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13 November 2014
Rutherford Co. Man Pleads Guilty to Securities FraudRead the Press Release
Defendant Stole more than $2 Million from over 30 Victim Investors
CHARLOTTE, N.C. – Chuckie Beaver, 51, of Ellenboro, N.C. appeared before U.S. Magistrate Judge David S. Cayer today and pleaded guilty to one count of securities fraud for defrauding more than 30 investors of over $2 million dollars, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Russell F. Nelson, Special Agent in Charge of the United States Secret Service, Charlotte Field Division joins U.S. Attorney Tompkins in making today’s announcement.
According to filed court documents and today’s plea hearing, from June 2012 to April 2014, Beaver induced over 30 victims to invest in his fraudulent scheme, falsely claiming that their money would be invested in “Best Services, Inc.,” a company owned by Beaver and specializing in the repair of industrial electronic equipment. Court records indicate that Beaver solicited friends, neighbors, and fellow church members to invest with his company, by claiming that his company needed additional capital to purchase materials to complete a large number of outstanding repair orders from major corporations. To further the scheme, court records show that Beaver created and showed his investors bogus documents, including false repair orders indicating significant work activity, fake customer checks, and fake customer emails, giving a false impression he had strong relationships with major corporations.
According court records, Beaver provided his investor victims with promissory note investment contracts, stating that the investors would receive the principal invested plus interest - as high as 100% - within a specified period of time, typically 30 days. Court records indicate that, at the time of investment, Beaver would provide his investor victims a post-dated check for the full amount of the promised investment plus interest. As filed documents show, in most instances, when the investors deposited Beaver’s checks they would be returned for insufficient funds. According to court records, when investor victims questioned Beaver about the returned checks, Beaver made up a number of excuses, and in some instances he was able to lull investors into investing even more money with the promise of even greater returns. Court records indicate that contrary to his claims, Beaver used the investors’ money to pay for personal expenses and to make payments to previous investors, commonly referred to as Ponzi-payments. In total, over the course of the scheme, Beaver defrauded more than 30 individuals from Mecklenburg, Gaston and Cleveland counties of more than $2 million.
Beaver was released on bond following his plea hearing. He faces a maximum prison term of 20 years and a $250,000 fine, or both, and has agreed to pay restitution, the amount of which will be determined by the Court at sentencing. A sentencing date for the defendant has not been set yet.
The investigation was handled by the Secret Service. Assistant United States Attorney Kevin Zolot, of the U.S. Attorney’s Office in Charlotte is handling the prosecution.
Ringleader in Multimillion-Dollar Bank Fraud Scheme Found Guilty in Manhattan Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MAHABUBUZ ZAMAN, a/k/a “Mahabub Zaman,” a/k/a “Faisal Ahmed,” was found guilty yesterday of participating in an elaborate bank fraud scheme which yielded millions of dollars in ill-gotten gains. Following a two-week trial before U.S. District Judge Alison J. Nathan, the jury found ZAMAN, one of the leaders of the scheme, guilty of conspiracy to commit bank fraud, conspiracy to commit identification document fraud, and use of a false passport. As part of the scheme, ZAMAN and his co-conspirators used fake companies, phony identification documents and hundreds of counterfeit checks to withdraw millions of dollars in stolen funds from more than a dozen banks.
Manhattan U.S. Attorney Preet Bharara said: “With the jury’s swift verdict, a 16th defendant, Mahabubuz Zaman, now stands convicted for his role in this multimillion-dollar bank fraud scheme. And we’re all the more close to bringing this case to a just and fitting conclusion, where each and every perpetrator of this fraud is made to answer for his or her crimes.”
According to the Superseding Indictment filed October 7, 2014, other court documents, and the evidence presented at trial:
From approximately 2008 through November 2012, ZAMAN and his co-conspirators engaged in a bank fraud scheme in which they created hundreds of counterfeit checks, deposited those counterfeit checks into bank accounts they had opened in the names of sham companies in order to fraudulently inflate the balances in those accounts, and then withdrew funds from those bank accounts before the financial institutions were able to determine the fraudulent nature of the checks. In addition to the check fraud, the defendant and his co-conspirators also obtained fraudulent mortgages and ran up credit card debt using false identities. The scheme victimized approximately 15 different banks, resulting in millions of dollars in losses to the banks.
As part of the scheme, the conspirators incorporated sham companies and then opened bank accounts in the names of those sham companies. The individuals opening the accounts (the “accountholders”) often used false identities, including names and social security numbers, and presented false identification documents, including false Bangladeshi passports and forged United States visas. The accountholders were generally instructed to make small legitimate deposits at first, so that the banks would make funds immediately available upon future fraudulent deposits.
The defendant and his co-conspirators obtained copies of legitimate checks and then used the payor account information that appeared on those checks to create counterfeit checks made payable to the sham companies they had incorporated as part of the scheme. The accountholders deposited the counterfeit checks into the sham company bank accounts at various banks. The accountholders often made deposits at numerous branches of the same bank on the same day. These deposits often were made on a Thursday or Friday so that the defendant and his co-conspirators could withdraw the illegal proceeds over the weekend when the banks were closed and were less likely to determine that the checks were counterfeit.
Once the defendant and his co-conspirators confirmed that funds from the counterfeit checks were available for withdrawal, the accountholders were directed to withdraw the funds from the counterfeit checks, typically over the weekend. The defendant and his co-conspirators often withdrew the funds from global cash access machines at casinos in Atlantic City, New Jersey, which did not have daily withdrawal limits. The accountholders often used false identification documents, including false Bangladeshi passports and fake United States visas, when making the withdrawals.
ZAMAN was one of the leaders of the scheme. Among other things, he recruited accountholders, directed both accountholders and higher-ranking members of the crew in the scheme’s operations, and collected a large share of the illicit profits. In addition, ZAMAN was primarily responsible for the crew’s fraudulent mortgage operations.
ZAMAN, 42, of Queens, New York, faces a maximum sentence of 30 years in prison for conspiring to commit bank fraud, 15 years in prison for conspiring to commit identification document fraud, and 10 years in prison for using a false passport. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. ZAMAN is scheduled to be sentenced by Judge Nathan on February 27, 2015.
In addition to the verdict yesterday, 15 of ZAMAN’s co-conspirators have previously pled guilty in connection with the bank fraud and fraudulent identity document conspiracy. A chart listing the date of conviction and charges of conviction for each of the 16 convicted defendants is attached. Four charged co-conspirators – Hamid Khan, Akther Rahman, Abdur Razzak, and Khairul Islam – are still at large.
U.S. Attorney Bharara praised the investigative work of ICE HSI. He also thanked United States Citizenship and Immigration Services, Queens County District Attorney’s office, the New Jersey State Police, the New York City Police Department, the New York State Police, the United States Secret Service, and the New York City Taxi and Limousine Commission for their assistance in the matter.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Lisa Korologos and Alexander Wilson are in charge of the prosecution.
Click here to view chart(s)
U.S. v. Mahabubuz Zaman S4 Indictment
RTD Supervisor Appears in Court for Accepting Bribes in Connection with His Official DutiesRead the Press Release
DENVER – Kenneth P. Hardin, age 60, of Aurora, Colorado, was indicted by a federal grand jury last week on charges of accepting bribes, United States Attorney John Walsh, FBI Special Agent in Charge Thomas P. Ravenelle, and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Hardin appeared in court yesterday for his initial appearance before U.S. Magistrate Tafoya, where he was advised of his rights and the charges pending against him.
According to the indictment, Hardin was an employee of the Regional Transportation District in Colorado (“RTD”), holding the position of Senior Manager of RTD’s Civil Rights Division. In that position, Hardin’s duties at RTD included directing and managing the operations of RTD’s Civil Rights Division, which was responsible for furthering civil rights goals through regulatory compliance, complaint investigation, community outreach, and programmatic strategy development. The Disadvantaged Business Enterprise program is one of the programs that fell under the umbrella of RTD’s Civil Rights Division. As the Senior Manager of the Civil Rights Division, Hardin also served as RTD’s Diversity Officer, and his duties included taking a leadership role in developing diversity initiatives. RTD receives money from federal grants.
On or about the dates listed below, Hardin corruptly solicited and accepted money from a person intending to be influenced and rewarded in connection with RTD business involving more than $5,000.
Date
Amount of Bribe
April 30, 2014
$1,100
May 15, 2014
$1,000
June 26, 2014
$1,000
September 15, 2014
$2,000
Hardin was charged with four counts of bribery concerning programs receiving Federal funds each of which carries a penalty of not more than 10 years in federal prison and a fine of up to $250,000.
“Colorado is rightly proud of its long, successful tradition of government free of bribes and corruption,” said U.S. Attorney John Walsh. “When we identify public corruption and bribery, the United States Attorney’s Office and federal law enforcement will pursue it tirelessly and prosecute it forcefully under the law.”
“The charges against Hardin illustrate the FBI’s commitment to investigate officials who use their positions of trust for personal gain,” said FBI Special Agent in Charge Thomas P. Ravenelle. “This type of criminal activity undermines the public’s confidence in government activities that should be fair and transparent. To ensure these matters are fully addressed, we strongly encourage anyone who has information about corrupt activities at any level of government to call the FBI at 888-232-3270.”
“A senior official in government holds a position of trust in the eyes of the public and that trust was violated by accepting bribes,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office. “This successful investigation was due to the cooperative efforts of our law enforcement partners – US Attorney’s Office and the FBI.”
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Pegeen D. Rhyne.
The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.
Pittsburgh-area Man Gets 6-Year Prison Term for Violating Federal Gun and Drug LawsRead the Press Release
PITTSBURGH – Dustin Petry, an Allegheny County resident, was sentenced to 72 months in prison for conspiring to distribute heroin and for possessing a firearm in furtherance of a drug trafficking crime, United States Attorney David J. Hickton announced today.
Petry, 27, was sentenced by United States District Judge David S. Cercone. Judge Cercone also imposed a three-year term of supervised release to follow the prison sentence.
Assistant United States Attorney Craig W. Haller prosecuted this case on behalf of the United States.
The Federal Bureau of Investigation and the Pennsylvania Attorney General’s Office led the multi-agency investigation of this case that also included the Federal Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Moon Township Police Department, the North Fayette Police Department, the Pittsburgh Police Department, the Allegheny County Sheriff’s Office, the Pennsylvania State Police, the McKees Rocks Police Department, the Cranberry Township Police Department, the McKeesport Police Department, and the Wilkinsburg Police Department.
Pittsburgh Man Sentenced to 6 Years in Prison for Conspiring to Distribute HeroinRead the Press Release
PITTSBURGH - A Beechview resident has been sentenced in federal court to 72 months imprisonment, to be followed by six years supervised release, on his conviction of violating federal narcotics laws, United States Attorney David J. Hickton announced today.
United States District Judge Mark R. Hornak imposed the sentence on Brandon L. Johnson, 32.
According to information presented to the court, in November 2011, Johnson conspired with others to distribute and possess with the intent to distribute heroin.
Assistant United States Attorney Troy Rivetti prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Drug Enforcement Administration for the investigation leading to the successful prosecution of Johnson.
Pawtucket Man Sentenced to 8 Years in Federal Prison for Manufacturing and Distributing Meth from Newport Motel RoomRead the Press Release
PROVIDENCE, R.I. – Sean Costigan, 51, of Pawtucket, was sentenced on Wednesday to 96 months in federal prison for manufacturing and distributing methamphetamine. Costigan was arrested in January 2014, when DEA Drug Task Force agents and detectives from the Warwick and Newport Police Departments executed a court authorized search of a Newport motel room rented by Costigan and seized materials being used to manufacture and distribute methamphetamine.
At sentencing, U.S. District Court Judge John J. McConnell, Jr., also ordered Costigan to serve 3 years supervised release upon completion of his prison term. Costigan pleaded guilty in July 2014 to one count of manufacturing methamphetamine and four counts of distribution of methamphetamine.
Costigan’s sentence is announced by United States Attorney Peter F. Neronha; Michael Ferguson, Acting Special Agent in Charge of the DEA’s New England field division; Warwick Police Chief Colonel Stephen M. McCartney; and Newport Police Chief Gary T. Silva.
