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27 October 2014
Joel R. Levin Returns to U.S. Attorney’s Office to Succeed Retiring First Assistant U.S. Attorney Gary S. ShapiroRead the Press Release
CHICAGO — A veteran federal prosecutor rejoined the U.S. Attorney’s Office today as the second-ranking official and will succeed the office’s longest-serving prosecutor upon his retirement early next month. Zachary T. Fardon, United States Attorney for the Northern District of Illinois, announced the appointment of Joel R. Levin, who was a federal prosecutor for 28 years in Chicago, San Francisco, and Milwaukee, as First Assistant U.S. Attorney, succeeding Gary S. Shapiro, who has held the position for nearly 17 years of his 42-year career with the Justice Department.
Mr. Levin, 60, who was a trial partner with Mr. Fardon and others in the prosecution of former Illinois Gov. George Ryan, left government service in 2008 for private law practice. He returned to the office today as the No. 2 official under Mr. Fardon.
Mr. Shapiro, 68, whose distinguished career over four decades included 16 months as the U.S. Attorney before Mr. Fardon took office a year ago, is retiring effective Nov. 3.
“I am very pleased to welcome Joel, my friend and former trial partner, as a senior member of our team, knowing that we are gaining the benefit of his judgment and counsel in the critically vital role of First Assistant. This office is extremely fortunate to have Joel step into a leadership role and draw upon his breadth of experience, both in this and other U.S. Attorney’s Offices, as well as private practice,” Mr. Fardon said.
“At the same time, we are keenly aware that Gary’s retirement brings an end to his guiding influence, which has been steadfast through the tenure of five U.S. Attorneys, as well as five additional U.S. Attorneys while Gary was with, and led, the independent Organized Crime Strike Force. We in law enforcement, and the citizens of the Northern District of Illinois, owe Gary our deepest gratitude for his four decades of public service and for upholding the highest principles of justice for all. We congratulate him and wish him a wonderful retirement,” Mr. Fardon added.
Mr. Levin said: “It is humbling to replace Gary but I am honored by the opportunity of returning to public service and working with Zach, as well as the entire U.S. Attorney’s Office. I am excited to contribute to protecting our national security, attacking the violence that has plagued our neighborhoods, rooting out public corruption, prosecuting health care fraud and bringing to justice those who attempt to undermine the integrity of our markets and financial system.”
Mr. Shapiro said: “Chicago is blessed with a remarkable federal prosecutor’s office, staffed with talented and dedicated public servants. I’ve been able to investigate and try cases with some of the most creative and committed investigators imaginable, and in an atmosphere in which ‘doing the right thing’ was the only object. I’ve been very lucky to be allowed to work here.”
The First Assistant U.S. Attorney, also known as the FAUSA, plays a major role in supervising all matters, including investigations and prosecutions involving international terrorism, public corruption, corporate fraud, and organized crime, including violent crime and narcotics and gang prosecutions. The FAUSA also has significant responsibility for managing more than 300 employees, including currently 162 Assistant U.S. Attorneys in Chicago and Rockford, serving 18 counties and nine million residents in northern Illinois.
Mr. Levin returns to the U.S. Attorney’s Office from Perkins Coie in Chicago, where he was a member of the firm’s White Collar & Investigations practice since 2008. Mr. Levin was an Assistant U.S. Attorney in Milwaukee from 1980 to 1984, and an AUSA in San Francisco from 1984 to 1997, serving as chief of the Criminal Division his last two years there. In 1997, he joined the U.S. Attorney’s Office in Chicago and held supervisory positions, including chief of the Financial Fraud and Special Prosecutions Section in 2007-08. In addition to the public corruption prosecution of Ryan and other defendants in Operation Safe Road, Mr. Levin handled numerous financial fraud cases and was a member of the trial team in the prosecution of Gustavo “Gino” Colon, the leader of the Latin Kings street gang.
Mr. Levin received four Justice Department Director’s Awards for superior performance between 1990 and 2006; the Federal Bar Association’s Frank McGarr Award in 2002; and the Chicago Crime Commission’s Star of Distinction Award in 2006. He has been an adjunct professor of law at Northwestern University since 2008.
Mr. Levin graduated from Yale University in 1976 and from Harvard Law School in 1979.
Mr. Shapiro served as the United States Attorney from July 1, 2012, to Oct. 23, 2013, between the terms of Mr. Fardon and Patrick J. Fitzgerald. Former U.S. Attorney Scott R. Lassar appointed Mr. Shapiro First Assistant in January 1998, and Mr. Fitzgerald reappointed him in that position after taking office in 2001. In 2007, Mr. Shapiro received a Justice Department Director’s Award for executive achievement.
He joined the Justice Department in 1972 as a trial attorney and, in 1974, he joined the Chicago Strike Force, a field office of the Justice Department’s Organized Crime and Racketeering Section. In 1984, he became Attorney in Charge of the Chicago Strike Force, responsible for supervising all federal organized crime investigations and trials in Illinois, Indiana, and Wisconsin. In 1990, when the Strike Force field offices nationwide were merged into the United States Attorney’s offices, Mr. Shapiro became Chief of the Organized Crime Section of the Chicago U.S. Attorney’s Office. In 1992, he was appointed Chief of the Criminal Division.
Mr. Shapiro brought his considerable experience prosecuting organized crime and the Chicago “Outfit” to bear over the last decade in supervising Operation Family Secrets, which resulted in Frank Calabrese, Sr., a street crew leader, Joey “The Clown” Lombardo, and James Marcello, both Outfit capos, each being sentenced to life in prison for crimes related to more than a dozen mob murders and attempted murders, including some of Chicago’s most notorious Outfit hits, dating back to the 1960s.
Mr. Shapiro also helped oversee the decade-long civil investigation of systemic corruption nationwide in the Laborers’ International Union of North America (LIUNA), which resulted in an unprecedented out-of-court settlement and a top-to-bottom reformation of LIUNA’s election and internal policing structures designed to rid the union of decades of organized crime influence. For this achievement, in 2000, Mr. Shapiro and other members of the team received the Attorney General’s Distinguished Service Award.
In the 1980s, Mr. Shapiro prosecuted Roy Williams, then president of the International Brotherhood of Teamsters; Allen Dorfman, once responsible for the management of the multi-billion-dollar Teamsters Central States Pension Fund; Joey Lombardo; and several pension fund trustees for conspiring to bribe then U.S. Sen. Howard Cannon, of Nevada, to kill proposed Senate legislation to deregulate the trucking industry. Following Williams’ conviction and sentencing, he became the highest-ranking Teamsters official ever to testify against the mobsters who then controlled the Teamsters Union, and his cooperation contributed substantially to the subsequent convictions of the leaders of the organized crime families in Chicago, Kansas City and Cleveland for skimming millions of dollars from Las Vegas casinos.
Mr. Shapiro also prosecuted Harry Aleman, the notorious Chicago mobster and hitman, for operating a violent home invasion crew, and he oversaw the racketeering investigation and trial of Aleman, mob capo Ernest “Rocky” Infelise, and other Chicago Outfit members, as well as the prosecution of then-Cicero Town President Betty Loren Maltese. Mr. Shapiro is also credited with helping turn Robert Cooley, a corrupt former Chicago lawyer, into a government cooperating witness, who testified in several Operation Gambat trials involving organized crime and judicial corruption in the early 1990s.
In the late 1970s, Mr. Shapiro headed the investigation and trials of Charles Nicosia, former mayor of East Chicago, Ind., and other East Chicago public officials and local contractors for significant bribery schemes involving the payment of millions of dollars to obtain and then skim the public works contract to revamp East Chicago’s water treatment and sewer system.
Mr. Shapiro graduated from Rice University in 1968 and from the University of Texas School of Law in 1971.
Jefferson City Man Pleads Guilty to Attempted Sex Trafficking of a ChildRead the Press Release
Project Safe Childhood
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Jefferson City, Mo., man pleaded guilty in federal court today to the attempted sex trafficking of a child as the result of an undercover investigation in which he thought he was meeting a 12-year-old victim for illicit sex.
Jeremy Ryan Bappert, 30, of Jefferson City, pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth to the charge contained in a Nov. 7, 2013, federal indictment.
According to today’s plea agreement, a confidential informant received a text from Bappert and notified the Columbia, Mo., Police Department. Bappert asked the confidential informant to find a young girl, “around 9 to 11 years old,” and asked what $100 would get him. A police detective instructed the informant to send a response to Bappert that a person named “Julie” had a child available.
The police detective assumed the role of “Julie” and had a number of text conversations with Bappert. Bappert asked how old the child would be and said he was looking for “very young.” The undercover detective told Bappert that “Julie’s” daughter was 12 years old.
On July 19, 2013, Bappert sent a text to “Julie” seeking to arrange a meeting. He offered to pay $150 and provide a gram of hash in exchange for meeting at a hotel room in Jefferson City. Bappert, whose driver’s license was suspended, wasn’t able to find a ride on that day. He sent another text on July 24, 2013, saying that he had arranged a ride to Columbia but would have to pay $50 to the driver. He offered to pay “Julie” $100 but promised to pay $200 the next time. He also offered to bring “Julie” a gram of hash.
On July 25, 2013, Bappert agreed to meet at a restaurant in Columbia. When Bappert entered the restaurant, he was arrested. Investigators searched Bappert’s cell phone and recovered 246 images and six videos of child pornography.
Under federal statutes, Bappert is subject to a mandatory minimum sentence of 15 years in federal prison without parole, up to life in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the FBI, the Boone County, Mo., Sheriff’s Department and the Columbia, Mo., Police Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."- Importing Methamphetamine Lands Mexican National 11-Year Prison Term
Government Resolves False Claims Act Allegations Against Advanced Professional Home Health CareRead the Press Release
Company agrees to pay penalty and implement compliance program to resolve claims arising from alterations to physician orders for home healt care services
GRAND RAPIDS, MICHIGAN – Advanced Professional Home Health Care, a home health agency based in Troy, with offices in Grand Rapids and Flint, has entered into an agreement with the U.S. Attorney’s Office for the Western District of Michigan that requires the agency to pay $57,000 and to implement a compliance program relating to its documentation of physician orders for home health services. The settlement resolves allegations that Advanced Professional Home Health Care violated the False Claims Act by altering physician signature dates and other information on certain physician orders for home health care services that the government examined during its investigation.
Under the terms of the settlement agreement, Advanced Professional Home Health Care has agreed to implement and maintain a compliance program for at least two years. This compliance program requires the company to provide training to its staff regarding medical records and documentation requirements, including those relating to signature and retention requirements for home health care orders. In addition, the company is required to hire an independent firm to perform unscheduled and unannounced reviews for each of the next two years to evaluate the company’s physician orders for home health care services and its billings, claims, and reimbursements based on these orders.
This case resulted from a civil lawsuit filed by a whistleblower who worked in one of Advanced Professional Home Health Care’s offices. The lawsuit, known as a qui tam action, was filed under the False Claims Act, which allows private whistleblowers to bring lawsuits on behalf of the United States and receive a share of any recoveries. In this case, the United States intervened in the whistleblower’s lawsuit. The whistleblower will receive a portion of the settlement proceeds, as well as additional amounts from the company for attorney’s fees and costs.
The U.S. Attorney’s Office for the Western District of Michigan investigated this case. Assistant U.S. Attorney Ryan D. Cobb represented the United States.
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Fremont Man Sentenced to 5 years in Prison for Possession with the Intent to Distribute MethamphetamineRead the Press Release
United States Attorney Deborah R. Gilg announced that Rodrigo Delacruz, 27, of Fremont, Nebraska, was sentenced on October 27, 2014, to 5 years in prison by United States District Judge Laurie Smith Camp. Delacruz had previously pled guilty after Fremont police officers responded to a domestic assault call on May 2, 2014. The investigation led to contact with Delacruz at a Fremont gas station. Delacruz was found in possession of over 10 grams of actual methamphetamine , a scale, drug paraphernalia, and $1,797 in his coat.
