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Friday 5 September 2014
Justice Department Participates in Child Cyber Safety Night at Nationals Park, Saturday, September 6thRead the Press Release
Child Cyber Safety Night at the Ballpark is the latest effort by the Justice Department and its law enforcement and community partners to encourage parents to speak with their children about online and cell phone safety and provide prevention materials. As part of the event, the department will receive the Washington Nationals Spirit Award. Deputy Attorney General James Cole will be recognized in an on-field ceremony at Nationals Park along with Office of Juvenile Justice and Delinquency Prevention (OJJDP) Administrator Robert L. Listenbee, and Special Agent in Charge Tim Gallagher of the FBI Washington Field Office.
The Spirit Award will be announced during the pre-game show scheduled to begin at 3:00 p.m. Saturday, Sept. 6, 2014, before the 4:05 p.m. Major League Baseball game between the Washington Nationals and the Philadelphia Phillies.
In a public service announcement to be shown at the game, Attorney General Eric Holder will emphasize the importance of creating an ongoing dialogue with children about safe use of technology.
“As a parent, I understand the opportunities – and the challenges – that new technologies present for America’s young people,” Attorney General Holder will say in the announcement. “It’s up to each of us to start a dialogue with our kids about safe Internet and cell phone practices. Together, we can ensure that our kids are safe and protected – both online and off.”
Child Cyber Safety Night at the Ballpark is a large-scale awareness event being led by INOBTR (I Know Better), a non-profit organization and OJJDP grantee focused on promoting youth safety. The Federal Bureau of Investigation (FBI) and Internet Crimes Against Children Task Force Program (ICAC) will join INOBTR in sharing resources for parents and children via the Community Clubhouse at the Center Field Plaza. Materials will be available when the gates open Saturday at 1:30 p.m. through the third inning of the game.
OJJDP provides national leadership, coordination and resources to prevent and respond to juvenile delinquency and victimization. For more on Internet and cell phone safety, please visit: www.projectyouthsafety.org/cybersafe.
Press inquiries regarding logistics should be directed to Kelly McMahon at [email protected] or 314-853-1053.
Jefferson County Woman Sentenced to 120 Months on Methamphetamine ChargesRead the Press Release
Follow @SDILNewsA Jefferson County woman was sentenced on September 3, 2014, to federal prison on methamphetamine charges, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Julia Ann Snow, 52, of Mt. Vernon, Illinois, was sentenced to 120 months’ imprisonment, four years’ supervised release following her imprisonment, and was fined $500. Snow had previously been convicted following a two day jury trial on five counts in a federal indictment. Count 1 charged that from on or about June 2010, until on or about September 19, 2012, in Jefferson County, Snow and others conspired to knowingly and intentionally manufacture more than 50 grams of methamphetamine. Count 4 charged that on July 5, 2012, Snow knowingly possessed equipment, chemicals, products, or materials used to manufacture methamphetamine. Counts 5, 6, and 7 charged that Snow knowingly possessed pseudoephedrine, knowing and having reasonable cause to believe that the pseudoephedrine would be used to manufacture methamphetamine, on three separate dates (December 16, 2011, August 25, 2011, and July 29, 2010).
The investigation in this case was conducted by the Joint Narcotics Unit of the Mt. Vernon Police Department and the Jefferson County Sheriff’s Department.
The case was prosecuted by Assistant United States Attorney George Norwood.
Italian National and Previously Convicted Felon Arrested for Unlawful ReentryRead the Press Release
Boston – An Italian national and illegal alien was arrested on Sept. 2, 2014 for reentering the United States after being removed on three prior occasions to Italy.
Philip Mario Carnovale, 62, who most recently resided in Danvers, was charged in a criminal complaint with unlawful reentry of a previously removed alien.
According to the criminal complaint, in December 1992, Carnovale was convicted in federal court of six counts of money laundering and racketeering and, subsequently, sentenced to 108 months in prison. Following his sentence, in May 2004, Carnovale was removed from the United States to Italy, his country of origin. Carnovale then reentered the United States on two separate occasions and was removed each time. Carnovale allegedly reentered the United States at an unknown location and date after his third removal and was encountered by federal agents.
The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; and David W. Hall, Special Agent in Charge of U.S. Department of State, Bureau of Diplomatic Security, Boston Field Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Carlos A. López of Ortiz’s Major Crimes Unit.
The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Idaho Department of Corrections Prisoner Sentenced on Federal Child Pornography ChargeRead the Press Release
Engaged in Sexual Chats with Teenage Girls via Social Media Websites
BOISE - Jacob Eldon Hobart, 27, of Boise, Idaho, was sentenced today to 120 months in federal prison for possession of sexually explicit images of minors, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Hobart to serve 15 years of supervised release and undergo sex offender treatment after his release from prison. Hobart pleaded guilty to the charge on April 30, 2014.
According to the plea agreement, the case originated in December 2012, when the Idaho Internet Crimes against Children Task Force received a report from the National Center for Missing and Exploited Children. A social networking site had observed a person with the screen/user name of Jacob Hobart (Jacob H) presenting himself on their site as 15 years of age; however, company personnel had observed another chat conversation in which Hobart stated he was actually 25 years of age. The social networking site further reported that Hobart had communicated with a female who identified herself as being 15 years of age.
Boise Police Detectives investigated and found hundreds of emails in Hobart’s Yahoo email from the social media site, including emails in which Hobart had requested to be friends with dozens of teenage females, ranging in age from 13 to19 years of age based on the ages stated in their profile. One of those girls was a 14-year-old girl from Washington State with whom Hobart exchanged sexually explicit photos. Another victim, the one who had held herself out on the social networking site as being 15, was actually a local 12-year-old middle school student, to whom Hobart had sent obscene photographs.
Hobart is currently incarcerated in the Idaho Department of Corrections, serving a term of two years fixed and eight years indeterminate for an unrelated charge of sexual battery involving lewd or lascivious acts on a minor child 16 to 17 years of age.
The case was investigated by the Boise Police Department, which is a member of the Idaho Internet Crimes Against Children (ICAC) Task Force, a statewide coalition of local, state and federal law enforcement and prosecution agencies, focused on apprehending and prosecuting individuals who use the Internet to criminally exploit children. For more information about the Idaho ICAC Task Force and a list of all the participating agencies, visit www.icacidaho.org.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006, by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Highland Resident Sentenced for Transportation and Possession of Visual Depictions of Minors Engaged in Sexually Explicit ConductRead the Press Release
Follow @SDILNewsA Highland, Illinois, resident was sentenced on September 4, 2014, to a two-count Indictment, charging him, in Count 1, with Transportation of Visual Depictions of Minors Engaged in Sexually Explicit Conduct; and, in Count 2, with Possession of Visual Depictions of Minors Engaged in Sexually Explicit Conduct; the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Daniel C. Shaw, a/k/a “Josh Shackfer,” 39, Highland, Il, was sentenced to a term of imprisonment of 72 months on each count, to run concurrently; a term of supervised release of 10 years on each count, also to run concurrently; fined $250 on each count, for a total fine of $500; and ordered to pay a $200 special assessment. Shaw was taken into custody by the USMS immediately after the hearing ended.
The investigation began on September 23, 2012, when the mother of a fifteen (15) year old minor contacted the Citrus County, Florida, Sheriff’s Office, and reported that a man sent her daughter pictures of a penis, and that she found sexually explicit texts between the man and her daughter. When interviewed, the daughter admitted that her conversations with the man, who she knew as “Josh Shackfer,” were sexual, and that she had told him her age. Despite numerous texts from the mother to the man telling him to stop communicating with her daughter, which the man ignored, the mother reported the incident to the Citrus County Sheriff’s Office.
The subsequent Florida investigation revealed that, from on or about July 30, 2010, until January 12, 2011, Defendant Daniel C. Shaw, posed as a 16 year old boy named “Josh Shackfer,” and made contact with several minor females in Florida using MySpace. Shaw was 35 years old at the time, and lived in Highland, Illinois. The investigation also revealed that Shaw, using a fake MySpace page for “Josh Shackfer,” engaged in sexually explicit conversations with several minor females, either through text messaging, instant messaging, or telephone calls, knowing that these girls were minors. He also asked some of these minor females to send him photographs of them naked and/or of their naked genitalia. Several females did so, including M.P., who sent close-up photographs of her naked genitalia. The pictures of M.P., which were clearly visual depictions of a minor engaged in sexually explicit conduct, were found on Shaw’s MySpace e-mail account. After being shown the pictures by a Highland, Illinois, Police Officer, Shaw identified the pictures of M.P. by initialing each of them, and indicated that he knew M.P. was either 16 or 17. (Count 2).
In a voluntary statement to a Highland, Illinois, Police Detective, Shaw admitted communicating with the minor females in Florida using a fake MySpace page under the name of “Josh Shackfer,” in which he identified himself as an 18 year old, and that he used images found on the internet of a younger male and portions of a male body on this MySpace page. He also admitted engaging in sexually explicit conversations with these underage girls, and trading pictures with them. Shaw saved the pictures sent to him from the minor females, including the sexually explicit pictures, on his Yahoo e-mail account. Shaw said that he had been engaged in this activity for approximately six (6) months, and that he knew the girls he communicated with in Florida were between 14 and 17 years of age. The pictures that were downloaded also demonstrated that Shaw had transferred the visual depictions of the minors engaged in sexually explicit conduct from one e-mail account to another via the internet (Count 1).
Shaw also provided a voluntary statement to members of the FBI’s Springfield Child Exploitation Task Force in which he again admitted creating the fake “Josh Shackfer” MySpace page to communicate with underage girls, and ask them to send pictures of themselves, including pictures of their breasts, buttocks and genitalia. Shaw said that M.P. sent him between five (5) and seven (7) pictures of her breasts, buttocks, and other “body poses,” and again acknowledged that he knew M.P. was a minor at the time he requested the pictures of her naked genitalia.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 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 was investigated by the Citrus County, Florida, Sheriff’s Department, the Highland, Illinois, Police Department and the Federal Bureau of Investigation's Springfield Child Exploitation Task Force (SCETF). The case was assigned to Assistant United States Attorney Angela Scott.
Guatemalan Pseudoephedrine Trafficker Sentenced to 11 Years for Importing Pills for Meth ProductionRead the Press Release
ALEXANDRIA, Va. – Erick Estrada Reyes, 31, of Guatemala, was sentenced today to 11 years in prison, followed by three years of supervised release, for conspiring to import several thousand pseudoephedrine pills into the United States for the production of methamphetamine.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Robert W. Patterson, Acting Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Special Operations Division, made the announcement after sentencing by U.S. District Judge T.S. Ellis, III.
Estrada Reyespleaded guilty on June 6, 2014 to conspiracy to unlawfully import pseudoephedrine and aiding and abetting the manufacture of methamphetamine. According to court records, Estrada Reyes was involved in the sale of nearly 5,000 pseudoephedrine pills to a person he believed was involved in a methamphetamine production operation based in Houston, Texas. This individual was, in reality, a DEA cooperating witness. Estrada Reyes, along with his father, Edgar Estrada Morales, and his cousin, Victor Estrada Paredes, negotiated the sale of equipment used to extract pseudoephedrine from pill form for use in the manufacture of methamphetamine. They also discussed working for the DEA cooperator’s fictitious U.S.-based methamphetamine trafficking organization. According to the indictment, Estrada Reyes worked for his father’s operation, which sold pseudoephedrine to groups that sold methamphetamine in the United States, including the “La Familia” Mexican drug cartel.
Estrada Reyes, along with his father and cousin, were indicted on Feb. 3, 2011 by a federal grand jury for their involvement in this operation. Edgar Estrada Morales was sentenced to 14 years in prison on Aug. 2, 2013, and Victor Estrada Paredes was sentenced to 11 years in prison on July 19, 2013.
This case was investigated by the DEA’s Special Operations Division. Assistant U.S. Attorney Michael P. Ben’Ary is prosecuting the case.
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. 1:11-cr-62.
Grand Island Business Sentenced for Structuring Bank Transactions to Evade Reporting RequirementsRead the Press Release
United States Attorney Deborah R. Gilg announced that United States District Court Judge John M. Gerrard sentenced Gomez, Inc., of Grand Island, Nebraska to serve 5 years of probation and pay a $50,000.00 fine following the company’s conviction for illegally structuring financial transactions. Judge Gerrard also ordered the forfeiture of $10,361.70 and ordered the company to pay a $125.00 special assessment fee.
Between January 5, 2009, and March 30, 2012, Gomez, Inc., doing business as Fourth Street Auto Sales, deposited and directed currency deposits into bank accounts at various financial institutions. Gomez, Inc. and its officers were aware of the financial institution’s legal obligation to report currency transactions in excess of $10,000. During the period set forth in the information, Gomez, Inc., through its officers, intentionally structured and caused to be structured currency deposits to the bank in amounts under $10,000, in order to evade the reporting requirements under federal law. During the period in question, Gomez, Inc. structured and caused to be structured currency transactions totaling between $1,000,000 and $2,082,338, including $10,361.70 seized by the United States as a result of the investigation.
“Structuring financial transactions to avoid currency reporting requirements is a criminal violation of federal law under the Bank Secrecy Act,” said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation. “We are committed to enforcing the law and following the money, wherever it leads.”
