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29 October 2014
Detroit-Area Home Health Care Assistant Sentenced for Scheme to Bill Medicare Nearly $15 Million for Services Never ProvidedRead the Press Release
A physical therapist assistant was sentenced today to serve 50 months in prison for his role in a $14.9 million fraud scheme, through which he and others billed Medicare for home health services that they never provided, and provided beneficiaries with prescriptions for unnecessary painkillers and other narcotics to induce them to sign false medical documents to support the fraudulent billings.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Detroit Office made the announcement.
Jigar Patel, 31, a physical therapist assistant from Madison Heights, Michigan, was sentenced by U.S. District Judge Terrence G. Berg in the Eastern District of Michigan. In addition to his prison term, Patel was ordered to pay $1.9 million in restitution.
Patel, along with co-defendants Srinivas Reddy, 38, an unlicensed doctor from Bloomfield Hills, Michigan, and Shahzad Mirza, 43, a physical therapist from Canton, Michigan, were each convicted by a federal jury on April 30, 2014, of one count of conspiracy to commit health care fraud. In addition, Mirza and Patel were each found guilty of two counts of health care fraud, and Reddy was found guilty of three counts of health care fraud. Patel was also found guilty of one count of money laundering. Reddy and Mirza will be sentenced at a later date.
According to evidence presented at trial, between July 2008 and September 2011, the defendants used four home health care companies – Physicians Choice Home Health Care LLC, Quantum Home Care Inc., First Care Home Health Care LLC, and Moonlite Home Care Inc. – to fraudulently bill Medicare for home health care services that were never provided. Through those companies, the defendants paid kickbacks to recruiters for the referral of Medicare beneficiaries. In turn, the recruiters paid the beneficiaries cash and promised them access to unnecessary prescriptions for painkillers and other narcotics. Through a fifth company, Phoenix Visiting Physicians, the defendants employed unlicensed individuals, including Reddy, to provide the beneficiaries with the promised prescriptions and to obtain the necessary information to complete the referrals for medically unnecessary home health care services.
Evidence presented at trial showed that beneficiaries signed blank medical paperwork that Patel and others then completed with false information purporting to show that care was provided, when it was not. Patel, Mirza and others signed this paperwork, certifying that they had provided the services. In the course of the conspiracy, Patel incorporated his own staffing company, MI Healthcare Staffing, through which he laundered proceeds of the fraud.
As a result of the defendants’ fraudulent conduct, Medicare paid nearly $15 million.
The defendants were charged in a superseding indictment on Feb. 6, 2012. Three other individuals charged in the indictment remain fugitives. The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
The case is being investigated by HHS-OIG and the FBI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. The case is being prosecuted by Assistant Chief Catherine K. Dick and Trial Attorneys Matthew C. Thuesen and Rohan A. Virginkar of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
Controller of Greenwich Hedge Fund Charged with Embezzling MillionsRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that LAWRENCE J. HERZING, 45, of Greenwich, was arrested today on a federal criminal complaint alleging that he embezzled millions of dollars from the hedge fund where he was employed.
As alleged in the criminal complaint, HERZING was recently employed as the controller of Greenwich-based Contrarian Capital Management, L.L.C. On 32 occasions between 2004 and 2013, HERZING used his position to wire funds from his employer to accounts that he controlled. Two fraudulent wire transfers specifically alleged in the complaint totaled more than $2.4 million.
Following his arrest, HERZING appeared before U.S. Magistrate Judge William I. Garfinkel in Bridgeport and was released on a $5.6 million bond, $2.6 million of which will be secured by HERZING’s Greenwich residence.
The complaint charges HERZING with wire fraud, an offense that carries a maximum term of imprisonment of 20 years.
U.S. Attorney Daly stressed that a complaint is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation, with the assistance of the Greenwich Police Department. The case is being prosecuted by Assistant U.S. Attorneys Jonathan Francis and Heather Cherry.
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(203) 821-3722 [email protected]Connecticut Man Sentenced to 10 Years in Prison for Cocaine TraffickingRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Richard
A. Kincaid, III, of Waterbury, Connecticut was sentenced yesterday in U.S. District Court by
Chief Judge John A. Woodcock, Jr. to 10 years in prison and three years of supervised release for distributing cocaine. He was also ordered to forfeit $3,906 and a 2008 Chevrolet Impala.According to court records, on March 25, 2014, the defendant drove the Impala from
Connecticut to a Bangor residence to deliver about seven ounces of cocaine to an individual there. The defendant also collected money from drug customers at the residence. He was arrested a week later when he returned to Bangor.
The case was investigated by the U.S. Drug Enforcement Administration and the Maine
Drug Enforcement Agency.Citizen of Morocco Sentenced to 2 Years in Prison for Fabricating Refugee Application to Remain in U.S.Read the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that EL MEHDI SEMLALI FATHI, 27, a citizen of Morocco last residing in Bridgeport, was sentenced today by Chief U.S. District Judge Janet C. Hall in new Haven to 24 months of imprisonment for fabricating a refugee application to remain in the U.S.
According to court documents and statements made in court, in January 2008, FATHI was admitted to the United States after he obtained a student visa to study at Virginia International University. In February 2009, FATHI’s student visa status was terminated by the university after he failed all of his classes during the Fall 2008 semester and did not register for classes for the Spring 2009 semester. After his student visa status was terminated, FATHI failed to leave the U.S.
In December 2010, FATHI was detained in immigration custody as a result of an arrest in Virginia. While he was detained, he met an individual who explained refugee relief to him. In an effort to obtain refugee relief and remain in the U.S., FATHI reviewed certain country reports relating to Morocco and then prepared and filed, under penalty of perjury, a false refugee application (I-589), which included events he learned about in the country reports. FATHI’s false statements included a claim that he would be persecuted by the Kingdom of Morocco based on his membership in a particular social group and imputed political opinion, and that he was arrested twice in 2007 and persecuted by the Moroccan government.
In June 2011, an immigration judge in Virginia released FATHI on bond. FATHI then moved to Bridgeport and his immigration case was transferred to Connecticut. In September 2011, FATHI represented to an immigration judge in Hartford that all of the information on his I-589 application was accurate when he knew that all of the information in support of his refugee claim was materially false.
While his immigration proceedings were pending, FATHI traveled to California where he was arrested and subsequently placed in immigration custody. In January 2013, after his immigration proceedings were transferred to California, FATHI again falsely represented to an immigration judge in Adelanto, Calif., that his refugee application was true and accurate. In another hearing in August 2013, FATHI again committed perjury while testifying in support of his refugee application by stating that he was arrested and savagely beaten several times by the Moroccan authorities when, in fact, he was never arrested or persecuted by the Moroccan authorities, and that he attended a university in Marrakech during which he participated in demonstrations that caused him to be arrested by the Moroccan authorities when, in fact, he never attended any university in Marrakech.
In February 2014, during an interview with a federal agent, FATHI falsely claimed that Moroccan intelligence authorities had arrested him as part of a conspiracy with all of the other members of Jamaat Ansar El-Mehdi, a Moroccan based terrorist group that was dismantled by Moroccan security forces in 2006.
FATHI has been detained since his arrest on April 7, 2014. On July 24, 2014, he waived his right to indictment and pleaded guilty to one count of perjury in an immigration matter.
FATHI has agreed to be deported at the conclusion of his prison term.
This matter was investigated by the Federal Bureau of Investigation’s Joint Terrorism Task Force, which includes participants from Homeland Security Investigations (HSI) in New Haven, Internal Revenue Service – Criminal Investigation Division, Naval Criminal Investigative Service, Connecticut State Police, Bridgeport Police Department, Norwich Police Department and the New York Police Department. The HSI attaché office in Casablanca, Morocco, provided critical assistance to the investigation.
The case was prosecuted by Assistant U.S. Attorneys Krishna Patel and Stephen Reynolds.
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(203) 821-3722 [email protected]Charlotte Man Sentenced to More Than 12 Years for Robbing PharmacyRead the Press Release
CHARLOTTE, N.C. – Antonio Donte Smith, 30, of Charlotte, was sentenced to 147 months in prison today in connection with the 2012 robbery of a pharmacy and related firearms violations, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Chief U.S. District Judge Frank D. Whitney also ordered Smith to serve five years under court supervision.
Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division and Chief Rob Merchant of the Pineville Police Department (PPD) join U.S. Attorney Tompkins in making today’s announcement.
In July 2013, a federal jury convicted Smith of Hobbs Act robbery, possession of a firearm in furtherance of a crime of violence, and possession of a firearm by a convicted felon in connection with the September 2012 armed robbery of a pharmacy located in Pineville, N.C. According to filed documents, evidence presented at trial, and today’s sentencing hearing, Smith entered the pharmacy wearing a white hooded sweatshirt and a cut-off black tee-shirt sleeve across his face, and was carrying a Ruger .45 caliber pistol. Court records show that Smith pointed the firearm at the store clerk and demanded money from the cash register, to which the cashier complied. Court records indicate that while Smith was taking the money from the register Smith noticed a customer, pointed his firearm at the customer, ordered the customer to get on his knees and robbed the customer of his wallet. According to court records, Smith then forced the store manager to give him all the money kept in the store’s safe. At trial, witnesses testified that Smith pointed his gun at the store manager and began to count down from ten while the store manager tried to open the safe.
Court records indicate that Smith fled the store, entered a vehicle and proceeded to lead law enforcement officers on a high speed chase. Eventually Smith abandoned the car and fled on foot into a wooded area where he dropped the firearm and some of his clothing. According to court records, police officers, assisted by a K-9 unit, found and arrested Smith who was hiding in a nearby apartment complex. In the area where Smith was apprehended, officers located money and a receipt that belonged to the pharmacy customer Smith had robbed earlier. At trial, Smith claimed that it was his brother who had robbed the pharmacy.
In handing down today’s sentence, Judge Whitney stated that “Smith is a very serious recidivist with regard to violent armed crimes.” He also noted that Smith committed five armed robberies and planned out violent crimes and that he terrified the employees of the pharmacy he robbed.
In 2002, Smith was convicted in state court of four counts of robbery with a dangerous weapon. According to police reports and court documents from those cases, Smith robbed three Charlotte-area pharmacies and a fast-food restaurant and even shot a cashier working at one of the drug stores during one of the robberies.
Smith has been in local federal custody since he was arrested in February 2013. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The case was investigated by ATF and PPD. The prosecution is being handled by Assistant U.S. Attorney Jennifer Dillon.
Canadian Man Pleads Guilty to Transporting Child PornographyRead 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 Kevin
Rockwell, 31, of Leduc, Alberta, Canada, pled guilty today in U.S. District Court to transporting child pornography. He was indicted in May 2013.According to court records, in April 2013, Rockwell, who was in Canada, sent an email message to the undercover email account of a federal agent in Maine, attaching a file containing
38 images of sexually explicit conduct involving young children. In May 2014, Canada ordered him extradited and surrendered to American law enforcement officials.Rockwell faces a sentence of between five years and 20 years in prison and a $250,000 fine. He also faces a term of supervised release of between 5 years and life. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by U.S. Immigration and Customs Enforcement’s
Homeland Security Investigations and the Royal Canadian Mounted Police.CEO of Lafayette and Walnut Creek Venture Capital Firm Sentenced to 24 Months in PrisonRead the Press Release
OAKLAND – Stephen B. Lopez was sentenced today to 24 months in prison, and ordered to pay $1.3 million in restitution for his guilty plea to two counts of wire fraud, announced U.S. Attorney Melinda Haag, Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Thomas McMahon and FBI Special Agent in Charge David J. Johnson.
Lopez, 58, of Lafayette, Calif., was indicted by a federal grand jury on March 21, 2013. He was charged with three counts of mail fraud, seven counts of wire fraud, and two counts of money laundering. On April 10, 2014, a superseding indictment was returned charging Lopez with obstruction of justice and witness tampering. On Aug. 12, 2014, Lopez pleaded guilty to two counts of wire fraud, in violation of 18 U.S.C. § 1343.
According to the plea agreement, Lopez, who held a law degree from Stanford University, was the founder of Lighthorse Ventures, LLC (LHV), a private equity investment company located in Lafayette and Walnut Creek, Calif. In March of 2008, Lopez needed money to pay off a civil settlement agreement owed by him personally. In order to raise this money, Lopez told victims that LHV needed money to pay off a loan; he intentionally failed to tell the victims that the money LHV received would be used to pay off his own personal debt. Victims wrote checks to LHV, which Lopez deposited into LHV’s bank account. Thereafter, Lopez wrote a $600,000 check from LHV’s bank account to pay off his personal debt.
The sentence was handed down by the Honorable Jeffrey White, United States District Court Judge. Judge White also sentenced the defendant to a three-year period of supervised release and ordered Lopez to pay $1.3 million in restitution to the victims.
Maureen Bessette is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Janice Pagsanjan. The prosecution is the result of an investigation by the IRS - Criminal Investigation and the FBI.
(Lopez superseding indictment )
Brackenridge Woman Charged with Stealing Benefits, Making False Statements to the GovernmentRead the Press Release
PITTSBURGH - A resident of Brackenridge, Pa., has been indicted by a federal grand jury in Pittsburgh on charges of theft of government property and false statements to the government, United States Attorney David J. Hickton announced today.
The three-count indictment returned on October 28, named Kristyn Mazinski, 46, as the sole defendant.
According to the indictment presented to the court, between Aug. 3, 2011, and April 3, 2013, Mazinski converted to her own use Social Security benefits totaling $24,760 which she received on behalf of a minor for whose use and benefit the payments were intended. On two occasions, April 12, 2012, and April 25, 2013, Mazinski also made false statements to the government in which she advised that the minor resided with her, when in fact the minor did not reside with Mazinski.
The law provides for a maximum total sentence of not more than 15 years in prison, a fine of $750,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant. Bond has been requested at $10,000 unsecured.
Assistant United States Attorney Margaret E. Picking is prosecuting this case on behalf of the government.
The Social Security Administration-Office of Inspector General conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Bloomington Woman Admits to Having Pipe Bomb Placed in MailboxRead the Press Release
Urbana, Ill. – Sentencing has been set for Jan. 9, 2015, for Linda Sue Curtis, 57, of Bloomington, Illinois. Yesterday, Curtis pled guilty to conspiracy to possess a destructive device, as announced by Jim Lewis, U.S. Attorney for the Central District of Illinois. Curtis remains on bond following her appearance yesterday before United States District Judge Harold A. Baker.
