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Tuesday 23 September 2014
Local Man Pleads Guilty to Running $8.7 Million Ponzi SchemeRead the Press Release
CINCINNATI – John R. Bullar, 52, of Cincinnati, Ohio, pleaded guilty to one count of wire fraud and to one count of money laundering relative to a fraudulent investment scheme that he ran for 10 years. Bullar faces a maximum of 20 years in prison and a fine of up to $250,000.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, Ohio Attorney General Mike DeWine, Commissioner Andrea Seidt, Ohio Department of Commerce, Division of Securities and Joseph T. Deters, Hamilton County Prosecuting Attorney announced the guilty plea entered before U.S. District Judge Michael R. Barrett.
According to court documents, between 2003 and September 2013 Bullar devised a scheme to defraud investors by soliciting millions of dollars under false pretenses, failing to invest investors' funds as promised, and misappropriating and converting investors' funds for his own benefit without the knowledge or authorization of the investors.
Bullar was the sole owner and operator of Executive Management Advisors, LLC ("EMA"), which had its principal place of business in Cincinnati, Ohio. Bullar also was the sole owner and operator of Priapus Group, LLC. Since at least 1998, Bullar offered investment opportunities to investors through his company, EMA. Bullar marketed himself as someone experienced in the financial services industry and who was successful in investing in commodity futures.
In an effort to persuade individuals to invest with him, Bullar frequently made numerous false representations. For example, Bullar told potential clients that he never had a losing quarter. Bullar also offered potential investors a false sense of security by telling potential investors that he, himself, was the biggest investor in EMA. Bullar told the investors that he would manage their funds even though it was below his minimum level of investment.
The majority of Bullar’s investors were friends, family members and fellow church members. Bullar told his clients that he had invested their money in precious metals, gold, silver, bonds, and foreign currency and that he made money based on the volatility of the market, regardless of whether the market was up or down. Bullar told clients that he preferred to keep the number of his investor’s small, so that he could "fly under the radar." Bullar also told clients that he had a computerized algorithm system that monitored the market for patterns and alerted him to potential losses. Bullar told investors that although he had been offered millions of dollars for the system he would not sell it, because he could make more money using the system rather than selling it. These representations were false, however, because in reality, Bullar had invested only a small amount of the money that he received from clients, using the vast majority of the money to pay other investors and his own personal expenses.
To induce current clients to keep investing, Bullar provided investors with quarterly statements purporting to show their account balances. These statements often showed substantial gains over a short period of time.
Although Bullar collected over $8.7 million from investors between mid-2006 and September 2013, only $580,500.00 was sent to brokers for trading. The remaining $8.1 million was never invested at all. The small fraction of investor money that Bullar actually sent to brokers for trading failed to generate profits and the money was either lost via trading or later withdrawn by Bullar.
In addition, investors actually paid taxes on the fictitious earnings. Bullar caused Forms 1099 to be issued to investors for tax purposes, which reported the fictitious gains. Investors relied on these documents to file their tax returns and investors paid taxes on the fictitious gains reported to them.
Bullar furthered his scheme by creating an appearance of legitimacy. Bullar created an investment blog for his clients (www.emafutures.com), which he updated regularly, sharing various articles and reports about the market. Bullar outfitted his home office, which investors frequented, with a television and three computer monitors to give investors the impression that he was constantly monitoring the market. Bullar’s expansive 5 bedroom/5 bathroom home also gave investors the impression that he was a successful trading advisor. In addition, Bullar also purchased an adjoining lot with investor money and used investor money to remodel the cabin on the lot, install a swimming pool and outdoor kitchen, and pay for professional landscaping on the lot. Bullar also entertained groups of investors at his home, treating investors to lavish dinners and paying for some investors to vacation with him.
In addition, Bullar used investor money to pay for the mortgage on his home, home renovations, vacations, country club dues, boats, jet skis, sports tickets, and vehicles, among other things.
In total, Bullar’s investment scheme involved more than 10 victims but less than 50 victims. The loss amount resulting from Bullar’s investment scheme exceeded $2,500,000 but was less than $7,000,000.
Bullar was released on bond.
“When you knowingly mix deceit and trickery into the financial well-being of individuals, you create a recipe for devastation that could last a lifetime,” said Special Agent in Charge of IRS Criminal Investigation.” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
U.S. Attorney Stewart commended the investigation by the IRS-Criminal Investigation and Ohio Bureau of Criminal Investigation, the coordination of the Hamilton County Prosecutor’s Office, as well as Assistant United States Attorney Emily N. Glatfelter, who is representing the United States in this case. U.S. Attorney Stewart also thanked the U.S. Commodity Futures Trading Commission, which has filed civil charges in a separate action.Life in Prison for Normal Ill. Man for Crack Cocaine and Marijuana Distribution ConspiracyRead the Press Release
Peoria, Ill. – U.S. District Judge Michael M. Mihm today sentenced Richard George Martin, 35, of Normal, Ill., to serve the remainder of his life in prison with no possibility for parole to be served concurrently with his sentence in a McLean county drug case. Martin was also ordered to forfeit more than $120,000 in seized assets. Following today’s court hearing, Martin was remanded to the Illinois Department of Corrections.
A jury convicted Martin in December 2013, for conspiracy to distribute more than five kilograms of cocaine and more than 50 kilograms of marijuana from 1999 to 2011. According to court documents, Martin has at least three prior felony drug convictions in addition to McLean county case number 10-CF-981.This case was prosecuted as a result of "Operation Prairie Eagle," a cooperative investigation targeting distribution of crack cocaine and marijuana in the Bloomington-Normal area. The Organized Crime Drug Enforcement Task Force (OCDETF) investigation was led by the Normal Police Department and the Federal Bureau of Investigation. Assistant U.S. Attorney Greggory R. Walters is prosecuting the defendants charged as a result of the “Prairie Eagle” investigation. Since 2011, “Operation Prairie Eagle” has resulted in the conviction of 22 defendants for conspiracy to distribute and the distribution of controlled substances in the Bloomington-Normal area.
Liberty Reserve Technology Manager Pleads GuiltyRead the Press Release
The former information technology manager of Liberty Reserve, a company that operated one of the world’s most widely used digital currency services and allegedly laundered billions in suspected criminal proceeds, pleaded guilty today in the Southern District of New York in connection with his role in maintaining the company’s technological infrastructure.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Preet Bharara of the Southern District of New York made the announcement.
Maxim Chukharev, 28, of San José, Costa Rica, pleaded guilty today before U.S. District Judge Denise L. Cote to conspiring to operate an illegal unlicensed money transmitting business. Sentencing is scheduled for January 30, 2015.
According to allegations contained in the indictment and statements made in related court proceedings, Liberty Reserve was incorporated in Costa Rica in 2006 and billed itself as the Internet’s “largest payment processor and money transfer system.” Liberty Reserve was created, structured and operated to help users conduct illegal transactions anonymously and launder the proceeds of their crimes, and it emerged as one of the principal money transfer agents used by cybercriminals around the world to distribute, store and launder the proceeds of their illegal activity. Liberty Reserve was used extensively for illegal purposes, functioning as the bank of choice for the criminal underworld because it provided an infrastructure that enabled cybercriminals around the world to conduct anonymous and untraceable financial transactions.
According to court records, before being shut down by the government in May 2013, Liberty Reserve had more than one million users worldwide, including more than 200,000 users in the United States, who conducted approximately 55 million transactions through its system totaling more than $6 billion in funds. These funds encompassed suspected proceeds of credit card fraud, identity theft, investment fraud, computer hacking, child pornography, narcotics trafficking and other crimes.
Chukharev was an associate of Liberty Reserve founder Arthur Budovsky and served as Liberty Reserve’s information technology manager in Costa Rica. In that role, Chukharev was principally responsible, along with co-defendant Mark Marmilev, formerly Liberty Reserve’s chief technology officer, for maintaining Liberty Reserve’s technological infrastructure.
Chukharev, Marmilev and Budovsky were among seven individuals charged in the indictment, which was unsealed on May 28, 2013. Three co-defendants – Marmilev, Vladimir Kats and Azzeddine el Amine – previously pleaded guilty and await sentencing. The indictment also charged Liberty Reserve with conspiracy to commit money laundering and operation of an unlicensed money transmitting business, and the charges remain pending.
The charges contained in the indictment remain pending and are merely accusations. The defendants are presumed innocent unless and until proven guilty.
This case is being investigated by the U.S. Secret Service, the Internal Revenue Service-Criminal Investigation and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, with assistance from the Secret Service’s New York Electronic Crimes Task Force. The Judicial Investigation Organization in Costa Rica, the National High Tech Crime Unit in the Netherlands, the Financial and Economic Crime Unit of the Spanish National Police, the Cyber Crime Unit at the Swedish National Bureau of Investigation and the Swiss Federal Prosecutor’s Office also provided assistance.
This case is being prosecuted jointly by the Criminal Division’s Asset Forfeiture and Money Laundering Section (AFMLS) and the U.S. Attorney’s Office’s Complex Frauds Unit and Asset Forfeiture Unit in the Southern District of New York, with assistance from the Criminal Division’s Office of International Affairs and Computer Crime and Intellectual Property Section.
Trial Attorney Kevin Mosley of AFMLS and Assistant U.S. Attorneys Serrin Turner, Andrew Goldstein and Christine Magdo of the Southern District of New York are in charge of the prosecution, and Assistant U.S. Attorney Christine Magdo is in charge of the forfeiture aspects of the case.
Liberty Reserve Information Technology Manager Pleads Guilty in Manhattan Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Leslie R. Caldwell, Assistant Attorney General for the Justice Department’s Criminal Division, announced that MAXIM CHUKHAREV, formerly an information technology manager for Liberty Reserve, pled guilty today in Manhattan federal court to conspiring to operate an unlicensed money transmitting business. CHUKHAREV helped maintain the technological infrastructure for Liberty Reserve, a company that operated one of the world’s most widely used digital currency services. CHUKHAREV was arrested in San Jose, Costa Rica, in May 2013 and pled guilty today before U.S. District Judge Denise L. Cote.
According to allegations contained in the Indictment filed against Liberty Reserve, CHUKHAREV, and six other individual defendants, and statements made in related court proceedings:
Liberty Reserve was incorporated in Costa Rica in 2006 and billed itself as the Internet’s “largest payment processor and money transfer system.” Liberty Reserve was created, structured and operated to help users conduct illegal transactions anonymously and launder the proceeds of their crimes. It emerged as one of the principal money transfer agents used by cybercriminals around the world to distribute, store, and launder the proceeds of their illegal activity. Liberty Reserve was used extensively for illegal purposes, functioning as the bank of choice for the criminal underworld because it provided an infrastructure that enabled cybercriminals around the world to conduct anonymous and untraceable financial transactions.
Before being shut down by the U.S. government in May 2013, Liberty Reserve had more than one million users worldwide, including more than 200,000 users in the United States, who conducted approximately 55 million transactions through its system totaling more than $6 billion in funds. These funds encompassed suspected proceeds of credit card fraud, identity theft, investment fraud, computer hacking, child pornography, narcotics trafficking, and other crimes.
CHUKHAREV was an associate of Liberty Reserve founder Arthur Budovsky and served as Liberty Reserve’s information technology manager in Costa Rica. In that role, CHUKHAREV was responsible, along with co-defendant Mark Marmilev, formerly Liberty Reserve’s Chief Technology Officer, for maintaining Liberty Reserve’s technological infrastructure.
CHUKHAREV, 28, of San Jose, Costa Rica, pled guilty to one count of conspiring to operate an unlicensed money transmitting business, which carries a maximum sentence of five years in prison. He is scheduled to be sentenced by Judge Cote on January 30, 2015 at 10:00 a.m. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Chukharev is among seven individuals charged in the indictment, which was unsealed on May 28, 2013. Three co-defendants – Vladimir Kats, Azzeddine el Amine, and Mark Marmilev – previously pled guilty and await sentencing. The indictment also charged Liberty Reserve with conspiracy to commit money laundering and operation of an unlicensed money transmitting business, and those charges remain pending.
Mr. Bharara praised the outstanding work of the United States Secret Service, the Internal Revenue Service-Criminal Investigation, and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, which worked together in this case as part of the Global Illicit Financial Team. Mr. Bharara also thanked the United States Secret Service’s New York Electronic Crimes Task Force for its extraordinary assistance with the investigation. Additionally, Mr. Bharara specially thanked all the international law enforcement agencies that assisted in the investigation, in particular, the Judicial Investigation Organization in Costa Rica, the National High Tech Crime Unit in the Netherlands, the Spanish National Police, Financial and Economic Crime Unit, the Cyber Crime Unit at the Swedish National Bureau of Investigation, and the Swiss Federal Prosecutor’s Office.
This case is being prosecuted jointly with the Department of Justice’s Asset Forfeiture and Money Laundering Section (“AFMLS”), which is overseen by Assistant Attorney General Leslie R. Caldwell. Mr. Bharara thanked AFMLS for its partnership and also thanked the Department of Justice’s Office of International Affairs and Computer Crime and Intellectual Property Section for their support.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit and Money Laundering and Asset Forfeiture Unit. Assistant United States Attorneys Serrin Turner, Andrew Goldstein, and Christine Magdo of the Southern District of New York and Trial Attorney Kevin Mosley of AFMLS are in charge of the prosecution, and Assistant United States Attorney Christine Magdo is in charge of the forfeiture aspects of the case.
The charges contained in the Indictment against certain of CHUKHAREV’s co-defendants remain pending and are merely accusations. Those defendants are presumed innocent unless and until proven guilty.