This case was investigated by IRS Criminal Investigation.Georgia “Sovereign Citizen” Convicted of Filing False Liens Against Federal OfficialsRead the Press Release
A federal jury in Omaha, Nebraska, found a Pelham, Georgia, man guilty late yesterday of seven counts of conspiracy to file and filing false liens against two U.S. District Court judges, the U.S. Attorney for the District of Nebraska, two Assistant U.S. Attorneys and an Internal Revenue Service (IRS) special agent, the Justice Department announced.
Randall David Due faces a statutory maximum sentence of 10 years in prison for each false lien conviction. Based on the evidence introduced at trial and court filings, Due and co-conspirator Donna Kozak, of Omaha, engaged in a conspiracy to retaliate against federal officials involved in the criminal investigation and prosecution of David and Bernita Kleensang, associates of Due and Kozak who were convicted of federal tax crimes in 2012. Kozak was tried separately and convicted on Aug. 1.
Due and Kozak initially retaliated against the federal judge who presided over the Kleensang trial by filing a false lien against her for $19 million with the Boyd County Clerk’s Office in Butte, Nebraska. After a federal grand jury indicted Kozak for filing the false lien and for committing federal tax crimes, Due and Kozak filed five $18 million false liens with the Washington County Register of Deeds Office in Blair, Nebraska, against the federal officials involved in the investigation and indictment of Kozak and additional federal officials involved in the Kleensang case.
This case was investigated by special agents of the FBI and the department’s Tax Division prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found at the division website
Fraudster Who Ran Oil and Gas Investment Scheme Is Sentenced to 60 Months in Federal Prison on Money Laundering ConvictionRead the Press Release
FORT WORTH, Texas — A Lipan, Texas, man who pleaded guilty in May 2014 to one count of money laundering stemming from an oil and gas investment scheme he ran, was sentenced today, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
James M. McConathy, 62, was sentenced by U.S. District Judge John McBryde to 60 months in federal prison, and he was ordered to pay $112,746 in restitution. Judge McBryde ordered McConathy to surrender to the Bureau of Prisons on September 26, 2014. According to documents filed in the case, McConathy admitted that in October 2010, he wired $75,000 in funds he derived as a result of wire fraud from his account at First National Bank Lipan to Southlake Energy’s account at Bank of Texas.
In April 2010, McConathy purchased rights to an oil and gas lease known as the “T.W. Martin Lease,” which is located in Navarro County, for approximately $20,000. In late September 2010, McConathy placed a call from Lipan, Texas, to an individual, “S.H.” in Evanston, Wyoming, and told S.H. that he could purchase a 50% interest in the lease for $125,000. During that call, McConathy falsely represented to S.H. that the T.W. Martin Lease was producing an amount of oil significantly greater than it was actually producing. In early October 2010, McConathy traveled to Evanston and met with S.H. Agreeing to buy one-half stake in the lease, S.H. gave McConathy a check for $125,000.
Less than a week later, McConathy loaned $75,000 of that money to Southlake Energy, in Southlake, Texas. S.H. did not know McConathy loaned the money. As directed by McConathy, Southlake Energy repaid the $75,000 loan by sending a $75,000 wire transfer to a bank account held by McConathy’s wife, and by doing this, was able to conceal the funds’ origins.
In late December 2010, McConathy sent S.H. a check for approximately $4,500, purported to be S.H.’s portion of the proceeds of the sale of 146 barrels of oil produced in October 2010 at the T.W. Martin Lease to a third party. In fact, McConathy had not sold any oil to a third party, and the lease had not produced 146 barrels of oil in October.
In late January 2011, S.H., believing the T.W. Martin Lease was generating revenue as promised, sent McConathy an additional $7,500 for an oil rig. The following day, McConathy sent S.H. a check for $5,358, purported to be S.H.’s portion of the sale of 174.4 barrels produced in November 2010 at the T.W. Martin Lease to a third party.
Similar representations and transactions occurred in March and May 2011. After May 2011, McConathy stopped sending checks to S.H.
These periodic payments McConathy made to S.H. were designed to convince him that the T.W. Martin Lease was productive and profitable. In fact, the payments were funded with money unrelated to the T.W. Martin Lease oil sales.
The Internal Revenue Service Criminal Investigation and FBI investigated the case.
Four 10th Street Gang Members Convicted of Murder, Racketeering and Narcotics TraffickingRead the Press Release
BUFFALO, N.Y. U.S. Attorney William J. Hochul, Jr. announced today that following a seven week jury trial, a federal jury has convicted four members of the 10th Street Gang of racketeering conspiracy, multiple violent crimes in aid of racketeering, narcotics trafficking and firearm offenses.
“More than four years ago, our Office declared a focus on gangs and the violent activities that go with them,” said U.S. Attorney Hochul. “Today, thanks to the unrelenting efforts of law enforcement, the community and the jury, we can announce some of the results of that effort. The convictions of four defendants on racketeering related charges means that 44 10th Street Gang members and associates have now been convicted. But beyond sending these violent predators to prison, in most cases for a very long time, the prosecution means that an entire neighborhood can now enjoy the streets of this fine community. We will continue to assist in the transformation of our fine City thru vigorous prosecution of any remaining gang members.”
Specifically:
• Matthew Smith, 28, was convicted of Racketeering Influenced Corrupt Organizations (RICO);
• Smith, Jonathan Delgado, 26, Domenico Anastasio, 27, and Ismael Lopez, 26, were convicted of RICO conspiracy;
• Defendants Smith, Anastasio and Lopez were convicted of murder in aid of racketeering;
• Defendants Smith, Delgado, and Lopez were convicted of narcotics conspiracy;
• Defendants Smith, Delgado, and Lopez were convicted of possession of a gun in furtherance of drug trafficking activities;
• And defendants Delgado, Anastasio, and Lopez were convicted of possession with intent to distribute and distribution of heroin.The jury also returned a special finding indicating that all four defendants participated in the murders of Brandon McDonald and Darinell Young.
Defendants Anastasio, Smith and Lopez face a mandatory sentence of life in prison; defendant Delgado faces a maximum sentence of life in prison.
Assistant U.S. Attorneys Joseph M. Tripi and John M. Alsup, who handled the prosecution of the case, stated that the defendants were responsible for multiple acts of violence including the murders of Brandon McDonald and Darinell Young and the attempted murders of three others on April 17, 2006.
Matthew Smith will be sentenced on February 20, 2015; Jonathan Delgado on February 24, 2014; Ismael Lopez on February February 27, 2014; and Demenico Anastasio on March 3, 2015. All sentencings will be before U.S. District Judge Richard J. Arcara who presided over the trial.
In addition to the violent crimes, the 10th Street Gang also trafficked in various controlled substances. Members and associates conspired to distribute 280 kilograms or more of crack cocaine, five or more kilograms of cocaine and a quantity of marijuana.
Today’s convictions are the culmination of an investigation on the part of Special Agents of the FBI Safe Streets Task Force, the New York State Police, under the direction of Major Michael Cerretto, the Buffalo Police Department under the direction of Commissioner Daniel Derenda and the Bureau of Alcohol, Tobacco, Firearms, and Explosives under the direction of Frank Christiano.Former Vancouver, Washington Resident Sentenced to 12 Years in Prison for Distributing Pictures of Child RapeRead the Press Release
A former Vancouver, Washington man who has served three years in state prison for attempted child molestation, was sentenced to an additional 12 years in federal prison for distributing pictures and videos of children being raped, announced U.S. Attorney Jenny A. Durkan. JOSEPH SCHESSO, 36, was indicted in 2011 by a federal grand jury for production of child pornography, distribution of child pornography, receipt of child pornography and possession of child pornography. Following a lengthy series of appeals regarding search warrants executed in the case, SCHESSO pleaded guilty to distribution of child pornography. Today’s twelve year sentence runs consecutive to the three years SCHESSO has spent in prison on the state charge, resulting in a total of 15 years imprisonment. At sentencing U.S. District Judge Robert J. Bryan said “These crimes carry long sentences, but they are appropriate under the circumstances.”
According to records filed in the case, SCHESSO first came to the attention of authorities when investigators in Germany discovered an individual in the U.S. distributing child pornography through a file-sharing program. The information was passed from German law enforcement to investigators with U.S. Immigration and Customs Enforcement (ICE), who traced the computer’s internet protocol address to SCHESSO’s residence. In June 2010, agents executed a search warrant on SCHESSO’s Vancouver home. Investigators found more than 3,400 images and 632 movie files of child pornography on SCHESSO’s computers. They also located a media card for a digital camera. Forensic examination of the media card revealed sexually explicit photos of a young child. Further examination revealed furniture and blankets in the photos were at SCHESSO’s home. The child was later identified as someone who had visited SCHESSO’s home.
On November 28, 2012, SCHESSO was sentenced in Clark County Superior Court to 40 months to life in prison for attempted child molestation.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys= Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
The case was investigated by ICE’s Homeland Security Investigations. The case is being prosecuted by Assistant United States Attorney Marci Ellsworth.
Former Silk Road Drug Vendor Sentenced to PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced a former drug vendor on the Silk Road website, Jacob Theodore George IV, age 33, of Edgewood, Maryland, today to six years in prison, followed by three years of supervised release, for conspiracy to distribute and possess with intent to distribute drugs, including heroin.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division; Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office; and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
“Today's sentencing again underscores HSI's commitment to continue working with our domestic and international law enforcement partners to identify and arrest individuals who are conducting criminal activities by using networks and digital currency designed to provide anonymity, such as Tor and bitcoins,” said HSI Baltimore Special Agent in Charge William Winter. “International drug traffickers are on notice that this illegal trade will not be tolerated.”
“Mr. George believed that he could operate with impunity on the Internet, providing a “service” to drug users and drug dealers alike. In doing so, he increased his trafficking network in the Baltimore area. Internet usage exists is in every home in the United States: our children communicate with their friends, work on school projects. Parents trust that their children are engaged in these activities safely in their homes. I am proud to say with the joint efforts between DEA and our law enforcement partners, Mr. George will no longer have access to this expansive illicit marketplace on the Internet.”
According to his plea agreement, from at least November 2011 to January 18, 2012, George sold drugs via Silk Road. George made contact with buyers via Silk Road, accepted payment electronically through Silk Road using bitcoin, a digital currency, and shipped drugs via the United States Postal Service to buyers throughout the United States and in foreign countries. The owner and operator of Silk Road, alleged to be Ross William Ulbricht, collected a fee for each transaction on the website. George acquired drugs from two primary sources: he purchased some drugs, including heroin, from drug dealers in the Baltimore metropolitan area; and he purchased synthetic drugs, including methylone, from suppliers in China and had those drugs shipped to him. In one of the first seizures of its kind, federal agents also seized bitcoin used by George to buy and sell drugs on the Silk Road website.
Ross Ulbricht, a/k/a “Dread Pirate Roberts,” a/k/a “DPR,” age 30, of San Francisco, California, has been indicted in Maryland and in the U.S. District Court for the Southern District of New York on charges related to his alleged operation of the Silk Road website. Ulbricht is scheduled for trial in New York on November 3, 2014. No court appearance in Maryland has been scheduled. An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised HSI Baltimore, DEA, U.S. Postal Inspection Service, U.S. Secret Service and IRS-Criminal Investigation for their work in the investigation. U.S. Attorney Rosenstein recognized U.S. Attorneys Preet Bharara and Zach Fardon of the Southern District of New York and the Northern District of Illinois, respectively, and their offices; the FBI; and Senior Trial Counsel James Silver of the U.S. Department of Justice Computer Crimes and Intellectual Property Section for their assistance in the case. Mr. Rosenstein thanked Assistant United States Attorney Justin S. Herring, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Former Post Office Manager Pleads Guilty in Bribe SchemeRead the Press Release
Station Manager Submitted Fraudulent and Inflated Invoices for Landscaping and Cleaning Services in Exchange for Bribe Payments
Baltimore, Maryland – Former U.S. Postal Service Station Manager Richard Lewis Wright, III, age 47, of Baltimore, pleaded guilty today to bribery in connection with a scheme to obtain U.S. Postal Service contracts in exchange for bribe payments.On August 29, 2014, U.S. District Judge Ellen L. Hollander sentenced former USPS Station Manager Kimberly A. Parnell, age 43 and contractor Shane Anderson, age 37, both of Baltimore, to 20 months and 15 months in prison, respectively, each followed by three years of supervised release, for bribery in the same scheme.
The plea and sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Paul Bowman of the U.S. Postal Service Office of Inspector General; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to their plea agreements, Wright was the USPS Station Manager of the Waverly Station in Baltimore, Maryland, and Parnell was the USPS Station Manager of the Pikesville Station in Pikesville, Maryland. As part of their official duties as a USPS Station Manager, Wright and Parnell had the authority to contract for landscaping, snow removal, and certain cleaning services at the Post Offices they managed, and to submit invoices for those services to USPS for payment.
Beginning in 2007 for Wright and 2010 for Parnell, and continuing until July 2013, Wright and Parnell admitted that they created, approved and submitted false and inflated invoices for maintenance work allegedly performed at their Post Offices and then split the proceeds with the providers of the services, including Shane Anderson and others.
According to their plea agreements, Wright and Parnell initially accepted bribes from co-conspirator G.M., who owned a landscaping company. In July 2013, after becoming increasingly frustrated with G.M’s slow payment of bribes to Wright and Parnell, Parnell recruited Shane Anderson, who operated a landscaping company in Baltimore, called Youthful Minds Lawn Care and whom she believed would make bribe payments in exchange for USPS contracts, to participate in the scheme. Thereafter, Wright, Parnell and Anderson agreed that Wright and Parnell would submit false and inflated invoices from Youthful Minds Lawn Care for landscaping services in exchange for a percentage of the proceeds paid to Youthful Minds by the USPS.
