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21 October 2014
Former Credit Union Employee Pleads Guilty to Federal Bank Fraud ChargeRead the Press Release
ALBUQUERQUE – Louisa Gabaldon, 43, of Belen, N.M., pleaded guilty this morning to a federal bank fraud charge under a plea agreement with the U.S. Attorney’s Office.
Gabaldon was indicted on Aug. 7, 2013, and charged with 12 counts of bank fraud. The indictment alleged that from Jan. 2004 through July 2010, Gabaldon engaged in an illegal scheme to defraud her employer, the Belen Railroad Employees Credit Union (Credit Union) by making fraudulent withdrawal of funds from accounts belonging to the Credit Union’s customers.
Today, Gabaldon pled guilty to Count 5 of the indictment charging her with fraudulently withdrawing $31,000 from a customer’s account on July 31, 2006. The plea agreement, however, requires Gabaldon to pay $118,376.56 in restitution to cover losses associated with all 12 counts in the indictment as well as related losses suffered by the Credit Union.
In entering her guilty plea, Gabaldon admitted that, while employed by the Credit Union, she had loan approval which permitted her – when authorized by customers – to make withdrawals from customers’ accounts, transfer funds among their accounts, increase the amount of their loan accounts and open new loans in their names. Gabaldon admitted that, without the knowledge or permission of Credit Union customers, she added amounts to customers’ existing loan accounts and opened new loans in their names and used the funds to pay for her own debts and to make a partial payment for the purchase of a home. In order to conceal her fraudulent activity, Gabaldon moved funds among customers’ accounts to make it appear as if loans had been repaid or funds were replaced.
At sentencing, Gabaldon faces a maximum penalty of 30 years in prison. She remains on conditions of release pending her sentencing hearing, which has yet to be scheduled.
This case was investigated by the Albuquerque office of the FBI and is being prosecuted by Assistant U.S. Attorney Sean J. Sullivan.
Former City Dispatcher Sentenced to 14 Months for Bribery SchemeRead the Press Release
PHILADELPHIA – Dorian Parsley, 44, of Philadelphia, formerly a dispatcher with the Philadelphia Police Department (PPD), was sentenced today to 14 months in prison for conspiracy, solicitation of a bribe, and honest services fraud in connection with a scheme by which she gave an unfair advantage to certain tow truck operators in exchange for cash bribes. Parsley pleaded guilty to the charges on July 21, 2014. In addition to the prison term, U.S. District Court Judge Eduardo C. Robreno ordered a $1,000 fine, one year of supervised release, and a $300 special assessment.
Between February 2011 and December 2013, Parsley operated a bribery scheme through which she collected weekly payments totaling more than $35,000 from three tow truck operators, now her co-defendants, in exchange for providing them with certain confidential information, including accident and disabled vehicle locations, and the personal identifying information of accident victims. Parsley did this by secretly sending text messages from her personal cellphone, in a purposeful end-run around PPD policies and procedures. In this way, the defendant provided an unfair economic advantage to her bribers, at the expense of other tow truck operators who relied on the proper functioning of the PPD’s rotational towing program.
The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department. It is being prosecuted by Assistant United States Attorneys Kevin Brenner and Jennifer Chun Barry.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Former Campaign Coordinator Pleads Guilty to Embezzling from Texas Lieutenant Governor David DewhurstRead the Press Release
In Austin today, 58-year-old political consultant Kenneth Barfield (aka “Buddy Barfield”) pleaded guilty to stealing approximately $1.8 Million in campaign funds from Texas Lieutenant Governor David Dewhurst announced United States Attorney Robert Pitman, Christopher Combs, Federal Bureau of Investigation (FBI) Special Agent in Charge of the San Antonio Division, and IRS Criminal Investigation Acting Special Agent in Charge William Cotter.
Appearing before United States Magistrate Judge Mark Lane, Barfield pleaded guilty to one count of wire fraud, one count of making a false tax return and one count of embezzlement of federal campaign funds. According to court documents, Barfield, and through his Austin-based companies, was a member of the campaign staff and committee for Lieutenant Governor David Dewhurst’s run for the Republican nomination for United States Senate in 2012. Barfield and his companies were responsible for securing, paying, and/or subcontracting legal and legitimate activities on behalf of Dewhurst’s campaign and had a fiduciary duty to act in the best interests of the campaign, including oversight and maintenance of financial records.
By pleading guilty to the charges, Barfield admitted to knowingly engaging in a scheme to steal an estimated $1.8 Million in campaign funds and use it for his own personal expenses including his home mortgage, school tuition for his children, personal investments and other living expenses. Barfield further admitted that on his 2008 Income Tax return, he knowingly stated that his Taxable Income was zero when, in fact, his Taxable Income should have been reported as approximately $582,000. Barfield also admitted that under his direction, fraudulent documentation was submitted in disclosure reports to the Federal Elections Commission (FEC) regarding expenditures for campaign disbursements.
“This case should serve as a reminder of the unfortunate truth that some people abuse positions of trust to enrich themselves at the expense of others, including, in this case, the taxpayers,” stated United States Attorney Robert Pitman.
Barfield is on bond pending sentencing. He faces up to 20 years in federal prison for wire fraud; up to three years in federal prison for making a false tax return; and, up to five years in federal prison for embezzlement of federal campaign funds. Sentencing before United States District Judge Sam Sparks in Austin has yet to be scheduled.
“Whenever an individual utilizes their position to defraud the public for their own personal gain by stealing campaign contributions, it tarnishes our political process. The FBI is committed to working with our law enforcement partners to ensure those who choose to line their pockets with public funds and abuse their positions of trust are held accountable,” stated FBI Special Agent in Charge Christopher Combs.
“The role of IRS Criminal Investigation becomes even more important in embezzlement cases such as this due to the complex financial transactions that must be unraveled. As in the case of Mr. Barfield, federal tax laws are typically violated in connection with this blatant fraud which can result in additional jail time,” stated IRS Criminal Investigation Acting Special Agent in Charge William Cotter. “Honest and law abiding citizens are fed up with greedy individuals who abuse the trust they are granted and use deceit and fraud to line their pockets with other people's money. Today's guilty plea demonstrates the collective efforts of IRS and our partners to enforce the law and ensure public trust.”
