Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
17 November 2014
Justice Department Enters into a Settlement Agreement with Peapod to Ensure that Peapod Grocery Delivery Website is Accessible to Individuals with DisabilitiesRead the Press Release
The Justice Department announced today that it has entered into a settlement agreement with Ahold U.S.A. Inc. and Peapod LLC, the owners and operators of www.peapod.com, to remedy alleged violations of the Americans with Disabilities Act (ADA). Peapod is America’s leading Internet grocer, delivering more than 23 million orders in 12 Midwest and East Coast states and the District of Columbia. The agreement resolves the department’s allegations that www.peapod.com is not accessible to some individuals with disabilities, including individuals who are blind or have low vision, individuals who are deaf or hard of hearing, and individuals who have physical disabilities affecting manual dexterity.
Many individuals with disabilities use computers and other electronic devices to access the Internet with the help of assistive technologies, including text-to-speech “screen reader” software programs, refreshable Braille displays, keyboard navigation and captioning. Such technologies have been readily available and widely used for decades; however, websites must include programming for the assistive technologies to function properly for users with disabilities. Inaccessible websites and mobile applications persist even while there are well-established industry guidelines – the Web Content Accessibility Guidelines (WCAG) 2.0 – for making web content accessible.
Under the agreement, Peapod is required to adopt measures to ensure that users with disabilities are able to fully and equally enjoy the various goods, services, facilities and accommodations provided through www.peapod.com including:
-
ensure that www.peapod.com and its mobile applications conform to, at minimum, the Web Content Accessibility Guidelines 2.0 Level AA Success Criteria (WCAG 2.0 AA), except for certain third party content;
-
designate an employee as web accessibility coordinator for www.peapod.com, who will report directly to a Peapod, LLC executive;
-
retain an independent website accessibility consultant, who will annually evaluate the accessibility of the website and its mobile applications;
-
adopt a formal web accessibility policy;
-
provide a notice on www.peapod.com soliciting feedback from visitors on how website accessibility can be improved;
-
provide automated accessibility testing and accessibility testing by individuals with a variety of disabilities of www.peapod.com and its mobile applications;
-
provide mandatory annual training on website accessibility for Peapod’s website content personnel.
“This agreement ensures that people with disabilities will have an equal opportunity to independently and conveniently shop online for groceries,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “We applaud Peapod for working cooperatively with the department and for its commitment to customers with disabilities.”
Title III of the ADA prohibits discrimination on the basis of disability by public accommodations in the full and equal enjoyment of the goods, services, facilities, privileges, advantages and accommodations of places of public accommodations. Title III of the ADA also requires public accommodations to take necessary steps to ensure individuals with disabilities are not excluded, denied services, segregated, or otherwise treated differently because of the absence of auxiliary aids and services, such as accessible electronic information. The Justice Department has long considered Title III and its implementing regulation to apply to the online services and communications of public accommodations.
To find out more about federal disability rights laws, call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov.
-
Judge Sentences Washington, Pa., Man to 7 Years in Prison for Cocaine Trafficking SchemeRead the Press Release
PITTSBURGH - A resident of Washington, Pennsylvania, has been sentenced in federal court to 84 months imprisonment followed by five years supervised release on his conviction of violating federal drug trafficking laws, United States Attorney David J. Hickton announced today.
United States District Judge Terence F. McVerry imposed the sentence on Keith Malone a/k/a K- Rizz, 39.
According to information presented to the court, from in and around January 2011 and continuing thereafter to in and around June 2012, Malone conspired with others to distribute and possess with intent to distribute five kilograms or more of cocaine.
The prosecution of Malone was the result of a long-term investigation that involved wiretaps on cell phones utilized by several members of the conspiracy. At the conclusion of the investigation, 20 defendants (including Malone) were charged in a large-scale cocaine conspiracy that operated between Warren, Ohio, and Washington, Pa. All 20 defendants have since pleaded guilty. The same investigation also resulted in the prosecution of 10 defendants charged in a large-scale heroin conspiracy that operated between Detroit, Michigan, and Washington, Pa. All 10 defendants have likewise pleaded guilty.
Assistant United States Attorneys Charles A. Eberle and Barbara K. Doolittle prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation and the Pennsylvania State Police for the investigation leading to the successful prosecution of Malone.
Judge Sentences Federal Inmate to 2 More Years in Prison for Possessing A WeaponRead the Press Release
ERIE, Pa. - An inmate at the McKean Federal Correctional Institution in Bradford, Pennsylvania pleaded guilty and was sentenced in federal court to 24 months in jail on his conviction of possession of contraband in prison, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Keith Hightower, 29. The sentence was imposed to run consecutively to the sentence Hightower is currently serving.
According to information presented to the court, on or about May 9, 2014, Hightower was in possession of contraband, namely, a weapon.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended Officers of the McKean Federal Correctional Institution for the investigation leading to the successful prosecution of Hightower.
Inmate Sentenced to an Additional Month in Prison for Possessing Cell PhoneRead the Press Release
ERIE, Pa. - An inmate at the McKean Federal Correctional Institution in Bradford, Pennsylvania pleaded guilty and was sentenced in federal court to 1 month in jail on his conviction of possession of contraband in prison, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Jose I. Aquino, 31. The sentence was imposed to run consecutively to the sentence Aquino is currently serving.
According to information presented to the court, on or about June 14, 2014, Aquino was in possession of contraband, namely, a cell phone.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended Officers of the McKean Federal Correctional Institution for the investigation leading to the successful prosecution of Aquino.
Illegal Alien Sentenced to Two Years' Imprisonment for Illegally Reentering the United StatesRead the Press Release
An alien who illegally reentered the United States after being deported was sentenced today to two years in federal prison.
Marcelino Aguilar-Vicente, age 31, a Mexican citizen living in Waterloo, Iowa, received the prison term after a July 15, 2014, guilty plea to one count of illegal reentry into the United States after being deported following a conviction for an aggravated felony.
In May 2014, Aguilar-Vicente was taken into Immigration custody after he was arrested in Black Hawk County, Iowa, for traffic violations. At the guilty plea, Aguilar-Vicente admitted he illegally reentered the United States after he was deported in March 2007. Prior to his deportation in 2007, Aguilar-Vicente was convicted in 2006 in Dinwiddie County, Virginia, of four counts of obtaining money by false pretenses, and in Hopewell County, Virginia, of one count of conspiracy to commit grand larceny, and three counts of grand larceny, all aggravated felonies.
Aguilar-Vicente was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Aguilar-Vicente was sentenced to 24 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Aguilar-Vicente is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Daniel C. Tvedt and investigated by the Department of Homeland Security.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-CR-62.
Illegal Alien Sentenced to 11 Months in Prison for Conspiracy to Induce Other Aliens to Unlawfully Reside in the United StatesRead the Press Release
An illegal alien who conspired with others to transport and encourage aliens to reside in the United States in violation of the law was sentenced today to eleven months’ in federal prison.
Ramon Perez, age 22, an illegal alien from Guatemala living in Waucoma, Iowa, received the prison term after an August 28, 2014, guilty plea to one count of conspiracy to transport, encourage and induce aliens to reside in the United States in violation of law.
In a plea agreement, Perez admitted he conspired with others to encourage aliens to work and reside in the Iowa in violation of the law. As part of the conspiracy, Perez brought aliens from Colorado to work and reside in Iowa. In Iowa, Perez transported aliens to work sites where he supervised their work constructing grain bins.
Perez was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Perez was sentenced to eleven months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Perez is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Daniel C. Tvedt and investigated by the Department of Homeland Security, Homeland Security Investigations.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-CR-2039.
Iberia Parish Man Sentenced for Traveling to North Carolina to have Sex with a MinorRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that a New Iberia man was sentenced to 210 months in prison for traveling to North Carolina in order to have sex with a minor.
Ray Paul Dionne, 55, of New Iberia, La., was sentenced by U.S. District Judge Richard T. Haik on one count of traveling with the intent to engage in illicit sexual conduct with a minor. He was also sentenced to a lifetime of supervised release. According to evidence presented at the guilty plea, Dionne admitted that he traveled to North Carolina on two occasions in June and August of 2012 to engage in sexual contact with a minor under the age of 12. On August 27, 2012, when law enforcement learned that Dionne was staying at a North Carolina residence, they entered the residence and discovered Dionne lying in bed with the child.
“One of our top priorities in this District is protecting children,” Finley stated. “This case should send a message that Louisiana is not a safe haven for those who exploit children. The U.S. Attorney’s Office, along with our federal, state and local law enforcement partners, will continue to investigate and prosecute this type of activity to the fullest extent of the law.”
The Iberia Parish Sheriff’s Office, Boiling Point Springs Police Department, Brunswick County Sheriff’s Office, and the U.S. Marshal’s Service conducted the investigation. Assistant U.S. Attorney John Luke Walker is prosecuting the case.
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, 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.
Huntington Felon Sentenced to Federal Prison for Illegal Possession of FirearmsRead the Press Release
HUNTINGTON, W.Va. – United States Attorney Booth Goodwin announced that a Huntington man was sentenced today to three years and five months in federal prison for unlawfully acquiring five guns from a Huntington pawn shop. Estill Timothy Slone, 46, previously pled guilty in federal court in Huntington to being a felon in possession of a firearm.
On February 26, 2014, Slone and Brittany Amanda Hewlett went to a Huntington pawn shop to buy five guns. Hewlett completed the required federal firearms form on which she lied claiming to be the actual purchaser of the guns when she knew the guns were really for Slone. Hewlett had agreed to acquire the guns for Slone who was prohibited from possessing a firearm because he was a convicted felon. On March 4, 2014, Slone and Hewlett returned to the pawn shop to complete the transaction. The guns were delivered to Slone by an undercover ATF agent, after which Slone was immediately arrested.
Hewlett was sentenced in August of 2014 to 12 months and 1 day imprisonment for her role in this offense.
The Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant United States Attorney Joseph F. Adams handled the prosecution.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by working with existing local programs that target gun crime.
High School Teacher Indicted for Child Sexual ExploitationRead the Press Release
Project Safe Childhood
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a teacher at St. Elizabeth High School in St. Elizabeth, Mo., has been indicted by a federal grand jury on charges related to the sexual exploitation of a child.
Stephen Gregory Strobel, 25, of St. Elizabeth, was charged in a four-count indictment returned under seal by a federal grand jury in Jefferson City, Mo., on Nov. 5, 2014. That indictment was unsealed and made public today upon Strobel’s arrest and initial court appearance.
The federal indictment alleges that Strobel used a minor to produce a video of child pornography on April 22, 2014. Strobel is also charged with receiving child pornography over the Internet, distributing child pornography over the Internet and possessing child pornography between March 2014 and May 2014.
The federal indictment also contains a forfeiture allegation, which would require Strobel to forfeit to the government any property used to commit the alleged offenses, including a laptop computer and an iPhone.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the Missouri State Highway Patrol, the FBI, the Ohio Attorney General’s Office and the Wayne County, Ohio, Sheriff’s Department.- Gulf Cartel Plaza Boss Heads to Federal Prison
Green Cove Springs Convenience Store Owners Sentenced for Income Tax Refund FraudRead the Press Release
Jacksonville, Florida – U.S. District Judge Marcia M. Howard today sentenced Abass Issa to 38 months in federal prison and Antoun Arbaji to 24 months in federal prison for theft of government property. The court also ordered each to serve a three-year term of supervision following their incarceration, and to repay the United States a total of $1,566,819.45 in restitution. Arbaji and Issa pleaded guilty on May 27, 2014, and June 26, 2014, respectively.
