGH - A resident of Sharon, Pennsylvania, has been sentenced in federal court to 41 months for his conviction of possession of a firearm by a convicted felon, United States Attorney David J. Hickton announced today.
Senior United States District Judge Terrence McVerry imposed the sentence on Ralph Samuels, 50.
According to information presented to the court, during the early morning hours of Oct. 3, 2012, Samuels engaged in a shootout with Daniel Odem, Jr., a resident of Farrell. This shootout, which occurred on the 500 block of Emerson Avenue in Farrell took place because of a fight that had occurred earlier that evening at Rockabilly’s Bar. Both Samuels, who, at that time, was a convicted felon and therefore illegally possessed the firearm he utilized in the shootout, and Odem, Jr., were injured in the shootout. Police later recovered Samuels’ DNA on the firearm he utilized, which was a .45 caliber Firestorm pistol.
Prior to imposing sentence, Judge McVerry declined Samuels’ request for a downward variance and instead imposed a sentence within the Sentencing Guidelines. Judge McVerry noted the danger that Samuels’ actions posed to himself, Odem, Jr., and the general community.
Assistant United States Attorney Eric S. Rosen prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Southwest Mercer County Regional Police, the Federal Bureau of Investigation, and the Bureau of Alcohol, Tobacco, Firearms and Explosives for the investigation leading to the successful prosecution of Samuels.
Sewickley Man Defrauded Investors to Support His LifestyleRead the Press Release
PITTSBURGH – An Allegheny County resident pleaded guilty in federal court to a charge of wire fraud, United States Attorney David J. Hickton announced today.
Daniel Hoey, 49, of Sewickley, Pa., pleaded guilty to one count before Chief United States District Judge Joy Flowers Conti.
In connection with the guilty plea, the court was advised that Hoey participated in a scheme to defraud through an entity named Trilliant that purportedly offered mortgage services to entities as an employee benefit. Hoey used a series of false representations and falsified documents to solicit investments and loans from the victims of his fraud scheme. He provided false documents to the victims to induce them to invest, and then he spent the investors’ money to support his lifestyle.
Judge Conti scheduled sentencing for Feb. 6, 2015, at 10 a.m. The law provides for a total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the government.
The United States Postal Inspection Service conducted the investigation that led to the prosecution of Hoey.
Serial Armed Robber Exiled to 30 Years in PrisonRead the Press Release
Perpetrator of 13 Robberies or Attempted Robberies Has “Committed his Last Robbery”
Baltimore, Maryland – U.S. District Judge George L. Russell, III sentenced John Joseph Wilson, age 54, of Dundalk, Maryland today to 30 years in prison followed by five years of supervised release for armed robbery of a bank and post office, and the use of a firearm during a robbery. Judge Russell also ordered Wilson to pay restitution of $48,818.01.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; Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division; Colonel Marcus L. Brown, Superintendent of the Maryland State Police; Chief James W. Johnson of the Baltimore County Police Department; Harford County Sheriff L. Jesse Bane; Commissioner Anthony W. Batts of the Baltimore Police Department; Baltimore City State’s Attorney Gregg L. Bernstein; Baltimore County State’s Attorney Scott Shellenberger; and Harford County State’s Attorney Joseph I. Cassilly.
“If we are serious about reducing gun crime, we need to be serious about sentencing armed criminals to long terms in prison,” said U.S. Attorney Rod J. Rosenstein. “Hopefully John Joseph Wilson has committed his last armed robbery.”
According to his plea agreement, from July 2010 to October 2013, Wilson robbed or attempted to rob: four banks on eight occasions, one post office on three occasions and a supermarket on two occasions. These robberies occurred primarily in Harford and Baltimore Counties, and total $49,046.17. In all but one robbery, Wilson pointed a firearm at an employee. During his final robbery, Wilson shot at a citizen who was chasing him.
Beginning on July 22, 2010, Wilson stole $6,883.50 from the Mars Supermarket located on Philadelphia Road in Baltimore, after pointing a semi-automatic handgun at a clerk and taking money from her cash drawer. Wilson returned to the same store on August 27, 2010 and robbed the same clerk with the same gun, stealing $6,064.01.
On September 30, 2010, Wilson pointed a pistol at a bank clerk and stole $8,297 from a cash drawer at Madison Square Federal Savings Bank in Fallston, Maryland. When Wilson returned to the bank on October 9th, the employees recognized him from the earlier robbery and refused to let him enter the bank. Wilson pointed a handgun at the employees before fleeing.
A couple years later, on November 5, 2012, Wilson used a short-barreled shotgun to steal $4,116.66 from the BB&T Bank in Fallston.
Wilson used the revolver or shotgun to steal $490 from the Benson Post Office on Connolly Road in Fallston on December 12, 2012; $8,684 from Sovereign Bank on Emmorton Road in Bel Air, Maryland on December 17, 2012; and $8,960 from the same Sovereign Bank on January 4, 2013.
Wilson returned to the same BB&T Bank in Fallston on February 4, 2013 and stole $930. This time, instead of displaying a gun, Wilson showed a bank clerk his cell phone to display his demands for “Large bills” and “no dye pack.”
On April 27, 2013, after initially being thwarted from entering the Sovereign Bank on Emmorton Road in Bel Air, Wilson returned to the Benson Post Office. Using a revolver, he forced a postal clerk to open a safe. He took $821 from the safe and cash drawers.
On September 6, 2013, Wilson stole $3,800 from the Liberty Federal Savings and Loan Association Bank on Belair Road in Bel Air, after pointing a gun at an employee.
Finally, on October 5, 2013, Wilson again robbed the Benson Post Office. When the postal clerk saw Wilson’s gun, she fled to a business next door. The proprietor of that business chased Wilson, who turned and fired one shot toward the proprietor before fleeing away from the area. Postal Inspectors and Maryland State Police processed the crime scene at the Benson Post Office and developed evidence that assisted in the identification of Wilson as a suspect.
Wilson was arrested on October 9, 2013. The revolver and shotgun used in all but one of the robberies were recovered.United States Attorney Rod J. Rosenstein commended the FBI, U.S. Postal Inspection Service, Maryland State Police, Baltimore County Police Department, Harford County Sheriff’s Office, Baltimore Police Department and the Baltimore City, County and Harford County State’s Attorney’s Offices for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney P. Michael Cunningham, who prosecuted the case.
Second Vice President of Equatorial Guinea Agrees to Relinquish More Than $30 Million of Assets Purchased with Corruption ProceedsRead the Press Release
The Department of Justice has reached a settlement of its civil forfeiture cases against assets in the United States owned by the Second Vice President of the Republic of Equatorial Guinea Teodoro Nguema Obiang Mangue that he purchased with the proceeds of corruption.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting Director Thomas S. Winkowski of U.S. Immigration and Customs and Enforcement made the announcement after the settlement was signed and lodged with the U.S. District Court for the Central District of California.
“Through relentless embezzlement and extortion, Vice President Nguema Obiang shamelessly looted his government and shook down businesses in his country to support his lavish lifestyle, while many of his fellow citizens lived in extreme poverty,” said Assistant Attorney General Caldwell. “After raking in millions in bribes and kickbacks, Nguema Obiang embarked on a corruption-fueled spending spree in the United States. This settlement forces Nguema Obiang to relinquish assets worth an estimated $30 million, and prevents Nguema Obiang from hiding other stolen money in the United States, fulfilling the goals of our Kleptocracy Asset Recovery Initiative: to deny safe haven to the proceeds of large-scale foreign official corruption and recover those funds for the people harmed by the abuse of office.”
“While this settlement is certainly gratifying for the many investigators and prosecutors who worked tirelessly to bring it to fruition, it is undoubtedly even more rewarding for the people of Equatorial Guinea, knowing that at least some of the money plundered from their country’s coffers is being returned to them,” said Acting ICE Director Winkowski. “ICE remains steadfast in its resolve to combat foreign corruption when the spoils of these crimes come to our shores and we are committed to seeking justice and compensation for the often impoverished victims.”
According to court documents, Nguema Obiang, the son of Equatorial Guinea’s President Teodoro Obiang Nguema Mbasogo, received an official government salary of less than $100,000 but used his position and influence as a government minister to amass more than $300 million worth of assets through corruption and money laundering, in violation of both Equatoguinean and U.S. law. Through intermediaries and corporate entities, Nguema Obiang acquired numerous assets in the United States that he is agreeing to relinquish in a combination of forfeiture and divestment to a charity for the benefit of the people of Equatorial Guinea.
Under the terms of the settlement, Nguema Obiang must sell a $30 million mansion located in Malibu, California, a Ferrari automobile and various items of Michael Jackson memorabilia purchased with the proceeds of corruption. Of those proceeds, $20 million will be given to a charitable organization to be used for the benefit of the people of Equatorial Guinea. Another $10.3 million will be forfeited to the United States and will be used for the benefit of the people of Equatorial Guinea to the extent permitted by law.
Under the agreement, Nguema Obiang must also disclose and remove other assets he owns in the United States. Nguema Obiang must also make a $1 million payment to the United States, representing the value of Michael Jackson memorabilia already removed from the United States for disbursement to the charitable organization. The agreement also provides that if certain of Nguema Obiang’s other assets, including a Gulfstream Jet, are ever brought into the United States, they are subject to seizure and forfeiture.
Next week, the parties will request that the court enter appropriate orders to implement and enforce this agreement.
This case was brought under the Kleptocracy Asset Recovery Initiative by a team of dedicated prosecutors in the Criminal Division’s Asset Forfeiture and Money Laundering Section, working in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption and, where appropriate, return those proceeds to benefit the people harmed by these acts of corruption and abuse of office. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to [email protected].
The investigation was conducted by ICE, Homeland Security Investigation’s (HSI) Foreign Corruption Investigations Group and the HSI Asset Identification and Removal Group in Miami, with the assistance of the HSI Office of the Special Agent in Charge for Los Angeles, the HSI Attaché Office in Rome, HSI Attaché Office in Madrid, HSI Attaché Office in London and the HSI Attaché Office in Paris. HSI established the FCIG in 2003 to conduct investigations into the laundering of proceeds emanating from foreign public corruption, bribery and embezzlement. The cases are worked jointly with representatives of the victimized foreign governments. The FCIG’s goal is to prevent foreign-derived, ill-gotten gains from entering the U.S. financial infrastructure; to seize assets identified in the U.S.; and to repatriate these funds to the victimized governments. Since the initiative’s launch, HSI has effected 220 seizures involving more than $146 million worth of property and assets.