This case was investigated by special agents with the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation together with the Travis County District Attorney’s Special Prosecution Division. Assistant United States Attorneys Dan Guess and Ashley Hoff are prosecuting this case on behalf of the Government.Former CEO of Pharmacy Dispensing Service Indicted on Federal Tax ChargesRead the Press Release
NEWARK, N.J. - The former chief executive officer of a New Jersey company that provided pharmacy dispensing services was indicted today by a federal grand jury for allegedly filing false tax returns, U.S. Attorney Paul J. Fishman announced.
Gary J. Sekulski, 67, of Flanders, New Jersey, was charged with the filing of false federal income tax returns for tax years 2007, 2008 and 2009. Sekulski is expected to surrender for an arraignment before a federal judge on a date to be determined.
According to the indictment:
Sekulski was the CEO and President of Healthcare Corporation of America (HCA), a New Jersey company that controlled a pharmacy dispensing service to public and non-profit entities and served as a holding corporation for a number of wholly owned subsidiaries.
For tax years 2007, 2008, and 2009, Sekulski understated the amount of income that he received from HCA and other sources on his federal income tax returns. Sekulski then signed the returns under penalty of perjury and caused them to be filed with the IRS.
During that time, Sekulski sold shares of company stock, received settlement payments, and paid company money into his personal bank account without reporting any of the resulting income. In all, Sekulski failed to report approximately $353,000 in taxable income.
Each of the three tax counts carries a maximum potential penalty of three years in prison and a $250,000 fine together with the costs of prosecution.
U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen for the investigation, and thanked special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for their valuable assistance.The government is represented by Assistant U.S. Attorney Lee M. Cortes Jr., of the U.S. Attorney’s Office in Newark.
14-382
Defense counsel: William C. Cagney Esq., New Brunswick, New Jersey
Sekulski, Gary Indictment
Former Baptist Missionary Pleads Guilty to Wire FraudRead the Press Release
RICHMOND, Va. – Brady Nurse, 38, of Bothell, Washington, pleaded guilty today to wire fraud in connection with the fraudulent reimbursement of expense invoices while he served as a Baptist missionary in Portugal.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; and Adam S. Lee, Special Agent in Charge for the Federal Bureau of Investigation (FBI), Richmond Division, made the announcement after the guilty plea was accepted by United States Magistrate Judge David J. Novak. Nurse faces a maximum penalty of 20 years in prison, a fine of up to $250,000, and full restitution when he is sentenced on January 21, 2015, by United States District Judge James R. Spencer.
In a statement of facts filed in support of his plea agreement, Nurse admitted that from 2008 to 2013, while working in Portugal as a Baptist missionary for the International Mission Board (“IMB”), he fraudulently obtained $285,412.73 through 135 fraudulent reimbursement requests. The IMB is an entity of the Southern Baptist Convention, the nation's largest evangelical denomination, with more than 40,000 churches and nearly 16 million members. It is headquartered in Richmond, Virginia. The IMB is dedicated to evangelizing around the world with approximately 4,800 missionaries worldwide.
Nurse acknowledged that in 2006, he was appointed to Apprentice status (missionary) by the IMB, and assigned to Lisbon, Portugal. In 2009, he was approved for Career status. Nurse served as the Logistics Coordinator (“LC”) in Portugal, responsible for ensuring the payment of certain expenses for himself, other missionaries, and the IMB overall while overseas. He was also responsible for the financial support activities for IMB field personnel assigned to Portugal. As a Logistics Coordinator, Nurse was paid on an as-needed basis, for field personnel housing, car maintenance, applicable taxes, and major purchases.
IMB LC’s located overseas conducted business from both IMB bank accounts and personal accounts. Nurse acknowledged that when an authorized expense was incurred, he would prepare a request for reimbursement, supported by appropriate documentation. He would then submit the reimbursement request by wire transfer/email from Portugal to the IMB offices in London, U.K., which were then routed to IMB offices in Richmond, Virginia. Once the reimbursement requests were approved by the IMB, Nurse was paid by electronic funds transfers to his overseas bank account through on line banking from a Richmond, Virginia. The internal auditing and control staff of the IMB initially detected, and then determined the extent of Nurse’s fraudulent scheme, subsequently reporting it to the F.B.I.
Nurse admitted using a variety of techniques to submit for, and fraudulently receive, funds from IMB. For instance, he increased amounts on valid documents/invoices submitted on expense reports to fraudulently increase his reimbursement; submitted fraudulent, manufactured, and/or duplicated documentation on expense reports for reimbursement; submitted inadequate documentation, such as quotes and estimates for services to be performed by vendors rather than actual paid invoices, but falsely represented them as services actually provided; altered documentation; and was reimbursed for non-reimbursable expenses such as a jewelry purchase disguised as vehicle painting.
On January 30, 2014, Nurse officially resigned from IMB.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney S. David Schiller is prosecuting the case on behalf of the United States.
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. 3:14-cr-138.
Former Attorney Pleads Guitly to Defrauding Her ClientsRead the Press Release
A former attorney who defrauded over a dozen clients pled guilty today in federal court in Cedar Rapids.
Susan Hense, 54, from Cedar Rapids, Iowa, was convicted of one count of wire fraud.
In a plea agreement, Hense admitted that she knowingly made up a scheme to defraud the clients of her law firm, Hense Law PLC, and to obtain money from her clients under false pretenses and promises. Hense admitted that she falsely represented to her clients that money belonging to them would be held in trust on their behalf in a bank account when, in fact, Hense intended to steal at least a portion of the clients’ money. Hense further admitted that over a three year period, she stole and misappropriated at least $837,011.31 in client funds. Hense has since been disbarred and can no longer practice law in Iowa.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Hense remains free on conditions of release set by the court pending sentencing. Hense faces a possible maximum sentence of 20 years’ imprisonment, a fine, $100 in special assessments, and three years of supervised release following any imprisonment. Hense has also agreed to pay restitution to the victims of her offense.
The case is being prosecuted by Assistant United States Attorney Anthony Morfitt and was investigated by the Cedar Rapids Police Department.
Court file information is available at https://ecf.iand.uscourts.gov. The case file number is 14-CR-109.