According to court documents, Curtis conspired with another individual, Lloyd Lockwood, to possess the pipe bomb, and the pipe bomb was placed into a mailbox belonging to the victims in Decatur, Illinois. Lockwood was found guilty by a jury in August of 2013, and was subsequently sentenced to 10 years in federal prison.For conspiracy to possess an unregistered destructive device, the statutory maximum penalty is up to 5 years in prison, and a fine of up to $250,000.
The case is being prosecuted by Assistant U.S. Attorney Jason M. Bohm. The charges are the result of an investigation by the FBI, ATF, Decatur Police Department, Macon County Sheriff’s Office, Bloomington Police Department, TSA, and University of Illinois/Champaign Police Department Bomb Squad.
Biomet Companies to Pay over $6 Million to Resolve False Claims Act Allegations Concerning Bone Growth StimulatorsRead the Press Release
EBI LLC, doing business as Biomet Spine and Bone Healing Technologies and Biomet Inc. have agreed to pay $6.07 million to resolve allegations that EBI violated the False Claims Act by paying kickbacks to induce use of its bone growth stimulators and billing federal health care programs for refurbished stimulators, the Department of Justice announced today. EBI is a medical device company located in Parsippany, New Jersey, that sells bone growth stimulators, which are used to repair fractures that are slow to heal. It is a subsidiary of Biomet, which is based in Warsaw, Indiana.
“Medical device companies must not use improper financial incentives to influence the decision to use their products,” said Acting Deputy Assistant Attorney General August Flentje of the Justice Department’s Civil Division. “This settlement demonstrates the department’s commitment to protect patients, and the taxpayers who fund their care, by ensuring that medical decisions are based on the patients’ medical needs rather than the financial interests of others.”
The United States alleged that, from 2001 to 2008, EBI paid staff at doctors’ offices to influence doctors to order its bone growth stimulators. These payments were allegedly provided pursuant to personal service agreements with staff members. The United States concluded that these payments violated the Anti-Kickback Act and resulted in false billings to various federal health care programs, including Medicare. The settlement also resolves EBI’s disclosure that it received federal reimbursements for bone growth stimulators that had been refurbished.
“This settlement demonstrates our resolve in ensuring that patients receive, and the government pays for, health care that is based on sound medical judgment, and not compromised by kickbacks,” said U.S. Attorney Carmen M. Ortiz of the District of Massachusetts.
“Kickbacks taint medical decision-making, cause overutilization of services, and lead to increased taxpayer and patient costs,” said Special Agent in Charge Phillip Coyne of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “These improper inducements have no place in government health programs relied on by millions of Americans.”
The settlement resolves in part an allegation filed in a lawsuit by Yu Yue, a former product manager for EBI, in federal court in New Jersey. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. Yu’s share has not yet been determined.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $23 billion through False Claims Act cases, with more than $14.8 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement was the result of a coordinated effort by the Commercial Litigation Branch of the Civil Division; the U.S. Attorney’s Office for the District of Massachusetts; HHS-OIG; the U.S. Postal Service Office of Inspector General; the Defense Criminal Investigative Service; the U.S. Department of Veterans Affairs, Office of Inspector General and the U.S. Food and Drug Administration, Office of Criminal Investigations.
Ms. Yu’s case is captioned United States ex rel. Yu v. Biomet, Inc., Civil Action No. 09-1731 (D.N.J.). The claims resolved by the settlement are allegations only; there has been no determination of liability.
Biomet Companies Pay over $6 Million to Resolve False Claims Act Allegations Concerning Bone Growth StimulatorsRead the Press Release
BOSTON – EBI LLC (d/b/a Biomet Spine and Bone Healing Technologies) and Biomet Inc. have paid $6.07 million to resolve allegations that EBI violated the False Claims Act by paying kickbacks to induce use of its bone growth stimulators and billing federal health care programs for refurbished stimulators, the Department of Justice announced today. EBI is a medical device company located in Parsippany, New Jersey, that sells bone growth stimulators, which are used to repair fractures that are slow to heal. It is a subsidiary of Warsaw, Indiana, based Biomet.
The United States alleged that, from 2001 to 2008, EBI paid staff at doctors’ offices to induce doctors to order its bone growth stimulators. These payments were allegedly provided pursuant to personal service agreements with staff members. The United States concluded that these payments violated the federal anti-kickback statute and resulted in false billings to various federal health care programs, including Medicare. The settlement also resolves EBI’s disclosure that it received federal reimbursements for bone growth stimulators that had been refurbished.
“This settlement demonstrates our resolve in ensuring that patients receive, and the government pays for, health care that is based on sound medical judgment, and not compromised by kickbacks,” said U.S. Attorney Carmen M. Ortiz of the District of Massachusetts.”
“Medical device companies must not use improper financial incentives to influence the decision to use their products,” said Acting Deputy Assistant Attorney General August Flentje of the Justice Department’s Civil Division. “This settlement demonstrates the Department’s commitment to protect patients, and the taxpayers who fund their care, by ensuring that medical decisions are based on the patients’ medical needs rather than the financial interests of others.”
“Kickbacks taint medical decision-making, cause overutilization of services, and lead to increased taxpayer and patient costs,” said Special Agent in Charge Phillip Coyne of the Office of Inspector General, United States Department of Health and Human Services. “These improper inducements have no place in government health programs relied on by millions of Americans.”
The settlement resolves in part an allegation filed in a lawsuit by Yu Yue, a former product manager for EBI, in federal court in New Jersey. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. Yu’s share has not yet been determined.
The settlement was the result of a coordinated effort by the United States Attorney’s Office for the District of Massachusetts; Commercial Litigation Branch of the Department of Justice’s Civil Division; the Department of Health and Human Services Office of Inspector General; the U.S. Postal Service Office of Inspector General; the Defense Criminal Investigative Service; the U.S. Department of Veterans Affairs, Office of Inspector General and the U.S. Food and Drug Administration, Office of Criminal Investigations.
Beaver County Man Charged with Unlawfully Receiving Social Security Income BenefitsRead the Press Release
PITTSBURGH – A Beaver County resident has been indicted by a federal grand jury in Pittsburgh on a charge of theft of government property, United States Attorney David J. Hickton announced today.
The one-count indictment returned yesterday named David Tindell, 52, of Industry, Pa., as the sole defendant.
According to the indictment presented to the court, from in or around January 2005, to in or around March 2014, Tindell unlawfully received property of the United States, that is, Supplemental Security Income (SSI) benefits in the amount of approximately $70,654.80.
The law provides for a maximum total sentence of not more than 10 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant. Bond has been requested at $10,000 unsecured.
Assistant United States Attorney Margaret E. Picking is prosecuting this case on behalf of the government.
The Social Security Administration-Office of Inspector General conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Alabama Bail Bondsman Sentenced for Stealing Identities that Were Used to File Fraudulent Tax ReturnsRead the Press Release
A former bail bondsman in Dothan, Alabama, was sentenced yesterday to serve 51 months in prison for his involvement in a stolen identity tax refund fraud (SIRF) scheme, Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama announced.
Roderick Neal was also ordered to pay $109,480 in restitution and to serve three years of supervised release following his prison sentence.
According to court documents and evidence from the trial of his co-conspirator, Nina Macena, Neal provided stolen identities to Ivory Bolen, also of Dothan, who used the identities to file false tax returns that fraudulently requested refunds from the Internal Revenue Service (IRS). Bolen would attempt to have the refunds deposited onto prepaid debit cards, which would be mailed to addresses controlled by Bolen and Macena. Macena obtained the identities from Neal, who had access to the personal information of individuals who had been detained at the Dothan City Jail. Altogether, Bolen filed tax returns claiming more than $300,000 in refunds using the identities that Neal stole from his employer, but the IRS was able to successfully stop a number of the fraudulent returns.
Bolen was sentenced to serve 48 months in prison and Macena was sentenced to serve 34 months in prison.
This case was investigated by special agents of the IRS-Criminal Investigation. Trial Attorneys Jason Poole, Charles M. Edgar Jr. and Michael Boteler of the Tax Division prosecuted the case with the assistance of the U.S. Attorney’s Office for the Middle District of Alabama.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
- 4 Charged with Sex Trafficking of Minors
29 Defendants Facing State or Federal Charges for Alleged Roles in “Cracking Cards” Schemes Costing Banks Millions of DollarsRead the Press Release
CHICAGO — Twenty-nine northern Illinois and Indiana defendants are facing state or federal charges following a coordinated investigation of “cracking cards,” a scheme that costs banks millions of dollars and has its roots on Chicago’s south side and is spreading to other cities through rap music and social media. Six Indiana defendants include four men who are part of a group that has posted Internet rap videos referring to the cracking cards scheme and displaying large amounts of cash and expensive items, according to the charges announced today.
Federal agents and local law enforcement officers from the U.S. Postal Inspection Service, FBI, IRS Criminal Investigation Division, FDIC and U.S. Department of Labor Offices of Inspector General, the Chicago Police Department, and the Sheriff’s Offices of Cook and DeKalb counties began arresting the defendants yesterday. Sixteen are facing federal bank fraud charges in Federal Court in Chicago; six are facing federal charges in U.S. District Court in Hammond, Ind., and seven are facing state charges brought by the Cook County State’s Attorney’s Office.
Since at least 2011, the defendants and other individuals allegedly deposited counterfeit checks into banking accounts belonging to third parties who willingly or unwillingly surrendered their debit cards and PINs for use in the cracking cards schemes. The defendants then allegedly used automated teller machines or point of sale terminals at currency exchanges and retail stores to withdraw or spend funds that the banks advanced to the third-party accounts before learning that the deposited checks were bogus. The banks lost money they advanced to the account holders when the customers denied responsibility for the withdrawals and purchases.
Cracking cards schemes have become a popular method of obtaining illicit funds in Chicago and surrounding areas. The schemes often involve numerous participants, including some individuals affiliated with Chicago street gangs, the charges allege. Schemers use various methods to recruit bank customers to give up their debit cards and PINs, including approaching individuals at parties, schools, or on the street, and using social media outlets, such as Instagram and Facebook, to advertise opportunities for making fast cash by sharing a portion of the fraud proceeds.
“Our purpose today is to warn bank customers that fast cash schemes are usually too good to be true and they should always safeguard their account information, and, at the same time, we are putting those persons who engage in this type of illegal activity on notice that debit card fraud can result in serious state or federal charges, which carry severe penalties and consequences,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois.
“Over the last three years, the United States Postal Inspection Service and other federal, state, and local law enforcement agencies, have conducted this major bank fraud investigation involving ‘cracking cards.’ The charges allege that defendants knowingly deposited fraudulent checks intending to defraud banks and their customers. The Postal Inspection Service is committed to working together with the banking industry to protect the public and preserve its trust in the U.S. mail and banking system,” said Antonio Gómez, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.
According to the federal charging documents, after schemers obtained a debit card and PIN for a bank customer’s account, they manufactured or purchased one or more counterfeit checks to deposit into the account. The bogus checks often contained legitimate bank account and routing numbers that belonged to the accounts of actual businesses. Certain individuals developed a reputation for “making paper,” that is, making, printing, and selling counterfeit checks. The schemers then deposited, or recruited someone else to deposit, the counterfeit checks into the third party’s bank account, typically via an ATM transaction. The schemers then waited for the bank to credit the purported funds from the counterfeit check, usually within hours of the deposit, after which they often attempted a small ATM withdrawal of $100 or more to determine whether an account was credited with the advanced funds. If the transaction succeeded, schemers went to an ATM, a currency exchange, or point-of-sale terminal at a retail store to withdraw or spend the remaining funds that the bank advanced to the third-party account.
One defendant, MATTHEW MOSLEY, 26, of Chicago, allegedly “made paper,” that is, he manufactured counterfeit checks, which he used and sold to others in cracking cards schemes. Mosley was arrested yesterday and charged with bank fraud for allegedly causing banks to lose more than $32,000 in funds he withdrew after depositing counterfeit checks.
Mosley was one of 16 defendants charged with bank fraud in separate criminal complaints filed in U.S. District Court in Chicago. These 16 defendants allegedly caused bank losses totaling more than $1.7 million, with individual defendants responsible for amounts ranging from $26,000 to $260,000. Five of these defendants were arrested yesterday, one was already in custody, and arrest warrants were issued for 10 others.
Six other defendants were charged with conspiracy to commit bank fraud in a criminal complaint filed in U.S. District Court in Hammond. These defendants allegedly caused thousands of dollars in bank losses. Five of the six were arrested yesterday and remain in custody while the sixth was already in state custody. All six are scheduled to appear tomorrow morning in Federal Court in Hammond.
Four of these defendants ― KEVIN FORD, 26, of Chicago; CORTEZ STEVENS, 24, of Griffith, Ind.; STEPHEN GARNER, 23,of Portage, Ind.; and MIKCALE SMALLY, 21, of Chicago ― are identified in the complaint as part of a group that called themselves “R.A.C.K. Boyz,” “Rack Boyz,” or “TheRackBoyz.” The other two defendants, MERCEDES HATCHER, 21, of Danville, Ill., and BRITTANY SIMS, 24, of Portage, Ind., were identified as Ford’s and Garner’s girlfriends, respectively.
The RACK Boyz have Facebook and Twitter accounts and post videos on YouTube, including a rap video entitled, “For the Money,” which refers to cracking cards and shows the defendants wearing RACK Boyz shirts and displaying large amounts of cash, according to the complaint affidavit. Ford is also associated with a different so-called “money team,” known as BandKlan, which also has rap videos posted on YouTube.
The complaint alleges that the defendants use social media to recruit people with bank accounts or who will open bank accounts to use in the cracking cards scheme. They allegedly sent out numerous private messages and posted messages on their Facebook walls inviting people to participate in the scheme. The charges allege that the defendants were linked to numerous withdrawals from third-party bank accounts after counterfeit checks were deposited.
Ford also allegedly “made paper,” by printing fraudulent checks, and, on Oct. 20, Ford allegedly posted threats to law enforcement officers on his Facebook wall.