U.S. v, Liberty Reserve, et al. Indictment
Lewiston Man Sentenced to Two Years on Firearms ChargeRead the Press Release
Contact: Craig M. Wolff
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that
Andrew Silva, 30, of Lewiston, was sentenced today in U.S. District Court by Judge Nancy
Torresen to 2 years in prison and 3 years of supervised release for being a felon in possession of
a firearm and ammunition. Silva pleaded guilty on May 21, 2014.According to court records, on September 12, 2012, officers from the Lewiston Police
Department responded to a reported domestic incident. When Silva was arrested in connection
with the incident, a round of .22 caliber ammunition was found in his pocket. Officers then
obtained a search warrant and found a loaded .22 caliber pistol in the living room closet of the
apartment in which Silva was arrested. Silva was prohibited from possessing firearms or
ammunition because of a prior felony conviction for aggravated assault.The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and
Explosives, and the Lewiston Police Department.Law Enforcement Crackdown on Food Stamp FraudRead the Press Release
Eleven individuals were charged and arrested in metro-Detroit today on criminal food stamp fraud, announced U.S. Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Michigan Attorney General Bill Schuette, Special Agent in Charge Anthony Mohatt, U.S. Department of Agriculture, Office of Inspector General; Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation; Special Agent in Charge Marlon Miller, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI); and Col. Kriste Kibbey Etue, Michigan State Police. The agencies are working together to combat fraud against the U.S. Department of Agriculture’s Supplemental Nutrition and Assistance Program (SNAP) food stamp program) and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).
Today’s announcement comes at the conclusion of a joint federal and state search and arrest warrant operation that investigated retailers in Hamtramck, Warren, and Detroit who were illegally trafficking in food stamps. The charges allege that store owners and employees allowed SNAP and WIC benefit recipients to use their Electronic Benefit Transfer (EBT) cards to exchange their SNAP or WIC benefits for cash. In return, the stores added a surcharge to the recipients’ withdrawal of SNAP and WIC benefits, sometimes in an amount equal to that of the amount of cash benefit received by the recipient. SNAP and WIC benefit funds are transferred electronically directly to bank accounts managed by the retailers. These transactions totaled an estimated $12.5 milliondollars during the investigation.
The following individuals were arrested today and will be appearing in federal court this afternoon:
- Al Amin Supermarket, 11920 Conant, Hamtramck, owner Moklasur Mukul, age 36, of Hamtramck;
- Bengal American Grocery, 9800 Joseph Campau Avenue, Hamtramck, manager Mohamed Ali, age 38, resident of Detroit;
- Deshi Bazar, 12045 Conant Street, Hamtramck, owners Ali Ahmed, age 31, and Nazir Ahmed, age 32, and employee Mustak Ahmed, age 34, all residents of Detroit;
- Maloncho Greens House, 12133 Conant Street, Hamtramck, owner Azizur Ullah, age 37, of Hamtramck, and employees Mohammed Chadek, age 44, Mohammed Miah, age 38, and Mohammed Amin, age 38, residents of Hamtramck;
- New Al-Madeena Grocery, 2220-2222 Caniff Street, Hamtramck, owner Dilshad Chowdhury, age 34, resident of Hamtramck.
- Pay-Less Foods, 11350 Joseph Campau Avenue, Hamtramck, owner Mohamed Ahmed, age 58, resident of Hamtramck;
- Other locations in metro-Detroit were also searched as part of the investigation.
“Taxpayers in Michigan fund food stamp programs to provide food for the needy, not to create a commodity to be traded for profit," McQuade said. "We hope today’s charges will deter other merchants to ensure that food assistance programs are not abused."
"Michigan families are working harder than ever for every tax dollar," said Schuette. "Today's charges should send the message that we will not stand by while tax dollars are being stolen. Enriching yourself at public expense is not only shameful, but compromises the integrity of government and violates the public trust. I would like to thank our state and federal partners for their cooperative efforts to secure justice and fight fraud wherever it is found."
“This investigation and prosecution should send a strong zero-tolerance message to those individuals engaged in the practice of defrauding taxpayer funded WIC and SNAP programs,” said Anthony Mohatt, Special Agent-in-Charge, USDA-Office of Inspector General. “It should also serve as a warning to all stores, that participate in the WIC and SNAP programs as vendors, that fraud and trafficking (purchasing those benefits for cash) will be vigorously investigated and prosecuted by the USDA-OIG, the U.S. Attorney's Office, and all its federal, state, and local partners that have a stake in ensuring that fraud is eliminated from taxpayer funded programs.”
“Far from being a victimless crime, the offenders in this investigation brazenly defrauded a combined amount of approximately $12.5 million from taxpayer funded programs,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The SNAP and WIC programs are intended to provide assistance for those in need—not a means of abuse or selfish enrichment. The FBI, along with its federal, state and local partners, remains steadfast in its commitment to root out those who steal from taxpayers and defraud our government programs.”
“The Michigan State Police recognize how important the coordination of law enforcement resources are when working with our federal law enforcement partners,” stated Col. Kriste Kibbey Etue, director of the Michigan State Police. “Bridge Card fraud harms those less fortunate so we are thankful for the support of the USDA and U.S. Attorney’s Office in bringing these cases to justice.”
“Taxpayers fund food stamps as a benefit to those who need assistance,” said Marlon Miller, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Detroit. “When unscrupulous business owners take advantage of these benefits for their own profit, the taxpayer is cheated and the individuals who really need the help also suffer.”
Prosecutions are being coordinated by Assistant United States Attorneys Frances Carlson, Abed Hammoud, Stephen Hiyama, Lee Janice, Karen Reynolds, Erin Shaw, Graham Teall, and Timothy Wyse, and by Denise Hart from the Michigan Attorney General’s Office- Al Amin Supermarket, 11920 Conant, Hamtramck, owner Moklasur Mukul, age 36, of Hamtramck;
Laguna Pueblo Man Sentenced to Thirty Months for Failure to Update his Sex Ofender RegistrationRead the Press Release
ALBUQUERQUE – Howard Ortiz, 33, was sentenced today to 30 months in federal prison for failing to comply with the Sex Offender Registration and Notification Act (SORNA). Ortiz, a member and resident of Laguna Pueblo, will be on supervised release for five years after completing his prison sentence. He will be required to register as a sex offender after he completes his prison sentence.
SORNA, known as the Adam Walsh Protection and Safety Act, requires that a convicted sex offender register in each jurisdiction where the offender resides, where the offender is employed, or where the offender is a student, and that the sex offender maintain current registrations.
Ortiz was arrested in Dec. 2012, on a criminal complaint charging him with violating SORNA. On Dec. 19, 2012, he was indicted and charged with failing to update his sex offender registration between Aug. 28, 2012 and Nov. 25, 2012. Ortiz pleaded guilty to the indictment on June 19, 2014, and admitted that he failed to maintain his registration as required by SORNA.
Ortiz is required to register as a sex offender because he was convicted of an aggravated sexual abuse offense in Feb. 2001, and was sentenced to 78 months in prison. Based on that conviction, Ortiz is required to update his sex offender registration every 90 days for the rest of his life. In Sept. 2010, Ortiz was convicted of failing to comply with SORNA and sentenced to 24 months of imprisonment.
This case was investigated by the U.S. Marshals Service and was prosecuted by Assistant U.S Attorney Kyle T. Nayback.Justice Department Settles Immigration-Related Employment Discrimination Claim Against Major AirlineRead the Press Release
The Justice Department announced today that it reached an agreement with United Continental Holdings Inc. resolving a claim that divisions of the company previously operating as Continental Airlines discriminated against individuals because of citizenship status in violation of the Immigration and Nationality Act (INA).
The department’s investigation was initiated based on a telephone call to the Office of Special Counsel for Immigration-Related Unfair Employment Practices’s (OSC) hotline. The department found that the company requested lawful permanent resident employees, but not U.S. citizen employees, to complete additional Forms I-9 and provide additional proof of employment eligibility after hire even though the law prohibits this practice. The INA’s anti-discrimination provision prohibits employers from placing additional documentary burdens on work-authorized employees during the employment eligibility verification process based on their citizenship status.
“The INA’s anti-discrimination provision protects individuals from being singled out for unnecessary and unauthorized employment reverification based on their citizenship or immigration status,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “We commend Continental’s willingness to resolve the issues uncovered during the department’s investigation.”
Under the settlement agreement, Continental will pay $215,000 to the United States, create a $55,000 back pay fund to compensate individuals who may have lost wages due to the company’s practices, and undergo training on the anti-discrimination provision of the INA. The company will also be subject to departmental monitoring of its employment eligibility reverification practices for a period of two years.
The Office of Special Counsel for Immigration-Related Unfair Employment Practices within the Justice Department is responsible for enforcing the anti-discrimination provision of the INA. Among other things, the statute prohibits citizenship status and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; retaliation; and intimidation.
For more information about protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php, email [email protected]; or visit OSC’s website at www.justice.gov/crt/about/osc.
Applicants or employees who believe they were subjected to: different documentary requirements based on their citizenship status, immigration status, or national origin; or discrimination based on their citizenship status, immigration status or national origin in hiring, firing, or recruitment or referral for a fee, should contact OSC’s worker hotline for assistance.
Justice Department Seeks to Shut Down Chicago Area Tax Return PreparersRead the Press Release
The Justice Department announced today that it has asked a federal court in Chicago, Illinois, to permanently bar Anna Platos and Theodore (Ted) Platos, who do business as Midway Accounting Services, from preparing federal tax returns. According to the complaint, Ted Platos began doing business as API Tax Solutions in 2013. The civil injunction suit alleges that Anna Platos and Ted Platos claim bogus deductions and credits on customers’ federal tax returns.
Anna Platos and Ted Platos allegedly claim head-of-household filing status on customers’ tax returns in order to increase customers’ standard deductions, even though Anna Platos and Ted Platos are aware that the customers do not qualify to claim that filing status. Anna Platos and Ted Platos also allegedly fabricate claims for education credits, unreimbursed employee business expenses, charitable contributions, medical expenses, and state and local taxes paid on tax returns that they prepare. The complaint further alleges that Anna Platos fabricated a receipt purportedly supporting an energy credit that she claimed on a customer’s tax return, presented that fabricated receipt to the Internal Revenue Service (IRS) and instructed the customer to lie to the IRS.
The complaint also requests that the federal court require Anna Platos and Ted Platos to provide the government with a list of customers for whom they have prepared tax returns beginning with the 2009 tax year, to contact those customers to inform them of the injunction order, and to post a copy of the injunction order at their place of business.
Return preparer fraud is one of the IRS' Dirty Dozen Tax Scams for 2014. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. Anna Platos, etc., et al.
Complaint for Permanent Injunction and Other ReliefJacksonville Tax Return Preparers SentencedRead the Press Release
Jacksonville, Florida – Senior U.S. District Judge Harvey S. Schlesinger sentenced Troy Solomon today to three years in federal prison for conspiracy to defraud the United States, fraud, and making false statements in the preparation of a tax return. Antonio Gadsden was sentenced today to eight months’ imprisonment for the same offenses. In addition, Solomon and Gadsden were ordered to pay restitution to the Internal Revenue Service in the amounts of $507,382 and $38,337, respectively. Solomon pleaded guilty on January 21, 2014, and Gadsden pleaded guilty on January 22, 2014.
According to court documents, from at least February 1, 2010 through April 16, 2012, Solomon was the owner and operator of Solomon’s Tax Services, LLC, a Jacksonville business that offered tax return preparation services. Solomon and his employees, including Gadsden, prepared and filed with the IRS hundreds of individual tax returns for clients during this time period. In preparing the tax returns, Solomon and Gadsden knowingly used false Schedule C income and expenses, and fictitious Schedule A itemized deductions, including moving expenses and education expenses, in order to maximize the Earned Income Credit and refunds received. Solomon’s conduct resulted in a tax loss to the United States of at least $507,382. During the same time period, Gadsden’s conduct resulted in a tax loss of at least $38,337.
This case was investigated by Internal Revenue Service – Criminal Investigation. It was prosecuted by Assistant United States Attorney Kelly S. Karase.
Jackson Woman Sentenced for Stolen Identity Refund FraudRead the Press Release
Jackson, Miss – S’ade Tyler, 28, of Jackson, was sentenced to 27 months in federal prison followed by three years of supervised release for conspiracy to defraud the United States and wire fraud, U.S. Attorney Gregory K. Davis announced today. She was also ordered to pay restitution to the U.S. government in the amount of $62,946.39.
On June 4, 2013, Tyler pled guilty to conspiring to defraud the government by using personal identifying information, including names and social security numbers, which had been stolen from the Central Mississippi Correctional Facility located in Rankin County and from other locations. The information was then used by Tyler’s co-conspirators to file false tax returns with the Internal Revenue Service. The tax returns claimed that the tax payers were owed a refund. The refunds were then electronically deposited into various bank accounts in Mississippi belonging to Tyler and her co-conspirators.
This case was investigated by the U.S. Secret Service and the Internal Revenue Service Criminal Investigation with assistance from the Mississippi Attorney General’s Office, the Mississippi Department of Corrections and the Mississippi Department of Revenue. It was prosecuted by Assistant U.S. Attorney Patrick Lemon.If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
Help us combat the proliferation of sexual exploitation crimes against children.
Intelligence Officer at Southern Command Charged with Accepting A Bribe and Helping Steal Drug ProceedsRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Jose Emmanuel Torres, 37, of Cooper City, was sentenced by U.S. District Judge K. Michael Moore to 41 months in prison, followed by two years of supervised release and ordered to forfeit $6,000. Torres previously pled guilty to a two-count information charging him with federal bribery, in violation of Title 18, United States Code, Section 201(b)(2)(A) and (B), and exceeding authorized access to a government computer, in violation of Title 18, United States Code, Section 1030(a)(2)(B) and (c)(2)(B)(i) and (ii).