Five Northern California Real Estate Investors Indicted for Bid Rigging and Fraud at Public Foreclosure AuctionsRead the Press Release
A federal grand jury in San Francisco returned an eight-count indictment against five real estate investors for their role in bid rigging and fraud schemes at foreclosure auctions in Northern California, the Department of Justice announced.
The indictment, filed today in U.S. District Court for the Northern District of California in San Francisco, California, charges Northern California real estate investors Joseph Giraudo, Raymond Grinsell, Kevin Cullinane, James Appenrodt and Abraham Farag with participating in conspiracies to rig bids and schemes to defraud mortgage holders and others. The indictment alleges that the defendants agreed to stop bidding or to refrain from bidding for properties at public foreclosure auctions in San Mateo County, California, in return for payoffs and concealing the fact that monies were diverted from mortgage holders, homeowners and others to co-schemers. Additionally, Giraudo, Grinsell and Appenrodt were charged with bid rigging and fraud in San Francisco County, California. To date, 47 individuals have agreed to plead or have pleaded guilty, as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
“These defendants corrupted the public foreclosure auctions in San Mateo and San Francisco counties, and they did so to line their pockets with money that rightfully belonged to mortgage holders and others,” said Brent Snyder, Deputy Assistant Attorney for the Antitrust Division’s criminal enforcement program. “As these charges demonstrate, the Antitrust Division will continue to pursue bidders at foreclosure auctions who violated the Sherman Act and defrauded mortgage holders and others.”
The indictment alleges, among other things, that beginning no later than August 2008 and continuing until January 2011, the defendants conspired to rig bids to obtain numerous properties sold at foreclosure auctions in San Mateo and San Francisco counties, paid others not to bid, accepted payoffs not to bid and, in the process, defrauded mortgage holders, other holders of debt secured by the auctioned properties and, in some cases, the defaulting homeowners.
“These charges demonstrate our continued commitment to investigate and prosecute individuals and organizations responsible for the corruption of the public foreclosure auction process,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “The FBI is committed to work these important cases and remains unwavering in our dedication to bring the members of these illegal conspiracies to justice.”
Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. Each count of mail fraud carries a maximum sentence of 20 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the mail fraud schemes. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than $1 million.
Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties, California. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300, or call the FBI tip line at 415-553-7400.
Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 93 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
Final Defendant and Leader of Burglary Ring Pleads Guilty to Dozens of Commercial Burglaries and to ArsonRead the Press Release
Robbed Businesses in Maryland, Virginia, West Virginia and Pennsylvania
Baltimore, Maryland – Carl Paschall, Sr., age 54, of Halethorpe, pleaded guilty today to conspiring to commit bank burglary and arson of property used in interstate commerce.The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Chief Gary Gardner of the Howard County Police Department; Chief James W. Johnson of the Baltimore County Police Department; Anne Arundel County Police Chief Kevin Davis; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Otis E. Harris, Jr., Special Agent in Charge, Coast Guard Investigative Service, Chesapeake Region; and Commissioner Anthony W. Batts of the Baltimore Police Department.
According to his plea agreement, from at least November 2010 until his arrest in July 2013, Carl Paschall, Sr. was the leader of a group that included his son, Carl Paschall Jr., Chad Paschall, Thomas Ellis, and Michael Johnson, who conspired to commit commercial burglaries in Maryland, Virginia, West Virginia, and Pennsylvania. Paschall, Sr. also conspired with defendants in a related case, David Paschall, Jr., Mark Johnson, Ronald Henderson and others, to commit the robberies. The conspirators stole cash, money orders, stamps, silver bars, jewelry, cigarettes, lottery tickets, prescription drugs, food, beverages, safes, laptop computers, cell phones, electronics, vehicles and other valuable items from gas stations, convenience stores, banks, credit unions and other commercial establishments during the night. The conspirators often stole or attempted to steal cash from ATMs.
The conspirators usually cut power lines, telephone lines, cables and other wires before entering a business. They used vise grips, sledgehammers, chop saws, grinders and blow torches to enter the business, and then often waited – for several minutes or sometimes up to several hours – before ransacking the business of its valuable items.
Carl Paschall, Sr. admitted that he committed, or attempted to commit, dozens of commercial burglaries and that the loss resulting from these burglaries exceeded $800,000.
On May 26, 2012, Carl Paschall, Sr. and his son, Carl Paschall, Jr. stole a white 2012 Ford E250 panel van from a rental car office in Martinsburg, West Virginia, which they used during three commercial burglaries committed on May 26th and 27th at businesses in West Virginia. On May 31, 2012, the conspirators drove the van to Newport Road in Woodbine, Maryland and parked the vehicle on the side of the road. The conspirators left some evidence of their crimes inside the stolen van, including stolen safes and lottery tickets. The applied an ignitable fluid inside the vehicle and set it on fire. Early in the morning on June 1, 2012, Howard County Fire and Rescue Department responded to the scene and encountered the van fully engulfed in flames. After extinguishing the fire, the remaining contents of the van were preserved for law enforcement.
Carl Paschall, Sr. and the government have agreed that if the Court accepts his plea, Paschall, Sr. will be sentenced to 66 months in prison. As part of his plea agreement, Paschall, Sr. will be required to pay restitution in the full amount of the victim’s losses and to forfeit $200,000. U.S. District Judge J. Frederick Motz has scheduled Paschall’s sentencing for December 1, 2015, at 10:30 a.m.
Carl Paschall, Jr., age 32, of Baltimore, previously pleaded guilty and was sentenced to 66 months in prison and was ordered to pay restitution of $200,000. Chad Paschall, age 28, of Baltimore; David Paschall, Jr., age 55, of Catonsville, Maryland; Mark Johnson, age 51, of Baltimore; Ronald Henderson, age 52, of Pasadena, Maryland; Thomas Daniel Ellis, age 24, and Michael Johnson, age 25, both of Baltimore, also pleaded guilty to their participation in the conspiracy. All are awaiting sentencing except Ellis and Michael Johnson, who was sentenced to a year and a day in prison and three years of probation, respectively.United States Attorney Rod J. Rosenstein commended the DEA, Howard County Police Department, Baltimore County Police Department; Anne Arundel County Department, ATF, Department of Health and Human Services - Office of Inspector General; Coast Guard Investigative Service and Baltimore Police Department for their work in the investigation. Mr. Rosenstein also praised the many local and state agencies in Virginia, West Virginia and Pennsylvania for their assistance in the investigation.