Seven defendants were arrested yesterday and today on state charges filed by the Cook County State’s Attorney’s Office. They are: RAPHAEL FOX, 23, of Chicago; TIERRE McKNIGHT, 19, of Country Club Hills; DONOVAN GRICE, 22, of Dolton; ROYTRELL LONG, 20, of Matteson; LAKEYA SHAMBLEY, 23, of Chicago; MICHAEL BONDS, 26, of Dolton; and ANTONIO CHAVIS, Jr., 21, of Chicago. Each was charged with continuing financial crimes enterprise, financial institution fraud, wire fraud, and Long, alone, was also charged with forgery.
In addition to Matthew Mosley, the remaining 15 Chicago federal defendants (all of Chicago unless noted otherwise) and the amounts of their alleged frauds are: DONNIVAN ALLEN, 25, $196,000; TYRONE BULLOCK, 25, $260,000; DURRAN DAVIS, 29, $90,000; SAMAJE DAVIS, 26, $140,000; MICHAEL GREEN, 27, $61,000; DAVEY HINES, 21, $85,000; CHESTER JACKSON, 23, $26,000; ANTWAN D. KINERMAN, 23, of Markham, $45,000; DENNIS MITCHELL, 26, of Hammond, $50,000; PAIGE PARKER, 24, $85,000; KEVIN THUNDERBIRD, 28, $45,000; RASHEED THURMAN, 28, $200,000; JAVON TURNER, 21, $70,000; MAHLIK WASHINGTON, 22, $100,000; and BLAKE WILLIAMS, 30, of Schaumburg, $230,000.
The charges identify Citibank, US Bank, JP Morgan Chase, Bank of America, and others as being among the victims of the schemes.
As a result of this investigation, CHRISTOPHER CAIN, 26, of Chicago, was charged previously with bank fraud in U.S. District Court in Chicago. Cain, who was the first defendant charged with card-cracking, pleaded guilty, admitting that he was responsible for bank losses totaling $184,877. Earlier this month, Cain was sentenced to five years in federal prison.
The arrests and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; David A. Capp, United States Attorney for the Northern District of Indiana; Anita Alvarez, Cook County State’s Attorney; Antonio Gómez, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; W. Jay Abbott, Special Agent-in-Charge of the Indianapolis Division of the Federal Bureau of Investigation; James C. Lee, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division; Joe Moriarty, Special Agent-in-Charge of the Federal Deposit Insurance Corporation Office of Inspector General; James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor Office of Inspector General; Garry McCarthy, Superintendent of the Chicago Police Department; Thomas Dart, Cook County Sheriff; and Roger A. Scott, DeKalb County Sheriff. Fraud investigators from several banks assisted in the investigation.
The 16 federal defendants in Chicago were each charged with one count of bank fraud, which carries a maximum sentence of 30 years in prison and a $1 million fine. The six federal defendants in Hammond were each charged with one count of conspiracy to commit bank fraud, which carries a maximum sentence of five years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
In the federal cases, the government is being represented in Chicago by Assistant United States Attorneys Kate Zell, Sunil Harjani, Elizabeth Pozolo, and Special Assistant U.S. Attorney Heidi Manschreck. In Hammond, the government is being represented by Assistant United States Attorney Diane Berkowitz. The state case is being prosecuted by the Public Corruption and Financial Crimes Unit of the Cook County State’s Attorney’s Office.
The public is reminded that complaints contain only charges and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Complaint
28 October 2014
Woman Sentenced to More Than 7 Years in Prison for Wire Fraud Conspiracy Involving Stolen Identities and Consumer Credit ReportsRead the Press Release
STATESVILLE, N.C. – On Monday, October 27, 2014, U.S. District Judge Richard L. Voorhees sentenced Nakia Monica Brown, 36, formerly of Charlotte, to 87 months in prison and to two years of supervised release for her role in a scheme involving stolen personal identities and fraudulently-obtained consumer credit reports, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Judge Voorhees also ordered a money judgment forfeiture against Brown in the amount of $396,194.18, and victim restitution in the amount of $447,101.
U.S. Attorney Tompkins is joined in making today’s announcement by Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS).
According to filed court documents and court proceedings, from 2009 to 2010, Brown and her conspirators obtained a list of more than 1,400 identity theft victims, which contained stolen personally identifiable information (PII), such as the victims’ names, social security numbers, and dates of birth. Court records show that the conspirators used the victim’s PII to obtain free consumer credit reports from credit reporting agencies and then used the credit report information to manufacture fake identification documents and to purchase over $400,000 in merchandise from 11 national retail chains.
According to filed documents and court proceedings, Brown gained access to the victims’ consumer credit reports, including the victims’ credit scores, their existing credit card accounts, their available lines of credit and other biographical information, such as their residential addresses. In this manner, Brown fraudulently acquired a combined total of 370 credit reports from three major credit reporting agencies, according to court documents. Court documents indicate that Brown then used the identity theft victims’ information to manufacture counterfeit New York driver’s licenses that contained the names, dates of birth and addresses of the identity theft victims, along with photographs and physical descriptions of Brown and her conspirators. Using the counterfeit driver’s licenses, Brown and her conspirators fraudulently purchased merchandise at national retail stores based on the identity theft victims’ available credit or based on same-day, instant credit offered by the retail stores to new customers. Court records indicate that the fraudulently-purchased merchandise was then sold to pawnbrokers, “fences” and other end users. According to court records, Brown and her conspirators purchased over $400,000 in merchandise. Brown pleaded guilty to one count of wire fraud conspiracy and one count of aggravated identity theft in May 2013.
Following the sentencing hearing, Brown was permitted to remain on bond and will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
Brown’s conspirators, Tiffany Sherise Young, 22, of Charlotte and Trina Monique Young, 41, of Bronx, N.Y. were each sentenced earlier this year to 10 months in prison and to two years of supervised release on wire fraud conspiracy charges.
The investigation was handled by USPIS, with assistance from the Charlotte- Mecklenburg Police Department. The prosecution was handled by Assistant U.S. Attorneys Tom O’Malley and Benjamin Bain-Creed of the U.S. Attorney’s Office in Charlotte.
Ukraine Man Arrested at Denver International Airport After Interfering with Delta Flight Crew MembersRead the Press Release
UPDATE: Pecherskyi is scheduled to appear in U.S. District Court in Denver on Monday, November 3, 2014, before U.S. Magistrate Judge Kathleen M. Tafoya at 10:00 a.m. for a preliminary hearing and a detention hearing. Magistrate Judge Tafoya is located on the 2nd floor of the Byron G. Rogers Courthouse, located at 1929 Stout Street. The hearing will likely involve an interpreter, which could prolong the court appearance. The defendant is represented by a federal public defender.
DENVER – Vadym Pecherskyi, age 42, of Kiev, Ukraine, was arrested late last night after he interfered with two flight attendants aboard a Delta Airlines flight from Atlanta’s Hartsfield-Jackson Airport to Denver International Airport, U.S. Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. Pecherskyi is scheduled to appear before a U.S. Magistrate Judge tomorrow, where he will be advised of his rights, as well as the charges pending against him. Those charges are contained in a Criminal Complaint filed this morning.
On October 27, 2014 at 9:03 p.m. an FBI Special Agent was notified by the DIA Communications Center that a disturbance had occurred onboard a Delta Flight. The agent, after responding to the airport, learned that passenger Vadym Pecherskyi, who was on Delta Flight 2525, had made unwanted sexual advances toward two female flight attendants. The defendant had been served at least two alcoholic drinks before his behavior.
As a result of his sexual advances, both flight attendants felt they could not adequately perform their assigned duties aboard the airplane. A passenger onboard the flight also confirmed the defendant’s sexual advances towards the flight attendants.
This conduct would generally result in a charge of interference with flight crew members, where the defendant would face not more than 20 years in federal prison, and up to a $250,000 fine.
This case was investigated by the Federal Bureau of Investigation (FBI) and the Denver Police Department (DPD).
The defendant is being prosecuted by Assistant U.S. Attorney Robert Brown.
A Criminal Complaint is a probable cause charging document. Anyone accused of committing a federal felony crime has a Constitutional right to be indicted by a federal grand jury.
The charges contained in this press release are allegations, and the defendant is presumed innocent unless and until proven guilty.
U.S. Attorney Damon P. Martinez Appoints District Election OfficerRead the Press Release
ALBUQUERQUE – U.S. Attorney Damon P. Martinez announced today that Assistant U.S. Attorney (AUSA) Jonathon M. Gerson will lead the efforts of his Office in connection with the Justice Department’s nationwide Election Day Program for the general elections on Nov. 4, 2014. AUSA Gerson has been appointed to serve as the District Election Officer for the District of New Mexico and in that capacity is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
U.S. Attorney Martinez said, “Every citizen must be able to vote without interference or discrimination, and to have that vote counted without it being stolen because of fraud. The Justice Department will act promptly and aggressively to protect the integrity of the election process.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur.
The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on Election Day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting, may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 4, 2014, and to ensure that such complaints are directed to the appropriate authorities, U.S. Attorney Martinez stated that AUSA/DEO Gerson will be on duty in this District while the polls are open. He can be reached by the public at (505) 362-3147.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on Election Day. The local FBI field office can be reached by the public at (505) 889-1300.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
U.S. Attorney Martinez said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division.”
U.S. Attorney Announces Office Collected over $100 MillionRead the Press Release
BOISE – United States Attorney Wendy J. Olson announced today that her office's Financial Litigation Unit collected more than $100 million in civil debts and in criminal fines, assessments and restitution for the fiscal year that ended September 30, 2014. U.S. Attorney Olson stated that the Financial Litigation Unit collected $11,469,290 in criminal fines, assessments, and restitution, and $86,151,947 in civil debts. In addition, the Asset Forfeiture Unit collected approximately $4.6 million of proceeds of crime from convicted criminals.
“The more than $100 million our staff collected through civil debts, asset forfeiture, fines, assessments and restitution is more than ten times the U.S. Attorney's Office's operational budget,” said Olson. “Our dedicated collection staff of attorneys, paralegals, analysts and fiscal agents ensure that those who owe the federal government money as a result of litigation in this district or as a result of longtime debt, such as student loans, make appropriate payments. Our asset forfeiture staff likewise works efficiently to deprive criminals of the profits of their crimes. This year, they have all done outstanding work and served this office, taxpayers and the federal government well.”
The Financial Litigation Unit collects civil penalties for violations of regulations involving, among other things, controlled substances, environmental protection, damage to federal property, and procurement fraud. It also collects civil debts for defaulted student loans and defaulted federally financed mortgages, working with debtors to arrange viable payment plans. During fiscal year 2014, the office collected over $86 million in civil debt. Of that, the office collected $85.8 million from EPA violations concerning release of hazardous substances. This includes the final payments from Hecla Mining Company as part of the settlement reached September 8, 2011, resolving claims stemming back to the 1980s for cleanup costs from releases of wastes from Hecla’s mining operations. Hecla has paid the United States a total of $189,345,889.42. The settlement, which also included payments to the Coeur d’Alene Tribe and the State of Idaho, totaled $263.4 million plus interest. Payments were made through a structured settlement, with the final payment being due August 15, 2014. This was one of the largest cases ever filed under the Superfund statute. The settlement funds were dedicated to restoration and remediation of natural resources in the Coeur d’Alene Basin.
The U.S. Attorney’s office also collected approximately $89,891 in defaulted student loans and $168,596 in fire suppression costs for human-caused fires.
From convicted criminals, the U.S. Attorney's Office collects fines, assessments, restitution, and asset forfeitures. Victims of crime receive funds collected in criminal restitution cases. In fiscal year 2014, the U.S. Attorney's Office collected over $6 million in criminal restitution which was distributed to victims of crime. Other criminal collections such as fines go into the Crime Victims Fund. From there, funds are distributed to the Idaho Crime Victims Compensation Program, the Idaho Council on Domestic Violence and Victim Assistance, and similar programs across the country. Money recovered from the illegal proceeds of criminal activity through forfeiture is returned to victims, used to offset the costs of operating federal prisons, and shared with local, state, and federal law enforcement agencies to help fight crime. Other recoveries go back to agency creditors.
On March 4, 2014, the United States District Court sentenced Elaine Martin for tax fraud and ordered her to pay $156,578.57 in restitution. The United States Attorney’s Office collected the full amount. Garth Callaghan was sentenced on July 30, 2012, for failing to pay employment taxes to the IRS. His criminal judgment imposed $177,096 in federal restitution. The United States Attorney’s Office collected the full amount during the past fiscal year. As a result of his schemes to defraud retirement plans, Matthew Hutcheson was tried and convicted of seventeen counts of wire fraud on April 15, 2013, and sentenced on July 7, 2013. His criminal judgment imposed $5,307,688.00 in restitution with interest. Collections to date total over $14,000 and will be distributed to individual victims pending the final appeal order. Further collection efforts are under way.
U.S. Attorney Announces Memphis Man Is Sentenced to 20 Years in Federal Prison for Being A Felon in Possession of AmmunitionRead the Press Release
Memphis, TN – Edward L. Stanton III, United States Attorney for the Western District of Tennessee announced today that Brashard Gibbs, age 21, of Memphis, TN, was sentenced on Friday by U.S. District Judge Sheryl H. Lipman to serve 20 years in federal prison followed by three years of supervised release. There is no parole in the federal prison system.
According to the Indictment and statements made in open court, on August 28, 2013, during a drive-by shooting at a car wash located at 2562 Lamar Avenue in Memphis, Tennessee, Robbie Webb was shot and killed and another individual was injured. Witnesses identified Brashard Gibbs, a.k.a. Hotboy, as one of the shooters. Witnesses also observed that Gibbs was firing an assault style weapon from the vehicle. Ammunition, consistent with the firing of an assault style weapon, was recovered from the scene.
In addition, on September 1, 2013, witnesses observed Gibbs firing an assault style weapon at another individual. Again, the ammunition recovered from the scene was consistent with the firing of an assault weapon. At the time of both incidents, Gibbs was a convicted felon.
On February 18, 2014, a federal grand jury indicted Gibbs on two counts of possession of ammunition by a convicted felon. On July 24, 2014, a jury found Gibbs guilty on both counts.