The case was handled by Trial Attorneys Woo S. Lee, Stephen A. Gibbons, and Della G. Sentilles and Assistant Deputy Chief Daniel Claman of the Criminal Division’s Asset Forfeiture and Money Laundering Section, with substantial assistance from Assistant U.S. Attorney Steven Welk of the Central District of California. The Criminal Division’s Office of International Affairs also provided significant assistance
The department appreciates the extensive assistance provided by the Government of France in this investigation and prosecution.
Obiang Settlement Agreement
Ringleader of Fraud Conspiracy Sentenced to PrisonRead the Press Release
OAKLAND – Kyle Edward Moore was sentenced, today to 37 months in prison, and was ordered to pay $520,904 in restitution for carrying out two conspiracies to commit financial aid fraud and wire fraud, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.
Moore pleaded guilty on Feb. 14, 2014, to two counts of conspiracy to commit financial aid fraud and one count of wire fraud. According to the plea agreement, Moore conspired to obtain federal student aid funds offered under the Title IV Federal Student Assistance Program. Moore and his co-defendants obtained the aid by preparing and transmitting fraudulent Free Applications for Federal Student Aid (FAFSAs) to the U.S. Department of Education.
In carrying out the fraud scheme, Moore and his co-defendants recruited third-parties to serve as “straw students” and then assisted the straw students in preparing, signing, and transmitting fraudulent FAFSAs. Moore knew that many of the straw students were not eligible to obtain Title IV funds because, among other things, the straw students had not obtained high school diplomas or a recognized equivalent and had no intention of attending school or using the funds for educational purposes. After receiving the student loan funds, Moore and his co-defendants shared the fraudulently obtained funds among themselves and sometimes with the straw students.
Moore admitted to intending to steal $771,268 and to successfully stealing $520,904.
Moore, 29, of Hayward, and three co-defendants were indicted by a federal grand jury on Aug. 15, 2013. They were charged with conspiracy to commit financial aid fraud, in violation of 18 U.S.C. § 371, and with multiple counts of wire fraud, in violation of 18 U.S.C. § 1343.
The sentence was handed down by the Honorable John S. Tigar, United States District Court Judge, in Oakland, following a guilty plea on two counts in violation of 18 U.S.C. § 371, and on one count of 18 U.S.C. § 1343. Judge Tigar also sentenced the defendant to a three-year period of supervised release and to forfeit $520,904 in the form of a money judgment. The defendant will begin serving the sentence on Jan. 12, 2015.
Wade M. Rhyne is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Janice Pagsanjan and Patty Lau. The prosecution is the result of an investigation by the U.S. Department of Education, OIG; the FBI; and the U.S. Department of Housing and Urban Development, OIG.
(Moore indictment )
Pittsburgh Man Pleads Guilty to Possessing Sexually Explicit Images and Videos of MinorsRead the Press Release
PITTSBURGH- A Pittsburgh resident pleaded guilty in federal court to a charge of child pornography, United States Attorney David J. Hickton announced today.
Zachary Roth, 38, pleaded guilty to one count before Chief United States District Judge Joy Flowers Conti.
In connection with the guilty plea, the court was advised that on or about March 21, 2007, Roth did knowingly possess visual depictions, namely, images and videos contained in computer graphics files, the production of which involved the use of minors engaging in sexually explicit conduct.
Judge Conti scheduled sentencing for Feb. 20, 2015, at 11 a.m. The law provides for a total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Amy L. Johnston is prosecuting this case on behalf of the government.
The United States Department of Homeland Security, Immigration and Customs Enforcement (ICE) and the Pennsylvania State Police conducted the investigation that led to the prosecution of Roth.
Passenger Indicted for Disrupting Transalantic FlightRead the Press Release
BOSTON – A Haitian national was indicted yesterday for interfering with flight crew members on a flight from Miami to Paris, which caused the flight to be diverted to Boston.
Edmond Alexandre, 60, a Haitian national residing in Paris, France, was indicted for interference with flight crew members and attendants. On Aug. 27, 2014, approximately two hours after takeoff, Alexandre allegedly began to argue with other passengers over a reclined seat. A flight crew member intervened. In response, Alexandre chased the crew member down the aisle of the plane and grabbed the crew member’s arm. Federal Air Marshals intervened and subdued Alexandre. The captain of the flight diverted the plane to Boston’s Logan International Airport where Alexandre was arrested.
The charging statute provides a sentence of no greater than 20 years in prison and three years of supervised release. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Dwain G. Troutt, Supervisory Air Marshal in Charge of the Transportation Security Administration, Office of Law Enforcement, Federal Air Marshal Service, Boston Field Office; Bob Allison, Federal Security Director for the Transportation Security Administration for the District of Massachusetts; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Colonel Timothy P. Allen, Superintendent of the Massachusetts State Police, made the announcement. The case is being prosecuted by Assistant United States Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.
Owner of Mountain Pure Water Found Guilty of Wire Fraud and Money Laundering ViolationsRead the Press Release
LITTLE ROCK, AR – Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, Christopher A. Henry, Special Agent in Charge of the IRS-Criminal Investigation, and Scott Dennis, Special Agent in Charge of the Small Business Administration Office of Inspector General announced that John B. Stacks, owner of Mountain Pure Water, was found guilty on Thursday, October 9, 2014, by a jury on three counts of wire fraud, one count of submitting a false claim, and three counts of false statements. The jury was unable to reach a unanimous verdict concerning the three counts of money laundering. The Honorable J. Leon Holmes presided over the seven day trial and three days of jury deliberation in the United States District Court in Little Rock.
“In times of recovery after the destruction caused by recent tornados, people have depended on the help provided through Small Business Administration loans to rebuild their businesses,” stated Thyer. “Unfortunately, there are some who lie, cheat and steal from, essentially, their neighbors to obtain funds that should go toward recouping legitimate business losses. I am grateful that this jury has weighed the evidence in this case and found Mr. Stacks guilty of wire fraud, submitting a false claim and making false statements. This verdict is the culmination of many hours of investigation by the IRS and SBA OIG. Their efforts have brought this injustice to light and have righted a wrong perpetrated on local business owners.”
"Today's verdict is a direct result of the excellent partnership the IRS, the U.S. Attorney’s office and our law enforcement partners have in combating violations of Federal law," said Christopher A. Henry, Special Agent in Charge, IRS-Criminal Investigation. "Stealing from the government is not a victimless crime; it is a crime against the American public. This verdict should serve as a deterrent to those who might contemplate similar fraudulent actions."
“Today’s verdict sends a strong message that taxpayers have zero tolerance for fraud in disaster assistance programs,” said Special Agent-in-Charge Scott Dennis. “SBA disaster assistance loans are for persons and businesses that have suffered damage, not for persons seeking personal gain. I want to thank the U.S Attorney's Office and our law enforcement partners for their dedication and hard work throughout this investigation.”
Stacks was originally indicted on December 3, 2013, and charged with 3-counts of wire fraud, 3-counts of money laundering, 1-count of submitting a false claim to the Small Business Administration (SBA), and 4-counts of making a false statement.
According to evidence presented at trial, in 2009, Stacks obtained an SBA loan for $703,300 under false pretenses. Stacks claimed he had over $500,000 worth of Mountain Pure Water equipment at his farm in Damascus, Arkansas, that was destroyed when a tornado touched down in the area in May 2008. The wire fraud and money laundering charges stem from three transfers of money from the SBA in Kansas City, Missouri to Stacks’ General Account at Home Bank of Arkansas in Greenbrier. The false claim and statement charges are related to the Loan Authorization and Agreement and other related documents and statements Stacks submitted to the SBA to induce the SBA to make the loan.
Sentencing will be scheduled by the Court at a later date. Stacks faces a statutory maximum penalty for Wire Fraud of not more than 20 years; a statutory penalty for False Claim of not more than 5 years; and a statutory penalty for false statement of not more than 5 years of imprisonment.
The case was investigated by IRS-Criminal Investigation and the SBA Office of Inspector General. Assistant United States Attorney Angela Jegley and First Assistant United States Attorney Pat Harris prosecuted the case for the United States.
Northampton County Doctor and Son Charged with Tax FraudRead the Press Release
PHILADELPHIA - Francis J. Cinelli, Sr., M.D., 87, and Francis J. Cinelli, Jr.,49, of Wind Gap, PA were each charged separately, by information, with one count of tax fraud stemming from false tax returns filed by Cinelli Jr., announced United States Attorney Zane David Memeger.
Cinelli Jr. is charged with filing a false tax return, stemming from his alleged filing of a 2007 false tax return with the IRS on which he failed to declare approximately $163,000 in income he had earned during that year.
Cinelli Sr. is charged with aiding and abetting Cinelli Jr.’s filing of a false tax return. According to the information, Cinelli Jr. filed a 2008 false tax return with the IRS on which Cinelli Jr. failed to declare approximately $109,000 in income that Cinelli Sr. had paid to Cinelli Jr. during that year.
Each of the defendants faces a maximum sentence of three years in prison, a one year term of supervised release, a $100,000 fine, and a $100 special assessment.
The cases were investigated by the Internal Revenue Service Criminal Investigation Division and the Federal Bureau of Investigation and are being prosecuted by Assistant United States Attorney Michael S. Lowe.
An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Click here to view the information for Cinelli, Sr.
Click here to view the information for Cinelli, Jr.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525New Jersey Man Found Guilty in Manhattan Federal Court of Perpetrating Multimillion-Dollar Investment FraudRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that CHARLES HUGGINS was found guilty in Manhattan federal court of perpetrating a multimillion-dollar investment fraud against dozens of victims across the United States. HUGGINS was convicted following a two-week jury trial before U.S. District Judge Sidney H. Stein.
According to the Complaint and other filings in Manhattan federal court, and the evidence presented at trial:
From 2008 through at least September 2011, HUGGINS and others solicited millions of dollars from various investors through companies known as JYork Industries Inc. (“JYork”) and Urogo Inc. (“Urogo”) with false and misleading representations that he would use the investors’ money exclusively to mine gold and diamonds from Sierra Leone and Liberia. HUGGINS falsely promised investors, among other things, high rates of return on their investments, which he represented were based upon the profits generated by the sale of the gold and diamonds in the United States.
In fact, from 2008 through at least September 2011, HUGGINS and his co-conspirators misappropriated millions of dollars of investors’ funds and used those funds for their own purposes or to repay other investors. Contrary to the representations of HUGGINS and his co-conspirators, the vast majority of the investment funds was used to pay HUGGINS’s personal expenses and for purposes entirely unrelated to what was represented to investors. For example, hundreds of thousands of dollars in investor funds were diverted to Orpheus Inc., a record label owned by HUGGINS, and used to pay, among other expenses, HUGGINS’s $7,200 monthly apartment rent in the Sutton Place section of Manhattan, for upkeep of HUGGINS’s Mercedes Benz, restaurant tabs, clothes from expensive boutiques, and personal credit card bills. HUGGINS personally received hundreds of thousands of dollars in cash and gave tens of thousands of dollars in cash to other members of his family. A portion of the funds was used to make payments to other investors, as in a classic Ponzi scheme.