Mr. Rosenstein thanked Assistant United States Attorneys David I. Sharfstein and Andrea L. Smith, who are prosecuting this case.
Federal Court Permanently Bars San Antonio Tax Preparer from Preparing Tax Returns for OthersRead the Press Release
A federal court in San Antonio has permanently barred a Texas man and his business, Cardenas Income Tax Service, from preparing federal tax returns for others, the Justice Department announced today.
The civil injunction order, to which John Andrew Cardenas consented, was signed by Judge Orlando L. Garcia of the U.S. District Court for the Western District of Texas.
The complaint alleged that Cardenas individually and through Cardenas Income Tax Service, which had offices in Uvalde, Crystal City, Kingsville and Corpus Christi, Texas, prepared federal tax returns for customers using fraudulent Schedule C businesses on the return to inappropriately reduce customers’ federal tax liabilities. The suit alleges that the harm caused to the U.S. Treasury may exceed $900,000. Cardenas, who previously pleaded guilty to one count of aiding and abetting the preparation of a false and fraudulent tax return, agreed to the permanent injunction and admitted the allegations in the government’s complaint.
Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2014. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. John Andrew Cardenas, etc.
Agreed Stipulated Judgment of Permanent Injunction Against John Andrew CardenasDentist and Wife Charged with Bankruptcy FraudRead the Press Release
ROCKFORD — A husband and wife, both formerly of Barrington Hills, Ill., were indicted today by a federal grand jury in Rockford on separate counts of making false statements in a bankruptcy case. The indictment alleges that DANIEL APOSTOLOPOULOS, 52, and SOULA APOSTOLOPOULOS, 45, each filed a Chapter 7 Bankruptcy Petition, and fraudulently failed to disclose financial interests.
According to the indictment, on Oct. 23, 2009, Daniel Apostolopoulos filed a Chapter 7 bankruptcy Petition, and made false statements on a bankruptcy schedule and a Statement of Financial Affairs, both of which were filed under penalty of perjury. Specifically, it is alleged that Apostolopoulos intentionally concealed his interest in a checking account, a Chicago restaurant, and property located in Wisconsin. It is also alleged that Daniel Apostolopoulos failed to disclose his relationships with his father-in-law and sister-in-law, to whom he had transferred a Volvo and a Mercedes automobile within two years of filing, as well as concealing his prior ownership in other financial accounts.
The indictment further alleges that on March 4, 2010, Soula Apostolopoulos filed a Chapter 7 bankruptcy Petition, and made false statements on her Statement of Financial Affairs, filed under penalty of perjury. According to the indictment, Soula Apostolopoulos fraudulently concealed income she received from her interest in a Chicago restaurant she previously purchased with her husband, as well as her interest in Wisconsin property and in financial accounts during the year preceding the filing of her bankruptcy.
Providing material false statements or documents under penalty of perjury in a bankruptcy case carries a maximum penalty of 5 years in prison, a fine of up to $250,000, or twice the gross gain or gross loss resulting from that offense, whichever is greater. The judge may also impose a sentence of probation of one to five years, and a term of supervised release of up to three years. If convicted, the Court must impose a reasonable sentence under the advisory United States Sentencing Guidelines.
Members of the public are reminded that a criminal indictment contains only charges and is not evidence of guilt. Each defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt of each defendant beyond a reasonable doubt.
The indictment 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 Federal Bureau of Investigation.
The government is represented by Assistant U.S. Attorney Michael D. Love.
Indictment
Defendant Pleads Guilty to Email Extortion SchemeRead the Press Release
RICHMOND, Va. – Christopher J. Burruss, 37, of Toano, Virginia, pleaded guilty today to Interstate Threat to Injure the Reputation of Another, in violation of 18 U.S.C. § 875(d). Burruss faces a maximum of 2 years’ imprisonment, a fine of $250,000, and one year of supervised release when he is sentenced on January 21, 2015, by United States District Court Judge James R. Spencer.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; and Adam S. Lee, Special Agent in Charge for the Federal Bureau of Investigation (FBI), Richmond Division, made the announcement after the guilty plea was accepted by Magistrate Judge David J. Novak.
According to court papers, the victim of the scheme, T.N., is an attorney who previously represented Burruss in an Eluding Police and Driving Under the Influence (First Offense) criminal case in New Kent County, Virginia. In November 2010, Burruss went to trial and was ultimately convicted on both offenses. In November 2012, Burruss filed a Habeas Corpus Petition in state court, alleging ineffective assistance of counsel by T.N. After a hearing on the matter, the Virginia Circuit Court with jurisdiction over the case rejected Burruss’s challenge. He appealed and, in early 2014, the case was pending before the Virginia Supreme Court with oral arguments scheduled for February 11, 2014.
As part of the plea, Burruss admitted that on September 12, 2013, he filed a Virginia State Bar complaint against T.N. Among other allegations, Burruss stated that he believed that T.N. had mishandled the New Kent County criminal case and had inappropriate communications and contact with Burruss’s friend, S.B., and another woman leading up to and after the criminal case that affected T.N.’s representation. Included with the complaint, Burruss attached several embarrassing email and text messages between T.N., S.B., and two other women. Also included were affidavits from S.B. and another woman detailing some of their interactions with T.N. before and after the New Kent County criminal case. These emails, text messages, and affidavits later served as the basis for Burruss’s extortionate threats against T.N.
From January 23, 2014, through January 26, 2014, Burruss, with the assistance of S.B., began a direct email exchange with T.N. in which Burruss communicated his extortionate demands. In a series of three emails, his demands evolved and required that to avoid disclosure of the embarrassing communications to the press, T.N. would have to submit an affidavit to the Virginia Supreme Court admitting to mishandling the New Kent County criminal case and repay almost $20,000 in legal fees incurred by Burruss in connection with the case. The one-count information charging Burruss is premised on the following extortionate communication sent by Burruss on January 24, 2014, in response to a series of questions from T.N.:
Hi [T.N.]-
In response to your letter this morning Chris is seeking that you write an affidavit to be submitted to the Supreme Court admitting that you mishandled the case. He is also seeking complete restitution, which would include your retainer and the $20,000 in legal fees since then. In the event that the DUI fine remains in effect he asks that you pay that, as well. Neither of the affidavits from [C.E.] or myself were submitted to the court. They are not yet public record, however Chris intends to move forward on Monday afternoon. As far as the Bar is concerned we all know they would prefer to keep all of this very quiet.