During a post arrest interview, Delacruz admitted to using and selling methamphetamine in the past. Because Delacruz possessed more than 5 grams of actual methamphetamine, he faced a mandatory minimum sentence of 5 years. After serving his sentence Delacruz will be required to serve a Term of Supervised Release of 4 years.
This case was the result of an investigation by the Fremont Police Department and III CORPS Drug Task Force.
Franklin Man Pleads Guilty to Possessing Child PornRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that a Franklin man pleaded guilty to charges that he downloaded and stored images of child pornography on a hard drive.
Tommie Joseph Beason, 37, of Franklin, La., pleaded guilty before U.S. District Judge Richard T. Haik to one count of possession of child pornography. According to evidence presented at the guilty plea, law enforcement agents detected Beason downloading child pornography. Law enforcement agents then searched Beason’s residence on June 3, 2014 and found 230 images and 88 videos of hardcore child pornography on an external hard drive. The illegal files found included prepubescent child pornography with very young children and sadistic material.
Beason faces 10 years in prison, five years to life of supervised release, and a $250,000 fine. A sentencing date has not been set.
Homeland Security Investigations and the Louisiana State Police conducted the investigation. Assistant U.S. Attorney John Luke Walker is prosecuting the case.
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Attorney’s Office and the U.S. Department of Homeland Security/Homeland Security Investigations/Immigration & Customs Enforcement (ICE) encourage the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) DHS-2ICE. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online at www.ice.gov/exec/forms/hsi-tips/tips.asp. Tips may be submitted anonymously.
Four Men Sentenced to Federal Prison for Robbery of Jewelry CourierRead the Press Release
Four members of a robbery crew that targeted jewelry couriers were sentenced to federal prison for their roles in conspiracy to commit a Hobbs Act robbery and related offenses.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Sally Quillian Yates of the Northern District of Georgia made the announcement.
Honorio Sanchez-Valenica, 46, of Gwinnett, Georgia, John Rodriguez, 37, of Los Angeles, Ali Alejandro Godoy-Maximo, 25, of Los Angeles, and Michael Alejandro Tovar-Vargas, 37, of Los Angeles, were sentenced to serve 137 months in prison, 63 months in prison, 68 months in prison and 87 months in prison respectively for their involvement in the Jan. 31, 2013, robbery of a jewelry courier at a gas station in Buford, Georgia. In addition to the prison sentences, the defendants were ordered to pay $122,398 in restitution. U.S. District Judge Steve C. Jones of the Northern District of Georgia imposed the sentences. Jose Vicente Ramirez-Rodriguez, 38, of Los Angeles, also pleaded guilty for his role in the robbery and will be sentenced on Dec. 10, 2014.
Court records show that on Jan. 31, 2013, the defendants robbed a jewelry courier while he was putting gas in his car. Two of the defendants approached the victim, one restrained him with a knife, and the other smashed the car’s window and took a briefcase containing over $125,000 in assorted jewelry.
In his plea agreement, Sanchez-Valencia also admitted to his involvement in a similar robbery in Dallas on Aug. 27, 2012. In that robbery, Sanchez-Valencia conducted surveillance of two jewelry couriers at a restaurant. Within minutes after Sanchez-Valencia left, three masked men with a gun came into the restaurant and robbed the jewelry couriers, taking two briefcases containing over $500,000 in jewelry. Some of that jewelry was later recovered by law enforcement during the execution of a search warrant at a storage unit rented by Sanchez-Valencia.
This case was investigated by the FBI, Immigration and Customs Enforcement, and the Gwinnett County Police Department, with assistance from the Dallas Police Department. This case is being prosecuted by Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Kim Dammers of the Northern District of Georgia.
Former Technology Director for City of Lenexa Pleads Guilty to Wire FraudRead the Press Release
KANSAS CITY, KAN. - The former technology director for the City of Lenexa pleaded guilty Monday to a federal wire fraud charge, U.S. Attorney Barry Grissom said.
Andrew L. Davey, 44, Overland Park, Kan., pleaded guilty to one count of wire fraud. In his plea, he admitted the crime occurred from 2010 to 2012 while he was the director of technology for the City of Lenexa. After he left the city to take another job, city officials discovered he had purchased numerous electronic devices, such as iPads, computers, digital cameras and televisions which he gave to friends, traded for other merchandise or services, or sold on eBay and kept the proceeds.
For instance, he gave iPads to members of his church, and traded an iPad to another city employee for wheels and tires. The other employee was not aware the iPad belonged to the city. He gave his mother a 50-inch television and iPad that were purchased with city funds. He told her the equipment was obsolete and the city no longer needed it.
Sentencing is set for Jan. 20. Both parties have agreed to recommend a sentence of 12 months and a day in prison and restitution of approximately $103,677. Grissom commended the Lenexa Police Department, the FBI and Assistant U.S. Attorney Chris Oakley for their work on the case.
Former Rowan County Resident Found Guilty of Federal Fraud ChargesRead the Press Release
GREENSBORO, N.C. – Sandy Wade Parsons was found guilty of forty-three federal fraud charges, announced Ripley Rand, United States Attorney for the Middle District of North Carolina. He will be sentenced by United States District Judge Thomas D. Schroeder in Winston-Salem on February 18, 2015.
Sandy Parsons, 40, was found guilty of one count of conspiracy to defraud the government, which carries a maximum sentence of five years in prison and a $250,000 fine; one count of aggravated identity theft, which carries a mandatory sentence of two years, consecutive to any other sentence, and a $250,000 fine; one count of false statement to a government agency, which carries a maximum sentence of two years in prison and a $250,000 fine; twenty counts of theft of government funds which carries a maximum sentence of five years in prison and a $250,000 fine; and twenty counts of mail fraud which carries a maximum sentence of twenty years in prison and a $250,000 fine.
Casey Stone Parsons, Sandy Parsons's co-defendant, pleaded guilty on October 1, 2014. Her sentencing is scheduled for February 10, 2015.
The Casey and Sandy Parsons case was investigated by the Rowan County Sheriff’s Office, the Federal Bureau of Investigation, Internal Revenue Service, Criminal Investigations, and the Social Security Administration. The Casey Parsons and Sandy Parsons cases are being prosecuted by Assistant United States Attorney Anand Ramaswamy.
Former President and Owner of Rehabilitation Clinic Pleaded Guilty in Health Care Fraud and Money Laundering SchemeRead the Press Release
The former president and owner of a rehabilitation therapy services clinic pleaded guilty in Tampa today to health care fraud and money laundering charges.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney A. Lee Bentley III of the Middle District of Florida, Acting Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office and Special Agent in Charge Paul Wysopal of the FBI’s Tampa Field Office made the announcement.
Laura Leyva, 45, of Miami Lakes, Florida, pleaded guilty in the U.S. District Court for the Middle District of Florida to conspiracy to commit health care fraud and conspiracy to commit money laundering. Her sentencing date will be set by the court.
According statements made in court, from June 2007 through November 2009, Leyva was the president and owner of American Rehab of Kissimmee Inc., aka American Rehab of South Florida Inc., a comprehensive outpatient rehabilitation facility located in Kissimmee, Florida, and Hialeah, Florida. During that time period, American Rehab submitted approximately $2,543,368 in false and fraudulent claims for reimbursement to Medicare seeking payment for rehabilitation therapy services that were not legitimately prescribed and not provided. Medicare paid approximately $1,074,278 on those claims. Co-conspirators falsified and forged medical records were used to give the appearance that therapy services were rendered to Medicare beneficiaries at American Rehab when, in fact, they were not. Leyva admitted that she destroyed falsified medical records in order to conceal evidence of the health care fraud and money laundering scheme.
This 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 Middle District of Florida. This case is being prosecuted by Trial Attorney Christopher J. Hunter 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.
Former Political Operative Convicted in Million Dollar Fraud SchemeRead the Press Release
BATON ROUGE, LA – United States Attorney Walt Green announced today that RAYMOND CHRISTOPHER REGGIE, age 52, of Mandeville, Louisiana, pled guilty this morning before U.S. District Judge Shelly D. Dick to all five counts of mail fraud charged against him. REGGIE had been scheduled for trial today and pled guilty without the benefit of a plea agreement. REGGIE faces incarceration, fines, restitution orders, and the forfeiture of assets. His sentencing date has not yet been set.
This morning, REGGIE pled guilty to a Superseding Indictment which charged him with engaging in a scheme to defraud various car dealerships in southeast Louisiana from January 2009 through July 2012. During the relevant period, REGGIE owned and operated Nexlevel Group, an advertising firm that purchased and managed advertising for the car dealerships. REGGIE submitted fictitious advertising expenses for payment by the dealerships, falsely representing that such expenses were actually incurred. Once the dealerships issued payments for the bogus expenses, REGGIE diverted the payments to his personal use and enjoyment. As a result of REGGIE’S submission of fictitious advertising expenses for payment, the car dealerships issued 138 checks totaling approximately $1,217,657.36 for advertising services which had not been received by the dealerships. REGGIE diverted all of the fraudulently obtained funds to a bank account which he controlled.
According to government filings in the case, REGGIE also allegedly engaged in tax and bank fraud during the relevant period. If proven, such activities could be considered at his sentencing in this matter.
United States Attorney Green stated: “Being articulate, smart, charming, and connected are often characteristics seen in successful con artists, like this defendant. The audacity of his fraud schemes is only outdone by his desperate attempts to deflect blame to others. This defendant only accepted responsibility after realizing that his efforts to smear and blame others would not save him from the harsh reality of the law and facts. I greatly appreciate the tremendous work of the prosecutors and agents who handled this matter. My office will continue to work with IRS-CI, the Fraud Section, and our other partners to ensure that such fraudsters are brought to justice.”
Acting Special Agent-in-Charge Jerome R. McDuffie of the Internal Revenue Service, Criminal Investigation, stated: “We are pleased with the guilty pleas entered today by Raymond Reggie. IRS-CI and the U. S. Attorney’s office will not ignore illegal business practices and remain fully committed to prosecution of those who engage in these practices for personal gain.”
This matter is being handled by the U.S. Attorney’s Office for the Middle District of Louisiana, the Criminal Fraud Section of the U.S. Department of Justice, and the Criminal Investigations Division of the Internal Revenue Service. It is being prosecuted by Assistant U.S. Attorneys Rene Salomon and Ryan Crosswell and Senior Litigation Counsel Jack Patrick of the Criminal Fraud Section.
Former Orange County Teacher Named in Federal Sex Tourism CaseRead the Press Release
SANTA ANA, California – A former teacher with the Santa Ana School District has been charged with traveling to the Philippines to engage in sex with an underage girl and producing a video of the encounter.
Robert Ruben Ornelas, 63, of Santa Ana, was taken into federal custody Friday afternoon after being named in a criminal complaint filed in United States District Court.
The three-count complaint accuses the onetime school teacher and girl’s softball coach of engaging in sexual conduct in a foreign place, producing child pornography, and possessing child pornography.
Ornelas also faces state charges of lewd acts with a child, but the defendant was turned over to federal custody on Friday after the new complaint was filed.
The federal complaint details allegations that Ornelas traveled in March 2012 to the Philippines, where he engaged in sexual conduct with a girl who was approximately 14. According to the affidavit in the case, Ornelas took video of his encounter with the girl and brought the images with him when he returned the U.S. the following month. The third count in the complaint accuses the defendant of knowingly possessing the child pornography.
While Ornelas is charged with conduct related to one victim, the affidavit discusses evidence linking him to the sexual molestation of additional victims.
The federal case is based on information and images found on Orenelas’ computer and digital media seized by investigators when they executed a search warrant at his residence. On the seized media, investigators discovered communications between Ornelas and several underage girls in the Philippines dating back to 2007. Investigators also found numerous sexually explicit photos and videos of underage girls.
The Orange County District Attorney’s Office previously charged Ornelas with two counts of lewd conduct with a child for allegedly molesting a relative. While those charges remain pending at this time, Ornelas was transferred to the custody of the U.S. Marshals Service Friday afternoon to facilitate the federal prosecution.