U.S. Attorney Stanton praised the investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Multi-Agency Gang Unit. Assistant U.S. Attorney Kevin Whitmore represented the government.
Two Former Police Officers Plead Guilty to Using Excessive Force When Tasing a WomanRead the Press Release
Eric Walters, 39, and Franklin Brown, 35, formerly police officers with the City of Marion Police Department, in South Carolina, pleaded guilty yesterday in federal court to using excessive force against a woman with mental disabilities on April 2, 2013, the Justice Department announced today.
Walters and Brown each pleaded guilty to one count of deprivation of rights under color of law for using unreasonable force for their role in repeatedly tasing the victim when she posed no threat to either officer. Walters and Brown pleaded before U.S. District Court Judge Bryan Harwell in federal court in Florence, South Carolina.
According to the information and facts presented in court, in the course of detaining the victim, Walters tased the victim causing her to fall to the ground and injure her head. Once on the ground, Walters continued to tase the victim multiple times. Brown, subsequently, arrived on scene and proceeded to tase the victim as she was seated on the curb, restrained in handcuffs, and surrounded by law enforcement. In court, Walters and Brown admitted there was no legitimate law enforcement purpose for repeatedly tasing the victim as she did not pose a threat to the officers.
“The defendants abused their authority as law enforcement officers by repeatedly tasing a defenseless, compliant victim,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “The Justice Department will continue to vigorously prosecute those who cross the line to engage in acts of criminal misconduct.”
“Law enforcement officers are entrusted with the state’s police powers to maintain and restore order,” said U.S. Attorney Bill Nettles for the District of South Carolina. “In this case, the officers abused that authority, and purposefully hurt the victim who at the time posed no threat to these officers or anyone else. No just society can tolerate this sort of abuse by those who wear the badge. I’d like to thank the Federal Bureau of Investigations, the South Carolina Law Enforcement Division, the Department of Justice Civil Rights Division and the team in my office who worked together to ensure that these officers were held accountable for their misdeeds.”
Sentencing will be scheduled at a later date. Walters and Brown face statutory maximum penalties of 10 year sentences in prison and $250,000 fines.
The case was investigated by the Columbia Division of the FBI and is being prosecuted by Assistant U.S. Attorney John Potterfield of the District of South Carolina and Trial Attorneys Nicholas Murphy and Henry Leventis of the Civil Rights Division.
Two Former Police Officers Plead Guilty to Using Excessive Force When Tasing a WomanRead the Press Release
Contact: (202) 514-2007
WASHINGTON – Eric Walters, 39, and Franklin Brown, 35, formerly police officers with the City of Marion Police Department, in South Carolina, pleaded guilty yesterday in federal court to using excessive force against a woman with mental disabilities on April 2, 2013, the Justice Department announced today.
14-1185
Walters and Brown each pleaded guilty to one count of deprivation of rights under color of law for using unreasonable force for their role in repeatedly tasing the victim when she posed no threat to either officer. Walters and Brown pleaded before U.S. District Court Judge Bryan Harwell in federal court in Florence, South Carolina.
According to the information and facts presented in court, in the course of detaining the victim, Walters tased the victim causing her to fall to the ground and injure her head. Once on the ground, Walters continued to tase the victim multiple times. Brown, subsequently, arrived on scene and proceeded to tase the victim as she was seated on the curb, restrained in handcuffs, and surrounded by law enforcement. In court, Walters and Brown admitted there was no legitimate law enforcement purpose for repeatedly tasing the victim as she did not pose a threat to the officers.
“The defendants abused their authority as law enforcement officers by repeatedly tasing a defenseless, compliant victim,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “The Justice Department will continue to vigorously prosecute those who cross the line to engage in acts of criminal misconduct.”
“Law enforcement officers are entrusted with the state’s police powers to maintain and restore order,” said U.S. Attorney Bill Nettles for the District of South Carolina. “In this case, the officers abused that authority, and purposefully hurt the victim who at the time posed no threat to these officers or anyone else. No just society can tolerate this sort of abuse by those who wear the badge. I’d like to thank the Federal Bureau of Investigations, the South Carolina Law Enforcement Division, the Department of Justice Civil Rights Division and the team in my office who worked together to ensure that these officers were held accountable for their misdeeds.”
Sentencing will be scheduled at a later date. Walters and Brown face statutory maximum penalties of 10 year sentences in prison and $250,000 fines.
The case was investigated by the Columbia Division of the FBI and is being prosecuted by Assistant U.S. Attorney John Potterfield of the District of South Carolina and Trial Attorneys Nicholas Murphy and Henry Leventis of the Civil Rights Division.
DO NOT REPLY TO THIS MESSAGE. IF YOU HAVE QUESTIONS, PLEASE USE THE CONTACTS IN THE MESSAGE OR CALL THE OFFICE OF PUBLIC AFFAIRS AT 202-514-2007.Two Charged in $5.8 Million Reloadable Debit Card Extortion ScamRead the Press Release
NEWARK, N.J. – Two Philadelphia men were arrested this morning for allegedly conspiring to extort victims to load prepaid debit cards with funds that were stolen as part of the scheme, U.S. Attorney Paul J. Fishman announced.
Special agents of the FBI and U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI) arrested Alpeshkumar Patel, 30, and Vijaykumar Patel, 39, of Philadelphia at Vijaykumar Patel’s home on a complaint charging them with conspiracy to commit wire fraud. The pair, who are not related, are expected to appear this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.
According to the complaint unsealed today:
From September 2013 through March 2014, Alpeshkumar Patel and Vijaykumar Patel were part of a conspiracy to steal money using reloadable debit cards. First, the conspirators would purchase reloadable Green Dot Cards, and register them in names other than their own. The conspirators – some of whom were located in India – contacted victims by phone and used threats or deceit to induce them to put money on MoneyPak cards, which are used along with assigned PIN codes to add funds to Green Dot Cards. The conspirators then used the reloadable cards to purchase money orders that were deposited into bank accounts. All of the steps were taken quickly so law enforcement and victims could not identify the conspirators or prevent or reverse the fraudulent transfers.
As one example, a retail store located in New Jersey received a telephone call from an unknown caller on Sept. 10, 2013. The caller said there was a bomb in the store and the store manager had five minutes to comply with the caller’s demands or the bomb would detonate. The caller then demanded the manager load 10 $500 MoneyPak cards and provide the caller with the associated PIN codes. The manager had provided the code for one card before law enforcement arrived at the store, instructed the manager to hang up the phone, and evacuated the building.
The $500 associated with that code was transferred to an existing prepaid reloadable Green Dot Card. Surveillance video showed Alpeshkumar Patel in the Philadelphia CVS where the Green Dot Card was bought. That card was then used by Vijaykumar Patel, who was caught on video purchasing two money orders in a Philadelphia Wal Mart. The money orders, in turn, were used to deposit funds into a bank account.
Phone numbers and IP addresses associated with the Sept. 10, 2013, call and other calls tied to the conspiracy were tied to approximately 2,500 Green Dot Cards that were funded in excess of $5.8 million.
The charge of conspiracy to wire fraud carries a maximum potential penalty of 20 years in prison and a fine of the greater of $250,000, or twice the gross profits to the defendants or twice the gross loss suffered to the victims of the offense.
U.S. Attorney Fishman credited special agents, detectives and investigators assigned to the Joint Terrorism Task Force, under the direction of FBI Special Agent in Charge Aaron T. Ford in Newark, under the direction of FBI Special Agent in Charge Edward J. Hanko in Philadelphia, and special agents of HSI, under the direction of Special Agent in Charge Andrew McLees in Newark, with the ongoing investigation. Special agents of HSI, under the direction of Special Agent in Charge John Kelleghan in Philadelphia, assisted with the arrest.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations and the defendants are considered innocent unless and until proven guilty.14-389
Defense counsel: Alpeshkumar Patel: Assistant Federal Public Defender K. Anthony Thomas Esq., Newark
Vijaykumar Patel: James A Plaisted Esq., Roseland, New JerseyPatel, Alpeshkumar and Vijaykumar Complaint
Two Alleged Pimps Facing Federal Indictment for Kidnapping and Sex Trafficking of a ChildRead the Press Release
Baltimore, Maryland - A federal grand jury returned a superseding indictment today against Rayvon O. Archibald, a/k/a “P Money,” “Keyvon M. Malone,” “Keyvon Smith,” and “Snoopy,” age 24, of Boston, Massachusetts, and Jonathan M. Went, a/k/a “Jon Maxx,” and “Max Out,” age 30, of Massachusetts and Gwynn Oak, Maryland. The original indictment charged Archibald and Went with sex trafficking of a child. The superseding indictment adds charges for conspiracy, transportation of a minor with intent to engage in prostitution, and kidnapping.The superseding indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; Colonel Marcus L. Brown, Superintendent of the Maryland State Police; and Baltimore County State’s Attorney Scott Shellenberger.
The four count superseding indictment alleges that Archibald and Went were pimps, engaged in the business of recruiting, transporting, providing, and maintaining by any means females to engage in commercial sex acts. Archibald and Went used the internet to purchase and post advertisements for commercial sex in Maryland, New York, and elsewhere.
According to the superseding indictment, on March 5, 2014, Archibald encountered Girl 1, a female under the age of 14, in New York City and provided her with alcohol and drugs. On March 6, 2014, Archibald transported Girl 1, against her will, traveling by bus from New York to White Marsh, Maryland, then by taxi to Went’s apartment in Gwynn Oak. That same day, Archibald and Went allegedly posted an advertisement on a commercial sex website soliciting customers for Girl 1 which listed the number for a phone controlled by Archibald and Went. They also instructed Girl 1 on pricing for commercial sex acts and provided her with a document that included prices.
The superseding indictment alleges that on March 6 and March 7, 2014, Archibald and Went communicated with potential commercial sex customers and made appointments for Girl 1 by telephone and text messages; took money from customers in exchange for making Girl 1 available to engage in sex acts; and provided condoms to Girl 1 and the customers to facilitate sex acts involving Girl 1. Further, the indictment alleges that Archibald slapped Girl 1 across the face after she failed to obtain money for Archibald and Went from a commercial sex customer, and that Archibald took a mobile device away from Girl 1. She had been using the device in an attempt to alert her mother and law enforcement officers about her situation and location.
Archibald and Went face up to life in prison for conspiracy to commit sex trafficking of a child; a minimum of 15 years and up to life in prison for sex trafficking of a child; a minimum of 10 years in prison and up to life in prison for transportation of a minor with intent to engage in prostitution; and a minimum of 25 years and up to life in prison for kidnapping. An initial appearance on the superseding indictment has not yet been scheduled. Archibald and Went were previously ordered to be detained pending trial.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
The case was investigated by the FBI-led Maryland Child Exploitation Task Force (MCETF), created in 2010 to combat child prostitution, with members from10 state and federal law enforcement agencies. The Task Force coordinates with the National Center for Missing and Exploited Children and the Maryland State Police Child Recovery Unit to identify missing children being advertised online for prostitution.
MCETF partners with the Maryland Human Trafficking Task Force, formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders. Members include federal, state and local law enforcement, as well as victim service providers and local community members. For more information about the Maryland Human Trafficking Task Force, please visit http://www.justice.gov/usao/md/priorities_human.html.
United States Attorney Rod J. Rosenstein commended FBI, Baltimore County Police Department, Maryland State Police and the Baltimore County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Zachary A. Myers and Mark W. Crooks, who are prosecuting the case.
Turkish Man Sentenced for Smuggling Counterfeit Cancer DrugsRead the Press Release
St. Louis, MO – OZKAN SEMIZOGLU, the “Foreign Trade Director” of a Turkish drug wholesaler, was sentenced to 27 months in prison for smuggling counterfeit, misbranded and adulterated cancer treatment drugs into the United States, including multiple shipments of Altuzan® (the Turkish version of Avastin®) that he sent from Turkey to Chesterfield, Missouri.
According to Semizoglu’s plea agreement, Semizoglu used shipping labels that concealed the illegal nature of the prescription drug shipments, including customs declarations falsely describing the contents as "gifts" or "documents" or “product sample” with no or low declared monetary values. Semizoglu also ensured that large drug shipments were broken into several smaller packages to reduce the likelihood of seizures by U.S. Customs authorities and the corresponding loss of expensive drug shipments. Additionally, Semizoglu shipped some prescription cancer treatment drugs that needed constant cold temperatures to maintain their stability and effectiveness in shipping boxes without insulation or any temperature protection whatsoever. Given the length of time required to ship products from Turkey to Missouri, Semizoglu admitted he was aware that the packages would frequently arrive in the United States at temperatures outside the constant cold temperature range discussed on the drugs’ labeling.
Further, Semizoglu admitted in his plea agreement to selling Altuzan® to Richard Taylor, a United Kingdom drug wholesaler. The U.S. Food and Drug Administration’s (“FDA”) Office of Criminal Investigations (“FDA-OCI”) previously seized Altuzan® from various U.S. physicians and customers of Taylor in 2012. The FDA-OCI ultimately determined that this Altuzan® received from Taylor and Semizoglu was counterfeit, with no active drug ingredient in the drug vials. FDA issued several public safety alerts about these events. FDA-OCI’s ongoing investigation has led to a number of related prosecutions in this District, including Dr. Abid Nisar, Sandra Behe, James Newcomb, Richard Taylor, Dr. Erick Falconer, Greg Martin, Kamaldeep Sandhu and Navdeep Sandhu, as well as prosecutions in the Southern District of California and the District of Maryland.
"Today's sentencing marks a public recognition that we will continue to pursue and bring to justice those who violate the law and jeopardize public safety," said Philip J. Walsky, acting director, FDA Office of Criminal Investigations. "National borders can no longer keep out criminal activity. As we did in this case, we will work with our international partners to protect U.S. public health."
This case was investigated by FDA’s Office of Criminal Investigations, with assistance from the United States Marshal’s Service, the United States Attorney’s Office for the District of Puerto Rico, the Office of Inspector General for the U.S. Department of Health and Human Services, the Johnson County, Kansas Sheriff’s Office Criminalistics Laboratory, Europol, the Bonn prosecutor in Germany (Staatsanwaltschaft); the Federal Criminal Police of Germany (Bundeskriminalamt, BKA); the Dusseldorf Police, the German State Criminal Police (Landeskriminalamt, LKA), the U.S. Department of State’s Diplomatic Security Service, the U.S. Consulate General’s Overseas Criminal Investigations Branch in Istanbul, Turkey, and the Drug Enforcement Administration.