Best regards-
[S.B.]After receiving the final email on the afternoon of January 26, 2014, T.N. had no further communication with Burruss or S.B. T.N. reported this matter to federal and state authorities, which led to the current prosecution.
The case was investigated by the FBI’s Richmond office. Assistant United States Attorneys Michael Gill and Heather Hart are prosecuting the case on behalf of the United States
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. 1:14-cr-135.
Danville Couple Charged with Tax FraudRead the Press Release
SAN FRANCISCO – Kamran Azizi and Hedyeh Shoar were charged with conspiracy to defraud the United States, announced U.S. Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.
According to the Indictment, during 2005 through 2008, Azizi was responsible for collecting donations at several MTO centers in the Northern District of California. MTO, a Sufi Islamic organization, has members who often make donations to the organization by way of cash or checks. During 2005 through 2008, Shoar was employed by MTO as an accountant. The Indictment alleges that Azizi kept a portion of members’ donations to MTO for his own benefit with the knowledge and assistance of Shoar.
Azizi and Shoar, married at the time, filed joint federal income tax returns for the tax years 2005 and 2006. Azizi filed individual federal income tax returns for the tax years 2007 and 2008. These tax returns omitted the MTO donations Azizi kept for his own benefit during these years, even though these donations were Azizi’s primary source of income. The Indictment also alleges that defendants deceived their tax return preparer by failing to provide that person with complete information regarding Azizi’s income.
Azizi was also charged with 2 counts of filing false federal income tax returns for the 2007 and 2008 filings.
Azizi was arraigned before the Honorable Elizabeth D. Laporte, United States Magistrate Judge, on Oct. 20, 2014. Azizi made his initial appearance before the Honorable Kandis Westmore, United States Magistrate Judge, on Oct. 16, 2014, at which time the Indictment was unsealed. Shoar remains a fugitive.
The maximum statutory penalty for each count of Conspiracy, in violation of 18 U.S.C. § 371, is five years in prison and a $250,000 fine. The maximum statutory penalty for each count of Filing a False Tax Return, in violation of 26 U.S.C. § 7206(1), is three years in prison and a $250,000 fine.
Assistant U.S. Attorney Michael G. Pitman is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Please note, an indictment contains only allegations and, as with all defendants, Azizi and Shoar must be presumed innocent unless and until proven guilty.
(Azizi unsealed indictment )
Dalton Man Sentenced to 52 Months in Prison for Possessing Child PornographyRead the Press Release
BOSTON – A Dalton man was sentenced today in U.S. District Court in Springfield for possessing child pornography.
Jared Sprague, 25, was sentenced by U.S. District Judge Mark G. Mastroianni to 52 months in prison and 10 years of supervised release for possessing child pornography. Sprague pleaded guilty in July 2014.
In 2012, federal agents executed a search warrant at Sprague’s residence and seized a computer that contained approximately 100 files of child pornography, including videos that involved prepubescent minors subjected to sadistic or violent sexual conduct, such as bestiality, rape, and bondage.
United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; and Dalton Police Chief Jeffrey E. Coe, made the announcement. The case was prosecuted by Assistant U.S. Attorneys Steven H. Breslow and Deepika Shukla of Ortiz's Springfield Branch Office.
Corrections Officer and Three Inmates Among Seven Charged in Alleged Plot to Smuggle Contraband into Cook County JailRead the Press Release
CHICAGO — Nearly three ounces of marijuana was confiscated after it was found hidden inside two sandwiches that a Cook County corrections officer allegedly tried to smuggle into the Cook County Jail last year in exchange for a $200 bribe. As a result of that seizure and an allegedly broader conspiracy, the corrections officer, three inmates, two civilians, and a Chicago police dispatcher are facing federal charges in connection with alleged smuggling of marijuana and other contraband into the jail, sheriff’s department and federal law enforcement officials announced today.
In June 2013, three jail inmates allegedly conspired with two civilian women to bribe JASON MAREK, a corrections officer for the Cook County Department of Corrections since May 2011, to bring marijuana, cigarettes, tobacco, alcohol, food and other contraband into the jail for inmates’ consumption and for further distribution within the jail, according to a three-count criminal complaint that was filed yesterday and unsealed today.
According to the charges, an ounce of marijuana, which sells for approximately $200 outside the jail, could be sold for five times as much, or $1,000, inside the jail.
Marek, also known as “Murder” and “Murda,” 29, formerly of Orland Park, was assigned to the 3 to 11 p.m. shift at CCJ, Division 9, Tier 2H, when the alleged marijuana smuggling was thwarted on June 21, 2013. He was arrested this morning and was released on his own recognizance after appearing before U.S. Magistrate Judge Jeffrey T. Gilbert in Federal Court.
Between June 15 and 24, 2013, three jail inmates – THADIEUS GOODS, PRINCE JOHNSON, and LAVANGELIST POWELL – who were housed in the same tier where Marek was assigned, allegedly conspired with two women to bribe Marek to smuggle the marijuana and other contraband into the jail. During a recorded telephone call from the jail on June 15, 2013, Goods told his wife, PEARLISA STEVENSON, that, with her help, he had the opportunity to make some money by selling marijuana inside the jail as long as he also had a corrections officer willing to help him.
“Rooting out corruption in the Cook County Jail is a top priority of mine,” said Cook County Sheriff Thomas J. Dart. “I’m thankful to our federal partners at the FBI and the U.S. Attorney’s Office for working closely with my staff to conduct such a thorough investigation and to charge this far-reaching case.”
The arrests and charges were announced by Sheriff Dart, together with 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. The investigation was a joint effort between the FBI and the Sheriff’s Office of Professional Responsibility, with Sheriff Dart’s full support, to improve the security and integrity within the Cook County Jail.
Goods, also known as “Big Weasy,” “Weasy,” and “Wang,” 36, of Calumet Park; Johnson, aka “Primo,” 32; and Powell, aka “JuJu” and “Juicy,” 22, both of Chicago, remain in state custody and will be transferred to face the federal charges on a date yet to be determined.