“Among the panoply of dangerous, indeed, life-threatening illegal drugs, meth may top the list. Meth labs are notorious for exploding without warning, and it has devastating health effects on those who use it,” said United States Attorney Peter F. Neronha. “The defendant here manufactured and sold meth with impunity, without any concern whatsoever for the buyers of his product or those residing literally footsteps away. His lengthy sentence is more than well-deserved. I want to thank all of our law enforcement partners, who worked so diligently to eliminate the threat posed by this defendant.”
“Methamphetamine is a highly addictive and dangerous drug. Clandestine labs used to produce this poison are extremely dangerous, unstable, very flammable, and can contaminate the locations in which they are found,” said NEFD DEA Acting Special Agent in Charge Ferguson. “We are committed to working with our law enforcement partners in combatting this threat and have highly specialized trained DEA agents assigned to the DEA Clandestine Laboratory Enforcement Team (CLET), not only working these types of investigations, but providing training to our state and local first responders.”
At the time of his guilty plea, Costigan admitted to the court that on four occasions between October 25 and December 6, 2013, he sold methamphetamine to a Warwick undercover police officer. Three of the transactions occurred in the parking lot of a hotel in Warwick. The fourth transaction occurred in a hotel room in North Smithfield.According to information presented to the court, on January 16, 2014, DEA and DEA Drug Task Force agents, and Warwick and Newport Police detectives executed a court authorized search of a Newport motel room rented by Costigan. Inside the room, law enforcement discovered materials being used to manufacture and distribution of methamphetamine. Members of the DEA CLET dismantled the operation and seized multiple items associated with a methamphetamine manufacturing operation.
Warwick Deputy Police Chief Michael Babula noted, “The initial investigator on this case was Detective David Verity of the Warwick Police Department, our assigned member to the Drug Task Force sponsored by the DEA. The information was initially obtained by the Warwick Police Special Operations Group. This investigation was continued and brought to completion with the assistance of the task force as a whole. We strongly believe that these multi-agency task forces are the only practical way to deal with multi-jurisdictional drug trafficking. We are particularly pleased that this effort was able to take down a lab manufacturing meth, a drug which has destroyed so many lives, and in many cases, whole communities.”
Costigan has been detained since his arrest on January 16, 2014.
The case was prosecuted by Assistant U.S. Attorney Pamela E. Chin.
The DEA Drug Task Force is comprised of law enforcement agents and officers from the DEA, Rhode Island State Police, and the Cranston, East Providence, Newport, Providence, South Kingstown, Warwick, West Warwick and Woonsocket Police Departments.
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Contact: 401-709-5357
[email protected]Owner of Miami Home Health Company Pleads Guilty for Role in $30 Million Health Care Fraud SchemeRead the Press Release
An owner of a Miami home health care company pleaded guilty today for his role in a $30 million home health Medicare fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement
Ramon Regueira, 66, of Miami, pleaded guilty before U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida to one count of conspiracy to commit health care fraud. Sentencing is scheduled for Jan. 21, 2015.
According to his plea agreement, Regueira was an owner of Nation’s Best Care Home Health Corp. (Nation’s Best), a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries. Regueira admitted that he and his co-conspirators operated Nation’s Best for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary or were not provided.
Specifically, Regueira admitted that he and his co-conspirators paid kickbacks and bribes to patient recruiters who provided patients to Nation’s Best, as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services. Regueira and his co-conspirators then used these prescriptions, POCs and medical certifications to fraudulently bill the Medicare program for unnecessary home health care services.
From January 2007 through November 2012, Nation’s Best submitted approximately $35 million in claims for home health services that were not medically necessary or not provided, and Medicare paid approximately $21 million for these fraudulent claims.
The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Assistant Chief Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers. To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Owner of Miami Home Health Company Pleads Guilty for Role in $30 Million Health Care Fraud SchemeRead the Press Release
An owner of a Miami home health care company pleaded guilty today for his role in a $30 million home health Medicare fraud scheme.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.
Ramon Regueira, 66, of Miami, pleaded guilty before U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida to one count of conspiracy to commit health care fraud. Sentencing is scheduled for Jan. 21, 2015.
According to his plea agreement, Regueira was an owner of Nation’s Best Care Home Health Corp. (Nation’s Best), a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries. Regueira admitted that he and his co-conspirators operated Nation’s Best for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary or were not provided.
Specifically, Regueira admitted that he and his co-conspirators paid kickbacks and bribes to patient recruiters who provided patients to Nation’s Best, as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services. Regueira and his co-conspirators then used these prescriptions, POCs and medical certifications to fraudulently bill the Medicare program for unnecessary home health care services.
From January 2007 through November 2012, Nation’s Best submitted approximately $35 million in claims for home health services that were not medically necessary or not provided, and Medicare paid approximately $21 million for these fraudulent claims.
The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Assistant Chief Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers. To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Oroville Man Indicted for Receiving Child PornographyRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a four-count indictment today against Jan Alan Shafer, 63, of Oroville, charging him with receipt of child pornography, United States Attorney Benjamin B. Wagner announced.
According to court documents, for more than two years, Shafer engaged in conversations of a sexual nature via email and an Internet instant messenger service with an adult who was posing as a 10-year-old boy. During their email exchanges, Shafer received images of child pornography, including sexually explicit images of prepubescent children.
This case is the product of an investigation by the Federal Bureau of Investigation and the Butte County Sheriff’s Office. Assistant United States Attorney Brian A. Fogerty is prosecuting the case.
Shafer was arrested on October 30, 2014, and remains in custody. He is scheduled to be arraigned before U.S. Magistrate Judge Edmund F. Brennan on November 14, 2014.
If convicted, Shafer faces a maximum statutory penalty of 40 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.
Omaha Man Sentenced to 90 Months for Receiving Child PornographyRead the Press Release
United States Attorney Deborah R. Gilg announced that Jonathan M. Vidlak, 22, was sentenced in the United States District Court in Omaha, Nebraska for receiving child pornography. The Honorable John M. Gerrard sentenced Vidlak to ninety (90) months of imprisonment. There is no parole in the federal system. After his release from prison Vidlak will begin a 15 year term of supervised release.
A computer used by Vidlak was observed by law enforcement in October and November 2011 to be offering videos of child pornography on a file sharing network. The videos involved children between the ages of five and ten engaged in sexual acts.
On March 22, 2012, a search warrant was executed at Vidlak’s residence. During an interview with a Douglas County Sheriff Investigator, Vidlak admitted to downloading child pornography on the internet. He admitted searching for child pornography two or three times a week and deleting the images. Although no child pornography was found on the computer, forensic analysis revealed evidence consistent with searching for child pornography. In addition agents had successfully downloaded a partial video of child pornography from Vidlak’s computer as it was being offered to the public through the file sharing program.
This case was brought as a part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This matter was investigated by the Omaha FBI's Cyber Crime Task Force (CCTF), of which the Douglas County Sheriff’s Office, is a partner. The Omaha CCTF is a multi-jurisdictional task force consisting of eleven federal, state and local law enforcement agencies from Nebraska and Iowa. The mission of the Omaha CCTF is to investigate and apprehend high technology criminals and to protect our communities by preventing high technology crime and national security threats involving computers and computer networks. The Omaha CCTF was established on the premise that the capabilities of law enforcement agencies to investigate computer and high technology related crimes are enhanced in a task force setting involving the sharing of resources and expertise.
Ohio Woman Pleads Guilty to Importing Drugs into U.S.Read the Press Release
BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Leeann Corley, 29, of Dayton, Ohio, pleaded guilty to importing 32,767 pills containing methamphetamine, MDMA and BZP into the United States from Canada before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of life in prison, a fine of $10,000,000 or both.
Assistant U.S Attorney Mary Catherine Baumgarten, who is handling the case, stated that on March 3, 2011, the defendant attempted to enter the United States from Canada at the Peace Bridge as a passenger on a Greyhound bus. During a secondary inspection of the bus and its passengers, Corley was sent for a pat-down search after several inconsistencies were found in her statements to Customs and Border Protection Officers. During the search, officers located 33 ziplock bags containing multi-colored pills concealed in a bodysuit that the defendant was wearing.
A forensic analysis determined there were approximately 32,767 tablets containing methamphetamine, 3,4 methylene-dioxymethamphetamine, and benzylpiperazine, all controlled substances.
The plea is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero and Customs and Border Protection, under the direction of Randy Howe, Director of Field Operations.
Sentencing is scheduled for February 25, 2015 at 1:00 p.m. before Judge Arcara.Ohatchee Man Sentenced to 20 Years in Prison for Child ExploitationRead the Press Release
BIRMINGHAM -- A federal judge today sentenced an Ohatchee man to 20 years in prison for receiving, possessing and distributing child pornography, announced U.S. Attorney Joyce White Vance and the Alabama Law Enforcement Agency.
U.S. District Judge Abdul K. Kallon sentenced KENDALL ADAM HESTER, 29, on the child pornography charges. A federal jury convicted Hester in August. He has remained in custody since his conviction. Judge Kallon ordered Hester to remain on supervised release for 20 years following completion of his prison term.
Hester searched the Internet and downloaded child pornography using peer-to-peer computer software, according to court records. In December 2012, law enforcement agents found 342 videos of child pornography on a computer and compact disks at Hester's home. The videos showed graphic sexual acts involving children under age 12, some as young as 2 or 3 years old, and included sadistic sexual acts involving bondage, according court documents.
The Alabama Law Enforcement Agency investigated the case, which Assistant U.S. Attorneys Chinelo Dike-Minor and Daniel J. Fortune prosecuted.
Ocala Man Pleads Guilty to Receipt and Distribution of Child PornographyRead the Press Release
Ocala, Florida – United States Attorney A. Lee Bentley, III announces that Terry Scott Hilliard II (29, Ocala) has pleaded guilty to receipt and distribution of child pornography. He faces a minimum mandatory sentence of 5 years, up to a maximum sentence of 20 years, in federal prison. A sentencing hearing has not yet been set.
According to the plea agreement, Hilliard was arrested by federal agents on July 8, 2014, during the execution of a search warrant at his Ocala residence. The search warrant was executed in connection with an online investigation into persons receiving and distributing images of children engaged in sexually explicit conduct. Hilliard admitted to the agents that he had been receiving and distributing these types of images for at least a year. A review of his email account revealed numerous videos and photographs of children under the age of 12 engaged in sexually explicit conduct.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children via the Internet, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
New York Woman Admits Role in Business Loan Fraud SchemeRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that MARIAME ROBINSON-COWAN, 66, of Yonkers, N.Y., waived her right to indictment and pleaded guilty yesterday in New Haven federal court to one count of conspriacy related to her participation in an advance fee fraud scheme.
According to court documents and statements made in court, between approximately March 2010 and October 2014, a co-conspirator of ROBINSON-COWAN’s operated Jalin Realty Capital Advisors, LLC, (Jalin) and American Capital Holdings, LLC, (ACH). Using these businesses, the co-conspirator defrauded individuals, including Connecticut residents, who wired funds to him in anticipation of receiving large business loans. The upfront fees were alternately described as “application fees,” “collateral fees” or “commitment fees.” The victims were promised a refund of the upfront fees if their loan transactions were not completed.
In order to convince victim-borrowers that the loans were legitimate and Jalin and ACH had successfully secured loans in the past, the co-conspirator provided victims and potential victims ROBINSON-COWAN’s name and phone number and told them that they could contact ROBINSON-COWAN for a reference. ROBINSON-COWAN then falsely represented to victims and potential victims that she had, in fact, received funding from her co-conspirator for a construction loan, and that she had successfully done a project financed with her co-conspirator and Jalin.
Through this scheme, the government believes that more than 20 individuals provided ROBINSON-COWAN’s co-conspirator with a total of more than $3 million in advance fees for business loans that were never provided. A few individuals received a partial refund of advance fees they had provided, but the refunds were made using fees that had been paid by other victims.