According to documents filed in court in this case, Torres was assigned to the Department of Defense, Defense Intelligence Agency. His duties included collecting information regarding persons who are allegedly involved in terrorism and drug trafficking. During the course of his duties, Torres interviewed a confidential informant (CI) who was attempting to gain legal residence status in the United States and had provided Torres and other agents of the United States with information regarding persons involved in drug trafficking and terrorism. The CI had been periodically arrested on immigration violations. In August 2013, Torres told the CI that he had used his influence to have the person arrested on immigration charges. Torres asked the CI for $10,000. The CI understood that if he did not give Torres the money, Torres would use his influence to have the CI arrested again. The CI referred the matter to law enforcement and the FBI began recording text messages, telephone and Skype calls between Torres and the CI. In November 2013, the CI paid Torres $6,000 in order for Torres to use his influence to assist him with his immigration proceedings.
In or about mid-2013, Torres told the CI that he was looking to steal a delivery of drug money or identify a stash house where they could steal drug money. Torres caused another person to run a check of federal databases to determine if the persons who were to be assisting in the robbery were cooperating with the government. Torres used a “secret” email account to send the information regarding the background of the persons who were allegedly assisting in the robbery. On January 29, 2014, Torres provided the CI a detailed four-page DEA seizure form dated January 31, 2014 that reflected a bulk cash seizure in the amount of $500,000. The CI requested the DEA seizure form in order to tell the owners of the money in Colombia that the money was seized. Torres was told that for providing the seizure receipt that Torres would receive $250,000 from the money stolen from the drug dealers. On January 31, 2014, Torres was called and the CI told Torres that he had stolen the drug proceeds and for Torres to meet him and get his portion of the stolen drug proceeds, which was $250,000. Torres met the person in a parking lot in Dania and was provided a duffel bag with $250,000.
Mr. Ferrer commended the investigative efforts of the FBI. Mr. Ferrer would also like to thank the Drug Enforcement Administration and the United States Secret Service for their assistance. The case is being prosecuted by Assistant U.S. Attorney Jeffrey N. Kaplan.
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.
Indian Tribes in Kansas Receive More Than $1.3 Million in Public Safety GrantsRead the Press Release
KANSAS CITY, KAN. – Indian tribes in Kansas are being awarded more than $1.3 million in public safety grants from the U.S. Dept. of Justice, U.S. Attorney Barry Grissom said today.
“Protecting public safety in Indian Country is a critical part of our goal to strengthen and sustain native communities in Kansas,” said U.S. Attorney Barry Grissom.
The grants, awarded through the Justice Department’s Coordinated Tribal Assistance program, include:
- Kickapoo Tribe in Kansas: $449,824 from the Violence Against Women Tribal Governments Program through the Office on Violence Against Women (OVW).
- Prairie Band Potawatomi Nation: $365,386 from the Comprehensive Tribal Victim Assistance Program through the Office for Victims of Crime (OVC).
- Sac and Fox Nation of Missouri in Kansas and Nebraska: $547,482 from the Violence Against Women Tribal Governments Program through the Office on Violence Against Women (OVW).
Nationally, the Justice Department has announced 169 grants in FY 2014 to American Indian tribes totaling more than $87 million to enhance law enforcement practices and sustain crime prevention and intervention efforts. The grants are awarded in purpose areas including public safety and community policing, justice systems planning, alcohol and substance abuse, corrections and correctional alternatives, violence against women, juvenile justice and tribal youth programs.
Henderson, Nev. Man Sentenced to Two Years in Prison for Aiming Laser Pointer at Police HelicopterRead the Press Release
LAS VEGAS, Nev. - A Henderson, Nev. man was sentenced today to two years in prison for aiming a laser pointer at a Las Vegas Metropolitan Police Department (LVMPD) helicopter on six occasions earlier this year, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
James David Zipf, 30, pleaded guilty in June to one count of aiming a laser pointer at an aircraft, and was sentenced by U.S. District Judge Miranda M. Du. Zipf was permitted to self-report to federal prison by December 30, and must also serve three years of supervised release and undergo mental health and substance abuse treatment.
Zipf admitted that just after midnight on Jan. 30, 2014, he aimed a blue laser four times at the LVMPD helicopter from the second story window of the Green Valley neighborhood house where he lived. Zipf also admitted that on Feb. 3, 2014, at about 9:00 p.m., he pointed the blue laser light two times at a LVMPD helicopter causing one of the flight officers to experience a severe headache. Zipf was convicted in 2011 in Phoenix, Ariz. of pointing a similar blue laser at a police helicopter there.
“In 2012, it became a federal felony offense to knowingly target an aircraft with a laser,” said U.S. Attorney Bogden. “This activity is extremely dangerous, and can disorient and temporarily blind a pilot. If you have information about a lasing incident or see someone pointing a laser at an aircraft, call your local FBI field office or dial 911.”
Since the FBI and the Federal Aviation Administration (FAA) began tracking laser strikes in 2005, statistics reflect a more than 1,100 percent increase in the deliberate targeting of aircraft by people with handheld lasers. In 2013, there were 3,960 laser illumination incidents reported by pilots to the FAA. This is an average of 10.8 incidents every night.
The case was investigated by the FBI and LVMPD, and prosecuted by Assistant U.S. Attorney Roger Yang.Georgia Man Sentenced to 10 Months in Prison for Discharging Waste into Potomac River- Defendant Managed Clean-Up of Storm Sewer System at National Mall -Read the Press Release
WASHINGTON - Patrick Brightwell, 48, of Bogart, Ga., was sentenced today to 10 months in prison on charges that he orchestrated the discharge of waste into the Potomac River at East Potomac Park from 2009 through 2011, during the same period he managed the company hired by the National Park Service to clean out the storm water sewer system on the National Mall.
The sentence was announced by Acting Assistant Attorney General Sam Hirsch of the Environment and Natural Resources Division of the Department of Justice; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia, David G. McLeod, Jr. Special Agent in Charge of the Environmental Protection Agency’s criminal enforcement program for the Middle Atlantic States, and Robert D. MacLean, Acting Chief, United States Park Police.
Brightwell pled guilty in June 2014, in the U.S. District Court for the District of Columbia, to one count of violating the Clean Water Act by knowingly discharging a pollutant without a permit and one count of presenting false claims to the United States. He was sentenced by the Honorable James E. Boasberg. Upon completion of his prison term, Brightwell will be placed on three years of supervised release. He also was ordered to pay $270,667 in restitution to the National Park Service, representing the losses for the work that was not properly performed. Brightwell also must pay a forfeiture money judgment totaling $230,899.
An eight-count indictment of Brightwell was unsealed following his arrest in Georgia on Dec. 5, 2013. The remaining charges were dismissed as part of the guilty plea.
“This government contractor is now paying the price for ripping off the taxpayer and dumping waste in the Potomac River,” said U.S. Attorney Machen. “This prison sentence demonstrates how serious we are about enforcing the Clean Water Act. We will continue to use the criminal laws to protect our country’s most treasured natural resources.”
“The Potomac is a national treasure, and EPA is committed to keeping it safe and clean” said Special Agent in Charge McLeod. “The defendant knowingly dumped untreated wastewater into this historic waterway, and needs to be held accountable. Wastewater that is illegally discharged is a danger to public health and a threat to the environment.”
“The sentence in this case shall serve as a reminder that environmental crimes will not be tolerated by the National Park Service, law enforcement, the criminal justice system, and the community," said Acting Chief MacLean. “I applaud the collaborative efforts of every agency involved as a testament to the inherent dedication to protecting our nation's natural resources.”
According to a statement of offense signed by the government and defendant, from in or about 2007 through 2011, Brightwell was a manager of a company that had a contract with the National Park Service to clean the storm water sewer system on the National Mall. The contract required that waste removed from the Mall’s storm drains and oil-water separators be disposed of at a proper disposal facility in compliance with District of Columbia regulations and federal law.
Brightwell hired employees and subcontractors to perform work under the contract and oversaw their work from 2008 to 2011. To clean the structures, Brightwell and his company used a vacuum truck, a vehicle designed to gather, store, and transport such waste. When the storage compartment in the vacuum truck became full, workers would have to discharge waste from the truck prior to continuing the cleaning.
In 2009, 2010, and 2011, according to the statement of offense, Brightwell directed his employees and subcontractors to discharge waste from the vacuum truck at a storm drain near a parking lot in East Potomac Park, across Ohio Drive from the Potomac River. Brightwell concealed these discharges from the National Park Service and police. Workers also discharged waste at a manhole near Fort McNair in the District of Columbia.
During this period, Brightwell continued to invoice the National Park Service for cleaning services, but concealed and did not disclose that the waste was not being properly disposed, as required by the contract. From 2009 through 2011, Brightwell’s company received approximately $406,000 in payments from the National Park Service related to the contract.
According to the statement of offense, the employees and subcontractors illegally dumped waste at the parking lot approximately two-thirds of the time, and dumped the waste at a proper disposal facility in Fort Washington, Md., about one-third of the time.
The subcontractor, B&P Environmental LLC, and a B&P employee working on June 6, 2011, both pled guilty in November 2014 to violations of the Clean Water Act before the U.S. District Court. As part of their pleas, both the company and employee agreed to cooperate with the government’s investigation. Both the company and employee are awaiting sentencing.
The case was investigated by Special Agent S. Christopher Michael of the EPA and Detective Jon Crichfield of the U.S. Park Police and supported by Environmental Protection Specialists Jerry Crutchley and Justin Young. It was prosecuted by Senior Trial Attorney Lana Pettus of the Department of Justice’s Environmental Crimes Section and Assistant U.S. Attorney Jonathan P. Hooks of the U.S. Attorney’s Office for the District of Columbia. Assistant U.S. Attorneys Anthony Saler and Catherine Connelly of the Asset Forfeiture and Money Laundering Section assisted with the case. Further assistance was provided by Paralegal Specialist Ashleigh Nye of DOJ’s Environmental Crimes Section and Paralegal Specialists Krishawn Graham and Donna Galindo of the U.S. Attorney’s Office.
14-214Gaithersburg Man Pleads Guilty in Bank Fraud SchemeRead the Press Release
Baltimore, Maryland – Phong Dinh Tran, age 40, of Gaithersburg, Maryland, pleaded guilty today to conspiring to commit bank fraud arising from a scheme to use a straw purchaser to buy a liquor store.The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Small Business Administration Inspector General Peggy E. Gustafson; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division.
According to his plea agreement, Tran created R&K Real Estate Investment, Inc. to buy Potomac Wine & Spirits, a liquor store in Hagerstown, Maryland. Tran was the majority and controlling owner of R& K, and K.P. had a minority ownership interest. In May 2006 Tran and K.P. signed agreements to buy the liquor store for $899,000 and the real estate that the store occupied for $400,000.
Tran sought Joon Park, a principal of Jade Capital & Investments, to broker a loan for the store’s purchase. Tran and Park discussed obtaining a loan at PNC Bank that was guaranteed by the U.S. Small Business Administration (SBA). Because Tran had significant debt from the purchase of residential properties, Park advised that Tran would not likely be approved for an SBA guaranteed loan.
Tran disclosed to Park that he could use a straw buyer, T.C.P., for the loan. Tran and Park agreed that they would falsely represent to PNC that T.C.P. would be the owner and operator of the liquor store. Tran asked the straw buyer to apply for the loan and promised that he, Tran, would pay all the bills for the store and make the loan payments. The settlement for the sale of the liquor store to R&K occurred on September 29, 2006. The straw purchaser falsely represented to PNC that he was the president of R&K. The funds needed to close the transaction were provided by Tran, not the straw purchaser. PNC funded a loan of $950,000.
After the closing, Tran ran the liquor store. On January 22, 2007 Tran sold a 50% stake in the store to another individual for $380,000. During the sale, Tran represented to the individual that he owned 100% of the store. In 2007, Tran stopped making loan payments to PNC and the loan went into default.
Tran faces a maximum sentence of 30 years in prison and a $1 million fine. U.S. District Judge William D. Quarles, Jr. scheduled his sentencing for December 18, 2014, at 1:00 p.m.
In a separate case, Joon Park, a/k/a “Joon Pak,” and “Joon Paik,” age 44, of Falls Church, Virginia, previously pleaded guilty to his role in a bank fraud conspiracy arising from a scheme to fraudulently obtain numerous business loans guaranteed by the SBA, with resulting losses of over $100 million. Park submitted false SBA loan applications on behalf of his clients from 2003 to 2011. Judge Quarles sentenced Park on June 20, 2013 to 15 years in prison and ordered Park to pay a money judgment of $91,449,700.
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. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the SBA-OIG, FBI and U.S. Postal Inspection Service for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Leo J. Wise and Sean Delaney, who are prosecuting the case.
Former Wichita Man Sentenced for $2.7 Million Mortgage FraudRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former Wichita, Kan., man was sentenced in federal court today for his role in a $2.7 million mortgage fraud scheme.
Terrence Matthew Brown, also known as Terry Brown, 49, of Round Rock, Texas, formerly of Wichita, was sentenced by U.S. District Judge Brian C. Wimes to seven years and three months in federal prison without parole. The court also ordered Brown to pay $1,201,635 in restitution.
On May 2, 2013, Brown was found guilty of conspiracy to commit wire fraud and five counts of wire fraud.
Brown participated in a mortgage fraud conspiracy in 2006 in which mortgage lenders were defrauded in 10 separate loans for five properties, which were obtained by false statements in loan applications and other documents. Mortgage loans totaling $2.7 million were approved to purchase properties in Greenwood, Mo., Kansas City, Mo., Overland Park, Kan., and Leawood, Kan., all within a period of three months.
The scheme involved Brown buying homes at inflated prices, obtaining mortgage loans by fraud at the inflated amounts, and receiving kickbacks from the excess loan proceeds without the lenders’ knowledge. In order to qualify for the loans, Brown lied to lenders about his income, his employment, his assets and liabilities, his intent to occupy the properties and other matters.