Beginning in August 2010, Wright also began soliciting and receiving bribes from Ladeena Sketers-Anderson, who operated Keep U Clean cleaning service. Sketers-Anderson received USPS payments, approved by Wright for services allegedly provided at Wright’s Post Office, and deposited the checks into her account. Sketers-Anderson then issued checks to a cleaning company owned by Wright, which Wright endorsed and cashed.
In all, Wright submitted a total of $591,791 worth of invoices in exchange for bribe payments and Parnell submitted a total of $50,470 worth of invoices in exchange for bribe payments.
Richard Wright faces a maximum penalty of 15 years in prison. As part of his plea agreement, Wright will be required to pay restitution in the full amount of the loss, which will be determined by the Court. U.S. District Judge Ellen L. Hollander has scheduled Wright’s sentencing for February 6, 2015, at 10:00 a.m.
Ladena D. Sketers-Anderson, age 48, of Randallstown, Maryland, previously pleaded guilty to her role in the scheme and is scheduled to be sentenced on September 12, 2014, at 11:00 a.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 USPS-Office of Inspector General and FBI for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Leo J. Wise, who is prosecuting the case.
Former Office Manager Sentenced to 27 Months in Prison for Forgery and Signing A False Tax ReturnRead the Press Release
Oklahoma City, Oklahoma – ERIN MARIE WELLS, of Yukon, Oklahoma, was sentenced to serve 27 months in prison for check forgery and signing a false federal income tax return, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
From 2009 until mid-2013, Wells was employed as the office manager of Advanced Electric, located in Oklahoma City. She was responsible for paying the company’s bills, depositing checks into the company bank account, and maintaining the company’s books and records. On May 12, 2014, she pled guilty to forging the signature of the company’s owner on a $1,500 check and using the proceeds for her personal benefit. In a plea agreement, she agreed to pay restitution to the company in the amount of $256,857.76. At the same hearing, Wells pled guilty to signing a false tax return. She admitted that on January 11, 2013, she signed a personal federal tax return for the 2012 calendar year that she knew was false because it reported only $28,386 in total income, substantially less than the income she actually received.
At sentencing, U.S. District Judge Stephen P. Friot ordered that Wells be incarcerated for 27 months. The sentence was based in part on the fact that Wells embezzled more than a quarter of a million dollars over several years while holding a position of trust in the company. It was also based on a total loss to the IRS of $51,145.00 during three tax years. Following her 27-month sentence, Wells was ordered to serve three years of supervised release and perform 104 hours of community service. The sentence also requires her to pay a total of $308,002.76 to Advanced Electric and the IRS.
This case was the result of an investigation by the Internal Revenue Service - Criminal Investigations and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Scott E. Williams.
Former Director of Advance Operations in 2010 Mayoral Campaign Pleads Guilty to Conspiring to Violate Campaign Finance LawsDefendant Served as Candidate’s Official Driver; Also Admits Receiving Secret Contributions for His Own 2008 D.C. Council CampaignRead the Press Release
WASHINGTON – Mark Long, 47, the former Director of Advance Operations for the 2010 campaign of a mayoral candidate in the District of Columbia, pled guilty today to conspiring to defraud the District of Columbia’s Office of Campaign Finance by funding and concealing contributions in excess of those permitted under D.C. campaign finance laws.
The guilty plea was announced by U.S. Attorney Ronald C. Machen Jr., Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, and Thomas J. Kelly, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI).
Long pled guilty in the Superior Court of the District of Columbia to conspiring to violate District of Columbia campaign finance laws by defrauding the District of Columbia’s Office of Campaign Finance. He appeared before the Honorable Anita Josey-Herring. No sentencing date was set. The charge carries a statutory maximum of five years in prison and potential financial penalties. Under the Court’s voluntary sentencing guidelines, the parties have agreed that Long faces a range of one to 12 months in prison, or, possibly, probation.
The guilty plea calls for Long to cooperate fully in an ongoing investigation. The charge involves Long’s work on behalf of a candidate in the 2010 election for Mayor of the District of Columbia. Long admitted that he worked as the director of advance operations for the candidate, who is identified in court documents as “Mayoral Candidate A.” Long admitted that he received payment for his services to the campaign from business owner Eugenia C. Harris, who had received the funds from another business owner, Jeffrey E. Thompson, who at the time of the offense controlled one of the District’s largest government contracts. He admitted knowing that Thompson and Harris intended to conceal, and did in fact, conceal, these payments from the Office of Campaign Finance.
Long also admitted working through Thompson and Harris to conceal excessive contributions for his own unsuccessful 2008 campaign for an At-Large seat on the Council.
Long is the third former Council candidate to plead guilty to conspiracy charges that involve concealed contributions from Thompson. Thompson pled guilty in March 2014 to two felony charges involving his campaign finance activities, Harris pled guilty to charges in July 2012. Both are awaiting sentencing and both are cooperating in the investigation.
The other Council candidates who entered guilty pleas include Kelvin Robinson, who admitted receiving money for his unsuccessful 2010 campaigns for the Ward 6 and At-Large seats, and Jeff Smith, who admitted receiving money for his unsuccessful 2010 campaign for the Ward 1 seat. Robinson is awaiting sentencing. Smith was sentenced on Aug. 28, 2014, to 60 days in jail, in addition to a year of probation, 400 hours of community service, and a $10,000 fine.
A fourth candidate, former District of Columbia Council member Michael A. Brown, pled guilty to charges in an unrelated bribery investigation. In those proceedings, he publicly admitted that his campaign committees had secretly received money from Thompson.
A total of six people have now pled guilty to charges involving the 2010 mayoral election. In addition to Long, Thompson and Harris, the other defendants have included Vernon Hawkins, who was a volunteer advisor in 2010 for “Mayoral Candidate A.” and Howard L. Brooks and Thomas W. Gore, who both worked on “Mayoral Candidate A’s” campaign.
“Mark Long’s guilty plea is further evidence that this 2010 mayoral campaign was rife with corruption,” said U.S. Attorney Machen. “Long is now the sixth person associated with the 2010 mayoral campaign to become a felon as a result of illegal conduct on behalf of that campaign. Six months ago, when contractor Jeff Thompson walked into court and pulled back the curtain on widespread corruption in D.C. politics, we pledged to continue our work to hold accountable everyone who conspired with him to poison our political system. Since his plea, no fewer than four candidates for elected office in the District of Columbia have stood up in court and confessed to taking Thompson’s illegal contributions. Our work continues.”
“Today, Mr. Long took responsibility for concealing payments from the D.C. Office of Campaign Finance for his work on the 2010 mayoral campaign and to concealing in-kind contributions to his 2008 campaign for D.C. Council,” said Assistant Director in Charge McCabe. “Citizens are entitled to honest campaigns and fair elections, free of fraud. The FBI remains vigilant to such abuse and urges anyone with information about fraud or corruption to come forward and contact the FBI.”
Thompson is the former chairman, chief executive officer, and majority owner of Thompson, Cobb, Bazilio and Associates (TCBA), a corporation that provided accounting, management, consulting, and tax services. He also is the former chairman, chief executive officer, and owner of D.C. Healthcare Systems, Inc. (DCHSI), an investment holding and for-profit corporation. Both companies generated millions of dollars in government contracts.
Harris owned and controlled two businesses: Belle International, Inc., and Details International Inc. Long worked from May 2007 through May 2011 for Details International, Inc., holding the title of account executive.
According to a statement of offense, signed by the government as well as the defendant, Long, Thompson, Harris and others acted to make and to receive – and to conceal – campaign contributions in excess of those permitted under the District of Columbia Campaign Act.
The District of Columbia Campaign Act imposes limits on the amount of money that can be contributed to a District of Columbia candidate and that candidate’s principal campaign committee. It also prohibits any person or corporation from making a contribution in the name of another, including by reimbursement. Finally, it requires principal campaign committees to file periodic reports of receipts and disbursements.
During the 2010 mayoral campaign, as arranged by Thompson and Harris, Long became the Director of Advance Operations for the campaign of “Mayoral Candidate A.” From May 2010 through September 2010, according to the statement of offense, Long received a salary from Harris’s company, Details International, Inc., in his capacity as a consultant to Details International, to provide services to the mayoral campaign. Thompson and his companies provided funds to Details International to cover the salary.
Among his responsibilities, Long served as the official campaign driver for “Mayoral Candidate A,” taking the candidate to various campaign-related and other events. Long drove the candidate in a Lincoln Navigator, which he suspected was provided by Harris.
Long understood that Thompson and Harris intended to conceal their payments to him for services to the mayoral campaign, keeping the activities secret from the District of Columbia’s Office of Campaign Finance, other candidates, and the public. As a result, the campaign of “Mayoral Candidate A” did not report the payments for Long’s services on documents filed with the Office of Campaign Finance.
Also, according to the statement of offense, as part of his services to the campaign, Long set up a secret meeting between “Mayoral Candidate A” and a rival mayoral candidate in August of 2010. Based on his discussions with Harris, the meeting was to attempt to arrange a secret agreement in which the rival would drop out of the race and endorse “Mayoral Candidate A” in return for something of value. Long drove “Mayoral Candidate A” to a meeting place in Maryland.
The charging document filed against Long states that the principal campaign committee for “Mayoral Candidate A” issued a check in the amount of $20,000 to Harris’s company, Details International, that contained false and misleading information in that it stated that the purpose of the $20,000 payment to the company was for “consulting services;” in fact, the payment was intended to be used by Harris for the benefit of the rival mayoral candidate in exchange for dropping out of the election and endorsing “Mayoral Candidate A.” The rival candidate, however, did not drop out of the race and made no endorsement.
Long’s own campaign accepted and concealed illegal contributions from Thompson and Harris, during his 2008 bid for the At-Large Council seat. With Long’s knowledge, Thompson and Harris paid for campaign expenses in coordination with and in support of Long’s principal campaign committee. These in-kind contributions exceeded the legal limits, and they were concealed from the District of Columbia Office of Campaign Finance.
In announcing the guilty plea, U.S. Attorney Machen, Assistant Director in Charge McCabe, and Special Agent in Charge Kelly commended the work of those who investigated the case from the FBI’s Washington Field Office and IRS-CI.
They also expressed appreciation for the work of Assistant U.S. Attorneys Michael K. Atkinson, Jonathan P. Hooks, Ellen Chubin Epstein, and Lionel André, of the Fraud and Public Corruption Section of the U.S. Attorney’s Office for the District of Columbia, who are prosecuting cases in the investigation.
Finally, they acknowledged the efforts of others who worked on the case from the U.S. Attorney’s Office, including Deborah Connor, Chief of the Fraud and Public Corruption Section, as well as former Criminal Investigator Matthew J. Kutz; Forensic Accountant Crystal Boodoo; Paralegal Specialists Krishawn Graham, Tasha Harris, Corrine Kleinman, and Heather Sales; and Legal Assistant Angela Lawrence.
14-195Former DMV Employee Sentenced to Three Years in Prison for Conspiracy to Commit Bribery, Document Fraud and Witness Tampering in A Widespread Corruption Case at the DMV in Southern CaliforniaRead the Press Release
Jeffrey Bednarek, a former employee at the California Department of Motor Vehicles office in El Cajon, California, was sentenced today by U.S. District Court Judge Cathy A. Bencivengo to three years in prison for his leadership role in a conspiracy to commit bribery, identification document fraud and witness tampering. In addition to the prison sentence imposed, the court also ordered Bednarek to pay a fine of $25,000.
In handing down the sentence, Judge Bencivengo told the defendant that as a DMV employee and a former corrections officer, he should have known better. “You were in fact violating the public trust…You had to know it was wrong.”
In comments at today’s hearing, Assistant U.S. Attorney Joseph Orabona argued for a significant sentence and gave examples of Bednarek’s cavalier attitude about his crimes. “Bednarek’s greed overrode his integrity. His attempt to alter the testimony of a witness just prior to trial showed his determination to mask the truth about his criminal activities.”
Orabona told the judge that Bednarek processed a fraudulent license for an undercover agent, and after it was complete, he handed the agent the temporary license, made the sign of the cross, and said, “Be good. Be gone. And sin no more.”
The prosecutor also read text messages from Bednarek to co-conspirator Jim Bean, referring to the substantial amount of cash he was collecting through the bribery scheme. “Come drop the package chubby. Cha-ching.”
Bednarek pleaded guilty on January 28, 2014. According to court documents, Bednarek was a Licensing Registration Examiner at the El Cajon DMV who was responsible for conducting driving tests for driver’s license applicants. Beginning in at least April 2009, and continuing up to at least April 26, 2012, Bednarek conspired with his co-defendants to commit federal program bribery and identification document fraud. In his plea agreement, Bednarek admitted that he falsely entered “passing” scores for both written and behind-the-wheel tests for applicants who applied for regular (Class C) and commercial (Class A) driver’s licenses in exchange for bribes. Bednarek also acknowledged that he directed others to enter false “passing” test scores and that he created false driving test score sheets to create the appearance that the applicant had completed the test. Bednarek said in his plea agreement that during the conspiracy, he produced more than 100 fraudulent driver’s permits and licenses, and that applicants paid more than $50,000 in total bribes for permits and licenses that he fraudulently produced.
