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Monday 29 September 2014
Pierre Man Charged with Failure to Register as A Sex OffenderRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pierre, South Dakota, man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Darrell Jerome Anderson, age 43, was indicted on September 16, 2014. He appeared before U.S. Magistrate Judge Mark A. Moreno on September 22, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, at least 5 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between June 1, 2014, and August 12, 2014, Anderson, a person required to register under the Sex Offender Registration and Notification Act, and a sex offender by reason of a conviction under state law, failed to register and update his registration.
The charge is merely an accusation and Anderson is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
Anderson was released on bond pending trial. A trial date has not been set.
Perry Hall Man Pleads Guilty for His Role in A Conspiracy to Defraud the City of BaltimoreRead the Press Release
Baltimore, Maryland - Robert Johnson, age 33, of Perry Hall, Maryland, pleaded guilty today to a wire fraud conspiracy and aggravated identity theft, related to a scheme to defraud the City of Baltimore through the reissuance of fraudulent checks for pay and benefits.The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Robert H. Pearre, Jr., Inspector General, City of Baltimore Office of Inspector General; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Gregg L. Bernstein.
According to his guilty plea and court documents, Robert Johnson was employed in the Consumer Relations Service of the U.S. Department of Veteran’s Affairs. Johnson admitted that from July 11, 2013 through August 2, 2013, he and his co-conspirator, who was employed as an accountant in the Finance Department of the City of Baltimore, conspired to defraud the City of Baltimore. During the time of the conspiracy, Baltimore City employees who left their employment were entitled to a lump sum check of any pay and benefits for which they qualified. Johnson and his co-conspirator used the financial and identity information of former employees to request fraudulent employee benefit payout checks, which Johnson then deposited into his personal account and used for the benefit of the conspirators.
According to his plea agreement, Johnson’s co-conspirator identified individuals who had received and cashed large lump sum payments and then requested that such checks be reissued, as if they had not been received. These duplicate checks were printed at the Baltimore City Finance Office, where the co-conspirator stole the checks. The co-conspirator delivered the checks to Johnson, endorsed “Pay to the Order of Robert Johnson,” purportedly signed by the recipient. Johnson endorsed and cashed the checks, and deposited the proceeds into a bank account he controlled. Johnson used the funds for his own purposes and to fund meals and other purchases for the benefit of his co-conspirator.
For example, on July 11, 2013, Johnson deposited a check made out to Victim 1, in the amount of $14,741.09, and fraudulently endorsed to Johnson with a forged signature of Victim 1. On July 31, 2013, Johnson deposited a check made out to Victim 2, in the amount of $58,485.91. Again, the check was endorsed to Johnson with a forged signature of Victim 2. Both victims had previously received and cashed their initial lump sum payment checks and the duplicate checks were issued and endorsed to Johnson without their knowledge or permission.
After Johnson attempted to wire some of the funds to pay off an account at a different financial institution, Johnson’s bank was alerted to the suspicious transactions and referred the matter to the City of Baltimore Office of the Inspector General, who sought the assistance of the Finance Department in determining the authenticity of the endorsements. Johnson’s co-conspirator was tasked with the investigation and notified Johnson of the problem. According to Johnson’s plea agreement, the co-conspirator attempted to derail the investigation and obtain release of the funds by the bank by claiming to have spoken with the check recipients, who confirmed that the endorsements were genuine. In fact, neither statement was true. Meanwhile, Johnson’s bank had reversed the deposits and returned the funds to the City of Baltimore, leaving a large deficit in Johnson’s account balance. Johnson obtained funds from his co-conspirator to repay the amount due.
Over the course of the conspiracy, Johnson fraudulently obtained between $70,000 and $120,000, all of which was ultimately recovered.
Johnson faces a maximum sentence of 20 years in prison for the wire fraud conspiracy; and two years in prison, consecutive to any other sentence imposed, for aggravated identity theft. U.S. District Judge George L. Russell III has scheduled sentencing for January 16, 2015 at 11 a.m.
United States Attorney Rod J. Rosenstein praised the Baltimore Office of Inspector General, Baltimore City Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Tamera L. Fine and Special Assistant U.S. Attorney Josh Felsen, a cross-designated Baltimore City Assistant State’s Attorney, who are prosecuting the case.
Pakistani Man Indicted for Selling 'StealthGenie' Spyware AppRead the Press Release
A Pakistani man has been indicted in the Eastern District of Virginia for allegedly conspiring to advertise and sell StealthGenie, a spyware application (app) that could monitor calls, texts, videos and other communications on mobile phones without detection. This marks the first-ever criminal case concerning the advertisement and sale of a mobile device spyware app.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Assistant Director in Charge Andrew McCabe of the FBI’s Washington Field Office made the announcement.
“Selling spyware is not just reprehensible, it’s a crime,” said Assistant Attorney General Caldwell. “Apps like StealthGenie are expressly designed for use by stalkers and domestic abusers who want to know every detail of a victim’s personal life – all without the victim’s knowledge. The Criminal Division is committed to cracking down on those who seek to profit from technology designed and used to commit brazen invasions of individual privacy.”
“StealthGenie has little use beyond invading a victim’s privacy” said U.S. Attorney Boente. “Advertising and selling spyware technology is a criminal offense, and such conduct will be aggressively pursued by this office and our law enforcement partners.”
“This application allegedly equips potential stalkers and criminals with a means to invade an individual’s confidential communications,” said FBI Assistant Director in Charge McCabe. “They do this not by breaking into their homes or offices, but by physically installing spyware on unwitting victim’s phones and illegally tracking an individual’s every move. As technology continues to evolve, the FBI will investigate and bring to justice those who use illegal means to monitor and track individuals without their knowledge.”
According to allegations in the indictment, Hammad Akbar, 31, of Lahore, Pakistan, is the chief executive officer of InvoCode Pvt Ltd, the company that advertises and sells StealthGenie online. Akbar and his co-conspirators allegedly created the spyware, which could intercept communications to and from mobile phones, including Apple’s iPhone, Google’s Android, and Blackberry Limited’s Blackberry. StealthGenie was undetectable by most users and was advertised as being untraceable.
Akbar was charged in the indictment with conspiracy, sale of a surreptitious interception device, advertisement of a known interception device and advertising a device as a surreptitious interception device. He was arrested in Los Angeles on Sept. 27, 2014, and is expected to appear before a magistrate judge in the Central District of California later today.
StealthGenie was hosted at a data center in Ashburn, Virginia. On Sept. 26, 2014, a federal judge in the Eastern District of Virginia issued a temporary restraining order authorizing the FBI to temporarily disable the website hosting StealthGenie.
The indictment alleges that StealthGenie’s capabilities included the following: it recorded all incoming/outgoing voice calls; it intercepted calls on the phone to be monitored while they take place; it allowed the purchaser to call the phone and activate it at any time to monitor all surrounding conversations within a 15-foot radius; and it allowed the purchaser to monitor the user’s incoming and outgoing e-mail messages and SMS messages, incoming voicemail messages, address book, calendar, photographs, and videos. All of these functions were enabled without the knowledge of the user of the phone.
Akbar and his co-conspirators allegedly programmed StealthGenie to synchronize communications intercepted by the app with the customer’s account so that the customer could review intercepted communications almost immediately from any computer with access to the Internet. To install the app, a purchaser needed to obtain physical control over the phone to be monitored for only a few minutes. The purchaser could then review communications intercepted from the monitored phone without ever again having physical control over the phone. Akbar and others alleged designed SteathGenie to be undetectable to users of the phone.
According to allegations in the indictment, the business plan for the development, sale and advertisement of StealthGenie stated that the target population for the marketing of the app was “[s]pousal cheat: Husband/Wife of (sic) boyfriend/girlfriend suspecting their other half of cheating or any other suspicious behaviour or if they just want to monitor them.” Language and testimonials on the StealthGenie website focused significantly on potential purchasers who did not have any ownership interest in the mobile phone to be monitored, including those suspecting a spouse or romantic partner of infidelity. The indictment alleges that Akbar and his co-conspirators fabricated the testimonials.
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty in a court of law.
This case is being investigated by the FBI’s Washington Field Office, and prosecuted by Trial Attorneys William A. Hall Jr. and Peter V. Roman of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Jay V. Prabhu of the Eastern District of Virginia.
The FBI has made available a document for individuals with questions concerning StealthGenie. It may be found at http://www.ic3.gov/media/2014/140930.aspx.
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Pakistani Man Indicted for Selling “Stealthgenie” Spyware AppRead the Press Release
WASHINGTON – A Pakistani man has been indicted in the Eastern District of Virginia for allegedly conspiring to advertise and sell StealthGenie, a spyware application (app) that could monitor calls, texts, videos and other communications on mobile phones without detection. This marks the first-ever criminal case concerning the advertisement and sale of a mobile device spyware app.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Assistant Director in Charge Andrew McCabe of the FBI’s Washington Field Office made the announcement.
“Selling spyware is not just reprehensible, it’s a crime,” said Assistant Attorney General Caldwell. “Apps like StealthGenie are expressly designed for use by stalkers and domestic abusers who want to know every detail of a victim’s personal life – all without the victim’s knowledge. The Criminal Division is committed to cracking down on those who seek to profit from technology designed and used to commit brazen invasions of individual privacy.”
“StealthGenie has little use beyond invading a victim’s privacy” said U.S. Attorney Boente. “Advertising and selling spyware technology is a criminal offense, and such conduct will be aggressively pursued by this office and our law enforcement partners.”
“This application allegedly equips potential stalkers and criminals with a means to invade an individual’s confidential communications,” said FBI Assistant Director in Charge McCabe. “They do this not by breaking into their homes or offices, but by physically installing spyware on unwitting victim’s phones and illegally tracking an individual’s every move. As technology continues to evolve, the FBI will investigate and bring to justice those who use illegal means to monitor and track individuals without their knowledge.”
According to allegations in the indictment, Hammad Akbar, 31, of Lahore, Pakistan, is the chief executive officer of InvoCode Pvt Ltd, the company that advertises and sells StealthGenie online. Akbar and his co-conspirators allegedly created the spyware, which could intercept communications to and from mobile phones, including Apple’s iPhone, Google’s Android, and Blackberry Limited’s Blackberry. StealthGenie was undetectable by most users and was advertised as being untraceable.
Akbar was charged in the indictment with conspiracy, sale of a surreptitious interception device, advertisement of a known interception device and advertising a device as a surreptitious interception device. He was arrested in Los Angeles on Sept. 27, 2014, and is expected to appear before a magistrate judge in the Central District of California later today.StealthGenie was hosted at a data center in Ashburn, Virginia. On Sept. 26, 2014, a federal judge in the Eastern District of Virginia issued a temporary restraining order authorizing the FBI to temporarily disable the website hosting StealthGenie.
The indictment alleges that StealthGenie’s capabilities included the following: it recorded all incoming/outgoing voice calls; it intercepted calls on the phone to be monitored while they take place; it allowed the purchaser to call the phone and activate it at any time to monitor all surrounding conversations within a 15-foot radius; and it allowed the purchaser to monitor the user’s incoming and outgoing e-mail messages and SMS messages, incoming voicemail messages, address book, calendar, photographs, and videos. All of these functions were enabled without the knowledge of the user of the phone.