According to court documents, Arbaji owned and operated a Fina Express convenience store in Green Cove Springs. Issa owned and operated V&J Stores, Inc., another convenience store in Green Cove Springs. Beginning in 2011, Issa began obtaining known fraudulent IRS refund checks from a source in Tampa. The checks were either in the form of United States Treasury checks or tax refund anticipation loans. Many of the refund checks were issued in the names of deceased individuals, though some were issued in the names of living taxpayers. Over 200 stolen identities were involved in the scheme.
After Issa obtained the checks in bulk from his source in Tampa, he then located individuals, like Arbaji, to cash the checks in exchange for a fee. All proceeds were given to Issa, who kept a portion, and then returned the remainder to his Tampa source. During 2011, Issa and Arbaji used Arbaji’s bank account to cash $1,512,607 in fraudulent United States Treasury checks and $406,795 in fraudulent refund anticipation loans. Prior to indictment, the United States seized $352,584 from Arbaji’s bank account.
This case was investigated by the Internal Revenue Service—Criminal Investigation, the United States Secret Service, and the Florida Department of Law Enforcement. It was prosecuted by Assistant United States Attorney Mac D. Heavener, III.
GenPhar Inc., Vaxima, Inc, Convicted of Fraud, No Verdict Reached on Jian DongRead the Press Release
Contact Person: Nathan Williams (843) 727-4381
Columbia, South Carolina ---- United States Attorney William N. Nettles stated today that GenPhar Inc. and Vaxima Inc. were convicted on Friday, November 14, 2013 following a ten day trial in Federal Court. The jury did not reach a verdict on Jian Yun Dong, aka John Dong, and a mistrial was declared regarding his charges.
All three defendants were charged with Conspiracy to Commit Grant Fraud, Wire Fraud, Theft of Government Property and Providing False Statements. GenPhar and Vaxima were each convicted of one count of Theft of Government Property. GenPhar was convicted of an additional seventeen counts of Wire Fraud, and Vaxima was convicted of an additional sixteen counts of Wire Fraud. The jury did not reach a verdict on the Conspiracy count as to any defendant, on any counts against defendant Jian Dong, and one count of Wire Fraud. A mistrial was declared on those counts, and a hearing date regarding them has yet to be set.
The trial began on November 5, 2014, and concluded on November 14, 2014. Testimony at trial established that federal grant money was obtained by GenPhar and Vaxima for purposes of biodefense research, but was used for other purposes, specifically to construct a commercial office building. Testimony further established that a total of approximately six million dollars were spent on the construction, which included approximately four million dollars of improperly diverted grant money.
The Hon. C. Weston Houck presided over the trial. The convictions are the result of an investigation conducted by the Department of Health and Human Services Office of Inspector General, the Defense Criminal Investigative Service, the Federal Bureau of Investigation, and the U.S. Army Criminal Investigation Command. Assistant United States Attorneys Eric Klumb and Nathan Williams of the Charleston office prosecuted the case.Fort Worth Man Sentenced to 30 Years in Federal Prison on Child Pornography ConvictionsRead the Press Release
FORT WORTH, Texas — A 40-year-old Fort Worth resident, Christopher Robert Weast, was sentenced on Friday by U.S. District Judge John McBryde to serve 30 years in federal prison following his conviction at trial this summer on two felony child pornography offenses, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
A federal jury convicted Weast in July 2014 on one count of possession of child pornography and one count of receipt of child pornography.
The government presented evidence at trial that the investigation began in June 2012 when an officer with the Fort Worth Police Department (FWPD), working online in an undercover capacity, downloaded child pornography from Weast. The investigation revealed that Weast had numerous files of child pornography on his computer and on an external hard drive.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The FWPD and the FBI investigated. Assistant U.S. Attorney A. Saleem and Special Assistant U.S. Attorney Dan Cole prosecuted.
- Former Chiropractic Clinic Owner Sentenced in $3 Million Automobile Insurance Fraud Conspiracy
Former CFO Charged with Stealing $1.2 Million, Spending Some of the Money on Women he Met OnlineRead the Press Release
The former chief financial officer of Alotech Ltd. was charged with defrauding his former employer out of more than $1.2 million, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office.
A criminal information was filed in federal court charging John H.C. Black, 56, of Cleveland Heights, with one count of wire fraud.
Black spent more than $450,000 of the stolen money buying cars and making purchases at Louis Vuitton, Sak’s Fifth Avenue, Victoria’s Secret, Neiman Marcus and other stores for women that Black met on the web site www.seekingarrangements.com, according to the information.
“According to these charges, this defendant defrauded his employer and betrayed the trust of all those who worked at Alotech,” Dettelbach said. “The fact that he blew hundreds of thousands of dollars on lingerie, purses and shopping trips to Chicago for women he met online only adds insult to injury.”
“Buying female companionship with Alotech’s bank account was not what John Black was hired to do,” Anthony said. “Black is being held accountable for the numerous financial schemes he utilized to defraud the company that paid his salary.”
Black was employed as the CFO at Alotech from July 1, 2009, through Aug. 31, 2012. Alotech is headquartered in Brooklyn, Ohio, and is engaged in the manufacture, research and development of cast parts used by the military, auto industry and aerospace industry, among other applications, according to the information.
He began to use Alotech’s business checking account for personal expenditures in early 2011. Black also encouraged Alotech’s chief executive officer to obtain two corporate credit cards – one in Black’s name and one in the CEO’s name – to be used in case of emergency. Black also obtained a debit card without authorization of Alotech of the company’s CEO, according to the information.
Black began issuing multiple corporate checks for his personal benefit around early 2011, and withdrawing cash from ATMs with the unauthorized debit card, according to the information.
Around October 2011, Black met multiple women through the website www.seekingarrangements.com. The website purported to match younger females, approximately 20-30 years old, with rich, older men. The men agreed to provide the women with cash and gifts in exchange for their companionship, according to the information.
Between October 2011 and August 2012, Black provided cash and gifts with money that he fraudulently obtained from Alotech. These include multiple personal vacations to Chicago and numerous purchases there. This also includes purchases at Hannoush Jewelry, Macy’s.com, Neiman Marcus, Louis Vuitton, Sak’s Fifth Avenue and Victoria’s Secret, according to the information.
He also purchased two automobiles for one of the women, including an Audi, according to the information.
This indictment is the result of an investigation by Federal Bureau of Investigation. The case is being prosecuted by Special Assistant U.S. Attorney Derek Kleinmann.
If convicted, the defendant’s sentence will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Florida Woman Sentenced for Telemarketing SchemeRead the Press Release
Follow @SDILNewsStephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that Amber Jones, 28, of Fort Lauderdale, Florida, was sentenced in United States District Court in East St. Louis, Illinois, on Friday, November 14, 2014, on one count of conspiracy to commit mail and wire fraud. Jones was sentenced to one day in prison, to be followed by two years of supervised release. Jones was also ordered to pay $6,934 in restitution and a $100 special assessment.
The investigation determined that Jones was a telemarketer who worked for National Solutions and related companies located in Orlando, Florida. Telemarketers for National Solutions placed cold calls to timeshare owners and then falsely represented that their company had actual buyers for the owners’ timeshare property. The company solicited from each victim advanced fees of up to several thousand dollars in purported closing costs that were to be refunded to the owner at closing. Many timeshare owners were told that their closings would occur within a matter of days. Despite collecting fees from these victims, the National Solutions companies never sold a single timeshare unit and indeed made little effort even to market the properties for sale. Instead, Jones and her co-conspirators simply pocketed the advanced fees. Jones’ participation in the scheme began in August 2010 and continued through April, 2011. From 2007 to 2011, over 2,500 timeshare owners across the country were scammed by the National Solutions businesses to the tune of more than $6 million.
This prosecution follows an investigation by the Midwest Region Office of the Federal trade Commission and the St. Louis Field Office of the Chicago Division of the United States Postal Service. The case was prosecuted by Assistant United States Attorney Michael Quinley and Special Assistant United States Attorney Michael Hallock.
Five Defendants Sentenced in Health Care Fraud Case Involving A Metroplex Chiropractor and Former Union RepresentativeRead the Press Release
FORT WORTH, Texas — Five defendants who were convicted for their respective roles in a health care fraud case involving a chiropractor and a former union representative from the Dallas – Fort Worth (DFW) metroplex, were sentenced today, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Reginald Guy, 44, of Arlington, Texas, was sentenced this morning by U.S. District Judge Reed C. O’Connor to 156 months in federal prison and ordered to pay approximately $2.4 million in restitution. Guy was convicted at trial in June 2014 on all counts of a superseding indictment charging one count of conspiracy to commit health care fraud, five counts of health care fraud and four counts of aggravated identity theft.
Guy was a factory worker in Arlington, and from approximately 2003 until November 2009, when his employment was terminated, he served as a union representative. He used that union representative position to recruit and refer his co-workers to DFW Rehab & Diagnostics, which was operated from the office of Metroplex DFW Sports Rehab Center in Arlington, and then later from a stand-alone location in Grand Prairie, Texas. In exchange for monthly kickbacks, work excuse notes, and a variety of prizes, the workers agreed to allow their insurance companies to be billed for services they did not receive.
Dr. Abbas Zahedi, 49, of Carrolton, Texas, was convicted on the same offenses at that trial. A chiropractor, Dr. Zahedi owned and operated DFW Rehab & Diagnostics. Dr. Zahedi, who is in custody, is scheduled to be sentenced by Judge O’Connor on January 5, 2015.
From 2009 to 2012, Dr. Zahedi, Reginald Guy, and four convicted codefendants conspired to submit health insurance claims to Blue Cross Blue Shield of Texas (BCBS) and other insurers for services not rendered. These four coconspirators, James Sterns, Tina Perkins, Donna Harris and Gregory Wattron, who cooperated with the government in the investigation and testified against Zahedi and Guy at their trial, were also sentenced today.
Sterns, 50, of DeSoto, Texas, was sentenced to 10 months in federal prison and ordered to pay approximately $2.2 million in restitution. Sterns owned and operated Metroplex. In early 2010, Sterns hired Guy to be the office manager of Metroplex, where he worked in that position to mid-2011, shortly before the clinic closed. In March or April 2011, Dr. Zahedi hired Guy to work as a consultant at the clinic’s Grand Prairie location. After Guy began working for Dr. Zahedi, Guy helped transfer patients and patient information to Dr. Zahedi, and the fraudulent referral and billing scheme continued.
Perkins, 43, of Dallas, was sentenced to 10 months in federal prison and was ordered to pay approximately $2.4 million in restitution. Perkins worked as the biller and office consultant for Dr. Zahedi and was responsible for submitting claims to insurance companies.
Perkins’ sister-in-law, Donna Harris, 43 of Haltom City, Texas, was sentenced to eight months in federal prison and was ordered to pay approximately $2 million in restitution. Harris permitted the clinic, in exchange for cash payments, to submit claims to BCBS for services purportedly performed by Dr. Zahedi and Wattron, when in fact she received no treatment. Then, in early 2011, Dr. Zahedi hired Harris to be the office manager at the Grand Prairie location. There, she continued to allow Dr. Zahedi to submit claims under her name to BCBS for services that were not performed. Harris also permitted Dr. Zahedi to submit claims to BCBS for Harris’ immediate and extended family members for services they did not receive.