While awaiting an upcoming trial that was scheduled for December 2, 2013, Bednarek tampered with one of the Government’s witnesses, the plea agreement said. According to court documents, Bednarek was arrested on November 13, 2013 pursuant to a complaint for witness tampering. On November 22, 2013, Judge Bencivengo ordered that Bednarek be detained pending trial. Bednarek admitted in his plea agreement that between January 26, 2013 and November 4, 2013, he knowingly attempted to corruptly persuade a Government witness to alter his testimony, namely, to provide false testimony regarding cash bribes that Bednarek had received for his aggravating role in the conspiracy. Bednarek admitted that he intended to prevent and influence the Government witness’s testimony in the trial that was scheduled for December 2, 2013.
U.S. Attorney Laura Duffy said, “Public corruption is one of our highest priorities. Today’s sentence demonstrates that those who violate the public’s trust will be held accountable for their crimes. We thank our partners at the FBI and DMV for their commitment to this important investigation.”
“Our department takes any type of crime among our employees very seriously,” said DMV Director Jean Shiomoto. “Our own DMV Investigations Unit and other law enforcement agencies are always on the lookout for this type of illegal activity in any of our field offices.”
Of the 31 defendants charged in this widespread corruption scheme (related Criminal Case Nos. 12CR1852-CAB, 13CR0121-CAB, and 13CR0592-CAB), 30 of the 31 defendants, including Bednarek, have pleaded guilty to felony conduct, namely, conspiracy to commit bribery and identification document fraud. One defendant is a fugitive. All of the former DMV employees convicted in this case were sentenced to prison, and most of the recruiters and driver’s license applicants received probationary sentences. In total, the Court imposed approximately $119,000 in fines. The following table provides a summary of the crimes and sentences for almost all of the defendants in the widespread corruption scheme:
DEFENDANT CASE NO. CHARGE(S) SENTENCE Jim Lynn Bean 12CR1852-CAB Conspiracy
Bribery 597 days in prison,
3 years supervised release,
Fine of $25,000 Jeffrey Thomas Bednarek 12CR1852-CAB Conspiracy
Bribery
Identification
Document Fraud
Witness Tampering 36 months in prison,
3 years supervised release,
Fine of $25,000 Scott David Friedli 12CR1852-CAB Conspiracy 4 months in prison,
2 years supervised release,
Fine of $1,500 Marco Beltran 12CR1852-CAB Conspiracy 6 months in prison,
2 years supervised release,
Fine of $4,000 Gabriella Villanueva 12CR1852-CAB Conspiracy 5 years probation,
Fine of $200 Bashar Assad Azaria 12CR1852-CAB Conspiracy 5 years probation,
Fine of $2,000 Reenan Esa Kuza 12CR1852-CAB Conspiracy 2 years probation,
Fine of $3,000 Usman Aliyev 12CR1852-CAB Conspiracy 5 years probation,
Fine of $2,100 Abdulmajed Alhokair 12CR1852-CAB Conspiracy 5 years probation,
Fine of $1,000 Ahmad Alarbeed 12CR1852-CAB Conspiracy 5 years probation,
Fine of $1,000 Mohammed Alsuwaidi 12CR1852-CAB Conspiracy 5 years probation,
Fine of $1,000 Khalid Abdulaziz Al-Sowaidi 12CR1852-CAB Conspiracy 5 years probation,
Fine of $1,000 Talal Bass Almousharji 12CR1852-CAB Conspiracy 5 years probation,
Fine of $900 Virginia Pena 12CR1852-CAB Conspiracy 51 days in prison,
2 years supervised release,
Fine of $600 Gizem Yontar 12CR1852-CAB Conspiracy 5 years probation,
Fine of $1,000 Douri Zafer 12CR1852-CAB Conspiracy 5 years probation,
Fine of $1,000 Asiel Bahjat Tomika 12CR1852-CAB Conspiracy 5 years probation,
Fine of $4,600 Angel Salvador Astimibay 12CR1852-CAB Conspiracy 5 years probation,
Fine of $1,000 Bekzad Mirhanov 12CR1852-CAB Conspiracy 5 years probation,
Fine of $1,000 Jesus Leon 13CR0121-CAB Conspiracy 5 years probation,
Fine of $200 Jesse Mario Bryan 13CR0592-CAB Conspiracy
Bribery 6 months in prison,
3 years supervised release,
Fine of $25,000 Alexander Gonzalez 13CR0592-CAB Conspiracy 12 days in prison,
32 months supervised release,
Fine of $8,000 Frank Tom Attiq 13CR0592-CAB Conspiracy 5 years probation,
Fine of $200 Ali Al Nadawi 13CR0592-CAB Conspiracy 5 years probation,
Fine of $1,500 Saleh Almuzini 13CR0592-CAB Conspiracy 5 years probation,
Fine of $1,000 Matthew Allan Elliott 13CR0592-CAB Conspiracy 5 years probation,
Fine of $1,000 Mohamed Alali 13CR0592-CAB Conspiracy 5 years probation,
Fine of $800 James Lester Shaw 13CR0592-CAB Conspiracy 10 days in prison,
2 years supervised release,
Fine of $4,000 Hassan Hamad Althani 13CR0592-CAB Conspiracy 5 years probation,
Fine of $1,000These cases are the result of an active, ongoing criminal investigation. Anyone with information about corruption at the DMV is asked to contact the Federal Bureau of Investigation at 1-877-NO-BRIBE (662-7423), or the DMV’s Investigations Branch-Office of Internal Affairs at 626-851-0173.
DEFENDANT Case Number: 12CR1852-CAB Jeffrey T. Bednarek Age: 54 SUMMARY OF CHARGESCount 1 Title 18, United States Code, Section 371 -- Conspiracy to Commit Bribery and to Produce Unauthorized Identification Documents -- statutory maximum sentence of 5 years’ custody, a maximum fine of $250,000, special assessment of $100, and a maximum term of supervised release of 3 years.
Count 2 Title 18, United States Code, Section 666(a)(1)(B) -- Bribery -- statutory maximum sentence of 10 years’ custody, special assessment of $100, and a maximum term of supervised release of 3 years.
Count 7: Title 18, United States Code, Section 1512(b)(1) -- Witness Tampering -- statutory maximum sentence of 20 years’ custody, a maximum fine of $250,000, special assessment of $100, and a maximum term of supervised release of 3 years.
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Department of Motor Vehicles B Investigations DivisionFormer CEO of Atlanta-Area Daycare Chain Sentenced to Prison for Stealing Nearly $2 Million in Federal Child Nutrition FundsRead the Press Release
ATLANTA - Antonio T. Hurt has been sentenced to two years and one month in federal prison for stealing nearly $2 million from a federal program that partially reimburses daycare centers for the cost of meals for needy children.
“Hurt used the child nutrition funds to expand his day care business, lease cars, buy jewelry, and pay for other personal expenses,” said United States Attorney Sally Quillian Yates. “Stealing almost $2 million in taxpayer money is bad enough, but stealing funds intended to feed underprivileged children is outrageous.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “Stealing federal funds destined to feed needy children and using those funds to purchase luxury personal items is the epitome of a selfish act. This sentencing will hold Mr. Hurt accountable for his selfish act and serve as a reminder that the FBI will make every effort to identify and present for prosecution those individuals abusing their positions by diverting and stealing federal funds from their intended purpose for personal gain.”
“It is unfortunate that programs funded by the government, such as this one which assists in providing healthy meals to eligible day care children, are sometimes seen as a mechanism for fraud by individuals who continue to think they can get away with schemes to enrich themselves. Taxpayers trust that when such funding is provided that it will be utilized to help people and not be misused and misappropriated by those entrusted to deliver the programs. The United States Department of Agriculture, Office of Inspector General, continues to dedicate its resources to work with the U.S. Attorney’s Office and its federal, state, and local law enforcement partners to investigate and prosecute such individuals. We hope that today’s sentencing of Mr. Hurt sends a strong message to others that fraud will not be tolerated in government funded programs,” said Karen Citizen-Wilcox, Special Agent-in-Charge for USDA’s Office of Inspector General.
According to United States Attorney Yates, the charges, and other information presented in court: Between 2007 and 2010, Hurt served as the chief executive officer of Bright Star Early Learning Center, which owned and operated multiple daycare centers throughout metropolitan Atlanta, Ga., and in other parts of north Georgia under the name Bright Star. Hurt also entered into franchise agreements that allowed multiple additional third-party daycare centers to operate under the Bright Star name.
In February 2006, Hurt arranged for Bright Star Early Learning Center to apply to participate in the Child & Adult Care Food Program (CACFP). CACFP, which is funded by the U.S. Department of Agriculture under the National School Lunch Act of 1964, is a federal program that partially reimburses daycare centers for the cost of serving breakfast and lunch to eligible children whose family income falls below certain thresholds. In Georgia, the program is administered by the Georgia Department of Early Care & Learning. Child and adult care centers that are eligible to participate in the program are required to submit monthly claims to the Department of Early Care & Learning to detail the number of eligible students, meals, and other information for each 30-day period. The Department of Early Care & Learning then reimburses the daycare centers.
Beginning in October 2007 and continuing through January 2010, Hurt submitted millions of dollars in CACFP reimbursement claims to the Department of Early Care & Learning on behalf of his own daycare centers and his franchisees. Hurt’s reimbursement claims intentionally misstated the number of eligible students, meals, and other information. As a result, the Department of Early Care & Learning issued fraudulently inflated reimbursement funds to accounts that Hurt controlled. Hurt then issued the expected payments to the unsuspecting daycare centers and retained the fraudulently inflated portion for himself, amounting to approximately $1.9 million over a two-year period. Hurt used the money to expand and fund the operation of his daycare business and to live beyond his means.Hurt, 39, of Macon, Ga., was formerly a high school principal in Georgia and Maryland. Hurt was sentenced by U.S. District Judge Amy Totenberg to two years, one month in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $1,872,152.78. Hurt was convicted on these charges on April 9, 2014, after he pleaded guilty.
This case was investigated by the Federal Bureau of Investigation.
Assistant United States Attorney David M. Chaiken prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.Former Army Captain Convicted of Wire Fraud and Mail FraudRead the Press Release
GAINESVILLE, FLORIDA – Michael Benjamin Crowder, 36, now of Bradenton, Florida, was convicted yesterday in federal court in Gainesville of multiple counts of wire fraud and mail fraud, announced United States Attorney Pamela C. Marsh, Northern District of Florida. Sentencing has been set for November 17, 2014.
Crowder, while attending law school at the University of Florida under the Army’s Funded Legal Education Program, owned and operated M & H Coins and Precious Metals, LLC, from his Gainesville home. Crowder continued to operate the business while stationed at Fort Sill, Oklahoma.
At trial, the government presented evidence that the defendant accepted payments in excess of $700,000 that were to be used to purchase coins and precious metals for his customers. Instead, Crowder used the money to purchase a sports car, real estate, and to make investments in the commodities market. None of the money Crowder received from the victims has been recovered.
On each count, Crowder is facing a maximum term of 20 years imprisonment, a $250,000 fine, three years of supervised release upon the completion of his sentence, and a $100 Special Monetary Assessment. The trial was held before United States District Court Judge Mark E. Walker and began on August 25, 2014.
Crowder was subject to an Army Board of Inquiry upon the return of the indictment and, in lieu of disciplinary action, resigned his commission. The resignation was accepted on November 1, 2013.
U.S. Attorney Marsh praised the work of the Federal Bureau of Investigation, whose investigation led to the convictions in this case.
The case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Greg McMahon.
Former Area Man Convicted of Sex-Trafficking Two Minors and an Adult Victim at Southwest Suburban MotelsRead the Press Release
CHICAGO ― A former suburban man who was living in Michigan when he was arrested in 2011 was convicted by a federal jury of sex-trafficking three victims, including two minors, federal law enforcement officials announced today. The defendant, FABRIEL DELANEY, was found guilty of all eight counts against him, including sex-trafficking by force, fraud and coercion, and of minors. The jury began deliberating late Wednesday and returned its verdict yesterday afternoon following a trial that began Aug. 25 in U.S. District Court.
Delaney, also known as “Face,” 28, formerly of Palatine, as well as Battle Creek and Kalamazoo, Mich., faces a mandatory minimum sentence of 15 years in prison and a maximum of life on multiple counts. U.S. District Judge John Darrah scheduled sentencing for Dec. 10.
Delaney has been in federal custody since July 2011 when he was arrested by FBI agents outside a hotel in Tinley Park. According to the evidence at trial, Delaney transported two minor females and a young woman from Kalamazoo to the hotel to engage in prostitution at what he believed was a bachelor party. Delaney specifically expected the victims to engage in sexual activity with 10 to 12 men for $150 to $300 per customer. Instead, Delaney was arrested at the hotel as part of a sting that followed a long-term investigation of his sex trafficking crimes.
All three victims, who were 16, 17, and 20-years-old at the time, testified about their prior involvement with Delaney at the trial. They testified that, at first, Delaney took half of the money they were paid and, later, took all of the money they were paid, after advertising their services on various Internet websites. The adult victim testified that Delaney threatened her by holding a hot iron next to her face, and there was additional testimony about beatings and other threats of violence.
The investigation began in September 2010 when Illinois State Police made a traffic stop in Will County and found Delaney driving with three female passengers, including one of the minor victims, who Delaney was sex-trafficking at a hotel in the Joliet area. Delaney typically met customers in a hotel parking lot to ensure they were not undercover police before sending them to the victim’s hotel room.