Akbar and his co-conspirators allegedly programmed StealthGenie to synchronize communications intercepted by the app with the customer’s account so that the customer could review intercepted communications almost immediately from any computer with access to the Internet. To install the app, a purchaser needed to obtain physical control over the phone to be monitored for only a few minutes. The purchaser could then review communications intercepted from the monitored phone without ever again having physical control over the phone. Akbar and others alleged designed SteathGenie to be undetectable to users of the phone.
According to allegations in the indictment, the business plan for the development, sale and advertisement of StealthGenie stated that the target population for the marketing of the app was “[s]pousal cheat: Husband/Wife of (sic) boyfriend/girlfriend suspecting their other half of cheating or any other suspicious behaviour or if they just want to monitor them.” Language and testimonials on the StealthGenie website focused significantly on potential purchasers who did not have any ownership interest in the mobile phone to be monitored, including those suspecting a spouse or romantic partner of infidelity. The indictment alleges that Akbar and his co-conspirators fabricated the testimonials.
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty in a court of law.
This case is being investigated by the FBI’s Washington Field Office, and prosecuted by Trial Attorneys William A. Hall Jr. and Peter V. Roman of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Jay V. Prabhu of the Eastern District of Virginia.
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Nuestra Familia Gang Member Sentenced to More Than 31 Years in Prison for Drug TraffickingRead the Press Release
SACRAMENTO, Calif. — Robert Hanrahan, aka Bubba, 41, of Salinas, was sentenced today by United States District Judge William B. Shubb to 31 years and three months in prison for conspiracy to distribute methamphetamine and cocaine, United States Attorney Benjamin B. Wagner announced.
According to facts admitted during Hanrahan’s guilty plea, beginning in 2003, he acted as a leader of the Nuestra Familia, a violent prison gang based within the California and Federal prison systems whose members exert control over street-level Norteño gang members engaged in drug trafficking and violent crime. Hanrahan oversaw the establishment of Street Regiments in San Francisco and the surrounding Bay Area counties. Hanrahan was the primary supplier of methamphetamine and cocaine to the San Francisco regiment between 2004 and 2005. During the drug conspiracy, in August 2004, Salinas police served a state search warrant for controlled substances at a Salinas residence. Inside the residence, officers found Hanrahan and two pounds of methamphetamine, a pound of cocaine, drug ledgers, two digital scales, empty baggies, a stolen .40-caliber handgun, a 12‑gauge shotgun, and a rifle.
According to the plea agreement, in January 2006, while Hanrahan’s Salinas drug case was pending, he fled to Mexico. The NF funneled money obtained through drug trafficking to him for living expenses in Mexico, which included high phone bills. Western Union receipts traced the flow of NF drug money from Northern California to Hanrahan in Mexico. Ultimately, Hanrahan was apprehended at the U.S.-Mexico border on November 12, 2006.
This case is the product of an investigation by the FBI’s Stockton Violent Crime Task Force, the San Joaquin County Metropolitan Narcotics Task Force (METRO), the Stockton Police Department, the Salinas Police Department, the Watsonville Police Department, and the Monterey County Sheriff’s Office, and the California Department of Corrections and Rehabilitation into the activities of the Nuestra Familia. Assistant United States Attorneys Jason Hitt and William S. Wong prosecuted the case.
This case and a related indictment have resulted in a number of significant sentences:
On April 21, 2010, Manuel Gauna was sentenced to more than 21 years in prison.
On December 13, 2010, Richard Mendoza was sentenced to 17 years in prison.
On February 22, 2011, Bismark Ocampo was sentenced to 28 years in prison.On May 25, 2011, the trial defendants were sentenced to the following:
Larry Amaro was sentenced to 40 years in prison.
Ernest Killinger was sentenced to 362 years in prison.
Gerardo Mora was sentenced to more than 33 years in prison.
Jason Stewart-Hanson was sentenced to 25 years in prison.
On July 25, 2011, Gabriel Caracheo was sentenced to 25 years in prison.
On July 27, 2011, David Ramirez was sentenced to 15 years in prison.
On September 26, 2011, Fernando Villalpando was sentenced to 20 years in prison.
On October 17, 2011, Faustino Gonzalez was sentenced to more than 15 years.
On November 28, 2011, Oscar Campos-Padilla was sentenced to 14 years in prison.
On September 24, 2012, Rebecca Guzman was sentenced to 14 years in prison.
On January 22, 2013, Juan Gallegos, aka Wino, was sentenced to 28 years in prison.
On December 23, 2013, Carolyn Huerta, was sentenced to 10 years in prison.North Dakota Man Gets 30 Years for Traficking over 30 Pounds of Meth in Bakken AreaRead the Press Release
Butte-A 48-year-old Minot, North Dakota man who trafficked over 34 pounds in and around Montana was sentenced to 30 years in federal prison. United States District Court Sam Haddon sentenced Lloyd Nickle to 360 months in prison, followed by a term of 5 years supervised release. A federal jury made up of Montana citizens found Nickle guilty on June 11, 2014, following a trial in Butte. He was convicted of conspiracy to possess with the intent to distribute methamphetamine and possession with the intent to distribute methamphetamine.
Nickle's 30-year sentence sends a clear message to all those engaging in criminal enterprise in and around the Bakken," said Montana U.S. Attorney Mike Cotter. "If you push poison in Montana, you will pay the price. Meth traffickers are in the despicable business of destroying individuals, families, and placing Montana's public in danger. The Department of Justice and the U.S. Attorney's Office are committed to the relentless fight against drug distribution in Big Sky Country."
The FBI recognizes the positive impact of coordinated law enforcement efforts pertaining to drug trafficking in multi-jurisdictional areas," said Mary Rook, FBI Special Agent in Charge of the Salt Lake City Division. "This case illustrates incredible results based on the cooperation of all of the involved agencies."
Nickle was engaged in the methamphetamine conspiracy from June 2012 until January 2014. During the course of the conspiracy, Nickle purchased large amounts of methamphetamine from sources in California for distribution in Montana and North Dakota. Nickle, who is from Minot, North Dakota, would send partial payments for the methamphetamine by Federal Express to the sources and then make arrangements to meet the sources in various locations to complete the transactions. These meetings occurred in Butte, Dillon, Elko, Nevada, Caldwell, Idaho and Sacramento, California. Nickle and his fellow conspirators would then transport the methamphetamine to Butte, Billings, and other locations in Montana and North Dakota for distribution. Nickle was found responsible for the possession and distribution of at least 34 pounds of methamphetamine over the course of the conspiracy.
Von Rackham, one of Nickle's co-conspirators was previously sentenced to 135 months imprisonment. Margaret Silvia, another co-conspirator, was sentenced to 100 months, and Leonard Ewalt was sentenced to 138 months. Nickle was acquitted by the jury of a gun charge.
The prosecution was part of Project Safe Bakken, a cooperative effort between federal and state prosecutors and federal, state, local, and tribal law enforcement agencies in Montana and North Dakota. The case was investigated by the Federal Bureau of Investigation, Montana Division of Criminal Investigations and the Butte-Silver Bow Law Enforcement Department.
Norris Man Sentenced for Two Counts of Assault with A Dangerous WeaponRead the Press Release
United States Attorney Brendan V. Johnson announced that a Norris, South Dakota, man convicted of two counts of Assault with a Dangerous Weapon was sentenced on September 23, 2014, by U.S. District Judge Roberto A. Lange.
Chauncy Crow Dog, age 20, was sentenced to 42 months in custody, 2 years of supervised release, restitution, and a $200 special assessment to the Federal Crime Victims Fund.
Crow Dog was indicted by a federal grand jury on August 21, 2013, and pled guilty on June 17, 2014.
The convictions arose from an incident that took place on August 14, 2013, at the Paul Mart Store in Rosebud. The two victims engaged in an argument and physical confrontation with Crow Dog and another person. Crow Dog retrieved a baseball bat and struck both men, knocking them to the ground. Neither victim had a weapon. While the victims were down and on the ground, Crow Dog delivered blows to their backs and to their heads. Crow Dog’s friends told him to stop, but he did not. The victims were seriously injured.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Tim Maher.
Crow Dog was remanded to the custody of the U.S. Marshals Service to begin serving his sentence.
Norris Man Sentenced for Sexual Abuse of A MinorRead the Press Release
United States Attorney Brendan V. Johnson announced that a Norris, South Dakota, man convicted of Sexual Abuse of a Minor was sentenced on September 22, 2014, by U.S. District Judge Roberto A. Lange.
Arnold Eagle Bear, Jr., age 32, was sentenced to 27 months in custody, 5 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund. Also, Eagle Bear cannot have contact with minors, shall register as a sex offender, and participate in a sex offender program.
Eagle Bear was indicted by a federal grand jury on April 22, 2014. He pled guilty on June 30, 2014.
The conviction stems from incidents between November 1, 2013, and December 31, 2013, when Eagle Bear used his computer to communicate with underage girls. He misrepresented his age as being 18 or 19 when he spoke with a minor female. They later met at her house and had sexual intercourse. He knew it was wrong but believed girls would not talk to him if they knew his real age.
This case was investigated by the Federal Bureau of Investigation and the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Timothy M. Maher prosecuted the case.
Eagle Bear was immediately turned over to the custody of the U.S. Marshals Service.
Nashville Man Pleads Guilty to Mailing Threatening Communication on the Front of A Ku Klux Klan PublicationRead the Press Release
Memphis, TN – Daniel Puckett, age 58, of Nashville, Tennessee, pleaded guilty today to a one count indictment charging him with mailing a threatening communication to his ex-employer, announced Edward L. Stanton III, United States Attorney for the Western District of Tennessee.
“Today’s guilty plea reflects the vile nature of the threatening communication Daniel Puckett sent to his fellow co-worker,” said U.S. Attorney Stanton. “The U.S. Attorney’s Office will continue to vigorously prosecute those who commit heinous acts like Puckett’s, as there is simply no room in a civilized society for this kind of hateful conduct.”
According to facts revealed in the indictment and recited during the plea, Puckett was employed by Aerotech Corporation, a temporary employment service. Puckett was placed as a temporary employee at Unilever Corporation in Covington, Tennessee, but was later released by Unilever. Puckett sent a threatening communication written across the front of a Ku Klux Klan publication titled The Torch to his ex-supervisor at Unilever. The statement written on the publication read, “We have space for you and your family under a big oak tree.” Inside the publication it was written that the supervisor was not a member of the “Knights” but wanted to attend the “National Klan Congress.” Title 18, United States Code, Section 876 makes it a crime to mail a threatening communication.
Puckett faces a maximum penalty of five years imprisonment, a $250,000 fine, and a period of supervised release. Sentencing is scheduled for January 9, 2015, at 11:00 a.m. before United States District Judge Sheryl H. Lipman.
This case was investigated by the United States Postal Inspection Service and the Covington Police Department. The case is being prosecuted by First Assistant United States Attorney Lawrence Laurenzi on behalf of the government.
Mobridge Man Charged with Assaulting, Resisting, or Impeding A Federal Officer Involving Physical ContactRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mobridge, South Dakota, man has been indicted by a federal grand jury for Assaulting, Resisting, or Impeding a Federal Officer Involving Physical Contact.
Ed Charles LeClair, IV, age 22, was indicted on September 16, 2014. He appeared before U.S. Magistrate Judge Mark A. Moreno on September 22, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 8 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about July 27, 2014, LeClair forcibly assaulted, resisted, opposed, impeded, intimidated, and interfered with a Dewey County Deputy Sheriff while he was assisting federal law enforcement officers. They were all engaged in the performance of their official duties.