ROBINSON-COWAN is scheduled to be sentenced by U.S. District Judge Janet Bond Arterton on May 20, 2015, at which time she faces a maximum term of imprisonment of five years.
This matter is being investigated by the Federal Bureau of Investigation and the Ansonia Police Department, and is being prosecuted by Assistant U.S. Attorneys Anthony Kaplan and Michael McGarry.
Citizens with information that may be helpful to this ongoing investigation are encouraged to contact the FBI at (203) 777-6311.
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(203) 821-3722 [email protected]New York Man Charged with Identity Theft and Tax SchemeRead the Press Release
PHILADELPHIA - Brandon Morrison, 25, of New York City, was arraigned today on an indictment charging him with five counts of wire fraud, five counts of making a false claim against the United States, and four counts of identity theft, announced United States Attorney Zane David Memeger. The indictment alleges that from January 2011 to May 2011, Morrison sold the stolen identities of a number of people for use in fraudulently prepared tax returns which directed that the tax refund checks be deposited to bank accounts opened and controlled by a co-conspirator.
If convicted the defendant faces a maximum possible sentence of 145 years of imprisonment, three years of supervised release, a $3,500,000 fine, and a special assessment of $1,400.
The case was investigated by the Internal Revenue Service and the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Laurie Magid.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Click here to read the indictment.
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PATTY HARTMAN, Media Contact, 215-861-8525New Orleans Man, Corey D. Wilson, Sentenced to 10 Years in Heroin Distribution ConspiracyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that COREY D. WILSON, age 37, of New Orleans, was sentenced today for his role in a conspiracy to possess with the intent to distribute 100 grams or more of heroin.
U.S. District Judge Jane Triche Milazzo sentenced WILSON to 124 months imprisonment, 8 years of supervised release, and a special assessment of $100.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration, a High Intensity Drug Trafficking Area group (“HIDTA group”) consisting of DEA in New Orleans and Houston, NOPD and ATF agents, the West Bank Major Crimes Task Force, the Louisiana State Police, and the United States Postal Inspection Service in investigating this matter. This was an Organized Crime Drug Enforcement Task Force case. Assistant U.S. Attorneys Sharan Lieberman and Collin Sims are in charge of the prosecution.
New Martinsville Man Sentenced for Possession of Child PornographyRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistWHEELING, WEST VIRGINIA – Jonathan Harman, 26, of New Martinsville, West Virginia, was sentenced for possession of child pornography, United States Attorney William J. Ihlenfeld, II, announced today.
An investigation by the Federal Bureau of Investigation revealed that Harman utilized the internet and peer-to-peer file sharing networks to access and download images and videos containing child pornography.
Harman pled guilty in July 2014 to a criminal Information charging him with one count of "Possession of Child Pornography," including at least one image involving a prepubescent minor and a minor who had not attained 12 years of age. He was sentenced to five years of probation.
Assistant U.S. Attorney Steve Vogrin prosecuted the case on behalf of the government.
Chief U.S. District Judge John Preston Bailey presided.
New Haven Drug Trafficker Sentenced to 10 Years in Federal PrisonRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ROMELL BROWN, 36, of New Haven, was sentenced today by Senior U.S. District Judge Warren W. Eginton in Bridgeport to 120 months of imprisonment, followed by five years of supervised release, for his role in a gang-related narcotics distribution ring.
According to court documents and statements made in court, this matter stems from an investigation conducted by the FBI New Haven Safe Streets Task Force and the New Haven Police Department into drug distribution and related violence allegedly being committed by members and associates of the Grape Street Crips in New Haven. The investigation revealed that BROWN, who is not a member of the Grape Street Crips, regularly supplied cocaine to the leader of organization, Donald Ogman, who then converted the cocaine into crack for sale. At times, BROWN also sold crack cocaine.
BROWN has been detained since his arrest on March 29, 2012. On March 11, 2014, he pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, cocaine base (“crack cocaine”).
A total of 18 individuals were charged as a result of this investigation, and all have pleaded guilty. Ogman and several other defendants await sentencing.
This matter is being investigated by the FBI’s New Haven Safe Streets Task Force, which includes the New Haven, Hamden and Milford Police Departments, the Connecticut State Police and the State of Connecticut Department of Correction. The investigation has been assisted by the U.S. Marshals Service and the Westerly (R.I.) Police Department.
This case is being prosecuted by Assistant U.S. Attorneys Anthony E. Kaplan and H. Gordon Hall.
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Tom Carson
(203) 821-3722 [email protected]New Haven Drug Dealer Sentenced to More Than 5 Years in Federal PrisonRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that ANTHONY MOORE, also known as “Freak,” 33, of New Haven, was sentenced yesterday by U.S. District Judge Robert N. Chatigny in Hartford to 63 months of imprisonment, followed by four years of supervised release, for distributing crack and powder cocaine.
According to court documents and statements made in court, this matter stems from “Operation Bloodline,” a joint law enforcement investigation targeting narcotics trafficking and gang violence in the Dwight-Kensington and Fair Haven sections of New Haven. Led by the DEA New Haven Task Force and the New Haven and Hamden Police Departments, the year-long investigation included the use of court-authorized wiretaps on numerous telephones, extensive physical surveillance, controlled purchases of narcotics, execution of search warrants, and seizures of narcotics and firearms. More than 100 individuals were charged as a result of the investigation.
MOORE was arrested on May 22, 2012, and is detained. On December 10, 2013, he pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, 28 grams or more of cocaine base (“crack cocaine”).
MOORE’s criminal history includes three prior felony drug convictions.
This matter was investigated by the Drug Enforcement Administration’s New Haven Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Haven, Hamden, West Haven, North Haven, Branford, Ansonia and Meriden Police Departments. The United States Marshals Service, the Connecticut State Police, the Connecticut Department of Correction, Parole and Community Services and the Milford, Hartford, New Britain, North Branford and Stratford Police Departments provided valuable assistance to the investigation.
This case is being prosecuted by Assistant U.S. Attorneys S. Dave Vatti and Marc Silverman.
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(203) 821-3722 [email protected]Native of El Salvador Charged with Illegal ReentryRead the Press Release
Carlos I. Cruz-Aguilar, a/k/a “Carlos I. Cruz,” 42, of Philadelphia, PA, was charged today by Indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about February 7, 2014, Cruz-Aguilar, an alien, and native and citizen of El Salvador, was found in the United States after having been deported from the United States on or about September 22, 2004.
If convicted the defendant faces a maximum possible sentence of 20 years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney Terri Marinari.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Click here to view the indictment.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Monessen Man Sentenced to Probation with Home Detention for $50K Fraud SchemeRead the Press Release
PITTSBURGH - A resident of Westmoreland County was sentenced yesterday in federal court to three years probation and six months home detention on his conviction of conspiracy, United States Attorney David J. Hickton announced today.
United States District Judge Gustave Diamond imposed the sentence on William Thomas Holiday, III, 27, of Monessen, Pennsylvania.
According to the information presented to the court, in 2012 Holiday and others used victim identities to obtain unauthorized Discover credit cards which were later used to purchase merchandise at department stores, or to obtain cash at ATMs in Western Pennsylvania. Losses from the conspiracy exceeded $50,000.
Assistant United States Attorney Gregory C. Melucci prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Western Pennsylvania Financial Crimes Task Force for conducting the investigation that led to the successful prosecution of Holiday. The WPFCTF was established as a collaborative, multi-agency effort to effectively combat financial crimes, including identity fraud, in Western Pennsylvania. Partnering in this effort are the United States Attorney's Office, the United States Secret Service, the United States Postal Inspection Service, the Department of Homeland Security, the Allegheny County District Attorney's Office, the Allegheny County Police Department, the City of Pittsburgh Bureau of Police and the Pennsylvania State Police.
Missouri Man Sentenced to 13 YearsFor Robbing Bank in Shawnee, Kan.Read the Press Release
KANSAS CITY, KAN. - A Missouri man was sentenced Wednesday to 13 years and a month in federal prison for a robbery at a bank in Shawnee, Kan., U.S. Attorney Barry Grissom said.
Scott Thario, 22, Lee’s Summit, Mo., pleaded guilty to one count of bank robbery and one count of unlawful possession of a firearm in furtherance of a crime of violence.
A grand jury indictment filed in December 2013 alleged that on Dec. 16, 2013, Thario robbed Intrust Bank at 19501 West 65th Terrace in Shawnee, Kan. The indictment alleged he was carrying a short-barreled shotgun during the robbery.
Grissom commended the Shawnee Police Department, the FBI and Assistant U.S. Attorney David Zabel for their work on the case.
Member of Organized Cybercrime Ring Responsible for $50 Million in Online Identity Theft Sentenced to 115 Months in PrisonRead the Press Release
A Georgia man who purchased stolen credit card data and other personal information through the identity theft and credit card fraud ring known as “Carder.su” was sentenced today to serve 115 months in federal prison. He was further ordered to pay $50.8 million in restitution.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Assistant Special Agent in Charge Michael Harris of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE HSI) in Las Vegas made the announcement. U.S. District Judge Andrew P. Gordon of the District of Nevada imposed the sentence.
“Cyber thieves created a real criminal organization through the virtual world of the Internet, stealing credit card data and relying on technology, perceived anonymity, and international borders to evade law enforcement,” said Assistant Attorney General Caldwell. “Cameron Harrison made a living by using that stolen financial information.. Applying time-honored techniques from mob and gang prosecutions to this new generation of cybercriminals, we were able to infiltrate and bring down the Carder.su ring.”
“The financial toll exacted by identity theft and credit card fraud can be crippling to victims both financially and emotionally,” said U.S. Attorney Bogden. “These are far from victimless crimes and the members of this organization were responsible for the theft of over $50 million. We are working diligently with our law enforcement partners to ensure that the people who commit these high-tech crimes are put out of business.”
“This significant sentence is entirely fitting given that this defendant’s actions and those of the larger criminal organization harmed countless innocent Americans and seriously compromised our financial system,” said Homeland Security Investigations Executive Associate Director Peter T. Edge. “Criminals like this defendant who believe they can elude detection by hiding behind their computer screens here and overseas are discovering that cyberspace affords no refuge from American justice. HSI will continue to work closely with its law enforcement partners to track down these violators and see that they face the full weight of the law.”
Cameron Harrison, aka “Kilobit,” 28, of Augusta, Georgia, admitted at his guilty plea hearing that he became associated with the Carder.su organization in June 2008. According to Harrison’s admissions, Carder.su was an Internet-based, international criminal enterprise whose members trafficked in compromised credit card account data and counterfeit identifications and committed money laundering, narcotics trafficking and computer crimes. Harrison admitted that the group tried to protect the anonymity and the security of the enterprise from both rival organizations and law enforcement. For example, members communicated through various secure and encypted forums, such as chatrooms, private messaging systems, encrypted email, proxies and encypted virtual private networks. Gaining membership in the group required the recommendation of two current members in good standing.
Harrison admitted that he purchased compromised credit card account data and other personal identifying information from fellow Carder.su members. He further admitted to possessing over 260 compromised credit and debit card numbers, which were recovered from his computer and email accounts following his arrest.
Harrison was identified when he purchased a counterfeit Georgia driver’s license from an undercover special agent through the Carder.su network. During interactions with the undercover special agent, Harrison admitted to having been a vendor of counterfeit identifications in the defunct cyberfraud organization “ShadowCrew.”
Fifty-five individuals were charged in four separate indictments in Operation Open Market, which targeted the Carder.su organization. To date, 26 individuals have been convicted and the rest are either fugitives or are pending trial. Harrison pleaded guilty in April 2014 to participating in a racketeer influenced corrupt organization, conspiracy to engage in a racketeer influenced and corrupt organization, and trafficking in and production of false identification documents.
The cases were investigated by HSI and the U.S. Secret Service, and are being prosecuted by Trial Attorney Jonathan Ophardt of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Kimberly M. Frayn and Andrew W. Duncan of the District of Nevada.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov/.