Wattron, 56, of Grapevine, Texas, was sentenced to six months in federal prison and was ordered to pay approximately $1.3 million in restitution. He worked as an occupational therapist at the clinic from approximately 2008 until August 2011. Wattron agreed to allow Sterns and Dr. Zahedi bill insurance companies for occupational therapy that he did not perform.
The FBI and the Office of Personnel Management - Office of Inspector General investigated. Assistant U.S. Attorney Nancy Larson and Special Assistant U.S. Attorney Douglas Brasher prosecuted the case.
Final Two Holland Latin King Gang Members Sentenced to over 20 Years for Racketeering and Drug DealingRead the Press Release
Multi-year Investigation ends in 31 Latin King Members Convicted and Imprisoned for the Gang’s 20 years of Violence and Interstate Drug-Dealing.
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick Miles announced today that U.S. District Court Judge Robert Holmes Bell imposed sentences of over 20 years for the final two defendants in the multi-year joint federal and state investigation and prosecution of 31 Holland Latin Kings (HLK) gang members. Judge Bell sentenced David Casillas to 30 years in federal prison, with 12 years credit for time served on earlier Latin King related offenses; he sentenced Antonio Rios to 25 years in prison, with five years credit for time already served. Casillas and Rios were convicted of conspiracy to engage in racketeering and conspiracy to deal over five kilograms of cocaine after a two-week trial in June 2014. Defendant Rios was acquitted of a separate marijuana conspiracy charge.
U.S. Attorney Miles said, “One of the Department of Justice’s top priorities is helping local law enforcement agencies protect our nation’s communities as safe places where our citizens can thrive. Violent street gangs, wherever they exist in West Michigan, are a true threat to the law-abiding people of our communities. This case is an example of the federal-state-local partnerships that my office uses as the most effective way to combat organized, violent groups. The collaboration of the Holland Police, Michigan State Police, and ATF was pivotal in this case. Without these partnerships, this case would not have been possible. My office shares great pride with our partners in successfully prosecuting this local chapter of a violent national gang.”
The three-year investigation revealed that the HLK began in the early 1990’s and grew to the size of over 50 members by the mid-2000’s. The Holland group was a local chapter of a national gang, the Almighty Latin King Nation. Holland members followed a national manifesto and regional constitution. The Holland chapter maintained a strict hierarchical structure that was mandated by national edict, including regional and local leadership positions. For example, a local chapter’s leaders were elected by membership vote. The president carried the title of “Inca,” the vice president was called the “Cacique,” and the “Enforcer” was responsible for maintaining a cache of firearms and imposing punishments (“violations”) for infractions of the gang’s rules. The organization’s finances were maintained by the “treasurer,” and the coffers were supplied by cocaine and marijuana sales.
The gang conducted secretive meetings, called “servicios,” which began with a Latin King prayer, after which members paid dues which were used to purchase narcotics, firearms, and pay members’ criminal-defense bills. These “servicios” also included beatings of members as punishment for “violations” of the organization’s rules. Members employed anti-surveillance security procedures during “servicios,” including strip searches, which were ultimately unsuccessful because officers covertly recorded several meetings. The gang also benefitted from the national organization’s structure, which was based in Chicago, Illinois, also known to the gang as the “Motherland.” Latin King Members in Chicago and other states supported the HLK by providing guidance and narcotics. The HLK maintained supremacy among West Michigan gangs through the profitable sale of cocaine and marijuana (gang rules forbade the sale of other substances). The gang also benefitted from a well-earned reputation of violently defending its turf and members against perceived threats. This included shootings, stabbings, firebombings of residences, beatings, and events of witness intimidation.
By the mid-2000’s, the Holland Latin Kings grew so large that it split into two factions: the East-Side and West-Side, with each subchapter maintaining its own leadership structure. The two subchapters grew to such strength that it became difficult for local law enforcement to conduct routine investigations of crime in Holland and West Michigan because the HLK successfully intimidated anybody otherwise willing to cooperate with law enforcement. Despite several members being convicted for minor offenses in state court, the gang would financially support incarcerated members, after which the members would quickly return to the gang’s criminal operation. This cycle of crime and violence continued until federal, state, and local authorities began collectively investigating the organization, through the use of confidential informants and the secret federal grand jury system.
The investigation became public on July 19, 2012, when over 100 state and federal officers simultaneously executed search warrants at over 15 residences and a business in Holland, which were all linked to the HLK. This collaborative effort involved the following agencies: the federal Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF); the Ottawa County Prosecutor’s Office; the Michigan State Police; the Holland Police Department; and the Ottawa County Parole Office.
On February 8, 2013, a federal Grand Jury charged 31 members of the HLK street gang with conspiracy to engage in racketeering activity and conspiracy to traffic cocaine and marijuana. The indictment also alleged acts of violence in furtherance of the gang, including attempted murders, shootings, firebombings, beatings, stabbings, and acts of witness intimidation. Of the 31 charged, 29 defendants pled guilty to racketeering offenses. The Holland Latin Kings included at least three Regional Leaders:
- Eric Ruibal, aka, Cubano – Regional Inca (Leader of all Michigan Latin Kings). Ruibal, a Cuban national, was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic over five kilograms of cocaine. He was sentenced to 20 years in federal prison, with 7.75 years credit for time already served.
- Mario Herrera, aka, Caveman – Regional Leader. Herrera was convicted by plea agreement of conspiracy to engage in racketeering activity and was sentenced to 7.67 years in federal prison, which included a substantial reduction due to Herrera’s cooperation with authorities.
Desidario Amaro, aka Desi – Regional Leader. Amaro was convicted by plea agreement of conspiracy to engage in racketeering activity and was the only defendant sentenced by
U.S. District Court Janet T. Neff, who substantially reduced Amaro’s potential sentence for his cooperation with authorities. Amaro was sentenced to 2.75 years in federal prison.
Several members held leadership positions in the local chapters of the gang. - Nicholas Bernal, aka Nicky B – Inca of the East-Side HLK. Bernal was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic 100 or more kilograms of marijuana. He was sentenced to 19 years in federal prison.
- Francisco Martinez, Jr., aka Chewbacca – Inca of the West-Side HLK. Martinez, Jr. was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic 100 or more kilograms of marijuana. He was sentenced to 9 years in federal prison.
- James Gonzales, aka Godfather – Cacique of the West-Side HLK. Gonzales was convicted by plea agreement of conspiracy to engage in racketeering activity. He was sentenced to 16.67 years in federal prison.
- Ramon Gaytan, Jr., aka King Snaps – Enforcer of the West-Side HLK. Gaytan, Jr. was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic 100 or more kilograms of marijuana. He was sentenced to 16.67 years in federal prison.
- Arturo DeLeon – Cacique of the East-Side HLK. Deleon was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic 100 or more kilograms of marijuana. He was sentenced to 9 years in federal prison.
- Francinet Cruz – Enforcer of the East-Side HLK. Cruz was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic 500 or more grams of cocaine. He was sentenced to 19.5 years in federal prison, with credit for 1.5 years of time served.
- Joseph Martinez, aka Dogface – former Enforcer of the West-Side HLK. Martinez was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic 100 or more kilograms of marijuana. He was sentenced to 20 years in federal prison.
- Julio Hernandez, aka Solo – former leader of the East-Side HLK. Hernandez was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic 100 or more kilograms of marijuana. He was sentenced to 10 years in federal prison.
- Jose Hernandez, aka BigTime – former Inca of the East-Side HLK. Hernandez was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic 100 or more kilograms of marijuana. He was sentenced to 9 years in federal prison.
- Frank Cisneros, aka Knuckles – former leader of the East-Side HLK. Cisneros was
convicted by plea agreement of conspiracy to engage in racketeering activity. He was sentenced to 17.5 years in federal prison. - Ramon Morales – former Inca of the East-Side HLK. Morales was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic 100 or more kilograms of marijuana. He was sentenced to 11.25 years in federal prison.
The remaining seventeen defendants all pled guilty to racketeering offenses. Each was sentenced to federal prison for periods ranging between two and eleven years. All told, the indictment resulted in over 340 years of prison sentences for HLK members.
ATF Special Agent in Charge Steven J. Bogdalek said “Unfortunately, far too many citizens live in fear of gang related violence. One of ATF’s primary missions is to make communities safe from the criminal activities of violent gangs such as the Holland Latin Kings. Along with our state and local partners and the United States Attorney’s Office, we are pleased with the conclusion of this case, knowing that Holland is a safer community as a result of this prosecution.”
The investigation was aided by several other agencies, including the Michigan Department of Corrections and the Kerr County, Texas, Sheriff’s Department.
This case was prosecuted by Assistant U.S. Attorneys Russell A. Kavalhuna and Phillip J. Green. Mr. Green is now a federal magistrate judge in the Western District of Michigan.
END
Federal Inmate Sentenced to 14 Months in Prison for Possessing A WeaponRead the Press Release
ERIE, Pa. - An inmate at the McKean Federal Correctional Institution in Bradford, Pennsylvania pleaded guilty and was sentenced in federal court to 14 months in jail on his conviction of possession of contraband in prison, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Oscar Acosta-Levario, 32. The sentence was imposed to run consecutively to the sentence Acosta-Levario is currently serving.
According to information presented to the court, on or about June 10, 2014, Acosta-Levario was in possession of contraband, namely, a weapon.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended Officers of the McKean Federal Correctional Institution for the investigation leading to the successful prosecution of Acosta-Levario.
Etowah County Man Pleads Guilty to Producing, Possessing Child PornographyRead the Press Release
BIRMINGHAM -- An Etowah County man pleaded guilty today in federal court to producing child pornography involving two children in north Alabama, announced U.S. Attorney Joyce White Vance, Homeland Security Investigations Special Agent in Charge Raymond R. Parmer Jr. and Etowah County Sheriff Todd Entrekin.
VICTOR GRAY DINGLER, 33, entered his guilty plea before U.S. District Judge Virginia Emerson Hopkins to five counts of producing child pornography between 2008 and 2014. Dingler also pleaded guilty to two counts of possessing child pornography involving children younger than 12. Sentencing is scheduled Feb. 26.
Some of the pornography Dingler produced involved a 3-year-old child. The second victim was an elementary school student in Etowah County, according to court records. The Alabama Department of Education was instrumental in helping law enforcement locate that child in September 2014, after HSI received a series of images that originated from a website located by Danish National Police. One of the images included a blanket bearing an Alabama university logo, according to court records.Dingler faces a possible sentence of 15 to 30 years in prison on each production of child pornography count, and a maximum of 20 years in prison on each possession count. Both charges carry a maximum $250,000 fine.
The Department of Homeland Security-HSI and the Etowah County Sheriff's Department investigated the case, which Assistant U.S. Attorneys Jacquelyn Hutzell, Xavier Carter and Daniel J. Fortune are prosecuting.
Essex County, N.J., Man Sentenced to 57 Months in Prison for Using Stolen Identities to Obtain Tax Refund ChecksRead the Press Release
NEWARK, N.J. – An Irvington, New Jersey, man was sentenced today to 57 months in prison for using stolen identities to file false tax returns and obtain hundreds of thousands of dollars in tax refund checks, U.S. Attorney Paul J. Fishman announced.