The charge is merely an accusation and LeClair is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Services and the Dewey County Sheriff’s Office. Assistant U.S. Attorney Mikal Hanson is prosecuting the case.
LeClair was released on bond pending trial. A trial date has not been set.
Mission Man Sentenced for First Degree BurglaryRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mission, South Dakota, man convicted of First Degree Burglary was sentenced on September 23, 2014, by U.S. District Judge Roberto A. Lange.
Joshua Daniel Peneaux, age 19, was sentenced to 44 months in custody, 2 years of supervised release, $1,400 in restitution, and a $100 special assessment to the Federal Crime Victims Fund.
Peneaux was indicted by a federal grand jury on April 8, 2014, and pled guilty on July 14, 2014.
The conviction stems from an incident on March 30, 2014, in Mission, when Peneaux and others kicked open the door of a home in the middle of the night intending to loot the house of valuables to sell for money to buy marijuana. The homeowner became alert to the intrusion, armed himself with a firearm, and confronted the intruders. When the intruders did not get on the floor as instructed, the homeowner shot at the intruders, mortally wounding one and shooting Peneaux in the buttock. When Peneaux was taken to the hospital for treatment, a knife was found in his pants pocket.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Tim Maher.
Peneaux was remanded to the custody of the U.S. Marshals Service to begin serving his sentence.
- Mission Man Gets Nearly 20 Years for Leading Marijuana Conspiracy
Michael and Tommy Brummitt Sentenced for Being Felons in Possession of FirearmsRead the Press Release
GREENEVILLE, Tenn. – On Sept. 29, 2014, Tommy Brummitt, 43, of Elizabethton, Tenn., was sentenced by the Honorable J. Ronnie Greer, U.S. District Judge, to serve 188 months in federal prison, for being a felon in possession of a firearm. Judge Greer previously sentenced Michael J. Brummitt, 44, also of Elizabethton, on Sept. 22, 2014, to serve 54 months in federal prison for also being a felon in possession of a firearm. Upon their release from prison, each will be subject to supervision by the U.S. Probation Office for five years. There is no parole in the federal system.
Both Tommy and Michael Brummitt pleaded guilty to possession of firearms after having been previously convicted of a felony offense. Tommy Brummitt was subject to the provisions of the Armed Career Criminal Act, which provides for a minimum mandatory sentence of 15 years for possession of a firearm after three prior felony convictions for violent offenses or drug trafficking offenses.
In October 2013, shots were fired from a vehicle in which the Brummitts, who are cousins, were traveling on Dry Creek Road in Elizabethton. Shotgun pellets struck several residences and some residents suffered injuries. The Brummitts fled from officers, but were quickly apprehended by deputies with the Carter County Sherriff’s Department. Each denied being the shooter, although the shots were fired from the vehicle in which only the two Brummitts were occupants.
Law enforcement agencies participating in the joint investigation included the Carter County Sheriff’s Department and Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorney J. Gregory Bowman represented the United States.
This case was brought as part of Project Safe Neighborhoods (PSN), a comprehensive national strategy that creates local partnerships with law enforcement agencies to effectively enforce existing gun laws. It provides more options to prosecutors, allowing them to utilize local, state, and federal laws to ensure that criminals who commit gun crime face tough sentences. PSN gives each federal district the flexibility it needs to focus on individual challenges that a specific community faces.
Mexican Citizen Apprehended in Lebanon County Charged with Improper EntryRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania and the U.S. Department of Homeland Security, Immigration and Customs Enforcement, Enforcement and Removal Operations (ERO) announced today that a 42-year-old native and citizen of Mexico has been charged with improper entry into the United States.
According to United States Attorney Peter Smith, Gerardo Bedolla-Diaz, age 42, was charged in a one-count information filed with the Court in Harrisburg today.
The information alleges that Bedolla-Diaz, an illegal alien, did enter the United States at any time or place other than as designated by immigration officers and was found in the United States in Lebanon County, Pennsylvania after eluding examination or inspection by immigration officers.
If convicted, Bedolla-Diaz faces a maximum sentence of up to six months’ imprisonment and a $5,000 fine
This investigation was conducted by the U.S. Department of Homeland Security, Immigration and Customs Enforcement, Enforcement and Removal Operations (ERO). It is being prosecuted by Special Assistant United States Attorney Alice Song Hartye.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Mercer County, N.J., Woman Sentenced to 32 Months in Prison for Narcotics DistributionRead the Press Release
TRENTON, N.J. - A Lawrenceville, New Jersey, woman was sentenced today to 32 months in prison for distributing oxycodone-based prescription pills from a steakhouse in Trenton, U.S. Attorney Paul J. Fishman announced.
Mary Manfredo, 67, previously pleaded guilty before U.S. District Judge Michael A. Shipp to an indictment charging her with one count of conspiracy to distribute and possess with intent to distribute oxycodone. Judge Shipp imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Manfredo admitted that from May 2011 through July 2012, she conspired with Joseph Giorgianni, a/k/a “Jo Jo,” 65, of Ewing Township, New Jersey; Charles Hall III, 51, of Trenton; Anthony DiMatteo, 33, of Trenton; Giuseppe A. Scordato, 49, of Hamilton, New Jersey; and others to illegally acquire and distribute oxycodone-based prescription pills. JoJo’s Steakhouse, a Trenton restaurant, served as a front for the conspiracy. Manfredo admitted that she received pills from Giorgianni and Hall at JoJo’s Steakhouse and then gave them to DiMatteo and Scordato. After selling the pills, DiMatteo and Scordato gave a portion of the proceeds to Manfredo, who later gave the money to Giorgianni and Hall.
For their roles in the conspiracy, DiMatteo and Scordato were sentenced to 87 months in prison and 48 months in prison, respectively.
Giorgianni and Hall also were sentenced – to 78 months in prison and 48 months in prison, respectively – after pleading guilty to the oxycodone distribution conspiracy and separate charges, including conspiring with the former Trenton Mayor Tony Mack to extort bribes and kickbacks in connection with a Trenton parking garage project.
In addition to the prison terms, Judge Shipp sentenced Manfredo to serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI’s Trenton Resident Agency, Newark Field Office, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation.
The government is represented by Assistant U.S. Attorneys Eric W. Moran and Matthew J. Skahill of the U.S. Attorney’s Office Special Prosecutions Division in Trenton and Camden, respectively.14-346
Defense counsel: Anthony Simonetti Esq., Hightstown, New JerseyMarysville Man Sentenced to Nine Years in Prison for Distribution of Pictures of Child RapeRead the Press Release
A 43-year-old Marysville, Washington man was sentenced today in U.S. District Court in Seattle to nine years in prison for distribution of child pornography, announced U.S. Attorney Jenny A. Durkan. TODD ALAN RAMEY was arrested in November 2013 following the serving of a search warrant at his Marysville home. RAMEY was identified in an investigation by U.S. Immigration and Customs Enforcement’s Homeland Security Investigation (HSI) of a foreign based website used to exchange images of child rape and sexual abuse. The forensic review of RAMEY’s computer revealed more than 14,000 images and 1,700 videos of children being raped and sexually molested. RAMEY was ordered to pay $12,000 in restitution to the victims depicted in the photos. U.S. District Judge James L. Robart imposed 15 years of supervised release following the prison sentence.
According to records filed in the case, RAMEY came to the attention of law enforcement because of his use of a website involved in the exchange of child pornography. In addition to the child pornography, RAMEY distributed images of children with descriptions of how he planned to rape or molest them. RAMEY had been investigated previously in connection with sexual contact with a 14-year-old. RAMEY pleaded guilty to distribution of child pornography in February 2014.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys= Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/pscThe case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigation (HSI) and was prosecuted by Assistant United States Attorney Kate Vaughan.
Manon Cote Imprisoned for Embezzling from Newport EmployerRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that Manon Cote, 47, of Newport, was sentenced today in United States District Court in Brattleboro to 15 months of imprisonment following her guilty to a forgery charge which stemmed from Cote's embezzlement of hundreds of thousands of dollars from her employer. U.S. District Judge J. Garvan Murtha ordered that Cote serve three years of supervised release following completion of her prison term, and pay restitution of about $368,000. Cote was directed to surrender to the Bureau of Prisons on November 18 to begin serving her sentence.
On March 21, 2013, a federal grand jury in Burlington returned a three count indictment charging Cote with mail and wire fraud and forging checks of an organization. Cote pled guilty to the forgery charge last October. According to the indictment, Cote was employed as office manager for DeLaBruere=s Auto Sales, Inc., a new and used car and truck dealership in Newport. Between 2006 and January 2012, Cote embezzled about $380,000 from DeLaBruere=s, primarily be stealing cash from the daily receipts she was responsible for depositing into the company=s bank account. Cote tried to cover up the thefts of cash by writing company checks to unauthorized payees in amounts equal to the sum of cash she was stealing, then depositing the checks back into the company bank account. In issuing those checks, Cote used without authority the signature stamp of the owner of DeLaBruere=s. Cote stole additional company funds by improperly issuing checks to herself; by using company funds to pay personal loans; and by using the company credit card for personal reasons.
This case was investigated by the Vermont State Police and the U.S. Secret Service.
Cote is represented by Assistant Federal Public Defender David McColgin. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Man Using False Identity Sentenced to 27 Years in Prison on International Sex TraffickingRead the Press Release
First time recently enacted extraterritorial jurisdiction provision of our anti-trafficking laws is used to charge sex trafficking occurring in another country
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office, and Wendy A. Bashnan, Special Agent in Charge, Bureau of Diplomatic Security (DS), Miami Field Office, announce that Damion St. Patrick Baston, 37, of Jamaica, was sentenced by U.S. District Judge Cecilia M. Altonaga to 324 months in prison, followed by a lifetime of supervised release.
On July 1, 2014, Baston was convicted by a jury of all of the crimes with which he was charged: three counts of sex trafficking through means of force, threats of force, fraud, and coercion, both in the Southern District of Florida and in multiple countries around the world, including Australia, in violation of Title 18, United States Code, Sections 1591(a)(1) and 1596; five counts of transporting multiple individuals for prostitution, in violation of Title 18, United States Code, Section 2421; one count of importation of an alien for prostitution, in violation of Title 8, United States Code, Section 1328; one count of use of a passport secured by false statement, in violation of Title 18, United States Code, Section 1542; one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A; one count of illegal reentry of an alien previously ordered removed, in violation of Title 8, United States Code, Section 1326; and nine counts of money laundering, in violation of Title 18, United States Code, Section 1956.
According to the indictment, other documents filed in federal court and statements made, beginning as early as 2009, Baston victimized seven women in the Middle East, Australia, and the United States. At trial, six victims bravely testified that the defendant had used force, threats, and coercion to traffic them for sex in various cities, including Miami. Baston had been ordered removed from the United States in the late 1990s following his conviction for an aggravated felony, but thereafter stole the identity of an American citizen, which he used to obtain a Florida driver’s license and U.S. passport in that person’s name. Baston used this false identity for international travel as he continued to recruit and victimize women.
Mr. Ferrer commended the investigative efforts of ICE-HSI and DS, as well as the Australian Federal Police. The case was prosecuted by Assistant U.S. Attorneys Olivia S. Choe and Roy K. Altman.
Human trafficking must stop. To report suspected human trafficking occurring in South Florida, please call the National Human Trafficking Resource Center Hotline at 1-888-373-7888.
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.