Mechanicville Man Pleads Guilty to Production of Child PornographyRead the Press Release
ALBANY, NEW YORK – ROBERT V. MCLAUGHLIN, age 57, of Mechanicville, New York, pled guilty today in Albany before United States District Judge Mae A. D’Agostino to two counts of production of child pornography, announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation.
McLAUGHLIN faces at least15 years and up to 30 years of imprisonment on each count, as well as term of supervised release of at least 5 years and up to life. He also faces a maximum fine of $250,000 and mandatory registration as a sex offender. McLAUGHLIN will be sentenced in Albany, New York on March 12, 2015.
As part of his guilty plea, McLAUGHLIN admitted that between 2012 and 2014 he engaged in sexually explicit conduct with two young girls for the purpose of producing visual depictions of that abuse, and that he produced such depictions.
This case was investigated by the New York State Police and the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Lisa M. Fletcher and Special Assistant United States Attorney Amanda W. Cox.
Mcdowell County Woman Pleads Guilty in Federal Court to Filing Fraudulent Water Quality ReportsRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced that Bonita Witt-Hird, 60, of Thorpe (McDowell County) West Virginia, pled guilty today in federal court in Charleston to filing fraudulent water quality reports.
Witt-Hird was formerly employed as the office manager for Richmorr Associates, Inc., an environmental engineering firm in Elkview, West Virginia. Richmorr provides water sampling services to wastewater treatment plants throughout West Virginia. Wastewater plants are required by state and federal law to sample wastewater discharges. The results are submitted to the West Virginia Department of Environmental Protection (WVDEP). WVDEP reviews the results to ensure compliance with water quality standards. In the event of non-compliance, WVDEP may levy fines or, in extreme cases, shut down the wastewater treatment plant.From April of 2012 to June of 2013, Witt-Hird filed approximately 80 false reports with the WVDEP. These false reports made it appear that current water quality sampling had been performed for the wastewater plants when, in fact, the test results had been copied from previous years.
Witt-Hird previously plead guilty on September 26, 2013 to obstructing an IRS investigation and is currently imprisoned on the sentence imposed for that offense. For the fraudulent water quality report offense, Witt-Hird faces a maximum penalty of two years imprisonment, and a fine of up to $250,000. She is scheduled to be sentenced on January 5, 2015.
The investigation was conducted by the Environmental Protection Agency, Criminal Investigation Division, the WVDEP and the Federal Bureau of Investigation. Assistant United States Attorney Erik S. Goes is in charge of the prosecution.
McLaughlin Woman Charged with Assault Resulting in Serious Bodily Injury to A ChildRead the Press Release
United States Attorney Brendan V. Johnson announced that a McLaughlin, South Dakota, woman has been indicted by a federal grand jury for Assault Resulting in Serious Bodily Injury to a Child.
Makayla Kills In Water, age 20, was indicted on October 15, 2014. She appeared before U.S. Magistrate Judge William D. Gerdes on November 6, 2014, and pled not guilty to the Indictment. The maximum penalty upon conviction is up to life in custody and/or a $250,000 fine, 5 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about September 20, 2014, Kills In Water unlawfully assaulted a child who had not attained the age of 18 years old, and said assault resulted in serious bodily injury.
The charge is merely an accusation and Kills In Water is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Kills In Water was released on bond. A trial date has been set for December 2, 2014.
Many Resident Pleads Guilty to Possession with Intent to Distribute Cocaine BaseRead the Press Release
SHREVEPORT, La. –United States Attorney Stephanie A. Finley announced today that a Many resident pleaded guilty to possession with intent to distribute crack cocaine in Sabine Parish.
Cassius L. Medlock, 32, of Many, La., pleaded guilty before U.S. District Judge Elizabeth E. Foote, to one count of possession with intent to distribute cocaine base. Medlock was stopped on August 14, 2014, for speeding and after searching the vehicle, officers observed more than 193 grams of cocaine base and marijuana in the vehicle he was driving. Six children were also present in the vehicle.Medlock faces five to 40 years in prison, four to five years of supervised release and a $5 million fine. A sentencing date of March 5, 2015 was set.
The DEA and the Sabine Parish Sheriff’s Office investigated the case. Assistant U.S. Attorney Seth Reeg is prosecuting the case.
Man who Operated Reno Consulting Firm Pleads Guilty to Failure to Pay $100,000 in Employment Taxes to IRSRead the Press Release
RENO, Nev. – Michael Stickler, 54, of Reno, pleaded guilty today before U.S. District Judge Larry R. Hicks to one count of willful failure to collect or pay employment and Federal Insurance Contribution Act (FICA) taxes to the IRS, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.
According to Stickler’s plea agreement, he owned and operated a company in Reno called Faith Based Solutions from 1999 to 2009. Stickler collected and withheld employment and FICA taxes from his employees’ wages, but failed to pay them over to the IRS. Stickler pleaded guilty to failing to pay $17,389.25 in employment and FICA taxes for the fourth quarter of tax year 2007, but the plea agreement states that Stickler also admitted to willfully failing to pay over employment and FICA taxes to the IRS for other periods during the tax years 2006 through 2010, and that the total tax loss that can be used for sentencing purposes is $100,899.90.
In a separately filed federal case, Stickler was convicted by a jury on March 24 of theft of public money. The evidence presented to the jury in that case was that in 2007, Stickler’s company, Faith Based Solutions, received $500,000 in federal grant money to teach non-profit organizations how to apply for federal government grants. Stickler drew down all of the grant funds in the first seven months of the grant period, and instead of distributing the money to sub-grantees, he put it in accounts that he controlled and used it to pay large salaries to himself and family members, to take elaborate vacations, and for other items that were not approved by the grant.Sentencing in both cases will be on Feb. 9, 2015, at 9:00 a.m. before U.S. District Judge Miranda M. Du.
The cases were investigated by IRS Criminal Investigation and the U.S. Department of Health and Human Services Office of Inspector General. They are being prosecuted by Assistant U.S. Attorney Carla B. Higginbotham.Los Altos Investment Manager Indicted for Securities and Mail FraudRead the Press Release
SAN JOSE – A federal grand jury in San Jose returned a twenty-nine count indictment charging a Los Altos investment manager with securities and mail fraud, relating to a multi-million dollar investment scheme, announced United States Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson, and Special Agent in Charge Kari Overson, Small Business Administration’s Office of Inspector General.
According to the indictment, which was unsealed yesterday, Mark Feathers is named as the sole defendant in all counts, including 17 counts of securities fraud and 12 counts of mail fraud between 2009 and 2012.
The indictment alleges that Feathers, 51, of Los Altos, Calif. was the founder, CEO, and a director of Small Business Capital Corporation (SBCC), a privately-held California corporation formed in 2004 with its principal place of business in Los Altos. SBCC was the sole manager of three investment funds that were marketed as investing in loans secured by first deeds of trust on commercial and income-producing residential real estate.
According to the indictment, Feathers, raised more than $50 million from over 250 investors through the offer and sale of securities in the form of membership interests in investment funds. The defendant and SBCC represented to prospective investors that the investment funds would pay “Member Returns” of at least 7.5% from profits generated by the investment funds' mortgage loan portfolios. However, by June 2012, as a result of his fraudulent scheme, Feathers had allegedly booked over $5 million in unsecured loans from the investments funds to his management company, paid returns to investors in excess of net profits of the investment funds, a “Ponzi” scheme in which the returns were partially funded with money from new investors, and in the process, diverted approximately $2 million to his own personal benefit.
According to the indictment, despite owing a fiduciary duty to the investment funds’ investors, the defendant failed to disclose significant conflicts of interest arising from causing the investment funds to transfer over $7 million to SBCC so it could pay its expenses, and recording a majority these transfers as assets of the investment funds. In addition, the defendant sent regular newsletters to investors reassuring them that the funds were making loans secured by first and second deeds of trust and that all loans were performing. However, as alleged in the indictment, the investment funds had unsecured loans to SBCC, these loans were not generating returns, and the investment funds themselves were not generating returns as represented in the Offering Documents or the subsequent account statements transmitted to investors.
The defendant made his initial appearance in federal court in San Jose yesterday before the Honorable Judge Paul S. Grewal, United States Magistrate Court Judge, who unsealed the indictment. The defendant was released on a $250,000 bond and subject to various terms and conditions. His next scheduled appearance is on Wednesday, Nov. 19, 2014, at 1:30 p.m., for status and further setting before Judge Grewal in San Jose.
The maximum statutory penalty for each count of securities fraud is thirty years imprisonment, a fine of $1,000,000 or twice the amount of gain or loss, whichever is greater, five years of supervised release, and restitution if appropriate. The maximum statutory penalty for each count of mail fraud is twenty years imprisonment, a fine of $250,000 or twice the amount of gain or loss, whichever is greater, and restitution if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Timothy J. Lucey is the Assistant United States Attorney who is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation by the FBI in coordination from the Small Business Administration’s Office of Inspector General and with substantial assistance from the Securities Exchange Commission’s Los Angeles Regional Office.
(Feathers indictment )
Loomis Armored Transport Drivers Arrested in Plot to Steal More Than $1 Million Being Transported for Federally Insured BankRead the Press Release
LOS ANGELES – Two armored truck drivers for Loomis were arrested this morning on federal charges related to a scheme in which they stole more than $1 million in cash, part of a shipment that was being transported for Bank of America
Cesar Yanez, 37, of Fontana, and Aldo Esquivel Vega, 28, of Pomona, were arrested this morning without incident by special agents with the FBI and officers with the Los Angeles Police Department. In relation to search warrants executed this morning, agents found approximately $85,000 in cash at the home of Yanez.
A third person involved in the scheme, Jovita Medina Guzman, 39, of San Bernardino, was also arrested this morning for helping her co-defendants hide and disperse the stolen funds and for being an accessory after the fact.
All three defendants are expected to be arraigned on a four-count indictment this afternoon in United States District Court.
The indictment, which was returned by a federal grand jury on November 7 and unsealed this morning, alleges that Yanez and Vega, while employed by Loomis on June 27, were transporting a multi-million dollar shipment of cash for Bank of America when they stopped in a parking lot on West Adams Boulevard. Vega electronically opened the rear doors of the armored car, which allowed Yanez to access the cash storage area of the vehicle. Yanez removed $1,086,000 in cash from the armored car and placed it into a trash can that had been left in the parking by an as-yet-unidentified person, who later picked up the trash can and recovered the stolen money. Later, Guzman allegedly delivered some of the stolen money to Vega.
Yanez and Vega are each charged with conspiracy to commit bank larceny and bank larceny. Additionally, Yanez and Guzman are charged with Possession of Bank Larceny Proceeds, and Guzman is charged as an accessory after the fact to hinder and prevent her co-defendants’ apprehension, trial, and punishment.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
If they are convicted of the offenses alleged in the indictment, Yanez would face a statutory maximum sentence of 25 years in federal prison; Vega would face up to 15 years; and Guzman could be sentenced to as much as 15 years in custody. Additionally, each of the defendants could be ordered to pay fines of as much as two times the loss suffered by Bank of America.
The investigation into the theft of bank funds was conducted by the Federal Bureau of Investigation and the Los Angeles Police Department.
Release No. 14-151
Leader of Drug Distribution Network Sentenced to 108 Months in PrisonRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistWHEELING, WEST VIRGINIA – Richard L. Baron, 52, of Triadelphia, West Virginia, the leader of a prescription painkiller, heroin, and cocaine distribution network, was sentenced to 108 months in prison, United States Attorney William J. Ihlenfeld, II, announced today.
Sophisticated surveillance techniques employed by U.S. Drug Enforcement Administration and the Ohio Valley Drug and Violent Crime Task Force, a HIDTA-funded initiative, revealed that large quantities of prescription pills were obtained from Columbus, Ohio, Baltimore, Maryland, Detroit, Michigan, and California. Baron then orchestrated a complex collection of associates to redistribute the drugs. The distribution network focused primarily on prescription pills, but also involved heroin and cocaine.