The case was prosecuted by the Health Care Fraud Unit of the U.S. Attorney’s Office for the Eastern District of Missouri.
Three Sentenced and Two Indicted for Tax Refund Fraud and Identity Theft SchemesRead the Press Release
Follow @NDFLNewsPENSACOLA, FLORIDA – Pamela C. Marsh, United States Attorney for the Northern District of Florida, announced today that three individuals have been sentenced to federal prison and two more have been indicted by a federal grand jury in the past months for their roles in related tax refund fraud and identity theft schemes.
Today, Rex E. Robinson, Jr., 29, of Cantonment, Florida, was sentenced by Senior U.S. District Judge Roger Vinson to 75 months in prison after having pled guilty to mail fraud and aggravated identity theft charges stemming from his participation in a scheme to defraud the Internal Revenue Service (IRS) by filing over 100 false tax returns using other people’s identities, the majority of whom were deceased. Robinson was found in possession of approximately 566 individuals’ identities, 179 of which were actually used to file the fraudulent returns attributed to the scheme. As a result of his scheme, the IRS mailed out $87,324 in fraudulently obtained tax refund checks to Robinson’s various addresses, which Robinson was ordered to pay back in restitution as part of his sentence.
Last week, Ariyanna S. Lampley (previously Schuyler J. Nickerson), 32, of Pensacola, Florida, was sentenced by Chief U.S. District Judge M. Casey Rodgers to 75 months in prison after having pled guilty to theft of government money and aggravated identity theft. Lampley forged a deceased person’s signature and deposited into her account one of the fraudulent tax refund checks obtained by Robinson, knowing that Robinson had obtained it by filing false returns. Lampley was ordered to pay back $212,792.96 in restitution to the IRS not only for the check she deposited for Robinson, but for the over 70 additional fraudulently obtained federal tax refund checks she had cashed for others since 2010.This past July, Brian Richardson, 28, of Cantonment, was sentenced by Senior U.S. District Judge Roger Vinson to 12 months and one day in prison after having pled guilty to aggravated identity theft. Richardson stole the personal identifying information of over 40 elderly hospital patients from his employer and provided it to Robinson for use in the tax fraud scheme.
In addition, on October 21, 2014, a federal grand jury indicted Richard J. Beverly II, 25, and Andrey C. Cook, 33, both of Pensacola, on mail fraud and aggravated identity theft charges in a related but separate case. The indictment alleges Beverly filed approximately 40 false tax returns to get over $85,000 in tax refunds using the identities of deceased persons and disabled patients living at a group home in Pensacola, which were stolen and provided by Cook. Both defendants have pled not guilty, and trial is currently scheduled for December 1, 2014, before Senior U.S. District Judge Lacey Collier.
These cases resulted from investigations by the Internal Revenue Service-Criminal Investigations Division, with assistance from the Federal Bureau of Investigation, the U.S. Marshals Service, the U.S. Postal Inspection Service, and the Escambia County Sheriff’s Office. The cases are being prosecuted by Assistant U.S. Attorney Alicia Kim.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt at trial.
Three Plead Guilty to Federal Firearm Violations in Gulf Breeze Home Invasion CaseRead the Press Release
Follow @NDFLNewsPENSACOLA, FLORIDA - Teandre L. Altman, age 21, of Pensacola, pled guilty today to participating in a home invasion on August 27, 2014, with Robert F. Fraser, age 26, and Frank A. Rogers, age 19, who pled guilty previously. The pleas were announced today by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
The allegations leading up to the federal indictment began on August 26, 2014, when a female placed an “Craigslist” ad that said: “Looking to have fun tonight, my place or yours hmu if interested. Friendly with everything and down for anything.” An adult male subsequently contacted the female, and the two individuals communicated through text messages that evening. The male victim provided the female with his address in Gulf Breeze, Florida, and invited her to the residence. Defendant Robert Fraser, a friend of the female, agreed to travel with her to the victim’s residence during the early morning hours of August 27, 2014. Defendant Fraser contacted defendant Teandre Altman to provide transportation to the residence in Gulf Breeze. Defendants Altman and Frank Rogers picked up defendant Fraser and the female and traveled to the victim’s residence where the defendants intended to rob the victim.
Upon arrival, the defendants entered the victim’s residence, violently subdued him, and searched his residence for valuables. The defendants found an unlocked safe and stole the contents including fifteen firearms and a large quantity of ammunition, using the victim’s own suitcases to transport their loot. Once the defendants left, the victim called the police and gave a description of his assailants and their vehicle. Law enforcement officers subsequently located the vehicle and attempted to make a traffic stop, but the defendants fled through Gulf Breeze, over the Three-Mile Bridge, and into Pensacola at speeds exceeding 100 mph, throwing some firearms from the vehicle into Escambia Bay. The defendants were eventually arrested within several blocks of where they abandoned their vehicle in the East Hill area of Pensacola.
Fraser, Altman, and Rogers are scheduled for sentencing in December 2014. All three defendants pled guilty to conspiracy charges related to the possession of stolen firearms as well as substantive counts of possession of stolen firearms. Fraser and Altman also pled guilty to being convicted felons in possession of firearms. The defendants face up to ten years’ imprisonment on each of the substantive counts, and another five years’ imprisonment on the conspiracy count.
U.S. Attorney Marsh praised the work of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Santa Rosa County Sheriff’s Office, the Gulf Breeze Police Department, the Pensacola Police Department, and the State Attorney’s Office, whose joint investigation led to the indictment in the case. The case is being prosecuted by Assistant U.S. Attorney David L. Goldberg.
Three More Members of Philadelphia Based Armed Robbery Crew Indicted for Jewelry Store RobberiesRead the Press Release
Charges against three more members of a Philadelphia-based armed robbery crew were unsealed Tuesday on charges relating to two Michigan jewelry store robberies, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office, Sheriff Larry Stelma, Kent County Sheriff’s Department and Chief Michael Patton, West Bloomfield Police Department.
David Briley, 45, Shaheed Calhoun, 35, and Orlando Johnson, 40, all of Philadelphia, Pennsylvania, join Nathaniel Pembrook, 42, who was initially charged in September 2014, with charges relating to armed jewelry store robberies here in Michigan on April 22, 2014.
According to the indictment, Briley, Calhoun, Johnson, and Pembrook robbed two jewelry stores. The first robbery took place at Medawar Jewelers located on Plainfield Avenue in Grand Rapids. The second robbery took place at Tapper’s Diamonds and Fine Jewelry located on Orchard Lake in West Bloomfield. In both robberies, the robbers entered the stores during business hours with their faces covered or partially covered and brandished a firearm while ordering employees and customers to the floor. During the robbery at Medawar Jewelers, Pembrook was shot in the arm by one of the store owners. Blood recovered from the scene in Grand Rapids was DNA tested and determined to be that of Nathaniel Pembrook.United States McQuade, stated, "This case is an excellent example of the value of collaboration by federal, state and local law enforcement. We are grateful for the diligence of all of our partners in investigating this case so that these charges could be filed."
“As reflected by the indictments, FBI Detroit—along with our federal, state and local partners—remains dedicated to the pursuit and apprehension of those responsible for these acts of violence,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The continued, multi-jurisdictional collaboration between law enforcement resulted in the indictment of David Briley, Shaheed Calhoun, and Orlando Johnson for their involvement in these violent robberies, and we will maintain our resolve as we continue to thoroughly investigate this case.”
“Investigators in this case have been relentless. It should send a powerful message to the criminals within our community that justice will prevail,” stated Kent County Sheriff Larry Stelma.
"The entire West Bloomfield community is grateful for the great law enforcement partnership that has led to the continuing federal indictments related to these very serious crimes. As the investigation continues, this partnership remains devoted to bringing everyone that played a role in these incidents to justice," said Chief Michael Patton.
All four men have been charged with Interference with Commerce by Robbery, Possession of a Firearm in Furtherance of a Crime of Violence, Conspiracy to Interfere with Commerce by Robbery and being a Felon in Possession of a Firearm. If convicted on all charges, they will all face up to life in federal prison.
All four men were arrested in Pennsylvania. Pembrook is currently detained here in Michigan awaiting trial. Johnson, Briley and Calhoun are currently awaiting removal to Detroit for his arraignment on the charges.
The case was investigated by the West Bloomfield Police Department, the Kent County Sheriff’s Department and the Oakland County Gang and Violent Crimes Task Force, which is comprised of Special Agents with the FBI Oakland County Resident Agency, and state and local law enforcement officers with the Oakland County Sheriff’s Office; the Michigan State Police and the Michigan Department of Corrections, Parole; and the Bloomfield Twp., Auburn Hills, Royal Oak , Southfield, and Waterford Twp. Police Departments. The case is being prosecuted by Assistant U.S. Attorneys Daniel Lemisch and Chris Graveline with the United States Attorney’s Office for the Eastern District of Michigan in Detroit with the assistance of the United States Attorney’s Office for the Western District of Michigan.An indictment is only a charge and is not evidence of guilt. Every defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Three Dallas Roommates Indicted for Conspiring to Obstruct JusticeRead the Press Release
DALLAS — A federal grand jury has returned a six-count superseding indictment charging three Dallas residents with conspiracy to obstruct justice and related felony offenses stemming from the arrest and subsequent trial last month of one of the defendants on a federal firearm offense, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Chaddrick Darrion Ashley, 25, Daisy Emerson, 24, and Ofelia Nunez, 19, are each charged with one count of conspiracy to obstruct justice. The indictment also charges Ashley with one count of possession of a firearm by a convicted felon. Emerson is also charged with one count, and Nunez with three counts, of making a false declaration before the Court. Ashley is in federal custody and Nunez is on pretrial release. Emerson is expected to surrender to federal authorities this week.
According to the indictment, Ashley was arrested on March 26, 2014, for possession of a firearm by a felon. The indictment alleges that shortly after his arrest, Ashley conspired with Emerson and Nunez to execute a false affidavit, claiming the gun Ashley was charged with belonged to Nunez. Nunez executed a false affidavit, and testified at Ashley’s trial last month on that charge, that she was riding in the car with her boyfriend, and they picked up Ashley and another friend. Nunez exited the vehicle and discovered she left her gun in the car. Nunez also claimed she did not know Ashley. Emerson also testified at Ashley’s trial, claiming she did not participate in assisting Nunez file the false affidavit. At the time, Ashley, Emerson and Nunez were living together in an apartment in Dallas.
An indictment is an accusation by a grand jury. A defendant is presumed innocent unless found guilty beyond a reasonable doubt. If convicted, however, each defendant faces a maximum statutory penalty of 20 years in federal prison and a $250,000 fine on the conspiracy to obstruct justice charge. Each count of false statements before the Court carries a maximum statutory penalty of five years in federal prison and a $250,000 fine. The possession of a firearm by a felon offense carries a penalty of 15 years to life in federal prison and a $250,000 fine.
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case.
Texas Woman Allegedly Prepares Tax Returns Claiming False Deductions and CreditsRead the Press Release
A Texas federal court permanently barred Melissa Alvarez, a tax preparer in McAllen, Texas, from preparing returns for others, the Justice Department announced today. Alvarez agreed to the permanent ban, and the court entered an order imposing a permanent injunction against Alvarez on Oct. 27.
The order also requires Alvarez to turn over to the government a list of all customers for whom she prepared federal tax returns or claims for a refund for tax years 2011 through 2013, and to notify her customers for tax year 2013 of the permanent injunction against her. The order authorizes the government to monitor Alvarez’s compliance with the terms of the order.
The complaint alleged that Alvarez prepared returns that contained false, improper or inflated deductions or tax credits, such as the earned income tax credit. The complaint also alleged that these activities caused Alvarez’s customers to file returns which unlawfully understated income and tax liabilities and overstated refunds.
Return-preparer fraud is one of the Internal Revenue Service’s (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 fraudulent 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.
Stockholm Man Sentenced to 22 Years in Prison on Child Pornography ChargesRead the Press Release
Contact: F. Todd Lowell
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that
Benjamin A. Rossignol, 22, of Stockholm, Maine, was sentenced yesterday in U.S. District
Court by Chief Judge John A. Woodcock, Jr. to 22 years in prison to be followed by 20 years of supervised release for possessing and distributing child pornography. Rossignol pleaded guilty to the charges on May 8, 2014.Court records reveal that in October 2013 the defendant created images of child pornography using a minor child. He sent three of those images to a covert internet investigator with the Queensland Police Service (“QPS”) in Australia. On November 8, 2013, federal and state agents executed a search warrant at the defendant’s residence in Stockholm. A forensic examination of the defendant’s cell phone and his computer revealed images identical to the ones sent to the QPS investigator and other child pornography.
The investigation was conducted jointly by U.S. Immigration and Customs
Enforcement’s Homeland Security Investigations, the Maine State Police Computer Crimes Unit, the Bangor Police Department and the Queensland Police Service.Statement by U.S. Attorney Sarah R. Saldana Concerning the November 2014 General ElectionRead the Press Release
DALLAS — U.S. Attorney Sarah R. Saldaña, of the Northern District of Texas, announced today that she has appointed four Assistant U.S. Attorneys (AUSAs) to serve as District Election Officers (DEOs) in the Dallas, Fort Worth, Abilene, Lubbock, and Amarillo, Texas, offices. These DEOs will lead the efforts of her Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 4, 2014, general elections. As DEOs, AUSAs Errin Martin, Chris Wolfe, Juanita Fielden, Steve Sucsy, and Tim Hammer are responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
U.S. Attorney Saldaña said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud. The Department of Justice is committed to protecting the integrity of the election process.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on Election Day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 4, 2014, and to ensure that such complaints are directed to the appropriate authorities, U.S. Attorney Saldaña stated that each of the DEOs will be on duty while the polls are open, and may be contacted at the following telephone numbers:
Dallas AUSA Errin Martin 214-659-8838
Fort Worth AUSA Chris Wolfe 817-252-5221
Abilene AUSA Juanita Fielden 325-672-8160
Lubbock AUSA Steve Sucsy 806-472-7564
Amarillo AUSA Tim Hammer 806-324-2345
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on Election Day. The Dallas FBI office can be reached by the public at 972-559-5000.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
U.S. Attorney Saldaña said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division, of the Department of Justice.”