Lonnie Greer, Jr. Sentenced for Being A Felon in Possession of FirearmsRead the Press Release
GREENEVILLE, TN – On Sept. 29, 2014, Lonnie Gene Greer, Jr., 36, of Jonesborough, Tenn., was sentenced by the Honorable J. Ronnie Greer, U.S. District Judge, to serve 180 months in federal prison. Upon his release from prison, Greer will be subject to supervision by the U.S. Probation Office for three years. There is no parole in the federal system.
Greer pleaded guilty to possession of firearms after having been previously convicted of a felony offense. He had been previously convicted of multiple aggravated burglaries in Washington County.
Greer was the subject of a firearms trafficking investigation by the Washington County Sheriff’s Department. His possession of firearms was discovered after he was arrested by the Washington County Sheriff’s Office for evading arrest. Further investigation confirmed that Greer sold multiple firearms, which he admitted were sometimes traded for illegally obtained prescription narcotics.
Law enforcement agencies participating in the joint investigation included the Washington County Sheriff’s Department and Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorney J. Gregory Bowman represented the United States.
This case was brought as part of Project Safe Neighborhoods (PSN), a comprehensive national strategy that creates local partnerships with law enforcement agencies to effectively enforce existing gun laws. It provides more options to prosecutors, allowing them to utilize local, state, and federal laws to ensure that criminals who commit gun crime face tough sentences. PSN gives each federal district the flexibility it needs to focus on individual challenges that a specific community faces.
Laytonville Resident Pleads Guilty to Manufacturing Marijuana and Money LaunderingRead the Press Release
SAN FRANCISCO – Matthew David Graves pleaded guilty on Sept. 26, 2014, to manufacturing and possession of marijuana with intent to distribute, conspiracy to do so, and money laundering, announced United States Attorney Melinda Haag, Drug Enforcement Administration Special Agent in Charge Jay Fitzpatrick and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.
In open court, Graves admitted that between Nov. 6, 2008 and Nov. 8, 2012, he knowingly and intentionally conspired to manufacture and possess with the intent to distribute 100 or more marijuana plants and that he possessed more than 100 marijuana plants with intent to distribute on multiple occasions during that period. Graves also pleaded guilty to multiple counts of money laundering and admitted that he made multiple cash deposits into the bank account of his business, Matt Graves Construction, and that those deposits involved the proceeds from the manufacturing and possession of marijuana.
On Sept. 19, 2013, Graves, 56, of Laytonville, Calif., was charged by a Superseding Indictment with conspiracy to possess with the intent to distribute marijuana, three counts of manufacturing and possession with intent to distribute marijuana, four counts of money laundering, and one count of being a felon in possession of a firearm. Graves pleaded guilty to all counts in the superseding indictment with the exception of being a felon in possession of a firearm.
Graves also consented to the forfeiture of his interest in four pieces of real property in Leggett, Calif. and a 2008 Toyota Tundra. This property was used to commit or facilitate the crimes to which Graves pleaded guilty.
The maximum statutory penalties for conspiracy to manufacture and possess with intent to distribute 100 or more marijuana plants, in violation of 21 U.S.C. § 846, and manufacture and possession with intent to distribute 100 or more marijuana plants, in violation of U.S.C. §§ 841(a)(1) and 841(b)(1)(B)(vii), is 40 years in prison with a mandatory minimum of five years imprisonment, a $5,000,000 fine and a lifetime supervised release with a four year minimum term of supervised release. The maximum statutory penalty for money laundering, in violation of 18 U.S.C. § 1956(a)(1)(B)(i), is 20 years in prison, and a $500,000 fine or twice the value of the property involved in the transaction. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Graves sentencing is scheduled for Dec. 17, 2014, before the Honorable Charles R. Breyer, United States District Court Judge, in San Francisco.
Assistant United States Attorney Kevin Barry is prosecuting the case. The prosecution is the result of an investigation by the Mendocino County Sheriff's Office, the Drug Enforcement Administration, and the Internal Revenue Service, Criminal Investigation.
(Graves superseding indictment )
Justice Department Settles with Private Montessori School to Prevent Disability DiscriminationRead the Press Release
The Justice Department announced today that it has reached an agreement with Milwaukee Montessori School, a private day school serving over 400 children from 18 months old through eighth grade, to remedy alleged violations of the Americans with Disabilities Act (ADA). The agreement resolves allegations by the department that the school failed to accommodate and then impermissibly disenrolled a young child whose disability caused him to stumble and fall more frequently than his peers. The agreement is being filed as a consent decree along with a complaint in the U.S. District Court for the Eastern District of Wisconsin, and must be approved by the court.
Under the agreement, the school will adopt a disability nondiscrimination policy, including procedures for prompt handling of requests to reasonably modify school policies for children with disabilities. The school will train teachers, administrators, and board members on ADA requirements and report to the department on its compliance with the agreement. In addition, the school will pay $50,000 in compensatory damages to the child identified in the complaint and his parents, and will pay a civil penalty of $5,000 to the United States.
“It is illegal under the ADA to discriminate against children with disabilities,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “Just like public schools, private schools must make reasonable modifications of policies to permit children with disabilities to participate fully in their programs. This agreement ensures that children will not be denied quality educational opportunities based on their disabilities.”
“This is a most important, meaningful, and effective action by the leadership of the Milwaukee Montessori School to ensure compliance with the ADA,” said James L. Santelle, U.S. Attorney for the Eastern District of Wisconsin. “The agreement that we are announcing today reflects the school’s commitment and that of the Justice Department to ensure the full accessibility and opportunity promises of the law in the private educational setting.”
Title III of the ADA requires public accommodations, including private schools such as Milwaukee Montessori School, to provide individuals with disabilities equal access to goods, services, privileges, accommodations, facilities, advantages and accommodations. For more information about the ADA, call the Department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or access the ADA website at www.ada.gov.
Joliet Man to Serve More Than Six Years in Prison for Possession of A Firearm by A FelonRead the Press Release
Urbana, Ill. – A Joliet, Ill., man, Troy J. Kelly, 32, of the 900 block of Leawood Drive, was sentenced today to serve 77 months (6 years, 5 months) in federal prison for possessing a firearm as a felon. U.S. District Judge Colin Bruce also ordered that Kelly remain on supervised release for a period of three years following completion of his prison sentence.
A grand jury indicted Kelly in February 2014, and he has remained in the custody of the U.S. Marshals Service since his arrest in March 2014. On June 3, Kelly entered a plea of guilty to being a felon in possession of a .45 caliber semi-automatic pistol on Oct. 3, 2013, in Kankakee County.
The charge is the result of ongoing investigations related to gun violence in the Kankakee area by the Kankakee Area Project Safe Neighborhoods Task Force, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Kankakee Police Department. Assistant U.S. Attorney Eugene L. Miller prosecuted the case.
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney's Office announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Judge Strong in Great Falls on September 29, 2014, and entering pleas of Not Guilty were:
WILLIAM JAMES BALL, a 46-year-old resident of Harlem, appeared on charges of aggravated sexual abuse and strangulation. If convicted of the most serious charges contained in the indictment, BALL faces life in prison, $250,000 in fines and lifetime supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference: 14-81
ROBERT ALLEN SMITH, a 59-yeard-old resident of Great Falls, appeared on charges of receipt of child pornography and possession of child pornography. If convicted of the most serious charge contained in the indictment, SMITH faces 20 years in prison, $250,000 in fines and lifetime years supervised release. The case was investigated by the Great Falls Police Department. PACER Case Reference: 14-70
Appearing before U.S. Magistrate Judge Ostby in Billings on September 25, 2014, and entering pleas of Not Guilty were:
DUSTIN JAMES MASSEY, a 29-year-old resident of Billings, appeared on charges of conspiracy to possess with intent to distribute methamphetamine. If convicted of the most serious charge contained in the indictment, MASSEY faces 20 years in prison, $1,000,000 in fines and 3 years supervised release. The case was investigated by Federal Bureau of Investigation. PACER Case Reference: 14-96
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court's calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl..
Indiana Man Charged with Perjury, Obstruction and Making False StatementsRead the Press Release
Alexander Krivozus, 42, of Carmel, Indiana, was charged earlier this week by a grand jury in Cleveland, Ohio for two counts of making false statements, one count of perjury and one count of obstruction of justice during an investigation into a Cleveland resident who maintained a secret bank account at UBS, the Justice Department and Internal Revenue Service announced.
According to the documents filed with the court, during 2009 through 2011, the Department of Justice and the IRS were investigating Edward Gurary, of Cleveland, Ohio as a result of receiving records from UBS bank in Switzerland from Gurary’s undeclared bank account at UBS. The records revealed that Gurary had UBS wire funds from his undeclared bank account to various bank accounts in Latvia, and asked UBS to fax the confirmations of some of the wire transfers to a fax number in the (317) area code, a number the government later associated with Krivozus. Krivozus was subpoenaed to testify, interviewed by the government over two days, and testified before the grand jury. In each interview, as well as before the grand jury, Krivozus denied knowing about the Gurary transactions or the faxed confirmations.
According to other court records, Gurary was arrested in February 2011, and pleaded guilty on March 08, 2011 in United States District Court in Cleveland, Ohio to one count of filing false income tax returns with the IRS for the years 2004 through 2008. The charges against Krivozus allege that his statements and denials in the interviews and before the grand jury were false.
Krivozus faces a maximum sentence of five years in prison on each charge, a $250,000 fine, and 3 years of supervised release.
The case was investigated by the IRS Criminal Investigation Division, and is being prosecuted by Justice Department Tax Division trial attorney Richard M. Rolwing and Assistant United States Attorney Robert Patton.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax/. Additional information about tax fraud schemes to watch out for may be found on the IRS Criminal Investigation Web site at http://www.ustreas.gov/irs/ci/.
Hillsboro Drywall Company President Sentenced for Federal Tax EvasionRead the Press Release
PORTLAND, Ore. - On Friday, September 26, 2014, Stephen Gregory Nagy, 53, Hillsboro, Oregon, was sentenced by the U.S. District Judge Michael W. Mosman, to nineteen months in federal prison for evading the payment of federal payroll taxes. Judge Mosman also ordered that Nagy pay $481,517.73 in restitution to the IRS, and serve a three-year term of supervision upon his release from prison. Nagy, who had previously pleaded guilty to tax evasion, was the president of S&S Drywall Assemblies, a company providing drywall services in the construction industry, from January 2005 through September 2011. Nagy was ordered to surrender to U.S. Marshals by December 2, 2014.
The IRS assessed S&S Drywall Assemblies $481,519 in federal employment taxes, penalties and interest for the quarters beginning June 2009 and ending September 2010. Nagy met with the IRS in May 2010, and committed to a plan to pay the past due payroll taxes for his company, but he decided not to comply with the payment plan and engaged in a variety of interrelated fraudulent schemes to evade the payment of the delinquent payroll taxes.
Nagy began conducting extensive business transactions in cash in order to hide funds from the IRS. He obtained the cash by illegally hiring undocumented workers to work on prevailing wage jobs, paying them a small portion of the prevailing hourly rate, and demanding that they kick back the largest portion of their wages to him in cash. Nagy failed to report this cash to the IRS.