Stevenson, aka “Wang Wang,” 29, and NATOSHA McCOLLUM, aka “Tasha,” 21, who is Powell’s girlfriend, both of Chicago, were arrested this morning and were released on their own recognizance after appearing before Magistrate Gilbert.
Those six defendants ― Marek, Goods, Johnson, Powell, Stevenson, and McCollum ― were charged with conspiracy to possess with intent to distribute marijuana.
The seventh defendant, STEPHANIE LEWIS, 40, of Chicago, a “supervisor police operations” in the police dispatch group in the city of Chicago’s Office of Emergency Management and Communications, and who is Johnson’s girlfriend, was arrested last night. She was charged with one count of illegally accessing a law enforcement computer to assist the alleged extortion and drug distribution conspiracy. Lewis and three others ― Powell, Johnson, and McCollum ― were also charged with conspiracy to access a law enforcement computer to further extortion and a drug conspiracy.
Lewis was also released on her own recognizance. Marek, Stevenson, McCollum, and Lewis were each ordered to return to court at 9:30 a.m. Friday for a status hearing before Magistrate Gilbert.
According to a 48-page complaint affidavit, Goods and Powell pre-sold marijuana to inmates within the CCJ. In June 2013, inmates transferred funds to Stevenson and McCollum via the jail’s Inmate Trust Account system, allegedly to purchase marijuana and other contraband, which Goods, Powell, and Johnson expected to be brought into the jail. After collecting the money from other inmates, McCollum and Stevenson discussed with Goods and Powell their efforts to purchase marijuana from drug dealers outside the jail. Johnson and Lewis allegedly coordinated the delivery of contraband to Stevenson for delivery into the jail, and on June 21, 2013, Stevenson delivered the marijuana and other banned goods to Marek. At the same time, McCollum and Stevenson paid Marek a $200 bribe to smuggle the contraband into the jail. Marek attempted to deliver the marijuana to Goods but was intercepted by the FBI and the Sheriff’s Department’s Office of Professional Responsibility as he entered the jail.
After Marek failed to deliver the marijuana and contraband, Goods, Powell, and Johnson allegedly worked with McCollum and Lewis to obtain Marek’s home address and information about his family to threaten Marek and convince him to bring additional contraband into the jail. Johnson allegedly contacted Lewis and, after informing her that Marek had accepted a bribe but failed to deliver the goods, asked Lewis to provide Marek’s personal information, including his home address and names of family members because Johnson and Goods planned to send their associates to Marek’s house. After receiving Marek’s license plate number from McCollum, Lewis allegedly conducted an inquiry of Marek’s license plate on an OEMC computer linked to an Illinois State Police database, which queried the National Crime Information Center database, and Lewis then provided Marek’s home address to Johnson, the complaint alleges.
In June 2013, Good, Powell, and Johnson were housed in the jail’s Division 9, Tier 2H, where Marek was assigned for a 90-day rotation. Tier 2H is located on the second floor of the south tower of Division 9, which is located at 2834 West 31st St., Chicago, and is comprised of two interconnected three-story buildings that house general population male inmates with a maximum security classification.
Each count of the complaint carries a maximum penalty of five years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant United States Attorneys Megan Church and Michelle Nasser.
The public is reminded that a complaint contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Complaint
Convicted Felon Sentenced for Firearms and Identity Theft ChargesRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Manuel Orosa, Chief, Miami Police Department, announce that Miguel Roman, 22, of Miami, was sentenced today before U.S. District Judge Ursula Ungaro to 102 months in prison, to be followed by three years of supervised release.
Roman previously pled guilty to one count of possession of three firearms and ammunition while a convicted felon, in violation of Title 18, United States Code, Section 922(g)(1), one count of possession of 15 or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(3), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1).
According to court documents, during a search warrant on Roman’s apartment, law enforcement discovered three firearms, several boxes of ammunition, a variety of papers and documents reflecting the personally identifying information (PII) of other individuals, including names, dates of birth, and social security numbers, and several debit cards in other individuals’ names. The PII included a notebook containing many handwritten names, dates of birth, and social security numbers of other individuals, together with notations indicating Roman used the PII for fraudulent purposes. Also found were many documents reflecting PII, a large plastic bag containing notebooks of handwritten PII, forms from the Bureau of Prisons reflecting the PII of prisoners, and an envelope containing three treasury checks in other individuals’ names. In total, 1,114 unique names and social security numbers were discovered. Although not directly attributable to the defendant’s conduct, fraudulent tax returns were filed on behalf of at least sixteen of the individuals whose PII was found in Roman’s residence. The amount of loss resulting from the offense is $507,000.
Mr. Ferrer commended the investigative efforts of IRS-CI, the FBI, and the City of Miami Police Department. This case is being prosecuted by Assistant U.S. Attorney Jamie R. Galvin.
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.
Connecticut Investment Advisor Admits Defrauding Clients Through Cherry-picking SchemeRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that NOAH L. MYERS, 43, of Lyme, waived his right to indictment and pleaded guilty yesterday before U.S. District Judge Stefan R. Underhill in Bridgeport to defrauding investment clients in a “cherry-picking” securities scheme.
“Investors place an extraordinary amount of trust in their investment advisors, and we will always protect their right to the fair and ethical management of their savings,” stated U.S. Attorney Daly. “Investment advisors who breach their clients' trust in violation of federal securities laws will be prosecuted and risk losing both their freedom and their ill-gotten gains. We thank the FBI and the SEC for their diligent work in uncovering this cherry-picking scheme.”
“Noah Myers put his financial self-interest ahead of that of his clients,” stated FBI Special Agent in Charge Ferrick. “This conduct undermines the confidence of the American public in our securities markets. The FBI and the U.S. Attorney's Office, along with our law enforcement partners, will continue to vigorously investigate and prosecute these crimes.”
“Cherry-picking” is a fraudulent securities trading practice in which the responsible individual executes trades without assigning those trades to a particular trading account until the individual determines whether or not the trade has become profitable or suffered losses. The responsible individual then allocates the profitable trades to favored accounts – often the individual’s own account – and assigns unprofitable trades to disfavored client accounts.