Hakeem Awe, 40, of Irvington, New Jersey, previously pleaded guilty before U.S. District Judge Jose L. Linares to two counts of an indictment charging him with mail fraud and aggravated identity theft. Judge Linares imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Awe used stolen names, Social Security numbers, and other personally identifying information to file false tax returns, using fictitious financial information to make it appear that the filer was entitled to a tax refund. Awe also listed the filer’s address as one of several post office boxes that he controlled in and around New Jersey. He received the checks at his post office boxes and then deposited them into bank accounts that he controlled.
In addition to the prison term, Judge Linares sentenced Awe to three years of supervised release and ordered him to pay restitution of $1,242,047.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen in Newark, and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Andrew J. Bruck of the Organized Crime/Gang Unit and Jacques S. Pierre of the Special Prosecutions Division, both of the U.S. Attorney’s Office in Newark.
14-404
Defense counsel: Timothy R. Anderson Esq., Red Bank, N.J.Economic Development Employee Charged with Possessing Child PornRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that an employee of the South Central Ozarks Council of Governments has been charged in federal court with possessing child pornography on his worksite computer.
Steven Gregary Reed, 36, was charged in a federal criminal complaint filed in the U.S. District Court in Springfield, Mo., on Thursday, Nov. 13, 2014. Reed remains in federal custody pending a detention hearing on Tuesday, Nov. 18, 2014.
Reed is employed as the coordinator of solid waste management with the South Central Ozarks Council of Governments, an economic development organization for seven counties in the south central region of Missouri (Douglas, Howell, Oregon, Ozark, Shannon, Texas, and Wright Counties), which is headquartered in Pomona, Mo.
According to an affidavit filed in support of the criminal complaint, a law enforcement officer was conducting an undercover investigation into the distribution of child pornography using peer-to-peer file-sharing software. A computer at the office of the South Central Ozarks Council of Governments was identified as advertising more than 100 files of suspected child pornography to share online. The same computer was identified as repeatedly searching for online child pornography for several months.
On Oct. 29, 2014, the affidavit says, law enforcement officers executed a search warrant at the office and determined that the desktop computer used by Reed was the computer identified in their investigation. Officers identified seven videos that contain probable child pornography on the computer, according to the affidavit, five videos that contain probable child pornography on Reed’s work laptop computer and 60 images of child pornography (with some of the boys as young as six years of age) on Reed’s flash drive.
Dickinson cautioned that the charge contained in this complaint is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Abram McGull, II. It was investigated by the Southwest Missouri Cyber Crimes Task Force, the FBI, the Missouri State Highway Patrol and the Howell County, Mo., Sheriff’s Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Easton Drug Dealer Sentenced to 11 Years in Prison in Heroin Distribution ConspiracyRead the Press Release
Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced Gary Barham, age 52, of Easton, Maryland, today to 11 years in prison, followed by five years of supervised release, for conspiracy to distribute and possess with intent to distribute heroin.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Frederick County Sheriff Charles A. “Chuck” Jenkins; Colonel Marcus L. Brown, Superintendent of the Maryland State Police; Washington County Sheriff Douglas W. Mullendore; and Hagerstown Police Chief Mark Holtzman.
According to his plea agreement, since early 2014, Barham conspired with Jeffrey Anderson and others to distribute and possess with the intent to distribute heroin. During the course of the conspiracy, Barham obtained bulk quantities of heroin from Jeffrey Anderson, which he then re-distributed in and around the Eastern Shore of Maryland.During the investigation, law enforcement obtained a wiretap on phone lines used by Anderson. Barham was overheard by law enforcement on numerous calls discussing heroin sales with Anderson. For example, on April 2, 2014, law enforcement overheard Barham and Anderson discuss meeting at a restaurant in Bowie, Maryland, so that Barham could obtain a supply of heroin. Law enforcement then saw Barham and Anderson meet at the restaurant to conduct the drug transaction.
Over the course of the conspiracy, Barham distributed at least 100 grams of heroin.
Jeffrey Michael Anderson, age 35, of Upper Marlboro, Maryland, pleaded guilty to conspiracy to distribute and possess with intent to distribute heroin. Anderson and the Government have agreed that if the Court accepts his plea agreement, Anderson will be sentenced to 192 months in prison. U.S. District Judge Richard D. Bennett has scheduled sentencing for Anderson on January 30, 2015, at 3:00 p.m.Co-defendants Rahdel Sharbaan, age 41, of Bronx, New York; Reginald Jones, age 26, of Bronx, New York; Shawn Christopher Malley, age 25, of Crofton, Maryland; Amanda Jo Palmer, age 32, of Hagerstown, Maryland; and William Ulysses Robinson, age 38, of Grasonville, Maryland, have all pleaded guilty to their roles in the conspiracy. Judge Bennett has scheduled sentencing for Robinson on January 6, 2015, at 2:00 p.m.; for Malley on January 7, 2015, at 3:00 p.m.; for Sharbaan on January 8, 2015, at 3:00 p.m.; for Jones on January 9, 2015, at 11:00 a.m.; and for Palmer on January 21, 2015, at 3:00 p.m.
United States Attorney Rod J. Rosenstein praised HSI-Baltimore, DEA, Frederick County Sheriff’s Office, Maryland State Police, Washington County Sheriff’s Office and Hagerstown Police Department for their work in the investigation and recognized the Maryland Natural Resources Police, St. Michael’s Police Department, Easton Police Department, Ocean City Police Department and Talbot County Sheriff’s Office for their assistance. Mr. Rosenstein thanked Assistant U.S. Attorney Kenneth S. Clark, who is prosecuting this Organized Crime Drug Enforcement Task Force case.ESRI Agrees to Pay $550,000 to Settle Allegations of Government Contract FraudRead the Press Release
DENVER -- Esri, Inc., a geographic information systems (GIS) software development company based in Redlands, California, has paid $550,000 to settle allegations that it violated the False Claims Act by overbilling the Bureau of Land Management’s (BLM) National Operations Center (NOC) during the course of multi-year GIS software development projects called the National Integration Land System and GeoCommunicator.
The NOC provides internal operational and technical program support to BLM offices across the country. It contracted with Esri for the development of mapping system software to aid in achieving BLM’s land management goals.
Government contractors are bound by the rules set forth in the Federal Acquisition Regulations (FAR) and are expected to know and comply with those provisions. During the course of the GIS projects, Esri and BLM entered into Time and Materials (T&M) type contracts. The FAR regulations for T&M contracts prohibit contractors from adding certain types of profit and fees to billed items such as travel and the cost of project subcontractors. The United States alleges that Esri added prohibited profit and fees to invoices for payment in T&M contracts, without BLM’s knowledge or approval. Because Esri did not disclose these billing practices to BLM, the federal agency paid Esri hundreds of thousands of dollars to which it was not entitled. Esri also improperly billed BLM for Esri employees to attend conferences unrelated to the GIS projects, and improperly billed BLM for computer services such as servers and virtual private network accounts for which BLM did not contract.
“Protecting taxpayer dollars is a critical mission of the United States Attorney’s Office,” said U.S. Attorney John Walsh. “When a government contractor inflates its bills to the United States, we will take action both to recover the overbilled amount, and also to hold the contractor responsible for the misconduct.”
“This settlement is another example of the successful results of collaboration between BLM, Office of Inspector General and the U.S. Attorney’s Office to fight fraud, waste and mismanagement,” said Mary Kendall, Deputy Inspector General, Department of the Interior.
The claims settled by this agreement are allegations only. There has been no determination of liability.
This matter was investigated by the Department of the Interior’s Office of Inspector General. It was handled by Assistant U.S. Attorneys Amanda Rocque and Zeyen Wu.
Doctor Admits Taking Bribes in Test-Referral Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A doctor with practices in Wall Township and Howell Township, New Jersey, today admitted accepting bribes in exchange for test referrals as part of a long-running scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Anthony DeLuca, 52, of Point Pleasant, New Jersey, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with one count of accepting bribes.
Including DeLuca, 32 people – 21 of them doctors – have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. The investigation has so far recovered more than $10.2 million to date through forfeiture.According to documents filed in this and related cases and statements made in court:
DeLuca admitted he accepted bribes in return for referring patient blood specimens to BLS and was paid approximately $1,500 per month, which he received from another person on in his medical office engaged in the same activity.
On April 9, 2013, federal agents arrested David Nicoll, 40, of Mountain Lakes, New Jersey, Scott Nicoll, 33, of Wayne, New Jersey, a senior BLS employee and David Nicoll’s brother, and Craig Nordman, 35, of Whippany, New Jersey, a BLS employee and the CEO of Advantech Sales LLC – one of several entities used by BLS to make illegal payments. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and Frank Santangelo, 44, of Boonton, New Jersey. In June 2013, David and Scott Nicoll, Nordman and four other associates of BLS pleaded guilty to charges related to their involvement. Santangelo, a doctor, pleaded guilty in August 2013 to charges relating to his role in the scheme
The bribery count to which DeLuca pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for March 20, 2015. As part of his guilty plea, DeLuca must forfeit $16,500, representing the total bribe monies received from BLS.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell; IRS– Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s guilty pleas.The government is represented by Senior Litigation Counsel Andrew Leven, Assistant U.S. Attorney Joseph Minish, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $540 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
14-401Defense counsel: Patrick Egan Esq., Philadelphia, Pa.
DeLuca, Anthony Information
Delaware Woman Pleads Guilty to Fraud ChargesRead the Press Release
NORFOLK, Va. – Linda M. Avila, 50, of Frankford, DE, pleaded guilty today to conspiring to obtain payment for false claims and mail fraud.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; Thomas J. Kelly, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal; and Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Washington, D.C.; made the announcement after Avila’s guilty plea was accepted by United States District Judge Raymond A. Jackson of the Eastern District of Virginia.
According to a statement of facts filed with the plea agreement, Linda Avila and unindicted co-conspirators devised a scheme to file false income tax returns using forms obtained from illegal aliens on the Eastern Shore of Virginia and elsewhere. Avila altered the W-2 forms by using white out to cover up the names, social security numbers, and addresses and then wrote in other names and addresses and filed the fraudulent returns. The addresses listed were for post office boxes and residential addresses that she had access to. After she received the checks, she provided fake identification documents to the conspirators so they could cash the checks. An arrest warrant and search warrant were executed at her home in Delaware and agents seized approximately 17 boxes of fraudulent tax records. Templates for fraudulent W-2 forms and identification documents were also found on her computer. The records included copies of approximately 1,754 tax returns filed between 2008 and 2014 for tax years 2004 through 2013. The total loss to the IRS based on the fraudulent returns is approximately $7.2 million.
A Norfolk federal grand jury indicted Avila on July 25, 2014 on charge of conspiracy to make false claims, false claims against the United States and mail fraud. She is scheduled to be sentenced on February 17, 2015 and faces a maximum of 30 years in prison.
This case was investigated by the Internal Revenue Service and Homeland Security Investigations. Assistant United States Attorney Randy Stoker is prosecuting the case on behalf of the United States.A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-108.
Dallas County Man in Federal Custody for Producing Child PornographyRead the Press Release
DALLAS — A Hutchins, Texas, man, Servando Vega Cervantes, 24, was arrested last week on a federal complaint charging production of child pornography, announced U.S. Attorney Sarah R. Saldana.
After making his initial appearance in federal court, U.S. Magistrate Judge Irma C. Ramirez ordered that he remain in custody.