Dozens of victims across the United States lost their money in the scheme. When certain investors complained that they had not received the investment return that they were promised, HUGGINS gave those investors small repayments from funds invested by others, or claimed that he converted their investment into restricted shares of Oraco Resources, a publicly traded company of which Huggins was a majority shareholder, that were nearly worthless.
HUGGINS, 68, of Edgewater, New Jersey, was convicted of one count of conspiracy to commit wire fraud and one count of wire fraud. Each of those counts carries a maximum potential penalty of 20 years in prison and a fine of the greater of $250,000 or twice the gross gain or loss derived from the offense. 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. HUGGINS is scheduled to be sentenced in January 2015 before Judge Stein.
Mr. Bharara praised the work of the FBI in the investigation of this case. He added that the investigation is continuing.
The case is being handled by the General Crimes Unit of the United States Attorney's Office. Assistant United States Attorneys Edward A. Imperatore and Andrea L. Surratt are in charge of the prosecution.
New Jersey Man Enters Guilty Plea on Firearms ViolationsRead the Press Release
Prosecution is part of Project Safe Neighborhoods Initiative
JOHNSTOWN, Pa. – A resident of Tuckertown, NJ, pleaded guilty in federal court in Johnstown to a charge of violating federal firearms laws, United States Attorney David J. Hickton announced today.
Abdur Rahmen Abdullah, 32, pleaded guilty to the indictment before United States District Judge Kim R. Gibson.
In connection with the guilty plea, on Jan. 10, 2013, Abdullah possessed a Remington, Model 870 Wingmaster, 12 gauge shotgun. On July 1, 2008, Abdullah was convicted in the United States District Court for the District of NJ of being a felon in possession of a firearm, which is a crime punishable by imprisonment for a term exceeding one year. Federal law prohibits persons who have been convicted of a crime punishable by a term of imprisonment exceeding one year from possessing firearms or ammunition.
Judge Gibson scheduled sentencing for Feb. 26, 2015, at 10:00 a.m. The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history of the defendant.
Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Johnstown Police Department conducted the investigation that led to the prosecution of Abdullah.
According to Mr. Hickton, Abdur Rahmen Abdullah is being prosecuted as part of Project Safe Neighborhoods, a collaborative effort by federal, state and local law enforcement agencies, prosecutors and communities to prevent, deter and prosecute gun crime.
- McAllen Man Using USDA Vehicle Attempts to Deliver Cocaine
Massena Woman Pleads Guilty to Identity Theft FraudRead the Press Release
Involved false income tax returns of over $200,000
SYRACUSE, NEW YORK –United States Attorney Richard S. Hartunian and IRS-Criminal Investigations, New York Field Office, Special Agent in Charge Shantelle P. Kitchen announced that Lacey Jane Hollinger, 27, of Massena, New York pled guilty yesterday in federal court in Syracuse, New York to mail fraud and aggravated identity theft in a case involving false federal income tax returns that resulted in the theft of over $200,000.00 from the IRS. Hollinger admitted that in 2011 and 2012 she contacted Massena area residents via Facebook and other electronic media to tell them they were eligible for a tax refund even though they were unemployed and had no income as part of a U.S. Government “stimulus program.” No such program existed. Several dozen responded, giving Hollinger their personal identification information (date of birth, social security number, etc.). Hollinger forwarded this information to others who used it to create false and fraudulent tax returns that generated over $200,000.00 in tax refunds. Hollinger, and others involved in the fraudulent scheme, stole these funds after they were electronically deposited in bank accounts they controlled in Arizona.
The Massena area residents never saw the tax returns, which falsely represented that they were self-employed and entitled to a refund. Some did get pre-paid debit cards that Hollinger and others caused them to receive in the mail. Many got nothing, with Hollinger and the other fraudsters keeping most of the refund money.
“Identify theft and false income tax filings are two crimes that are increasingly affecting the public,” stated United States Attorney Richard S. Hartunian. “The most important thing for citizens to remember is to never give their personal identifying information out to people they don’t know or who shouldn’t need that information.”
At sentencing on February 6, 2015, Lacey Jane Hollinger faces a maximum sentence of up to twenty (20) years for her conviction for mail fraud and a fine of up to $250,000.00 as well as restitution. She faces an additional maximum sentence of up to twenty (20) years for her plea of guilty to aggravated identity theft, with a mandatory minimum term of two (2) years imprisonment to be served consecutively to her mail fraud sentence. She faces up to three (3) years of supervised release following her release from prison.
The case was investigated by Special Agents of the Internal Revenue Service, Criminal Investigations (Syracuse, New York Field Office), under the direction of Special Agent in Charge Shantelle P. Kitchen. It is being prosecuted by Assistant United States Attorney Richard Southwick.
Malden Man Sentenced to 15 Years for Sex TraffickingRead the Press Release
BOSTON – A Malden man was sentenced yesterday to 15 years in prison for sex trafficking a 15-year-old girl.
David Minasian, 25, was sentenced by U.S. District Judge William G. Young to 15 years in prison, five years of supervised release, a fine of $250,000 and ordered to pay $4,000 in restitution to the victim. Minasian will be required to register as a sex offender upon his release from prison. In May 2014, Minasian pleaded guilty sex trafficking of a minor.
In 2012, Minasian and others photographed the 15 year-old victim wearing revealing lingerie and posing in provocative positions, and then posted these photographs to the adult section of Backpage.com, a site commonly used for advertising commercial sex activity, soliciting customers for “escort services.” Customers who responded to the advertisements were directed to where Minasian was staying with the victim to have sex with her for a fee. Minasian and his co-defendant also transported the victim to motels inside Massachusetts where they paid for rooms to prostitute her.
At the sentencing hearing, the victim’s mother addressed the Court on behalf of the victim, who was not present. The mother explained that Minasian had given the victim heroin and prostituted her once she became addicted. The victim is still battling her addiction. In imposing a 15 year sentence, Judge Young chastised the defendant for preying on a particularly vulnerable victim.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. The case was investigated by the Federal Bureau of Investigation’s Boston Child Exploitation Task Force, which is comprised of members from the FBI, Massachusetts State Police, and the Malden and Arlington Police Departments. It was being prosecuted by Assistant U.S. Attorney Leah Foley on Ortiz’s Civil Rights Enforcement Team.Liberty Reserve Founder Extradited from SpainRead the Press Release
The founder of Liberty Reserve, a virtual currency used by cybercriminals around the world to launder proceeds of their illegal activity, was extradited from Spain and arrived in the United States this afternoon.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Preet Bharara of the Southern District of New York made the announcement.
Arthur Budovsky, 40, a citizen of Costa Rica, was arrested in Spain in May 2013 after being indicted by a grand jury in the Southern District of New York. Following his extradition by Spanish authorities, Budovsky arrived in New York this afternoon and will be presented before U.S. Magistrate Judge James C. Francis IV on Oct. 11, 2014, at 2:00 p.m. Budovsky will be arraigned before U.S. District Judge Denise L. Cote on Oct. 14, 2014, at 12:45 p.m.
“Arthur Budovsky allegedly built Liberty Reserve overseas to provide the international underworld with a crime-friendly digital currency and elude the scrutiny of American authorities. He even renounced his U.S. citizenship to try to escape facing justice in an American courtroom,” said Assistant Attorney General Caldwell. “With the cooperation of our foreign partners in Spain and elsewhere, this case and extradition are a clear example that money launderers can run, but they cannot hide from the Department of Justice.”
“For years, Arthur Budovsky allegedly enabled criminals in the United States and around the world to process illegal payments and to launder billions of dollars in crime proceeds through Liberty Reserve,” said U.S. Attorney Bharara. “Budovsky operated Liberty Reserve from Costa Rica, hoping to evade the reach of U.S. law enforcement. Thanks to the cooperative efforts of our law enforcement partners here and in Spain, he was apprehended and extradited to the United States where he will now face justice.”
According to allegations contained in the indictment and statements made in related court proceedings, Liberty Reserve was born out of Budovsky’s unsuccessful experience running a third-party exchange service, called Gold Age Inc., for another digital currency, called E-Gold. In or about 2006, Budovsky was convicted in New York State of operating Gold Age Inc. as an unlicensed money transmitting business. In 2007, the operators of E-Gold were also charged with criminal offenses, including money laundering and operating an unlicensed money transmitting business, and subsequently ceased doing business. In the wake of his own criminal conviction, Budovsky set about building a digital currency that would succeed in eluding law enforcement where E-Gold had failed, by, among other ways, locating the business outside the United States. Accordingly, Budovsky emigrated to Costa Rica, where he and other defendants began operating Liberty Reserve.
Liberty Reserve, which billed itself as the Internet’s “largest payment processor and money transfer system,” was created, structured and operated to help users conduct illegal transactions anonymously and launder the proceeds of their crimes. The indictment alleges that Budovsky devoted himself to building and expanding Liberty Reserve so that the company could profit from attracting more and more criminal customers, all while seeking to evade the scrutiny and reach of U.S. law enforcement authorities. At all relevant times, Budovsky directed and supervised Liberty Reserve’s operations, finances, and corporate strategy.
Liberty Reserve emerged as one of the principal money transfer agents used by cybercriminals around the world to distribute, store, and launder the proceeds of their illegal activity. Liberty Reserve was used extensively for illegal purposes, functioning as the bank of choice for the criminal underworld because it provided an infrastructure that enabled cybercriminals to conduct anonymous and untraceable financial transactions. The indictment alleges that Budovsky was so committed to evading U.S. law enforcement that he formally renounced his U.S. citizenship in 2011 and became a Costa Rican citizen, telling U.S. immigration authorities that he was concerned that the “software” his “company” was developing “might open him up to liability in the U.S.”
Before being shut down by the U.S. government in May 2013, Liberty Reserve had more than one million users worldwide, including more than 200,000 users in the United States, who conducted approximately 55 million transactions through its system totaling more than $6 billion in funds. These funds encompassed suspected proceeds of credit card fraud, identity theft, investment fraud, computer hacking, narcotics trafficking, and other crimes.
Budovsky is among seven individuals charged in the indictment, which was unsealed on May 28, 2013. Four co-defendants – Vladimir Kats, Azzeddine el Amine, Mark Marmilev, and Maxim Chukharev – have pleaded guilty and await sentencing before U.S. District Judge Denise L. Cote. Charges against Liberty Reserve and two individual defendants who have not been apprehended remain pending.
The charges contained in the indictment remain pending and are merely accusations. The defendants are presumed innocent unless and until proven guilty.