Spartanburg Man Sentenced to 37 Months for Defrauding Banks and Car DealersRead the Press Release
Contact Person: Bill Watkins (864) 282-2100
Columbia, South Carolina---- United States Attorney Bill Nettles stated today that Michael L. Wolfenbarger, age 42, of Spartanburg, South Carolina, was sentenced today in federal court in Anderson, South Carolina, for wire fraud, a violation of 18 U.S.C. ? 1343. United States District Judge Timothy M. Cain sentenced Wolfenbarger to 37 months imprisonment and ordered him to pay $1.3 million in restitution.
Evidence presented at the change of plea hearing established that Wolfenbarger acted as the middleman between various automotive dealerships and private individuals in the purchase and sale of used vehicles. Wolfenbarger utilized bank accounts at Branch Banking & Trust Company and The Palmetto Bank in his business affairs. Wolfenbarger would write checks drawn on bank accounts with insufficient funds or create counterfeit instruments and deposit these checks into other accounts. The pattern of depositing insufficient funds (“NSF”) checks and counterfeit instruments resulted in the books and records of the Banks showing inflated balances that permitted these NSF checks or counterfeit instruments to be honored rather than returned unpaid. Wolfenbarger would then withdraw monies from the Banks and/or write checks for goods and services based on inflated balances and thus take advantage of the time required for a check deposited in one bank to be physically presented for payment at the bank on which it was drawn. It was further part of the scheme and artifice to defraud that Wolfenbarger, rather than remitting funds to the automotive dealerships once a used vehicle had been sold, would deposit these funds in accounts with the Banks in an effort to perpetuate the kite and cover bad checks that he had written. Through this scheme an artifice, the victims lost approximately $1.3 million.
The case was investigated by agents of the Federal Bureau of Investigations and the Spartanburg County Sheriff’s Office. Assistant United States Attorney Bill Watkins of the Greenville office handled the case.Southern Illinois Resident Charged with Drug ConspiracyRead the Press Release
Follow @SDILNewsOn October 27, 2014, Antuan D. Perkins, a/k/a “Little Man,” 22, of Carbondale, made his initial appearance in federal court in Benton, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. At an October 28, 2014, detention hearing, Perkins was ordered held without bond.
Perkins, who is charged by indictment with conspiracy to distribute crack cocaine and heroin, fled the area after the May 2014, indictment. On October 8, 2014, he was arrested in Chicago by members of the United States Marshals Service and the Great Lakes Regional Fugitive Task Force.
The offense occurred between 2012 and May 2014, in Williamson County. The crack cocaine and heroin offense carries a penalty of up to 20 years in federal prison, to be followed by 3 years’ supervised release, and a fine of $1,000,000. Co-defendant Ahamad R. Atkins, a/k/a “Omar” and “O” has previously pled guilty to his role in the drug conspiracy and is awaiting sentencing.
Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The ongoing investigation is being conducted by the Southern Illinois Enforcement and Drug Enforcement Administration. The Williamson County State’s Attorney’s Office, United States Marshals Service, and Great Lakes Regional Fugitive Task Force assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Sonoma Resident Sentenced to Two Years in Prison for Filing False Tax ReturnRead the Press Release
SAN FRANCISCO – Sandra Lynn Vitorelo, AKA Sandra Mathewson, was sentenced yesterday to two years in prison and ordered to pay $91,442 in restitution for failure to report misappropriated funds on tax return, announced U.S. Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Thomas McMahon.
According to court documents, Vitorelo had her own tax return preparation and accounting business called M-V Services. In 2000, Vitorelo became the bookkeeper for her cousin. Vitorelo managed her cousin’s assets including stocks, currency, and real property. In 2006, the daughter of Vitorelo’s cousin opened a clothing store in Novato, Calif. Vitorelo subsequently began managing the finances for that store.
Vitorelo made unauthorized transfers from the bank accounts of her cousin and cousin’s daughter to her own Bank of America accounts. Vitorelo admitted to misappropriating at least $248,583 which she kept for her own use.
Vitorelo admitted that the money she misappropriated from her victims was converted to her own personal use. Vitorelo further admitted that she underreported her income on her federal income tax returns beginning in 2006 and continuing through 2009 as a result of her intentional failure to report these funds as income.
Vitorelo pleaded guilty in open court yesterday.
On Oct. 3, 2013, Vitorelo, 59, of American Canyon, was indicted on four counts of filing false tax returns. The sentence was handed down by the Honorable Thelton E. Henderson, United States District Court Judge, following a guilty plea on one count in violation of 26 U.S.C. § 7206(1). Judge Henderson also sentenced the defendant to a three-year period of supervised release. The defendant will begin serving her sentence on April 27, 2015.
Assistant US Attorney Cynthia Stier is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
(Vitorelo indictment )
Seven Middle District Men IndictedRead the Press Release
GREENSBORO, N.C. – Six Chatham County men and an Alamance County man were indicted by a federal grand jury for drug trafficking, announced Ripley Rand, Unites States Attorney for the Middle District of North Carolina. The seven people are currently in custody.
The indictment alleges that beginning in or about 2009 and continuing up to September 2014, the defendants did conspire to unlawfully distribute cocaine hydrochloride and methamphetamine. The investigation culminated on October 10, 2014 when the defendants were arrested. Six kilograms of cocaine hydrochloride and over $100.000.00 in cash were also seized at that time. The government has also begun asset forfeitures proceedings on more than ten acres of property located in Siler City.
Indicted were:
Abel Espinoza Garcia, 25, Siler City NC
Valentin Gorostieta Hernandez, 30, Siler City NC
Mauro Gorostieta Hernandez 22, Siler City NC
Kevin Ocampo, 19, Siler City NC
Antonio Ocampo, 42, Siler City NC
Constantino Alavarez Santanna, 37, Siler City NC
Craig Leevon McMasters, 42, Mebane NC
Chief Gary Tyson of the Siler City Police Department remarked, “I am very proud of my officers that work on this case. We had great collaboration between the different agencies involved. Our Town and surrounding areas are safer because of this effort. I hope the partnerships that were forged while working this case will lead to future operations that we can work together in a collaborative manner.”
Sheriff Richard Webster of Chatham County added: “The use of illegal drugs has always been an issue for law enforcement nationwide. By working together at local, state and federal levels, greater things can be accomplished to make Chatham County a safer community to live. This was certainly proven with this collaboration effort.”
The case was investigated by the Chatham County Sheriff’s Office, Randolph County Sheriff’s Office, Siler City Police Department, North Carolina State Bureau of Investigation, the United States Drug Enforcement Administration, and the Internal Revenue Service, Criminal Investigations Division.
The charges contained in the indictment are allegations. The defendants are presumed innocent unless and until he is proven guilty beyond a reasonable doubt in a court of law.
Schanze Charged in Two-Count Misdemeanor Information with Using an Aircraft to Harass Wildlife; Pursuing A Migratory BirdRead the Press Release
SALT LAKE CITY - Dell Schanze, age 45, of American Fork, Utah, has been charged in a two-count misdemeanor information with knowingly using an aircraft to harass wildlife and pursuing a migratory bird. The charges were filed Tuesday afternoon in U.S. District Court in Salt Lake City.
Count one of the information alleges that Schanze violated the Airborne Hunting Act by using a motorized paraglider to harass an owl during an incident in February or March of 2011. Count two of the document alleges Schanze used his motorized paraglider to pursue a barn owl, which is a violation of the Migratory Bird Treaty Act.
The information also includes a notice of intent by the U.S. Attorney’s Office to seek forfeiture of the motorized paraglider or substitute property or assets.
The potential penalty for using an aircraft to harass wildlife is up to one year in jail and a fine of $100,000. The potential penalty for pursuing a migratory bird is up to six months in jail and a $5,000 fine.
Charges included in a misdemeanor information are not findings of guilt. Individuals charged in a misdemeanor information are presumed innocent unless or until proven guilty in court.
A summons will be issued to Schanze to appear in federal court.
The case is being investigated by the U.S. Fish and Wildlife Service and prosecuted by the U.S. Attorney’s Office in Salt Lake City.
Salisbury Cocaine Dealer Sentenced to over 11 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge George J. Hazel sentenced David Wayne Nelson, age 32, of Salisbury, Maryland, today to 140 months in prison, followed by five years of supervised release, for conspiracy to distribute and possess with intent to distribute cocaine.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Colonel Marcus L. Brown, Superintendent of the Maryland State Police; Wicomico County Sheriff Michael A. Lewis; Salisbury Police Chief Barbara Duncan; Chief Michael Phillips of the Fruitland Police Department; and Wicomico County State’s Attorney Matthew Maciarello.
According to their plea agreements, from July 2013, through August 27, 2013, Nelson conspired with Royce Levi Brown, and others to distribute cocaine. During the investigation, DEA and the Wicomico County Narcotics Task Force initiated wire taps on cellular telephones belonging to Brown and executed search warrants at multiple locations, including residences associated with Nelson and Brown. Law enforcement overheard and observed Nelson engage in drug transactions with Brown.
For example, on July 30, 2013, law enforcement overheard conversations in which Nelson agreed to buy one kilogram of cocaine from Brown. Brown delivered the cocaine to Nelson at his residence. On August 13, 2013, law enforcement overheard Nelson arrange to purchase one half kilogram of cocaine from Brown for $21,000.
Royce Levi Brown, age 31, of Mardela Springs, Maryland, previously pleaded guilty to his role in the conspiracy and is awaiting sentencing.
United States Attorney Rod J. Rosenstein commended the DEA and the Wicomico County Narcotics Task Force comprised of the Maryland State Police, Wicomico County Sheriff’s Office, Salisbury Police Department, Fruitland Police Department and the Wicomico County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Peter J. Martinez, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Rochester Man Guilty of Trafficking in Credit Card AccountsRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Andres Ahmed Vasquez, 29, of Rochester, NY, pleaded guilty before U.S. District Judge Charles J. Siragusa to trafficking in and possession of unauthorized counterfeit access devices. Each charge carries a maximum sentence of 10 years in prison, a fine of $250,000, or both.
Assistant U.S. Attorney John J. Field, who is handling the case, stated that between June 2012 and May 2014 Vasquez trafficked in, possessed, and used stolen credit card account numbers and codes belonging to more than 250 different victims. The defendant obtained more than $210,000 as a result of his crimes.
This plea is the culmination of an investigation by Special Agents of the United States Secret Service, under the direction of Special Agent in Charge Tracy Gast.
Vasquez is scheduled to be sentenced by on January 30, 2014, at 2:00 p.m. before Judge Siragusa.- Rio Grande City Woman Convicted of Distributing Marijuana
Registered Sex Offender Arrested, Charged with Possesion of Child PornographyRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Chad Allen Mesler, 44, of Bath, NY, was arrested and charged by criminal complaint with possession of child pornography and transportation of obscene materials. The possession of child pornography charge carries a minimum sentence of 10 years in prison and a maximum of 20 years due to the defendant’s prior conviction. The transportation of obscene materials is punishable by up to 10 years in prison. The charges also carry a fine of up to $250,000.
Assistant U.S. Attorney Craig R. Gestring, who is handling the case, stated that according to the complaint, Probation Officers from the Western District of New York were supervising the defendant following a 2011 conviction for possession of child pornography. During a routine visit to Mesler’s residence in Bath, they found a laptop computer that contained images of child pornography. Officers also found printed obscene magazines depicting children as young as infants being raped which the defendant had buried in his back yard. The Probation Department contacted the FBI Crimes Against Children Task Force for investigative and forensic assistance.
Mesler made an initial appearance today before U.S. Magistrate Judge Marian W. Payson and was detained. His next scheduled appearance is January 8, 2015 at 9:00 a.m.
The criminal complaint is the culmination of an investigation by Special Agents of Federal Bureau of Investigation and Officers of the United States Probation Department for the Western District of New York, under the direction of Anthony SanGiacomo.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.Rapid City Man Indicted for AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rapid City, South Dakota, man has been indicted by a federal grand jury for Assault with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury.
Leslie Michael Hawk, age 24, was indicted on October 21, 2014. He appeared before U.S. Magistrate Judge Veronica Duffy on October 22, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is 10 years of imprisonment and/or a $250,000 fine, 3 years of supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment charges that on October 8, 2014, near Loneman, Hawk assaulted a woman with a knife.
The charges are merely accusations and Hawk is presumed innocent until and unless proven guilty.
The investigation was conducted by the Bureau of Indian Affairs Office of Justice Services, and the Pennington County Sheriff’s Office. Assistant U.S. Attorney Ben Patterson is prosecuting the case.
Hawk was detained pending trial. A trial date has not been set.
Raleigh Attorney, Developers, Brokers, and Recruiters Sentenced to Prison for Expansive Mortgage Fraud SchemeRead the Press Release
RALEIGH – The United States Attorney’s Office announced that on Monday, October 27, 2014, and Tuesday, October 28, 2014, Chief United States District Judge James C. Dever, III sentenced numerous participants in an expansive mortgage fraud scheme to prison. Chief Judge Dever also collectively ordered more than $10 million in forfeiture and restitution judgments against the defendants. Those sentenced by the Court included multiple real estate developers, a closing attorney, two mortgage brokers, and a real estate broker.
“Mortgage fraud impacts the financial stability of our country’s housing markets. These individuals manipulated programs that make it possible for others to live the American dream of owning their own homes. The FBI and our law enforcement partners will expose these type of complex fraud schemes and ensure those responsible are held accountable for their crimes,” said John Strong, Special Agent in Charge of the FBI in North Carolina.
“The Federal Deposit Insurance Corporation - Office of Inspector General is committed to its partnerships with others in the law enforcement community as we address mortgage fraud cases throughout the country. The American people need to be assured that their government is working to ensure integrity in the financial services and housing industries and that those involved in criminal activities that undermine that integrity will be held accountable,” commented the Federal Deposit Insurance Corporation Inspector General Jon T. Rymer.