Brown and co-conspirators structured the home purchases in such a way that Brown would receive money from the loan proceeds without the knowledge or consent of the lenders. Brown received more than $200,000 in illegal kickbacks. In order to receive the kickbacks without the lenders finding out, Brown submitted false invoices to the title companies closing the loans. The invoices were in the names of businesses that claimed to be entitled to payment for services supposedly rendered.
All the loans went into default and the properties were foreclosed.
According to court documents, Brown would not have qualified financially for the loans if he had been truthful, as his income would not have supported the loans.
Brown failed to live in any of the five properties as his primary residence. Brown was a sex offender required to register where he lived; he reported to law enforcement that he lived in two of the properties for brief periods, but he failed to make any of them his primary residence for a year as required by the mortgages. He also made only $28,778 in total mortgage payments – barely more than one month of combined payments on the loans – before he defaulted on each of the loans.
This case was prosecuted by Assistant U.S. Attorney Linda Parker Marshall. It was investigated by the FBI.Former Treasurer for Communication Workers of America Local 88329 Sentenced to Two Years’ Probation for Falsifying RecordsRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 46-year-old Coudersport, Pennsylvania resident was sentenced yesterday in federal court in Wilkes-Barre to two years’ probation and ordered to pay more than $6,000 in restitution by U.S. Magistrate Judge Karoline Mehalchick for falsifying records in connection with his duties as treasurer for the Communication Workers of America Local 88329.
According to United States Attorney Peter Smith, Robert Vargeson falsified those records to conceal the fact that he had embezzled $6,013 from the union’s funds. Vargeson committed the offense during 2012 and 2013.
Vargeson was charged in a criminal Information filed by the United States Attorney on April 14, 2014. Vargeson pleaded guilty to the charge on April 24, 2014.
The prosecution of Vargeson resulted from an investigation by the U.S. Department of Labor.
Assistant U.S. Attorney Francis P. Sempa represented the government at sentencing.
Former Postal Clerk Convicted of Embezzling from U.S. Postal ServiceRead the Press Release
St. Thomas, USVI- After a two-day trial in the District Court in St. Thomas, Virgin Islands, a federal jury today found Rosemarie Peltier, a former postal clerk, guilty of embezzling thousands of dollars from the United States Postal Service (USPS), announced United States Attorney Ronald W. Sharpe and Special Agent in Charge Ricardo Medina of the Office of Inspector General of the United States Postal Service in Puerto Rico.
Peltier, who was employed at the Aubrey C. Ottley Post Office in Estate Thomas, was indicted earlier this year by a Federal Grand Jury for Misappropriation of Postal Funds, Embezzlement of Government Property, and False Entries and Reports of Money. The evidence presented at trial showed that Peltier devised a scheme to defraud and embezzle from the USPS by misusing the machine used to issue and record money orders. To cover up her crime, Peltier would then make false entries into the USPS’ computer system in an attempt to conceal the money that she embezzled. The evidence also showed that between 2010 and 2013, Peltier embezzled nearly $30,000. After deliberating for several hours, the jury returned guilty verdicts on all counts. Peltier was released on conditions, including an unsecured bond pending sentencing, which is scheduled for January 22, 2015.
Peltier faces a maximum sentence of ten (10) years imprisonment and fines of up to $250,000 on each count of conviction. United States Attorney Sharpe commended the efforts of the Office of Inspector General of the United States Postal Service who investigated the case. The case was prosecuted by Assistant U.S. Attorney Ishmael Meyers, Jr.
Former Olean Nurse Sentenced for Possesion of Child PornographyRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Willie G. Reid, 47, of Olean, N.Y., who was convicted of possession of child pornography, was sentenced to 90 months in prison by U. S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Marie P. Grisanti, who handled the case, stated that on May 2, 2013, the defendant possessed more than 600 images on a computer and hard drive in his residence. Some of the videos and images included pre-pubescent children and depictions of violence. At the time of his arrest, Reid was employed as a Registered Nurse at the Olean General Hospital.
The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, and the Cattaraugus County Sheriff’s Department, under the direction of Sheriff Timothy Whitcomb.Former Ohio Man Indicted for $1.2 Million Bank FraudRead the Press Release
A grand jury returned a four-count indictment charging a Mississippi man for a conspiracy in which he defrauded a Tennesse bank out of $1.2 million, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Paul D. Allen, age 52, of Oxford, Mississippi, age 52, was indicted on one count of conspiriacy to commit bank fraud and three counts of bank fraud.
Allen, a self-proclaimed entrepreneur and businessman, moved to the Northern District of Ohio in 1999. Prior to that, he lived in Tennessee, where he developed a relationship with Stephen Henry, an unindicted co-conspirator.
Allen and Henry executed a scheme to defraud Oakland Deposit Bank and obtain money and property from the bank by means of materially false and fraudulent representations. The bank was chartered and had offices in Tennessee. Henry served as president of the bank and also served as a loan officer, according to the indictment.
Allen contacted several people in Ohio and recruited them to invest in various business projects he promoted, including B-Telecom Incorporated, a purported data-storage company. Allen promised investors they would receive a percentage ownership in the business in return for the investors obtaining loans from the Oakland Deposit Bank in their own names. Allen told the investors the loan proceeds would be used for operating the business, according to the indictment.
Between 2003 and 2008, Allen had the investors complete loan documentation in support of the loans, and then submit the loan applications to Henry, or accompany the investors when they submitted the loan applications to Henry, according to the indictment.
Allen forged borrower signatures on loans for amounts ranging between $42,770 and $168,000. He sometimes took out additional loans in borrowers' names without their knowledge. He used the proceeds to pay personal expenses or to make interest payments on existing loans, according to the indictment.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, 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 case is being prosecuted by Assistant U.S. Attorney M. Kendra Klump following an investigation by the Federal Bureau of Investigation (Cleveland Division, Painesville Resident Agency) and with the assistance of the Geauga County Prosecutor’s Office.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Former Illinois Department of Public Health Administrator Pleads Guilty to Bribery, Kickback Scheme and Filing False Income Tax ReturnRead the Press Release
Springfield, Ill. – A former human resources director for the Illinois Department of Public Health, Roxanne Jackson, waived indictment and pled guilty today to an information that charges her with participating in a bribery and kickback scheme related to state grants and contracts and filing false income tax returns. The information was filed by the U.S. Attorney’s Office for the Central District of Illinois.
Jackson, 49, of Olympia Fields, Ill., appeared this afternoon before U.S. Magistrate Judge Thomas P. Schanzle-Haskins in Springfield to enter her plea. Sentencing for Jackson has been scheduled for Jan. 26, 2015, before U.S. District Judge Sue E. Myerscough.
According to court documents, Jackson was an associate of IDPH Chief of Staff Quinshanta Golden when Jackson and Golden devised a scheme to defraud the state related to grant funds and contract monies. Golden previously pled guilty on Apr. 10, 2014, to her role in the bribery and kickback scheme and obstruction of justice. Golden is scheduled to be sentenced on Oct. 31, 2014.
During today’s court hearing, Jackson admitted that from 2006 to 2010, she received more than $1,000,000 in grant funds originally awarded and disbursed to three Chicago not-for-profit organizations and in contract funds to a business identified as Security Firm A. As part of the scheme, at Golden’s direction, Jackson was hired as a paid consultant for the three not-for-profit entities and Security Firm A.
From 2004 to 2010, IDPH awarded more than 30 non-competitive grants totaling more than $11 million to three not-for-profit organizations: Broadcast Ministers Alliance, Access Wellness and Racial Equity, and the Medical Health Association. The grants were for programs relating to breast, cervical and prostate cancer, HIV/AIDS, and emergency preparedness. From 2006 through 2010, Security Firm A was paid more than $2 million in contract funds to conduct background checks and interviews of Illinois nursing home residents related to the Identified Offender Program.
Jackson admitted that as a condition to receive grant funds, she was required to pay Golden one-half of whatever she received, less any funds to be withheld for payment of taxes, which were never paid. Jackson admitted that from about July 2007 to April 2008, she made cash withdrawals of grant funds from her bank accounts and made cash payments to Golden ranging from $5,000 to as much as $70,000.
In agreement with Golden, Jackson further admitted that she was required to pay Golden kickbacks for each background investigation performed by Security Firm A. The payments ranged from $35 to $40 per investigation performed. From 2006 to 2009, Jackson received approximately $485,000 in funds from Security Firm A’s contracts with IDPH, and during 2007 and 2008, made kickback payments to Golden of approximately $109,500 in contract funds.
As a result of the scheme, from about July 2007 and continuing to approximately October 2008, Jackson admitted she repeatedly made kickback payments to Golden of grant and contract funds for a total of approximately $433,000.
As to Jackson’s filing false income tax returns for tax years 2006, 2007, 2008, and 2009, Jackson admitted she caused the filing of false and fraudulent federal income tax returns by failing to report a total of $908,266 in income, resulting in failure to pay $172,825 in taxes due.
At sentencing, according to the terms of the plea agreement, the government has agreed to recommend to the court a sentence at the low end of the applicable advisory sentencing guidelines, no more than 51 months in prison. According to the plea agreement, the parties agree that restitution amount for filing false income tax returns is $172,825. A restitution amount for the bribery offense has not been determined.
Central District of Illinois U.S. Attorney Jim Lewis expressed his appreciation to the federal law enforcement officers assigned and the agencies that support the Central District of Illinois U.S. Attorney’s Office’s Public Corruption Task Force: the U.S. Postal Inspection Service, Chicago Division; Internal Revenue Service, Criminal Investigation, Chicago Field Office; and the Illinois Secretary of State Office of Inspector General. Assistant U.S. Attorney Timothy A. Bass is prosecuting the case on behalf of the U.S. Attorney’s Office for the Central District of Illinois.Individuals who wish to provide information to law enforcement regarding matters of alleged public corruption are urged to call the U.S. Attorney’s Office at 217-492-4450.
Former Federal Corrections Officer Pleads Guilty to Bribery ChargeRead the Press Release
Ocala, Florida – United States Attorney A. Lee Bentley, III announces that Antoine D. Clark (30, Orlando) pleaded guilty today to an indictment charging him with receipt of a bribe by a public official. He faces a maximum penalty of 15 years in federal prison. A sentencing date has not yet been set.
According to the plea agreement, Clark was employed as a Corrections Officer by the Federal Bureau of Prisons at the Coleman Federal Correctional Complex, in Sumter County. Based on information from inmates at the facility, agents discovered that Clark had been smuggling tobacco products, alcoholic beverages, cell phones, and pornography into the prison. In exchange for these items, inmates had arranged for Clark to be paid by cash or wire transfers from third parties.
Following his arrest on June 26, 2014, Clark admitted that he had smuggled contraband into the prison in exchange for bribes. He received $28,450.00 in illegal payments, all of which is being forfeited.
This case was investigated by the Department of Justice, Office of the Inspector General. It is being prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.
Former Federal Bureau of Prison Employee Sentenced for Fraudulently Obtaining Federal Workers Compensation benefitsRead the Press Release
United States Attorney James L. Santelle of the Eastern District of Wisconsin announced today that on September 19, 2014, Christopher A. Seifer (age: 43) of Westfield, Wisconsin, was sentenced to 15 months imprisonment followed by three years of supervised release, and ordered to pay $84,717.60 in restitution to the U.S. Department of Labor. Seifer was also ordered to pay a $500 special assessment.
On February 4, 2014, Mr. Seifer was charged in a five-count indictment alleging that he had submitted more than 1,380 fraudulent claims seeking reimbursement from the federal government for mileage expenses that he falsely claimed to have incurred by driving to health clubs for self-directed pool-therapy sessions. The indictment alleged that Mr. Seifer did not, in fact, travel to the health clubs on many of his claimed dates of travel between March 28, 2006, and October 2, 2012, for which Mr. Seifer had sought and obtained more than $84,000 in mileage-expense reimbursements. On June 19, 2014, following a four-day trial, a jury found Mr. Seifer guilty on all counts.
The evidence produced at trial demonstrated that Mr. Seifer had defrauded the Department of Labor’s Office of Workers Compensation Program, which provides disability-related benefits to federal workers who suffer disabilities as a result of work-related injuries, by submitting false travel reimbursement claims and obtaining payments on those false claims. Mr. Seifer had formerly been employed by the United States Bureau of Prisons as an Electronics Technician at the Federal Correctional Institution in Oxford, Wisconsin, where he suffered work-related injuries and was then entitled to receive benefits, including medical benefits under the Federal Employees Compensation Act.
In making today’s announcement about the sentence, United States Attorney Santelle stated: “The 15-month incarceration term imposed on this defendant reflects the gravity and breadth of the fraud that Mr. Seifer perpetrated on the United States Bureau of Prisons and the United States Department of Labor —and on the public whose trust he compromised. The fact that he is also now obliged, following a full trial and exposition of his false statements and claims for reimbursement under the Workers Compensation Program, to pay restitution in an amount of nearly $85,000 similarly confirms the vigor and the focus of the investigative and prosecutorial work that has preceded this result. I commend specially the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, along with the United States Department of Justice’s Office of Inspector General, for the professionalism and precision of their investigative efforts in bringing this defendant and his fraudulent conduct to a decisive and deterrent-accomplishing end.”
This case was investigated by the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering & Fraud Investigations and the United States Department of Justice Office of the Inspector General, Chicago Field Office. This case was prosecuted by Assistant United States Attorneys Scott Campbell and Benjamin Proctor.
Former Fayette Sheriff's Department Employee Sentenced for Theft of Concealed Weapons FeesRead the Press Release
Charleston, W.Va. – United States Attorney Booth Goodwin announced that Cheryl Gray, 44, of Hilltop, West Virginia was sentenced today in federal court in Charleston to one year and one day in federal prison for mail fraud involving concealed weapons permits. Gray is a former employee of the Fayette County Sheriff’s Department where her duties included the collection of application fees for concealed weapons permits, and creating and submitting a list of permits issued by Fayette County to the West Virginia State Police. Gray previously pled guilty to mail fraud in June of 2014. At the plea hearing, Gray admitted that she stole the cash payments made by applicants for concealed weapons permits. She hid the theft by creating incomplete applicant lists and submitting them to the West Virginia State Police, omitting close to 400 names of applicants who had paid in cash. The fraud, which continued for more than six months, resulted in a combined loss to the Fayette County Sheriff’s Department and West Virginia State Police of approximately $40,000.