This case is being investigated by the U.S. Secret Service, the Internal Revenue Service-Criminal Investigation and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, with assistance from the Secret Service’s New York Electronic Crimes Task Force. The Judicial Investigation Organization in Costa Rica, the National High Tech Crime Unit in the Netherlands, the Financial and Economic Crime Unit of the Spanish National Police, the Cyber Crime Unit at the Swedish National Bureau of Investigation and the Swiss Federal Prosecutor’s Office also provided assistance.
This case is being prosecuted jointly by the Criminal Division’s Asset Forfeiture and Money Laundering Section (AFMLS) and the U.S. Attorney’s Office’s Complex Frauds Unit and Asset Forfeiture Unit in the Southern District of New York, with assistance from the Criminal Division’s Office of International Affairs and Computer Crime and Intellectual Property Section.
Trial Attorney Kevin Mosley of AFMLS and Assistant U.S. Attorneys Serrin Turner, Andrew Goldstein and Christine Magdo of the Southern District of New York are in charge of the prosecution, and Assistant U.S. Attorney Christine Magdo is in charge of the forfeiture aspects of the case.
Jesup, GA Siblings Plead Guilty in Multi-Million Dollar Stolen Identity and Tax Fraud SchemeRead the Press Release
Savannah, GA: Gregory Allen, 31, and Leisha Allen, 33, brother and sister from Jesup, Georgia, pled guilty on Monday before the United States District Court Chief Judge Lisa Godbey Wood for their roles in a stolen identity and tax fraud scheme operating in Wayne County, Georgia.
Evidence presented at the guilty plea hearings showed that Gregory and Leisha Allen were operators of a fraudulent tax preparer business, B & C Superior Tax Services. Gregory and Leisha Allen were members of a conspiracy that filed hundreds of fraudulent tax returns in order to illegally obtain tax refund checks. The fraudulent tax returns were electronically filed using the stolen names and social security numbers of others, including people who were incarcerated or deceased. Members of the conspiracy filed returns seeking over $2 million in fraudulent tax refunds.
United States Attorney Edward J. Tarver said, “These defendants were part of a criminal organization that tried to steal over two million dollars from the American people. The United States Attorney’s Office will continue to work with our law enforcement partners to prosecute those who steal the identities of others and to safeguard our tax dollars from fraud.”
“The Allens stole the identities of individuals who were incarcerated and those who were deceased in order to perpetuate a scheme to steal government money,” stated Veronica F. Hyman-Pillot, Special Agent in Charge, IRS Criminal Investigation. “These types of criminals must be and will continue to be pursued in order to obtain justice for our nation.”
The investigation of this case was led by the IRS Criminal-Investigation. Assistant United States Attorney Tania D. Groover is prosecuting the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Indictment Charges Oxford Resident with Operating Ponzi 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 a federal grand jury in New Haven has returned an indictment charging ROBERT E. LEE, JR., 50, of Oxford, with five counts of wire fraud stemming from his alleged operation of a Ponzi scheme. The indictment was returned on October 7, 2014.
As alleged in the indictment and other court documents, LEE was employed as a broker and financial advisor for various financial investment firms until July 2013 when he was terminated by his most recent employer, Rockwell Global Capital, LLC. Between January 2011 and March 2014, LEE defrauded individuals by claiming that he was investing their money in various investment vehicles when, in fact, he was maintaining custody of their funds in his personal bank account. He then used the money to make distributions to other investors, and for personal expenses. To conceal the scheme, LEE fabricated account statements and other documents, which he delivered to his victims.
LEE was arrested on a criminal complaint on May 12, 2014. He is currently released on a $250,000 bond and is scheduled to be arraigned in Bridgeport federal court on October 14 at 11 a.m. before Magistrate William I. Garfinkel. Each count of wire fraud carries a maximum term of imprisonment of 20 years.
The indictment also seeks the forfeiture of $358,077.17 that LEE held in an online trading account at the time of his arrest, and which has been seized by the government.This matter has been assigned to U.S. District Judge Michael P. Shea in Hartford.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorneys David T. Huang and Christopher M. Mattei.
Citizens with information that may be helpful to this ongoing investigation are encouraged to contact the FBI at (203) 777-6311.
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U.S. ATTORNEY'S OFFICE
Tom Carson
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[email protected]- Houston Man Charged with Trafficking in Counterfeit Beats by Dr. Dre
Harvard Student Charged with Making Hoax Bomb ThreatRead the Press Release
BOSTON – Eldo Kim, 21, of Allston has been charged in an Information in U.S. District Court in Boston with e-mailing several bomb threats to offices associated with Harvard University, including the Harvard University Police Department and the Harvard Crimson, the student-run daily newspaper.
Kim was previously charged by complaint and has been under pretrial supervision since his arrest. It is alleged that on Dec. 16, 2013, at approximately 8:30 a.m., the Harvard University Police Department, two officials of Harvard University, and the president of the Harvard Crimson, received identical e-mail messages bearing a subject line that read “bombs placed around campus.” The bomb threats specified four buildings on the Harvard campus – the Science Center, Sever Hall, Emerson Hall, and Thayer Hall.
Federal agencies, along with the Harvard University Police, Cambridge Police, Boston Police and Massachusetts State Police Departments, along with numerous other law enforcement and first responders, immediately went to the vicinity of the buildings specified in the e-mail messages. In addition, each of the Harvard buildings named in the threatening e-mails was immediately evacuated. Over the course of the next several hours, bomb technicians and hazardous materials officers conducted thorough sweeps of each of the four buildings. Law enforcement personnel ultimately concluded that no explosive devices had been placed in any of the four buildings.
In addition to filing the Information, the government requested that the court defer the prosecution for 18 months while Kim completes a pretrial diversion program, in which the Probation Department and Pretrial Services Office will supervise Kim and enforce various conditions, including home confinement for four months, payment of restitution to agencies that responded to Kim’s bomb hoax, and 750 hours of community service. Kim has also agreed to make a public apology.
If the court agrees to defer prosecution, and Kim successfully abides by all the terms of pretrial diversion, the government will dismiss the Information in 18 months. If Kim fails to abide by the conditions of the pretrial diversion program or fails to complete it successfully, the government will not dismiss the Information and the criminal prosecution will proceed.
United States Attorney Carmen M. Ortiz and Vincent Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being handled by Assistant U.S. Attorney John A. Capin.
Founder of Liberty Reserve Arthur Budovsky Extradited from Spain to Face Charges in Manhattan Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Leslie R. Caldwell, Assistant Attorney General for the Justice Department’s Criminal Division, today announced the extradition of ARTHUR BUDOVSKY from Spain to face charges related to his alleged operation of Liberty Reserve, a virtual currency that was used by cybercriminals around the world to launder the proceeds of their illegal activity. BUDOVSKY, 40, a citizen of Costa Rica, was arrested in Spain in May 2013, as a result of an Indictment filed in Manhattan federal court. Following his extradition by Spanish authorities, BUDOVSKY arrived in New York this afternoon. BUDOVSKY will be arraigned before U.S. District Judge Denise L. Cote on October 14, 2014, at 12:45 p.m.
Manhattan U.S. Attorney Preet Bharara stated: “As alleged, Arthur Budovsky founded Liberty Reserve to enable criminals in the United States and around the world to process illegal payments and to launder billions of dollars in crime proceeds anonymously and beyond the reach of U.S. law enforcement. Budovsky allegedly operated Liberty Reserve from Costa Rica and renounced his United States citizenship to evade the authorities. Now, thanks to the cooperative efforts of our law enforcement partners here and in Spain, Arthur Budovsky has been apprehended and will face justice in an American courtroom.”
Assistant Attorney General Leslie R. Caldwell stated: “Arthur Budovsky allegedly built Liberty Reserve overseas to provide the international underworld with a crime-friendly digital currency and elude the scrutiny of American authorities. He even renounced his U.S. citizenship to try to escape facing justice in an American courtroom. With the cooperation of our foreign partners in Spain and elsewhere, this case and extradition are a clear example that money launderers can run, but they cannot hide from the Department of Justice.”
According to allegations contained in the Indictment filed against Liberty Reserve, BUDOVSKY, and six other individual defendants, and statements made in related court proceedings:
Liberty Reserve was born out of BUDOVSKY’s unsuccessful experience running a third-party exchange service, called Gold Age, Inc., for another digital currency, called E-Gold. In or about 2006, BUDOVSKY was convicted in New York State of operating Gold Age, Inc., as an unlicensed money transmitting business. In 2007, the operators of E-Gold were also charged with criminal offenses, including money laundering and operating an unlicensed money transmitting business,, and subsequently ceased doing business. In the wake of his own criminal conviction, BUDOVSKY set about building a digital currency that would succeed in eluding law enforcement where E-Gold had failed, by, among other ways, locating the business outside the United States. Accordingly, BUDOVSKY emigrated to Costa Rica, where he and other defendants began operating Liberty Reserve.
Liberty Reserve billed itself as the Internet’s “largest payment processor and money transfer system.” Liberty Reserve was created, structured, and operated to help users conduct illegal transactions anonymously and launder the proceeds of their crimes. BUDOVSKY devoted himself to building and expanding Liberty Reserve so that the company could profit from attracting more and more criminal customers, all while seeking to evade the scrutiny and reach of U.S. law enforcement authorities. At all relevant times, BUDOVSKY directed and supervised Liberty Reserve’s operations, finances, and corporate strategy.
Liberty Reserve emerged as one of the principal money transfer agents used by cybercriminals around the world to distribute, store, and launder the proceeds of their illegal activity. Liberty Reserve was used extensively for illegal purposes, functioning as the bank of choice for the criminal underworld because it provided an infrastructure that enabled cybercriminals to conduct anonymous and untraceable financial transactions. BUDOVSKY was so committed to evading U.S. law enforcement that he formally renounced his U.S. citizenship in 2011 and became a Costa Rican citizen, telling U.S. immigration authorities that he was concerned that the “software” his “company” was developing “might open him up to liability in the U.S.”
Before being shut down by the U.S. government in May 2013, Liberty Reserve had more than one million users worldwide, including more than 200,000 users in the United States, who conducted approximately 55 million transactions through its system totaling more than $6 billion in funds. These funds encompassed suspected proceeds of credit card fraud, identity theft, investment fraud, computer hacking, narcotics trafficking, and other crimes.
BUDOVSKY is among seven individuals charged in the Indictment, which was unsealed on May 28, 2013. Four co-defendants – Vladimir Kats, Azzeddine el Amine, Mark Marmilev, and Maxim Chukharev – have pled guilty and await sentencing before U.S. District Judge Denise L. Cote. Charges against Liberty Reserve and two individual defendants who have not been apprehended remain pending.