“We recognize the negative impact that mortgage fraud has on our economy and on our communities. With actions like those announced today, a very clear message is sent: if you don’t operate within the boundaries of the law, we will not hesitate to act. We will continue to work with our law enforcement partners to ensure the US Mail is safe and not used to further schemes like this”, said Inspector in Charge Keith Fixel, US Postal Inspection Service.
"The Federal Deposit Insurance Corporation (FDIC) Office of Inspector General is pleased to join the U.S. Attorney's Office and our law enforcement partners in announcing these sentencings. The numerous subjects involved in these fraudulent schemes are now facing the reality that those who cause harm to FDIC-insured institutions and undermine the integrity of the Nation's housing industry will be held accountable."
Nadine E. Gurley, Special Agent in Charge for the U. S. Department of Housing and Urban Development, Office of Inspector General said, “HUD's Office of Inspector General is dedicated to protecting HUD from individuals seeking to defraud the Federal Housing Administration (FHA) insurance fund. The sentences announced today is a reminder to citizens that we will continue to investigate mortgage industry professionals who attempt to defraud our programs for their own personal enrichment. This partnership between the U.S. Attorney’s Office, HUD’s Office of Inspector General and law enforcement partners, has helped demonstrate to taxpayers that those who seek to unlawfully profit by defrauding HUD programs will be vigorously prosecuted.”
“This case clearly demonstrates the commitment of IRS Criminal Investigation to aggressively pursue individuals engaged in mortgage fraud in North Carolina,” said Special Agent in Charge Thomas J. Holloman III. “Mortgage fraud destroys neighborhoods and hurts innocent families. IRS Criminal Investigation is committed to combating mortgage fraud and other financial crimes to protect the American homeowner and the national economy.”
On Monday and Tuesday, Chief United States District Judge James C. Dever sentenced eight defendants in total who were tied to the mortgage fraud scheme. Those sentenced included former mortgage broker DEXTER TIRRELL JONES, 42 of Raleigh; developer RICKY LAMONT CONGLETON, 43, of Zebulon; closing attorney PHILLIP GRAHAM ROSE, 42 of Raleigh; developer and former mortgage broker VINCENT MALDINI, 46, of Seabright, New Jersey; developer JOHNNY RAY PEELE, 43, of Wake Forest; JOSEPH CARL HOLLIS, 35, of Raleigh; developer DWAYNE THOMAS HALL, 49, of Wake Forest, and former real estate broker, TRESHELL MAYO HERNDON, 39, of Raleigh. JONES, CONGLETON, ROSE, MALDINI, PEELE, HALL, and HERNDON, were each charged in a one-count criminal information with Conspiracy to Commit Bank and Wire Fraud in violation of Title 18, United States Code, Section 1349. HOLLIS was charged with Conspiracy to Commit Mail, Wire, and Bank Fraud, in violation of Title 18, United States Code, Section 371.
Summary of the Scheme
The investigation uncovered that between 2003 and 2009, CONGLETON, HERNDON, PEELE, HALL, MALDINI, JONES, HOLLIS, ROSE, and others known to the United States Attorney, were involved in a conspiracy to defraud numerous banks and lenders in the United States, collectively resulting in more than $44 million in fraudulent mortgage loan disbursements, and several million dollars in losses to victims.
The conspiracy further resulted in substantial losses to the United States Department of Housing and Urban Development (HUD) through its Federal Housing Administration (FHA) program.
The charging documents indicate that various developers in the scheme, including but not limited to CONGLETON, operating through Triple R Enterprises, LLC; HERNDON, operating through Herndon & Herndon Enterprises, LLC; HALL, operating through Dwayne T. Hall Builders; PEELE, operating through P.A.P’s Custom Home Builders, LLC and C and P Custom Homes, LLC; and MALDINI, operating through NY Construction, LLC, unlawfully profited from the sale of properties purchased or developed by the conspirators to individuals who did not have the financial means to purchase the properties, identified in the charging documents as “straw buyers”. To execute the scheme, CONGLETON, HERNDON, HALL, PEELE, MALDINI, and others involved in the scheme referred to as “Builders”, would cause entities owned or controlled by them to purchase and develop a property for quick resale. The builders caused individuals, referred to herein as “Intermediaries,” to locate individuals who were willing to allow their name and credit to be used to purchase properties from the Builders. The Intermediaries, including but not limited to HOLLIS, MALDINI and then mortgage broker, JONES, assisted the straw buyers to complete a loan application with a lender. For their services to the Builders, the conspirators paid the Intermediaries a kickback, or lump sum of cash, from the loan proceeds used by the straw buyers to purchase the properties from the Builders.
Conspirators enticed the straw buyers to participate in the scheme by making certain promises and representations including, but not limited to the following: (1) The straw buyers would be paid a sum of cash for purchasing the properties, (2)the straw buyers would not be required to make a down payment, (3) the straw buyers were told that the homes would be rented and the rental income would be used to pay the mortgage,(4) the straw buyers would not be required to make interest payments on the mortgage loans utilized to purchase the properties from the Builders.
CONGLETON, HERNDON, HALL, PEELE, MALDINI, and other Builders executed contracts to sell properties to the straw buyers for their appraised value, but set aside 15 to 20% of the sales price to use as the straw buyer’s down payment, and to pay kickbacks to the straw buyers and others participating in the scheme. The Builders further obtained and caused others to obtain cashier’s checks from accounts owned or controlled by the Builders to cover the down payment obligations of the straw buyers. The cashier’s checks were written to make it appear to lenders and banks that the straw buyers were providing the down payment funds when, in fact, such funds came from the Builders. These cashier’s checks were given to a closing attorney who handled the sale of the property from the Builder to the straw buyer.
Raleigh attorney PHILLIP GRAHAM ROSE served as the closing attorney on some, but not all, real estate transactions between Builders and straw buyers that were funded by banks and mortgage lenders in the scheme. In connection with the transactions involving the Builders and straw buyers, ROSE created and executed, and had the buyers and sellers execute, HUD-1 settlement statements that falsely indicated that the borrower brought cash to the closing when, in fact, as ROSE knew, the cash was provided by the Builders, including CONGLETON, HERNDON, HALL, PEELE, MALDINI, and others. ROSE and his staff transmitted the false HUD-1 settlement statements via mail and interstate wires to banks and mortgage lenders who relied upon them in funding the transactions. The Builders and straw buyers executed the HUD-1 settlement statements reflecting that the straw buyers were making the down payment on the properties, when in fact, the down payments were made by the Builders.
Because of the foregoing actions, banks and other lenders were deceived into disbursing loan proceeds to fund the purchase of the properties from CONGLETON, HERNDON, HALL, PEELE, MALDINI, and other Builders. The banks and lenders issued loans they either would not otherwise have made, or issued loans on terms they would not otherwise have authorized, had the Builders and others not concealed the true terms of the transactions, the actual qualifications and intentions of the straw buyers, the promises and representations made by the Builders and others to the straw buyers, and the false down payments of the straw buyers as reflected on the HUD-1 settlement statements.
Rental income was collected and sometimes not forwarded to pay the mortgage, as promised. The Builders also did not always make interest payments on loans issued to the straw buyers. As a result of the scheme, straw buyers were left accountable for loans that they did not have the financial means to repay, and banks were forced to initiate foreclosure proceedings and sell the properties at a loss.
Sentences Issued
MALDINI was a former mortgage broker who participated in the scheme as a middleman and a developer from 2005 to 2009. Law enforcement examined at least 22 transactions involving 4 straw borrowers. At sentencing on Monday, the Court ordered MALDINI to serve 60 months in federal prison, followed by 5 years of supervised release, and to make restitution to 11 lenders in the amount of $667,859.
CONGLETON was a real estate developer who participated in the scheme as a builder and a recruiter from 2004 to 2009. Law enforcement examined at least 49 transactions, spread across 20 straw borrowers and 18 lenders. Ultimately, the court ordered CONGLETON to serve 66 months in federal prison, followed by 5 years of supervised release. CONGLETON was further ordered to pay $1,123,459 to the victims of his crime, and another $3,253,142 in the form of a criminal forfeiture judgment consisting of cash and real estate tied to the offense.
JONES was a mortgage broker who participated in the scheme as a recruiter and intermediary from 2003 to 2009. Law enforcement examined at least 67 transactions involving 33 straw buyers and 24 victim lenders. Ultimately, the court ordered JONES to serve 30 months in federal prison, followed by 5 years of supervised release. The court further ordered Jones to pay restitution of $1,367,129 to the victims of his offense.
ROSE was an attorney who participated in the scheme as a closing attorney from 2002 to 2009. Following a search of his law office in 2012, law enforcement examined 98 fraudulent real estate transactions closed by ROSE for various Builders involved in the scheme. The transactions involved 46 straw borrowers and 28 lenders. The Court sentenced ROSE to 42 months in prison, followed by 5 years of supervised release. The Court also ordered ROSE to pay $1,589,298 to the victims of his offense.
PEELE was a real estate developer and recruiter for the scheme from 2007 to 2008. Law enforcement examined 14 transactions in which PEELE was a participant. Those transactions involved 3 straw borrowers, 13 victim lenders, and resulted in approximately $1.6 Million in gross, fraudulent proceeds. The Court sentenced PEELE to serve 30 months in prison, followed by 5 years of supervised release. The Court also ordered PEELE to pay $728,244 in restitution to the victims of his offense, as well as the forfeiture of certain real estate constituting fraudulent proceeds of the offense.
HALL was a real estate developer who participated in the scheme from 2004 to 2007. Law enforcement examined 38 transactions which involved 22 straw borrowers and 20 victim lenders. Ultimately, the Court ordered HALL to serve 39 months in federal prison, followed by 3 years of supervised release. The Court further ordered HALL to pay restitution to his victims in the amount of $1,214,326, and the criminal forfeiture of $7,278,558.00 dollars in cash proceeds from the offense.
HERNDON was a real estate broker and wife of a developer who participated in the offense from 2003 to 2008. Law enforcement examined 21 transactions wherein HERNDON signed false HUD-1 settlement statements on behalf of her real estate company at closing. HERNDON’s fraudulent transactions involved the use of 16 straw borrowers affected 12 victim lenders. The Court ordered HERNDON to serve 33 months in prison, followed by a 5 year term of supervised release. The Court further ordered HERNDON to pay restitution of $1,059,719 to the victims of her offense, as well as the criminal forfeiture of several million dollars in gross criminal proceeds.
HOLLIS participated in the scheme first as a straw buyer, and later as a recruiter. The Court ordered HOLLIS to serve a 5 year term of probation which included an 18 month term of house arrest. The Court further ordered HOLLIS to pay $198,500 to the victims of his offense.
Investigation of this case was conducted by the Federal Bureau of Investigation, the United States Department of Housing and Urban Development Office of the Inspector General, the Federal Deposit Insurance Corporation Office of the Inspector General, and the Internal Revenue Service Criminal Investigation. Other law enforcement partners also assisted in the investigation, including the United State Marshals Service and the Raleigh Police Department. Assistant United States Attorney William M. Gilmore represented the United States.
Racketeering Indictment Charges 3 More Tied to Unsolved Homicides, Drug Trafficking, Gun CrimesRead the Press Release
COLUMBUS – A federal grand jury has indicted three more people in connection with a series of violent crimes including 13 unsolved murders as well as other attempted murders, drug trafficking, weapons trafficking, extortion and robbery. The addition to the indictment includes an additional 23 felonies, including one murder and nine attempted murders.
Seventeen individuals were indicted in the racketeering case in July. All of the defendants are accused of being an organized criminal enterprise known as the Short North Posse. Eleven defendants could face the death penalty if convicted of the crimes in the indictment.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI), Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration (DEA), Michael Boxler, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Franklin County Prosecutor Ron O’Brien, and Columbus Police Chief Kim Jacobs announced the superseding indictment, which was unsealed today following early morning efforts to arrest and locate the defendants.
The superseding indictment alleges that beginning in 2005, members of the enterprise originally referred to themselves solely as the Short North Posse. Later some members began subsets of the Short North Posse referring to themselves as the Cut Throat Committee and later the Homicide Squad. Still within the Short North Posse, Cut Throat Committee and Homicide Squad specialized in murders and robberies of rival gang members, other drug dealers, and targets thought to have large sums of cash or firearms. The Short North Posse also identified themselves nationally with the Crips street gang.
Andre M. Brown, aka ‘Paco’, 33, of Columbus; Jonathan Holt, aka ‘Dough Boy’, 22, of Columbus and Christopher V. Wharton, 25, of Columbus were added to the indictment. Previous defendant Lance Reynolds, 31, of Columbus, was also charged with one count of racketeering conspiracy in the superseding indictment.A complete list of those charged is attached.
The superseding indictment charges one or more of the defendants with 13 unsolved homicides, 33 attempted homicides, 56 violent felonies and 73 weapons offenses. The crimes occurred in Canal Winchester, Chillicothe, Columbus, Pataskala, Pickerington, and Zanesville, between 2005 and 2012.
The superseding indictment is a result of a two-year long investigation by federal, state and local law enforcement agencies, including the FBI, DEA, ATF, Columbus Police, Franklin County Sheriff Zach Scott’s Office, and Franklin County Prosecutor Ron O’Brien’s Office. Fairfield County Prosecutor Gregg Marx, Licking County Prosecutor Kenneth Oswalt, Muskingum County Prosecutor D. Michael Haddox, Ross County Prosecutor Matthew S. Schmidt, law enforcement leaders from those counties, and officials of the Ohio Department of Rehabilitation and Correction joined U.S. Attorney Stewart in announcing the original charges.
“Thanks to the dedication of law enforcement officials in this cooperative investigation, we’re announcing charges against individuals who are allegedly responsible for 13 unsolved murders,” U.S. Attorney Stewart said. “Efforts remain ongoing, and we’re committed to solving additional homicides.”
The defendants will appear before a U.S. Magistrate Judge who will determine whether or not to hold them without bond until trial.
Stewart commended Assistant U.S. Attorneys David DeVillers and Kevin Kelley, as well as Special Assistant U.S. Attorney Jimmy Lowe with Franklin County Prosecutor O’Brien’s Office, who are prosecuting the case.
Charges contained in an indictment are allegations. All defendants should be presumed innocent until and unless proven guilty in court.