The West Virginia State Police, Fayette County Sheriff’s Department, and the Federal Bureau of Investigation conducted the investigation.
Defendant was sentenced by United States District Court Judge John T. Copenhaver, Jr.
Former Drug Property in Fairview Heights ForfeitedRead the Press Release
House Located at 20 Kassing Drive, Scene of Drug Overdose Deaths, Will Be Demolished
Follow @SDILNewsStephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that the forfeiture proceedings against the former drug house and real property located at 20 Kassing Drive in Fairview Heights, Illinois, have been completed. The property will be given to the City of Fairview Heights for public use. It is believed that the City will proceed with demolition of the building on property and eventually turn the property into a “pocket” park area.
“I am hopeful that the eventual use of this land by the citizens of Fairview Heights as a place of peace and relaxation will help erase the awful memories of the drug deals and the deaths which were connected to this site.” said United States Attorney Wigginton.
Deborah A. Perkins, 66, the owner of the property, forfeited her rights to her home and signed a Stipulation and Consent to Forfeiture. Perkins admitted that she sold heroin from the residence. Two young women, Jessica Williams and Jennifer Herling, died as a result of the drugs they received from persons at this residence. In addition to losing her home, Perkins was sentenced to 324 months imprisonment.
Lennil Johnson, of the St. Clair County Jail, attempted to take advantage of the forfeiture proceedings. Johnson filed fictitious claims against 20 Kassing Drive, claiming an ownership interest in the property. In adjudicating this forfeiture, the District Court denied Johnson’s claims, and, on April 1, 2014, sanctioned Johnson $1,000 for his actions. The Seventh Circuit Court of Appeals upheld the District Court’s handling of this action.
Former Danville Jail Employee Pleads Guilty to Stealing Inmates' MailRead the Press Release
September 23, 2014
DANVILLE, VIRGINIA – A former corrections officer at the Danville Adult Detention Center pled guilty today to a charge related to his admitted stealing of mail addressed to inmates at the facility.
Ezra Lamont Price, 33, of Danville, waived his right to be indicted today and pled guilty to an Information that charged him with one count of theft of mail. At sentencing, the defendant faces up to five years in federal prison and/or a fine of up to $250,000.
Today in District Court, Price admitted to taking mail intended for inmates being housed at the Danville Adult Detention Center, opening that mail and taking things of value contained within. Those items included cash, money orders and gift cards.
During an investigation by the United States Postal Service-Office on the Inspector General, several pieces of mail containing gift cards were sent in an undercover capacity from federal agents to prisoners at the Danville Adult Detention Center. That mail and the gift cards contained within, were diverted by Price and used at local businesses.
The investigation of the case was conducted by the United States Postal Service- Office of the Inspector General, the United States Postal Inspection Service and the Danville City Police Department. Assistant United States Attorney Laura Rottenborn will prosecute the case for the United States.
Former Business CEO Pleads Guilty to Orchestrating A Ponzi Scheme and Tax ChargesRead the Press Release
PHILADELPHIA - Walter P. Lambert, a/k/a “Buddy,” 73, of Pen Argyl, PA, pleaded guilty today to 16 counts of mail fraud, five counts of wire fraud, and one count of interfering with the due administration of the Internal Revenue Service. A sentencing hearing is scheduled for December 29, 2014. Lambert was the CEO of Blue Mountain Consumer Discount Company (“BMCDC”), a consumer loan company based in Wind Gap, Pennsylvania. He defrauded individual lenders into loaning over $5 million to BMCDC by promising them a high rate of return (typically 9% or 10%), which Lambert usually paid to the investors in cash and failed to document with the IRS.
Lambert told the individual lenders that BMCDC would use the lenders’ funds to issue high-interest loans to consumers (at an interest rate of approximately 23% to 26%), thereby allowing BMCDC to make a profit of approximately 13% to 16% after paying the individual lenders their 10% return. However, rather than using the individual lenders’ loan principal payments to issue new consumer loans, Lambert used the funds for his own benefit, including: to pay BMCDC’s overhead (including his own salary); to purchase a life insurance policy for himself; to purchase personal items and collectibles for himself and his family members; to pay for gasoline and repairs to personal cars owned and used by himself, his family members, and the owner of BMCDC; and to issue loans to himself, his children, and other “preferred” consumers at a rate of 6% interest per year or less, rather than the annual interest rate of 23% to 26% that the individual lenders were quoted. Prior to borrowing the principal from the individual lenders, Lambert failed to disclose that their loan principal would be used as set forth above. In order to keep the scheme afloat, Lambert continued to borrow money from new individual lenders, lied to them about what he would do with the money, and used the new loans to pay the old lenders their interest, and to pay BMCDC’s salary and overhead expenses.
Lambert doctored the books of BMCDC, submitted false annual reports to the Pennsylvania Department of Banking, and falsified BMCDC’s tax returns. He withdrew hundreds of thousands of dollars from BMCDC for the benefit of himself that he caused to be recorded as “loans” to himself and his family members. In falsely issuing these “loans” to his family members, Lambert forged the signatures of his family members on the loan paperwork and the checks issued by BMCDC, and deposited the checks into his personal bank accounts. Lambert documented fictitious payments to deceive the Pennsylvania Department of Banking into believing that BMCDC was financially sound and operating appropriately.
Lambert also interfered with the due administration of the Internal Revenue Service by, among other things, overstating corporate income, understating BMCDC’s salaries and wages by failing to record cash salary payments to BMCDC employees, understating BMCDC’s interest expenses by failing to record interest payments to individual lenders that were made in cash, and submitting false tax returns for BMCDC. Lambert is also to have paid a 1% “kickback” to one of the individual lenders, Nicholas R. Sabatine, III, charged separately, a local area attorney who referred clients to Lambert. While Lambert paid Sabatine’s clients 9% interest by check and provided them and the IRS with accurate annual IRS Forms 1099, Lambert paid Sabatine his promised 1% kickback in the form of cash that neither Lambert nor Sabatine timely declared to the IRS.
Lambert allegedly caused over 20 individual lenders to sustain losses of approximately $2,269,503, and caused the IRS to sustain a tax loss of at least approximately $252,621 for tax years 2007 through 2009.
Lambert faces a possible advisory sentencing guideline range of 51 to 63 months in prison, up to a three-year period of supervised release, restitution to the IRS, a fine of up to $5.5 million fine, and a $2,200 special assessment.
The case was investigated by the Internal Revenue Service Criminal Investigations and the FBI. It is being prosecuted by Assistant United States Attorney Michael S. Lowe.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Former Auto Parts Factory Manager Pleads Guilty to Fraud for Stealing and Selling PartsRead the Press Release
BIRMINGHAM -- A former manager at an automobile parts manufacturer in Vance pleaded guilty today to mail fraud in connection to parts he stole from the company and sold for personal profit, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
SAMUEL LANE WOODWARD, 40, of Tuscaloosa, entered his guilty plea to one mail fraud count before U.S. District Judge Sharon Lovelace Blackburn. His sentencing date has not been set.
As part of Woodward's plea agreement with the government, he is to pay T.W. Fitting-N.A. $46,051 in restitution. The government also seeks to have Woodward forfeit that same amount as proceeds of illegal activity.
Woodward was acting plant manager at T.W. Fitting from Nov. 1, 2011, to Aug. 1, 2012, and production manager from Aug. 1, 2012, to Dec. 11, 2012, when the company terminated his employment, according to his plea agreement.
T.W. Fitting assembled Tire Pressure Monitoring System valves and sold wheel rims. An FBI investigation revealed that Woodward stole TPMS valves and wheel rims from the factory in 2012 and sold them for personal profit to a business associate in Georgia. Woodward acknowledged in his plea agreement that the Georgia man mailed him a $12,050 check as payment for valves and wheel rims stolen from T.W. Fitting.
The maximum sentence for mail fraud is 20 years in prison and a $250,000 fine.
The FBI investigated the case, which Assistant U.S. Attorney Elizabeth A. Holt is prosecuting.
Former Assistant Vice President for Bergen County, N.J., Bank Charged with Embezzling over $1 MillionRead the Press Release
NEWARK, N.J. - A former assistant vice president at a Fort Lee, New Jersey bank surrendered to the FBI today for her alleged involvement in a scheme to embezzle over $1 million from her employer, U.S. Attorney Paul J. Fishman announced.
Miye Chon, a/k/a/ “Karen Chon,” 34, of Englewood Cliffs, New Jersey, is scheduled to make her initial appearance today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court. She is charged by complaint with theft, embezzlement or misapplication of funds by a bank officer or employee.
According to the complaint unsealed today:
Chon was employed by BankAsiana, a federally insured financial institution, until the bank was acquired in October 2013. Chon was an operations officer and later an assistant vice president at the Fort Lee branch. As a result, she had access to customer accounts, as well as the bank’s internal account records, computer system and vault.
Over the course of several years, Chon allegedly stole over $1 million from BankAsiana’s customer accounts by regularly making unauthorized transfers from customer certificate of deposit (CD) accounts into BankAsiana’s vault cash account, and then physically removing cash from the bank’s vault.
BankAsiana’s successor bank began an internal investigation after a customer found problems with tax forms and account records. The successor bank discovered that Chon, using her unique credentials, accessed BankAsiana’s computer systems on multiple occasions to make unauthorized transfers from customer CDs to the bank’s vault account before removing the cash. Chon had avoided detection by making false entries in the bank’s records and ensuring that funds she removed from CDs were transferred back into those accounts before they were set to reach maturity.
Chon allegedly embezzled funds on dozens of occasions, typically taking tens of thousands of dollars at a time, and one time converting as much as $100,000 from a customer’s CD account. Bank records show that during one week between September 27, 2013 and October 4, 2013, Chon’s last day working at the bank, she made multiple unauthorized transfers from customer accounts totaling approximately $1.2 million to cover losses in other customer accounts that she had previously looted. According to the successor bank’s investigation, the scheme resulted in an approximate $1.4 million loss to the bank.
Chon faces a maximum sentence of 30 years in prison, a maximum fine of the greater of $1 million or twice the gross gain or loss from the offense, and a mandatory restitution order in the full amount of BankAsiana’s loss.
U.S. Attorney Fishman praised special agents of the FBI’s Newark Field Office, under the direction of Special Agent in Charge Aaron T. Ford, for their work on this case.
The charge in the complaint against Chon is merely an accusation, and the defendant is considered innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorney Paul A. Murphy of the U.S. Attorney’s Office’s Economic Crimes Unit in Newark.
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Defense counsel: Matthew Jeon Esq., Fort Lee
Chon, Miye Complaint
Five Defendants Sentenced to Prison Terms for Multi-Million Dollar Theft of Pre-Retail Medical ProductsRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and David W. Bourne, Special Agent in Charge, Food and Drug Administration, Office of Criminal Investigation (FDA-OCI), Miami Field Office, announce that five Miami-area residents were recently sentenced to prison terms in connection with violations of the Safe Doses Act, which prohibits theft of “pre-retail” medical products. Ivan Manuel Valle, 34, of Miami, Daniel Martinez Zamora, 45, of Homestead, Raul Nick Garcia, 52, of Surfside, Ali Saleh, 35, of Miramar, and Jesus Mariano Gutierrez, 51, of Miami, were all sentenced to prison terms by U.S. District Judge Joan A. Lenard in connection with a scheme to steal more than $2.2 million worth of Mucinex cough medicine and $550,000 worth of Similac baby formula.
According to the indictment and documents filed in court, as part of an organized theft ring, 44 pallets of Similac were stolen by the conspirators from a distribution site in Forth Worth, Texas, and more than 131,000 cases of Mucinex were pilfered from a tractor-trailer truck in Mississippi. These pre-retail medical products were then transported by members of the theft ring to South Florida, stored in various locations, and offered for sale to brokers and retailers in and around Miami-Dade County. The defendants worked together to sell and distribute the stolen cargo. Valle and Zamora were brokers who obtained stolen product from others and sold portions of the stolen cargo. Garcia was a co-owner of Tadeo Supermarket in Miami where stolen cargo was sold, and he acted as a buyer and re-seller of stolen cargo using his family business, National Pallet, in Miami, where stolen product was stored. Saleh operated a beauty supply business in Broward County, where he stored stolen product and offered it for sale, and Gutierrez was a broker of the stolen cargo.
The stolen products were originally intended for sale at Wal-Mart and Walgreens stores and other retailers in the Southeastern United States.
Garcia and Zamora were each sentenced to 48 months in prison on September 22, 2014; Valle was sentenced to 60 months in prison and Gutierrez was sentenced to 30 months in prison on August 28, 2014; and, Saleh was sentenced to 34 months in prison on September 4, 2014. The defendants all previously pleaded guilty before Judge Lenard. A sixth defendant, Jorge Nimer Rolo, 47, of Miami, is currently in federal custody in Indiana and is awaiting trial on separate federal charges in the Southern District of Indiana.
The Safe Doses Act, passed by Congress in November, 2012, created a new offense, 18 U.S.C. § 670, which prohibits 1) stealing, or obtaining by fraud or deception, any pre-retail medical product; 2) knowingly and falsely making, altering, forging, or counterfeiting the labeling or documentation of a pre-retail medical product; 3) knowingly possessing or transporting a stolen or fraudulently-obtained pre-retail medical product; and, 4) buying or otherwise obtaining an expired or stolen pre-retail medical product with intent to defraud. Pre-retail medical products such as baby formula and cold medicine are covered by the Act.