The verdict was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. FBI field divisions in Detroit and Indianapolis assisted in the investigation, as well as the Cook County Sheriff?s Police Department, the Illinois State Police, police departments in Kalamazoo and Battle Creek, Mich., and the Will County State’s Attorney?s Office.
The government is being represented by Assistant U.S. Attorneys Rajnath Laud and Dylan Smith.
Federal Court Bars Southern California Man from Promoting Alleged Tax SchemeRead the Press Release
A federal court has permanently barred a Rancho Santa Margarita, California, man from promoting and selling an alleged nationwide tax scheme that involved using welfare benefit plans to unlawfully increase and accelerate tax deductions and avoid income taxes, the Justice Department announced today.
Kenneth Elliott consented to a permanent injunction order entered by District Judge Josephine L. Staton of the U.S. District Court for the Central District of California.
According to the complaint, welfare benefit plans permit companies to pool together and make monetary contributions toward the purchase of life insurance for the benefit of each participating company’s employees or principals. Participants in legitimate welfare benefit plans may be able to deduct their plan contributions as a business expense. The complaint alleged that Elliott falsely informed his customers that the welfare benefit plans he promoted and operated were legal. But, according to the complaint, Elliott has been promoting and operating plans that illegally permitted his customers to both claim substantial tax deductions for their plan contributions, then later access the full cash value of their plan contributions by taking out loans against the life insurance policies purchased with plan contributions. The complaint alleged that Elliott’s promotion and operation of these unlawful welfare benefit plans deprived the U.S. Treasury of significant amounts of tax and subjected his customers to audits and Internal Revenue Service (IRS) scrutiny.
The injunction order bars Elliott from selling and operating any purported welfare benefit plans. The court also ordered Elliott to send a copy of the injunction order to his customers.
In the past decade, the department’s Tax Division has obtained more than 500 injunctions to stop tax fraud promoters and tax return preparers. Information about these cases is available on the department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
El Paso County Man Sentenced to 30 Years in Federal Prison for the Sexual Exploitation of ChildrenRead the Press Release
DENVER – Kenneth Wayne Hugo, age 37, of El Paso County, Colorado, was sentenced yesterday by U.S. District Court Judge Robert E. Blackburn to serve 360 months (30 years) in federal prison for the sexual exploitation of children, United States Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. Following his prison term, Hugo will spend the rest of his life on supervised release. The defendant appeared at the hearing in custody, and was remanded by Judge Blackburn at the hearing’s conclusion.
Hugo was indicted by a federal grand jury in Denver on August 6, 2013. He pled guilty before Judge Blackburn on January 22, 2014. He was sentenced on September 4, 2014.
According to the stipulated facts contained in his plea agreement, this investigation began as an offshoot of an Australian investigation into citizens distributing child pornography. This investigation led authorities to Texas. As a result of a search warrant executed in Texas, federal authorities found a computer that contained evidence of emails being exchanged with an individual in Colorado Springs, Colorado, namely, Kenneth Hugo. On January 23, 2013, the FBI and the El Paso County Sheriff's Office executed a search warrant at Hugo’s residence. During the execution of the search warrant agents and deputies found images depicting prepubescent and toddler aged females being sexually penetrated. It was determined that Hugo started his collection by utilizing a Russian-based image-sharing website to download child pornography images and videos. He also used this website to meet online other like-minded individuals. Hugo also posted images on the site for others to download.
During the subsequent investigation authorities learned that the defendant had inappropriate sexual contact with prepubescent minor females. When minor children slept over at his house during the summer of 2012, Hugo would wait until the minor girls were asleep, sneak into their room, pull down the covers, pajamas and panties, and fondle them, all the while taking pictures using his cell phone camera. Forensic analysis of the items seized during the search warrant revealed 1,600 images of child pornography on the desktop computer and over 4,200 images on the laptop computer. The laptop also contained all the images Hugo had taken using his cell phone of the girls during the sleepovers. An external hard drive contained over 4,000 images of child pornography and a thumb drive contained approximately 290 such images.
Hugo was arrested on January 23, 2013 by state authorities for the sexual assault of three minor girls. Hugo pled guilty to the sexual assault of those girls in state court and was sentenced in November 2013 to an indeterminate term of imprisonment in the Colorado Department of Corrections of four years to life.
“The defendant in this case not only collected horrific photos and videos of toddlers and other children being sexually abused, the investigation also determined that Hugo himself was involved in the horrific conduct,” said U.S. Attorney John Walsh. “The lengthy sentence imposed by the Court is a measure of the damage this man has done, and the danger he poses to society and children.”
"Combating the exploitation and victimization of children is one of the FBI’s top priorities,” said FBI Denver Special Agent in Charge Thomas Ravenelle. “The 30 year prison sentence of Kenneth Hugo reflects the consequences of the FBI’s commitment to identifying, arresting and referring for prosecution those who prey on our children. Working in conjunction with state and local authorities, law enforcement has removed another child predator from our community and curtailed the abusive actions of an individual actively preying on children.”
This case was investigated by the FBI and the Colorado Springs Police Department.
The defendant was prosecuted by Assistant U.S. Attorney Valeria Spencer.
This case was brought as part of Project Safe Childhood (PSC), 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, PSC 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 PSC, please visit http://www.justice.gov/psc/ For more information about Internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab "resources."
Defendants Pleads Guilty to Mail Fraud, Conspiracy to Commit Money Laundering, and Conspiracy to DefraudRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that Sun Sims, 52, of Anchorage, entered a guilty plea to mail fraud, conspiracy to launder money, and conspiracy to make false statements regarding the distribution of cigarettes. Sims conspired with others to defraud the Municipality of Anchorage (MOA) by evading the payment of cigarette excise tax.
According to the plea agreement, Sun Sims and her business partner owned, operated, and managed Up in Smoke, located in the MOA, and Golden Eagle Tobacco and Longmere Lake Grocery and Liquor, both located outside the MOA. Because they owned Golden Eagle Tobacco and Longmere Lake Grocery and Liquor, Sun Sims and her partner could legitimately purchase MOA excise tax exempt cigarettes from tobacco wholesale distributors located in the MOA only if those cigarettes were actually transported outside of the MOA and offered for sale at those two stores. However, cigarettes that they purchased within the MOA and intended to sell at Up in Smoke or distribute to others within the MOA were not excise tax exempt.
Between 2009 and October 10, 2012, Sun Sims and her partner used their Golden Eagle Tobacco and Longmere Lake Grocery and Liquor store accounts with tobacco wholesale distributors within the MOA to purchase excise tax exempt cigarettes that they intended to sell and distribute within the MOA. Thus, they avoided paying the MOA excise tax and increased their own profits.
In addition, for a fee, Sun Sims and her business partner would sell tax exempt cigarettes to other retailers within the MOA. Sims and her partner would collect payment from the various retailers and convert the money collected into cashier’s checks that appeared to be purchased by either Golden Eagle Tobacco or Longmere Lake Grocery and Liquor for the purpose of buying tax exempt cigarettes. Then they used these cashier’s checks to purchase more tax exempt cigarettes, which they delivered to the other retailers within the MOA.
As part of the plea, Sims agreed to forfeit $1,214,402 in currency as well as 500 one-ounce silver coins. Mail fraud carries a sentence of up to 20 years imprisonment and fines up to $250,000. Conspiracy to money launder carries a sentence of up to 20 years imprisonment and fines up to $500,000. Conspiracy to make false statements regarding the distribution of cigarettes carries a sentence of up to five years’ imprisonment and fines up to $250,000
The case was jointly prosecuted by Assistant U.S. Attorney Stephan A. Collins and Special Assistant U.S. Attorney Erin W. Bradley of the U. S. Attorney’s Office for the District of Alaska. The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI), Alcohol Tobacco and Firearms (ATF), and the Anchorage Police Department.
Defendant Pleads Guilty in Identity Theft Tax Refund Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Donnell Young, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Paula Reid, Special Agent in Charge, United States Secret Service (USSS), Miami Field Office, and J. Scott Dennis, Chief, North Miami Beach Police Department, announce that Wadlin Fevrier, 36, of North Miami, pled guilty today to one count of using unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(2). Sentencing is scheduled for November 25, 2014. At sentencing, Fevrier faces up to ten years in prison.
According to court documents, a representative from Great Florida Bank contacted law enforcement regarding suspicious ATM activity occurring at various bank branches throughout the Miami area. Specifically, an individual conducted numerous ATM transactions at a particular branch bank between the dates of February 7, 2011 and March 26, 2011. The transactions involved cash withdrawals using different ATM cards and occurred on 19 different days.
During surveillance on March 31, 2011, law enforcement observed Fevrier making four separate ATM transactions using different cards. Law enforcement arrested Fevrier and searched his pockets. Inside his pockets were four Visa debit cards and $1,600.00 in cash. None of the Visa cards were embossed with a name. During a later consent search of Fevrier’s car, officers found 11 additional Visa debit cards. Fevrier admitted to being involved in illegal ATM activity.
Following Fevrier’s arrest, law enforcement subpoenaed the 15 cards found in his possession. There were approximately 27 separate tax refunds loaded onto the cards. These returns were collectively worth $62,580.00.
Mr. Ferrer commended the investigative efforts of IRS-CI, the USSS, and the North Miami Police Department. The case is being prosecuted by Assistant U.S. Attorney John R. Byrne.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Caribbean-based Investment Advisor Sentenced for Using Offshore Accounts to Launder and Conceal FundsRead the Press Release
WASHINGTON – Joshua Vandyk, an investment advisor, was sentenced today to serve 30 months in prison for conspiring to launder monetary instruments, the Justice Department and Internal Revenue Service (IRS) announced.
Vandyk, a U.S. citizen, and Eric St-Cyr and Patrick Poulin, Canadian citizens, were indicted by a grand jury in the U.S. District Court for the Eastern District of Virginia on March 6, and the indictment was unsealed March 12 after the defendants were arrested in Miami. Vandyk, 34, pleaded guilty on June 12, St-Cyr, 50, pleaded guilty on June 27, and Poulin, 41, pleaded guilty on July 11. St-Cyr and Poulin are scheduled to be sentenced on Oct. 3.
According to the plea agreements and statements of facts, Vandyk, St-Cyr and Poulin conspired to conceal and disguise the nature, location, source, ownership and control of property believed to be the proceeds of bank fraud, specifically $2 million. Vandyk, St-Cyr and Poulin assisted undercover law enforcement agents posing as U.S. clients in laundering purported criminal proceeds through an offshore structure designed to conceal the true identity of the proceeds’ owners. Vandyk and St-Cyr invested the laundered funds on the clients’ behalf and represented that the funds would not be reported to the U.S. government.
According to court documents, Vandyk and St-Cyr lived in the Cayman Islands and worked for an investment firm based there. St-Cyr was the founder and head of the investment firm, whose clientele included numerous U.S. citizens. Poulin, an attorney at a law firm based in Turks and Caicos, worked and resided in Canada as well as Turks and Caicos. His clientele also included numerous U.S. citizens. Vandyk, St-Cyr and Poulin solicited U.S. citizens to use their services to hide assets from the U.S. government, including the IRS. Vandyk and St-Cyr directed the undercover agents to create an offshore corporation with the assistance of Poulin and others because they and the investment firm did not want to appear to deal with U.S. clients. Vandyk, St-Cyr and Poulin used the offshore entity to move money into the Cayman Islands and used Poulin as a nominee intermediary for the transactions.According to court documents, Poulin established an offshore corporation called Zero Exposure Inc. for the undercover agents and served as a nominal board member in lieu of the clients. Poulin transferred approximately $200,000 that the defendants believed to be the proceeds of bank fraud from the offshore corporation to the Cayman Islands, where Vandyk and St-Cyr invested those funds outside of the United States in the name of the offshore corporation. The investment firm represented that it would neither disclose the investments or any investment gains to the U.S. government, nor would it provide monthly statements or other investment statements to the clients. Clients were able to monitor their investments online through the use of anonymous, numeric passcodes. Upon request from the U.S. client, Vandyk and St-Cyr liquidated investments and transfered money, through Poulin, back to the United States. According to Vandyk and St-Cyr, the investment firm would charge clients higher fees to launder criminal proceeds than to assist them in tax evasion.
The case was investigated by special agents of the IRS-Criminal Investigation. Trial Attorney Todd Ellinwood and Assistant Chief Caryn Finley of the Justice Department’s Tax Division and Assistant U.S. Attorney Kosta Stojilkovic for the Eastern District of Virginia are prosecuting the case. The Justice Department and the IRS would like to thank the Royal Canadian Mounted Police, the Royal Cayman Islands Police Service and the Royal Turks and Caicos Islands Police Force for their assistance in this investigation.
Additional information about the Tax Division and its enforcement efforts may be found at the division website.
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Caribbean-Based Investment Advisor Sentenced for Using Offshore Accounts to Launder and Conceal FundsRead the Press Release
Joshua Vandyk, an investment advisor, was sentenced today to serve 30 months in prison for conspiring to launder monetary instruments, the Justice Department and Internal Revenue Service (IRS) announced.
Vandyk, a U.S. citizen, and Eric St-Cyr and Patrick Poulin, Canadian citizens, were indicted by a grand jury in the U.S. District Court for the Eastern District of Virginia on March 6, and the indictment was unsealed March 12 after the defendants were arrested in Miami. Vandyk, 34, pleaded guilty on June 12, St-Cyr, 50, pleaded guilty on June 27, and Poulin, 41, pleaded guilty on July 11. St-Cyr and Poulin are scheduled to be sentenced on Oct. 3.