According to court documents and statements made in court, MYERS was the sole owner of MiddleCove Capital, LLC (“MiddleCove”), a Connecticut limited liability company with its principal place of business in the Centerbrook section of Essex. MiddleCove had been registered with the U.S. Securities and Exchange Commission (“SEC”) as an investment adviser since 2008, and MYERS was the portfolio manager and managed a number of client accounts with assets of approximately $129 million. MiddleCove used Charles Schwab & Co., Inc. (“Schwab”) to trade securities and as the custodian of the investments held in client accounts. As part of the trading arrangement with Schwab, MYERS was permitted to place block purchases and sales of securities through a master account with Schwab and then, later in the day, allocate the purchases and sales to various accounts, including his personal accounts and various client accounts, all held by Schwab.
Between April 2009 and November 2010, MYERS engaged in “cherry-picking” at MiddleCove by purchasing the leveraged exchange traded fund (ETF) ProShares UltraShort Financials, otherwise known by its ticker symbol “SKF,” as well as other securities. MYERS then disproportionately allocated trades that had appreciated in value during the course of the day to his personal and business accounts and allocated trades that had depreciated in value during the day to the accounts of his advisory clients. As a result, MYERS gained as his clients suffered commensurate trading losses.
For example, in August 2009, on the nine days when MYERS purchased SKF in block trades in the master account and the security was sold as a day trade, MYERS allocated between 9 percent and 32 percent of the profitable block trades to his personal accounts. On three of those days he allocated between 27 percent and 31 percent of the profitable day trades to his personal accounts.
In addition, on September 2, 2009, MYERS purchased SKF in a block trade in the master account and, after the investment increased in value, sold the shares in a day trade and allocated more than 31 percent of the investment to his personal accounts. In sharp contrast, MYERS undertook four additional block purchases in the master account of SKF on September 3, 4, 16 and 28, 2009. On each of these days, when the SKF investment declined in value by the close of trading, MYERS allocated no more than 5 percent of the block trade to his personal accounts and instead allocated the remaining 95 percent of the shares to his clients’ accounts.
In filings with the SEC in April 2009 and March 2010, MYERS and MiddleCove represented that batched trades would be allocated fairly and not unduly favor MYERS or MiddleCove.
MYERS pleaded guilty to one count of security fraud, which carries a maximum term of imprisonment of 20 years and a fine of up to $5 million. Judge Underhill scheduled sentencing for January 12, 2015.
The SEC has revoked the registration of MiddleCove as an investment adviser and barred MYERS from the securities industry.This matter has been investigated by the Federal Bureau of Investigation with the assistance of the U.S. Securities and Exchange Commission. The case is being prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.
Citizens are encouraged to report any financial fraud schemes by calling, toll free, 855-236-9740, or by sending an email to [email protected].
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Chinese Gang Leader Sentenced in Manhattan Federal Court to Life in Prison in Connection with Double Murder and Racketeering ConvictionsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that XING LIN, a/k/a “Ding Pa,” the leader of a gang that operated for nearly 15 years in the Chinatown neighborhood of Manhattan as well as in Queens, Atlanta, and Toronto, was sentenced today in Manhattan federal court to life in prison on murder, extortion, and racketeering charges. Following a three-week trial in April 2013, a jury convicted LIN of engaging in racketeering from 1996 through 2009, murdering two individuals in a Queens nightclub in 2004, operating multiple illegal gambling parlors, and extorting bus company owners. LIN was sentenced today by United States District Judge Miriam Goldman Cedarbaum.
Manhattan U.S. Attorney Preet Bharara said: “With today’s sentence, Xing Lin will finally be punished for ordering the murder of two victims, and for his lengthy criminal career of extortion and racketeering. I would like to thank our law enforcement partners at ICE’s Homeland Security Investigations and the New York City Police Department for their hard work on this case.”
According to the Superseding Indictment, other documents filed in Manhattan federal court, and the evidence presented at trial:
From 1996 until December 2009, LIN was a “Dai Lo” – a Chinese term that refers to the boss of a criminal gang. LIN’s gang operated in the Chinatown neighborhood of Manhattan; Flushing, Queens; Atlanta, Georgia; Toronto, Canada; and elsewhere. The members of LIN’s gang were known as followers. LIN and his followers, including co-defendant Hao Chao, a/k/a “Little Beijing,” engaged in a number of criminal ventures, including the operation of high-stakes illegal gambling parlors, the extortion of business owners, and the beating, stabbing, and murder of rivals.
Beginning in 2002, LIN extorted the owners of a bus company that operated buses between Manhattan and Raleigh, North Carolina. In May 2004, Chang Qin Zhou, one of the bus company shareholders, whom LIN was extorting, refused to pay LIN additional money that he had demanded. During the early morning hours of July 30, 2004, Zhou was with a group of men and women in a private room in a karaoke bar located on Kissena Boulevard in Flushing, Queens. LIN and Chou forced their way into the private room, and LIN ordered Chou to “shoot” Zhou. Chou shot Zhou six times, killing him. One of the bullets also struck and killed Mei Ying Li, a waitress who was working at the karaoke bar and who was in the private room at the time of the shooting. A second waitress was shot in the leg and survived.
Following the shooting in the karaoke bar, LIN relocated his criminal gang to Toronto, Canada, where he continued to run gambling parlors and use violence against his rivals.
LIN was arrested in Toronto, Canada, on April 14, 2011. Following extradition, LIN arrived in the United States on August 19, 2011.
In addition to the prison term, LIN, 42, was also ordered to pay a $25,000 fine, and a $400 special assessment fee.
Chou, who was charged in the Superseding Indictment with murder, extortion, and racketeering offenses, is a fugitive. The allegations against Chou are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Mr. Bharara praised the investigative work of Immigration and Customs Enforcement’s Homeland Security Investigations and the New York City Police Department.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Jennifer Burns and Peter Skinner are in charge of the prosecution.
Chilton Man Sentenced for Federal Wildlife ViolationsRead the Press Release
United States Attorney James L. Santelle, announced that on October 20, 2014, Todd David Doughty (age: 50), owner of the “Thunderbird Game Farm” in Chilton, Wisconsin, was sentenced to five years probation, ordered to pay a $5,000 fine, and had his hunting, fishing and trapping privileges revoked for five years by Chief United States District Court Judge William C. Griesbach. Doughty had previously been convicted for a violation of the Migratory Bird Treaty Act in violation of Title 16, United States Code, Sections 703(a), 707(b)(2) and Title 18, United States Code, Section 2.