Nagy also forced some S&S Drywall employees to file for unemployment benefits through the Oregon Employment Department. After the employees filed for unemployment coverage, Nagy fraudulently insisted that they continue to work full-time for S&S Drywall. The unemployment benefits did not fully compensate the employees at a rate equal to their previous S&S Drywall salaries. To make up the deficit, Nagy gave employees cash payments amounting to the difference between the unemployment benefits and their full-time salaries. These cash wages were neither reported to the IRS, nor were traceable by the IRS. Nagy did not withhold federal income taxes, or Social Security and Medicare taxes from these cash payments. Another result of this scheme was that Nagy had the State of Oregon pay a large portion of his labor costs, giving him more profit from his drywall business. Nagy used some of the cash from the prevailing wage fraud to pay the difference between his employees’ full-time salaries and the illegal unemployment benefits they were receiving. Nagy intimidated, manipulated, and threatened the loss of much needed jobs to gain the cooperation of his employees in this scheme.
Nagy also thwarted IRS collection efforts by placing business and personal assets in the names of others, by physically hiding the assets, and by eventually transferring all S&S Drywall Assemblies income, contracts, receivables, and assets to ASM Drywall, Inc., a shell company he created and placed in his sister’s name.
“Stephen Nagy spent years planning and executing his scheme to steal from his employees and to cheat the IRS,” said U.S. Attorney Amanda Marshall. “It is through the diligent efforts of our law enforcement partners, the IRS and the investigators at the Oregon Department of Justice, that this criminal was finally brought to justice.”
"When a person undertakes to cheat on their tax obligation as Nagy did, they take advantage of all the American taxpayers," said Special Agent in Charge Teri Alexander of IRS Criminal Investigation. "Paying taxes is the price we all pay to live in a free and functioning society. When someone fails to pay their fair share, the rest of us bear the burden. Moreover, in this case, Nagy cheated his employees who trusted him to pay their payroll deductions, thus robbing them of Social Security, Medicare, and other important contributions."
Special Agents with the IRS-Criminal Investigation, and the Oregon Department of Justice, Criminal Justice Division investigated the case. Assistant U.S. Attorney Claire M. Fay and Special Assistant U.S. Attorney Andrew D. Campbell prosecuted the case.
Head of International Narcotics Trafficking and Money Laundering Organization Sentenced to 150 Years in PrisonRead the Press Release
Organization spanned three continents, distributed over 8 tons of cocaine and laundered over $14 million in narcotics proceeds
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigations (FBI), Miami Field Office, and Donnell Young, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce that Alvaro López Tardón, 39, of Miami Beach and Madrid, Spain, was sentenced by U.S. District Judge Joan A. Lenard to 150 years in prison. In addition to the term of imprisonment, a $14 million forfeiture money judgment and $2 million fine were entered against Tardón. Tardón was also ordered to forfeit a significant number of assets, including luxury real estate, cars and bank accounts.
After a seven-week trial, Tardón was convicted on one count of conspiracy to commit money laundering and 13 substantive counts of money laundering, in violation of Title 18, United States Code, Sections 1956 and 1957, respectively.
Tardón was the head of an international narcotics trafficking and money laundering syndicate which distributed over 7,500 kilograms of South American cocaine in Madrid and laundered over $14,000,000 in narcotics proceeds in Miami by buying high-end real estate, luxury and exotic automobiles and other high-end items. The proceeds were smuggled into Miami by couriers through Miami International Airport, wire transferred to South Florida by co-conspirators via MoneyGram and Western Union, wire transferred to third parties internationally on behalf of Tardón, and wire transferred directly to Tardón and his co-conspirators in Miami through Tardón’s exotic car dealership and other companies controlled by him located in Madrid, Spain.
Following the guilty verdicts, the jury found that a significant portion of the Tardón’s assets should be forfeited. Those assets involved real estate and cars. The real estate purchased by Tardón included condominium units in Miami Beach and Coconut Grove areas of Miami-Dade County. The exotic automobiles included a Bugatti Veyron and Ferrari Enzo, each worth over $1 million, a Mercedes-Benz Maybach 57S, two Mercedes-Benz G55, a Rolls Royce Ghost, and a Land Rover Range Rover. The government also seized three bank accounts.
The seven-week trial included the introduction of over 36,000 pages of financial and corporate documents from Spain and the United States. The trial also included testimony from six members of the Spanish National Police, a member of the Spanish national wiretapping agency (SITEL), and the Spanish taxing authority (Agencia Estatal de la Administración Tributaria).
The investigation and prosecution of Tardón was the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies to identify, investigate and prosecute high level narcotics traffickers and money launderers.
“For over a decade, Tardón oversaw a narcotics trafficking and money laundering organization that spanned three continents, distributed over 8 tons of cocaine and laundered over $14 million,” said U.S. Attorney Wifredo A. Ferrer. “Today’s sentencing, which includes the forfeiture of millions of dollars in assets acquired with the proceeds of the narcotics trafficking, ensures not only that Tardón will spend the rest of his life in prison, but the dismantlement of this criminal organization.”
“With this term of imprisonment, rest assured Alvaro Lopez Tardon’s days as an international drug kingpin are over,” said George L. Piro, Special Agent in Charge, FBI Miami. “This was most certainly a team effort with the Spanish National Police and our partners in the Organized Crime Drug Enforcement Task Force.”
“Today’s sentencing of Tardon is a decisive blow against the drug trafficking and money laundering network. It also sends a clear message to those who attempt to hide their ill-gotten gains through investment in real estate and cars,” said Donnell Young, Acting Special Agent in Charge, IRS Criminal Investigation. “The success of this case can be attributed to the partnership of local, federal and international partners, and IRS Criminal Investigation is proud to be part of such a dedicated group of agencies who were committed to putting Tardon in prison and taking away assets he acquired from the proceeds of his illegal international organization.”
Mr. Ferrer commended the investigative efforts of the FBI, IRS-CI and members of the South Florida High Intensity Drug Trafficking Area Task Force (HIDTA) for their extraordinary work in this multi-agency, multi-jurisdictional investigation. Mr. Ferrer also thanked Customs and Border Protection, Tactical Analytical Unit, Drug Enforcement Administration, Miami Police Department and Monroe County Sherriff’s Office. This case was prosecuted by Assistant U.S. Attorneys Tony Gonzalez, Cristina Maxwell, Daren Grove and Evelyn B. Sheehan.
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.
Hawaii-Bound Meth Trafficker SentencedRead the Press Release
FRESNO, Calif. — Oscar Rodriguez, 31, of Sanger, was sentenced today by United States District Judge Lawrence J. O'Neill to four years and one month in prison, United States Attorney Benjamin B. Wagner announced.
According to court documents, on January 31, 2013, Transportation Security Agency officers stopped Rodriguez at the Modesto Airport after his baggage tested positive for the presence of a prohibited substance. As the result of a pat-down search, officers discovered two zip-lock baggies containing methamphetamine. The combined weight of the packaging materials and methamphetamine was 2.68 pounds. Rodriguez was carrying boarding passes for flights from Modesto to San Francisco and from San Francisco to Maui, Hawaii.
This case was the product of an investigation by the Drug Enforcement Administration, the Transportation Security Administration, and the Modesto Police Department. Assistant United States Attorney Michael Frye prosecuted the case.
Guilty Plea in Spice CaseRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announced that Tamer Shaher Foqahaa, a resident of Mobile, Alabama, entered a guilty plea today before Chief United States District Court Judge William Steele to a one count Information charging a conspiracy to possess with intent to distribute a controlled substance.
The matter was investigated by the DEA, the HSI and MCSENT and was prosecuted by AUSA Deborah Griffin.
Goodwin Announces Crime-fighting Grant for HuntingtonRead the Press Release
U.S. Attorney also welcomes selection of new Huntington police chief
CHARLESTON, W.Va. – United States Attorney Booth Goodwin today announced that Huntington has been awarded $100,000 in grant funding from the U.S. Department of Justice. The grant funding is being provided as part of the Byrne Criminal Justice Innovation Program. The award is a planning grant under which a strategic, collaborative and community-oriented plan will be designed to reduce crime in a specific neighborhood or target area. The city will use the grant to attack crime in downtown Huntington, in an area stretching from 18th Street to 1st Street and Veterans Memorial Boulevard to 7th Avenue.
U.S. Attorney Goodwin also welcomed today's announcement that Joe Ciccarelli has been selected as Huntington's new police chief. "I have known and worked with Joe Ciccarelli for many years during his time as a special agent with the FBI," Goodwin said. "He has long been a leader in the law enforcement community in southern West Virginia. Joe has a unique ability to bring agencies together in pursuit of a common goal. Mayor Williams made a great choice.
"Former Chief Skip Holbrook made invaluable and lasting contributions to the city of Huntington and its police department," Goodwin continued. "I was fortunate to work with him and the department on many initiatives to help fight crime in Huntington. I look forward to continuing that productive partnership and making it even stronger. "
Fresno Man Sentenced to 18 Months in Prison for Laser Strikes on CHP PlaneRead the Press Release
FRESNO, Calif. — David Walter Fee, 22, of Fresno, was sentenced today to 18 months in prison, to be followed by two years of supervised release, for aiming a laser pointer at a California Highway Patrol airplane, announced U.S. Attorney Benjamin B. Wagner.
According to court documents, the CHP airplane, Air 43, was struck up to 50 times by a powerful green laser pointer. As a result, the pilot suffered temporary blindness and Air 43 was forced to break away from a burglary in progress at a Fresno middle school. The CHP pilot reported that he gets struck by lasers almost every night and this incident was “the worst.”
The case was the product of an investigation by the FBI’s Fresno Office, the California Highway Patrol, and the Fresno Police Department. Assistant U.S. Attorneys Karen A. Escobar and Michael G. Tierney prosecuted this case.
“The public should be outraged by this reckless behavior that jeopardizes both air crews and the public,” said Supervisory Special Agent Jacqueline Neumann of the Sacramento FBI’s Fresno resident agency. “The public has the power to stop this activity. If anyone witnesses aircraft laser incidents, they should report it by calling 911 immediately. The public is also encouraged to have conversations with friends and family to improve understanding of the risks and discourage reckless usage of hand-held laser devices. The threat to aircraft safety is real and the penalties for this activity can be substantial.”
According to the latest statistics from the FBI, in 2014, the FAA has received 104 reports of laser incidents involving aircraft from the Eastern District of California. Fresno leads in the number of reported incidents in our district followed by Modesto, Bakersfield, and Sacramento, in that order.
Thousands of laser attacks go unreported every year. If you have information about a laser incident, or see someone pointing a laser at an aircraft, call your local FBI field office or dial 911.
Fremont Man Faces Firearms ChargeRead the Press Release
An information was filed against Timothy J. Miller, age 30, of Fremont, Ohio, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The information charges Miller with possession of two silencers and an AR-15 firearm that were not registered to him in the National Firearms Registration and Transfer Record.
If convicted, the defendant’s sentence will be determined by the court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, and the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is being handled by Assistant United States Attorneys Noah P. Hood and Gene Crawford.
Fort Thompson Man Charged with Aggravated Sexual Abuse of A ChildRead 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 Aggravated Sexual Abuse of a Child.
Dillon Bagola, age 22, was indicted on August 13, 2014. He appeared before U.S. Magistrate Judge Mark A. Moreno on September 22, 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 August 3, 2014, Bagola knowingly engaged in, and attempted to engage in, a sexual act with a child who had not attained the age of 12 years old.
The charge is merely an accusation and Bagola is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation and the Bureau of Indian Affairs, Lower Brule Agency. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
Bagola was remanded to the custody of the U.S. Marshals Service pending trial, which has been set for October 21, 2014.
Former Prison Employee Charged with Providing Contraband to Allenwood InmateRead the Press Release
The United States Attorney's Office for the Middle District of Pennsylvania, announced today that charges have been filed against Megan Shellenberger, currently a resident of Oklahoma City, Oklahoma.