According to the plea agreements and statements of facts, Vandyk, St-Cyr and Poulin conspired to conceal and disguise the nature, location, source, ownership and control of property believed to be the proceeds of bank fraud, specifically $2 million. Vandyk, St-Cyr and Poulin assisted undercover law enforcement agents posing as U.S. clients in laundering purported criminal proceeds through an offshore structure designed to conceal the true identity of the proceeds’ owners. Vandyk and St-Cyr invested the laundered funds on the clients’ behalf and represented that the funds would not be reported to the U.S. government.
According to court documents, Vandyk and St-Cyr lived in the Cayman Islands and worked for an investment firm based there. St-Cyr was the founder and head of the investment firm, whose clientele included numerous U.S. citizens. Poulin, an attorney at a law firm based in Turks and Caicos, worked and resided in Canada as well as Turks and Caicos. His clientele also included numerous U.S. citizens. Vandyk, St-Cyr and Poulin solicited U.S. citizens to use their services to hide assets from the U.S. government, including the IRS. Vandyk and St-Cyr directed the undercover agents to create an offshore corporation with the assistance of Poulin and others because they and the investment firm did not want to appear to deal with U.S. clients. Vandyk, St-Cyr and Poulin used the offshore entity to move money into the Cayman Islands and used Poulin as a nominee intermediary for the transactions.
According to court documents, Poulin established an offshore corporation called Zero Exposure Inc. for the undercover agents and served as a nominal board member in lieu of the clients. Poulin transferred approximately $200,000 that the defendants believed to be the proceeds of bank fraud from the offshore corporation to the Cayman Islands, where Vandyk and St-Cyr invested those funds outside of the United States in the name of the offshore corporation. The investment firm represented that it would neither disclose the investments or any investment gains to the U.S. government, nor would it provide monthly statements or other investment statements to the clients. Clients were able to monitor their investments online through the use of anonymous, numeric passcodes. Upon request from the U.S. client, Vandyk and St-Cyr liquidated investments and transfered money, through Poulin, back to the United States. According to Vandyk and St-Cyr, the investment firm would charge clients higher fees to launder criminal proceeds than to assist them in tax evasion.
The case was investigated by special agents of the IRS-Criminal Investigation. Trial Attorney Todd Ellinwood and Assistant Chief Caryn Finley of the Justice Department’s Tax Division and Assistant U.S. Attorney Kosta Stojilkovic for the Eastern District of Virginia are prosecuting the case. The Justice Department and the IRS would like to thank the Royal Canadian Mounted Police, the Royal Cayman Islands Police Service and the Royal Turks and Caicos Islands Police Force for their assistance in this investigation.
Additional information about the Tax Division and its enforcement efforts may be found at the division website .
- CVS and H-E-B Pay Civil Penalties for Alleged Violations of the Controlled Substances Act
BP Fraud SentencingRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announced that Faye Levene White, a resident of Mobile, Alabama, was sentenced to probation and ordered to make restitution in the amount of $55,000 today in connection with her guilty plea before United States District Court Judge Kristi Dubose to mail fraud.
White admitted a fraudulent BP oil spill claim was filed on her behalf and that she received funds to which she was not entitled.
The matter was investigated by the Mobile Field Office of the FBI and was prosecuted by AUSA Deborah Griffin
Attorney General Holder Announces Stuart Delery to Serve as Acting Associate Attorney GeneralRead the Press Release
Attorney General Eric Holder released the following statement Friday announcing that Stuart Delery, who currently serves as Assistant Attorney General for the Civil Division, will serve as Acting Associate Attorney General, which is the Justice Department’s third-ranking post:
“Stuart Delery is an exceptional public servant, a dedicated colleague, and a superb lawyer who will continue to ably serve the Department of Justice and the American people in his new role as Acting Associate Attorney General.
“Stuart is a lawyer’s lawyer who, even as he has risen to the leadership of the department, continues to thrive in the court setting and routinely is called on to personally argue the most complex cases. Over the last year, he and his colleagues have led government-wide implementation of the Supreme Court’s historic decision in United States v. Windsor—a case, again, that he personally argued at the appellate level—to ensure that all Americans are afforded the rights, protections, and benefits that they deserve.
“Through his outstanding leadership of the Civil Division, Stuart has helped to strengthen our nation's security, to protect public health and safety, and to achieve justice in cases of financial fraud and recover billions of dollars for taxpayers. I can think of no more dedicated, more capable, or more passionate public servant to continue the duties, and uphold the high standards, that defined Tony West's time in office. I am certain that Stuart will help lead us to new heights. I look forward to his continued contributions in the days ahead.”
Albany Woman Pleads Guilty to Threatening to Bomb SchoolRead the Press Release
EUGENE, Ore. – Jenelle Robyn Pinkston, 47 of Albany, Oregon, faces up to ten years in federal prison after pleading guilty to making a telephonic threat to blow up an Albany elementary school.
In the early afternoon of April 16, 2013, Pinkston made a call to Waverly Elementary School and advised the receptionist that the school was going to blow up in ten minutes. Though there was no bomb, police were called, fire alarms were activated and the school was evacuated. Telephone records led police to Pinkston.
In her plea agreement, Pinkston admitted she was also the caller on two bomb threats the following month at Waverly Elementary and another Albany school, Periwinkle Elementary.
Sentencing is set for December 17, 2014 in Eugene. In the meantime, Pinkston will remain in custody.
The FBI, Albany Police Department and the Linn County Sheriff’s Office conducted the investigation. Assistant U.S. Attorney William “Bud” Fitzgerald prosecuted the case.
Alaska Airlines Agrees to Pay $500,000 to Settle FAA Civil Penalty InvestigationRead the Press Release
Alaska Airlines, Inc. (Alaska) has agreed to pay the United States $500,000 to settle civil penalty claims that the U.S. Attorney’s Office has pursued on behalf of the Federal Aviation Administration (FAA).
This action arose out of an incident on January 18, 2010 in which an electrical fire ignited in the ceiling of the cockpit of an Alaska Boeing 737-400 while it was parked at the gate in Anchorage, Alaska. FAA’s investigation indicated that the fire was caused by chafed wiring that resulted from an improperly positioned metal clamp that attaches an air hose to one of the overhead panels in the cockpit.
Based on its own investigation, Alaska informed FAA in April 2010 that its maintenance task cards for the aircraft “directed” its maintenance provider, AAR Corporation (AAR), to remove the cockpit panel at issue during maintenance in July and August 2008, but failed to include the warning from Alaska’s Maintenance Manual, which specifically warned that an electrical fire could occur if the clamp was not positioned properly. Alaska also determined that the incorrect clamp or part was used and/or the clamp was installed improperly on additional aircraft, which resulted in chafed wiring on one aircraft.
By letter dated July 15, 2011, FAA informed Alaska that it violated multiple FAA regulations by operating the aircraft involved in the January 18, 2010 incident, as well as nine other aircraft with incorrect clamps or parts and/or improperly positioned clamps. Based on these findings, FAA assessed a $590,000 civil penalty against Alaska. Alaska has since disputed that AAR or its other maintenance providers reinstalled or repositioned the clamp on its Boeing 737-400 aircraft, including the aircraft involved in the January 18, 2010 incident. Pursuant to the parties’ settlement, Alaska denies all legal fault and responsibility.
“Civil enforcement actions are an important tool to ensure the FAA’s mission to provide safe air travel,” stated U.S. Attorney Jenny A. Durkan. “I am pleased we were able to bring a positive resolution to this matter.”
Government agencies supporting and/or participating in the successful resolution of this matter include: FAA Office of Chief Counsel and FAA Northwest Mountain Region Office of Regional Counsel.
Thursday 4 September 2014
Woodstock, Vermont’s One the Green Takes Steps to Comply with the Americans with Disabilities ActRead the Press Release
The United States Attorney’s Office for the District of Vermont announces that One the Green, Woodstock, Vermont has agreed to complete specific modifications to come into compliance with Title III of the Americans with Disabilities Act (“ADA”). Title III of the ADA prohibits a public accommodation from denying an individual or a class of individuals, on the basis of a disability, the opportunity to participate in or benefit from the goods, services, facilities, or accommodations of an entity. Title III requires a public accommodation to remove architectural barriers to access in existing facilities where it is readily achievable to do so. The United States Attorney’s Office’s investigation began following a complaint made to the Vermont Human Rights Commission regarding the accessibility of One the Green, Woodstock, Vermont.
An onsite survey of One the Green performed by United States Department of Justice architects revealed ADA compliance issues related to the shop’s entrance and interior. One the Green has remedied ADA compliance issues by constructing a ramp at the shop’s entrance and by improving transitions between doorways inside the building.
One the Green’s owners recognized the obligation to address the issues identified in the onsite survey. One the Green’s owners and their representatives are to be commended for their cooperation with the Office of the United States Attorney for the District of Vermont.
The Office of the United States Attorney for the District of Vermont worked in partnership with Tracey Tsugawa of the Vermont Human Rights Commission in addressing and resolving these important civil rights issues. Assistant United States Attorney Nikolas P. Kerest, with assistance from the Disability Rights Section of the Civil Rights Division of the Department of Justice, handled this matter on behalf of the United States and is working with other Vermont businesses to resolve their ADA compliance issues. Further information on the ADA and its requirements may be found at www.ada.gov.Wolcott Man Sentenced for Tax Evasion and Mail FraudRead the Press Release
The United States Attorney’s Office stated that Timothy Forrest Edgar, 49, of Wolcott, Vermont and Littleton, New Hampshire, was sentenced today following a plea to Tax Evasion and Mail Fraud charges related to a multi-year scheme to avoid paying taxes and child support obligations by harassing federal, state, and local officials charged with enforcing those obligations. The remaining seven counts of the Superseding Indictment were dismissed after sentencing.
Edgar was sentenced to a total of 13 months in prison, to be followed by three years of supervised release. In imposing sentence on Edgar, Chief U.S. District Court Judge Christina Reiss noted the real harm Edgar’s offenses had caused to individuals who had done nothing more than their jobs.
The U.S. Attorney’s Office recognizes the dedicated and coordinated efforts of the Federal Bureau of Investigation, Internal Revenue Service Criminal Investigation Division, and the Treasury Inspector General for Tax Administration in developing the case.
Assistant U.S. Attorney Eugenia Cowles represented the government. Edgar was represented by Assistant Federal Public Defender Steven Barth.
Winter Haven Man Pleads Guilty to Attempted Sexual EnticementRead the Press Release
Orlando, FL – United States Attorney A. Lee Bentley, III announces that Edward Alan Vadney (23, Winter Haven) pleaded guilty today to attempted sexual enticement of a minor. Vadney faces a mandatory minimum of 10 years, up to a maximum penalty of life in federal prison. He also faces a mandatory minimum term of 5 years, up to a life term of supervision, and registration as a sex offender under the Sex Offender Registration and Notification Act. A sentencing hearing is scheduled for November 20, 2014.
According to court documents, on May 15, 2014, a special agent with the Federal Bureau of Investigation (FBI), working in an undercover capacity, discovered an advertisement on the Internet seeking young girls’ underwear. Using his undercover e-mail account, the agent responded to the ad and began corresponding with the man later identified as Vadney. Via e-mail, the agent told Vadney that he had six-year-old and ten-year-old daughters. Vadney then expressed his interest in meeting and having sex with the children. Vadney and the FBI agent made arrangements to meet the following morning, in a restaurant parking lot in Lake Mary, Florida.
On the following morning, after speaking to a female undercover law enforcement officer posing as the fictitious ten-year-old “daughter” and confirming the meeting, Vadney traveled from Winter Haven, Florida to Lake Mary. When Vadney arrived at the predetermined meeting spot, he was taken into custody. During an interview with the FBI, Vadney said that he had traveled to Lake Mary to meet the “father” with whom he had been communicating since the previous day. Vadney admitted that his purpose in traveling to Lake Mary was to have sex with the man’s six-year-old and ten-year-old “daughters.”
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Joseph M. Schuster.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
- Webb County Justice of the Peace Pleads Guilty to Extortion
Visalia Man Indicted for Sexual Exploitation of A MinorRead the Press Release
FRESNO, Calif. — A federal grand jury returned a three-count indictment today charging Steven Christopher Montes, 25, of Visalia, with three counts of sexual exploitation of minors, United States Attorney Benjamin B. Wagner announced.
This case is the product of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Fresno County Sheriff’s Office, and the Kings County District Attorney’s Office. Assistant United States Attorney Brian W. Enos is prosecuting the case.
According to court documents, from November 2013 through August 2014 and while serving as a band teacher at Riverdale High School, Montes knowingly and surreptitiously took sexually explicit videos of minors on campus.
If convicted, Montes faces a possible sentence of 15 to 30 years in prison for each count charged. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.
case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
Union County, N.J., Pastor Admits Role in $15 Million Mortgage Fraud SchemeRead the Press Release
CAMDEN, N.J. – A pastor of the now-defunct ReBirth International Church in Elizabeth, New Jersey, admitted today to defrauding financial institutions as part of a $15 million mortgage fraud scam that used phony documents and “straw buyers” to make illegal profits on overbuilt condos, U.S. Attorney Paul J. Fishman announced.
Sean A. Souels, 44, of Linden, New Jersey, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to a second superseding indictment charging him with one count of conspiracy to commit wire fraud.