At his initial court appearance Friday afternoon in federal court, Ornelas was ordered held without bond and was ordered to appear at an arraignment on November 10.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The three charges in the criminal complaint carry a cumulative maximum sentence of 80 years in federal prison. The charge of producing child pornography carries a mandatory minimum sentence of 15 years.
The federal charges are the product of an ongoing probe by the Orange County Child Exploitation Task Force, which includes special agents from the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Newport Beach Police Department and the Orange County Sheriff’s Department.
Release No. 14-141
Former IRS Employee Sentenced for Tax Fraud ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former employee of the Internal Revenue Service was sentenced in federal court today for leading a conspiracy to steal taxpayers’ identity information in order to receive fraudulent tax refunds.
Taylor S. Knight, 33, of Kansas City, Mo., was sentenced by U.S. District Judge Howard F. Sachs to two years in federal prison without parole. The court also ordered Knight to pay $5,000 in restitution to the IRS.
Knight, who pleaded guilty on July 25, 2014, worked as an employee of the IRS at the office at 333 W. Pershing Rd., Kansas City, from March 2009 to January 2012. Knight admitted that she abused her position of trust when she inappropriately accessed the information of three taxpayers as part of a conspiracy to defraud the United States by using the stolen identity information to fraudulently induce the IRS into issuing tax refund payments.
On Sept. 30, 2011, Knight used the information from two of the victim taxpayers (who were married) to submit a bogus online application for three prepaid debit cards. These debit cards were issued and mailed to the residence of the grandmother of her boyfriend and co-conspirator, Michael J. Moore, 28, of Kansas City, Mo. Moore monitored the mail sent to his grandmother’s address and retrieved the three prepaid debit cards. Knight and Moore agreed to use his grandmother’s address rather than use an address associated with Knight in an effort to conceal her role in this conspiracy to defraud the United States. Moore has pleaded guilty to his role in the conspiracy and awaits sentencing.
On Oct. 17, 2011, Knight submitted a 2010 tax return for the same two married victim taxpayers. The IRS approved a $46,572 refund, of which $5,000 was deposited on a debit card that had been obtained by Knight. The IRS attempted to deposit the remaining $41,572 refund on the other debit cards obtained by Knight, but the receiving banks rejected the deposits.
Moore telephoned the IRS on Dec. 7, 2011, and falsely claimed to be the victim taxpayer. He provided the IRS representative with pertinent personal identification information for both victims and requested the IRS to send the remaining tax refund to a new address located in Independence, Mo. He identified this address because it was his former residence and he knew it was unoccupied.
In August 2011, the victim taxpayers filed legitimate amended tax returns. A $46,734 refund check was sent to the Independence address and was obtained by Moore and Knight. Knight agreed to pay $500 to co-defendant Michael Stalcup, 43, of Farley, Mo., to help her cash the refund check. Knight obtained false identification documents – including Social Security cards, credit cards and driver’s licenses – so that they could assume the identity of the victim taxpayers. Knight and Stalcup attempted to cash the stolen Treasury check at a local convenience store. The clerk was concerned about cashing such a large check and he went to his immediate supervisor for guidance. Stalcup told the clerk and his supervisor that, if they would cash the check, they could keep $6,000 of the proceeds. The supervisor decided not to cash the check, but he told them to come back later.
When Knight and Stalcup returned, the owner reported the incident to law enforcement. Police officers arrived about 10 minutes later. When Stalcup saw the police officers he attempted to flee, but was apprehended; both Knight and Stalcup were arrested. Stalcup has pleaded guilty to his role in the conspiracy and awaits sentencing.
Knight also admitted that she submitted a bogus online application for a prepaid debit card in the name of another victim taxpayer. The debit card was approved and mailed to an address in Oak Grove, Mo.; this debit card was never used. Knight admitted that she submitted this false online application to test whether her scheme to defraud the IRS was viable.
This case is being prosecuted by Special Assistant U.S. Attorney Trey Alford. It was investigated by the Treasury Inspector General for Tax Administration.Former Boeing Procurement Officer and Two Subcontractors Sentenced on Federal Fraud ChargesRead the Press Release
St. Louis, MO – Former Boeing Procurement Officer DEON ANDERSON was sentenced to 20 months in prison in connection with a bribery/kickback scheme involving Boeing military aircraft parts, as well as structuring currency transactions to conceal his receipt of the cash bribes. Co-defendants WILLIAM P. BOOZER, Hacienda Heights, California, was sentenced to 18 months in prison and fined $10,000; and ROBERT DIAZ, JR., Alta Loma, California, was sentenced to 15 months in prison and was fined $2,000.
Boeing Company Defense Space and Security Division is a defense contractor providing military- style aircraft to the United States Department of Defense and the United States armed services, with offices and procurement operations located in St. Louis. Deon Anderson was a Procurement Officer for Boeing, residing in the St. Louis area.
J. L. Manufacturing of Everett, Washington, is an aerospace job machine shop specializing in hard metals, with the capability of producing small to medium sized complex parts of ferrous and non-ferrous materials, and was a sub-contractor to Boeing on numerous United States government contracts. Jeffrey Lavelle, owner and operator of J. L. Manufacturing, directed the day-to-day operations of the company, and oversaw all financial aspects of the company.Inland Empire and Associates, Inc., Las Vegas, Nevada, is engaged in consulting to defense aircraft manufacturers and parts suppliers, including consulting for J. L. Manufacturing. Robert Diaz, Jr. was the owner and operator of Inland Empire, and personally consulted to J. L. Manufacturing and Jeffrey Lavelle relative to numerous Boeing sub-contracts.
Globe Dynamics International, Inc., Santa Ana, California, is a leader in producing small to large, close tolerance precision machined parts and the assembly of complex components. Globe Dynamics was a sub-contractor to Boeing on numerous United States government contracts. William Boozer, owner and operator of Globe Dynamics, directed the day-to-day operations of the company, including the submission of contract bids.
According to court documents and statements made in court, between November 2009 and February 2013, Boozer requested the Procurement Officer for Boeing, Deon Anderson, provide him with non-public competitor bid information and historical price information in connection with Boeing military aircraft part purchase order requests for quotes. They communicated by telephone and e-mail between California and St. Louis in code on a regular basis, Boozer frequently requesting “Isle 5," a coded reference to a “price check on aisle 5," understood by Anderson to be a request for historical price information and competitor bid information. Anderson gave the information to Boozer to be used in preparing and submitting bids on behalf of Globe Dynamics in response to approximately sixteen different Boeing requests for quotes relative to those various purchase orders, in exchange for cash payments. Of the sixteen bids Globe Dynamics was awarded seven purchase orders to supply United States military aircraft parts to Boeing totaling in excess of $1,500,000. The net benefit to Globe Dynamics on those seven purchase orders was approximately $116,339.
Beginning in May 2011 and continuing through April 2013, Deon Anderson provided J.L. Manufacturing, through Lavelle and Diaz, non-public competitor bid information and historical price information in connection with one and more Boeing military aircraft part purchase order requests for quotes. Lavelle used that information in preparing and submitting bids on behalf of J.L. Manufacturing to Boeing for approximately nine different Boeing requests for quotes relative to those various purchase orders. Of those nine, J.L. Manufacturing was awarded seven purchase orders to supply United States military aircraft parts to Boeing totaling approximately $2,052,746. In exchange for that information, they made cash payments to Anderson in St. Louis and in California.
Relative to the cash bribe payments he received, on more than one occasion Deon Anderson structured cash deposits into his personal checking account to conceal his bribe scheme.
Deon Anderson, St. Louis, Missouri, pled guilty to three felony counts of mail fraud, one felony count of wire fraud, and one felony count of currency structuring in June. Co-defendants William P. Boozer, Hacienda Heights, California, and Robert Diaz, Jr., Alta Loma, California, also previously pled guilty to related charges. The defendants appeared today in St. Louis for sentencing before United States District Judge Henry Autrey.
Co-defendant Jeffrey Lavelle, Mukilteo, Washington, is scheduled for sentencing November 17, 2014.
This case was investigated by Defense Criminal Investigative Service, Federal Bureau of Investigation, NASA-Office of Inspector General, Air Force Office of Special Investigations, Navy Criminal Investigative Service and Internal Revenue Service-Criminal Investigations. Assistant United States Attorney Hal Goldsmith handled the case for the U.S. Attorney’s Office.
Former American Airlines Pilot Sentenced to 21 Years for Child Pornography OffensesRead the Press Release
Tampa, FL – U.S. District Judge Steven D. Merryday has sentenced Donald Edwin Gallagher, Jr. (52, St. Petersburg) to 21 years in federal prison for production, distribution, and possession of child pornography. The court also ordered Gallagher to forfeit computers and electronic media that he had used to commit the offenses, and to pay restitution to the victims of his offenses. He was found guilty by a federal jury on March 13, 2014.
According to court documents, in January 2013, an undercover detective with the St. Petersburg Police Department downloaded approximately 15 files depicting child pornography from an Internet protocol address that traced back to Gallagher’s residence. Based upon an investigation into the origin of these images, the FBI and other local law enforcement agencies executed a federal search warrant at the residence. During the search, agents located and seized a laptop computer belonging to Gallagher, as well as hard drives and other digital media on which agents located thousands of images and hundreds of videos depicting child pornography. Upon further investigation and review of Gallagher’s digital media, law enforcement officials determined that Gallagher had used two minor victims to produce images and videos of them engaged in sexually explicit conduct.
This case was investigated by the FBI and members of the FBI’s Child Exploitation Task Force, including the Largo Police Department and the St. Petersburg Police Department. It was prosecuted by Assistant United States Attorneys Josephine W. Thomas and Stacie B. Harris.
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.
Florida Couple Plead Guilty to Federal Drug ChargesRead the Press Release
Husband also pleads guilty in money laundering conspiracy
Charleston, W.Va. – United States Attorney Booth Goodwin announced that Lester Taylor, 45, and Ali Weinberg, 32, both of Daytona Beach, Florida, entered guilty pleas today in federal court in Charleston to conspiracy to distribute oxycodone. Taylor also pleaded guilty to his role in a money laundering conspiracy.
Beginning in January 2010 and continuing until May 2014, Taylor acquired oxycodone pills in Florida and had them transported to Lincoln County, West Virginia, for distribution. Taylor shipped the pills via a common carrier, made personal trips from Florida to West Virginia, and used associates to carry the drugs from Florida to West Virginia. Taylor supplied pills to his associates for distribution, and once the pills were sold, the associates deposited the drug proceeds in Taylor’s bank accounts in Barboursville and Huntington. From January 2010 through May 2014, more than $700,000 in drug proceeds were deposited into Taylor’s bank accounts. Taylor retrieved the cash from Florida through ATM withdrawals, counter withdrawals or cashed checks made payable to him or his associates.
Ali Weinberg, Taylor’s fiancée, admitted that from approximately February 2013 through May 2014, she and Taylor obtained monthly prescriptions for oxycodone and hydromophone from doctors in Florida. They took the Florida prescriptions to A+ Pharmacy in Barboursville to be filled. The pills from these prescriptions were later distributed in Lincoln County. Weinberg admitted that from February 2013 through May 2014, she and Taylor obtained approximately 4,772 oxycodone 30 mg pills, approximately 630 hydromorphone 4 mg pills, and approximately 1,080 hydromorphone 8 mg pills through this scheme.
Taylor and Weinberg are scheduled to be sentenced on January 27, 2015, by United States District Court Judge John T. Copenhaver Jr.
The Drug Enforcement Administration, the Internal Revenue Service, and the West Virginia State Police conducted the investigation. Assistant United States Attorney Monica D. Coleman is in charge of the prosecution.
This case was brought as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of heroin and prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiates and heroin in communities across the Southern District.
Fishing Vessel Master Pleads Guilty and Is Sentenced for Sleeping While Vessel UnderwayRead the Press Release
HONOLULU – Kevin Lam, age 43, a resident of Oahu, pled guilty to eight charges of operating a commercial fishing vessel in a grossly negligent manner on Friday, October 24, and received a sentence of one-year probation and 60 hours of community service from Magistrate Judge Barry M. Kurren. The offenses occurred from September 7 through 14, 2011, one on each day. During the probationary period, Lam may not serve as Master or Person in Charge of any commercial vessel. Further, in order to serve as Master of any commercial vessel in the future, Defendant Lam must attend Coast Guard approved training.