Mr. Bharara praised the outstanding work of the United States Secret Service, the Internal Revenue Service-Criminal Investigation, and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, which worked together in this case as part of the Global Illicit Financial Team. Mr. Bharara also thanked the United States Secret Service’s New York Electronic Crimes Task Force for its extraordinary assistance with the investigation. Additionally, Mr. Bharara specially thanked all the international law enforcement agencies that assisted in the investigation, in particular, Interpol, the Judicial Investigation Organization in Costa Rica, the National High Tech Crime Unit in the Netherlands, the Spanish National Police, Financial and Economic Crime Unit, the Cyber Crime Unit at the Swedish National Bureau of Investigation, and the Swiss Federal Prosecutor’s Office.
This case is being prosecuted jointly with the Department of Justice’s Asset Forfeiture and Money Laundering Section (“AFMLS”), which is overseen by Assistant Attorney General Leslie R. Caldwell. Mr. Bharara thanked AFMLS for its partnership and also thanked the Department of Justice’s Office of International Affairs and Computer Crime and Intellectual Property Section for their support.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit and Money Laundering and Asset Forfeiture Unit. Assistant United States Attorneys Serrin Turner, Andrew Goldstein, and Christine Magdo of the Southern District of New York and Trial Attorney Kevin Mosley of AFMLS are in charge of the prosecution, and Assistant United States Attorney Christine Magdo is in charge of the forfeiture aspects of the case.
The charges contained in the Indictment against BUDOVSKY and certain of BUDOVSKY’s co-defendants remain pending and are merely accusations. Those defendants are presumed innocent unless and until proven guilty.
Former TD Bank Vice President Indicted in Connection with Rothstein CaseRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that an indictment was unsealed today charging Frank Spinosa, 53, of Ft. Lauderdale, with conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and five counts of wire fraud, in violation of 18 U.S.C. § 1343. If convicted, the defendant faces a maximum sentence of twenty years in prison and a $250,000 fine on each count.
The indictment, which was returned by a grand jury in Ft. Lauderdale on October 9, 2014, charges that the defendant was a Regional Vice President of TD Bank who, from in or about 2008 through in or about November 2009, conspired to defraud various investors. In 2009, it was discovered that Rothstein, Rosenfeldt and Adler, P.A. was being utilized by its Chairman and Chief Executive Officer, Scott W. Rothstein, to commit a massive Ponzi scheme stemming from the sale of fictitious confidential settlements.
The indictment charges that Spinosa and Rothstein agreed to utilize the prestige and legitimacy of TD Bank, and Spinosa’s position as Regional Vice President, to give investors in the scheme a false sense of security and induce them into investing in the confidential settlements by fraudulently creating documents that made it appear that certain investment funds were being held in restricted accounts at TD Bank, when they were not, and by fraudulently asserting that certain balances were being held within specified accounts at TD Bank, when they were not.
Mr. Ferrer commended the investigative efforts of the IRS-CI and the FBI. This case is being prosecuted by Assistant U.S. Attorneys Lawrence D. LaVecchio, Paul F. Schwartz, and Jeffrey N. Kaplan.
An indictment is only an accusation and a defendant is presumed innocent unless and until proven guilty.
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.
Former New Orleans Traffic Court Chief Financial Officer, Vandale Thomas, Found Guilty After TrialRead the Press Release
U.S. Attorney Kenneth A. Polite announced that, after a week-long jury trial, VANDALE THOMAS, age 40, a resident of Prairieville, Louisiana, was convicted on all 11 counts of theft, money laundering, and structuring transactions to evade reporting requirements. Seventeen witnesses testified for the United States, establishing that THOMAS knowingly embezzled over $680,000 during his three-year tenure as the Chief Financial Officer at New Orleans Traffic Court (“Traffic Court”).
THOMAS was found guilty of three counts of theft concerning programs receiving federal funds resulting from his employment at Traffic Court. Evidence presented at trial established that on November 24, 2008, THOMAS and his accounting firm, Thomas & Thomas Accounting Services, LLC, were hired by Traffic Court to provide accounting and bookkeeping services. THOMAS’s initial agreement with Traffic Court allowed him to bill at a rate of $75.00 an hour and his contract was not to exceed $75,000 for a twelve month period. THOMAS’s billings exceeded $75,000 within the first few months of his agreement. On six additional occasions between November 24, 2008, and April 13, 2011, THOMAS received written authorization from the City of New Orleans and Traffic Court to expand the amount that he could bill. In total, the City and Traffic Court authorized THOMAS to submit invoices and receive compensation for accounting services in an amount not to exceed $627,000. However, subsequent audits by the Louisiana Legislative Auditor’s Office and the Office of the Inspector General for the City of New Orleans, and an investigation by the Federal Bureau of Investigation revealed that THOMAS submitted 174 invoices and was issued 173 checks totaling $1,311,065.53.
THOMAS was also found guilty of three counts of laundering illegal funds obtained from Traffic Court. The jury found that on September 14 and September 24, 2010, THOMAS used illegally obtained money from Traffic Court to purchase casino chips in excess of $10,000 at a New Orleans casino and THOMAS used illegally obtained money from Traffic Court to make a down payment on an $80,000 Bentley GT Coupe.Additionally, THOMAS was found guilty of five counts of structuring transactions to evade reporting requirements. According to the evidence and testimony presented during the trial, THOMAS used numerous bank branches in order to evade federal currency transaction reporting requirements. Specifically, THOMAS went to multiple bank locations in New Orleans and Baton Rouge to structure cash withdrawals in order to evade the currency transaction reporting requirement that all transactions over $10,000 be reported by financial institutions to the Internal Revenue Service.
The maximum penalty THOMAS may receive for Counts 1 through 6 (Theft from Programs Receiving Federal Funds and Money Laundering) is ten years imprisonment and a $250,000 fine per count. The maximum penalty for Counts 7 through 11 (Structuring Transactions to Evade Reporting Requirements) is five years imprisonment and a $250,000 fine per count.
Sentencing in this matter is scheduled for January 14, 2015, before U.S. District Judge Stanwood R. Duval, Jr.
U.S. Attorney Polite stated, “Vandale Thomas defrauded the City of New Orleans out of hundreds of thousands of dollars in taxpayer dollars. He then blatantly flaunted his fraudulent conduct on gambling sprees and expensive cars. Today’s guilty verdict ensures that Thomas will be held accountable for his corrupt conduct. Moreover, this case should send a message to those public officials who are engaging in corruption, or are even contemplating doing so. Everyone in this community – the U.S. Attorney’s Office, our law enforcement partners, average residents, your co-workers, even those who you believe are trusted co-conspirators – will eventually work together to turn a spotlight on your criminality.”
IRS-CI Special Agent in Charge, Gabriel L. Grchan, stated, "All of the facts set forth in this trial proved that what Vandale Thomas did was nothing more than common thievery. The residents of New Orleans and the surrounding areas are fed up with seeing individuals like Thomas steal public funds to support their personal lifestyles of extravagance. The jury echoed that sentiment today with their verdict. IRS-CI will continue to aggressively pursue individuals who engage in the theft of public funds, and will seek to have them prosecuted to the fullest extent of the law."
New Orleans Inspector General Ed Quatrevaux stated, “The conviction today of the former Traffic Court accountant began with an evaluation of Traffic Court by the New Orleans Office of Inspector General, and shows what happens to those who steal from the City today. OIG staff assisted our federal law enforcement partners and prosecutors in building the case against Vandale Thomas. This partnership has resulted in the City of New Orleans being much better protected from those who would prey upon it, and we thank our federal partners for their efforts.”
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigations Division, and the New Orleans Office of Inspector General in investigating this matter. Assistant United States Attorneys Brian M. Klebba, Matthew Payne, and Marquest Meeks are in charge of the prosecution.
Former Kirtland Hills Police Chief Charged with Fraud and FalsificationRead the Press Release
The former police chief of Kirtland Hills was charged with defrauding the village out of at least $80,000 by making unauthorized purchases of clothing, tools and goods for his own personal use, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office.
A two-count criminal information was filed in federal court charging Gerald Smith, Jr., 57, of Kirtland, with one count of mail fraud and one count of destruction, alteration or falsification of records in a federal investigation.
“This defendant stole from the people he swore to serve,” Dettelbach said. “He used the public coffers to furnish his condo and pay for his meals. There will be consequences for public officials who violate the public’s trust.”
“To serve others and pursue justice is the oath all law enforcement promise to abide by,” Anthony said. “Unfortunately, this chief's self-interest and greed overrode his ethical conscious and his commitment to serve his community.”
Smith joined the Kirtland Hills police department in 1978 and served as chief from 1988 until April 4, 2014. In this capacity, Smith was authorized to reimburse officers for work-related expenses and use village funds to procure necessary supplies, including the use of several village credit cards or lines of credit, according to the information.
The department also had petty cash fund, maintained in Smith’s office, in which employees submitted receipts with their name and the purpose of the expense written on it, for which they were then reimbursed, according to the information.
Smith made approximately $80,000 in personal expenditures using village credit cards between 2007 and 2014. Some of the items were used to partially furnish his Florida condominium. Items purchased include ceiling fans, plumbing supplies, vacuum cleaners, children’s lunch boxes and story books, clothing, televisions, book shelves, personal hygiene items, firearms, car repairs and more, according to the information.
Smith concealed these purchases by making false entries on receipts to make it appear they were made by others or made for official police business. By spreading the purchases out among different funds, he prevented the village from readily noticing large amounts of expenditures from one particular fund, according to the information.
For example, Smith went on a hunting trip to Pennsylvania in 2007. While on vacation, he made the following purchases on a Kirtland Hills credit card: knife sharpening ($70), items at an Army Navy store ($269.96), and items at a sporting goods store, including Pro Hunter pants and jacket and a shirt ($209.97). He then falsely wrote on the receipt that the sporting goods clothing was SWAT clothing for a Kirtland Hills officer, according to the information.
In 2007, Smith ordered several items online, including a $107.96 pair of women’s tan Ugg boots with the village Mastercard. Smith falsely wrote on the receipt “Road Dept Boots and Boots for (a Kirtland Hills police officer),” knowing the officer did not receive the boots, according to the information.
Smith also obtained Kirtland Hills money by submitting false claims to the petty cash fund. When Kirtland Hills officers went out to lunch, or when Smith took personal trips with officers and the group stopped for food, Smith at times asked for the receipts. He then submitted the receipts for petty cash reimbursement under the officers’ names but without their knowledge, taking the cash for himself, according to the information.
On March 17, 2014, Smith was placed on leave by Kirtland Hills and required to surrender his access badges, keys and all village property. He was also served by FBI agents with a federal grand jury subpoena, which required the production of certain documents and items.