Souels was among 11 defendants charged in July 2012 with conspiracy to commit wire fraud and conspiracy to commit money laundering. Two additional defendants, Nicholas Tarsia, 65, of Totowa, N.J., and Mashon Onque, 43, of East Orange, N.J., were charged in November 2013 with conspiracy to commit wire fraud. Tarsia was also charged with one count of conspiracy to commit money laundering.
According to the documents filed in this case and statements made in court:
Souel’s conspirators, including Darryl Henry, 48, of Somerset, New Jersey, and Jerry Smith, 48, of Rahway, New Jersey – who both pleaded guilty before Judge Simandle; Henry in March of 2009 and Smith in December, 2011 – located oceanfront condominiums overbuilt by financially distressed developers and negotiated a buyout price with the sellers. They then caused the sales prices for the properties – located in Wildwood Crest and North Wildwood, New Jersey, other locations in New Jersey and in Naples, Fla. – to be much higher than the buyout price to ensure large proceeds. Other defendants helped conceal the true sales prices of certain properties through inflated sales contracts and finder’s fee agreements.
In 2007, Souels agreed with Henry and Smith to recruit a church member to purchase a Wildwood Crest property at an inflated rate. In order for the “straw purchaser” to appear more creditworthy, Souels submitted documents fraudulently claiming that the church member was employed as the president of operations at ReBirth International Church. Once the loan was approved and the mortgage lender sent the loan proceeds in connection with real estate closing, Souels received $30,000 from his conspirators.
The wire fraud conspiracy charge is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. Souels is scheduled to be sentenced on Jan. 20, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Matthew T. Smith and Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.
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Defense counsel: Jose Ongay Esq., Haddon Heights, N.J.
Ricks, Timothy, et al., Superseding Indictment
Two Men Sentenced for Using Paper as MoneyRead the Press Release
BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Gooding Vincent, 38, of Syracuse, NY, and Eugene Cooper, 38, of Buffalo, NY, who were convicted of using paper as money, were sentenced to two years probation by Magistrate Judge H. Kenneth Schroeder, Jr.
The sentencings are the result of an investigation by the United Stated Secret Service, under the direction of Special Agent in Charge Tracy Gast and Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of James C. Spero.
Assistant U.S. Attorney Russell T. Ippolito, Jr., who handled the case, stated that Vincent and Cooper participated in a scam commonly referred to as a “Black Money Scam.” Such a scam usually involves an individual attempting to convince an unsuspecting victim to provide the scammer with money to purchase chemicals to turn black-dyed paper into authentic U.S. currency. The individual concocts a story that money, which originated outside the United States, was treated chemically and dyed black to sneak it past immigration officials to avoid tax liability. The scammer attempts to convince the victim that money is needed to purchase chemicals to restore the money and that the scammer will share with the victim some of the funds once they are restored.
On July 8, 2013, the defendants met with a confidential informant (“CI”) working with the Government in order to convince the CI to purchase “dirty” money from them.
Vincent and Cooper attempted to use a slightly different version of the black money scam. According to the defendants, genuine United States currency had been obtained from the Central Intelligence Agency (CIA) to fight wars in Africa. The United States currency had been dyed either black or white to avoid being detected by opposition leaders in Africa and could be restored by simply washing the bills in chemicals provided by the defendant.
The CI agreed to purchase, and did purchase from the defendants, what the CI had been told was $10,500 in United States currency that had been dyed either black or white, in return for $10,000. In actuality, the defendants sold valueless black and white banknote sized paper to the CI for $10,000.
The defendants later admitted to agents working for the United States Secret Service and the Department of Homeland Security that they had sold black and white banknote sized paper having no value to the CI for $10,000. Vincent and Cooper admitted to the agents that the CI was led to believe that the CI was purchasing genuine United States currency.Two Kanawha County Men Sentenced to Prison on Federal Gun ChargesRead the Press Release
Charleston, W.Va. – United States Attorney Booth Goodwin announced today that David Burgess, 27, and Jesse Burgess, 26, both of Charleston, West Virginia, were each sentenced to 21 months in federal prison. Both men were sentenced on federal gun charges in connection with the theft of firearms from two local businesses. United States District Judge John T. Copenhaver, Jr., imposed the sentences.
David Burgess previously admitted that he illegally possessed a 9 mm semi-automatic pistol on September 17, 2012, the day he stole the firearm from Pawn for Cash, a federally licensed firearms dealer in Charleston. David Burgess had previously been convicted of the felony offense of credit card forgery in the Circuit Court of Kanawha County, West Virginia, and his rights to possess a firearm had not been restored. Jesse Burgess previously admitted that he aided and abetted his brother in stealing the pistol from Pawn for Cash. Jesse Burgess was also prohibited from possessing a firearm because he had previously been convicted of breaking and entering in the Circuit Court of Kanawha County, West Virginia, and his rights to possess a firearm had not been restored.
The investigation was conducted by the Charleston Police Department and the United States Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Haley Bunn handled the prosecution.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
Two Chinese Citizens Plead Guilty to Trafficking Counterfeit Cell Phone CasesRead the Press Release
Boston – Two Chinese citizens, living in Massachusetts, pleaded guilty today to importing and reselling counterfeit cases for cell phones.
Zexiong Chen, 28, and Haotian Chen, 26, who are unrelated, pleaded guilty before U.S. District Court Judge F. Dennis Saylor IV to trafficking in counterfeit goods. Sentencing is scheduled for Dec. 11, 2014.
In February 2013, the defendants incorporated Max Wireless Group, Inc. as a vehicle for importing and reselling cell phone cases, many of which were counterfeit. Through Max Wireless, Zexiong Chen and Haotian Chen imported counterfeit cell phone cases from China, sold a small percentage of them through their Wakefield store, and sold the vast majority of them to individuals and companies who resold them at retail locations. Many of these retail locations were kiosks in shopping malls, some of which were in Massachusetts.
On 12 occasions from November 2012 through August 2013, U.S. Customs and Border Patrol officials inspected shipments the defendants imported from China to the United States and determined that these shipments contained counterfeit items. These 12 seizures included more than 10,000 counterfeit cell phone cases, bearing marks of manufacturers, including OtterBox, Speck, Kate Spade, Hello Kitty, Ferrari and LifeProof. On Sept. 4, 20013, federal agents searched the Max Wireless store and found more than 2,500 counterfeit cell phone cases and accessories.
The total retail price for the authentic versions of all of the cell phone cases seized during the course of this investigation was more than $350,000, but the defendants paid far less for the cases and typically resold the cases for far less than suggested retail price.
In February 2014, Zexiong Chen was arrested at JFK International Airport as he prepared to board a plane to China. He has been in custody since that time. Haotian Chen, who was also arrested in February 2014, was released by the Court on conditions, and remains on release.
The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $2 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Adam Bookbinder, Chief of Ortiz’s Cyber Crime Unit.
Tulsa Woman Pleads Guilty to Theft of Government FundsRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that JANET CAROLYN JONES, age 65, of Tulsa, Oklahoma, pled guilty to an Information charging her with Theft Of Government Funds, in violation of Title 18, United States Code, Section 641.
The charges arose from an investigation by the Social Security Administration, Office of Inspector General.
The Information alleged that from in or about September 2000 through September 2013, in the Eastern District of Oklahoma, the Defendant did willfully and knowingly embezzle, steal and convert to her own use, money and things of value from the Social Security Administration, an agency of the United States, which had been paid to Ora Dell Dixon, a/k/a, Ora Dell Trento, as retirement benefits, to which the defendant knew she was not entitled and having a value in excess of $1,000.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, accepted the defendant’s guilty plea, and ordered the completion of a presentence report. Sentencing will be scheduled upon its completion.
The statutory range of punishment is 10 years imprisonment and/or a fine of up to $250,000.
Assistant United States Attorney Chris Wilson represented the United States.
Three Hedge Fund Manangers Sentenced in Connection with $40 Million "Black Diamond" Ponzi SchemeRead the Press Release
CHARLOTTE, N.C. – On Wednesday, September 3, 2014, U.S. District Judge Robert J. Conrad, Jr. sentenced three hedge fund managers in connection with a $40 million investment fraud conspiracy, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Jeffrey M. Toft, 51, of Sioux Fall, S.D., was sentenced to 66 months in prison followed by two years of supervised release. Chad A. Sloat, 36, of Kansas City, Mo. was sentenced to 70 months in prison, followed by two years of supervised release, and Michael J. Murphy, 54, of Deep Haven, Minn., was sentenced to 48 months in prison, and two years of supervised release.
Judge Conrad also ordered the defendants to pay restitution to victims as follows: Toft in the amount of $2,172,666; Sloat in the amount of $3,747,130 and Murphy in the amount of $2,552,824.30. Sloat was also ordered to pay $93,727 in restitution to the Internal Revenue Service. A fourth codefendant, Jonathan D. Davey, 50, of Newark, N.J. is currently awaiting sentencing.
At sentencing, Judge Conrad noted that the callous greed displayed by the defendants caused devastating financial ruin to hundreds of elderly and vulnerable victims. Judge Conrad also stressed that the lengthy sentences were appropriate given the predatory nature of the scheme.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte 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 filed court documents and court proceedings, the defendants operated “hedge funds” as part of a $40 million Ponzi scheme operating under the name Black Diamond Capital Solutions (Black Diamond). Court documents show that from 2007 to 2010, the defendants induced their investor victims to turn over their money by claiming, among other things, that they had done due diligence on Black Diamond and were operating legitimate hedge funds with significant safeguards, when, in reality, those claims were false. Court records also show that as Black Diamond began collapsing, the defendants and others created a new Ponzi scheme and used a series of separate bank accounts administered by Davey to further the scheme. Specifically, the defendants deposited new victim money into these bank accounts and used the money to make lulling payments to other victims and to fund the defendants’ lifestyles.
Toft pleaded guilty in November 2012 to securities fraud conspiracy, wire fraud conspiracy and money laundering conspiracy. Sloat pleaded guilty in October 2012 to securities fraud conspiracy and Murphy pleaded guilty to the same charge in January 2013. Davey was convicted at trial of securities fraud conspiracy, wire fraud conspiracy, money laundering conspiracy and tax evasion. He will be sentenced by the court at a later date.
Toft remains free on bond and will be transferred to the custody of the Federal Bureau of Prisons upon designation of federal facility. Murphy and Sloat have been in federal custody since their bonds were revoked due to bond violations in March 2012 and August 2013, respectively. All federal sentences are served without the possibility of parole.
The case is prosecuted by Assistant United States Attorneys Kurt W. Meyers and Mark T. Odulio of the Western District of North Carolina. The investigation was handled by the FBI and the IRS.
Three California Residents Plead Guilty to Sex Trafficking Related OffensesRead the Press Release
Orlando, FL – United States Attorney A. Lee Bentley, III announces that Vincent Hudson, a/k/a “Goldie,” (44, Stockton, CA), Patricia Poulson, a/k/a “Moët Diamonds,” (22, Stockton, CA), and Jessica McCrary, a/k/a “Amber Snow” (20, Stockton, CA) pleaded guilty today. Hudson pleaded guilty to one count of transporting a minor to engage in prostitution and one count of the commission of a felony offense involving a minor when required to register as a sex offender. Hudson was previously convicted of a felony sex offense that requires him to register as a sex offender in California. Poulson and McCrary each pleaded guilty to interstate travel with intent to promote an unlawful activity, namely prostitution. Hudson faces a mandatory minimum of 20 years, up to life in federal prison. Poulson and McCrary each face a maximum penalty of 5 years in federal prison. The sentencing hearing is scheduled for November 20, 2014, before United States District Judge Paul Byron.
According to their plea agreements, on November 8, 2013, Minor A, a 16 year-old female, met Hudson at a hotel in Orlando. McCrary and Poulson were traveling with Hudson. Minor A initially told Hudson that she was a runaway with an active arrest warrant. Hudson promised the minor a “new identity” if she would join their “team” as a prostitute. Minor A said that Hudson, Poulson, and McCrary told her that she would be working as a prostitute and having sex for money in both Louisiana and California.
Minor A left Orlando with Hudson, Poulson, and McCrary and they drove to Louisiana. While in Louisiana, Minor A walked the streets of Lafayette and New Orleans as a prostitute, providing commercial sex for money. All of the money that she earned was given to Hudson.
While they were in Lafayette, Hudson stole an identification card at a tattoo shop belonging to “D.G.” This became Minor A’s new identity. Minor A worked in Louisiana for three weeks and then took a bus from Lafayette, Louisiana to Stockton, California. Minor A rode the bus by herself using the name “D.G.” Once in Stockton, Minor A worked as a prostitute nearly every day, from noon to 11:00 p.m., until she was arrested for prostitution on December 18, 2013.
This case was investigated by the Federal Bureau of Investigation and the Orlando Metropolitan Bureau of Investigation. It is being prosecuted by Assistant United States Attorney David Haas.
Three Alabama Men Plead Guilty to Stolen Identity Refund Fraud SchemeRead the Press Release
Montgomery, Alabama - Three residents of Montgomery, Alabama, each pleaded guilty during the past week to one count of conspiracy to defraud the government and one count of aggravated identity theft, announced Deputy Assistant Attorney General Ronald A. Cimino of the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama.