Florence T. Nakakuni, United States Attorney for Hawaii, said that according to information produced in court, on multiple occasions, Lam, while Master of the commercial fishing vessel, the Lady Ann Margaret, slept for extended periods of time while the vessel was underway, with no other lookout or helmsman on watch. The prosecution alleged that Lam’s behavior risked the lives not only of his crew and a National Oceanic and Atmospheric Administration observer on board, but also other mariners at sea.
Judge Kurren remarked to Lam, "You are pretty fortunate that this didn't result in some catastrophe." Captain Shannon Gilreath, Commander, U.S. Coast Guard Sector Honolulu, supported the observation, saying “Mariners who intentionally sleep while on watch or abandon the wheelhouse after setting the helm on autopilot put the lives of their crews and other mariners at risk.”
The Coast Guard previously assessed a civil penalty of $2,500 against Lam within the year preceding the charged offenses for negligent operation of his vessel because he was asleep with no other watch. During that incident Lam’s vessel actually collided with another vessel.
This case was investigated by the Coast Guard Investigating Service (CGIS). Assistant United States Attorney Thomas J. Brady and Special Assistant United States Attorney Angela A. Cook prosecuted this case.
Federal Inmate Sentenced for Possessing A KnifeRead the Press Release
Bluefield, W.Va. – United States Attorney Booth Goodwin announced today that Senior United States District Judge David A. Faber sentenced a federal inmate for possessing a weapon in the Federal Correctional Institution at McDowell. Antonio Uribe Quintero, 36, was sentenced to 30 additional months in prison. Quintero pled guilty on June 23, 2014, admitting that on March 7, 2014, he possessed a hand-crafted knife in the prison. The sentence will run consecutively to the ten-year sentence Quintero is serving for illegally reentering the United States after having been deported and for violating the terms of his supervised release in a prior case. The case was investigated by the Federal Bureau of Prisons and the prosecution was handled by Assistant United States Attorney John File.
Fairmont Man Sentenced to 41 Months in Prison for Cocaine DistributionRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – A Fairmont, West Virginia man was sentenced to 41 months in prison for distributing crack cocaine, United States Attorney William J. Ihlenfeld, II, announced today.
Desean Aaron, 24, pled guilty in April 2014 to one count of “Aiding and Abetting Distribution of Cocaine Base” after an investigation by the Three Rivers Drug Task Force. Aaron, who is currently incarcerated at the North Central Regional Jail in Greenwood, West Virginia, will be given credit for time served since February 2014.
Assistant U.S. Attorney Zelda Wesley prosecuted the case on behalf of the government.
U.S. District Judge Irene M. Keeley presided.
Ex-San Bernardino Police Officer Sentenced to 25 Years in Prison in Civil Rights Case Stemming from Sexual Assaults of ProstitutesRead the Press Release
RIVERSIDE, California – A former officer with the San Bernardino Police Department was sentenced today to 300 months in federal prison for violating the civil rights charges of two women he forced perform sex acts while he was in uniform.
Jose Jesus Perez, 47, of Menifee, received the sentence from United States District Judge Virginia A. Phillips.
Perez was found guilty by a federal jury in May of two felony counts and one misdemeanor count of deprivation of rights under color of law for sexually assaulting two victims in 2011. The jury determined that both felony offenses involved aggravated sexual abuse, and that one attack involved a kidnapping and bodily injury.
The evidence presented during a week-long trial showed that Perez groped a woman and coerced her to perform oral sex on him by using force against her on April 25, 2011.
The jury also found that Perez had unlawful sexual intercourse with another woman on two occasions in August 2011.
The testimony at trial indicated that the two victims, who worked as prostitutes in the City of San Bernardino, engaged in the sex acts demanded by Perez out of fear of arrest because he was a police officer. One victim testified that he forced her to perform oral sex on him in his patrol car, and the other victim testified that he forced her to have intercourse with him next to his patrol car in a vacant lot and again in motel rooms.
A third woman testified that Perez had aggressively solicited sex from her while he was in uniform when he found her stranded in San Bernardino. The three women each testified that they feared repercussions if they did not comply with Perez’s demands.
Perez “has a long and escalating history of inappropriate sexual behavior towards women,” prosecutors wrote in a sentencing brief that noted a lengthy history of misconduct toward women. “Although defendant is no longer a police officer and is no longer able to abuse a position of public authority to his own criminal ends, he remains the same person — someone who lacks basic respect for the humanity and autonomy of women. Unfortunately, sexual predators in this county do not lack for means of carrying out their crimes, and a badge is unnecessary for their purposes. Defendant poses a greater danger than most sexual predators; although he lacks a badge, he retains his police tactical training and knowledge of police investigative methods. Defendant remains a threat to the public regardless of his employment.”
Perez became a police officer in 1997, when he was hired by the Los Angeles Police Department. Perez worked for the LAPD until 2008, when he went to work for the San Bernardino Police Department. Perez was released from employment by SBPD in December 2012. Perez has been in custody since he was arrested in September 2013 in Texas.
The investigation into Perez was conducted by the San Bernardino Police Department and the Federal Bureau of Investigation.
Release No. 14-140
Detroit Man Sentenced to More Than Three Years for Role in Huntington Heroin ConspiracyRead the Press Release
HUNTINGTON, W.Va. – A Detroit man was sentenced today for his participation in a conspiracy to distribute heroin in Huntington, announced U.S. Attorney Booth Goodwin. Jakaiser Wesley Jackson, 21, who previously pleaded guilty in July of 2014 to conspiring to distribute 100 grams or more of heroin, was sentenced to three years and one month in federal prison. United States Chief District Judge Robert C. Chambers imposed today’s sentence.
From January 2014 to April 2, 2014, Jackson conspired to distribute heroin with others, including Christopher Lamarr-Shawn Harris. Harris recruited Jackson and other co-conspirators to distribute heroin, mostly in the West Huntington area, and frequently arranged for the transportation of heroin from Detroit, Michigan, to Huntington. Harris and Jackson used multiple locations to store, prepare and distribute heroin, including the Red Roof Inn Hotel on Route 60 in Huntington and multiple residences in West Huntington. Harris and Jackson also recruited local residents in West Huntington to assist in heroin distributions.
Harris was arrested on December 31, 2013, when officers with the Huntington Police Department’s Special Investigations Unit executed a search warrant at an apartment at 1416 Jefferson Avenue in West Huntington. Officers seized more than 400 grams of heroin and $12,349 in cash during the search. Officers also arrested Harris, Denzell Lamar Bunkley, and Steven Edward Lewis, who were inside the apartment.
Harris was arrested again on February 20, 2014, in Ohio by the Ohio State Highway Patrol while traveling from Huntington to Detroit. During his arrest, officers seized another $24,930 from Harris.
Harris was arrested for a third time on April 2, 2014, after officers received information that he was selling heroin from the Red Roof Inn in Huntington. Officers executed a search warrant for two rooms at the hotel and seized approximately 192 grams of heroin and $3,000 in cash. Harris and Jackson had arranged to bring the heroin from Detroit to Huntington just days prior to the search. Jackson was also involved, along with Harris, in transporting heroin from Detroit on other occasions during the conspiracy.Jackson was the fifth defendant to be sentenced in connection with this heroin conspiracy. Brandon S. Keaton was sentenced to 15 months’ imprisonment in July 2014. Harris was sentenced to 147 months’ imprisonment and Bunkley was sentenced to 37 months’ imprisonment, both on October 6, 2014. Lewis was sentenced to 60 months’ imprisonment on October 13, 2014.
The Huntington Police Department Special Investigations Unit, the West Virginia State Police, the United States Drug Enforcement Administration, and the United States Marshals Service all participated in the investigation. Assistant United States Attorney Joseph F. Adams handled the prosecution.
This case was brought as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of heroin and prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiates and heroin in communities across the Southern District.
Detroit Man Sentenced for Clean Air Act CrimesRead the Press Release
A Detroit man was sentenced to 27 months in federal prison on October 24, 2014, for criminal violations of the Clean Air Act, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement was Randall Ashe, Special Agent in Charge of the U.S. Environmental Protection Agency’s criminal enforcement program in Michigan.
U.S. District Judge Robert H. Cleland imposed sentence on Terry Williams, 49, following Williams’ guilty plea to violating the Clean Air Act in connection with the dismantling and scrapping of the former AMC headquarters on Plymouth Road in Detroit. The work disturbed asbestos-containing materials and released ozone depleting substances.
In 2012, Williams hired crews to remove salvageable metal from the facility, which included the dismantling of air conditioning units charged with R-22 refrigerant, an ozone-depleting substance. Williams’ crews dismantled 50 to 70 of these air conditioning units, including many large rooftop units, causing releases of R-22 refrigerant into the environment.
Williams also arranged for other fixtures on the property to be scrapped, ordering crews to cut and remove pipes he knew to be insulated with regulated asbestos- containing insulation. These insulated pipes were removed without following the work practice requirements under the federal asbestos regulations, including failing to properly wet the asbestos-containing materials to prevent asbestos fibers from becoming airborne and failing to secure the materials for proper disposal.
“Exposure to asbestos can lead to serious diseases, and the defendant’s unsafe asbestos removal practices put the health of his workers and the public at risk,” said Ashe. “This defendant also chose to ignore the hazards of releasing ozone depleting substances, potentially causing harm to both human health and the environment. This sentence demonstrates that those who knowingly engage in such conduct will be prosecuted to the fullest extent of the law."
“Individuals who disregard environmental laws create real harm by polluting the air we all breathe,” McQuade said. “Their conduct not only risks the health of people living near the facility, but jeopardizes air quality in Michigan for future generations. We hope that prosecutions like this one will deter others from engaging in similar violations.”
The case was prosecuted by the U.S. Attorney’s Office in the Eastern District of Michigan by Assistant U.S. Attorney Jennifer Gorland and Special Assistant United States Attorney David Mucha. The case was investigated by agents of the Environmental Protection Agency’s Criminal Investigation Division.Court of Appeals Affirm Convictions in Case Involving Watermark FinancialRead the Press Release
BUFFALO, N.Y. — The U.S. Attorney’s Office announced today that the United States Court of Appeals for the Second Circuit has affirmed the convictions of Ian Campbell Gent and James F. Lagona. The defendants were convicted of conspiracy and mail fraud by a federal jury in February 2011. Lagona was sentenced to 11 years in prison; Gent was sentenced to eight years. Gent and Lagona appealed their convictions and sentences claiming in part that there was insufficient evidence that they had intent to defraud and knowledge of the scheme.
On appeal the government was represented by Assistant U.S. Attorney Joseph J. Karaszewski. The trial was handled by Assistant U.S. Attorney Gretchen L. Wylegala.
Gent and Lagona assisted in an investment fraud scheme in connection with financial service firms M-One Financial and Watermark Financial Services Group. The firms were owned by Guy W. Gane who was convicted in December 2010 and sentenced to 13 years in prison. The firms operated out of 2425 Sweet Home Road in Amherst, NY until May 2008 when federal agents executed a search warrant and the SEC filed a civil action in federal court. The scheme involved promising high returns to investors on “debenture” investments or “promissory notes.”
The Court found that Gent and Lagona had intent to defraud and knowledge of Watermark’s illegal scheme. Specifically, Lagona actively prepared new debentures even after becoming aware that payments to investors of previously issued debentures were due and could not be paid, as promised, with profit; attended at least one sales meeting in which he participated in procuring an investment based on false representations; signed letters assuring investors that their non-existent investments were safe; and did these things at times when he was aware that no investments and no income were being generated.
The Court further stated that when he was hired, Gent knew that the company was “bleeding money” and was paying new investors back with prior investor money. While working for Gane, Gent encouraged the sale of debentures or promissory notes to pay off earlier investors. Lagona falsely assured investors that their investments were safe. Losses suffered by the investors totaled over $6,000,000.