Baron, also known as "Unc" or "Class,” admitted his role is distributing oxycodone, heroin, and cocaine when he pled guilty in October 2012 to one count of "Conspiracy to Distribute Schedule I and II Controlled Substances." As part of his sentence, Baron will also forfeit more than $10,0000.00. The 108 month sentence will be served consecutive to a twelve month sentence imposed in a supervised release revocation hearing.
Additionally, Douglas Lee Saunders, 55, of Columbus, Ohio, was sentenced to five years of probation. Saunders supplied the distribution network with at least 297 oxycodone pills.
Twenty-two others were convicted as part of the Baron case, including Robert Paige Patterson, Samneisha Walker, Letitia Kadija Tambi, Deandre Scott Estelle, Edward Barry Davis, Robin E. Rusk, Brian Nicholas Barber, Gary Jospeh Hack, Elliot Ross Fitzsimmons, Chelsea Aleece Radcliffe, Thomas James Kunik, Ashlie Noel Taylor, Jenny E. Kota, Richard Fischer, Kevin R. Mills, James Nathan Barcus, Jonathan Allen Wildey, Reuben Jule Rouse, Teo Marcero Coleman, Jarrett James Robinson, Richard Edward Lang, Jr., and Craig A. Booker.
Assistant U.S. Attorney Randy Bernard prosecuted the cases on behalf of the government.
Chief U.S. District Judge John Preston Bailey presided.
Lawyer Sentenced in Manhattan Federal Court to Five Years in Prison in Connection with Leadership of Asylum Fraud RingRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that FENG LING LIU, a/k/a Karen, the attorney and owner of law firms in the Chinatown neighborhood of Manhattan, was sentenced in Manhattan federal court to five years in prison for her leadership of an immigration fraud conspiracy. Following a four-week trial in March and April 2014, a jury convicted LIU of participating in a conspiracy to commit immigration fraud between approximately 2007 and approximately 2012. LIU was sentenced yesterday by United States District Judge Ronnie Abrams.
Manhattan U.S. Attorney Preet Bharara said: “I would like to thank our law enforcement partners at the Federal Bureau of Investigation and U.S. Citizenship and Immigration Services for their hard work on this case.”
According to the Indictment filed in Manhattan federal court, public court filings, and the evidence admitted at trial:
LIU, a lawyer, operated two law firms – the Law Offices of Feng Ling Liu and Moslemi and Associates, Inc. – both of which assisted aliens from China in obtaining asylum status through fraud. LIU and her employees profited by creating and submitting asylum applications containing false stories of persecution purportedly suffered by alien applicants. LIU and her employees coached applicants to lie to immigration authorities and assisted applicants in obtaining and/or creating false documentation to support the fraudulent claims. In total, the two law firms filed thousands of fraudulent applications and earned tens of millions of dollars from their fraud.
In addition to the prison term, LIU, 48, of New York, New York, was ordered to pay a $12,500 fine and a $100 special assessment fee, and to forfeit $7,245,000.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation, and thanked the New York Asylum Office of the Department of Homeland Security, U.S. Citizenship and Immigration Services.
The case is being handled by the Office’s Organized Crime Unit. Assistant U.S. Attorneys Rebecca Mermelstein, Patrick Egan, and Robert Boone are in charge of the prosecution. Assistant U.S. Attorney Andrew Adams is in charge of the forfeiture.
Lantry Man Sentenced for Simple Assault of A MinorRead the Press Release
United States Attorney Brendan V. Johnson announced that a Lantry, South Dakota, man convicted of Simple Assault of a Minor, was sentenced on November 12, 2014, by U.S. Magistrate Judge Mark A. Moreno.
Robert Smith, age 53, was sentenced to 3 months in custody, 1 year of supervised release, and a $25 special assessment to the Federal Crime Victims Fund.
Smith was indicted for Sexual Contact with a Minor by a federal grand jury on September 17, 2013. He pled guilty to Simple Assault of a Minor on September 2, 2014.
The conviction arose from an incident that occurred between May 30 and July 27, 2012, near Lantry, when the victim, a minor between the ages of 12 and 16 years old, was at Smith’s home. At the time, Smith engaged in intentional, offensive touching of the victim and committed a simple assault on the victim.
This case was investigated by the Federal Bureau of Investigation, the South Dakota Department of Social Services, and the Cheyenne River Sioux Tribe Law Enforcement Division. Assistant U.S. Attorney Mikal Hanson prosecuted the case.
Smith was ordered to report to the U.S. Marshals Service on January 2, 2015, to begin serving his sentence.
La Vista Man Sentenced for Making False Statements in an Application for a Position with the United States Air Force Weather ServiceRead the Press Release
United States Attorney Deborah R. Gilg announced today that Franklin Ansu, age 31 of La Vista, Nebraska, was sentenced for his conviction for making false statements in an application for a position with the United States Air Force Weather Agency. Senior United States Judge Lyle E. Strom sentenced Ansu to three years of probation and ordered him to pay a fine in the amount of $1,000. Ansu was further ordered to perform 120 hours of community service while on probation.
Ansu, a naturalized United States citizen, served in the United States Air Force. After his discharge from the Air Force, he obtained a civilian position with the United States Air Force Weather Agency at Offutt Air Force Base. Ansu completed a required SF-86 Questionnaire form for each position which described his background and prior work experience. His answers on the questionnaires omitted any reference to Ansu’s prior employment with the Ghana Bureau of National Investigations. Ansu resigned his position with the weather agency after criminal charges were filed against him.
This case was investigated by the Federal Bureau of Investigation and the Air Force Office of Special Investigations.
Kittery Man Sentenced to over 3 Years in Prison for Providing False Document to Probation Officer and Violating Release ConditionsRead the Press Release
Contact: Craig M. Wolff
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that
Michael Rock, 54, of Kittery, Maine, was sentenced today in U.S. District Court by Judge D.
Brock Hornby to 39 months in prison, consisting of 27 months for violating conditions of supervised release and an additional 12 months for providing a false document to his federal probation officer. Rock was also sentenced to three years of supervised release following his release from prison. Rock pleaded guilty to the charges on May 8, 2014.According to court records, in November 2013, Rock was on federal supervised release following a conviction in the District of Maine for providing false information in a credit application. He had previously been convicted twice in this district for mail fraud. As a result of his convictions, he owed over $60,000 in restitution to his victims. As part of his supervised release, Rock was required to answer truthfully all inquiries by his probation officer and provide the officer with any requested financial information. After Rock’s probation officer received information leading her to suspect that he had violated his release conditions, she instructed him to complete a financial disclosure form. On the form, Rock failed to disclose a bank account through which he conducted most of his financial activity. The officer’s investigation also revealed that Rock failed to disclose that he was paying rent for a second residence in York in addition to the residence in Kittery that he disclosed.
The investigation was conducted by the U.S. Probation Office.
Jorge Gutierrez-sanchez Sentenced for Illegal Use of Social Security NumbersRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JORGE GUTIERREZ-SANCHEZ, a/k/a Frank Farias, a/k/a Eusebio Ramirez, Jr., a/k/a Erick S. Couvertier-Rivera, age 29, a Mexican citizen, was sentenced today for falsely representing two different social security numbers in order to obtain training for employment.
U.S. District Judge Nannette Jolivette Brown sentenced GUTIERREZ-SANCHEZ to six months imprisonment, followed by one year of supervised release.
According to court documents, on May 6, 2014, GUTIERREZ-SANCHEZ was hired by Insulations Inc., a company located in Harahan, Louisiana, using the name Erick Steven Couvertier-Rivera, with the Social Security number XXX-XX-6526. GUTIERREZ-SANCHEZ completed the I-9 form claiming U.S. citizenship, as well as W-4 form, using a driver’s license with his own photo in Couvertier-Rivera’s name and Social Security number.
On May 7, 2014, prior to Insulations Inc. sending GUTIERREZ-SANCHEZ to work at Mississippi Power Company, he attended training at Gulf Coast Safety Council (“GCSC”), located in St. Charles Parish in the Eastern District of Louisiana. In order to get into GCSC’s training, GUTIERREZ-SANCHEZ presented that same driver’s license and Social Security number in Couvertier-Rivera’s name.
This was not the first time GUTIERREZ-SANCHEZ had attended a GCSC training. On January 31, 2014, GUTIERREZ-SANCHEZ went to employment training at GCSC and presented GCSC personnel with a driver’s license with his photo, but in the name Frank Farias and gave GCSC a Social Security card in Frank Farias’s name with the number XXX-XX-7281. The same day GUTIERREZ-SANCHEZ was posing as Frank Farias, another individual went to GCSC for employment training and presented himself as Eusebio Ramirez, Jr. with a Social Security card with the number XXX-XX-4930 in the name of Eusebio Ramirez, Jr. and a driver’s license in the name of Eusebio Ramirez, Jr., but with GUTIERREZ-SANCHEZ’s picture on it. GUTIERREZ-SANCHEZ had previously used the identity of Eusebio Ramirez, Jr., including the driver’s license and social security card presented to GCSC on January 31, 2014, to gain employment.
U.S. Attorney Polite praised the work of the Bureau of Immigration and Customs Enforcement in investigating this matter. Assistant United States Attorney Emily K. Greenfield prosecuted the case.
Indictment in U.S. V. Irving Rubin, Et Al.Read the Press Release
U.S. v. Irving Rubin, et al. Indictment
Illegal Alien Sentenced to over Years in Prison for Aggravated Identity TheftRead the Press Release
An illegal alien from Mexico who assumed the identity of a United States citizen was sentenced today to more than two years in federal prison.
Juan Bautista-Rubio, age 22, an illegal alien from Mexico living in Cedar Falls, Iowa, received the prison term after a July 9, 2014, jury verdict finding him guilty of one count of aggravated identity theft. Bautista-Rubio previously pled guilty on May 9, 2014, to one count of illegal re-entry into the United States following deportation and one count of unlawful use of a fraudulently acquired social security card and permanent resident card to gain employment in the United States.
The evidence at trial showed that Bautista-Rubio used a fraudulently acquired social security card and a fake lawful permanent resident alien card to obtain employment in Waterloo, Iowa, where he filled out an Immigration I-9 Form on April 5, 2012, falsely claiming to be a lawful permanent resident alien. Immigration I-9 forms are required to be completed by all employees working within the United States. Bautista-Rubio worked in Waterloo, Iowa, continuously from April 2012 through June 2013 and again from December 2013 through April 2014.
On April 23, 2014, Bautista-Rubio was questioned by an agent with Homeland Security Investigations. During that interview Bautista-Rubio admitted that he was present in United States illegally after being deported in 2011 and that he knowingly used the identification documents of a real person, including the person’s name, date of birth, and social security number, to gain employment in the United States. Bautista-Rubio told the agent that he specifically requested and obtained the identification documents of a real person to ensure that he could work here.
Bautista-Rubio was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Bautista-Rubio was sentenced to 27 months’ imprisonment. A special assessment of $300 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.
Bautista-Rubio 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-0052.
Idaho Man Sentenced to 20 Years for Distributing Child PornographyRead the Press Release
Orlando, FL – U.S. District Judge Paul G. Byron today sentenced Charles Keith Rolfe (60, Heyburn, Idaho) to 20 years in federal prison for distributing child pornography. The Court also ordered Rolfe to serve a lifetime term of supervised release and to register as a sex offender after he completes his prison sentence. A restitution hearing for his victims is scheduled for January 13, 2015. Rolfe pleaded guilty on June 27, 2014.
According to court documents, in the summer of 2013, Rolfe met an Orlando man, William Edward Osman, on an online social networking site. The two men soon began trading images of child pornography via a Mobile Messaging Application (“MMA”). Osman also told Rolfe that he had molested his one-year-old daughter.
On October 15, 2013, special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) arrested Osman on charges related to the sexual exploitation of children. Agents seized his cell phone and identified Rolfe as one of the men with whom Osman had been electronically trading child pornography. After assuming Osman’s online identity, agents communicated with Rolfe in an undercover capacity. On February 28, 2014, Rolfe sent the undercover agents at least three videos containing images of child pornography via the MMA on his cell phone. He also told the agents that he had attempted to molest his own five-year-old daughter when his wife was away, and that he was grooming his daughter for potential future sexual abuse.