On March 20, 2014, Smith secretly brought more than 50 items from his residence to a village storage shed and placed the items on the shelves, to give the appearance that these items belonged to the Village of Kirtland Hills. Among the items Smith returned were a drill, heater, dehumidifier, air purifier, camouflage tarps, socket set, channel locks, extension cords, hammer, hand saw and other items, according to the information.
The case is being prosecuted by Assistant United States Attorney Antoinette T. Bacon following an investigation by the Federal Bureau of Investigation.
An information is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilty beyond a reasonable doubt.
Former Financial Administrator at Bureau of Prisons Is Sentenced for Submitting False DocumentRead the Press Release
FORT WORTH, Texas — A former financial administrator at the Bureau of Prisons (BOP), who admitted submitting a false document to the U.S., was sentenced this morning in federal court in Fort Worth, Texas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Cary J. Hudson, 49, of Mansfield, Texas, was sentenced by U.S. District Judge John McBryde to three years’ probation and fined $5,000.00, following his guilty plea in June 2014 to one count of submitting a false document to an agency of the U.S.
According to documents filed in the case, Hudson was employed as a financial administrator by the BOP since 1999, having worked at the Federal Correctional Institutions in Fort Worth and Seagoville, Texas, and at the Federal Medical Center Carswell in Fort Worth.
Hudson knew that BOP employees with fiduciary and management responsibilities were required to file annual reports disclosing any outside positions, employment and income. These disclosures are made through an Office of Government Ethics (OGE) Form 450. Government officials review these forms to identify conflicts of interests that may exist between BOP employees and private entities doing business with the BOP or seeking business with the BOP. For instance, a conflict of interest could, among other things, provide a BOP contractor an economic advantage over others and defeat the government’s attempt to secure a competitive contract.
In or around 2006, while employed by the BOP, Hudson entered into a business relationship as a consultant with Integrated Medical Solutions (IMS), a private, for-profit federal contractor that competes for BOP-administered contracts for inmate health care services at BOP institutions nationwide. IMS paid Hudson for these consulting services, but Hudson failed to disclose that relationship and the money paid to him to the BOP on the OGE Form 450 he submitted in February 2013.
The Department of Justice Office of the Inspector General investigated. Assistant U.S. Attorney Chris Wolfe prosecuted.
Former Businessman Sentenced in Manhattan Federal Court to 34 Months in Prison for Fraud in Connection with the Financing of “Rebecca – The Musical”Read the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that one-time Long Island businessman MARK HOTTON was sentenced in Manhattan federal court to 34 months in prison for defrauding the producers of the Broadway show “Rebecca – The Musical” (“Rebecca”) through an elaborate scheme involving fictitious overseas “investors,” and for carrying out a separate scheme to defraud a Connecticut-based real estate company through many of the same deceptions employed in the “Rebecca” fraud. HOTTON pled guilty in July 2013 before U.S. District Judge John G. Koeltl, who also imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “Mark Hotton scripted not one, but two intricate and multifaceted schemes to bilk his victims out of hundreds of thousands of dollars. I would especially like to thank the Federal Bureau of Investigation for their work on this complicated fraud case.”
According to the Complaint, the Indictment, and statements made in Manhattan federal court:
HOTTON once worked for a prominent investment bank and financial services firm, and is a former stockbroker with ties to numerous corporate entities. From September 2011 to October 2012, he engaged in two separate schemes involving fictitious individuals and entities he created to defraud his victims – the producers of “Rebecca,” a musical based on the novel by Daphne du Maurier, and a Connecticut-based real estate company.
As of late January 2012, the producers of “Rebecca” (the “Producers”) were trying to raise an additional $4 million in order to mount the musical on Broadway. The budget for Rebecca was between $12 million and $14 million, and in late January 2012, the producers realized they were at least $4 million short of their minimum capitalization goal. To raise additional funds, in February 2012, the Producers’ company entered into an agreement with TM Consulting, Inc., a company HOTTON controlled. Under the agreement, HOTTON undertook to raise money for “Rebecca” in return for a fee of $7,500, plus 8% of any funds raised in excess of $250,000, and tiered percentages of “Rebecca’s net profits.”
Over the course of the next few months, HOTTON led the Producers into believing that he had secured $4.5 million from four overseas investors – “Paul Abrams,” of Hawthorne, East Victoria; “Roger Thomas,” of St. Peter Port, Guernsey; “Julian Spencer,” of Crocker Hill, Chichester, Sussex, and “Walter Timmons,” of London (the “HOTTON Investors”). HOTTON provided the Producers with purported email contact information for these individuals and also furnished the Producers with investment agreements purportedly signed by them. These individuals also purportedly wrote emails to the Producers. For example, in April 2012, “Paul Abrams” wrote one of the Producers an email saying, “Mr. Hotton has spoken so highly about you… I look forward to meeting you and if any further participation in the musical is attainable outside of what I’m doing personally, please let Mr. Hotton know so he can organize it thru my kids Trust.”
Between February and June 2012, the Producers made a number of payments to HOTTON. Not only did they pay the $7,500 fee in February 2012, they also paid HOTTON more than $17,000 between February and June 2012. Furthermore, in April 2012, HOTTON demanded and was paid an “advance” against his 8% commission, claiming that he needed the money to cover the costs of a purported safari he had taken with “Paul Abrams” and Abrams’s eldest son.
In fact, the HOTTON Investors did not even exist. For example, some of the IP addresses used to access the email accounts of the HOTTON Investors trace back to a Manhattan location where HOTTON did business, and the businesses associated with some of the email address for the HOTTON Investors have websites whose domain names were registered to HOTTON and that he apparently created shortly before and during the fraud. HOTTON used the decoy email addresses to fabricate email correspondence between himself and the HOTTON Investors, which he then forwarded to the Producers. In some instances, he used the email addresses to communicate directly with the Producers.
In July 2012, as the Producers pressed for the HOTTON Investors to wire the money they had promised to send by July 31, 2012, HOTTON orchestrated the false illness, hospitalization, and subsequent untimely “death” of one of the main HOTTON Investors, “Paul Abrams.” HOTTON thereupon fabricated correspondence with a man named “Wexler,” who had purportedly been named the executor of the estate of “Paul Abrams.” HOTTON claimed to be meeting with “Wexler” in England in August 2012 in an effort to make sure the contribution to Rebecca was still made. However, travel records indicate that HOTTON had not left the United States since April 2012. Further, the email address used by “Wexler” was associated with a domain that was set up and registered to HOTTON.
As it became increasingly apparent that the commitments of the HOTTON Investors would fall through, HOTTON purported to try to broker a $1.1 million loan for the Producers, even offering up his own real estate and brokerage account as collateral for the loan. But there was no real loan or lender. Rather, HOTTON had simply created a second set of apparently fictional characters and entities to generate payments for himself. Among other things, HOTTON created the domain name of the title company he said could assist the Producers in obtaining the loan; invented the business purportedly making the loan; used decoy emails to fabricate correspondence with individuals who purportedly worked for the lender; and invented a company that would facilitate his hollow offer to put up collateral for the loan. Through this part of the “Rebecca” scheme, HOTTON was able to defraud the Producers into paying in excess of $35,000 to him and companies he controlled, including $10,000 paid to him personally, as half of a fee for helping to broker the loan, and $23,000 paid to a bank account for the “lender” but which was really controlled by HOTTON’s sister and administrative assistant.
The Connecticut Real Estate Fraud
HOTTON employed a similar set of deceptive devices – including some of the same email addresses and fictitious companies used to defraud Rebecca’s Producers – in order to defraud a Connecticut-based real estate company (the “Real Estate Company”) into paying hundreds of thousands of dollars to him and companies he controlled.
Beginning in September 2011, HOTTON agreed to help the president of the Real Estate Company (the “President”) obtain financing for various business ventures. HOTTON promised that a California-based group called “Pacific Ventures” and its affiliate “Mezzanine Capital” would assist in providing a $20 million loan. HOTTON provided as an email address for a contact at “Pacific Ventures” the same email address he told the Producers was used by “Paul Abrams” and which was then purportedly used by “Walter Timmons” as well as the assistants of “Paul Abrams” in the “Rebecca” scheme. Meanwhile, HOTTON provided as an email address for a contact at “Mezzanine Capital” the same email address he told the Producers was used by “Roger Thomas,” one of the HOTTON Investors.
In March 2012, HOTTON told the President that a third company, “CPS Equity,” would be able to process the loan, but required a $200,000 upfront fee, which the President paid. CPS Equity was the company associated with, among other things, the email address used by “Paul Abrams” when communicating with Rebecca’s Producers. Following the initial $200,000 payment, HOTTON further instructed the President to make additional payments in order to secure the loan.
In addition to the prison sentence, HOTTON, 48, of West Islip, New York, was ordered to forfeit $500,000 and to pay restitution of $68,000.
Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Edward B. Diskant and Sarah McCallum are in charge of the prosecution.
Forest Place Apartments’ Arsonist Sentenced to 16 Years in Federal PrisonRead the Press Release
LITTLE ROCK – Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced that Lacey Rae Moore, 44, who pleaded guilty to intentionally starting fires at Forest Place Apartments, including one that destroyed an entire building, was sentenced to 16 years in prison and ordered to pay more than $12 million in restitution on Friday.
Today, the Honorable Billy Roy Wilson sentenced Moore to nine years on Count 4 and seven years on Count 7, and then ordered that sentences be run consecutively for a total of 16 years, with five years of supervised release to follow. In addition, Judge Wilson ordered Moore to pay $12,558,802.82 in restitution, which accounts for the property damage to Forest Place as well as personal property insurance claims from multiple victims.
“Today’s sentence shows just how serious Lacey Moore’s crimes were and the harm it caused to the residents of Forest Place Apartments,” stated Thyer. “I hope today’s sentence will give some measure of closure to the many families that were impacted by these fires.”
On August 1, 2014, Moore pleaded guilty to Counts 4 and 7 of an eight-count indictment that charged her with the seven fires, plus the use of an unregistered explosive device in another fire at a Little Rock residence. Count 4 was for a May 16, 2013, fire at Forest Place Apartments in Little Rock that completely destroyed the North Building and forced the evacuation of 350-400 people. As a result of that fire at least 79 people were permanently displaced. A Little Rock Firefighter was injured suppressing the fire. Count 7 was for a June 28, 2013, fire in the South Building the forced the evacuation of 100 people and permanently displaced another 11.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, with substantial assistance from the Little Rock Fire Department, the Arkansas State Police and the Little Rock Police Department. The case is being prosecuted by Assistant United States Attorney Chris Givens.