According to the affidavit filed with the complaint, the Hutchins Police Department contacted the FBI in May 2014 regarding questionable online communication between an 11-year-old victim, “AP,” and the Facebook user profile of “Laura Ortiz.” The victim’s mother believed the user of the Ortiz profile was actually an adult male, and not a 13-year-old female as described in chat conversations between AP and Ortiz.
The investigation revealed that the user profile “Laura Ortiz” belonged to Cervantes. The investigation also revealed that AP knew Cervantes as “Jordan,” an alias Cervantes used. Further, “AP,” advised that he had sent images of “a body part” and the “front part of his body” to Ortiz, but that he had deleted the images. A forensic preview of Cervantes’ cell phone was conducted and images of prepubescent males were observed on the device.
Anyone who may have been victimized in this case is asked to contact the FB at 972-559-5000.
A federal complaint is a written statement of the essential facts of the offenses charged and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The statutory penalty for the offense as charged is not less than 15 or more than 30 years in federal prison, a $250,000 fine and a lifetime of supervised release.
The matter was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The Hutchins Police Department and the FBI’s Dallas Child Exploitation Task Force are conducting the investigation. Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.
- Cuban Handed Prison Sentence for Importing Crystal Meth
Concord Man Pleads Guilty to Defrauding Credit Union Out of $2.3 MillionRead the Press Release
A Concord Township man pleaded guilty today to defrauding Taupa Lithuanian Credit Union out of $2.3 million, law enforcement officials said.
John Struna, 52, is scheduled to be sentenced Feb. 25. He pleaded guilty to seven counts -- one count of conspiracy to commit bank fraud, one count of bank fraud, one count of making false statements and four counts of money laundering.
Struna will forfeit a restaurant he owns – the Sunny Street Café in Concord Township – as well as a condominium in Florida and a 2014 Mazda because they were purchased with proceeds of the fraud, according to court documents.
The guilty plea was announced by Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office, and Kathy Enstrom, Special Agent in Charge of the Internal Revenue Service – Criminal Investigations.
The National Credit Union Administration and the Ohio Department of Commerce took possession of Taupa last year and placed it into receivership due to its insolvency. Taupa, based in Cleveland, had about 1,150 members and assets of approximately $24 million, according to court records.
Credit union CEO Alex Spirikaitis, former teller Michael Ruksenas and Vytas Apanavicius have previously been found guilty for their roles in conspiracies related to defrauding the credit union.
Struna maintained both personal and corporate accounts at Taupa dating back to 1995. He began a conspiracy with Spirikaitis in 2002 and continued through 2013, during which time Spirikaitis caused Taupa to make approximately 46 fraudulent transfers into Struna’s accounts, according to court documents.
In 2011, Struna requested and received $112,105 from Spirikaitis for the purchase of a condominium located in Ft. Myers, Florida. At no time did Struna submit any credit applications or loan documents, according to court documents.
The fraudulent transfers totaled approximately $2.3 million. From 2002 through 2013, Struna repaid only approximately $15,000 of the $2.3 million Spirikaitis transferred into his accounts, according to court documents.
This case is being prosecuted by Assistant United States Attorney Robert J. Patton and Special Assistant United States Attorney Derek Kleinmann. The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service.
Clovis Man Pleads Guilty to Federal Methamphetamine Trafficking ChargeRead the Press Release
ALBUQUERQUE – Christopher Jason Kidd, 38, of Clovis, N.M., pleaded guilty this morning to participating in a methamphetamine trafficking conspiracy. Under the terms of the plea agreement, Kidd will be sentenced to 78 months in federal prison followed by five years of supervised release.
Kidd and three co-defendants, Tina Tafoya, 33, and John Jesse Perez, Jr., 45, both of Clovis, N.M., and Jeanette Driever, 37, of Grady, N.M., were indicted in Feb. 2014, on federal methamphetamine trafficking charges. Count 1 of the three-count indictment alleged that the defendants conspired to distribute methamphetamine in Curry County, N.M., between Sept. 2013 and Nov. 2013. Count 2 alleged that Kidd and Tafoya possessed methamphetamine with intent to distribute on Nov. 6, 2013, and Count 3 alleged that Driever and Perez possessed methamphetamine with intent to distribute on that same day.
During today’s hearing, Kidd entered a guilty plea to Count 1 of the indictment and admitted conspiring with his co-defendants to distribute methamphetamine in Curry County. Kidd’s plea agreement states that he and Tafoya supplied quantities of methamphetamine to others, including Driever and Perez, who resold the methamphetamine in smaller quantities to users. According to Kidd’s plea agreement, on Nov. 9, 2013, Kidd and Tafoya supplied a pound of methamphetamine to Driever and Perez. On that same day, Kidd and Tafoya also possessed another half-pound of methamphetamine at their residence.
Kidd remains in federal custody pending his sentencing hearing, which has yet to be scheduled.
Kidd’s co-defendants have entered not guilty pleas to the indictment. The three remain in custody pending their trial, which is scheduled for Jan. 8, 2015. An indictment is merely an accusation and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Las Cruces Agency Office of the FBI’s Albuquerque Division, the Region V Drug Task Force and the New Mexico State Police, with assistance from the Ninth Judicial District Attorney’s Office. The Region V Drug Task Force is comprised of the Clovis Police Department, the Portales Police Department, Curry County Sheriff’s Office and the Roosevelt County Sheriff’s Office. Assistant U.S. Attorney Nicholas Jon Ganjei is prosecuting the case.Cleveland Doctor Pleads Guilty to Defrauding MedicareRead the Press Release
CHATTANOOGA, Tenn.– On Friday, Nov. 14, 2014, Dr. Raymond Sean Brown, 44, of McDonald, Tenn., pleaded guilty to using misbranded drugs with the intent to defraud Medicare.
Brown was initially charged in a 35-count indictment alleging crimes involving wire fraud, mail fraud, health care fraud and money laundering. However, Brown ultimately agreed to plead guilty to an information charging him with the use of misbranded drugs with the intent to defraud. As part of the plea agreement, Brown also agreed to forfeit $6.765 million U.S. currency seized from his bank accounts in December 2012, and pay an additional $717,000 in cash.
Sentencing is set for Mar. 5, 2015, in U.S. District Court in Chattanooga, at which time the United States will move to dismiss the original indictment.
The plea agreement on file with the U.S. District Court states that from May 2008 until December 2012, Brown fraudulently billed Medicare for Botox injections he did not give. During that time period, he received $7,482,968 in reimbursement from Medicare for Botox injections. Additionally, between 2008 and 2012, Brown did not purchase any FDA approved Botox and only 254 vials of non-FDA approved Botox, but billed Medicare for 17,766 vials. By pleading guilty Brown admitted that he received the Botox in interstate commerce for delivery for pay which was misbranded and that he acted with intent to defraud or mislead.
Brown faces a term of up to three years in prison, a fine of up to $250,000 or twice the amount of the gross pecuniary gain, and supervised release of up to one year. In the Agreed Preliminary Order of Forfeiture filed in U.S. District Court today, Brown agreed to forfeit his interest in $186,091 in a Tennessee Valley Federal Credit Union account and $6,579,517 in an Athens Federal Credit Union account. He also agreed to pay a monetary judgment in the amount of $717,359.08.
This case was investigated by the U.S. Food and Drug Administration-Office of Criminal Investigation and the U.S. Department of Health and Human Services-Office of Inspector General. Assistant U.S. Attorney Terra L. Bay represents the United States.
Christian County Man to Serve 12 Years in Prisonfor Sexual Exploitation of A MinorRead the Press Release
Springfield, Ill. – U.S. District Judge Sue E. Myerscough today sentenced James Marshall Owens, 44, of Owaneco, Ill., to 12 years in federal prison for sexual exploitation of a minor. Owens, a former Taylorville school bus driver, was also ordered to remain on supervised release for 20 years following his term of imprisonment. Owens has remained in law enforcement custody since his arrest in May 2013.
On Feb. 24, 2014, Owens pled guilty to enticing individuals under the age of 18 to engage in sexual activity for which a person could be charged with a criminal offense. The offenses were committed from August 2012 to May 2013 and from December 2012 to February 2013.
The charges were investigated by the Federal Bureau of Investigation, the Illinois State Police, and the Christian County Sheriff’s Office. The case was prosecuted by Assistant U.S. Attorney Gregory K. Harris with the cooperation of the Christian County State’s Attorney’s Office.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys= Offices and the Criminal Division=s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Centralia Man Sentenced for Defrauding TaxpayersRead the Press Release
Follow @SDILNewsStephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on Friday, November 14, 2014, Jody Ray Wooters, 46, of Centralia, Illinois, was sentenced in United States District Court in East St. Louis, Illinois on one count of Health Care Fraud. Wooters was sentenced to six months in federal prison, to be followed by three years of supervised release. Wooters was also ordered to pay $53,098.15 in restitution back to the State of Illinois and a $100 special assessment. Wooters previously pled guilty to submitting false and fraudulent bills in relation to personal assistant services in the Home Services Program, a Medicaid Waiver Program designed to allow individuals to stay in their homes instead of entering a nursing home. The investigation determined that Wooters billed for hours of care for the customer, who was his mother’s boyfriend, when he was either not caring for the customer or when the customer was actually in the hospital. On at least one occasion, Wooters even billed for services while he was appearing in court in Marion County on unrelated charges.
This prosecution is part of the third wave of the “Operation Home Alone” initiative announced on June 5, 2014, by United States Attorney Wigginton. The investigation was conducted by the U.S. Department of Health and Human Services, Office of Inspector General, the Federal Bureau of Investigation, and the Illinois State Police, Medicaid Fraud Control Bureau. The case is being prosecuted by Assistant United States Attorney Ranley Killian, and Special Assistant United States Attorney Michael Hallock.
Carjacker Identified Through Stolen IPhone Convicted at TrialRead the Press Release
NEWARK, N.J. – A federal jury in Newark has convicted a carjacker identified after his victim used the “find my iPhone” feature on the phone also stolen during the gunpoint robbery, U.S. Attorney Paul J. Fishman announced.
Lee Caraballo, 28, of Newark, was convicted of both counts in the indictment against him: theft of a motor vehicle by force, violence and intimidation and use of a firearm in furtherance of a crime of violence. Following a three-day trial before U.S. District Esther Salas, the jury deliberated one hour before returning the guilty verdict.
According to documents filed in this case and the evidence at trial:
The government proved that, on Nov. 30, 2012, Lee Caraballo carjacked a Rutgers law student at gunpoint, in the driveway of the student’s home. After stealing the victim’s wallet and cell phone, Caraballo fled in the victim’s Toyota Corolla.
A Roselle Park police officer pulled over Caraballo later that day in a routine traffic stop, during which he was driving his own car. In that car, law enforcement found the victim’s cell phone and car keys as well as various items of clothing the victim later identified.
While Caraballo was in police custody, the carjacking victim located his phone remotely and called the police station. He later identified the defendant.
The carjacking charge carries a maximum potential penalty of 15 years in prison. The firearms charge carries a minimum consecutive term of seven years in prison and a maximum consecutive term of life in prison. Each charge also carries a maximum $250,000 fine. Sentencing is currently scheduled for Feb. 23, 2015.
U.S. Attorney Fishman credited investigators and officers of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; the New Jersey State Police, Newark Police Department and Roselle Park Police Department for the investigation that led to the conviction.