The Court also affirmed Lagona’s sentence but sent Gent’s sentence back for the U.S. District Court in Buffalo to make additional findings regarding a sentencing guideline issue.Convicted Sex Offender Sentenced to Federal Prison for Violating the Sex Offender Registration Notification ActRead the Press Release
PROVIDENCE, R.I. – David Torres, 43, of Fall River, Mass., was sentenced on Friday to 27 months in federal prison for failing to register as a sex offender, announced United States Attorney Peter F. Neronha and United States Marshal Jamie A. Hainsworth.
At sentencing, U.S. District Court Judge Mary M. Lisi also ordered Torres to serve 8 years supervised release upon completion of his prison term. Torres pleaded guilty on June 9, 2014, to one count of failure to register under the Sex Offender Registration and Notification Act (SORNA).
According to information presented to the court, in August 2013, as required by SORNA, Torres registered his residential address in Central Falls with the Central Falls Police Department. However, an investigation by the U.S. Marshals Service revealed that Torres was traveling to his place of employment in Westport, Mass., which he failed to disclose as required by SORNA.
According to court records, Torres was convicted in Bristol County, Mass., Superior Court in March 1992 of indecent assault and battery of a child over the age of 14. He was sentenced to three to five years imprisonment. Torres is also awaiting sentencing on an unrelated matter in Superior Court in Newport, Rhode Island.
The case was prosecuted by Assistant U.S. Attorney Richard W. Rose.
The Central Falls and Fall River Police Departments assisted the U.S. Marshals Service in the investigation of this matter.###
To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Columbus Man Ordered to Pay Nearly $450,000 for Tax ViolationsRead the Press Release
A Columbus man was ordered to pay nearly $450,000 in restitution and fines related to a tax conviction, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
David S. Owens aka D. Scott Owens, age 62, was ordered to pay $394,542 in restitution and fined $50,000. He was sentenced to six months of home confinement and three years of supervised released.
Owens previously pleaded guilty to one count of failure to account for an pay over employment tax.
"Business owners have a significant responsibility to collect and turn over all IRS withholding taxes,” Enstrom said. “Those who fail to do so to gain a competitive advantage that will not be tolerated and will be prosecuted to the fullest extent of the law.”
Between 2008 and 2009, Owens, through his Canfield, Ohio-based company, Advetech, Inc., made payroll tax withholdings from his employees’ paychecks, but failed to pay over those withholdings to the IRS in the approximate amount of $570,000, according to court documents.
Rather, during this period, Owens transferred hundreds of thousands of Advetech, Inc. dollars to at least two other Canfield companies owned and operated by Owens, including Brixton Development Corporation and Preferred Communities, Inc., from where he took hundreds of thousands of dollars in income for himself, according to the information.
The information was filed by Assistant U.S. Attorney Christos N. Georgalis after an investigation by agents of the the Internal Revenue Service and the U.S. Department of Labor, Employee Benefits Security Administration.
Clarkson Construction Employee Pleads Guilty to $300,000 Mail Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former director of information technology for Clarkson Construction Company pleaded guilty in federal court today to a mail fraud scheme in which he embezzled nearly $300,000 from the company.
Rodney J. Tatum, 42, of Kansas City, Mo., pleaded guilty before U.S. Magistrate Judge Robert E. Larsen to one count of mail fraud.
Clarkson Construction Company is one of the Midwest’s largest construction companies. Clarkson specializes in large-scale construction projects such as highways, interstates, bridges, and sport facilities. Clarkson employs approximately 130 full-time employees and approximately 650 hourly employees. Clarkson’s 2013 revenue was approximately $250 million.
Tatum was employed by Clarkson from 1991 until a federal criminal complaint was filed on Aug. 12, 2014; he was Clarkson’s director of information technology since 2003. In this role, he oversaw all of Clarkson’s IT activities at all of Clarkson’s business entities.
By pleading guilty today, Tatum admitted that he ordered at least $306,540 worth of expensive computer and communication equipment (including solid state hard drives, other computer equipment, and 23 iPhones) between Oct. 22, 2013, and July 31, 2014. Tatum was ordering with company funds and then reselling this equipment for personal profit without the company’s authorization.
In addition to the scheme to defraud Clarkson Construction, Tatum also defrauded Stedman Motor Sports in Moulton, Ala., out of $6,567 worth of work, including motorcycle customization. The total loss caused by Tatum is at least $313,107.
Tatum admitted that he resold the equipment for personal profit. Bank records indicate that, during the time the computer equipment was being purchased, Tatum’s bank account was credited approximately 57 times in the amount of approximately $269,706 from PayPal. Tatum’s personal Facebook page reflected apparently large spending, including on customized motorcycles, a boat, and a large motor home.
Tatum admitted that he ordered 545 expensive solid state hard drives totaling $249,008 as well as 58 other computer-based items with a value of $14,768. The total cost of the purchases, including sales tax, shipping and handling, was $284,948.
Tatum was also responsible for purchasing Clarkson’s cellular telephones through Verizon. Tatum used Clarkson’s corporate Verizon account to purchase 23 iPhone 5 Golds and two iPad Airs at a total value of $11,317.
Clarkson discovered numerous anomalies while reviewing Tatum’s purchasing card statements and expense reports, including falsified PayPal invoices and unexplained charges from Midwestelec. These additional charges have not yet been finalized as loss and incorporated into the loss figures.
Under federal statutes, Tatum is subject to a sentence of up to 20 years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by the FBI.
Clarksburg Man Sentenced for Unlawful Possession of FirearmRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – A Clarksburg, West Virginia man with a prior felony drug conviction was sentenced in federal court for unlawful possession of a firearm, United States Attorney William J. Ihlenfeld, II, announced today.
During a June 2013 traffic stop by the Morgantown Police Department, Petrus Hawkins, 35, was discovered in possession of a .45 caliber pistol. He pled guilty in June 2014 to one count of “Felon in Possession of Firearm” and was sentenced to 46 months in prison.
Hawkins was convicted in March 2009 in the U.S. District Court for the Northern District of West Virginia of the felony offense of attempting to possess with intent to distribute marijuana near the Gilmer County High School Football Field in Glenville, West Virginia.
Assistant U.S. Attorney Shawn Morgan prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives led the investigation.
U.S. District Judge Irene M. Keeley presided.
Carbon County Man Pleads Guilty to Producing Child PornographyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 47-year-old Kidder Township man pleaded guilty today before Senior U.S. District Court Judge Edwin M. Kosik to producing child pornography.
According to United States Attorney Peter Smith, the defendant, Todd Kowar, admitted to persuading and inducing a minor to engage in sexually explicit conduct for the purpose of producing images of such conduct. Kowar committed the crime between 2008 and December 2012.
The case against Kowar resulted from an investigation by the Federal Bureau of Investigation, the Pennsylvania State Police, and Kidder Township Police. Kowar was indicted by a federal grand jury in July 2014.
Judge Kosik ordered a pre-sentence report to be completed. Sentencing will be scheduled at a later date. Kowar is detained in prison pending sentencing.
Kowar faces a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison.
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."
The case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Business Owner Pleads Guilty to Wire Fraud Conspiracy to Fraudulently Obtain More Than $2.8 Million in Government Contracts Under the SBA 8(a) ProgramRead the Press Release
Baltimore, Maryland - Wesley Burnett, age 54, of Hermosa Beach, California, pleaded guilty on October 24, 2014, to conspiracy to commit wire fraud in connection with a scheme to fraudulently obtain more than $2.8 million in federal government contracts through the use of the Small Business Administration’s 8(a) program, designed to assist disadvantaged businesses.The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Small Business Administration (SBA) Inspector General Peggy E. Gustafson; Brigadier General Keith M. Givens, Commander Air Force Office of Special Investigations; and Mary L. Kendall, Deputy Inspector General, Department of the Interior.
According to his plea agreement, Wesley Burnett owned and operated Confederate Group LLC and Total Barrier Works (TBW). These companies were in the business of maintaining and installing anti-terrorist systems and vehicle control equipment such as security barriers, bollards, gates, uninterrupted power systems (UPS) and other perimeter security anti-terrorist equipment.
Burnett admitted that at various times from 2007 until 2014, he falsely represented to the U.S. government that Confederate Group LLC was a “Hispanic-American owned business,” a “minority owned business,” a “service disabled veteran owned business,” and a “small disadvantaged business,” in order to win federal contracts at military bases and federal buildings that were reserved for firms in those categories. In fact, Burnett is not a member of any racial or ethnic minority, is not a disabled veteran and is not a member of a socially disadvantaged group, as those terms are defined by the Small Business Administration, and therefore his company was not qualified to receive contracts set aside for those categories. As a result of Burnett fraudulently claiming minority and/or disabled veteran status, from 2008 through 2014, Confederate Group LLC was awarded approximately $534,315, in contracts reserved for minorities and service disabled veterans.
In order to bid on the set-aside contracts, Burnett recruited individual who were members of racial or ethnic minorities, service disabled veterans, or members of socially disadvantaged groups, and offered them a percentage of the total value of any contract he won using their companies’ name. As part of the scheme, Burnett, using the name of the minority owned company bid on federal government contracts set aside for companies owned by minorities, service disabled veterans, or members of socially disadvantaged groups. Burnett and TBW did all of the work covered by the contract, then paid the owner of the company in whose name the contract had been awarded a fixed percentage of the gross value of the contract, usually between four and five percent. To further this “pass thru” arrangement, Burnett falsely represented that TBW was a trade name for the minority owned company in whose name the contract had been awarded, when in fact TBW was a separate and distinct company.
For example, Yogesh K. Patel was the owner of United Native Technologies, Inc. (“UNTI”), which, according to its articles of incorporation, was formed to “perform information technology services to federal, state and local government, as well as commercial.” In 2005, Patel applied for and was granted certification as a minority or socially disadvantaged owned business under the SBA’s 8(a) program. In addition to a broad scope of assistance from SBA, participants in the 8(a) program can receive sole source government contracts that are reserved for minority or socially disadvantaged owned companies.
Burnett met Patel at a business conference and the two agreed to use UNTI to bid on 8(a) set aside contracts at federal government installations, including military bases and federal buildings, with Burnett, TBW and individuals at Burnett’s direction actually performing the work necessary to fulfill these contracts. Burnett also agreed to pay Patel approximately 4.5% of the total value of any contract awarded to UNTI. As a result, between January 2010 and November 2013, UNTI was fraudulently awarded more than $1.8 million in 8(a) set-aside U.S. government contracts, while the work on the contracts was actually performed by Burnett’s company and employees.
Burnett admitted that he had similar arrangements with the owner of an 8(a) firm that did electrical and other work for government and commercial clients, and with the owner of a service-disabled veteran owned small business. Burnett also fraudulently obtained the personal identifying information of a service-disabled veteran, which he then used when bidding on federal government contracts.
Burnett faces a maximum penalty of 20 years in prison for the wire fraud conspiracy. U.S. District Judge Deborah K. Chasanow has scheduled sentencing for February 2, 2015, at 10:00 a.m.
Yogesh K. Patel, age 47, of Gaithersburg, Maryland, previously pleaded guilty to his role in the scheme and is scheduled to be sentenced on January 12, 2015, at 12:00 p.m.
The National Procurement Fraud Task Force was formed in October 2006 to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force includes the United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as other cases brought by members of the Task Force, demonstrates the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.
United States Attorney Rod J. Rosenstein praised the SBA Office of Inspector General, U.S. Air Force Office of Special Investigations and the Department of the Interior, Office of Inspector General for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Leo J. Wise and Sean R. Delaney, who are prosecuting the case.
Buffalo Man Sentenced on Drug ChargesRead the Press Release
Buffalo, N.Y. -- U.S. Attorney William J. Hochul, Jr., announced today that Jerome C. Crosby, 58 of Buffalo, NY, who was convicted conspiracy to possess with intent to distribute and distribute cocaine, was sentenced to 77 months in prison by U.S. District Court Judge Richard J. Arcara. The defendant will also forfeit $58, 328 in United States currency, proceeds of the narcotics trafficking.