Mr. Ferrer commended the investigative efforts of the FBI and FDA-OCI, as part of the Miami Major Theft Task Force. This case is being prosecuted by Assistant U.S. Attorney Jerrob Duffy.
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.
Felon in Possession of Ammunition Sentenced to 77 Months ImprisonmentRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Charles Henry Reedy, age 24, was sentenced today after he previously pleaded guilty to being a previously convicted felon in possession of ammunition. United States District Court Judge Thomas O. Rice sentenced Reedy to 77 months imprisonment to be followed by three years of court supervision following his release from Federal prison. During the sentencing hearing Judge Rice addressed Reedy’s extensive criminal history and, after imposing the sentence, told Reedy he hoped to never see him before the court again.
According to information disclosed during the court proceedings, in 2010, Reedy was sentenced to over 23 months imprisonment for Assault in Violation of a Protection Order – Domestic Violence. He was subsequently released from prison and placed on court supervision. Thereafter, on January 16, 2014, Yakima Violent Crimes Task Force agents observed Reedy leaving a residence in a Ford Explorer. At the time, a Washington Department of Corrections warrant for Reedy’s arrest was outstanding. Agents conducted a traffic stop, Reedy was taken into custody, and a search warrant was obtained for the Ford Explorer. A backpack was located on the rear floor board behind the driver’s seat, which contained 400 rounds of CCI .22 caliber long rifle ammunition as well as Reedy’s mail and identification card. Agents with the Bureau of Alcohol, Tobacco, Firearms, and Explosives worked with the Yakima Police Department and determined that Reedy was prohibited from possessing ammunition or firearms. Reedy was subsequently charged Federally with being a previously convicted felon in possession of ammunition.
Michael C. Ormsby said, “Convicted felons, particularly those with domestic violence convictions, who possess ammunition present a significant danger. Local and federal law enforcement officers in the Eastern District of Washington are dedicated to work together to protect our communities from such offenders. This case is just one example of the cooperative and successful efforts by federal law enforcement officers and the Yakima Police Department.”
This investigation was conducted by the Yakima Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case was prosecuted by Alison Gregoire, an Assistant United States Attorney for the Eastern District of Washington.
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Federal Judge Sentences Tax Preparer to Seven Months in Prison for Filing False ReturnsRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a former Birmingham tax-return preparer to seven months in prison and ordered her to repay $70,045 to the IRS for filing false returns, announced U.S. Attorney Joyce White Vance and IRS, Criminal Investigation, Special Agent in Charge Veronica Hyman-Pillot.
U.S. District Judge Sharon Lovelace Blackburn sentenced JANICE E. FOY on one count of subscribing to a false federal tax return and one count of aiding in the preparation of a false return. Foy, 52, of Snellville, Ga., pleaded guilty to the charges in May. Foy owned and operated the now-defunct tax preparation business, VIP Tax Services, on Bankhead Highway in Birmingham. Blackburn ordered Foy to serve a year of supervised release following her prison sentence. Among special conditions of that release, the judge ordered Foy to pay restitution to the Internal Revenue Service and to refrain from assisting or aiding others in the preparation of taxes.
"An integral part of the agency's mission involves detecting and stopping fraudulent refund claims," Hyman-Pillot said. "IRS Criminal Investigation identified and investigated the filing of false tax returns submitted by Janice Foy, and as a result Ms. Foy will serve time in jail for her actions. Special Agents work year-round to investigate and root out dishonest return preparers like Ms. Foy," she said.According to court records, Foy orchestrated a tax refund scheme through VIP Tax Services. During the time Foy professionally prepared tax returns, from 2008 to 2010, she filed false tax returns on behalf of taxpayer clients who retained VIP's services, often including numerous false items on client's returns in order to maximize their refunds.
Foy pleaded guilty to one count of subscribing to a false U.S. tax return for claiming a First-time Homebuyer Credit of $7,500 on her own 2008 tax return, knowing she was not entitled to that deduction. She also pleaded guilty to one count of preparing a false federal tax return while operating a tax preparation service by adding false education credits, child tax credit and the First-time Homebuyer Credit to a client's return.
In her plea agreement, Foy also admitted to causing 26 false U.S. tax returns for 20 of her clients to be filed with the IRS for the tax years 2007-2009. Those returns contained fictitious dependents, inflated deductions, false income and expenses, and false education credits, dependent care expenses, and First-Time Homebuyer Credits or Residential Energy credits. Some of the false deductions and credits also enabled the defendant's clients to falsely claim the Earned Income Credit and the Additional Child Tax Credit. The total loss to the government was $90,798.
In a related case, KRISTIE SYKES, 42, of Birmingham, who worked at VIP, pleaded guilty on Monday to two counts of a five-count indictment charging her with aiding in the preparation of false federal tax returns.
IRS-CI investigated the case, which Assistant U.S. Attorney Chinelo Dike-Minor is prosecuting.
Federal Court Bars Pittsburgh Man from Preparing Federal Tax ReturnsRead the Press Release
A federal court in Pittsburgh, Pennsylvania, permanently barred Larry E. Snow from preparing federal tax returns for others, the Justice Department announced today. Snow allegedly claimed false tax deductions on customers’ tax returns.
Senior U.S. District Judge Maurice B. Cohill for the Western District of Pennsylvania entered the injunction against Snow on Sept. 23 after Snow failed to contest the government’s claims. In 2012, Snow pleaded guilty to one count of aiding and assisting in the preparation and presentation of false and fraudulent income tax returns and was later sentenced to six months of home detention and three years probation. According to the complaint, Snow repeatedly prepared returns with false deductions for medical expenses, personal property taxes, charitable contributions and unreimbursed employee expenses. He allegedly maintained a list he referred to as “IRS Gimmies,” which were items he instructed his employees to report on each return prepared in his accounting practice, regardless of whether the customer was entitled to them.
The IRS estimated that Snow’s fraudulent return preparation for one year alone cost the U.S. Treasury more than $1.3 million in lost tax revenue. The court also ordered Snow to notify his former customers of the injunction entered against him.
Return preparer fraud is one of the IRS' Dirty Dozen Tax Scams for 2014. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. Larry E. Snow
Default Judgment Against Defendant Larry E. SnowFederal Court Bars Pittsburgh Man from Preparing Federal Tax ReturnsRead the Press Release
WASHINGTON – A federal court in Pittsburgh, Pennsylvania, permanently barred Larry E. Snow from preparing federal tax returns for others, the Justice Department announced today. Snow allegedly claimed false tax deductions on customers’ tax returns.
Senior U.S. District Judge Maurice B. Cohill for the Western District of Pennsylvania entered the injunction against Snow on Sept. 23 after Snow failed to contest the government’s claims. In 2012, Snow pleaded guilty to one count of aiding and assisting in the preparation and presentation of false and fraudulent income tax returns and was later sentenced to six months of home detention and three years probation. According to the complaint, Snow repeatedly prepared returns with false deductions for medical expenses, personal property taxes, charitable contributions and unreimbursed employee expenses. He allegedly maintained a list he referred to as “IRS Gimmies,” which were items he instructed his employees to report on each return prepared in his accounting practice, regardless of whether the customer was entitled to them.
The IRS estimated that Snow’s fraudulent return preparation for one year alone cost the U.S. Treasury more than $1.3 million in lost tax revenue. The court also ordered Snow to notify his former customers of the injunction entered against him.
Return preparer fraud is one of the IRS' Dirty Dozen Tax Scams for 2014. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Eleventh Circuit Affirms Convictions and Sentence of Former “Cast Crete” PresidentRead the Press Release
Tampa, Florida – The United States Court of Appeals for the Eleventh Circuit yesterday affirmed the convictions of John Stanton, III, on charges that he had obstructed the administration of the Internal Revenue Laws and had failed to file tax returns for himself and for his companies, Florida Engineered Construction Products (FECP) and Denouement Strategies. The Court also upheld Stanton’s ten-year sentence for those convictions.
Stanton was the president of FECP, which operated under the name “Cast Crete” and which produced and sold tens of millions of dollars of precast concrete products annually. Despite the fact that FECP reaped handsome annual revenues and paid out tens of millions of dollars to Stanton and others, Stanton failed to file tax returns for FECP for several years and filed returns containing inaccurate information for several other years. He also failed to file tax returns for himself for 2005 and 2007, despite having received millions from FECP during that period. When the Internal Revenue Service (IRS) attempted to investigate FECP’s tax obligations, Stanton provided an investigator with false and misleading documents and information. The District Court found that, as a result of Stanton’s crimes, the IRS had lost more than $50 million in tax revenues—more than $100 million including interest and penalties.
On appeal, Stanton challenged the sufficiency of the evidence at trial, the constitutionality of the statute prohibiting his attempt to obstruct the administration of the Internal Revenue Laws, numerous District Court rulings, and various aspects of his ten-year sentence. The Eleventh Circuit rejected each of these arguments, “conclud[ing] that all of the issues in this appeal lack merit.”
Stanton is currently serving a sentence of ten years’ imprisonment.
This case was investigated by the Internal Revenue Service - Criminal Investigations. It was prosecuted in the District Court by Assistant United States Attorney Matthew Mueller and former Assistant United States Attorney Robert Monk. The appeal was handled by Assistant United States Attorneys Linda Julin McNamara and Todd B. Grandy.
El Paso, Texas Man Sentenced to Forty-Six Months for Unlawful Possession of Stolen FirearmsRead the Press Release
ALBUQUERQUE – Emanuel Medina, 24, of El Paso, Texas, was sentenced today in federal court in Las Cruces, N.M., to 46 months in federal prison followed by two years of supervised release for unlawfully possessing stolen firearms.
Medina and co-defendant Pete Richard Ferraro, 23, of Chaparral, N.M., were arrested on Oct. 25, 2013, on a criminal complaint alleging that he unlawfully possessed firearms between Oct. 11, 2013 and Oct. 23, 2013, in Doña Ana County, N.M. According to the complaint, on Oct. 22, 2013, an officer of the El Paso Police Department reported that a rifle and a shotgun were missing from his unmarked police vehicle. The results of a latent prints examination revealed that Ferraro left his fingerprints on the police vehicle. During the course of the investigation, Medina was interviewed and implicated himself in the theft of the firearms. The firearms were recovered in two Chaparral residences.
On May 27, 2014, Medina pled guilty to a felony information charging him with possession of stolen firearms. In his plea agreement, Medina admitted that Ferraro and he broke into the officer’s vehicle, stole the firearms and transported the firearms from Texas to New Mexico.
Ferraro entered a guilty plea to possession of stolen firearms on July 23, 2014. Ferraro has been in federal custody since his arrest and remains detained pending sentencing, which has yet to be scheduled. At sentencing, he faces a maximum statutory penalty of ten years in prison.
This case was brought as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.This case was investigated by the El Paso Group III Field Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the El Paso Police Department, and is being prosecuted by Assistant U.S. Attorney Randy Castellano of the U.S. Attorney’s Las Cruces Branch Office.
El Departamento de Justicia Resuelve un Caso de Discriminación en el Empleo Relacionado a Inmigración contra una AerolíneaRead the Press Release
WASHINGTON – El Departamento de Justicia anunció hoy que llegó a un acuerdo con United Continental Holdings, Inc., por medio del cual se resuelve una acusaciόn de que algunas divisiones de la compañía previamente operando como Continental Airlines discriminaron contra individuos por su estatus de ciudadanía en violación de la Ley de Inmigración y Nacionalidad (INA por sus siglas en inglés).
La investigación del departamento se inició por medio de una llamada telefónica que recibió la Oficina del Consejero Especial para Prácticas Injustas en el Empleo Relacionadas a la Inmigración (OSC) através de su línea directa. Durante la investigación, el departamento descubrió que la compañía solía requerir a sus empleados residentes permanentes legales, y no a los empleados estadounidenses, que llenaran Formularios I-9 adicionales y proporcionaran comprobantes adicionales de sus autorizaciones de empleo después de la contratación aunque esta práctica está prohibida por ley. La provisiόn antidiscriminatoria de la INA prohíbe que los empleadores impongan cargas documentales adicionales a los trabajadores con autorizaciόn de trabajo durante el proceso de verificación de elegibilidad de empleo basado en el estatus de ciudadanía del individuo.
“La provisiόn antidiscriminatoria de la INA protege a los individuos de reverificaciόn de empleo innecesaria y no autorizada por motivos de su ciudadanía o estatus migratorio,” dijo Molly Moran, Sub-Procuradora General Interina para la Divisiόn de Derechos Civiles. “Reconocemos la disponibilidad de Continental para resolver los problemas descubiertos durante la investigación del departamento.”
Según el acuerdo, Continental le pagará $215,000 a los Estados Unidos, establecerá un fondo de $55,000 para compensar a los individuos que pudieron haber sufrido una perdida de salario debido a las práticas injustas de la compañía y participará en un programa de capacitación sobre la provisión antidiscriminatoria de la INA. La compañía también estará sujeta a un período de monitoreo de sus prácticas de reverificación por el departamento por un período de dos años.
La Oficina del Consejero Especial para Prácticas Injustas en el Empleo Relacionadas a la Inmigración es la oficina responsable por hacer cumplir con la provisión antidiscriminatoria de la INA. Entre otras cosas, la ley prohíbe discriminación por estatus de ciudadanía o del origen nacional durante la contrataciόn, el despido, el reclutamiento o la referencia por comisiόn, las prácticas injustas de documentación, represalias, e intimidación.
Para más información sobre las protecciones contra discriminación en el empleo según las leyes migratorias, llame a la línea directa de OSC para trabajadores al 1-800-255-7688 (1-800-237-2515, TTY para personas con discapacidad auditiva), llame a la línea directa de OSC para empleadores al 1-800-255-8155 (1-800-237-2515, TTY para personas con discapacidad auditiva), o para registrarse para un seminario gratis ofrecido a través del internet visite www.justice.gov/crt/about/osc/webinars.php, envíe un correo electrónico al [email protected], o visite el sitio de Internet www.justice.gov/crt/about/osc.