According to United States Attorney Peter Smith, Shellenberger, age 30, is charged in a one-count Information with providing contraband – cell phones – in December 2013 to an inmate serving a sentence at the Federal Correctional Institution, Allenwood Federal Penitentiary, White Deer, Pennsylvania, while Shellenberger was employed there. Shellenberger has resigned from the Bureau of Prisons.
The government also filed a plea agreement in the case which is subject to the approval of the Court.
The investigation was conducted by the Bureau of Prisons, Office of Inspector General, and Bureau of Prisons Special Investigation Service. Assistant United States Attorney Wayne P. Samuelson is assigned to prosecute the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statues and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is one year imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Former Police Officer and School Administrator Charged with Violating Federal Child Sex Abuse LawsOther School Officials Charged with Failing to Report the AbuseRead the Press Release
LOUISVILLE, Ky. – A federal grand jury charged a Grayson County, Kentucky, man with violating federal laws designed to protect children from sexual abuse as well as threatening/intimidating a witness. The grand jury also charged several other school officials with failing to report the abuse, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Stephen E. Miller, age 44, previously worked as a police officer in Leitchfield, Kentucky. He resigned the position following complaints of inappropriate sexual activity toward two women. Miller then began working at Bluegrass Challenge Academy, a residential, educational program run by the Kentucky National Guard, located on Fort Knox Military Base. Miller had supervisory authority over the Academy students. He is charged with engaging in sexual contact with three students, including an incident of aggravated sexual abuse with one of the three. The incidents occurred between February and August, 2013. The Indictment also charges Miller with attempting to threaten or intimidate the third student to prevent her from reporting the matter to law enforcement.
Additionally, the grand jury charged school officials, John W. Smith, Leroy Burgess, Jr., Kemmye S. Graves, Rolanshia Windom, Rita Carthen, and Gabriel Onusko with failing to report the first incident of abuse to law enforcement officials, as required by federal law.
If convicted, Miller faces a maximum sentence of life in prison, a fine of up to $1,250,000 and at least five years of supervised release. The remaining defendants, if convicted, face maximum sentences of one year in prison, a fine of up to $100,000 and up to one year of supervised release. Miller is being held in the custody of the United States Marshals Service.
Assistant United States Attorneys Jo E. Lawless and Stephanie Zimdahl are prosecuting the case. The Federal Bureau of Investigation (FBI) with assistance from the Army Criminal Investigation Division conducted the investigation.
The indictment of a person by a Grand Jury is an accusation
only and that person is presumed innocent until and unless
proven guilty.Former Nashville Resident Sentenced for $1.2 Million Dollar Bank Fraud and Filing False Income Tax ReturnsRead the Press Release
David A. Billington, 51, formerly of Nashville and currently residing in Murray, Kentucky, was sentenced on September 22, 2014, to serve 51 months in prison for bank fraud and filing false tax returns, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Billington was also ordered to pay restitution and the taxes that he owed, when released from prison.
“Fraudulent conduct that impacts federally insured banks will continue to be aggressively investigated by federal law enforcement agencies and prosecuted by this office” said U.S. Attorney David Rivera. “When criminals willfully fail to report their ill-gotten gains, as the law requires, they will also face additional tax charges and stiff penalties.”
Billington pleaded guilty in April 2014 to embezzling $1.2 million from his former employer, Revolution Pictures, where he worked as a contract bookkeeper. Billington admitted to Chief Judge Joseph Haynes that from 2006 to 2011, he secretly wrote a series of company checks made payable to him; altered company books and records to conceal the fraud; and thereby fraudulently obtained company funds that totaled $1.2 million.
Billington also admitted that he failed to disclose the embezzled funds in tax returns he filed for tax years 2006 through 2010, which resulted in an underpayment of almost $280,000 in income taxes.
"This sentence is the culmination of the tireless efforts of the FBI and our law enforcement partners," said A. Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. "Their hard work once again proves that those who violate trust, fiduciary duty, and the law, for personnel gain, will be brought to justice and will pay the price of their crimes."
“No matter what the source of income, all income is taxable,” said Christopher A. Henry, Special Agent in Charge of the Nashville Field Office of the IRS – Criminal Investigation. “The prosecution of individuals who intentionally conceal income and evade taxes is a vital element of the IRS' enforcement strategy. We are pleased with the successful resolution of this investigation due to the cooperative efforts of our law enforcement partners.”
The case was investigated the FBI and the IRS-Criminal Investigation. The United States was represented by Assistant U.S. Attorney Hilliard Hester.
Former City of Marietta Employees and Landlords Sentenced for Section 8 Housing FraudRead the Press Release
ATLANTA - Shantel Bowens, Debbie Bailey, and Babatunde “Babs” Abass have been sentenced for stealing funds from the federal Housing Choice Voucher Program, known as “Section 8,” which provides rental assistance to low-income families.
“By stealing funds from the Section 8 program these defendants deprived needy families of suitable, safe housing,” said United States Attorney Sally Quillian Yates. “We will continue to aggressively prosecute government program fraud and criminals who steal from those most in need.”
Nadine E. Gurley, Special Agent in Charge for the U. S. Department of Housing and Urban Development, Office of Inspector General said: “HUD’s Office of Inspector General is dedicated to protecting taxpayers’ dollars and ensuring HUD programs are free from fraud, waste and abuse. This partnership between the U.S. Attorney’s Office and HUD’s Office of Inspector General has helped demonstrate to our recipients that those who seek to unlawfully profit by defrauding HUD programs will be vigorously prosecuted.”
According to United States Attorney Yates, the charges and other information presented in court: Bowens and Bailey worked for the City of Marietta’s Housing Choice Voucher Program, which oversees tenant and landlord participation in the Section 8 program. HUD provides the program with over $4 million per year in Section 8 funding. Abass and a fourth defendant, Tunji “Chris” Imoukhuede, were enrolled as landlords in the program.
In 2011, Bowens began identifying former Section 8 tenants, and reactivating their accounts, which had been closed. In particular, Bowens and Bailey selected tenants who were eligible for the largest Section 8 payments, based upon their employment and family size. Bowens altered computer records to link these tenants to Abass and Imoukhuede. The falsified records then indicated that the former tenants were now residing in properties owned by Abass and Imoukhuede. As a result, the two landlords began receiving fraudulent Section 8 payments. Abass and Imoukhuede kept 40% of the funds for themselves, and withdrew the remaining 60% in cash. In turn, they gave the cash to Bailey, who split it with Bowens.
During the scheme, which took place from January 2011 through June 2013, the four defendants obtained over $230,000 as a result of their fraudulent actions. In addition, from January 2010 through June 2013, Bowens lived rent-free in Section 8 housing under false pretenses. She falsified computer records so that a rental subsidy would be paid monthly to her own landlord, purportedly on behalf of a former tenant in the program. Over $40,000 in Section 8 funds went to Bowens’ own housing.
Bowens, 43, of Atlanta, Ga., has been sentenced to two years and two months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $275,871. Bowens was convicted on these charges on July 17, 2014, after she pleaded guilty.
Bailey, 41, of Rome, Ga., was sentenced on August 18, 2014, to one year and two months in prison to be followed by three years of supervised release, and was ordered to pay restitution in the amount of $234,977. She pleaded guilty to these charges on May 27, 2014.
Abass, 48, of Mableton, Ga., was sentenced to ten months in prison to be followed by three years of supervised release, and was ordered to pay restitution in the amount of $80,349. He was convicted on these charges on June 11, 2014, after he pleaded guilty.
Tunji Imoukhuede was arraigned on September 17, 2014.
This case was investigated by the U.S. Department of Housing and Urban Development, the City of Marietta, and the Marietta Police Department.
Assistant United States Attorney Shanya J. Dingle prosecuted the case.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Former Belmont Resident Charged with $6 Million Investment Fraud SchemeRead the Press Release
BOSTON – A former Belmont resident was arrested today in El Paso, Texas after being charged in U.S. District Court in Boston with defrauding at least 15 investors of more than $6 million.
John William Cranney, aka Jack Cranney, 73, was charged in an indictment unsealed today with four counts of wire fraud, 16 counts of mail fraud, and three counts of money laundering.
The indictment alleges that Cranney solicited money from people with whom he had personal and business relationships, represented that the money would be invested on their behalf, and guaranteed them a specific rate of return. In fact, Cranney did not invest the money, but instead spent it on personal and business expenses and to repay other victims and creditors.
According to the indictment, Cranney established shell investment entities called Cranney Capital I and Cranney Capital III and directed investors to send their money to those entities. Cranney led investors to believe that their funds were being invested through those entities, when, in fact, Cranney caused all funds deposited to those accounts to be transferred promptly to other accounts for his own use. Cranney also established the Cranney Capital I LLC Employee Stock Ownership Trust (ESOT), and represented to prospective investors that they could “roll over” their money held in IRA and 401(k) retirement accounts to the ESOT without paying withdrawal taxes and penalties, even though Cranney knew that none of the investors were employees of his or of the Cranney Capital I LLC. Cranney also sent some investors reports which purported to reflect the amounts those investors had earned and the total balance in their accounts, when in fact no such amounts had been earned and the stated balances did not exist in any account because Cranney had already spent all of the funds.
The maximum sentence under the mail and wire fraud statutes is 20 years in prison, three years of supervised release and a $250,000 fine or twice the gross gain/loss, whichever is greater. The maximum sentence under the money laundering statute is 10 years in prison, three years of supervised release and a $250,000 fine or twice the amount of the criminally derived property in the transaction, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Susan A. Hensley, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, made the announcement today. The U.S. Attorney’s Office also received assistance in its investigation from the Office of the Secretary of State of the Commonwealth of Massachusetts and his Securities Division, as well as the U.S. Trustee’s Office in Boston. The case is being prosecuted by Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Acquaintance of Well-Known Navy Seal Guilty of Illegally Possessing A FirearmRead the Press Release
HOUSTON - Daniel Lee Marshall, 45, of Conroe, has entered a plea of guilty to possession of a firearm by a convicted felon, announced U.S. Attorney Kenneth Magidson.
The investigation into Marshall began after authorities received a complaint from former U.S. Navy Seal Marcus Luttrell regarding a possible stolen firearm. Marshall had ingratiated himself to Luttrell’s family by falsely posing as a decorated former special forces operator. Lutrell later discovered one of his pistols was missing and believed Marshall was responsible.
That investigation led to the discovery that Marshall had a prior felony conviction in Brazoria County for forgery and is, therefore, prohibited from possessing a firearm.
On April 6, 2014, law enforcement executed a search warrant at Marshall’s residence in Conroe, at which time he was taken into custody. Upon that arrest, authorities discovered several firearms. Today, Marshall admitted he illegally possessed a .223 caliber semi-automatic rifle and a Mossberg, 12 gauge semi-automatic shotgun.
U.S. District Judge Gray H. Miller, who accepted the guilty plea, has set sentencing for Dec. 18, 2014. At that time, he faces up to 10 years in federal prison and a possible $250,000 fine. He was permitted to remain on bond pending that hearing.
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated with the assistance of the Walker County Sheriff’s Department. Assistant U.S. Attorneys John Jocher and Jim McAlister are prosecuting.
Foreclosure Rescue Scheme Defendants SentencedRead the Press Release
SACRAMENTO, Calif. — Four defendants involved in a scheme that victimized distressed homeowners were sentenced today, United States Attorney Benjamin B. Wagner announced.