Floridian Pleads Guilty to Tax EvasionRead the Press Release
JOHNSTOWN, Pa. - A resident of Winter Garden, Fl., pleaded guilty in federal court to charges of income tax evasion, United States Attorney David J. Hickton announced today.
Walter C. Pruchnik, Jr., pleaded guilty to one count before United States District Judge Kim R. Gibson.
According to the indictment presented to the court, from April 15, 2008, until April 15, 2011, Pruchnik owed substantially more federal income tax for the calendar years 2007 through 2010 than he declared on his income tax returns. Specifically, Pruchnik stated his taxable income for the calendar year 2007 was the sum of $66 and the amount of tax he owed was $5,316, when, in actuality, his taxable income for that year was $198,713, upon which he owed to the United States of America income tax of $66,079. For the calendar year 2008, Pruchnik stated his taxable income was -$3,638 and the amount of tax he owed was $4,380. However, in actuality, his taxable income for that year was $180,595, upon which he owed to the United States of America income tax of $58,890. For the calendar year 2009, Pruchnik stated his taxable income was $55,998 and the amount of tax he owed was $18,677. However, in actuality, his taxable income for that year was $110,630, upon which he owed to the United States of America income tax of $35,125. For the calendar year 2010, Pruchnik stated his taxable income was $35,447 and the amount of tax he owed was $12,197. However, in actuality, his taxable income for that year was $50,795, upon which he owed to the United States of America income tax of $16,833.
Judge Gibson scheduled sentencing for April 2, 2015, at 10:00 a. m. The law provides for a maximum total sentence of 20 years in prison and a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.
Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Internal Revenue Service Criminal Investigation conducted the investigation that led to the prosecution of Pruchnik.
Federal Jury Finds Port Charlotte Man Guilty in Sexual Exploitation CaseRead the Press Release
Fort Myers, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury yesterday found Quinton Paul Handlon (44) guilty of production of child pornography, possession of child pornography, and coercion and enticement of a minor to engage in sexual activity. He faces a maximum penalty of life in federal prison. His sentencing hearing is scheduled for January 12, 2015.
According to testimony and evidence presented at trial, Handlon sexually abused a family member over an approximately four-year period, while she was between the ages of 11 and 15. He provided her with money and other items in exchange for sexual activity. Handlon took sexually explicit photographs of the child, filmed her engaged in sexual activity with him, and coerced her to take photographs and videos of herself for his sexual gratification. A search warrant executed at Handlon’s residence recovered the electronic devices containing the victim’s images and videos.
This case was investigated by the FBI Child Exploitation Unit. It is being prosecuted by Assistant United States Attorneys Tama Koss Caldarone and Stacie B. Harris.
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 (CEOS), 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.projectsafechildhood.gov.
Extendicare Health Services Inc. Agrees to Pay $38 Million to Settle False Claims Act Allegations Relating to the Provision of Substandard Nursing Care and Medically Unnecessary Rehabilitation TherapyRead the Press Release
Extendicare Health Services Inc. (Extendicare) and its subsidiary Progressive Step Corporation (ProStep) have agreed to pay $38 million to the United States and eight states to resolve allegations that Extendicare billed Medicare and Medicaid for materially substandard nursing services that were so deficient that they were effectively worthless and billed Medicare for medically unreasonable and unnecessary rehabilitation therapy services, the Justice Department and the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) jointly announced today. This resolution is the largest failure of care settlement with a chain-wide skilled nursing facility in the department’s history.
As part of this settlement, Extendicare has also been required to enter into a five year chain-wide Corporate Integrity Agreement with HHS-OIG. Extendicare is a Delaware corporation that, through its subsidiaries, operates 146 skilled nursing facilities in 11 states. ProStep provides physical, speech, and occupational rehabilitation services.
“Our seniors rely on the Medicare and Medicaid programs to provide them with quality care, ensuring that they are treated with dignity and respect when they are most vulnerable,” said Acting Associate Attorney General Stuart F. Delery. “It is critically important that we confront nursing home operators who put their own economic gain ahead of the needs of their residents. Operators who bill Medicare and Medicaid while failing to provide essential services or bill for services so grossly substandard as to be effectively worthless will be pursued for false claims.”
This settlement resolves allegations that between 2007 and 2013, in 33 of its skilled nursing homes in eight states, Extendicare billed Medicare and Medicaid for materially substandard skilled nursing services and failed to provide care to its residents that met federal and state standards of care and regulatory requirements. The government alleges, for example, that Extendicare failed to have a sufficient number of skilled nurses to adequately care for its skilled nursing residents; failed to provide adequate catheter care to some of the residents and failed to follow the appropriate protocols to prevent pressure ulcers or falls. The eight states involved in this component of the settlement are Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Washington and Wisconsin.
“The continued viability of Medicare depends, in large part, on the honesty and integrity of the program participants,” said Acting Assistant Attorney General Joyce R. Branda for the Civil Division. “Health care providers must make decisions regarding the level of services to be provided based solely on their patients’ clinical needs, and not corporate financial targets.”
“This investigation and settlement highlights the importance of leveraging the joint resources and expertise of the states and federal government,” said Ohio Attorney General Mike DeWine. “Working together allowed us to focus our efforts nationally on protecting the most vulnerable in our population who rely on quality care in our nursing homes.”
Additionally, this settlement resolves allegations that between 2007 and 2013, in 33 of its skilled nursing homes, Extendicare provided medically unreasonable and unnecessary rehabilitation therapy services to its Medicare Part A beneficiaries, particularly during the patients’ assessment reference periods, so that it could bill Medicare for those patients at the highest per diem rate possible.
As a result of today’s settlement, the federal government will receive $32.3 million and the eight state Medicaid programs will receive $5.7 million. The Medicaid program is funded jointly by the federal and state governments.
“The United States remains committed to demanding the highest quality of care for nursing home and skilled facility residents,” said U.S. Attorney Carter M. Stewart for the Southern District of Ohio. “We are proud of our efforts to work cooperatively with our partners at the Ohio Attorney General’s Medicaid Fraud Control Unit, as well as with other U.S. Attorney’s offices across the country. We will remain vigilant in our efforts to combat healthcare fraud, especially when it impacts the most vulnerable in our society, including seniors and others requiring significant long term care.”
“Nursing home residents should not be subject to unreasonable or unnecessary rehabilitation therapy that is dictated by a company’s profits rather than patient needs,” said U.S. Attorney Zane David Memeger for the Eastern District of Pennsylvania. “It is critical to the integrity of a system that benefits millions of Americans that we do as much as possible to hold accountable those who commit fraudulent acts. The Eastern District of Pennsylvania will continue its efforts to prevent Medicare fraud and protect government beneficiaries.”
In addition, as part of this resolution, Extendicare and ProStep are required to enter into a five year chain-wide Corporate Integrity Agreement. It is a priority of the OIG to investigate and pursue cases involving abuse or grossly deficient care of Medicare or Medicaid beneficiaries and to recommend improvements to the systems intended to promote quality of care. To protect the Federal healthcare programs and its beneficiaries, OIG required Extendicare to agree to a Corporate Integrity Agreement under which Extendicare must have a comprehensive compliance program with systems to address the quality of resident care. Extendicare’s compliance program must include, among other things, corporate-level committees to address compliance and quality, including a committee to assess staffing, and an internal audit program to assess the quality of care provided to its residents. Extendicare must retain an independent monitor, selected by the OIG, who will regularly visit Extendicare’s facilities and report to the OIG. In addition, an independent review organization will perform annual reviews of Extendicare’s claims to Medicare.
“This case demonstrates that the government will aggressively pursue allegations of abuse and grossly deficient care,” said Inspector General Daniel R. Levinson of the U.S. Department of Health and Human Services. “Our five-year corporate integrity agreement with Extendicare requires a government-selected quality of care monitor be retained by Extendicare, and additional rigorous provisions designed to ensure Extendicare provides appropriate staffing and monitors the quality of care provided to its residents.”
Under the False Claims Act, private citizens, known as relators, can bring suit on behalf of the United States and share in any recovery. Two relators brought separate cases against Extendicare. Relator Tracy Lovvron will receive more than $1.8 million as her share of the recovery in the RUGS upcoding case, and Relator Donald Gallick will receive more than $250,000 as his share of the recovery in the Ohio worthless services case.
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 settlement was the result of a coordinated federal and state effort by the Civil Division, the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the U.S. Attorney’s Office for the Southern District of Ohio, HHS-OIG and the Attorneys General for the states of Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Washington and Wisconsin. This investigation was also supported by the department’s Elder Justice Initiative, which coordinates the department’s activities combating elder abuse, neglect and financial exploitation, especially as they impact beneficiaries of Medicare, Medicaid and other federal health care programs. Learn more about the Justice Department’s Elder Justice Initiative at http://www.justice.gov/elderjustice/.
The two qui tam cases are docketed as United States ex rel. Lovvorn v. EHSI, et. al. C.A. 10-1580 (E.D. Pa) and United States ex rel. Gallick et al., v. EHSI et al., C.A. 2:13cv-092 (S.D. Ohio). The claims resolved by the settlement are allegations only; there has been no determination of liability.
Extendicare Health Services Inc. Agrees to Pay $38 Million to Settle False Claims Act Allegations Relating to the Provision of Substandard Nursing Care and Medically Unnecessary Rehabilitation TherapyRead the Press Release
Company Also Required to Enter Five Year Chain-wide Corporate Integrity Agreement
WASHINGTON – Extendicare Health Services Inc. (Extendicare) and its subsidiary Progressive Step Corporation (ProStep) have agreed to pay $38 million to the United States and eight states to resolve allegations that Extendicare billed Medicare and Medicaid for materially substandard nursing services that were so deficient that they were effectively worthless and billed Medicare for medically unreasonable and unnecessary rehabilitation therapy services, the Justice Department and the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) jointly announced today. This resolution is the largest failure of care settlement with a chain-wide skilled nursing facility in the department’s history.
As part of this settlement, Extendicare has also been required to enter into a five year chain-wide Corporate Integrity Agreement with HHS-OIG. Extendicare is a Delaware corporation that, through its subsidiaries, operates 146 skilled nursing facilities in 11 states. ProStep provides physical, speech, and occupational rehabilitation services.
“Our seniors rely on the Medicare and Medicaid programs to provide them with quality care, ensuring that they are treated with dignity and respect when they are most vulnerable,” said Acting Associate Attorney General Stuart F. Delery. “It is critically important that we confront nursing home operators who put their own economic gain ahead of the needs of their residents. Operators who bill Medicare and Medicaid while failing to provide essential services or bill for services so grossly substandard as to be effectively worthless will be pursued for false claims.”