Los solicitantes o empleados que consideren que fueron sujetos a (1) diferentes requisitos de verificación por su estatus de ciudadanía, estatus migratorio u origen nacional, o (2) discriminación por estatus de ciudadanía, estatus migratorio, u origen nacional con relación a la contratación, el despido y el reclutamiento o la referencia por comisión, deberán comunicarse a la línea dedicada a los trabajadores anteriormente citada para poderlos ayudar.
Eighth Defendant Convicted in Residential Mortgage Fraud SchemeRead the Press Release
Conspirators Used Other Individuals’ Identities, False Income and Credit Information to Induce Lenders to Provide Home Mortgage Loans
Greenbelt, Maryland – A jury convicted Annika Boas, age 37, of Mount Rainier, Maryland on September 19, 2014, for conspiracy, wire fraud and making a false statement on a loan application, arising from a residential mortgage fraud scheme.The conviction was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Cary A. Rubenstein of the Housing and Urban Development Office of Inspector General - Office of Investigations; Acting Inspector General Michael P. Stephens of the Federal Housing Finance Agency Office of Inspector General; Special Agent in Charge Kathy Michalko of the United States Secret Service – Washington Field Office; John L. Phillips, Assistant Inspector General for Investigations, U.S. Department of the Treasury - Office of Inspector General; and Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
According to the evidence presented at her four day trial, from March 2007 to November 2008, Boas conspired with real estate agent Edgar Tibakweitira, Ayoub Luziga, with whom Boas was in a relationship, and others, to fraudulently secure residential mortgage loans by making false statements during the loan application and approval process. The conspirators used stolen or false identity information, false documents – including W-2 forms, earnings and banks statements – and false credit information to induce lenders to provide mortgage loans to straw purchasers, such as Boas and others recruited by Luziga and Tibakweitira. As part of the scheme, Tibakweitira inflated the sales price of the property by creating false documents for repairs and renovations that were never made. After the settlement, the conspirators divided up the cash received for the purported repairs.
Specifically, witnesses testified that the conspirators obtained the identity information of a least four individuals, without those individuals’ knowledge or permission. According to witness testimony, Boas and other conspirators assumed the identities of these individuals and acted as straw buyers to obtain the loans used to purchase the properties. The evidence showed that Boas assumed the identity of one of the victims, using a North Carolina driver’s license with the victim’s name but Boas’ photo, to pose as the victim at the settlement for two properties.
As a result of the conspiracy, Boas caused between $400,000 and $1 million in losses to federally-insured financial institutions.
“The United States Department of Housing and Urban Development, Office of the Inspector General (HUD-OIG) investigates allegations of waste, fraud and abuse in HUD sponsored programs such as our FHA program,” said Special Agent in Charge Cary A. Rubenstein of HUD-OIG’s Mid-Atlantic Region. “This group, including several mortgage industry professionals, perpetrated a sophisticated mortgage fraud scheme designed to enrich themselves at the expense of lenders and the FHA Insurance Fund. The efforts that brought us this verdict demonstrate that when law enforcement is made aware of schemes that place the public and the FHA Insurance program at risk, we will commit the necessary resources to make sure the fraudsters are brought to justice and are no longer in a position to engage in fraud.”
Boas faces a maximum penalty of 30 years in prison for the conspiracy, for each of two counts of wire fraud, and for each of two counts of making a false statement on a loan application. U.S. District Judge George Jerrod Hazel has scheduled sentencing for Boas on January 7, 2015 at 9:00 a.m.
Co-conspirators Edgar Tibakweitira, a/k/a “Edgar Julian,” “Charles Edgar Tibakweitira,” and “Edgar Gaudious Tibakweitira,” age 46, of Severn, Maryland and Ayoub Luziga, age 35, of Bowie, Maryland, have pleaded guilty to their roles in the scheme and are scheduled to be sentenced on November 3, 2014 at 10:00 a.m. and November 24, 2014, at 11:30 a.m., respectively.
Five other conspirators have also pleaded guilty to their roles in the scheme, including: Tibakweitira’s wife Flavia Makundi, age 42, of Severn; Mokorya Cosmas Wambura, age 41, of Takoma Park, Maryland; Raymond Abraham, age 47, of Silver Spring, Maryland; Cane Mwihava and Abdallah Suleiman Kitwara, both age 43, of Bowie. Wambura was sentenced to five years in prison and Makundi was sentenced to time served. Mwihava is scheduled to be sentenced on October 14, 2014 at 1:00 p.m., Abraham is scheduled to be sentenced on October 27, 2014 at 11:30 a.m., and Kitwara is scheduled to be sentenced on December 2, 2014 at 9:00 a.m.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available http://www.justice.gov/usao/md/priorities_financialfraud.html.
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.United States Attorney Rod J. Rosenstein praised HUD-OIG, FHFA-OIG, Treasury OIG, U.S. Secret Service and HSI Baltimore for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kristi N. O’Malley and Special Assistant U.S. Attorney Kevin DiGregory, Investigative Counsel for the Federal Housing Finance Agency Inspector General, who prosecuted the case.
District Woman Sentenced to 10 Months in Prison for Embezzling over $193,000 from Charitable Organization-Used Money for Vacations, Personal Training, Other Personal Expenses-Read the Press Release
WASHINGTON – Maria Herrmann, 53, of Washington, D.C., was sentenced today to 10 months in prison for embezzling over $193,000 from a charitable organization from 2004 through 2008, announced U.S. Attorney Ronald C. Machen Jr. and Gary R. Barksdale, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service.
Herrmann pled guilty in June 2014, in the U.S. District Court for the District of Columbia, to one count of wire fraud. She was sentenced by the Honorable James E. Boasberg. As part of her guilty plea, Herrmann agreed to forfeit the amount of her fraudulent proceeds, $193,770, and pay the same amount in restitution to the charitable foundation. Upon completion of her prison term, she will be placed on three years of supervised release.
As part of her guilty plea, Herrmann admitted that, between May 2004 and June 2008, she operated an on-line “e-store” with operations meant to raise funds for a non-profit charitable organization. To raise funds, the e-store auctioned various donated goods and services, as well as travel and vacation packages. Herrmann admitted to embezzling over $193,000 by wiring herself funds from the charity’s account, by using the e-store account to pay for personal purchases, and by other means.
Herrmann admitted using the charity’s funds to pay for vacations, personal training, pet care and pet supplies, and gourmet coffee, among other things. Finally, Herrmann admitted disguising her embezzlement from the charity by underreporting the e-store’s revenue.
In addition, at sentencing, the government submitted evidence regarding other misconduct Herrmann engaged in related to travel vouchers she sold through the “e-store.” As set forth in the government’s sentencing memorandum, Herrmann sold these travel vouchers below cost and then, often, deceived customers as to the quality of travel packages they purchased – for example, booking travelers in a lower quality hotel than promised. In June 2008, when her embezzlement was discovered, the operation became unsustainable. Thousands of would-be travel customers then found themselves stuck without airfare or hotels they were promised, including some on the eve of planned wedding and family travel. In the following weeks, the charitable foundation tried to make Herrmann’s customers whole, processing more than 4,000 claims and issuing refunds to over 2,000 customers. Those refunds, and other remedial costs, led to over $5.2 million in losses for the charity.
In announcing the sentence, U.S. Attorney Machen and Inspector in Charge Barksdale expressed appreciation for the work done by those who investigated the case from the U.S. Postal Inspection Service. They also commended the work of those who handled the case from the U.S. Attorney’s Office, including Paralegal Specialists Krishawn Graham and Donna Galindo, and Assistant U.S. Attorney Jonathan Hooks, who investigated and prosecuted the case.
14-213Distributor for Atlantic City "Dirty Block" Gang Admits Role in Heroin Trafficking ConspiracyRead the Press Release
CAMDEN, N.J. - An Atlantic City, New Jersey, man admitted today to engaging in a conspiracy to distribute heroin with Mykal Derry, a leader of the “Dirty Block” criminal street gang that allegedly used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City, U.S. Attorney Paul J. Fishman announced.
Aree Toulson, a/k/a “Beyah,” a/k/a “Beyeazz,” 25, of Atlantic City, pleaded guilty before U.S. District Judge Joseph E. Irenas in Camden federal court to a superseding information charging him with one count of conspiracy to distribute and to possess with intent to distribute, and to distribute and to possess with intent to distribute within 1,000 feet of public housing, 100 grams or more of heroin.
During the period of the conspiracy Toulson acted as a distributor on behalf of Mykal Derry, 34, of Atlantic City, helping Dirty Block to distribute heroin in and around the public housing apartment complexes of Stanley Holmes, Carver Hall, Schoolhouse, Adams Court and Cedar Court in Atlantic City.
Toulson was arrested on March 26, 2013. According to Toulson’s statements in court, he and others travelled with Mykal Derry to a shooting range in Lakewood, New Jersey, on Oct. 18, 2012, where Toulson – a previously convicted felon – used, possessed, and discharged a firearm. According to filed documents, members of the group also participated in a violent altercation with rival drug traffickers at an Atlantic City casino in December 2012.
The drug conspiracy charge carries a minimum penalty of five years in prison, a maximum penalty of 80 years in prison, and maximum potential fine of up to $10 million. Sentencing is scheduled for January 16, 2015.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor James P. McClain; the Atlantic City Police Department, under the direction of Police Chief Henry White; and the South Jersey Safe Streets Violent Incident and Gang Task Force, with the investigation.
The government is represented by Assistant U.S. Attorneys Patrick C. Askin and Justin C. Danilewitz of the U.S. Attorney’s Office Criminal Division in Camden.
The charges and allegations against Derry are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
14-340Defense counsel: Paul George Esq., Philadelphia
Toulson, Aree Superseding Information
Dinesh D’Souza Sentenced in Manhattan Federal Court to Five Years of Probation for Campaign Finance FraudRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that DINESH D’SOUZA was sentenced in Manhattan federal court to five years of probation, with eight months during the first year to be served in a community confinement center, after having pled guilty to violating the federal campaign election law by making illegal contributions to a United States Senate campaign in the names of others. D’SOUZA was sentenced today before U.S. District Judge Richard M. Berman.
Manhattan U.S. Attorney Preet Bharara stated: “Dinesh D’Souza attempted to illegally contribute over $10,000 to a Senate campaign, wilfully undermining the integrity of the campaign finance process. Like many others before him, of all political stripes, he has had to answer for this crime – here with a felony conviction.”
According to the Indictment, prior court filings, and statements made in court:
The Federal Election Campaign Act (the “Election Act”) is designed to limit financial influence in the election of candidates for federal office, including the Office of United States Senator, and provides for the public disclosure of the financing of federal election campaigns. In particular, the Election Act limits the amount and source of money that may be contributed to a federal candidate or that candidate’s authorized campaign committee. The Election Act specifically prohibits any person from making any contribution in the name of another, including reimbursing a third person, before or after that third person’s contribution, as inducement to make that contribution.
In 2012, the Election Act limited campaign contributions to $5,000 from any individual to any one candidate. In March 2012, D’SOUZA contributed $10,000 to the Senate campaign of Wendy Long on behalf of himself and his wife, agreeing in writing to attribute that contribution as $5,000 from his wife and $5,000 from him. In August 2012, D’SOUZA directed other individuals with whom he was associated, namely his assistant and a woman with whom D’SOUZA was romantically involved (the “Straw Donors”), to make contributions to Wendy Long’s campaign for the United States Senate (the “Long Campaign”) on behalf of themselves and their spouses that totaled $20,000 with the promise that he would reimburse them for the contributions. Later that same day or the next day, D’SOUZA, as promised, reimbursed the Straw Donors $10,000 each in cash for the contributions. When confronted by Ms. Long, D’SOUZA initially misled the candidate before admitting what he had done.
During the plea proceeding, D’SOUZA admitted before the Court that he caused two close associates to contribute $10,000 each to the Long Campaign with the understanding that he would reimburse them for their contributions and that he did reimburse them. D’SOUZA also admitted that he knew that what he was doing was wrong and something the law forbids.
In addition to the probationary term with confinement to a community center, Judge Berman sentenced D’SOUZA, 53, of San Diego, California, to a mandatory eight-hour day of community service every week of his five-year term of probation, weekly counseling sessions, and ordered him to pay a $30,000 fine, as well as a $100 special assessment.
Judge Berman previously denied D’SOUZA’s pretrial motion to dismiss the indictment for selective prosecution, ruling that there was “no evidence” to support D’SOUZA’s allegation. In sentencing D’SOUZA, Judge Berman referred to his prior ruling and remarked that “the defendant’s claim of selective prosecution, legally speaking, is ‘all hat, no cattle.’”
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation.
This case is being prosecuted by the Office’s Public Corruption Unit. Assistant United States Attorneys Carrie H. Cohen and Paul M. Krieger are in charge of the prosecution.
Department of Justice Will Not Challenge Proposed Chassis Use AgreementRead the Press Release
The Department of Justice today announced that it will not challenge a proposal by Flexi-Van Leasing Inc. and Direct ChassisLink Inc. to enter into a Chassis Use Agreement at the ports of Los Angeles and Long Beach, California. Flexi-Van and Direct ChassisLink are chassis leasing companies that also manage chassis pools operating at the ports of Los Angeles and Long Beach.
Based upon representations made by the applicants, as well as the department’s investigation, the department has no present intention to challenge the proposed agreement.
The department’s position was stated in a business review letter to counsel for Flexi-Van and Direct ChassisLink from Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.