United States District Judge William B. Shubb sentenced Jewel Hinkles, aka Cydney Sanchez, 64, of Los Angeles, to five years in prison; Jesse Wheeler, 37, of Roseville, to three years in prison, Cynthia Corn, 61, of Oakland, to two and a half years in prison and Brent Medearis, 48, of Modesto, to one year and 10 months in prison.
Michael P. Stephens, Acting Inspector General, Federal Housing Finance Agency Office of Inspector General stated: “It is particularly vile for fraudsters to target and take advantage of individuals who are scared, vulnerable and simply trying to protect their families and save their home. Jewel Hinkles, Jesse Wheeler, Cynthia Corn, and Brent Medearis will now have time to reflect on their actions. We will continue to pursue any individual who perpetrates such fraud, and we are proud to have worked with our law enforcement partners on this case.”
“This scheme preyed upon desperate, financially distressed homeowners who were at imminent risk of losing their homes to foreclosure,” said Supervisory Special Agent Todd Irinaga of the Sacramento FBI’s Modesto resident agency. “This demonstrates the success of a multi-agency investigation, and we are thankful for the collaborative efforts of our San Joaquin Valley Mortgage Fraud Task Force partners. The FBI will always work with its law enforcement partners to identify and investigate individuals who flout laws and exploit vulnerable citizens for personal gain.”
According to court documents, Hinkles was the founder and general manager of Horizon Property Holdings LLC, in Beverly Hills. From 2008 through 2010, Hinkles offered a service called “Save My Home” or “Homesaver” that promised to rescue financially distressed homeowners from foreclosure and reduce the principal on homeowners’ mortgages. Horizon offered its program directly to clients and also through several layers of “affiliates,” who promoted and sold the program to clients, mostly in Northern California.
The defendants told homeowners they would save their residences from foreclosure by arranging for investors to purchase their existing mortgage at a discounted price, thereby reducing the homeowner’s principal and monthly mortgage payment. To prevent foreclosure, the defendants filed fraudulent deeds transferring an interest in the homeowner’s property to a fictitious entity called Pacifica Group 49/II. In many instances, the defendants also filed fraudulent petitions in bankruptcy court, often naming both the homeowner and Pacifica Group 49/II as the debtor. The purpose of these petitions was to invoke the automatic provisions of federal bankruptcy law that bring to an immediate halt any foreclosure actions against a debtor’s property.
Because the fraudulent deeds and bankruptcy petitions delayed foreclosure proceedings, the defendants were able to pretend that they were providing a legitimate service and continue to collect fees from defrauded homeowners. To enroll in the Save My Home program, clients were required to pay an initial payment of approximately $3,500 and monthly fees up to $1,500. The Homesaver program required clients to pay an initial payment ranging from $1,750 to $6,500 and monthly fees up to $850. In total, the scheme collected at least $4.9 million from more than 1,000 homeowners, including homeowners whose mortgages were owned by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). However, according to court documents, the defendants never arranged for the purchase of a single mortgage from any of the clients’ lenders and never negotiated a single mortgage principal reduction for any of Horizon’s clients.
This case was the product of an investigation by the Federal Housing Finance Agency, Office of Inspector General; the United States Postal Inspection Service; the Federal Bureau of Investigation; and the Stanislaus County District Attorney’s Office. Assistant United States Attorneys Lee S. Bickley and Matthew D. Segal prosecuted the case.Federal Grand Jury Indicts Former Funeral Home Owner Rachel HardyRead the Press Release
DALLAS, Texas — A federal grand jury returned a four-count indictment last week charging Rachel Hardy, 35, with Food Stamp Benefit Fraud, two counts of Theft of Federal Public Money, and Theft of Educational Funds announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. Hardy self-surrendered today.
According to the indictment, Hardy failed to disclose her household composition and ownership of two businesses that generated income and as a result she obtained benefits from multiple government programs.
Count one of the indictment alleges that beginning in or around April 8, 2010, through July 31, 2012, Hardy obtained from the Department of Agriculture Food Stamp Program and its successor, SNAP, benefits having a value in excess of $5,000. Count two of the indictment alleges during the same time period Hardy received Medicaid benefits having a value in excess of $1,000.00.
Beginning in or around June 28, 2010 and continuing through May 22, 2013 the indictment alleges in count three Hardy received funds, assets, and property provided or insured under the Federal Pell Grant Program and the William D. Ford Federal Direct Loan Program, having a value in excess of $200.
Count four of the indictment alleges that beginning in or around November 2, 2010 and continuing through December 14, 2011 Hardy received housing subsidies in excess of $1,000.00.
A federal indictment is an accusation by a grand jury and a defendant is entitled to the presumption of innocence unless proven guilty. The maximum statutory penalty for the offenses charged is 20 years in federal prison and a $250,000 fine.
The Texas Health & Human Services Commission, OIG; U.S. Department of HUD, OIG; Department of Agriculture, OIG; and U.S. Department of Education, OIG are investigating.
Assistant U.S. Attorney Aaron Wiley is in charge of the prosecution.
Escondido Resident Pleads Guilty to Bulk Cash SmugglingRead the Press Release
FRESNO, Calif. — Martin Rojas-Cuamba (Rojas), 46, of Escondido, pleaded guilty today to bulk cash smuggling in Tulare, Kern, and San Diego Counties, U.S. Attorney Benjamin B. Wagner announced.
According to the plea agreement, Rojas smuggled $88,950 in cash from the United States to Mexico in order to evade the currency transaction reporting requirement. According to court documents, Rojas was connected to several marijuana cultivation operations on agricultural lands in Terra Bella and Bakersfield from which he profited. During a search of his residence in Escondido, law enforcement officers seized $53,750 in cash, which Rojas has agreed to forfeit.
Rojas is scheduled for sentencing on December 15, 2014, before U.S. District Judge Lawrence J. O’Neill. Rojas faces a maximum prison term of five years and a fine of up to $250,000. The actual sentence, however, will 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.
This case is the product of an investigation by the U.S. Forest Service, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the U.S. Drug Enforcement Administration, the Sheriff’s offices of Tulare, Kern, Ventura, and San Luis Obispo Counties, and the Escondido Police Department. Assistant United States Attorney Karen Escobar is prosecuting the case.
Emporia Man Sentenced After Arrest with 35 Pounds of MarijuanaRead the Press Release
WICHITA, KAN. An Emporia man who was arrested after sheriff’s officers found 35 pounds of marijuana and 21 firearms in his home was sentenced Monday to 21 months in federal prison, U.S. Attorney Barry Grissom said.
Keenan R. Linneman, 34, Emporia, Kan., pleaded guilty to one count of traveling in interstate commerce in furtherance of drug trafficking. In his plea, he admitted aiding and abetting another person to obtain 35 pounds of marijuana from Texas. On Nov. 4, 2013, the Lyon County Sheriff’s Department executed a search warrant at Linneman’s home where they found the marijuana and the firearms.
Grissom commended the Lyon County Sheriff’s Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives and Assistant U.S. Attorney Lanny Welch for their work on the case.
Eagle Butte Man Sentenced for Failure to Register as A Sex OffenderRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota, man convicted of Failure to Register as a Sex Offender was sentenced on September 22, 2014, by U.S. District Judge Roberto A. Lange.
Seth Carter, age 20, was sentenced to 10 months in custody, 5 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund. Carter was indicted by a federal grand jury on February 12, 2014. He pled guilty on June 30, 2014.
The conviction stems from an incident wherein Carter failed to register as a sex offender between December 4, 2013, and February 12, 2014. He had previously been convicted of Attempted Rape in the Fourth Degree in the Sixth Circuit District Court, Stanley County, South Dakota, which requires him to register as a sex offender.
This case was investigated by the U.S. Marshals Service and the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Mikal Hanson prosecuted the case.
Carter was immediately turned over to the custody of the U.S. Marshals Service.
Drug Transporter Arrested in Kern County SentencedRead the Press Release
FRESNO, Calif. — Enrique Reynosa, 37, was sentenced today to four years and nine months in prison, to be followed by three years of supervised release, for possessing methamphetamine and cocaine with intent to distribute, United States Attorney Benjamin B. Wagner announced. Senior U.S. District Judge Anthony W. Ishii also ordered the forfeiture of the Silverado pickup truck that Reynosa used to transport the drugs and $1,510 in cash.
According to court documents, on January 15, 2013, a CHP officer stopped Reynosa on Highway 99, south of State Route 119, for a traffic violation. The officer asked for and received verbal and written consent from Reynosa to search the vehicle. During the search, the officer found six pounds of methamphetamine, eight pounds of cocaine inside a speaker box. A drug detecting canine alerted to Reynosa’s right front pocket and led to the discovery of the cash.
This case was the product of an investigation by the U.S. Drug Enforcement Administration and California Highway Patrol. Assistant United States Attorney Karen Escobar prosecuted the case.
Dickinson County Man Pleads Guilty to Embezzling Railroad Union FundsRead the Press Release
TOPEKA, KAN. A former secretary-treasurer of a railroad union pleaded guilty Monday to embezzling union funds, U.S. Attorney Barry Grissom said.
Dale T. Hull, 62, Herington, Kan., pleaded guilty to one count of embezzling union funds. In his plea, Hull admitted the crime occurred while he was secretary-treasurer of the Brotherhood of Locomotive Engineers and Trainmen, Division 261, which represented employees of the Union Pacific Railroad who work in the Herington, Kan., terminal and the Salina, Kan., hub.
Starting in 2008, Hull made unauthorized and illegal account transfers from the union’s account to his personal checking account totaling more than $17,000. He also filed false reports to the U.S. Department of Labor in which he understated his earnings as secretary-treasurer of the union.
Sentencing is set for Jan. 5, 2015. He faces a maximum penalty of five years in federal prison, a fine up to $250,000 and restitution. Grissom commended the U.S. Department of Labor – Office of Inspector General and Assistant U.S. Attorney Richard Hathaway for their work on the case.
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Department of Justice Launches National Violence Reduction NetworkRead the Press Release
Attorney General Eric Holder and Assistant Attorney General Karol V. Mason for the Office of Justice Programs today launched the Violence Reduction Network (VRN), a national comprehensive approach to reduce violent crime in communities around the country. The Justice Department’s ability to provide intensive training and cutting-edge technical assistance will give local officials and law enforcement executives in each of the partner communities the support they need to advance anti-violence strategies.
“This new ‘all-hands’ approach to curbing endemic violence is founded on the recognition that our efforts are most effective when all criminal justice leaders stand united,” said Attorney General Holder. “It’s predicated on the notion that – although violent crime is in some ways a fundamentally local problem – it is not one that any community can meet in isolation.”
The Violence Reduction Network will help localities access a broad spectrum of Justice Department resources – empowering the federal government to strengthen partnerships and collaboratively tackle persistent challenges caused by violent crime. The partnering cities announced today are Camden, New Jersey; Chicago, Illinois; Detroit, Michigan; Oakland/Richmond, California; and Wilmington, Delaware.
The VRN summit’s agenda is dedicated to collaborative working sessions analyzing each city’s violence challenges and discussing the variety of department resources available to address the issues. Following the summit, the department will work with police chiefs and city leaders, along with leading criminal justice researchers and practitioners, to develop effective approaches to accomplishing each city’s violence reduction strategies.
“Through our partnerships with local leaders and practitioners and the wide range of resources we have available to address America’s public safety challenges, the Department of Justice is putting its full support behind violence reduction efforts in these five cities,” said Assistant Attorney General Mason. “I am eager to begin working with each of the sites and to help define a way forward to safer, healthier communities.”