The government is represented Assistant U.S. Attorneys Barry A. Kamar and Adam N. Subervi of the U.S. Attorney’s Office Criminal Division in Newark.
14-402
Defense counsel: Gary Leo Cutler Esq., NewarkCanadian Executive Extradited on Major Fraud Charges Involving a New Jersey Environmental Protection Agency Superfund SiteRead the Press Release
John Bennett, a Canadian national, was extradited Friday from Canada on a charge of participating in a conspiracy to pay kickbacks and commit fraud at the U.S. Environmental Protection Agency (EPA)-designated Superfund site Federal Creosote, located in Manville, New Jersey. He was also charged with a related count for major fraud against the United States related to contracts obtained at the Federal Creosote site, the Department of Justice announced today.
Bennett was the former Chief Executive Officer with Bennett Environmental Inc., a Canadian-based company that treated and disposed of contaminated soil. According to a felony indictment filed in the U.S. District Court for the District of New Jersey on Aug. 31, 2009 Bennett carried out the conspiracy by providing kickbacks to Gordon McDonald, the project manager at the Federal Creosote site, in order to influence the award of sub-contracts at the site and inflate the prices charged to the EPA by the prime contractor. The kickbacks were in the form of money transferred by wire to a co-conspirator’s shell company, lavish cruises for senior officials of the prime contractor, and various entertainment tickets. The department said the conspiracy began at least as early as December 2001 and continued until approximately August 2004.
The clean-up at Federal Creosote is partly funded by the EPA. Under an interagency agreement between the EPA and the Army Corps of Engineers, prime contractors oversaw the removal, treatment and disposal of contaminated soil as well as other operations at the Federal Creosote site.
Bennett arrived in the District of New Jersey, in Newark, on Nov. 14, 2014 and made his initial appearance today in the U.S. District Court for the District of New Jersey in Newark.
“The defendant is charged with thwarting the government’s competitive contracting practices,” said Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division. “This extradition demonstrates our resolve to pursue those who undermine competition. And it is yet another example of our longstanding cooperation with our enforcement colleagues in Canada’s Department of Justice, which helps ensure that those who subvert competition in the United States and elsewhere are brought to justice.”
The fraud conspiracy that Bennett is charged with carries a maximum penalty of five years in prison and a $250,000 fine. The major fraud against the United States charge carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
As a result of the department’s investigation, three companies, including Bennett Environmental Inc., and eight individuals have pleaded guilty. Bennett’s co-conspirator, Gordon McDonald, was convicted on Sept. 30, 2013, on 10 counts, including the two charges pending against Bennett. McDonald was sentenced on March 4, 2014 to a 14-year term of imprisonment.
The investigation was conducted by the Antitrust Division’s New York Field Office, the EPA Office of Inspector General and the Internal Revenue Service Criminal Investigation with assistance from the Antitrust Division’s Foreign Commerce Section and the Criminal Division’s Office of International Affairs. Anyone with information concerning bid rigging, kickbacks, tax offenses, or fraud relating to sub-contracts awarded at the Federal Creosote or Diamond Alkali sites should contact the New York Field Office of the Antitrust Division at 212-335-8000.
- Border Patrol Agent Pleads Guilty to Harboring Undocumented Aliens
Bakersfield Business Owner Pleads Guilty to Structuring over $1 Million in Bank DepositsRead the Press Release
FRESNO, Calif. — Michael Seguine, 63, of Bakersfield, pleaded guilty today to structuring cash deposits, United States Attorney Benjamin B. Wagner announced.
Seguine is the owner of Mike’s Coin & Stamp in Bakersfield. According to court documents, from July 2009 to May 2012, Seguine made a series of cash deposits in amounts less than $10,000 for the purpose of avoiding regulations that require banks to report all deposits over $10,000. The total amount Seguine structured during that time was between $1 million and $2.5 million.
In a related civil forfeiture action, Seguine agreed to forfeit approximately $305,000 to the United States.
This case is the product of an investigation by the Internal Revenue Service-Criminal Investigation and the Bakersfield Police Department. Assistant United States Attorney Michael G. Tierney is prosecuting the case.
Seguine is scheduled to be sentenced by United States District Judge Lawrence J. O’Neill on January 26, 2015. Seguine faces a maximum statutory penalty of up to five years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Arizona Tax Preparer Sentenced to 70 Months Imprisonment for Preparing Fraudulent Tax ReturnsRead the Press Release
PHOENIX – On Nov. 13, 2014, Latoya Nivea Morehead, 33, of Glendale, Ariz., was sentenced by U.S. District Judge James A. Teilborg to a 70-month term of imprisonment. Previously, on April 30, 2014, Morehead had been found guilty by a federal jury of 34 criminal counts, including 5 counts of wire fraud, 26 counts of making false statements to the IRS, and 3 counts of aggravated identity theft. Morehead was also ordered to pay $409,000 in restitution to the federal government.
Evidence at trial showed that Morehead, from 2006 through 2009, prepared and submitted over a hundred tax returns that contained false and fraudulent information. Most of the returns reported untruthful W-2 information, including false earnings and withholdings, which resulted in hundreds of thousands of dollars in fraudulent refunds. In many instances, she fabricated the optimal amount of false earnings and withholdings, which maximized the earned income credit. In some instances, she prepared returns using the identities of taxpayers without their knowledge or consent. Moreheadcommitted these crimes while working as a tax return preparer for another tax-preparation business in the Phoenix area and while doing business as “Latoya’s Tax Service.”
Finally, evidence also showed that Morehead failed to report business income on her own tax returns and lied about expenses associated with her businesses. This created a fictitious “business loss,” which was used to offset her reported tax earnings and thus reduce the amount of taxes she owed.
The investigation in this case was conducted by the Internal Revenue Service Criminal Investigation. The prosecution was handled by Peter Sexton and Walter Perkel, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR- 12-01577-PHX-JAT
RELEASE NUMBER: 2014-063_MoreheadFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.Arizona Man Sentenced for Drug Trafficking ConspiracyRead the Press Release
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Raul Eduardo Rivera de la Torre, 25, of Tucson, Arizona, who was found guilty following a jury trial of conspiracy to possess with intent to distribute, and to distribute, marijuana, was sentenced to 27 months in prison by U.S. District Judge Frank P. Geraci.
Assistant U.S. Attorney Charles Moynihan, who handled the case, stated that the conspiracy began in about March of 2007 and continued through April of 2010. During that time frame, the members of the conspiracy shipped hundreds of pounds of marijuana from Tucson, Arizona, to Cleveland, Ohio, Port Chester, New York, Philadelphia, Pennsylvania, and Rochester, New York. The organization acquired marijuana from a supplier from Mexico. Evidence presented by the Government at trial showed that de la Torre, who is from Mexico and went to high school in the U.S., was responsible for translating between the suppliers, who spoke Spanish, and the members of the conspiracy purchasing the marijuana and shipping it to the Northeast, who spoke English.
One Government witness, who was involved in the conspiracy, detailed that he purchased marijuana from the Mexican supplier and was assisted by the translations of the defendant. The witness further testified that he utilized various companies to ship marijuana packaged in boxes to various locations in Rochester. He also detailed that he later utilized over-land trucking companies to deliver crates full of marijuana to various locations in the Northeastern U.S. Another witness for the Government testified that he was responsible for receiving the shipments of marijuana in Rochester and would then distribute the marijuana once it arrived.
The sentencing is the culmination of an investigation on the part of Special Agents of the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent in Charge, New York Division.Almost Five Years in Custody for Defendant Who Stole Identities of Deceased Children to Evade TaxesRead the Press Release
SAN DIEGO - Lloyd Irving Taylor, formerly a licensed California tax attorney and certified public accountant, was sentenced today by U.S. District Court Judge Michael Anello to 57 months in prison and ordered to pay over $2.2 million in restitution to the Internal Revenue Service (“IRS”).
A jury previously convicted Taylor of 19 felony charges, including aggravated identity theft, false statements to a financial institution, tax evasion, corrupt interference with the IRS, and making false statements on United States passport applications. Taylor has been in custody since his arrest in San Diego in April 2013.
According to evidence presented at trial, Taylor stole the identities of deceased children and used them as aliases to obtain fraudulent passports and other identification documents. He then used the passports (which he obtained from U.S. Embassies throughout Europe) and other fraudulent documents to open and maintain multiple financial accounts so that he could hide his income and assets from the IRS. Taylor also misused the stolen identities to transfer funds between his nominee accounts, and to purchase various assets, such as gold coins, which he used to evade taxes.
Similarly, Taylor fabricated over a dozen fraudulent religious institutions, and opened 31 related bank and investment accounts in the names of these fake churches. Defendant then misused the tax-exempt status of these fake religious institutions to fraudulently claim that his income was not subject to federal taxes. Following a week-long trial in June 2014, the jury deliberated for just 30 minutes before finding the defendant guilty on all counts.
Among the witnesses who testified at trial was the brother of one of the deceased victims whose identity was stolen, as well as a blind elderly woman whose social security number was stolen and misused by the defendant. The jury also saw the $1.6 million worth of gold coins that the defendant had hidden in a storage locker prior to the execution of a search warrant.
Evidence introduced at trial proved that despite working and earning money for over 40 years, Taylor filed federal tax return just seven times. All told, Taylor failed to report approximately $5 million in income, on which he owed the IRS approximately $1.6 million.
U.S. Attorney Laura E. Duffy commented: “Identity theft is a dangerous crime that not only traumatizes the unsuspecting victims and their family members, but also facilitates the commission of further criminal activity. For years, Lloyd Taylor stole the identities of deceased children and travelled internationally to obtain fraudulent identification documents. Far from living up to his obligation to be an officer of the court and trusted financial advisor, Mr. Taylor took advantage of his victims to line his pockets and avoid paying his taxes.”
U.S. Attorney Duffy praised the efforts of the San Diego Regional Fraud Task Force, working cooperatively with the IRS and Department of State, to uncover the defendant’s criminal activities and bring him to justice.
“Mr. Taylor, a tax professional, tried in every conceivable way to avoid paying his taxes—from using the identities of dead children and fake churches to converting income to gold coins,” said IRS Criminal Investigation’s Special Agent in Charge Erick Martinez. “Today’s sentence reinforces our commitment to every American taxpayer to investigate and prosecute those who use the identities of others to evade their tax obligations.”
“The sentencing of Lloyd Taylor brings to a conclusion the multi-agency investigation in which the U.S. Department of State’s Bureau of Diplomatic Security (DS) brought passport fraud investigative experience and a global reach, to bear. DS is committed to protecting the integrity of the most highly sought after travel document in the world – the United States Passport,” said Michael Rohlfs, DS Resident Agent-in-Charge for San Diego.”