Assistant U.S. Attorney Mary Clare Kane, who handled the case, stated that between January 2008 and July 29, 2008, the defendant conspired with others to supply kilogram quantities of cocaine that he obtained in New York City to Wallace Peace and others. The cocaine was then distributed in the Central Park area of Buffalo.
Crosby was one of 31 defendants arrested and convicted in this case. He is the 29th defendant to be sentenced.
The plea is the culmination of an investigation by the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, the Drug Enforcement Administration, under the direction of Acting Special Agent in Charge James J. Hunt, New York Field Division, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Acting Special Agent in Charge James S. Higgins, New York Field Division.Berkeley County Couple Charged with Tax EvasionRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA – A Falling Waters, West Virginia couple was charged with failing to pay nearly $120,000.00 in federal income taxes, United States Attorney William J. Ihlenfeld, II, announced today.
In a ten-count information filed today, Frank J. Picone, 48, and Toni A. Picone, 43, were each charged with five counts of “Failure to File a Personal Income Tax Return.” An Internal Revenue Service, Criminal Investigation inquiry revealed that the couple failed to file personal income tax returns for tax years 2008 through 2012.
The defendants, who own Rocky’s New York Pizza in Hagerstown, Maryland, each face up to one year in prison and a fine of up to $250,000.00 on each count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Assistant U.S. Attorney Robert McWilliams, Jr. is prosecuting the case on behalf of the government.
An information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Armed Career Criminal Pleads Guilty to Unlawful Possession of FirearmRead the Press Release
ALBUQUERQUE – Paul Anthony Turrieta, 36, of Albuquerque, N.M., pleaded guilty this morning to being a felon in possession of a firearm and ammunition. Turrieta will be sentenced to 15 years in federal prison due to his status as an armed career criminal.
U.S. Attorney Damon P. Martinez said that Turrieta was being prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
“Keeping guns out of the hands of trigger pullers is our top priority,” said ATF Special Agent in Charge Thomas G. Atteberry. “I want to commend the enforcement efforts of the Albuquerque Police Department and the United States Attorney’s Office for their diligence.”
Turrieta was arrested in Feb. 2014, on an indictment charging him with unlawfully possessing a firearm and ammunition on Oct. 24, 2013, in Bernalillo County, N.M. According to court filings, Turrieta was prohibited from possessing firearms or ammunition because he previously had been convicted of numerous felony offenses, including three residential burglaries.
During today’s proceedings, Turrieta admitted possessing a revolver and ammunition which were discovered in the vehicle he was driving when an officer pulled him over on a traffic stop on Oct. 24, 2013. Turrieta acknowledged that he was prohibited from possessing the firearm and ammunition because he was a convicted felon.
Turrieta has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Albuquerque Police Department, with assistance from the 2nd Judicial District Attorney’s Office. Assistant U.S. Attorney Presiliano A. Torrez is prosecuting the case.
- Angleton Man Hammered with 35-Year Sentence for Trafficking Methtraw Purchasing and Other Charges Sends Dallas LPR to Federal Prison
Anchorage Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that an Anchorage man was sentenced in federal court in Anchorage for the crimes of drug trafficking conspiracy and possession of a controlled substance with intent to distribute.
David Alan Gonzales, 55, originally from Santa Ana, California, was sentenced by United States District Court Judge Sharon L. Gleason, to 120 months’ imprisonment.
According to Special Assistant U.S. Attorney Erin Bradley, Gonzales conspired to distribute, and possess with intent to distribute, methamphetamine. This case arose when the United States Postal Inspection Service identified a suspicious package at their processing center on March 26, 2013. The package, which contained 52 grams of actual methamphetamine, had been sent to Anchorage from Anaheim, California. Gonzales and his co-defendant, Albert Diaz Gumataotao, accepted delivery of the package on March 28, 2013. Though Gonzales was residing in Anchorage at the time of this offense, he has significant ties to the State of California, where he has lived most of his life. Gonzales was convicted by a federal jury in July of this year. Gumataotao pled guilty on November 6, 2013, to one count of drug trafficking conspiracy and was also sentenced to 120 months’ imprisonment.
In imposing the sentence, Judge Gleason noted a need to promote respect for the law, as well as a need to deter the defendant and others from committing similar crimes. Judge Gleason also focused on protecting the public and avoiding disparity in sentences.
Ms. Loeffler commends the United States Postal Inspection Service and the Anchorage Police Department for the investigation leading to the successful prosecution of Gonzales and Gumataotao. Special Assistant U.S. Attorney Bradley is a prosecutor in the U.S. Attorney’s Office who is funded by the Municipality of Anchorage for the purpose of prosecuting gang-related and violent crime cases.
- Alamo Woman Heads to Prison for Multiple Firearms Convictions
Accokeek Fraudster Sentenced to over 7 Years in Prison for using Stolen Bank Account Information while in Prison to Buy Cars and Other ItemsRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Lamonte X. Smith, age 30, of Accokeek, Maryland, today to 92 months in prison followed by six years of supervised release for conspiring to commit wire fraud and aggravated identity theft arising from a scheme in which, while he was incarcerated, he obtained access device account information of others from a bank to purchase cars, services, clothing and other items. Judge Grimm also entered an order that Smith forfeit and pay restitution of $115,207.09The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kathy A. Michalko of the United States Secret Service - Washington Field Office.
According to his plea agreement, Smith was incarcerated at the Maryland Reception Diagnostic and Classification Center (MDCC) in Baltimore from at least April to August 2011. Smith instructed a co-conspirator to buy “SIM” cards, which are used in cell phones to assign the device a telephone number, and deliver the SIM cards to Smith in prison. Smith used the SIM cards to activate a phone and call Bank of America, clothing vendors and car dealerships. Smith used one of the SIM cards to call Bank of America’s customer service department on several occasions, posed as an authorized user of business access device account holders, and fraudulently obtained access to bank accounts of individuals and small business owners without their knowledge.
Upon accessing the accounts, Smith caused credit limits to be raised, added additional authorized users and caused additional access devices to be mailed to others. From prison, Smith used the fraudulently obtained account information to buy cars, clothes and car transportation from prison. His conspirators directed the shipment of cars, clothing and other items totaling at least $115,207.09 to Smith’s home, or to a storage unit in Waldorf, Maryland.
On August 17, 2011, federal law enforcement agents searched two homes linked to Smith’s illegal conduct. After learning of the searches, Smith called an individual and offered to pay the individual to remove clothes, car accessories and other items from the storage unit in Waldorf. Law enforcement arrived at the storage unit before it could be emptied. The individual made consensually monitored phone calls with Smith from the storage unit in which Smith confirmed his plan to pay the individual to remove the items.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the Secret Service for its work in the investigation and thanked Assistant U.S. Attorneys Thomas P. Windom and Arun G. Rao, who prosecuted the case.
26 October 2014
Three Arrested in California as Part of Drug Trafficking and Money Laundering InvestigationRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Hugo Adalberto Adrian Ramirez (42, Ontario, California), Edgar Hurtado-Ramirez (45, Ontario, California), and Luis Fernando Mancillas Medina (49, Los Angeles, California) with conspiracy to distribute five kilograms or more of cocaine and conspiracy to commit money laundering. Each faces a mandatory minimum penalty of 10 years’ imprisonment, up to life, on the drug charge and a maximum of 20 years in federal prison on the money laundering charge. A related indictment charging Maria Leticia-Hernandez (23, Ontario, California) with conspiracy to commit money laundering was also unsealed today, and she faces up to 20 years in federal prison.
Ramirez, Medina, and Leticia-Hernandez were arrested earlier today, in the Los Angeles area, in conjunction with the arrests of 11 other co-conspirators throughout California in a related case. Hurtado-Ramirez is a fugitive. The San Diego-based Organized Crime Drug Enforcement Task Force (OCDETF) investigation was led by the Bureau of Land Management and is being prosecuted by the United States Attorney’s Office for the Southern District of California.
Today’s arrests are the latest in an investigation that has to date netted 23 convictions in the Middle District of Florida (MDFL) for drug trafficking, money laundering, and firearm offenses. According to court documents, the investigation targeted a nationwide drug trafficking and money laundering organization based in California. The organization shipped cocaine, methamphetamine, and marijuana from California to locations throughout the United States, including the MDFL. The drugs were shipped via Federal Express, United Parcel Service, and the United States Postal Service. They were also transported in automobiles that had been loaded on car haulers.
Co-conspirators retrieved packages of cocaine at various times in the MDFL, distributed the narcotics to lower level drug distributors in Tampa, St. Petersburg, and elsewhere, and then arranged for drug proceeds to be returned to California via money couriers, wire transfers, and bank deposits. Co-conspirators used drug proceeds that had been deposited into various bank accounts to purchase items such as airline tickets, rental cars, and hotel rooms for organization members.
“This case is the result of years of investigative work, spanning state and international borders,” said Susan L. McCormick, special agent in charge of HSI Tampa. “Dismantling a drug trafficking organization of this size and reach is significant to the safety and security of our nation.”
An indictment is merely a formal charge that a defendant has committed a violation of one or more federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, with assistance from other federal, state, and local agencies as part of an OCDETF investigation. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply. It will be prosecuted by Assistant United States Attorney Christopher F. Murray.
Indiana Woman Sentenced to Federal Prison for $3.5 Million FraudRead the Press Release
Orlando, Florida – Chief U.S. District Judge Anne C. Conway today sentenced Linda Deavers (61, Indiana) to six years and six months in federal prison for wire fraud and money laundering. The Court also ordered Deavers to serve a three-year term of supervised release, and to pay more than $3.5 million in restitution. A federal jury found her guilty on July 11, 2014.
According to evidence presented at trial, Deavers devised an investment fraud scheme that used an entity by the name of Angel Annie Humanitarian Trust, LLC. As part of her pitch to investors, Deavers represented that the Trust was a Section 501(c)(3) charitable organization and that she had connections to trading programs in Europe. She said that the investments would generate large rates of return, that she had been successful in investing in such trading programs previously, and that any money invested with her and the Trust would be invested in such trading programs overseas. None of those representations were true. Deavers collected more than $5.2 million from Florida investors. After returning approximately $1.8 million to investors, she used most of the remaining $3.4 million to fund her lavish lifestyle in Indiana and Europe, and to pay various expenses for herself and her family, including a $1 million deposit on a mansion. To lull her investors into a false sense of security, Deavers used e-mail and Skype to provide her investors with a series of false excuses as to why she had not been able to successfully invest their money. Even after spending the last of the funds from her victims, Deavers continued to falsely claim, for several years, that she was working on investments for them.
This type of scheme is sometimes referred to as a prime bank investment fraud scheme. For more information on this type of scheme, please visit the website for the United States Department of the Treasury, Office of Inspector General.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Roger B. Handberg.
25 October 2014
Attorney General Holder Announces Federal Government to Recognize Same-Sex Married Couples in Six Additional StatesRead the Press Release
In the latest development following the Supreme Court’s decision earlier this month to decline to hear any pending cases regarding same-sex marriage, Attorney General Eric Holder announced Saturday that the federal government will now recognize same-sex married couples in six new states: Alaska, Arizona, Idaho, North Carolina, West Virginia, and Wyoming.
Last week, the Attorney General made a similar announcement with respect to seven other states: Colorado, Indiana, Nevada, Oklahoma, Utah, Virginia and Wisconsin. Saturday’s announcement adds to that list and brings the total number of states where same-sex couples are recognized by the federal government to 32, plus the District of Columbia.
The Attorney General’s announcement means couples married in these states will now qualify for a range of federal benefits, including those administered by the Social Security Administration and Department of Veterans Affairs.
“With each new state where same-sex marriages are legally recognized, our nation moves closer to achieving of full equality for all Americans,” the Attorney General said. “We are acting as quickly as possible with agencies throughout the government to ensure that same-sex married couples in these states receive the fullest array of benefits allowable under federal law.”