Rolfe was arrested on April 3, 2014. A subsequent search of his home and cell phones revealed that Rolfe possessed almost 900 images of child pornography, many of which depicted children under the age of 12.
On September 3, 2014, Osman was sentenced to 60 years in federal prison for the production, distribution, and possession of child pornography."Crimes against our children will not be tolerated," said Susan L. McCormick, special agent in charge of HSI Tampa. "As a result of our collaboration with HSI Boise, and the investigative work of our agents here at home, this child predator can no longer victimize innocent children.”
This case was investigated by United States Immigration and Customs Enforcement’s Homeland Security Investigations. It was prosecuted by Assistant United States Attorney Joseph M. Schuster.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Hundred, WV Woman Sentenced for Distributing MarijuanaRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistWHEELING, WEST VIRGINIA – Nelda K. White, 55, of Hundred, West Virginia, was sentenced to twelve months and one day in prison for distributing marijuana, United States Attorney William J. Ihlenfeld, II, announced today.
White pled guilty in June 2014 to one count of "Conspiracy to Distribute Marijuana" after a West Virginia State Police investigation revealed that White was receiving shipments of marijuana from a source in California and reselling the marijuana in the Hundred, West Virginia area.
Assistant U.S. Attorney Steve Vogrin prosecuted the case on behalf of the government.
Chief U.S. District Judge John Preston Bailey presided.
Heroin Trafficker Faces Statutory Penalties of up to 60 Years in Federal Prison; To Forfeit Heroin Sales Proceeds of $382,227 in Cash, $39,000 Rolex WatchRead the Press Release
PROVIDENCE, R.I. – Neftali Reyes, a/k/a Popi, 32, of Providence, faces statutory penalties of up to 60 years in federal prison after pleaded guilty in U.S. District Court in Providence today to one count of conspiracy to distribute heroin and two counts of distribution of heroin. In addition, Reyes has agreed to forfeit $382,227 dollars and a Rolex watch valued at $39,000 seized by the government as a result of its investigation into Reyes’ drug trafficking activities and his arrest.
Reyes’ guilty plea is announced by United States Attorney Peter F. Neronha and Michael Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration’s (DEA) New England field division.
According to court documents and information presented to the court, since April, 2014, the Rhode Island DEA Drug Task Force has been conducting an investigation of a drug trafficking organization distributing heroin in Rhode Island involving the defendant, Neftali Reyes and others. To further the investigation, an undercover East Providence police officer, a member of the DEA Drug Task Force, contacted Reyes and arranged to make purchases of heroin from Reyes and his conspirators.
According to court documents, on two occasions in July 2014, the undercover East Providence police officer arranged with Reyes by telephone for the purchase of heroin. On each occasion a different “runner” met with the undercover officer at pre-determined locations in Providence and Cranston to complete the transactions. During discussions to arrange the second delivery, Reyes told the undercover officer arrangements for the sale and delivery of heroin to him was being slowed because his runners were “backed up.”
On August 25, 2014, law enforcement executed a court authorized arrest warrant issued for Reyes, arresting him as he left his residence and entered a parking garage. As Reyes was arrested, he dropped a shoebox containing $37,000 in cash, a cell phone and an iPad. A court authorized search of Reyes’ residence on the same day resulted in the seizure of $339,477 in cash from a safe, as well as additional cash and a men’s Rolex Oyster watch valued at $39,000 from the apartment.
According to court documents, Reyes admitted that the cash and the Rolex watch seized were the result of proceeds from the sale of heroin. Reyes agreed that he was selling heroin for $130 per gram and that the proceeds represent the sale of approximately 2,940 grams of heroin.
Reyes, who has been detained since his arrest, is scheduled to be sentenced by U.S. District Court Judge John J. McConnell, Jr., on February 3, 2015. Conspiracy to distribute heroin and distribution of heroin are punishable by statutory penalties of 20 years imprisonment, a fine of $1,000,000 and a term of supervised release of life with a minimum of three years.
The case is being prosecuted by Assistant U.S. Attorney Pamela E. Chin.
United States Attorney Peter F. Neronha acknowledges and thanks the Rhode Island Department of Attorney General and the East Providence Police Department for their assistance in the investigation of this matter.###
To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Hanover Man Convicted of Receipt and Distribution of Child PornographyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that Rodney Corbin, Jr., age 54, Hanover, Pennsylvania was sentenced today by Senior United States District Court Judge Sylvia H. Rambo to 97 months’ imprisonment, followed by 10 years of supervised release, anda $2,000 fine, for distribution and receipt of child pornography. Corbin pled guilty to the charges on October 1, 2013.
According to U.S. Attorney Peter Smith, Corbin purchased 28 separate orders of child pornography videos from an international company that produced images depicting the sexual exploitation of children. After securing a search warrant, law enforcement officers located two full carts, each measuring two by four by six feet in size, containing child pornography in Corbin’s residence.
Judge Rambo noted, this case represents the largest collection of printed child pornography ever seized in the Middle District of Pennsylvania. Corbin’s computer was also seized. During a search of the computer, investigators located thousands of images of child pornography.
This case was investigated by the United States Postal Inspection Service, the Pennsylvania State Police, the Department of Homeland Security (DHS), Homeland Security Investigations (HSI), Hanover Police Department and was prosecuted by Assistant United States Attorney Daryl F. Bloom.
Hammond Man, Meredith Corbin, Sentenced for Drug ViolationsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that MEREDITH CORBIN, age 33, of Hammond, Louisiana, was sentenced today, having previously pled guilty to possession of cocaine hydrochloride with intent to distribute and possessing a firearm during and in relation to that drug-trafficking crime.
U.S. District Judge Eldon E. Fallon sentenced CORBIN to 12 months and 1 day for possession of cocaine with intent to distribute and 60 months for possessing a firearm in relation to possession with intent to distribute cocaine, with sentences to run consecutively for a total of 72-month term of imprisonment. Additionally, CORBIN was sentenced to serve 3 years of supervised release following imprisonment and ordered to pay a $200 special assessment fee.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration and the Hammond Police Department in investigating this matter. Assistant United States Attorney Michael E. McMahon is in charge of the prosecution.
Gaithersburg Woman Convicted of Submitting Four Fraudulent Claims for Unemployment Insurance BenefitsRead the Press Release
Greenbelt, Maryland – Rebecca Lynn Biglow, age 42, of Gaithersburg, Maryland pleaded guilty today to mail fraud and aggravated identity theft in connection with a fraud scheme to obtain $71,022 in unemployment insurance benefits. Biglow also pleaded guilty to violating terms of her supervised release imposed after she had served time in prison for a previous federal conviction for bank fraud.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Bill Jones, of the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and Mark Kaufman, Commissioner of the Maryland Department of Labor, Licensing and Regulation’s (DLLR) Division of Financial Regulation."Rebecca Biglow filed fraudulent unemployment insurance claims while she was already under court supervision for a previous crime," said U.S. Attorney Rod J. Rosenstein.
According to her plea agreement, on September 9, 2009, Biglow submitted an unemployment insurance benefits claim to DLLR, claiming that she had worked from April 2008 to September 2009 for a home cleaning service company, where she earned wages totaling $23,390. In fact, Biglow was incarcerated from October 2007 to August 2009, and had not worked for the company. From September 2009 to January 2011, DLLR paid Biglow a total of $17,272 on this claim.On May 20, 2011, Biglow submitted another claim for unemployment insurance benefits, stating that she had worked for an individual at a business where she earned wages totaling $36,042.18. In reality, Biglow never worked for this individual. From May 2011 to December 2012, DLLR paid Biglow a total of $29,670 on this second claim.
On May 31, 2013, Biglow submitted a third unemployment benefits claim using the name, social security number and date of birth of another individual. Biglow falsely claimed that this individual had worked from June 2012 to May 2013 for a child care center, where the individual had earned $54,370 in wages. From June to December 2013, DLLR paid a total of $13,330 on this claim.
Finally, on October 25, 2013, Biglow submitted a fourth unemployment benefits claim falsely stating that she had worked at a candle business, earning $36,798 in wages from February to October 2013. From October 2013 to May 2014, DLLR paid Biglow $10,750 on this claim.
Biglow agrees to pay forfeiture and restitution of $71,022, the total amount paid by DLLR on the four fraudulent claims.
Bigelow was on supervised release during the time she submitted these false claims, after having served time in prison for a previous bank fraud scheme.
Biglow faces a maximum sentence of 20 years in prison for mail fraud; a mandatory minimum of two years in prison consecutive to any other sentence imposed for aggravated identity theft; and three years in prison for violating her supervised release, less any term of imprisonment imposed upon revocation of supervised release. U.S. District Judge Deborah K. Chasanow scheduled sentencing for March 2, 2015.
United States Attorney Rod J. Rosenstein praised the Department of Labor – OIG and DLLR for their work in the investigation and thanked Assistant U.S. Attorney Thomas P. Windom, who is prosecuting the case.Fourteen Defendants Charged in White Plains Federal Court with Massive Mortgage Fraud ConspiracyRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Carl E. DuBois, the Sheriff of Orange County, today announced the unsealing of an Indictment (the “Indictment”) charging 15 defendants, including 14 defendants with conspiracy to commit bank fraud and wire fraud in connection with mortgages and other loans secured by properties in Brooklyn, Manhattan and Monroe in Orange County, New York. The defendants include several related members of a family, the Rubins, as well as a real estate attorney and a real estate appraiser. The Indictment sets forth a total of 21 counts charging various defendants with additional crimes, including making false statements to lenders, aggravated identity theft, and theft of public money. Thirteen of the defendants were arrested today in a coordinated takedown. They will be arraigned on the charges in the Indictment before United States Magistrate Judge Paul E. Davison in the White Plains federal courthouse.
U.S. Attorney Preet Bharara stated: “The charges unsealed today describe a sweeping and cynical fraud. As alleged, the scheme carried out by the Rubins and others ripped off banks, welfare programs, and taxpayers. It ranged from 2004 to 2014, from Brooklyn to Harlem to Orange County, and the individuals involved alternately played the parts of prince or pauper, depending on which scam was being perpetrated. Now their alleged double dealing will be stopped, and they will have to submit to the truth-seeking process of the criminal justice system.”
FBI Assistant Director George Venizelos stated: “In a clear case of double dipping, the defendants convinced lenders of their affluence while allegedly accepting aid from government programs established for the benefit of those less fortunate, profiting from the proceeds of millions of dollars in fraudulently obtained loans and significantly defrauding the government of public money. May today’s charges remind those who poke holes in the government safety net and exploit gaps in the mortgage and banking sectors that they will face the error of their ways.”
Orange County Sheriff Carl E. DuBois stated: “We would like to thank United States Attorney Preet Bharara and his staff for their efforts and assistance, and I would also like to thank the personnel from all of the agencies involved for a commitment to this long and complicated investigation. It is important to note that this case originated from the Orange County Sheriff’s Office. Upon investigating what is usually a routine case, our investigator showed due diligence in her follow up, and with the latitude and encouragement by my office to investigate further using FBI resources, the result was a lengthy and comprehensive multi-jurisdictional, multi-million dollar mortgage fraud investigation.”
According to allegations made in the Indictment:
IRVING RUBIN, the defendant, was a purported real estate developer. IRVING RUBIN’s son, YEHUDA RUBIN, the defendant, was a purported mortgage broker and real estate developer. IRVING RUBIN, as well as his brothers ABRAHAM RUBIN, JACOB RUBIN, and SAMUEL RUBIN, the defendants; his sons YEHUDA RUBIN and JOEL RUBIN, the defendants; his wife, DESIREE RUBIN, the defendant; and his relatives-in-law JOEL KOPPEL, BENZION KRAUS, RIFKA RUBIN, RACHEL RUBIN, and RIVKY RUBIN, the defendants, claimed to own properties in Brooklyn, New York, as well as in Manhattan and Orange County, New York. MARTIN KOFMAN, the defendant, was a real estate lawyer licensed to practice in New York. PINCHUS GLAUBER, the defendant, was a real estate appraiser licensed in New York.