SNP
Cut Throat/Homicide SquadNo.
Name
Age
City of Residence
Counts
1
*Robert B. Ledbetter
35
Columbus, Ohio
1, 4, 9, 10, 29, 30, and 31
2
*Lance A. Green
34
Columbus, Ohio
1, 2, and 3
3
*Allen L. Wright
28
Columbus, Ohio
1, 2, and 3
4
Tysin L. Gordon
29
Columbus, Ohio
1
5
*Christopher A. Harris
27
Columbus, Ohio
1, 5, 6, 7, 8, 9, and 10
6
*Robert L. Wilson III
26
Columbus, Ohio
1, 5, 6, 9, 10, 15, and16
7
*Rashad A. Liston
25
Columbus, Ohio
1, 9, 10, 15, and 16
8
*Deounte Ussury
29
Columbus, Ohio
1, 7, 8, and 11
9
Thomas E. Coates
28
Columbus, Ohio
1
10
Ishmael Bowers
32
Columbus, Ohio
13 and 14
11
*Joseph Hill
30
Columbus, Ohio
1, 12, 13, 14, 34, and 35
12
Freddie K. Johnson
28
Columbus, Ohio
1, 32 and 33
13
*Deshawn Smith
27
Columbus, Ohio
1, 13, 14, 36 and 37
14
Lance Reynolds
31
Columbus, Ohio
1, 13, 14, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, and 38
15
*Rastaman A. Wilson
38
Columbus, Ohio
5 and 6
16
*Clifford L. Robinson
37
Columbus, Ohio
5 and 6
17
Troy A. Patterson
23
Columbus, Ohio
15 and 16
18
Andre M. Brown
33
Columbus, Ohio
1, 17, 18, 21, 22, 23, 24, 25, and 26
19
Johnathan Holt
22
Columbus, Ohio
17, 18, 19, and 20
20
Christopher V. Wharton
25
Columbus, Ohio
17, 18, 19, 20, 22, 23, 25, 27, 27, and 28
* indicates that they could face the death penalty
Count 1
Racketeering Conspiracy
18 U.S.C. § 1962(d)0-life imprisonment
$250,000 fine
$100 spec assmt
5 yrs supv relCounts 2, 3 4,5,7, 9, 11,12, 13, 15, 19, and 29
Murder in aid of racketeering
18 U.S.C. § 1959(a)(1)0-life imprisonment/death
$250,000 fine
$100 spec assmt
5 yrs supv relCounts 6,8,10, 14, 16, and 20
Murder through the use of a firearm during and in relation to a drug trafficking crime
18 U.S.C. § 924(C) and 924(j)0-life imprisonment/death
$250,000 fine
$100 spec assmt
5 yrs supv relCount 17
Attempted possession with intent to distribute cocaine
21 U.S.C. § 846
21 U.S.C. § 841(a)(1) and (b)(1)(C)0-20 years
$1,000,000 fine
$100 spec assmt
3 yrs supv relCounts 18, 23, 26, and 31
Use and discharge of a firearm during and in relation to a crime of violence
18 U.S.C. § 924(c)(1)(A)(iii)10 years - life imprisonment consecutive
$250,000 fine
$100 spec assmt
5 yrs supv relCounts 21, 24, 25, and 27
Possession with intent to distribute a detectable amount of marijuana
21 U.S.C. § 841(a)(1) and (b)(1)(D)0-5 yrs
$250,000 fine
$100 spec assmt
3 yrs supv relCount 22
Attempted possession with intent to distribute a detectable amount of marijuana
21 U.S.C. § 846
21 U.S.C. § 841(a)(1) and (b)(1)(D)0-5 yrs
$250,000 fine
$100 spec assmt
3 yrs supv relCount 28
Brandishing a firearm during and in relation to a drug trafficking crime
18 U.S.C. § 924(c)(1)(A)7 years – life consecutive
$250,000 fine
$100 spec assmt
5 yrs supv relCount 30
Conspiracy to murder a witness
18 U.S.C. § 1512(k)Life or death
$250,000 fine
$100 spec assmt
5 yrs supv relCounts 32, 33, 34, and 36
Possession of a firearm by a convicted felon
18 U.S.C. § 922(g)0-10 years
$250,000 fine
$100 spec assmt
3 yrs supv relCount 35
Possession with intent to distribute cocaine
21 U.S.C. § 841(a)(1)
21 U.S.C. § 841(b)(1)(C)0-20 years
$1,000,000 fine
$100 spec assmt
3 yrs supv relCount 37
Possession with intent to distribute heroin
21 U.S.C. § 841(a)(1)
21 U.S.C. § 841(b)(1)(C)0-20 years
$1,000,000 fine
$100 spec assmt
3 yrs supv relCount 38
Witness Tampering
18 U.S.C. § 15120-20 yrs
$250,000 fine
$100 spec assmt
3 yrs supv relPostal Employee Indicted for Theft from Evansville Mail FacilityRead the Press Release
Manager allegedly stole packages containing pain medication intended for veterans
EVANSVILLE– Josh Minkler, Acting United States Attorney, announced today federal theft charges against a postal employee who allegedly stole mail packages containing, among other things, hydrocodone, a prescription pain medication, intended for delivery to veterans who receive their Veterans Administration medication through the mail. Kevin R. Hicks, 53, of Evansville, Indiana, was charged with theft of mail matter by an employee. The indictment was the result of an investigation conducted by the United States Postal Inspection Service, the United States Postal Service Inspector General, the United States Department of Veterans Affairs, and the Evansville Police Department.
“Public corruption is one of the highest priorities of this office,” said Minkler. “Those who choose to betray the public’s trust will be held accountable and face the full force of federal law.”
In January of this year, law enforcement officials began an investigation when they determined several packages containing prescription medication from the Veteran’s Administration were not being delivered to the intended recipient. The packages routed to several zip codes in Southern Indiana and Central Kentucky never made it to their destination.
Hicks worked as a manager at the Evansville Postal Processing and Distribution Facility on Petersburg Road in Evansville. As a manager, Hicks had an opportunity to steal U.S. mail. The investigation revealed that Hicks had allegedly stolen over 23 packages containing prescription medications, including hydrocodone, a pain relief medication, for personal use.
Minkler explained the U.S. Attorney's Office established a Public Integrity Working Group in April 2012, with the stated purpose of aggressively investigating allegations of public fraud, waste and abuse by public officials in Indiana. Individuals with information on public corruption are encouraged to contact the U.S. Attorney's Office at (317) 229-2443.
According to Assistant United States Attorneys Todd Shellenbarger and Kyle Sawa, who are prosecuting this case for the government, Hicks could face up to five years in prison and a $250,000 fine if convicted. Hicks will be summoned to appear before a magistrate judge in Evansville.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Pittsburgh Man Sentenced for Smuggling Firearm from U.S.Read the Press Release
PITTSBURGH - A Pittsburgh resident has been sentenced in federal court to probation for a term of three years, with a condition of six months’ home detention on his conviction of smuggling goods from the United States, United States Attorney David J. Hickton announced today.
Senior United States District Judge Maurice B. Cohill imposed the sentence on Tarek Mohamed Chok, 50.
According to information presented to the court, on or about Sept. 18, 2012, Chok shipped a Springfield, Model 1911, .45 caliber pistol via FedEx from Pittsburgh to Lebanon. The package containing the firearm was intercepted in Dubai. On the shipping declaration, Chok declared the contents of the package to be a “car lock, keys, and student documents.” When approached by agents of DHS about his shipment, Chok initially lied and stated that the firearm in question, which records indicate was purchased by him, was “stolen” from him. Eventually, Chok admitted that he had, in fact, sent the firearm via FedEx, that he had lied to agents about it, and he misrepresented the contents of the package because he believed that if he had listed the true contents of the package, FedEx would not have sent the package.
Assistant United States Attorney James T. Kitchen prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Department of Homeland Security for the investigation leading to the successful prosecution of Chok.
Pepper Pike Man Charged with Making False Statements Related to $1 Million in LoansRead the Press Release
A criminal information was filed charging Allen D. Youngman with making false statements to a federally-insured financial institution, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Youngman, age 59, of Pepper Pike, owned Lakeside Scrap Metals, Inc., and related scrap metal companies. On behalf of Lakeside, Youngman obtained an asset-based loan that permitted borrowing against Lakeside’s accounts receivable and inventory from from First Merit Bank, a federally-insured financial institution.
Between approximately March 26, 2012, and August 14, 2012, Youngman prepared and submitted fraudulent receivables invoices, that permitted drawing up to 85 percent of the invoice totals. Youngman provided First Merit with eight fraudulent invoices that allowed him to draw approximately $1,007,347 on the loan, according to the information.
This case is being prosecuted by Assistant U.S. Attorney James V. Moroney following an investigation by the Federal Bureau of Investigation.
If convicted, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
A charge 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.
Owner of Accounting Business Sentenced to Two Years in Prison for Tax FraudRead the Press Release
STATESVILLE, N.C. – On Monday, October 27, 2014, U.S. District Judge Richard L. Voorhees sentenced Denise Swanson of Lenoir, N.C. to 24 months in prison for tax evasion, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Swanson was also ordered to serve three years under court supervision following her release from prison and to pay restitution in the amount of $839,830.99 to client victims and $249,912 to IRS.
U.S. Attorney Tompkins is joined by Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) in making today’s announcement.
According to court documents and yesterday’s sentencing hearing, Swanson was the owner and operator of “Bottom-line Accounting,” a tax preparation and bookkeeping business. Filed court documents show that from 2006 to 2012, Swanson performed tax preparation services for her clients, J.W. and K.W., and their business, C.B. (“the clients”), which included making related tax payments on their behalf. According to court records, Swanson received funds from her clients that were supposed to be used to pay their various tax obligations to IRS and other state agencies. But instead of making the payments, court records show, Swanson embezzled the money and used it to pay for personal expenses including her daughter’s college tuition, renovations to her house and gambling. In total, Swanson embezzled approximately $839,830 from her clients. According to court records, Swanson failed to report the embezzled income on her own individual tax returns for tax years 2006 through 2011. Swanson pleaded guilty to tax evasion for tax year 2010 in August 2013.
Following the sentencing hearing, Swanson was permitted to remain on bond and will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by IRS-CI. Assistant United States Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte prosecuted the case.
Owner of Accounting Business Sentenced to Two Years in Prison for Tax FraudRead the Press Release
STATESVILLE, N.C. – On Monday, October 27, 2014, U.S. District Judge Richard L. Voorhees sentenced Denise Swanson of Lenoir, N.C. to 24 months in prison for tax evasion, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Swanson was also ordered to serve three years under court supervision following her release from prison and to pay restitution in the amount of $839,830.99 to client victims and $249,912 to IRS.
U.S. Attorney Tompkins is joined by Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) in making today’s announcement.
According to court documents and yesterday’s sentencing hearing, Swanson was the owner and operator of “Bottom-line Accounting,” a tax preparation and bookkeeping business. Filed court documents show that from 2006 to 2012, Swanson performed tax preparation services for her clients, J.W. and K.W., and their business, C.B. (“the clients”), which included making related tax payments on their behalf. According to court records, Swanson received funds from her clients that were supposed to be used to pay their various tax obligations to IRS and other state agencies. But instead of making the payments, court records show, Swanson embezzled the money and used it to pay for personal expenses including her daughter’s college tuition, renovations to her house and gambling. In total, Swanson embezzled approximately $839,830 from her clients. According to court records, Swanson failed to report the embezzled income on her own individual tax returns for tax years 2006 through 2011. Swanson pleaded guilty to tax evasion for tax year 2010 in August 2013.
Following the sentencing hearing, Swanson was permitted to remain on bond and will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by IRS-CI. Assistant United States Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte prosecuted the case.
Oregon Man Pleads Guilty to Attempted Transfer of Obscene MaterialRead the Press Release
BOISE B Scott L. Austin, 52, of Portland, Oregon, pleaded guilty today to attempted transfer of obscene material to a minor, U.S. Attorney Wendy J. Olson announced.
According to the plea agreement, Austin admitted that on various occasions between the summer of 2011, and October 2013, he engaged in sexually explicit chats with an undercover police officer and a person he believed was the officer’s minor child. Austin admitted that on August 9, 2011, while chatting online with the supposed minor in a chat room titled “Incest,” he sent three sexually explicit images accompanied by contemporaneous sexually explicit chats directed at the minor. The images appeared to be minor females engaging in sexually explicit conduct, although the identity and ages of the persons depicted could not be determined. In August and September of 2013, Austin emailed the detective in his undercover capacity and said he was going to be in Boise and asked to meet with him and his daughter.
Austin showed up at the predetermined location on October 11, 2013. A detective and a young female police officer waited at the location. Austin drove by several times and sent a text message, “got spooked,” and asked, “Are you a cop?” Austin requested that the two individuals kiss as he drove by so he could see them. Then, Austin stopped and had a brief conversation with the undercover detectives. He said that he was curious and that he may not have enough time tonight, and he wanted to see about meeting tomorrow.
Austin also told the male undercover officer that, “I would feel comfortable if she would just like flash me,” suggesting that the female show her breasts. Austin then said, “Maybe we should try to get together tomorrow.” The detective asked him if he had a hotel room, or where they would go and Austin said he could get a hotel room. He further stated, “I have been kind of curious; I just don’t know if I want to cross that line. So I am just nervous about it.” Austin also said he wanted to see the female clearer to determine if she was the same person he had seen in photos (the undercover detective had previously sent G-rated images of the female detective to Austin, claiming she was his “daughter”), and asked the detectives to turn their dome light on so he could see her. He then said he wanted to go, and drove away.
The charge of attempted transfer of obscene material to a minor is punishable by up to 10 years in prison, a maximum fine of $250,000.00, and up to three years of supervised release.
Sentencing is set for January 12, 2014, before U.S. District Judge Edward J. Lodge at the federal courthouse in Boise.
The case was investigated by the Boise Police Department, which is a member of the Idaho Internet Crimes Against Children (ICAC) Task Force, a statewide coalition of local, state and federal law enforcement and prosecution agencies, focused on apprehending and prosecuting individuals who use the Internet to criminally exploit children. For more information about the Idaho ICAC Task Force and a list of all the participating agencies, visit www.icacidaho.org.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006, by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”