DEFENDANT Case Number: 13CR1390-MMA Lloyd Taylor Age: 71 San Diego, California CHARGESCounts 1-3: Title 18, United States Code, Section 1542 – Making a False Statement on a United States Passport Application
Maximum penalties: 10 years custody; $250,000 fine; $100 Special Assessment; 3 year supervised release.Count 4: Title 26, United States Code, Section 7212 – Corrupt Endeavor to Impede and Impair the Due Administration of the Internal Revenue Laws
Maximum penalties: 3 years in prison, a fine up to $250,000, and term of supervised release of not more than 1 year.Counts 5-6: Title 26, United States Code, Section 7201 – Tax Evasion
Maximum penalties: 5 years in prison, a fine of $250,000, and a term of supervised release of not more than 3 years.Counts 7-13: Title 18, United States Code, Section1014 – False Statements to a Federally Insured Financial Institution
Maximum penalties: 30 years in prison, a fine of $1,000,000, and a term of supervised release of 5 years.Counts 14-19: Title 18, United States Code, Section 1028A – Aggravated Identity Theft
INVESTIGATING AGENCY
Maximum penalties: 2 years consecutive to the sentence imposed for the underlying offense.San Diego Regional Fraud Task Force (multi-agency task force comprised of members of the United States Secret Service, the San Diego Police Department, and the San Diego District Attorney’s Office)
Internal Revenue Service – Criminal Investigation
United States Department of State, Office of Diplomatic SecurityAlleged Leader of a Mexican Drug Cartel Extradited to United StatesRead the Press Release
One of the alleged leaders of the Beltran Leyva Organization, a Mexican drug-trafficking cartel responsible for importing multi-ton quantities of cocaine and methamphetamine into the United States, was extradited to the United States from Mexico on Nov. 15, 2014, and will be making an initial appearance this afternoon before U.S. Magistrate Judge Alan Kay of the District of Columbia.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Director Joseph S. Campbell of the FBI’s Criminal Investigative Division, New York Division Special Agent in Charge James J. Hunt of the Drug Enforcement Administration (DEA) and Executive Associate Director Peter T. Edge of U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE HSI) made the announcement.
“Over the past two decades, the Beltran Leyva Cartel has distributed tens of thousands of kilograms of dangerous narcotics and engaged in a campaign of violence that sparked drug wars and jeopardized public safety across North America,” said Assistant Attorney General Caldwell. “Today’s extradition of alleged kingpin Alfredo Beltran Leyva is an important step toward stamping out an organization that has ruined the lives of so many. The Justice Department is committed to working with our international partners to bring the rest of the organization to justice.”
“The arrest and extradition of Alfredo Beltran Leyva represents a significant milestone in combating transnational criminal organizations,” said FBI Assistant Director Campbell. “It is through collaborative efforts with our law enforcement partners that the United States will stem the tide of this continuing threat.”
“For years Alfredo Beltran Leyva, along with his brothers, was responsible for not only smuggling tons of cocaine to the United States, but also for the violence that has plagued the lives of Mexican citizens,” said DEA Special Agent in Charge Hunt. “His extradition to the United States is an example of a commitment to international cooperation and the rule of law.”
“The illegal drugs distributed throughout the United States by the Beltran Levya Cartel ruined countless lives in this country and sowed violence and chaos throughout Mexico,” said HSI Executive Associate Director Edge. “The arrest and extradition of Alfredo Beltran Levya to face justice here for his crimes is a great victory for ICE HSI and our partner agencies.”
Alfredo Beltran Levya, 43, was indicted on Aug. 24, 2012, for international narcotics trafficking conspiracy in connection with his leadership role in theinternational drug-trafficking cartel bearing his family name.
According to a motion for pretrial detention filed by prosecutors, between the early 1990s until his January 2008 arrest by Mexican law enforcement, Beltran Levya allegedly led the Beltran Levya Organization with his brothers Hector Beltran Levya and Arturo Beltran Levya, the latter of whom was killed in a December 2009 shootout with the Mexican army. Since the 1990s, the Beltran Levya Organization, together with the Sinaloa Cartel, allegedly directed a large-scale drug transportation network, shipping multi-ton quantities of cocaine from South America, through Central America and Mexico, and finally into the United States via land, air and sea. The organization also employed “sicarios,” or hitmen, who allegedly carried out hundreds of acts of violence, including murders, kidnappings, tortures and violent collections of drug debts, at the direction of the organization.
Following the January 2008 arrest of Alfredo Beltran Leyva by Mexican law enforcement authorities, the Beltran Leyva Organization severed its relationship with the Sinaloa Cartel, which was blamed for the arrest. This resultedin a violent war between the two drug cartels, and the murder of thousands of citizens in Mexico, including numerous law enforcement officers and officials.
On May 30, 2008, the President added the Beltran Leyva Organization to the Department of Treasury’s Office of Foreign Asset Control’s Specially Designated Nationals and Blocked Persons list pursuant to the Foreign Narcotics Kingpin Designation Act. On Aug. 20, 2009, the President specifically designated Beltran Leyva as a specially designated drug trafficker under the same Kingpin Act.
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
The investigation is led by the FBI’s El Paso Office, in partnership with the DEA’s New York Field Division and HSI’s New York Office, as part of the Organized Crime Drug Enforcement Task Force. This case is being prosecuted by the Criminal Division’s Narcotic and Dangerous Drugs Section, with the assistance of the Criminal Division’s Office of International Affairs. The Justice Department thanks the government of Mexico for their assistance in this extradition.
Adam Winters Sentenced for Extortion of Babcock and Wilcox, Y-12, LLC.Read the Press Release
KNOXVILLE, Tenn. – On Nov. 17, 2014, Adam Winters, 25, of Oneida, Tenn., was sentenced to serve three months in prison as a result of his July 2014 guilty plea to charges involving the extortion of Babcock and Wilcox, Y-12, LLC. Upon his release from prison, Winters will be supervised for one year by U.S. Probation. 17, 2014
In July 2014, Winters pleaded guilty to transmitting communications containing threats to injure the reputation of Babcock and Wilcox, Y-12, LLC., in interstate and foreign commerce, with intent to extort money and other things of value from the corporation. Babcock and Wilcox, Y-12, LLC. (Babcock and Wilcox), is a corporation that manages and operates the Y-12 National Security Complex in Oak Ridge, Tenn.
Winters admitted that he emailed Babcock and Wilcox and attempted to email the Vice President of the United States, regarding copies of slides the he possessed, which contained information he believed would injure the reputation of Babcock and Wilcox. Following the email, he used the Internet and telephone, both of which are transmitted in interstate or foreign commerce, and communicated his threat to injure their reputation through the use of these slides. After making these threats, Winters met with undercover law enforcement agents to exchange the slides for $2,500,000, that he had demanded from Babcock and Wilcox during his extortion attempt. During this exchange meeting, law enforcement officers revealed their identity and arrested him.
This case was investigated by the U.S. Department of Energy, Office of Inspector General. Assistant U.S. Attorney Brooklyn Sawyers represented the United States.
14 November 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
- Jarvis Tolbert, 28, of South Bend, Indiana was sentenced to 60 months imprisonment with 4 years of supervised release after pleading guilty to the felony offense of knowingly or intentionally possessing with the intent to distribute a mixture or substance containing cocaine base over 28 grams. According to documents filed in this case, on February 22, 2014, Tolbert possessed a package containing a white rocklike substance that he believed was crack. Tolbert possessed this item in a hotel room in South Bend, Indiana. It was his intent to sell this substance. This case was the result of an investigation by the Drug Enforcement Administration. This case was prosecuted by Assistant United States Attorney Frank Schaffer.
- Erskine A. Jones, 22, of South Bend, Indiana was sentenced to 27 months imprisonment with 2 years of supervised after pleading guilty to the felony offense of being a felon in possession of a firearm. According to documents filed in this case, Jones had prior felony convictions for robbery (2012) and theft (2013). On December 17, 2013, officers from the South Bend Police Street Crimes Unit were conducting surveillance at an apartment complex in Mishawaka, Indiana. Officers observed Erskine Jones looking out of an apartment window. Officers were given permission to search that apartment. Jones was located in that apartment; while searching the apartment, officers found a Colt revolver hidden in a box of bread sticks in the freezer . Jones admitted during an interview that he knew an individual put the revolver in the freezer and that he had a potential buyer for it. This case was the result of an investigation by South Bend Police and the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Donald Schmid.
- David Rodriguez, 31, of Elkhart, Indiana was sentenced to 46 months imprisonment with 2 years of 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, on May 31, 2014, Rodriguez possessed a firearm in South Bend, Indiana. Police recovered the firearm from a seat on the porch of a neighbor’s house where Rodriguez had been sitting. This case was the result of an investigation by South Bend Police and the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Jesse M. Barrett.
Week in Review – HammondRead the Press Release
Hammond, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEA
- Kathryn Jackson, 29, of Chicago, Illinois pled guilty to the felony offense of identity theft. 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 United States Postal 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.
DISPOSITIONS
- Hudie Y Scott, 30, of Gary, Indiana was sentenced to 70 months imprisonment with 4 years of supervised release after pleading guilty to the felony offense of knowingly and intentionally distributing cocaine base, commonly known as “crack”. According to documents filed in this case, in October 2013, law enforcement agents performed a controlled buy of narcotics which led to the arrests of Scott and Dajon Rowlett. This case was the result of an investigation by Federal Bureau of Investigation. This case was prosecuted by Assistant United States Attorney Jennifer Chang-Adiga.
- Dajon E Rowlett, 32, of Gary, Indiana was sentenced to 51 months imprisonment and 3 years supervised release after pleading guilty to the felony offense of knowingly and intentionally distributing cocaine base, commonly known as “crack”. According to documents filed in this case, in October 2013, law enforcement agents performed a controlled buy of narcotics which led to the arrests of Rowlett and Hudie Y. Scott. This case was the result of an investigation by Federal Bureau of Investigation. This case was prosecuted by Assistant United States Attorney Jennifer Chang-Adiga.
- Jose Alvarez, Jr, 40, of East Chicago, Indiana was sentenced to 70 months imprisonment with 4 years supervised release after pleading guilty to the felony offense of knowingly and intentionally possessing with intent to distribute five hundred (500) grams or more of a mixture or substance containing a detectable amount of cocaine. According to documents filed in this case, in April 2014, law enforcement investigators performed a search of Alvarez’s residence in East Chicago, Indiana. In the premises, packages of marijuana were discovered including one of these packages containing approximately 3610 gross grams and another containing 801 gross grams. Investigators also located cocaine in three different locations within the premises. In the basement, investigators located approximately 1651 gross grams of cocaine in one location and approximately 350 grams of cocaine in another location and another package of 71 grams. This case was the result of an investigation by the Drug Enforcement Administration. This case was prosecuted by Assistant United States Attorney David Nozick.
- Gladys Merriweather, 49, of Michigan City, Indiana was sentenced to 2 years of probation and ordered to pay over $59,000 in restitution after pleading guilty to the felony offense of insurance fraud utilizing the mail. According to documents filed in this case, between April 2006 and May 2009, the defendant participated in an insurance fraud scheme wherein she, along with others, staged automobile accidents in Northwest Indiana and Chicago which resulted in claims and other documents being sent through the United States mail. Merriweather was involved in staged automobile accidents which resulted in a loss of over $59,000 dollars. This case was the result of an investigation by the United States Postal Service. This case was prosecuted by Assistant United States Attorney Toi Houston.
- Tomika Yates, 49, of Grand Prairie, Texas was sentenced to 2 years of probation and ordered to pay over $55,000 in restitution after pleading guilty to the felony offense of conspiracy to commit mail fraud. According to documents filed in this case, between December 2005 and July 2009, multiple defendants were involved in an insurance fraud scheme wherein they staged automobile accidents in Northwest Indiana and Chicago which resulted in claims and other documents being sent through the United States mail. Yates was involved in staged automobile accidents which resulted in a loss of over $55,000 dollars. . This case was the result of an investigation by the United States Postal Service. This case was prosecuted by Assistant United States Attorney Toi Houston.