Even with reports of national violent crime decreasing, in too many communities, crime rates have remained unacceptably high, particularly in areas where social ills like poverty, unemployment, and a lack of opportunity lead to tragic circumstances in which systemic violence can easily take root.
The launch of VRN is a result of the Obama administration’s continuing efforts to address violence in communities across the country. Nearly a year ago, President Obama convened a meeting at the White House with 18 mayors to discuss strategies for reducing youth violence. Following that meeting, Attorney General Holder sat down with mayors and police chiefs to talk about how the federal government can better support local efforts.
Representatives from VRN partner federal agencies include the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco and Firearms, the United States Marshals Service, the Drug Enforcement Administration, the Executive Office of the United States Attorneys, the Community Oriented Policing Services Office, the Office on Violence Against Women and the Office of Justice Programs.
Department of Justice Announces Camden, N.J., as Selected City for New Violence Reduction NetworkRead the Press Release
New Partnership Brings Together Federal and Local Law Enforcement,
Community Leaders to Reduce Violent Crime
WASHINGTON –Attorney General Eric Holder and Assistant Attorney General Karol V. Mason for the Office of Justice Programs today launched the Violence Reduction Network (VRN), a national comprehensive approach to reduce violent crime in communities around the country. The Justice Department’s ability to provide intensive training and cutting-edge technical assistance will give local officials and law enforcement executives in each of the partner communities the support they need to advance anti-violence strategies.
Camden, New Jersey, was selected as one of six cities slated to receive resources as part of the effort. Paul J. Fishman, U.S. Attorney for the District of New Jersey, was invited along with United States Marshal for the District of New Jersey Juan Mattos Jr.; Special Agents in Charge George P. Belsky of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Field Division, and Carl J. Kotowski of the Drug Enforcement Administration, New Jersey Division; J. Scott Thomson, Chief of the Camden County Police Department; and other federal, state, and local law enforcement officials working in Camden and around the country to participate in the three-day discussion on crime reduction strategies.
“This new ‘all-hands’ approach to curbing endemic violence is founded on the recognition that our efforts are most effective when all criminal justice leaders stand united,” said Attorney General Holder. “It’s predicated on the notion that – although violent crime is in some ways a fundamentally local problem – it is not one that any community can meet in isolation.”We have seen extraordinary things from what we call C-4, the unprecedented fusion center in Camden that brings together federal, state and local partners in a truly collaborative approach to fighting violent crime,” said U.S. Attorney Fishman. “It is gratifying that Camden has been selected as a partner in the VRN, so we will be able to build on what we’ve started and ensure federal resources are being used as effectively as possible to create safer communities. We have terrific local, county, state and federal partners who share our mission to make Camden the safe city its residents deserve”
The Violence Reduction Network will help localities access a broad spectrum of Justice Department resources – empowering the federal government to strengthen partnerships and collaboratively tackle persistent challenges caused by violent crime. The partnering cities announced today are Camden, New Jersey; Chicago, Illinois; Detroit, Michigan; Oakland/Richland, California; and Wilmington, Delaware.
The VRN summit’s agenda is dedicated to collaborative working sessions analyzing each city’s violence challenges and discussing the variety of department resources available to address the issues. Following the summit, the department will work with police chiefs and city leaders, along with leading criminal justice researchers and practitioners, to develop effective approaches to accomplishing each city’s violence reduction strategies.
“Through our partnerships with local leaders and practitioners and the wide range of resources we have available to address America’s public safety challenges, the Department of Justice is putting its full support behind violence reduction efforts in these five cities,” said Assistant Attorney General Mason. “I am eager to begin working with each of the sites and to help define a way forward to safer, healthier communities.”
Even with reports of national violent crime decreasing, in too many communities, crime rates have remained unacceptably high, particularly in areas where social ills like poverty, unemployment, and a lack of opportunity lead to tragic circumstances in which systemic violence can easily take root.
The launch of VRN is a result of the Obama administration’s continuing efforts to address violence in communities across the country. Nearly a year ago, President Obama convened a meeting at the White House with 18 mayors to discuss strategies for reducing youth violence. Following that meeting, Attorney General Holder sat down with mayors and police chiefs to talk about how the federal government can better support local efforts.
Representatives from VRN partner federal agencies include the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco and Firearms, the United States Marshals Service, the Drug Enforcement Administration, the Executive Office of the United States Attorneys, the Community Oriented Policing Services Office, the Office on Violence Against Women and the Office of Justice Programs.
For more VRN information visit www.bja.gov/Programs/VRN.html.14-347
Delaware Man Indicted for Murder for HireRead the Press Release
Greenbelt, Maryland - A federal grand jury has indicted Marquis Antwan Mack, a/k/a “Ice,” and “Goldie,” age 31, of Dover, Delaware, today for use of the telephone and interstate travel in the commission of a murder for hire.The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; and Chief Paul M. Bernat of the Dover Police Department.
The indictment alleges that from September 3, 2014 through September 12, 2014, Mack used his cellular telephone and traveled from Delaware to Maryland to arrange a murder for hire. According to indictment Mack allegedly agreed to pay $1,000 for the murder.
Mack faces a maximum sentence of 10 years in prison for use of the telephone and interstate travel in the commission of a murder for hire. An initial appearance has not yet been scheduled. Mack remains detained.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised ATF Baltimore and its Delaware Field Offices, and the Dover Police Department, for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Daniel C. Gardner and Leah J. Bressack, who are prosecuting the case.
Cyberstalking Case Involving Violent Threats Against Art Dealers and Their Children Leads to 5-Year Federal Prison TermRead the Press Release
LOS ANGELES – The owner of a Temecula art gallery who stalked, harassed and attempted to extort as much as $300,000 from art world professionals was sentenced today to 60 months in federal prison.
Jason White, 43, of Temecula, who pleaded guilty in March to two counts of federal stalking, was sentenced today by United States District Judge Stephen V. Wilson.
During today’s hearing, Judge Wilson called White’s crimes ”horrendous” and “very disturbing.”
White was arrested by the FBI on February 12 after engaging in a six-month stalking and extortion scheme that targeted art world professionals with whom he had had business relationships. When those business relationships ended, White posted derogatory information about his former associates on websites he had created, and then used threatening emails to demand hundreds of thousands of dollars in exchange for taking the websites down. White repeatedly made extortionate demands through harassing text messages and emails, and when his demands were not met, he threatened violence against the victim families, including their children.
“Given the ominous, angry and relentless nature of the messages, the victims had a reasonable fear that defendant planned to hunt down and kill their spouses and children,” prosecutors wrote in a sentencing memo filed with the court. “Indeed, this case is a parent’s worst nightmare that will likely haunt the victims for the rest of their lives because they will always be fearful that defendant may find their children and make good on his threats.”
In one part of the scheme, White targeted his former employer, an art publisher, as well as White’s supervisor at the art publisher’s company. After creating derogatory websites in the art publisher’s name, White allegedly sent threatening text messages to the art publisher, the publisher’s son, and his former supervisor. In a text message to his former supervisor, he threatened to find her family and make her pay with “fear, anguish and pain.” On several occasions, White obtained pictures of her child and sent pictures of the child to the victim with comments such as “it will be very unfortunate if something was to happen to him.”
White’s “conduct also demonstrates a disturbing and escalating pattern of stalking conduct, particularly since he committed these crimes less than one year after a
restraining order was filed against him by another former employer for identical cyber stalking and extortion conduct,” according to the government’s sentencing position papers. “As defendant intended, his stalking crimes traumatized his victims.”During today’s sentencing hearing, two of the victims spoke, telling Judge Wilson how they felt terrorized by the barrage of threatening emails and texts that White sent them.
The case against White was investigated by the Federal Bureau of Investigation, Art Crime Team.
Release No. 14-131
Crisp & Cole Co-defendant Julie Farmer Sentenced to Three Years in PrisonRead the Press Release
FRESNO, Calif. — United States District Judge Lawrence J. O’Neill sentenced Julie Dianne Farmer, 46, of Bakersfield, today to three years in prison, to be followed by five years of supervised release, for her involvement in an extensive mortgage fraud scheme that ran from January 2004 to September 2007, United States Attorney Benjamin B. Wagner announced. Judge O’Neill ordered her to pay $2,914,331 in restitution and to forfeit $15 million. Judge O’Neill also found that Farmer obstructed justice by testifying falsely at trial, and that she supervised other participants in the conspiracy.
On April 22, 2014, a federal jury found Farmer guilty of conspiracy to commit mail fraud, wire fraud and bank fraud, and two counts each of mail fraud and wire fraud.
“Today’s sentencing is the result of a culture of greed and opportunism that saturated a Bakersfield real estate company,” said U.S. Attorney Wagner. “The owners of the company have been held accountable with lengthy prison sentences, but they could not have accomplished their crimes without the knowing and willing help of many within their organization. The fraud committed at Crisp & Cole and by other professionals prosecuted in our district made a bad financial climate even worse for our communities. The U.S. Attorney’s Office remains committed to uncovering and prosecuting fraud and abuse in all facets of the housing market.”
“As we discovered during the course of a multi-year investigation, Farmer, the chief operations officer of Crisp & Cole, conspired with David Crisp, Carl Cole, and others to intentionally defraud financial institutions of money and property for personal enrichment,” said Supervisory Special Agent Jose Moreno of the Sacramento FBI’s Bakersfield resident agency. “Such crimes are not victimless. The conspirators’ greed ultimately caused irreparable damage to the Bakersfield community that sentences or restitution cannot fully repair.”
According to the evidence at trial, Farmer was Crisp & Cole Real Estate’s (CCRE) chief operations officer and managed CCRE’s business operations and business accounts. Together with co-defendants David Crisp and Carl Cole, Farmer oversaw and managed a conspiracy to defraud residential lenders. They used straw purchasers to acquire properties at inflated prices with funds borrowed from lenders, often using 100 percent financing and based on false and fraudulent loan applications. The conspirators frequently resold the properties from one straw buyer to another, each time at an inflated, higher price in order to extract the purported increased “equity” from the property for their benefit. Ultimately, most of the properties were foreclosed upon after the defendants failed to make the mortgage payments when due.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Kirk Sherriff, Henry Carbajal III, and Christopher Baker are prosecuting the case.
Farmer was the only defendant who took her case to trial. Her co-defendants pleaded guilty for their roles in the scheme, and most have been sentenced. Carl Cole and David Crisp were each sentenced to 17 years and seven months in prison. Caleb Cole was sentenced to five months in prison, and Jennifer Crisp was sentenced to five years’ probation. Jayson Peter Costa was sentenced to six and a half years in prison. Michael Angelo Munoz received a sentence of two years in prison, and Jeriel Salinas received a 19-month sentence. Sneha Mohammadi is scheduled to be sentenced November 14, 2014. Robinson Nguyen has completed his 27-month sentence.
Five related cases were brought in 2009 and 2010 against five defendants who pleaded guilty to charges relating to this scheme. Jerald Allen Teixeira is scheduled to be sentenced on February 9, 2015. The sentences for the other defendants are as follows: Megan Balod – 36 months’ probation; Christopher Lance Stovall – one year in prison; Kevin Patrick Sluga – 20 months in prison; and Leslie Sluga – three years’ probation.
This case was investigated and prosecuted in coordination with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. For more information on the task force, please visit www.StopFraud.gov.