From at least in or about 2004 through in or about 2014, IRVING RUBIN, a/k/a “Joseph Rubin,” YEHUDA RUBIN, a/k/a “Yidel Rubin,” PINCHUS GLAUBER, MARTIN KOFMAN, JOEL KOPPEL, a/k/a “Yoel Koppel,” a/k/a “Joel Kopple,” BENZION KRAUS, a/k/a “Benzion Krauz,” a/k/a “Benzion Krause,” ABRAHAM RUBIN, DESIREE RUBIN, a/k/a “Henchy Rubin,” JACOB RUBIN, a/k/a “Yaakov Rubin,” JOEL RUBIN, a/k/a “Yoel Rubin,” RACHEL RUBIN, a/k/a “Ruchy Rubin,” RIFKA RUBIN, a/k/a “Sura Rubin,” RIVKY RUBIN, a/k/a “Rivka Rubin,” and SAMUEL RUBIN, a/k/a “Shaye Rubin,” the defendants, and others known and unknown (hereinafter, the “Rubin Organization”), fraudulently obtained mortgage loans and other loans from banks and other lending institutions (the “lenders”). The defendants obtained the loans by providing materially false information to the lenders about the borrowers’ assets and liabilities, including but not limited to false information about the borrower’s employment, income, bank accounts, and primary residence. Through their scheme, the defendants fraudulently obtained more than $20 million in loan proceeds in connection with more than twenty fraudulent loans. The majority of the loans went into default, and the majority of the loan proceeds were not repaid.
As part of the scheme to defraud, the defendants used the fraudulent loan proceeds to personally enrich themselves and their families. Fraudulently obtained loan proceeds were used toward, among other things, (i) credit card debts for personal expenses of defendants, (ii) personal home mortgage payments of defendants, (iii) other real estate development projects including projects from which the defendants and others earned rental income, and (iv) debts arising from other fraudulently obtained loans, to conceal the fraudulent nature of these loans.
As part of the scheme to defraud, the defendants and others known and unknown also engaged in extensive efforts to perpetuate and conceal the fraudulent scheme. These efforts included, but were not limited to:
- Numerous members of the conspiracy acting as the borrowers for different loans, falsely claiming that the purpose of the loans was to purchase or refinance their primary residence, when, in fact the property was not their primary residence, and the loan proceeds were later distributed to other members of the conspiracy and to entities they controlled.
- The common claim by multiple co-conspirators acting as borrowers of sole ownership or control of assets or bank accounts, to give the false appearance of creditworthiness, when in fact the assets and/or bank accounts were non-existent or were owned and controlled by other members of the conspiracy, and the borrower either had joint or no ownership of them.
- Sham transfers of ownership of properties from one member of the conspiracy to another, or to other trusted individuals, thereby confounding attempts by lenders to recover on defaulted loans and facilitating further fraudulent borrowing against the properties.
- Following default on a fraudulently obtained loan, coordinated efforts to deceive the lender into granting a satisfaction of the debt at a significant loss, such as by proposing short sales of properties that, unbeknownst to the lender, were not arm’s-length transactions.
In furtherance of the scheme to defraud, members of the conspiracy participated in fraudulently obtaining loans in several ways, including but not limited to the following:
- YEHUDA RUBIN, the defendant, was an organizer of the fraudulent scheme. YEHUDA RUBIN personally participated in at least ten of the particular fraudulent loans, in various roles, including as borrower, borrower’s power of attorney, mortgage broker, distributor of fraudulent loan proceeds, and arranger of short sales.
- IRVING RUBIN, DESIREE RUBIN, ABRAHAM RUBIN, JACOB RUBIN, SAMUEL RUBIN, JOEL RUBIN, RIVKY RUBIN, RACHEL RUBIN, JOEL KOPPEL, RIFKA RUBIN, and BENZION KRAUSE, the defendants, were borrowers who fraudulently obtained loans from banks and other lenders. Working in concert with co-conspirators, they obtained loans upon false representations and pretenses. IRVING RUBIN, ABRAHAM RUBIN, JACOB RUBIN, SAMUEL RUBIN, and JOEL RUBIN, among others, also participated in the scheme by, among other things, (i) obtaining ownership of properties, (ii) assisting other borrowers in making false representations, (iii) receiving fraudulent loan proceeds, (iv) obtaining and distributing rental income on the properties, and (v) assisting in efforts to prevent or dissuade a lender from collecting on a defaulted loan.
- MARTIN KOFMAN, the defendant, acted as real estate attorney on numerous transactions associated with the fraudulent loans, including closings. KOFMAN, through his law firm’s trust account, distributed fraudulent loan proceeds between and among members of the conspiracy. KOFMAN also provided false information to lenders, including “show checks,” to deceive a bank into believing that the borrower had made a down payment toward the purchase of a property, when in fact the borrower made no such payment and the checks were ultimately deposited back into the law firm’s trust account.
- PINCHUS GLAUBER, the defendant, completed multiple appraisals of properties in connection with particular fraudulent loans. GLAUBER included false information in the appraisals, including about the detail with which he had inspected the properties he appraised. The estimated value of certain properties appraised by GLAUBER was false and inflated.
At the same time that the defendants were representing to banks that they had substantial income and assets, they were also representing to state and local agencies that they had little or no income and assets and were entitled to receive various forms of public assistance, including Medicaid, Food Stamps, and Home Energy Assistance Program (“HEAP”) benefits. For example:
- YEHUDA RUBIN and RACHEL RUBIN, the defendants, received Medicaid and Food Stamps at various times during the conspiracy. To receive benefits, they claimed, among other things, that their only income was $180 per month, and later $360 bi-weekly, from RACHEL RUBIN’s employment. To receive loans totaling more than $1 million, on the other hand, YEHUDA RUBIN claimed that he was employed, earning more than $17,000 per month in employment and rental income, and RACHEL RUBIN claimed that she was employed, earning $14,000 per month.
- JOEL RUBIN and RIVKY RUBIN, the defendants, received Medicaid and Food Stamps at various times during the conspiracy. To receive benefits, they claimed, among other things, that they were homeless, and later that their only income was $130 per week and $180 per week. To receive loans totaling more than $1 million, on the other hand, they claimed that RIVKY RUBIN was employed and had an income of $12,000 per month.
- SAMUEL RUBIN, the defendant, received Medicaid and Food Stamps at various times during the conspiracy. To receive benefits, SAMUEL RUBIN claimed, among other things, an income of $200 per week and $0 in financial resources. To receive loans in excess of $7 million, however, SAMUEL RUBIN claimed an income of more than $350,000 per year and a net worth of more than $10 million.
- IRVING RUBIN and DESIREE RUBIN, the defendants, received Medicaid at various times during the conspiracy. To receive benefits, IRVING RUBIN and DESIREE RUBIN claimed, among other things, that their only income was $1,200 per week, from IRVING RUBIN’s employment at Tristate Management. To receive a loan in excess of $500,000, on the other hand, IRVING RUBIN and DESIREE RUBIN claimed, among other things, that DESIREE RUBIN was employed at Tristate Management with a monthly income of $16,000.
In addition, seven are charged with theft of public money, in violation of Title 18, United States Code, Section 641. In particular, the defendants are charged with obtaining Medicaid and/or Food Stamps by submitting false information in the applications for such benefits.
The defendants and the counts with which they are charged in the Indictment are set forth in the attached list.
Mr. Bharara praised the investigative work of the FBI and the Orange County Sheriff’s Office.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Benjamin Allee, Kathryn Martin, and Michael Maimin are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. v. Irving Rubin, et al. Indictment
U.S. v. Rubin, et al. Ages & Residences Chart
Fort Thompson Man Charged with Assaulting, Resisting and Impeding A Federal OfficerRead the Press Release
United States Attorney Brendan V. Johnson announced that a Fort Thompson, South Dakota, man has been indicted by a federal grand jury for Assaulting, Resisting and Impeding a Federal Officer.
Tony O. St. John, a/k/a Anthony St. John, age 25, was indicted on October 15, 2014. He appeared before U.S. Magistrate Judge Mark A. Moreno on November 10, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 20 years in custody and/or a $250,000 fine, 3 years of supervised release, and up to $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about September 30, 2014, St. John forcibly assaulted, resisted, opposed, impeded, intimidated, and interfered with officers from the Bureau of Indian Affairs, Crow Creek Agency, when the officers were engaged in the performance of their official duties and employed as federal law enforcement officers with the Department of Interior.
The charges are merely accusations and St. John is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Crow Creek Agency. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
St. John was remanded to the custody of the U.S. Marshals Service pending trial, which has been set for January 6, 2015.
Former Wilmington Trust Officer Pleads Guilty to Accepting A Gift for Procuring LoansRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Peter W. Hayes, age 49 of Newark, DE, pleaded guilty to one count of accepting a gift for procuring loans, in violation of Title 18, United States Code, Section 215. United States District Judge Richard G. Andrews scheduled a sentencing hearing for March 17, 2015, at 9 a.m.
Hayes, a former Relationship Manager at Wilmington Trust Corp. (“WTC” or the “Bank”), admitted that he purchased two model homes from a large Bank customer (the “customer”) in November 2005 as part of a sale/lease-back arrangement, whereby the customer agreed to pay Hayes and his business partner monthly lease payments in the exact amount of, and to satisfy, their monthly mortgage payments. In March 2008, Hayes and his partner sold the model homes to a third-party for a loss, leaving Hayes with a $70,000.00 obligation to his mortgage lender. Hayes ultimately requested a loan from the WTC customer to cover the shortfall. In November 2008, the customer loaned Hayes the necessary funds by issuing him a check from the customer’s operating account at WTC. Hayes repaid the loan in February 2009 by depositing a treasury check directly into the customer’s WTC operating account.
During the four year period in which Hayes had a financial relationship with the customer, he approved millions of dollars in financing for various projects being developed by the customer. As part of his guilty plea, Hayes admitted to making specific funding decisions for the customer that were based on materially false statements and omissions, or were otherwise in contravention of existing loan agreements.
With his guilty plea, Hayes becomes the third former Bank employee to plead guilty to criminal conduct relating to his employment at WTC.
United States Attorney Oberly said, “It is a serious offense for a bank insider to engage in self-dealing with a client for his own personal benefit. The successful prosecution of Mr. Hayes demonstrates my Office’s commitment to uncover criminal misconduct committed by bank officers, particularly where such activity has the potential to affect the safety and soundness of a financial institution and its shareholders.”
The case was investigated by the Federal Bureau of Investigation; the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and the Internal Revenue, Service Criminal Investigation Division, and is being prosecuted by Assistant United States Attorneys Robert F. Kravetz and Lesley F. Wolf.
“Hayes, a former relationship manager at TARP bank Wilmington Trust, is the third employee to plead guilty to charges stemming from the investigation by SIGTARP and our partners of purported criminal conduct at the bank,” said Christy Romero, Special Inspector General for TARP (SIGTARP). “In today’s plea, Hayes admitted to exchanging favors with a long-time bank customer for his personal benefit. SIGTARP and our law enforcement partners stand united in our commitment to safeguarding TARP on behalf of taxpayers, and perpetrators of crime related to TARP will be brought to justice.”Former Swiss Banker Charged in Manhattan Federal Court for Conspiring with U.S. Taxpayers to Hide Hundreds of Millions of Dollars in Swiss Bank AccountsRead the Press Release
U.S. Attorney Preet Bharara for the Southern District of New York and Acting Special Agent in Charge Shantelle P. Kitchen of the New York Field Office of the Internal Revenue Service- Criminal Investigation (IRS-CI) announced today the indictment of Martin Dunki, a former client advisor and Senior Vice President at a Swiss bank headquartered in Zurich, Switzerland (Swiss Bank No. 1), for conspiring with U.S. taxpayer-clients and others to hide hundreds of millions of dollars in offshore accounts from the IRS, and to evade U.S. taxes on the income earned in those accounts.