Week in Review – Fort WayneRead the Press Release
Fort Wayne, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS
- James R. Cougill, 50, of Kendallville, Indiana pled guilty to the felony offense of possession with intent to distribute methamphetamine. The magistrate judge is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the United States Postal Inspection Service, Drug Enforcement Administration, Indiana State Police, Allen County Police Department and the Kendallville Police Department. Sentencing has not been set. This case is being prosecuted by Assistant United States Attorney Lovita Morris King.
- Michael A. Fabini, 35, of Fort Wayne, Indiana pled guilty to the felony offenses of conspiring to distribute and possess with intent to distribute marijuana and engaging in a monetary transaction in property derived from drug trafficking. 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 joint investigation was conducted by the Allen County Police Department Vice and Narcotics Division, the New Haven Police Department, and the FBI Fort Wayne Safe Streets Task Force (a taskforce comprised of FBI agents and officers from the Indiana State Police), Allen County Police Department, and Fort Wayne Police Department. Sentencing has not been set. This case is being prosecuted by Assistant United States Attorney Anthony W. Geller.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
Washington, Pa., Man Sentenced to 12 Years in Prison for Violating Federal Drug and Gun LawsRead the Press Release
PITTSBURGH - A Washington, Pa., resident has been sentenced in federal court to 144 months (12 years) imprisonment followed by five years supervised release on his conviction of violating federal firearms and narcotics laws, United States Attorney David J. Hickton announced today.
United States District Judge Terence F. McVerry imposed the sentence on Eric Everett a/k/a Fifty, 29.
According to information presented to the court, from in and around January 2011 and continuing thereafter to in and around June 2012, Everett conspired with others to distribute and possess with intent to distribute five kilograms or more of cocaine. Additionally, on June 28, 2012, Everett possessed a firearm in furtherance of a drug trafficking crime.
The prosecution of Everett was the result of a long-term investigation that involved wiretaps on cell phones utilized by several members of the conspiracy. At the conclusion of the investigation, 20 defendants (including Everett) were charged in a large-scale cocaine conspiracy that operated between Warren, Ohio, and Washington, Pa. All 20 defendants have since pleaded guilty. The same investigation also resulted in the prosecution of 10 defendants charged in a large-scale heroin conspiracy that operated between Detroit, Michigan, and Washington, Pa. All 10 defendants have likewise pleaded guilty.
Assistant United States Attorneys Charles A. Eberle and Barbara K. Doolittle prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation and the Pennsylvania State Police for the investigation leading to the successful prosecution of Everett.
Utah Pilot Pleads Guilty in Marijuana Trafficking Scheme That Ended in New CastleRead the Press Release
PITTSBURGH - A resident of the State of Utah has pleaded guilty in federal court in Pittsburgh to a charge of possession with intent to distribute a controlled substance, United States Attorney David J. Hickton announced today.
Ken Barton Burrows, 54, pleaded guilty to one count before United States District Judge Terrence F. McVerry.
According to information presented to the court, Burrows was recruited to fly a plane loaded with approximately 242 pounds of marijuana from Woodland Airport in Northern California to the East Coast. Customs and border patrol agents apprehended him when he landed at the New Castle municipal airport.
Judge McVerry scheduled the sentencing for Feb. 20, 2015, at 9 a.m. The law provides for a maximum total sentence of 5 years and up to 40 years, a fine of $5,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Gregory C. Melucci is prosecuting this case on behalf of the government.
Homeland Security Investigations, Customs and Border Protection Air and Marine, along with the Union and Mahoning Township Police Departments and the Pennsylvania State Police conducted the investigation leading to prosecution of Burrows.
U.S. Attorney’s Office Files Suit to Remove Unauthorized Individuals, Structures and Vehicles from Federal Park Land on St. JohnRead the Press Release
St. Thomas, USVI – United States Attorney Ronald W. Sharpe announced today that the United States has filed suit in United States District Court seeking the removal of several individuals from a parcel of property in the Virgin Islands National Park. The United States’ complaint alleges that 16 individuals are unlawfully occupying and living on National Park land, have illegally erected ten structures on the property and have placed 11 vehicles, abandoned appliances, trash, and livestock on the property. The civil complaint further alleges that those individuals have installed unauthorized electrical and water lines to the property and made illegal alterations to a public road. According to the complaint, since the individuals began the unlawful occupation, there have been documented incidents of them harassing park visitors, hikers, and even adjacent landowners using the public road.
As set forth in the complaint, the land was donated to the United States in 1956 for the creation of the Virgin Islands National Park on St. John. The land was donated on the condition that it be used solely for the creation of the National Park. The National Park Service (NPS) is responsible for managing National Parks, including the Virgin Islands National Park. Under federal law, individuals are prohibited from living on or erecting structures on National Park land without authorization from the NPS.
NPS discovered the illegal occupation in 2010. Since that time, NPS engaged in discussions and meetings with the individuals regarding ownership of the property. NPS presented the individuals with substantial evidence demonstrating the United States’ ownership of the property, including its recorded deed, surveys, and reports by licensed surveyors. At the same time, NPS gave the individuals every opportunity to substantiate their claim to ownership. However, the individuals have not produced any evidence to the NPS showing they have a legally cognizable ownership interest in the property. NPS therefore requested that the individuals voluntarily leave, but the individuals have refused.
“The NPS is statutorily obligated the protect Virgin Islands National Park land to ensure that it is open to the public,” U.S. Attorney Sharpe said. “Individuals who take National Park land for themselves destroy the spirit of the Park and prevent the public from enjoying the Park’s natural beauty. This office and the NPS will defend the integrity of the Park, including by removing unauthorized persons, vehicles, and buildings when necessary.”
Assistant U.S. Attorney Noah Sacks is representing the National Park Service in this case.
U.S. Attorney's Office Announces $255,000 Settlement with Livestock Producers for False Claims AllegationsRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced that a settlement has been reached with Carl Trahan, Melissa Trahan, the Estate of Ernie Little, Thad Little, Stacy Little, T.L. Cattle Co., and Little Cattle Co., for $255,000 in damages associated with claims submitted to the U.S. Department of Agriculture’s Farm Service Agency (FSA) to qualify for and receive 2005 Livestock Indemnity Program (LIP) payments following Hurricane Rita.
In 2005, the LIP provided payments to livestock producers for livestock deaths resulting from natural disasters, including Hurricane Rita. In order to qualify for disaster payments, producers were required to submit documentation to the FSA office to prove that the death of the eligible livestock occurred in an eligible parish as a direct result of an eligible hurricane. Beginning in June 2006, the settling parties made statements and claims to the FSA to obtain LIP payments which the United States contends were false or fraudulent.
“The federal government set up a program to help livestock producers who sustained significant losses during natural disasters,” Finley stated. “It is unfortunate that there are people who misuse these programs, but they should understand that such conduct will not be taken lightly in this District.”
The U.S. Department of Agriculture (USDA), Office of Inspector General, investigated the case. Assistant U.S. Attorney Karen J. King and Affirmative Civil Enforcement Investigator Christopher Knighton handled the civil case. The claims resolved by this settlement are allegations only and there has been no determination of liability.
If you witness or have knowledge of any violations of laws and regulations related to USDA programs, contact the OIG Hotline by telephone at (800) 424-9121 or TDD (202) 690-1202, or by email at [email protected].
Two Retailers Sentenced to Four Years in Prison for Food Stamp FraudRead the Press Release
Defendants Received Over $1.1 Million from USDA for Food Stamps Traded for Cash
Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced Abdulmalik Abdulla, age 37, and Ahmed Mohssen, age 54, both of Baltimore, today each to four years in prison, followed by one year of supervised release, for food stamp fraud and wire fraud in connection with a scheme to illegally redeem food stamp benefits in exchange for cash. Judge Bennett also ordered Abdulla and Mohssen, who were convicted on August 8, 2014, after a four day trial, to forfeit and pay restitution of $1,185,583.09.The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William G. Squires, Jr. of the U.S. Department of Agriculture Office of Inspector General, Northeast Region; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
The Supplemental Nutrition Assistance Program (SNAP), previously known as the Food Stamp Program, is administered by the Food and Nutrition Service (FNS) of the United States Department of Agriculture (USDA), together with state agencies. The program funds low-income individuals to allow them to obtain a more nutritious diet. In Maryland, the program provides eligible individuals with an electronic benefit transfer (EBT) card called the Independence Card, which operates like a debit card. Recipients use the EBT card to purchase approved food items from participating retailers.
Retailers must apply to and be approved by FNS to participate in the program. Authorized retailers use a point-of-sale terminal that checks the EBT card information and deducts the cash value of the purchase from the customer’s SNAP benefit balance. SNAP reimbursements are paid to retailers through electronic funds transfers. Retailers bill the government in return for providing approved food items. SNAP retailers, including the defendants, receive instruction regarding the requirements and regulations of the food stamp program, such as that only eligible food items can be exchanged for EBT benefits and that a retailer may never exchange EBT benefits for cash or non-food items.
The evidence presented at the four day trial showed that the defendants, who operated Sam’s NY Grocery, a convenience store on North Milton Street in Baltimore, received over $1.1 million in federal payments for transactions in which they did not provide any food, but split the proceeds with food stamp recipients. According to testimony at trial, the defendants exchanged EBT benefits for cash, typically paying half the value of the EBT benefits in cash and keeping the rest for themselves. The testimony at trial also showed that the defendants accepted food stamp benefits to sell individual cigarettes removed from a pack at a substantial markup. As a result of the unlawful transactions, the defendants obtained more than $1.1 million in EBT deposits for transactions in which the store did not provide food.
In separate cases, the 10 convenience store owners or operators indicted in September 2013 in connection with schemes to illegally redeem food stamp benefits in exchange for cash have pleaded guilty to food stamp fraud and/or wire fraud. Abdullah Aljaradi, age 52, and Ahmed Ayedh Al-Jabrati, age 56, both citizens of Yemen residing in Baltimore, were each sentenced to two years in prison, and ordered to pay restitution of $1.2 million. Jung Kim, age 52, of Ellicott City, Maryland, was sentenced to 20 months in prison, and ordered to forfeit $95,453.50 and pay restitution of $205,000. Amara Cisse, age 51, of Windsor Mill, Maryland, was sentenced to 27 months in prison and ordered to pay restitution of $654,349.24, and his wife, Fanta Keita was sentenced to two months in prison. John Cunningham, age 55, of Baltimore, was sentenced to two years in prison. Retailer Hyung Cho, age 40, was sentenced to 38 months in prison, and his mother Dae Cho, age 67, was sentenced to 18 months in prison. The Chos were also ordered to forfeit $371,439.21 and pay restitution of $1.4 million. Abdo Mohamed Nagi, age 54, a citizen of Yemen residing in Baltimore, and Kim Man Chu, age 39, of Rosedale, Maryland, pleaded guilty and were sentenced to 46 months and 18 months in prison, respectively. Nagi was ordered to forfeit $1.2 million and Chu was ordered to forfeit $834,996 and six firearms along with ammunition.
United States Attorney Rod J. Rosenstein praised the USDA Office of Inspector General and FBI for their work in the investigation. U.S. Attorney Rosenstein expressed appreciation to Secretary Ted Dallas and the Maryland Department of Human Resources, as well as U.S. Citizenship and Immigration Services - Office of Fraud Detection and National Security for their assistance in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys David I Sharfstein and Leo J. Wise, who prosecuted the case.