According to representations made by Flexi-Van and Direct ChassisLink, the proposed agreement will result in the establishment of a “gray” chassis pool, which will extend benefits associated with individual pools by allowing the interchange of chassis across multiple pools throughout the port complex. The increased flexibility created by the interchangeability will enhance customer service, improve chassis productivity, and respond to the desire of the Long Beach and Los Angeles ports authorities to achieve better overall utilization of the region’s chassis fleets. The pools managed by Flexi-Van and Direct ChassisLink will continue to compete for business, and leasing terms and rates will continue to be set independently by each chassis provider. No information will be exchanged between Flexi-Van and Direct ChassisLink regarding customer pricing or other competitively sensitive terms. A third party provider will be used to facilitate operation of the gray chassis pool, audit chassis usage, and prevent the exchange of competitively sensitive information among the pools and chassis providers. After initial implementation, Flexi-Van and Direct ChassisLink intend that the agreement will become open to other pools at the ports of Los Angeles and Long Beach. Based on these representations, as well as the department’s investigation into the particular facts and circumstances relating to the competitive conditions of chassis supply at the port complex, the department has no present intention to challenge the proposed agreement.
Under the department’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the division currently intends to challenge the action under the antitrust laws based on the information provided. The department reserves the right to challenge the proposed action under the antitrust laws if it produces anticompetitive effects.
A file containing the business review request and the department’s response may be examined in the Antitrust Documents Group of the Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 1010, Washington, D.C. 20530. After a 30-day waiting period, the documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the Business Review Procedure.
Delaware Real Estate Developer Indicted for False Statements and Environmental ViolationsRead the Press Release
WILMINGTON, Del. - David C. Weiss, Acting United States Attorney for the District of Delaware, announced that an Indictment has been handed down by a federal grand jury charging Joseph L. Capano, age 73, of Middletown, Delaware, with three counts of making false statements to federal authorities (18 United States Code §1001(a)), and charging Capano and Riverbend Community LLC, a Delaware Corporation, with conspiracy to violate the Clean Water Act (18 United States Code §371). Defendant Capano faces up to 5 years of imprisonment for the false statement charges, 3 years of imprisonment on the Clean Water Act conspiracy, and a maximum of $250,000 fine for each offense. Defendant Riverbend faces a fine of up to $500,000 for the Clean Water Act conspiracy.
The Indictment alleges that Capano and Riverbend Community LLC conspired with others to discharge pollutants into wetlands subject to federal jurisdiction without a permit, during development of Riverbend at Old New Castle, a residential development located off of Delaware State Route 9 in New Castle, Delaware. The Indictment focuses on earthmoving, construction and excavation activities that Capano, on behalf of Riverbend Community LLC, directed employees and contractors to perform on the entrance road to the development, known as the causeway. Specifically, the defendants directed contractors and employees to expand the causeway into wetlands subject to federal jurisdiction. The defendants also directed contractors and employees to place a water main pipe through the causeway wetlands area, even after the Army Corps of Engineers instructed the defendants to stop performing construction in wetland areas.
In addition, the Indictment alleges that Capano knowingly and willfully made multiple false statements to the Army Corps of Engineers regarding when the water main pipe was installed in the causeway wetland areas, including executing a false affidavit, and that he withheld maaterial information from the Army Corps of Engineers.
“Construction activities in wetland areas have the potential to pollute our waters and damage our environment. Before developers perform work in wetland areas, they must first seek a permit from the Army Corps of Engineers. When interacting with formal regulators regarding activities in wetland areas, developers must accurately describe the nature of their activities. Those who fail to do so proceed at their peril.” said Acting United States Attorney David C. Weiss.
“Wetlands play a critical role in maintaining a healthy environment,” said David G. McLeod, Jr., Special Agent in Charge of EPA’s criminal enforcement program in the Middle Atlantic States. “Once gone, it’s rare to see wetlands fully restored. EPA and its law enforcement partners are working to protect these invaluable natural assets as well as the communities around them.”This case is the result of an investigation conducted by the United States Environmental Protection Agency, Criminal Investigation Division Philadelphia Area Office. The prosecution is being handled by Assistant United States Attorney Jennifer K. Welsh, District of Delaware.
The charges in the Indictment are only allegations. The defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.Daytona Beach Felon Sentenced to 15 Years for Possessing A FirearmRead the Press Release
Orlando, Florida – Senior U.S. District Judge Gregory A. Presnell sentenced Antone T. Adams (25, Daytona Beach) yesterday to 15 years in federal prison for being a felon in possession of a firearm. Adams was indicted on October 9, 2013. He pleaded guilty on February 28, 2014.
According to court documents, on May 14, 2013, Adams sold a firearm and crack cocaine to an undercover agent. He sold the agent a Hi-Point pistol for $500 and 3.9 grams of crack cocaine for $340. Adams was a convicted felon at the time of the transaction and therefore was prohibited from possessing a firearm or ammunition under federal law.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives. It was prosecuted by Assistant United States Attorney James D. Mandolfo.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Trevor Velinor, Acting Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials. It is also a part of ATF’s Frontline strategy to reduce violent crime in communities.
Darby Man Charged with Stealing from Veterans AffairsRead the Press Release
Isaac Bonner, 43, of Darby, Pennsylvania, was charged today by information with theft of public funds from the Department of Veterans Affairs (“VA”), announced United States Attorney Zane David Memeger. It is alleged that the defendant submitted fraudulent time sheets while he was assigned to the VA Medical Center in Philadelphia, and took compensation for nursing aide services that he had not rendered. The VA paid approximately $64,377 for such services that it never received.
If convicted, the defendant faces a maximum sentence of 10 years in prison, up to three years of supervised release, a fine of up to $250,000, and a $100 special assessment.
The case was investigated by the VA Office of Inspector General and is being prosecuted by Assistant United States Attorney M. Beth Leahy.
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UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Contact: 401-528-5300Read the Press Release
U.S. MARSHALS CELEBRATE 225 YEARS OF SERVICE
PROVIDENCE, R.I. – Today the U.S. Marshals Service celebrates its 225th anniversary. As the nation’s oldest, most versatile federal law enforcement agency, it continues to build on its legacy of steadfast service and its unique position in the country’s federal justice system.
The U.S. Marshals Service’s legendary origins began in 1789 when the nation’s first president appointed the first U.S. Marshals.
“When President George Washington appointed the first 13 U.S. Marshals Sept. 24, 1789, his pen marked the creation of an agency that has since played a role in virtually every facet of the nation’s federal judiciary during times of crisis and times of peace,” said U.S. Marshals Service Director Stacia Hylton.
“From upholding the law in our untamed western territories to enforcing orders related to civil rights, the U.S. Marshals Service has been committed to answering the call of our great nation. As we mark 225 years of service, our men and women stand ready to continue that commitment,” Hylton said.
Today, the U.S. Marshals Service is a force of 5,400 deputies and civil servants who carry out operational and administrative duties as varied as apprehending fugitives, housing and transporting prisoners, protecting witnesses and federal judges, and managing and selling seized assets.Most notably, the Marshals Service is the federal government’s primary agency for conducting fugitive investigations. Working with its law enforcement partners at the federal, state, and local levels, the Marshals apprehend more federal fugitives than all other federal law enforcement agencies combined. The U.S. Marshals arrested more than 110,000 fugitives during fiscal year 2013.
“As United States Marshal for the District of Rhode Island, I am proud and privileged to be part of the rich history of the U.S. Marshals Service and to lead a force of committed women and men who serve as Deputy Marshals, administrative personnel and Court Security Officers,” said United States Marshal for the District of Rhode Island Jamie A. Hainsworth. He added, “I am excited to be part of this celebration of the 225th anniversary of the U.S. Marshals Service.”
Additionally, in Rhode Island, among the priorities of the U.S. Marshals Service is the physical protection of the Judiciary and federal court buildings; execution of federal warrants and to assist state and local law enforcement in the apprehension of wanted persons, the protection of witnesses and the administration of the witness protection program; the management of all assets seized by the federal government in the District of Rhode Island; working with members of the Violent Fugitive Task Force, partnering with the RI State Police and Providence Police; and the Sex Offender Registration and Enforcement Task Force, partnering with state and local law enforcement agencies throughout Rhode Island.
United States Marshal Hainsworth added, “As we mark this significant milestone of 225 years, we must also pause to recognize the first Federal law enforcement officer killed in the line of duty, U.S. Marshal Robert Forsyth in 1794, and more than 200 U.S. Marshals, Deputy U.S. Marshals and Special Deputy U.S. Marshals that have died in the line of duty since. In Rhode Island, we remember the loss and pay tribute to Special Deputy Court Security Officer Frank McKnight, who was killed in May of this year while on duty.”
Connecticut Man Pleads Guilty to Violating Federal Food, Drug, and Cosmetic ActRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that WESLEY SKORSKI, 44, of Marlborough, pleaded guilty today before U.S. Magistrate Judge Donna F. Martinez in Hartford to one count of introducing a misbranded drug into interstate commerce, in violation of the Federal Food, Drug, and Cosmetic Act.
According to court documents and statements made in court, SKORSKI owns and operates AviaMed, a Wethersfield-based business licensed by the State of Connecticut to engage in the wholesale distribution of medical devices and prescription drugs under the Federal Food, Drug, and Cosmetic Act. As part of the operation of AviaMed, SKORSKI received orders for prescription drugs from physicians and other health care providers.
In 2010 and 2011, SKORSKI entered into agreements with suppliers in the United Kingdom and Canada to receive prescription drugs, including oncology and dermatology drugs, which were commercially manufactured or produced outside the U.S. for distribution in foreign markets. After receiving the drugs from the foreign suppliers, SKORSKI repackaged them and distributed them to health care providers in the U.S. outside Connecticut.
The drugs SKORSKI received from foreign suppliers failed to contain the labeling required by the Food and Drug Administration, and were not approved for sale within the U.S. As a result, the drugs were considered misbranded under the Food, Drug, and Cosmetic Act.
SKORSKI is scheduled to be sentenced on December 16, 2014, at which time he faces a maximum term of imprisonment of one year and a fine of up to $1,000.
This investigation was conducted by special agents from the Food and Drug Administration, Office of Criminal Investigations. The case is being prosecuted by Assistant U.S. Attorney David J. Sheldon.PUBLIC AFFAIRS CONTACT:
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[email protected]Columbia Man Sentenced for Straw Puchasing FirearmsRead the Press Release
Contact Person: Stacey Haynes (803) 929-3000
Columbia, South Carolina ---- United States Attorney Bill Nettles stated today that Marquel Davon Foster, age 23, of Columbia, South Carolina was sentenced today in federal court after earlier pleading guilty to making a false statement in the acquisition of firearms from a federal firearms licensee, in violation of Title 18, United States Code, Sections 922(a)(6) and 924(a)(2). Senior United States District Judge Margaret B. Seymour sentenced Foster to 18 months imprisonment, followed by three (3) years of supervised release.
Evidence presented at the change of plea hearing established that in January 2013, during the execution of a drug search warrant in Bridgeton, NJ, officers recovered a Masterpiece Arms .45 caliber pistol with a high capacity magazine. A trace of the firearm revealed that it was purchased by Foster in Columbia, SC, on February 6, 2012. Agents with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) determined that Foster had purchased a total of six (6) firearms, comprised of two (2) firearms on February 6, 2012, two (2) firearms on February 8, 2012, and two (2) additional firearms on March 7, 2012. When agents approached Foster, he claimed that the Masterpiece Arms .45 caliber pistol with a high capacity magazine had been stolen a year earlier, but that he had the other five (5) firearms in his possession. When agents asked to see those five (5) firearms, Foster admitted that he did not have them and that he had purchased them for an individual from New Jersey that he met at the gun store in exchange for money. Foster stated that the individual, who he knew only by a nickname, gave him money, and asked Foster to purchase the firearms for him since he was unable to legally purchase them because he was a felon. Foster admitted to making a false statement on the forms to purchase the firearms and to purchasing a total of six (6) firearms for this individual in approximately a one-month period. The six (6) firearms were a Hi-Point .380 caliber pistol, a Masterpiece Arms .45 caliber pistol, a European American Arms, Corp. .357 caliber revolver, a Ruger 9mm pistol, a Taurus .40 caliber pistol, and a Masterpiece Arms 9mm pistol. Only one (1) of those firearms has been recovered as of this date.
The case was investigated by ATF and was prosecuted as part of the joint federal, state and local Project CeaseFire initiative, which aggressively prosecutes firearm cases. Assistant United States Attorney Stacey D. Haynes of the Columbia office handled the case.Clay County Man Pleads Guilty to Receiving Child Pornography over the InternetRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today that Gregory Michael McCarty (45, Green Cove Springs) has pleaded guilty to receiving child pornography over the Internet. He faces a mandatory minimum penalty of 5 years, up to 20 years, in federal prison, and a potential life term of supervision. A sentencing date has not yet been set.
According to court documents, an agent with the Florida Department of Law Enforcement (FDLE), in Jacksonville, began an undercover investigation to identify individuals who had access to and/or were trading images and videos of child pornography over the Internet. The agent determined that a host computer in the northeast Florida area was hosting images of child pornography using a peer-to-peer file sharing program. The agent was able to download several files from this computer. Further investigation traced the subscriber information to the residence of Gregory Michael McCarty in Clay County, Florida.
Law enforcement officers subsequently executed a federal search warrant at McCarty's residence and seized several computers and other electronic media. During an interview with agents, McCarty acknowledged that he had been receiving child pornography for about two years, stating that he had some on his external drives “for a long time.” He stated, “I fell into it and never got rid of it and never quit.” McCarty further stated, “I know it was wrong, I just didn’t get rid of it and didn’t, didn’t stop doing whatever I was doing.”
An analysis of McCarty’s computer media revealed that his laptop computer contained at least 18 images of child pornography, and at least 20 videos depicting minors engaged in sexually explicit conduct were found on an external hard disk drive that was connected to the laptop computer.
This case was investigated by the Florida Department of Law Enforcement, the Federal Bureau of Investigation, and the Clay County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.