“As alleged, Martin Dunki went to great lengths to help his U.S. taxpayer clients secret away millions of dollars in Swiss bank accounts,” said U.S. Attorney Bharara. “With today’s Indictment, Dunki joins the ranks of many other individuals this Office has charged in connection with hiding money in offshore bank accounts from the Internal Revenue Service.”
“The vigorous pursuit of unreported income in hidden offshore accounts is a top priority for the Internal Revenue Service,” said Acting IRS-CI Special Agent in Charge Shantelle P. Kitchen. “As part of our strategy, we will continue to identify and investigate banking and finance professionals who advise U.S. clients about ways to conceal their assets from the U.S. Government.”
According to the allegations contained in the indictment, which was unsealed today in Manhattan federal court, and other publicly available information:
Between 1995 and 2012, Dunki helped U.S. taxpayers evade taxes and hide hundreds of millions of dollars in undeclared accounts at Swiss Bank No. 1. Dunki provided this advice and assistance to U.S. taxpayers in his capacity as a client advisor at Swiss Bank No. 1, where he was employed until early 2012.
One of Dunki’s co-conspirators was Edgar Paltzer, an attorney based in Zurich, Switzerland, who previously pleaded guilty in the Southern District of New York for his role in assisting U.S. taxpayers and others to evade taxes. In 1999, Dunki, Paltzer and an attorney from Santa Barbara, California (Attorney 1), began working together in the management of undeclared accounts at Swiss Bank No. 1 for a number of U.S. taxpayers (collectively, the Dunki/Attorney 1 Clients). The undeclared assets of the Dunki/Attorney 1 Clients were maintained in accounts held in the names of sham foreign foundations, rather than in the names of the clients individually, to help the clients conceal their ownership of these undeclared accounts from the IRS. Initially, the sham foundations that held the accounts were organized under the laws of Liechtenstein. In December 2008, however, Liechtenstein and the United States signed a Tax Information Exchange Treaty (TIEA), under which Liechtenstein agreed to provide the United States with access to certain bank and other information needed to enforce U.S. tax laws. As a result of the TIEA between Liechtenstein and the United States, and to prevent disclosure to the IRS of the undeclared accounts maintained by the Dunki/Attorney 1 Clients, Dunki and others transferred the undeclared assets of the Dunki/Attorney 1 Clients to new accounts at Swiss Bank No. 1, held by new sham foundations organized under the laws of Panama. Moreover, beginning in August 2009, in response to the investigation of another Swiss bank, UBS AG, for helping U.S. taxpayers maintain undeclared accounts in Switzerland, Dunki and others helped to further conceal the undeclared accounts of the Dunki/Attorney 1 Clients by using assets in those accounts to purchase gold and other precious metals. The gold and precious metals, which amounted to tens of millions of dollars, were then transferred to escrow accounts opened at Swiss Bank No. 1 and hidden, along with substantial sums of cash, in a vault in Switzerland for the benefit of the Dunki/Attorney 1 Clients.
In addition to opening, maintaining, and managing undeclared accounts at Swiss Bank No. 1 for the Dunki/Attorney 1 Clients, Dunki opened, maintained and managed undeclared accounts at Swiss Bank No. 1 for other U.S. taxpayers. For instance, between 2000 and 2012, Dunki helped one U.S. taxpayer hide nearly $300 million in assets at Swiss Bank No. 1, in undeclared accounts held in the names of sham Liberian corporations. Further, between 1995 and 2008, Dunki helped another U.S. taxpayer maintain approximately $70 million in an undeclared account at Swiss Bank No. 1. When Dunki met with this taxpayer in the United States, the account statements that Dunki brought with him were deliberately cut off at the top, to omit the account number and the name of Swiss Bank No. 1, because – as Dunki himself acknowledged to the taxpayer – Dunki had to be careful not to leave a trace when going through U.S. customs.
Dunki also helped U.S. taxpayers bring funds back to the United States in ways designed to ensure that U.S. authorities would not discover the existence of the taxpayers’ undeclared accounts at Swiss Bank No. 1. For example, on at least one occasion, Dunki met a U.S. taxpayer in the United States and provided the taxpayer with an envelope containing approximately $10,000 in cash, which represented a cash withdrawal from the taxpayer’s undeclared account at Swiss Bank No. 1. On other occasions, Dunki helped send money from a U.S. taxpayer’s undeclared account at Swiss Bank No. 1 to another account in Geneva, Switzerland, and, from there, to a diamond dealer in Manhattan. Once the money was received by the diamond dealer, the U.S. taxpayer would pick it up and give the diamond dealer a fraction of the money as a commission.
Dunki, 66, a Swiss citizen, resides in Switzerland and has not been arrested. Dunki is charged with one count of conspiracy to defraud the IRS, which carries a maximum sentence of five years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
U.S. Attorney Bharara praised the outstanding efforts of IRS-CI in the investigation, which he noted is ongoing. He also thanked the Justice Department’s Tax Division for their significant assistance in the investigation.
This case is being handled by the U.S. Attorney’s Office for the Southern District of New York Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Sarah E. Paul and Jason H. Cowley are in charge of the prosecution.
The charge and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Former Swiss Banker Charged in Manhattan Federal Court for Conspiring with U.S. Taxpayers to Hide Hundreds of Millions of Dollars in Swiss Bank AccountsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Shantelle P. Kitchen, Acting Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the indictment of MARTIN DUNKI, a former client advisor and Senior Vice President at a Swiss bank headquartered in Zurich, Switzerland (“Swiss Bank No. 1”), for conspiring with U.S. taxpayer-clients and others to hide hundreds of millions of dollars in offshore accounts from the IRS, and to evade U.S. taxes on the income earned in those accounts.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Martin Dunki went to great lengths to help his U.S. taxpayer clients secret away millions of dollars in Swiss bank accounts. With today’s Indictment, Dunki joins the ranks of many other individuals this Office has charged in connection with hiding money in offshore bank accounts from the Internal Revenue Service.”
Acting IRS-CI Special Agent in Charge Shantelle P. Kitchen said: “The vigorous pursuit of unreported income in hidden offshore accounts is a top priority for the Internal Revenue Service. As part of our strategy, we will continue to identify and investigate banking and finance professionals who advise U.S. clients about ways to conceal their assets from the U.S. Government.”
According to the allegations contained in the Indictment, which was unsealed today in Manhattan federal court, and other publicly available information:
Between 1995 and 2012, DUNKI helped U.S. taxpayers evade taxes and hide hundreds of millions of dollars in undeclared accounts at Swiss Bank No. 1. DUNKI provided this advice and assistance to U.S. taxpayers in his capacity as a client advisor at Swiss Bank No. 1, where DUNKI was employed until early 2012.
One of DUNKI’s co-conspirators was Edgar Paltzer, an attorney based in Zurich, Switzerland, who previously pled guilty in the Southern District of New York for his role in assisting U.S. taxpayers and others to evade taxes. In 1999, DUNKI, Paltzer, and an attorney from Santa Barbara, California (“Attorney 1”) began working together in the management of undeclared accounts at Swiss Bank No. 1 for a number of U.S. taxpayers (collectively, the “Dunki/Attorney 1 Clients”). The undeclared assets of the Dunki/Attorney 1 Clients were maintained in accounts held in the names of sham foreign foundations, rather than in the names of the clients individually, to help the clients conceal their ownership of these undeclared accounts from the IRS. Initially, the sham foundations that held the accounts were organized under the laws of Liechtenstein. In December 2008, however, Liechtenstein and the United States signed a Tax Information Exchange Treaty (“TIEA”), under which Liechtenstein agreed to provide the United States with access to certain bank and other information needed to enforce U.S. tax laws. As a result of the TIEA between Liechtenstein and the United States, and to prevent disclosure to the IRS of the undeclared accounts maintained by the Dunki/Attorney 1 Clients, DUNKI and others transferred the undeclared assets of the Dunki/Attorney 1 Clients to new accounts at Swiss Bank No. 1, held by new sham foundations organized under the laws of Panama. Moreover, beginning in August 2009, in response to the investigation of another Swiss bank, UBS AG (“UBS”), for helping U.S. taxpayers maintain undeclared accounts in Switzerland, DUNKI and others helped to further conceal the undeclared accounts of the Dunki/Attorney 1 Clients by using assets in those accounts to purchase gold and other precious metals. The gold and precious metals, which amounted to tens of millions of dollars, were then transferred to escrow accounts opened at Swiss Bank No. 1 and hidden, along with substantial sums of cash, in a vault in Switzerland for the benefit of the Dunki/Attorney 1 Clients.
In addition to opening, maintaining, and managing undeclared accounts at Swiss Bank No. 1 for the Dunki/Attorney 1 Clients, DUNKI opened, maintained, and managed undeclared accounts at Swiss Bank No. 1 for other U.S. taxpayers. For instance, between 2000 and 2012, DUNKI helped one U.S. taxpayer hide nearly $300 million in assets at Swiss Bank No. 1, in undeclared accounts held in the names of sham Liberian corporations. Further, between 1995 and 2008, DUNKI helped another U.S. taxpayer maintain approximately $70 million in an undeclared account at Swiss Bank No. 1. When DUNKI met with this taxpayer in the United States, the account statements that DUNKI brought with him were deliberately cut off at the top, to omit the account number and the name of Swiss Bank No. 1, because – as DUNKI himself acknowledged to the taxpayer – DUNKI had to be careful not to leave a trace when going through U.S. customs.
DUNKI also helped U.S. taxpayers bring funds back to the United States in ways designed to ensure that U.S. authorities would not discover the existence of the taxpayers’ undeclared accounts at Swiss Bank No. 1. For example, on at least one occasion, DUNKI met a U.S. taxpayer in the United States and provided the taxpayer with an envelope containing approximately $10,000 in cash, which represented a cash withdrawal from the taxpayer’s undeclared account at Swiss Bank No. 1. On other occasions, DUNKI helped send money from a U.S. taxpayer’s undeclared account at Swiss Bank No. 1 to another account in Geneva, Switzerland and, from there, to a diamond dealer in Manhattan. Once the money was received by the diamond dealer, the U.S. taxpayer would pick it up and give the diamond dealer a fraction of the money as a commission.
DUNKI, 66, a Swiss citizen, resides in Switzerland and has not been arrested. DUNKI is charged with one count of conspiracy to defraud the IRS, which carries a maximum sentence of five years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the outstanding efforts of IRS-CI in the investigation, which he noted is ongoing. He also thanked DOJ’s Tax Division for their significant assistance in the investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Sarah E. Paul and Jason H. Cowley are in charge of the prosecution.
The charge and allegations contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Former Shelby County Hospital CFO Guilty in EHR Incentive CaseRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – The former Chief Financial Officer of Shelby Regional Medical Center has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Joe White, 67, of Cameron, Texas, pleaded guilty on Nov. 12, 2014 to making a false statement before U.S. Magistrate Judge John D. Love.
According to information presented in court, White was the Chief Financial Officer for Shelby Regional Medical Center in Center, Texas, which was owned and operated by Dr. Tariq Mahmood. White oversaw the implementation of electronic health records for the hospital and was responsible for attesting to the meaningful use of electronic health records in order to qualify to receive incentive payments under Medicare’s Electronic Health Record (EHR) Incentive Program. On Nov. 20, 2012, White knowingly made a false statement to Medicare falsely representing that the hospital was a meaningful user of electronic health records, when the hospital did not meet the meaningful use requirements. As a result, Shelby Regional Medical Center received $785,655.00 from Medicare. White was indicted by a federal grand jury on Feb. 6, 2014.
White faces up to five years in federal prison at sentencing. A sentencing date has not been set.This case was investigated by the U.S. Department of Health and Human Services – Office of the Inspector General (HHS-OIG), the Texas Office of the Attorney General – Medicaid Fraud Control Unit (OAG-MFCU), and the Federal Bureau of Investigation (FBI). This case is being prosecuted by Special Assistant U.S. Attorney Kenneth C. McGurk and Assistant U.S. Attorney Nathaniel C. Kummerfeld.
Any individuals with knowledge of these or other health care fraud violations are encouraged to contact the Department of Health and Human Services’ fraud hotline at 1-800-HHS-TIPS (447-8477).