In addition, the Attorney General also announced that the Department of Justice has determined it can legally recognize marriages performed in Indiana and Wisconsin this past June. These marriages were performed immediately after federal district courts ruled that those states’ bans on same-sex marriage are unconstitutional, but subsequent developments created confusion about the status of those marriages. Based on the Attorney General’s announcement, however, those couples married during that period will now have their unions recognized by the federal government.
24 October 2014
ZeekRewards President Indicted on Federal Charges for Operating $850 Million Internet Ponzi SchemeRead the Press Release
CHARLOTTE, N.C. – The president of ZeekRewards, Paul Burks, has been indicted on federal charges for operating an Internet Ponzi scheme that took in more than $850 million dollars, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The criminal indictment was returned today by a federal grand jury sitting in Charlotte, charging Burks, 67, of Lexington, N.C., with wire and mail fraud conspiracy, wire and mail fraud, and tax fraud conspiracy.
Russell F. Nelson, Special Agent in Charge of the United States Secret Service, Charlotte Field Division and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) join U.S. Attorney Tompkins in making today’s announcement.
According to allegations contained in the indictment, from January 2010 through August 2012, Paul Burks was the owner of Rex Venture Group, LLC (RVG), through which he owned and operated Zeekler, a sham Internet-based penny auction company, and its purported advertising division, ZeekRewards (collectively “Zeek”). The indictment alleges that Burks and his conspirators induced victims – including over 1,500 victims in the Charlotte area – to invest in their fraudulent scheme, by falsely representing that Zeekler was generating massive retail profits from its penny auctions, and that the public could share in such profits through investment in ZeekRewards. Indeed, the indictment alleges that Burks and others claimed, at one point, that investors would be guaranteed a 125% return on their investment.
The indictment alleges that Burks and his conspirators represented that victim-investors in ZeekRewards could participate in the Retail Profit Pool (RPP), which supposedly allowed victims collectively to share 50% of Zeek’s daily net profits. The indictment alleges that Burks and his conspirators did not keep books and records needed to calculate such daily figures, and that Burks simply made up the daily “profit” numbers. The indictment further alleges that, contrary to the conspirators’ claims, the true revenue from the scheme did not come from the penny auction’s “massive profits.” Instead, approximately 98% of all incoming funds came from victim-investors, which were then used to make Ponzi-style payments to earlier victim investors.
In addition to promising massive returns on investments, the indictment alleges that the conspirators also used a number of ways to promote Zeek to current and potential investors. For example, according to the indictment, the conspirators hosted weekly conference calls and leadership calls, where participants could call in listen to Burks and others make false representations intended to encourage victim-investors to continue to invest money and to recruit others to invest in Zeek. The indictment further alleges that Burks also organized and attended “Red Carpet Events,” where victim investors came to hear details of the scheme in person. During these events, according to the indictment, Burks and his conspirators made false representations about the massive retail profits generated by Zeek. The conspirators also used electronic and print media, including websites, emails and journals, to make false and misleading statements about the success of Zeekler to recruit victim investors.
The indictment alleges that as the Ponzi scheme grew in size and scope, it began to unravel as the outstanding liability resulting from the bogus 125% return on investment continued to rise beyond control. According to the indictment, by August 2012, the conspirators fraudulently represented to the collective victims that their investments were worth approximately $2.8 billion, but had no accurate books and records to even determine how much cash on hand was available to pay such liability. According to the indictment, by August 17, 2012, Burks and his conspirators had only $320 million (or approximately 11% of $2.8 billion) available to pay out investors. The indictment alleges that over the course of the scheme, Burks diverted approximately $10.1 million to himself.
Burks is also charged with tax fraud conspiracy for failing to file corporate tax returns or to make corporate tax payments for his companies, among other things. In addition, the indictment alleges, for tax year 2011, Burks issued fraudulent IRS Forms 1099s, causing victim-investors to file inaccurate tax returns for phantom income they never actually received.
The court has issued a summons against Burks and he is expected to appear in federal court for his initial appearance in the coming days. The wire and mail fraud conspiracy charge, the mail fraud charge and wire fraud charge each carry a maximum prison term of 20 years and a $250,000 fine. The tax fraud conspiracy charge carries a maximum prison term of five years and a $250,000 fine.
The details contained in this indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Two of Burks’ conspirators, Dawn Wright Olivares, Zeek’s Chief Operating Officer, and her step-son and Zeek’s Senior Technology Officer, Daniel C. Olivares, pleaded guilty in December 2013 to investment fraud conspiracy. Dawn Wright Olivares also pleaded guilty to tax fraud conspiracy. Both defendants await sentencing.
In making today’s announcement, U.S. Attorney Tompkins thanked the U.S. Secret Service and IRS-CI for investigating the case, and the U.S. Securities & Exchange Commission, Division of Enforcement for its assistance with the investigation.
The prosecution is handled by Assistant United States Attorneys Jenny Grus Sugar, Corey Ellis and Mark T. Odulio of the U.S. Attorney’s Office in Charlotte.
Additional information and updated court filings about this and related cases filings can be accessed at the district’s website: www.justice.gov/usao/ncw/ncwvwa.html.
Winchester Man Sentenced for Distributing Fatal HeroinRead the Press Release
HARRISONBURG, VIRGINIA – A Winchester man, who distributed heroin to two local residents who later died of heroin overdoses, was sentenced this week in the United States District Court for the Western District of Virginia in Harrisonburg.
Tyler Christian Clements, 25, of Winchester, Va., previously pled guilty to two counts that stemmed from the distribution of heroin resulting in serious bodily injury and death. The two heroin overdose deaths took place on August 16, 2013 and September 23, 2013. Today in District Court, Clements was sentenced to 264 months of federal incarceration.
“The epidemic of heroin abuse has infected many communities in the Western District of Virginia,” United States Attorney Timothy J. Heaphy said today. “We will continue to react to the scourge of heroin in our communities by apprehending and incarcerating those who bring this poison into our communities. At the same time, we must continue to support education, prevention and treatment programs. Only a comprehensive approach which couples targeted enforcement with aggressive prevention will be effective.”
“This investigation was about the tragic deaths of two people whose lives were ended far too soon. Today, Mr. Clements will begin to pay the price for his actions. He will no longer be able to sell this poison to members of this community,” said Drug Enforcement Administration Special Agent in Charge Karl C. Colder. “The sentencing of Mr. Clements is the result of the hard work and dedication of DEA and its state and local law enforcement counterparts. Our message is simple: DEA will relentlessly pursue those individuals that cause these senseless deaths. We will continue to work closely with our partners in targeting and dismantling heroin trafficking networks operating in Frederick County.”
Clements previously admitted to traveling to Baltimore and purchasing heroin. He returned to the Winchester area and sold the heroin he purchased in Baltimore to individuals who later used the drug provided by Clements and died as a result of heroin overdoses. Local and federal law enforcement worked with their counterparts in Baltimore and identified his source of the heroin.
On August 16, 2013, Clements sold heroin that he had purchased in Baltimore to Derek Lee Spouse. Mr. Spouse used the heroin and died as a result of a heroin overdose. The medical examiner concluded that the cause of Mr. Spouse’s death was “adverse effect of ethanol and heroin.” The medical examiner also determined that, in his opinion, “without the heroin, Mr. Spouse would not have died.”
Less than two months later, on September 24, 2013, Clements again went to Baltimore and purchased heroin. He returned to Winchester where he distributed it to an unnamed victim who used the drugs provided by Clements and later died of a heroin overdose. In this case, after the victim overdosed, Clements removed from the scene and disposed of evidence, including needles and other drug paraphernalia, before emergency personnel and law enforcement had arrived. The medical examiner determined that the victim died as a result of “acute heroin poisoning.”
The investigation of this case was conducted by the Northwest Virginia Regional Drug Task Force, which includes the Virginia State Police, and the Drug Enforcement Administration. The Task Force includes law enforcement from the counties of Frederick, Clarke, Shenandoah, Warren and Page as well as the cities and towns of Winchester, Front Royal and Strasburg.
Weymouth Man Sentenced to Six Years for Bank RobberiesRead the Press Release
BOSTON – Charles Knights, 43, of Weymouth, was sentenced today for attempted bank robbery and two counts of bank robbery. U.S. District Judge Nathaniel M. Gorton sentenced Knights to six years in prison and three years of supervised release on each count, all to run concurrently. Knights was on supervised release at the time of his offenses and was previously sentenced to six months’ incarceration on a supervised release violation.
On Feb. 25, 2013, Knights attempted to rob the Citizens Bank at 607 Boylston Street in Boston by means of a demand note. Later that day, while law enforcement units were on scene at Citizens Bank, Knights robbed the Sovereign Bank at 279 Massachusetts Avenue in Boston and stole $415 in cash. On March 4, 2013, Knights robbed the TD Bank at 1840 Massachusetts Avenue in Lexington and obtained $865.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Boston Police Commissioner William Evans, made the announcement today. The case is being prosecuted by Stacy Dawson Belf of Ortiz’s Major Crimes Unit.
Week in Review – South BendRead the Press Release
South Bend, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEA
- Anthony Colley, 27, of North Liberty, Indiana pled guilty to the felony offenses of interstate wire fraud and conspiracy to commit wire/mail fraud. The magistrate judge is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Drug Enforcement Administration. Sentencing has been set for 1/28/2015. This case is being prosecuted by Assistant United States Attorney Donald J. Schmid.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS
- Luis Trevino, 35, of South Bend, Indiana was sentenced to 180 months imprisonment with 3 years supervised release after pleading guilty to the felony offense of knowingly or intentionally possessing with the intent to distribute a mixture or substance containing cocaine. According to documents filed in this case, on February 5, 2014, Trevino possessed cocaine in his home in South Bend, Indiana that he intended to sell.
- Javier Trevino, 33, of South Bend, Indiana was sentenced to 21 months imprisonment with 2 years supervised release after pleading guilty to knowingly or intentionally possessing with the intent to distribute marijuana. According to documents filed in this case, on February 5, 2014, Trevino possessed marijuana in his mother’s home in South Bend, Indiana that he intended to sell.
Both cases were the result of an investigation by the Drug Enforcement Administration and both were prosecuted by Assistant United States Attorney Frank Schaffer.
Week in Review – HammondRead the Press Release
Hammond, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITION
- Rene Patterson, 32, of Merrillville, Indiana was sentenced to 30 months imprisonment with 3 years of supervised release after pleading guilty to the felony offense of being a felon in possession of a firearm. According to documents filed in this case, in June 2013, Patterson was found to be in possession of a semiautomatic pistol and two extended magazines of ammunition. Patterson had a previous conviction in 2006 for carrying a handgun without a license. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Tom McGrath.
Week in Review – Fort WayneRead the Press Release
Fort Wayne, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEA
- Deantre L. Rogers, 36, of Fort Wayne, Indiana pled guilty to the felony offense of knowingly distributing a controlled substance (28 grams or more of crack cocaine). The magistrate judge is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Federal Bureau of Investigation, FBI Safe Streets Task Force and the Fort Wayne Police Department. Sentencing will be set by separate order by the district court. This case is being prosecuted by Assistant United States Attorney Anthony W. Geller.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
Walter Hill, Jr., Sentenced to 20 Years in Prison for Conspiracy to Possess with Intent to Distribute CocaineRead the Press Release
St. Thomas, USVI - District Court Judge Curtis V. Gomez sentenced Walter Hill, Jr., 46, of St. John, VI, on October 23, 2014, to a mandatory minimum sentence of 20 years in prison, 10 years of supervised release, a $300 special monetary assessment, 300 hours of community service, and ordered forfeiture of property constituting the proceeds of the crime, United States Attorney Ronald W. Sharpe announced.
On March 27, 2014, a federal jury convicted Hill of conspiracy to possess with intent to distribute cocaine, possession with intent to distribute cocaine and use of a communication facility, namely, a telephone, to facilitate a drug crime. Hill was arrested as part of the investigation of Roberto Tapia, Director of the Virgin Islands Department of Planning and Natural Resources (DPNR) Division of Environmental Enforcement. On November 7, 2013, he was charged in a 69-count third superseding indictment, along with Tapia, Angelo Hill, Stephen Torres, Eddie Lopez-Lopez, Raymond Brown, Hector Alcenio, Angel L. Negron-Beltran, and Edwin Monsanto.