Cruz Castillo Burnett, Jacorey Giddens and Rodrickus Howard were indicted on May 1, 2014. According to court documents, the defendants conspired to acquire the means of identification of individuals, including names, Social Security numbers and dates of birth, of other persons without their knowledge or consent. From March 2011 to April 2013, the defendants used these stolen identities to file more than 500 false tax returns, and each return claimed fraudulent refunds from the Internal Revenue Service (IRS). The defendants received the fraudulent refunds in various forms, including U.S. Treasury checks, direct deposits to bank accounts and direct deposits onto prepaid debit cards in the names of identity theft victims.
The three defendants each face a statutory maximum sentence of 10 years in prison for the conspiracy count, followed by up to three years of supervised release. The defendants will each be required to serve a statutory mandatory sentence of two years in prison for the aggravated identity theft count.
The case was investigated by special agents of the IRS-Criminal Investigation. The case is being prosecuted by Trial Attorneys Greg Bailey and Michael Boteler of the Tax Division and Assistant U.S. Attorney Todd Brown for the Middle District of Alabama.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Three Alabama Men Plead Guilty to Stolen Identity Refund Fraud SchemeRead the Press Release
Montgomery, Alabama - Three residents of Montgomery, Alabama, each pleaded guilty during the past week to one count of conspiracy to defraud the government and one count of aggravated identity theft, announced Deputy Assistant Attorney General Ronald A. Cimino of the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama.
Cruz Castillo Burnett, Jacorey Giddens and Rodrickus Howard were indicted on May 1, 2014. According to court documents, the defendants conspired to acquire the means of identification of individuals, including names, Social Security numbers and dates of birth, of other persons without their knowledge or consent. From March 2011 to April 2013, the defendants used these stolen identities to file more than 500 false tax returns, and each return claimed fraudulent refunds from the Internal Revenue Service (IRS). The defendants received the fraudulent refunds in various forms, including U.S. Treasury checks, direct deposits to bank accounts and direct deposits onto prepaid debit cards in the names of identity theft victims.
The three defendants each face a statutory maximum sentence of 10 years in prison for the conspiracy count, followed by up to three years of supervised release. The defendants will each be required to serve a statutory mandatory sentence of two years in prison for the aggravated identity theft count.
The case was investigated by special agents of the IRS-Criminal Investigation. The case is being prosecuted by Trial Attorneys Greg Bailey and Michael Boteler of the Tax Division and Assistant U.S. Attorney Todd Brown for the Middle District of Alabama.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Tehachapi Man Indicted on Child Pornography ChargesRead the Press Release
FRESNO, Calif. — A federal grand jury returned an indictment today against Thomas Bettis, 53, of Tehachapi, charging him with two counts of receipt and distribution of child pornography, United States Attorney Benjamin B. Wagner announced.
According to court documents, between October 2011 and March 2013, Bettis downloaded and distributed graphic images of child pornography. In order to trade and obtain more images of child pornography, Bettis communicated with at least two individuals—one of whom was an undercover law enforcement officer.
This case is the product of two separate investigations by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Federal Bureau of Investigation. Assistant United States Attorney David L. Gappa and Special Assistant United States Attorney Brian A. Fogerty are prosecuting the case.
Bettis was arrested on August 27, 2014, and he has been ordered detained as a danger to the community. His next court date is September 10, 2014, at 1:30 p.m. before a magistrate judge.
For each count, Bettis faces a prison sentence of between five and 20 years, a potential $250,000 fine, and a lifetime term of supervised release. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
Taylor County Man Pleads Guilty in Video Voyeurism CaseRead the Press Release
ABILENE, Texas — A Trent, Texas, man appeared in federal court in Abilene, Texas, today and pleaded guilty, before U.S. Magistrate Judge E. Scott Frost, to a federal indictment charging one count of video voyeurism, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Jeremy Wayne Griffith, 28, of Trent, Texas, was arrested in November 2013 on the federal offense and was released on bond. He faces a statutory penalty of one year in federal prison and a $100,000 fine. A sentencing date was not set.
According to documents filed in the case, from November 2009 until November 2010, Griffith was employed by KBR, Inc., as an HVAC operator assigned to the U.S. Army installation C3 Camp Warhorse in Iraq. Griffith was responsible for the installation and repairing of heating and air conditioning units at Camp Warhorse.
The FBI received information that Griffith had installed a hidden camera in the female barracks at Camp Warhorse and had videos of nude female soldiers and/or contractors stationed at the military installation. On June 13, 2013, the FBI executed a federal search warrant at Griffith’s residence in Trent, and agents located and seized an external hard drive. A forensic review of that hard drive revealed videos of captured hidden camera footage of multiple female soldiers and/or contractors undressing in the female locker room at Camp Warhorse.
The female locker room was a place where female soldiers and/or contractors had a reasonable expectation of privacy.
The case is being prosecuted by Assistant U.S. Attorney Justin Cunningham of the U.S. Attorney’s Office in Lubbock, Texas.
Suspended Physician Pleads Guilty to Illegally Dispensing Oxycodone and Falsely Billing Medicare in Undercover ProbeRead the Press Release
CHICAGO — A suburban physician whose medical license was suspended after he was arrested earlier this year pleaded guilty today to health care fraud and illegally prescribing controlled substance medications. The defendant, SATHISH NARAYANAPPA BABU, who owned Anik Life Sciences Medical Corp., admitted that he illegally prescribed oxycodone and other controlled substances, and fraudulently billed Medicare approximately $500,000, and fraudulently collected approximately $216,000, for services he did not provide.
Babu, 47, of Bolingbrook, operated Anik Life Sciences, a home-visiting physician’s office, in Darien and, previously, in Arlington Heights. He was arrested in February following an investigation by the Drug Enforcement Administration, the U.S. Department of Health and Human Services Office of Inspector General, and the Federal Bureau of Investigation.
As part of his plea agreement, Babu agreed to surrender his DEA registration. He faces a maximum sentence of 10 years in prison on one count of health care fraud and four years in prison on one count of illegally prescribing a controlled substance, and a $250,000 maximum fine on each count. The government anticipates an advisory United States Sentencing Guidelines range of 57 to 71 months in prison, according to Babu’s plea agreement.
Babu remains free on bond, which prohibits him from writing any prescriptions or submitting any claims to Medicare, while awaiting sentencing on Jan. 21, 2015, by U.S. District Judge John J. Tharp, Jr.
Babu also agreed to forfeit approximately $126,000 that was seized when he was arrested, as well as three automobiles ― a 2013 BMW, a 2001 BMW, and a 2010 Lexus.
In pleading guilty, Babu admitted that between November 2012 and December 2013, he issued multiple prescriptions for controlled substances to a purported patient who was actually an undercover agent, despite never having seen or examined the patient. The prescriptions totaled approximately 300 pills containing 80mg strength oxycodone, 180 pills containing 5-325mg strength hydrocodone, and 120 pills containing 1 mg strength of alprazolam. Babu also permitted unlicensed personnel associated with Anik Life Sciences to issue prescriptions to the patient. During the same period, Babu submitted false claims to Medicare for services purportedly provided to the patient that were not rendered by Babu or another licensed medical professional.
According to court documents, the undercover agent posed as a healthy individual purportedly covered by Medicare and seeking physician services to obtain prescription medication, including oxycodone. The agent claimed to have shoulder pain from a previous injury and to be on disability. On approximately 10 occasions, representatives from Anik Life Sciences, none of whom were licensed as physicians, nurses, or other medical professionals, visited the undercover agent in his purported apartment.
Babu caused unlicensed personnel from Anik Life Sciences to provide purported medical care ― including prescriptions issued under Babu’s name and DEA registration number for controlled substances ― to the undercover agent and then billed Medicare for that purported care. Medicare and its contractor paid about $4,000 to cover the costs of the prescriptions that Babu issued to the undercover agent.
In addition to the undercover agent, Babu had other patients, whom he certified and re-certified as eligible for home health services under Medicare, and submitted claims for care he purportedly provided, including home visits and diagnostic testing and review, without regard to whether the claimed services were medically necessary. Babu hired three foreign medical school graduates who were not licensed physicians in the United States to conduct home visits and advertised these individuals as “MDs” or doctors. Babu submitted Medicare claims indicating that he personally conducted the patient visits and provided comprehensive medical evaluations that he did not actually perform.
Babu also maintained an office staff that he directed to order certain diagnostic tests for every patient, including ultrasound and autonomic nervous system testing, without regard to medical necessity. He further prescribed controlled substances to patients who he had never seen or examined and permitted his unlicensed staff to fill out prescriptions and order refills for patients.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jack Riley, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration; Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the HHS-OIG; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The officials commended the assistance of United Healthcare in the investigation. The government is being represented by Assistant U.S. Attorney Sarah Streicker.
Plea Agreement
St. Mary’s County Man Charged with Involuntary Manslaughter in Death of His Infant SonRead the Press Release
Greenbelt, Maryland - A criminal complaint was filed today charging John MacDonald Junek, age 40, of Leonardtown, Maryland, with involuntary manslaughter in connection with the death of his infant son. An initial appearance is scheduled for 2:00 p.m. today before U.S. Magistrate Judge Charles B. Day, in U.S. District Court in Greenbelt, Maryland.The criminal complaint was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Darrell Gilliard of the Naval Criminal Investigative Service, Washington Field Office.
The criminal complaint alleges that at 3:25 p.m. on September 3, 2014, Junek’s infant son was found unresponsive, locked inside Junek’s vehicle which was parked at the Naval Air Station (NAS) Patuxent River, where Junek worked. According to the criminal complaint, Junek dropped his four year old son at preschool that morning and was then supposed to drop his infant son at the Child Development Center on NAS Patuxent River. Junek explained that he entered the base and drove directly to his office, leaving his son in his rear-facing car seat in his locked vehicle at approximately 8:50 a.m.
According to the criminal complaint, Junek’s wife called him at 3:20 p.m. to see if he had their son’s car seat with him. Junek could not recall whether he had the car seat and realized that he may not have dropped the baby off at the CDC. Junek went to his vehicle and discovered the infant in his car seat unconscious. Junek called emergency responders and attempted to perform CPR on the child until police and EMS arrived and took over.
According to the criminal complaint, Junek had driven his vehicle to a meeting at approximately 1:00 p.m. He remained at the meeting until 2:00 p.m. and drove back to his office. Junek advised law enforcement that he had been in a hurry to get to the meeting and had not noticed his son was still strapped to his car seat in rear of the vehicle. The temperature reached 85 degrees on September 3, 2014.
Junek faces a maximum sentence of eight years in prison for involuntary manslaughter. He is currently detained.
A criminal complaint is not a finding of guilt. An individual charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised the NCIS for its work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Kristi O’Malley and Michael Packard, who are prosecuting the case.
St Thomas Man Arrested and Charged with Possession with Intent to Distribute Drugs Within 1,000 Feet of A SchoolRead the Press Release
St. Thomas, USVI- Nyah Henry, 25, of St. Thomas was arrested Wednesday for possession of cocaine and marijuana with intent to distribute within 1,000 feet of the Ivanna Eudora Kean High School, announced United States Attorney Ronald W. Sharpe. Henry appeared today in United States District Court before U.S. Magistrate Judge Ruth Miller and was released on conditions, including a $25,000 unsecured bond.
Henry was arrested pursuant to a warrant issued after he was indicted by a federal grand jury in a two-count indictment charging him with (1) possession with intent to distribute marijuana within 1,000 feet of a school on January 18, 2014, and (2) possession with intent to distribute cocaine within 1,000 feet of a school on January 18, 2014.
Under federal law, a person who distributes controlled substances within 1,000 feet of a school faces a mandatory minimum sentence of one year in federal prison. Henry also faces a maximum sentence of up to 40 years in prison. Arraignment is scheduled for Wednesday, September 10, 2014.
The public is reminded that an indictment is merely a charging document and is not evidence of guilt. A defendant is presumed innocent until proven guilty.
The case is being investigated by the U.S. Drug Enforcement Administration and the Virgin Islands Police Department. It is being prosecuted by Assistant U.S. Attorney Ishmael Meyers, Jr.
Sisters, Postal Employees Sentenced in Seperate CasesRead the Press Release
BUFFALO, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that in separate and unrelated cases, Amanda Elliott, 35, of Ellington, N.Y., and Tamara Elliott, 30, of Falconer, N.Y., who were convicted of misappropriation of postal service funds by postal service employee, were sentenced by Chief U.S. District Judge William M. Skretny.
Amanda Elliott was sentenced to two years probation and ordered to pay $5,579.48 in restitution. Tamara Elliott was sentenced to two years probation to include three months home confinement and ordered to pay restitution totaling $11,326.86.
The sentencings are the culmination of an investigation by Special Agents with the U.S. Postal Service, Office of Inspector General, under the direction of Special Agent in Charge Monica Weyler, Eastern Area Field Office, Philadelphia, PA.
Assistant U.S. Attorney Russell T. Ippolito, Jr., who handled the case, stated that Amanda Elliott was the Postmaster Relief at the post office located in Lily Dale, N.Y. between December 2012 and September 5, 2013. During that time, the defendant accepted cash payments from customers for the purchase of postage stamps. Instead of depositing the cash in the cash register, Elliott kept the cash for personal use.
In the second case, Tamara Elliott was the Postmaster Relief at the post office located in Ellington, N.Y. Between December 2012 and September 5, 2013, Tamara Elliott accepted cash payments from customers for the purchase of postage stamps. Instead of depositing the cash in the cash register, the defendant kept the cash for her own purposes. Tamara Elliott also rented post office boxes and sold money orders to customers and kept the cash payments.