This settlement resolves allegations that between 2007 and 2013, in 33 of its skilled nursing homes in eight states, Extendicare billed Medicare and Medicaid for materially substandard skilled nursing services and failed to provide care to its residents that met federal and state standards of care and regulatory requirements. The government alleges, for example, that Extendicare failed to have a sufficient number of skilled nurses to adequately care for its skilled nursing residents; failed to provide adequate catheter care to some of the residents and failed to follow the appropriate protocols to prevent pressure ulcers or falls. The eight states involved in this component of the settlement are Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Washington and Wisconsin.
“The continued viability of Medicare depends, in large part, on the honesty and integrity of the program participants,” said Acting Assistant Attorney General Joyce R. Branda for the Civil Division. “Health care providers must make decisions regarding the level of services to be provided based solely on their patients’ clinical needs, and not corporate financial targets.”
“This investigation and settlement highlights the importance of leveraging the joint resources and expertise of the states and federal government,” said Ohio Attorney General Mike DeWine. “Working together allowed us to focus our efforts nationally on protecting the most vulnerable in our population who rely on quality care in our nursing homes.”
Additionally, this settlement resolves allegations that between 2007 and 2013, in 33 of its skilled nursing homes, Extendicare provided medically unreasonable and unnecessary rehabilitation therapy services to its Medicare Part A beneficiaries, particularly during the patients’ assessment reference periods, so that it could bill Medicare for those patients at the highest per diem rate possible.
As a result of today’s settlement, the federal government will receive $32.3 million and the eight state Medicaid programs will receive $5.7 million. The Medicaid program is funded jointly by the federal and state governments.
“The United States remains committed to demanding the highest quality of care for nursing home and skilled facility residents,” said U.S. Attorney Carter M. Stewart for the Southern District of Ohio. “We are proud of our efforts to work cooperatively with our partners at the Ohio Attorney General’s Medicaid Fraud Control Unit, as well as with other U.S. Attorney’s offices across the country. We will remain vigilant in our efforts to combat healthcare fraud, especially when it impacts the most vulnerable in our society, including seniors and others requiring significant long term care.”
“Nursing home residents should not be subject to unreasonable or unnecessary rehabilitation therapy that is dictated by a company’s profits rather than patient needs,” said U.S. Attorney Zane David Memeger for the Eastern District of Pennsylvania. “It is critical to the integrity of a system that benefits millions of Americans that we do as much as possible to hold accountable those who commit fraudulent acts. The Eastern District of Pennsylvania will continue its efforts to prevent Medicare fraud and protect government beneficiaries.”
In addition, as part of this resolution, Extendicare and ProStep are required to enter into a five year chain-wide Corporate Integrity Agreement.It is a priority of the OIG to investigate and pursue cases involving abuse or grossly deficient care of Medicare or Medicaid beneficiaries and to recommend improvements to the systems intended to promote quality of care. To protect the Federal healthcare programs and its beneficiaries, OIG required Extendicare to agree to a Corporate Integrity Agreement under which Extendicare must have a comprehensive compliance program with systems to address the quality of resident care. Extendicare’s compliance program must include, among other things, corporate-level committees to address compliance and quality, including a committee to assess staffing, and an internal audit program to assess the quality of care provided to its residents. Extendicare must retain an independent monitor, selected by the OIG, who will regularly visit Extendicare’s facilities and report to the OIG. In addition, an independent review organization will perform annual reviews of Extendicare’s claims to Medicare.
“This case demonstrates that the government will aggressively pursue allegations of abuse and grossly deficient care,” said Inspector General Daniel R. Levinson of the U.S. Department of Health and Human Services. “Our five-year corporate integrity agreement with Extendicare requires a government-selected quality of care monitor be retained by Extendicare, and additional rigorous provisions designed to ensure Extendicare provides appropriate staffing and monitors the quality of care provided to its residents.”
Under the False Claims Act, private citizens, known as relators, can bring suit on behalf of the United States and share in any recovery. Two relators brought separate cases against Extendicare. Relator Tracy Lovvron will receive more than $1.8 million as her share of the recovery in the RUGS upcoding case, and Relator Donald Gallick will receive more than $250,000 as his share of the recovery in the Ohio worthless services case.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 settlement was the result of a coordinated federal and state effort by the Civil Division, the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the U.S. Attorney’s Office for the Southern District of Ohio, HHS-OIG and the Attorneys General for the states of Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Washington and Wisconsin. This investigation was also supported by the department’s Elder Justice Initiative, which coordinates the department’s activities combating elder abuse, neglect and financial exploitation, especially as they impact beneficiaries of Medicare, Medicaid and other federal health care programs. Learn more about the Justice Department’s Elder Justice Initiative at http://www.justice.gov/elderjustice/.
The two qui tam cases are docketed as United States ex rel. Lovvorn v. EHSI, et. al. C.A. 10-1580 (E.D. Pa) and United States ex rel. Gallick et al., v. EHSI et al., C.A. 2:13cv-092 (S.D. Ohio). The claims resolved by the settlement are allegations only; there has been no determination of liability.El Paso Man Sentenced in Malicious Destruction of A BuildingRead the Press Release
In El Paso yesterday, 22-year-old Kevin Rodriguez was sentenced to 60 months in federal prison followed by three years of supervised release and ordered to pay restitution for his role in maliciously causing destruction to the Coronado Tower Building announced United States Attorney Robert Pitman and Special Agent in Charge Robert R. Champion, Bureau of Alcohol, Tobacco, Firearms and Explosives, Dallas Field Division.
According to court records, in April 2013, Rodriguez caused a fire to be started in the Coronado Tower Building located at 6006 North Mesa in El Paso. An individual working in the building saw Rodriguez in close proximity to the fire and started chasing Rodriguez. Rodriguez fled from the building and was shortly apprehended by a chef at a restaurant located in the Coronado Towers. Rodriguez was then placed in police custody.
In July 2014, Rodriguez pled guilty to one count of maliciously damaging a building and admitted he started the fire using tissue and a lighter. The fire caused some tenants of the building to close their business or to relocate to other offices in the building.
This case was investigated by Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives and Investigators from the El Paso Fire Department Arson Unit.
East St. Louis Man Gets Tough Sentence in UPS Truck RobberyRead the Press Release
Follow @SDILNewsStephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that Anthony T. Moore has been sentenced to 235 months in federal prison for the armed robbery of a UPS truck on December 17, 2012. Moore was sentenced in U.S. District Court in East St. Louis, Illinois on October 10, 2014.
Moore’s federal sentence of nearly 20 years will be consecutive to a 34-year state sentence he received for Attempted Murder.
Moore, age 22, was found guilty of the federal Armed Robbery charge on June 11, 2014, following a 3-day jury trial.
According to evidence presented at trial, Moore hijacked a UPS truck in East St. Louis at gunpoint and forced the driver to move the truck to a deserted dead-end street in Washington Park, Illinois. Moore and two accomplices then stole the packages which were inside the truck.
At trial, the UPS driver testified that “I thought it was the last day of my life, and that I would never see my kids again. I just asked the Lord to receive my soul. I was that sure he was going to kill me.”
After the robbery, Moore shot a 15-year-old acquaintance in the back of the head, because Moore believed the juvenile could implicate him in the UPS truck robbery. Moore was convicted last year in St. Clair County Circuit Court for that shooting.
At Moore’s federal sentence hearing on Friday, Chief U.S. District Judge David R. Herndon described the testimony which he had heard at Moore’s trial as “harrowing.” Judge Herndon also stated that, “There is no question in my mind that the public would be in danger if you were walking the streets.” He described Moore as “a career criminal in my view.”
The Armed Robbery charge of which Moore was convicted is a federal “Hobbs Act Robbery.” The Hobbs Act makes it a crime to obstruct, delay, or affect interstate commerce by robbery, and is used by United States Attorney Wigginton’s office as a way to combat armed robbery in the Southern District of Illinois. “This conviction is just the latest in a series of federal prosecutions I have initiated, as part of our efforts to send a clear message to these extraordinarily dangerous gunmen who commit armed robberies, that they will face harsh federal penalties for their crimes.” said Wigginton. “I will continue to use every available federal resource to try to ensure the safety of the citizens of Southern Illinois.”
The investigation which resulted in Moore’s arrest and conviction was conducted by the FBI and the Illinois State Police.
The case was tried by Assistant United States Attorneys Steven Clark and Robert Garrison.
Defendant Pleads Guilty to Defrauding Investors for More Than $19 Million in Small Appliance Resale SchemeRead the Press Release
United States Attorney Andrew M. Luger today announced the guilty plea of TYRONE HERMAN, 55, of St. Anthony, Minn., for defrauding investors for more than $19 million. HERMAN, who was charged by information on September 9, 2014, pleaded guilty today before Untied States District Judge Joan N. Ericksen.
“Investment fraud takes all forms – even sophisticated investors can be victims,” said U.S. Attorney Luger. “Working closely with our colleagues from the Minnesota Department of Commerce and the Federal Bureau of Investigation, today we are protecting more people than ever before, by removing from the market place those who are stealing clients’ money by investment fraud.”
Minnesota Department of Commerce Commissioner Mike Rothman said: “We will continue to fight investment fraud and criminal Ponzi schemes. After a concerned citizen gave a tip to our securities investigators, our agents from the Commerce Fraud Bureau and the FBI collaborated to investigate and stop Mr. Herman from committing any more criminal financial abuse.”
Special Agent in Charge of the Federal Bureau of Investigation Minneapolis Division Richard Thornton said: “The FBI remains steadfast in its commitment to prevent financial fraud. This guilty plea serves as a reminder to those who commit financial fraud that no safe harbor exists.”
According to his guilty plea and documents filed in court, HERMAN, from 1998 through December 2013, operated Executive Marketing Group (EMG) and Ty Herman & Associates, which he claimed had business relationships with manufacturers and wholesalers from whom he could purchase small appliances and other inventory at below-retail market rates. HERMAN told the victims that he could re-sell the inventory in which they invested for a profit of 35 percent, and that victims would receive their money back, with a 30 percent rate of return, within 90 days of the sale of inventory.
According to his guilty plea and documents filed in court, HERMAN created false invoices to demonstrate to victims that had sold the inventory. When they demanded return of their investments, HERMAN provided fake bank statements showing that, while he had the money in his bank account, the Internal Revenue Service had frozen the account so that he could not access the victims’ money. HERMAN repaid some investors with Ponzi-type payments, not from the sale of inventory.
According to HERMAN’S guilty plea and documents filed in court, he stole more than $19 million from at least 25 separate victims.
This case is the result of an investigation conducted by the Minnesota Department of Commerce and the Federal Bureau of Investigation.
Assistant U.S. Attorney Karen Schommer prosecuted the case.
Defendant Information:
TYRONE R. HERMAN, 55
St. Anthony, Minn.
Convicted:
• Wire Fraud, 1 count###