The case was investigated by the Public Corruption Task Force, which comprises the Federal Bureau of Investigation (FBI); U.S. Drug Enforcement Administration (DEA); Virgin Islands Police Department; U.S. Marshals Service; Internal Revenue Service Criminal Investigation Division (IRS-CI); U.S. Department of Homeland Security, Homeland Security Investigations (HSI); U.S. Customs and Border Protection (CBP); United States Coast Guard; Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Office of the Virgin Islands Inspector General. It was prosecuted by Assistant U.S. Attorney Kelly B. Lake.
Virginia Beach Man Indicted in Major Health Care Fraud of Virginia Medical Assistance ProgramRead the Press Release
NORFOLK, Va. – Baffour E. Opoku, owner and operator of Progressive Counseling Services, LLC, a Virginia Beach based counseling business, and nine other current and former employees were indicted on Wednesday by a federal grand jury for their alleged roles in a scheme to defraud the Virginia Medical Assistance Program. Court documents were unsealed today.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Mark R. Herring, Virginia Attorney General; Royce E. Curtin, Special Agent in Charge of the FBI’s Norfolk Field Office; Clark E. Settles, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington; Thomas J. Kelly, Special Agent in Charge, IRS-Criminal Investigation, Washington, D.C. Field Office; and Bill Jones, Special Agent in Charge for the Washington Regional Office of the U.S. Department of Labor’s Office of Inspector General – Office of Labor Racketeering and Fraud Investigations, made the announcement after the defendants made their initial appearances in federal court this afternoon.
The nine of the ten defendants were arrested today, and are currently awaiting further proceedings. The defendants are: Baffour E. Opoku, 48, of Virginia Beach, Virginia; Doretha Selby-Diggs, 40, of Portsmouth, Virginia; Lisa Barrett, 49, of Norfolk; Barbara Bing Banks, 34, of Hampton, Virginia; Corey Etheridge, 42, of Chesapeake, Virginia; Jacqueline Harris, 34, of Portsmouth; Verline Harris, 48, of Virginia Beach; Arlette Johnson, 58, of Virginia Beach; Alfreda Stallion, 52, of Virginia Beach; and Johnny Stallion, 34, of Las Vegas, Nevada.
According to the 105 count indictment, the defendants conspired to obtain reimbursement payments from the Virginia Medical Assistance Program by submitting false claims for mental health support services in 2011 and 2012. Opoku owned and operated Progressive Counseling Services, LLC. He hired the other nine defendants to provide mental health support services to Medicaid-eligible clients in the Tidewater area. According to the indictment, Opoku, along with an unindicted co-conspirator, created fraudulent assessments of Progressive clients to obtain authorization to bill Medicaid for mental health support services. Once Progressive obtained this authorization, Opoku submitted false and fraudulent Medicaid reimbursement claims on behalf of mental health support services purportedly provided by the co-defendants. The indictment alleges these reimbursement claims were bogus because most of the counselors were unqualified to serve as mental health professionals, the counseling sessions never occurred, and progress notes used to document the sessions were fabricated.
In addition, Opoku faces charges that he failed to report nearly $450,000 in taxable income to the IRS over two tax years and that Opoku, along with Doretha Selby-Diggs and Corey Etheridge, submitted false documents to U.S. Citizenship and Immigration Services, part of the Department of Homeland Security, with respect to a pending immigration matter.
The indictment further alleges that Lisa Barrett, Barbara Bing, Jacqueline Harris, and Arlette Johnson testified falsely before a federal grand jury that was investigating this matter.
This case was investigated by the FBI’s Norfolk Field Office; the Medicaid Fraud Control Unit of the Virginia Attorney General’s Office; Homeland Security Investigations (HSI); IRS-Criminal Investigation; and the Department of Labor, Office of Labor Racketeering and Fraud Investigations. Assistant U.S. Attorneys Joseph L. Kosky and V. Kathleen Dougherty are prosecuting the case.
Criminal indictments are only charges and not evidence of guilt. All defendants are presumed to be innocent until and unless proven guilty.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-CR-137.
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United States Files Enforcement Action Against South Dakota Laser Medical Device DistributorRead the Press Release
The United States filed a civil complaint for injunctive relief in the U.S. District Court for the District of South Dakota against 2035 Inc. and its president, Dr. Robert L. Lytle, the Department of Justice announced today. Lytle, who does business as 2035 Private Membership Association and QLasers Private Membership Association, is the owner and operator of 2035 Inc.
According to the complaint, the defendants are responsible for designing, manufacturing, marketing and distributing the QLaser System, a collection of approximately 12 devices that are marketed as low level laser devices for home use. The defendants market their devices throughout the country – through seminars, websites, newspaper ads and other means – for treatment of “over 200 different diseases and disorders,” including cancer, cardiac arrest, HIV/AIDS, diseases and disorders of the eye and ear, venereal disease and diabetes. Although two of the devices are cleared for providing temporary relief of pain associated with osteoarthritis of the hand, none of the devices have been cleared by the U.S. Food and Drug Administration (FDA) or otherwise approved to treat any other medical conditions. Failure to obtain FDA clearance or premarket approval before marketing and distributing a device renders the device adulterated and misbranded and violates the Food, Drug, and Cosmetic Act (FDCA).
“The public should be able to trust that medical devices marketed to them to treat certain conditions are shown to be safe and effective,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “The Department of Justice will take action to ensure that public health is not put at risk.”
According to the complaint, the defendants distribute labeling with the QLaser devices that touts their use for treatment of the serious conditions listed above, as well as their use on eyes and skin. However, the complaint alleges, applying the laser devices to the eyes and skin can be harmful, and use of the devices to treat serious conditions such as cancer, HIV/AIDS and diabetes, among others, is unsupported by any published clinical studies. The complaint further alleges that the medical claims regarding use of the laser devices to treat these conditions are false and misleading and that the devices are unsafe if used in the manner recommended or suggested in defendants’ labeling.
During multiple inspections of the defendants’ operations over the course of approximately 11 years, the FDA informed the defendants – both verbally and in writing – that they were violating the FDCA. Despite these warnings, the complaint alleges that defendants continue their violations. Most recently, in August and September 2014, FDA investigated the defendants’ business operations, including QLasers PMA, and www.qlaserspma.com, a website owned and operated by Lytle through QLasers PMA. According to the complaint, these investigations revealed that the defendants continue to make claims that cause their QLaser devices to be in violation of the law.
The government requests that the court enjoin the defendants from continuing to market their QLaser devices, or any other device, unless or until such devices receive FDA clearance or approval. The complaint further requests the court order the defendants to cease manufacturing, processing, packaging, labeling, holding or distributing any product that is a device unless and until the defendants have come into compliance with the FDCA.
“After several warnings from the FDA, this distributor was well aware he was in violation of the law by continuing to market laser devices for unapproved uses,” said U.S. Attorney Brendan V. Johnson for the District of South Dakota. “Regardless, he continued to put consumers at risk, leading them to believe the product they were buying from his companies could treat certain serious medical conditions. Consumer confidence is critical, and the Department of Justice will work to protect that confidence and keep the public safe.”
The FDA referred this matter to the Department of Justice. Trial Attorneys Cindy Cho and Ross Goldstein of the Consumer Protection Branch in the Civil Division, together with the U.S. Attorney’s Office for the District of South Dakota, brought this case on behalf of the United States.
U.S. Attorney Gregory K. Davis Speaks to Middle School Students in Hattiesburg During National Bullying Prevention MonthRead the Press Release
Hattiesburg, Miss – U.S. Attorney Gregory K. Davis and Assistant U.S. Attorney Angela Williams spoke to students at N.R. Burger Middle School in Hattiesburg, Mississippi on October 16 and 17 as a part of the school’s recognition of National Bullying Prevention Month. The officials presented the Southern District of Mississippi’s Legal Enrichment and Decision Making (LEAD) Program. They spoke to the 6th and 7th grade students about the importance of obtaining an education and making good choices which will put students on the path to success. They also spoke to students about bullying, gang avoidance, the dangers of illegal drug abuse, and safely using the internet and social media.
U. S. Attorney Davis said, “The reason we are here today is to emphasize the importance of education and the opportunities it provides for students. The decisions made while in school can make a tremendous difference in their lives as well as their peers.”
Davis continued, “One of my primary goals as a prosecutor is to prevent crimes from happening in the first place. Educating students about the social and legal consequences of their decisions is essential to reducing negative behavior and making our communities safe,” U.S. Attorney Davis said.
Throughout the 2014-2015 school year, US Attorney Davis and the Assistant United States Attorneys of the Southern District of Mississippi will be traveling to middle and high schools throughout the Southern District of Mississippi to present the LEAD program. School districts that are interested in having the program presented should contact Sheila Wilbanks with the U.S. Attorney’s Office at 601-965-4480.
U.S. Attorney Brendan Johnson Receives Shared Hope Pathbreaker Award for Anti-Trafficking LeadershipRead the Press Release
ARLINGTON, VA. – Brendan Johnson, U.S. Attorney for the District of South Dakota, has been named a 2014 Pathbreaker Award recipient for his determined leadership in combatting child sex trafficking.
U.S. Attorney Johnson has taken a progressive approach to demand enforcement through broad collaboration and aggressive prosecution of buyers which established broader federal engagement in combating demand for child sex trafficking. At the request of Attorney General Eric Holder, Johnson was one of fifteen U.S. Attorneys selected to serve on the Attorney General’s Advisory Committee from 2012-2013. He has prioritized the prosecution of cases involving violence against Native American women and children and human trafficking. Mr. Johnson has overseen the prosecution of more than 25 human trafficking cases in five years, including three life-sentences and the federal prosecution of numerous men who attempted to purchase sex from trafficking victims. His office pursued the case of United States v. Jungers through the Eighth Circuit Court of Appeals, securing the critical decision that buyers of sex acts with minors are committing crimes of sex trafficking under the federal law, upping the risk of such activity by those who drive the sex trafficking markets.
“Brendan Johnson is a force of determination, initiative and skill that should leave buyers terrified to purchase sex with a minor in South Dakota,” Shared Hope International President and Founder Linda Smith said. “By creating a threshold for buyer accountability, he sets a national precedent that, if applied, will make significant strides in reducing tolerance for purchasing sex with a minor.”
In 2000, the U.S. Department of State engaged Shared Hope International to hold Pathbreaking Strategies Conferences in six countries to energize the global conversation about the issue of trafficking and share innovative approaches to combat the problem. The conferences led to significant change in the global landscape of national responses to trafficking in countries that were behind the global community and enabling an environment that was fostering trafficking with no developed response. During this process, the Pathbreaker Award was established to recognize the pioneering efforts of individuals throughout the world who broke the trend of inaction and initiated proactive responses to prevent trafficking. See all Pathbreaker Award recipients.
The 2014 Pathbreaker Award recipients also include Congressman Frank Wolf (VA-10) and Marian Hatcher, Project Manager for the Sheriff’s Women’s Justice Programs at the Cook County Sheriff’s Office. U.S. Attorney Johnson and Ms. Hatcher will accept the award on November 7 during Shared Hope International’s JuST Conference in Washington, D.C.
MEDIA MATERIALS
For media convenience, a variety of video clips and resources, including survivor comments, are available at this location: vimeo.com/sharedhope/albums. Clips are password protected, please contact Taryn Offenbacher at [email protected] for access.
ABOUT SHARED HOPE INTERNATIONAL: Shared Hope International was established in 1998, by former U.S. Congresswoman Linda Smith, to prevent, restore, and bring justice to women and children in crisis. We provide leadership in awareness, training, prevention strategies, restorative care, research, and policy initiatives. For more information about Shared Hope International, go to www.sharedhope.org.
For more information contact Taryn Offenbacher at (602) 818-3955 or [email protected].