According to the plea agreement and other documents filed with the court, Doughty illegally engaged in the sale of sausage containing Snow Goose, a migratory bird. While sentencing the defendant, Chief Judge Griesbach noted a litany of past wildlife offenses which “spoke to the defendant’s character” and his “disregard for wildlife laws” which necessitated the lengthy revocation of hunting privileges. As a convicted felon, Doughty may never again possess a firearm for any purpose.
The case was investigated by the United States Fish and Wildlife Service and the Wisconsin Department of Natural Resources. It was prosecuted by Assistant United States Attorney Daniel R. Humble.Chesapeake Woman Sentenced to 15 Years for Her Role in Conspiracy to Produce Child PornographyRead the Press Release
NORFOLK, Va. – Shaniesta Kenay Banks, 22, of Chesapeake, Virginia, was sentenced today to 15 years in prison, followed by lifetime supervised release, for production of child pornography.
Dana J. Boente, United States Attorney for the Eastern District of Virginia and Clark Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, made the announcement after sentencing by Senior U.S. District Judge Robert G. Doumar.
Banks pleaded guilty on December 11, 2013. According to court documents, Banks became involved in the conspiracy when she was contacted by coconspirator Robert Harold Scott, Jr. under his assumed online identity of “Mike Pyro.” Scott would routinely communicate with women in and around the Tidewater area to set up “sex parties,” where the women would work as prostitutes and Scott would pay them for their services. In reality, Scott would not pay them and, at times, extort the women by threatening to publish sexually explicit videos. In addition to the adult parties, Scott was found to be conspiring with and producing child pornography with several different women, including Banks. Law enforcement found that, when discussing the sex parties, sometimes Scott would request these women to produce child pornography and was very specific as to the sex acts he wanted done on camera. Banks complied in return for the promise of money. Specifically, Banks produced child pornography with a 4 year old child.
This case was investigated by Homeland Security Investigations. Assistant U.S. Attorney Elizabeth M. Yusi prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-164.
California Man who was Supplying Pure Methamphetamine to Reno, Nev. Area Sentenced to 19½ Years in PrisonRead the Press Release
RENO, Nev. - A man who supervised and directed an illegal drug distribution operation in Reno from his home in southern California, was sentenced on Monday, Oct. 20, to 19½ years in federal prison and five years of supervised release, announced U.S. Attorney Daniel G. Bogden, for the District of Nevada.
Rosendo Salgado, 42, of Montclair, Calif., who was convicted by a jury on July 18 of one count of conspiracy to distribute methamphetamine, one count of money laundering conspiracy, and one count of illegal use of a communication facility, was sentenced by U.S. District Judge Larry R. Hicks.
“This defendant was no amateur drug trafficker and made a personal choice to engage in the trafficking of large amounts of almost pure methamphetamine over an extended period of time,” said U.S. Attorney Bogden. “He showed his leadership of, experience and command of the conspiracy by using lower-ranking members to make hand-to-hand sales and use of coded language to track sales.”
According to court records and evidence admitted at trial, beginning in January 2013 pursuant to a court authorized wiretap, law enforcement officials intercepted telephone calls of Salgado discussing the methamphetamine distribution operation in the Reno area with co-conspirators. The investigation continued, with Salgado observed meeting his co-conspirators in Reno. On May 12, 2013, officials discovered from additional intercepted telephone calls of Salgado’s telephone, that a supply of methamphetamine from Salgado would be arriving that day in Reno via a vehicle courier, with the drugs secreted in the back door of the vehicle. Investigators conducted surveillance outside the Reno home where the methamphetamine was delivered, and observed two co-conspirators removing a panel from the back passenger door of a white Toyota bearing California license plates. That evening, investigators executed a federal search warrant at the home and recovered a firearm and two pounds of pure methamphetamine. Two days later, Salgado was arrested and charged by federal criminal complaint in California.
At sentencing, the court found that Salgado was an organizer, leader, manager or supervisor of the methamphetamine distribution conspiracy based upon the evidence, including intercepted calls, revealing Salgado’s instruction to his co-conspirators on a number of operational matters, including how to locate the concealed drugs that had been delivered to them, how much to sell the drugs for, where to deposit the drug proceeds, and how to use coded language to keep tallies of sales. The co-conspirators who resided in Reno were prosecuted and convicted by the Washoe County District Attorney’s Office.
The case was prosecuted by Assistant U.S. Attorneys James E. Keller and Megan M. Rachow and investigated by the DEA, Northern Nevada High Intensity Drug Trafficking Area (HIDTA) Task Force, and Washoe County Sheriff’s Department.
Braddock Hills Bar & Grill Owner Pleads Guilty to Income Tax EvasionRead the Press Release
PITTSBURGH - A resident of North Braddock, Pa., pleaded guilty in federal court to a charge of income tax evasion, United States Attorney David J. Hickton announced today.
Thomas G. Foglia pleaded guilty to one count before United States District Judge Gustave Diamond.
In connection with the guilty plea, the court was advised that Foglia, the proprietor of Foli’s Place, admitted to keeping two sets of books for the purpose of understating his income on tax returns. This led to a total tax loss, due to false Forms 1040 filed by Foglia for the years 2005 through 2009, of $193,518.
Judge Diamond scheduled sentencing for Feb. 18, 2015 at 11 a.m. The law provides for a total sentence of five years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court released Foglia on bond.
Assistant United States Attorney Leo M. Dillon is prosecuting this case on behalf of the government.
The Internal Revenue Service - Criminal Investigation, conducted the investigation that led to the prosecution of Foglia.
Boulder Man Sentenced to Federal Prison for Failing to Register as A Sex OffenderRead the Press Release
DENVER – Douglas Wayne Delling, age 53, of Boulder, Colorado, was sentenced last week by U.S. District Court Judge Robert E. Blackburn to serve 41 months in federal prison for failure to register as a sex offender, U.S. Attorney John Walsh and U.S. Marshal John Kammerzell announced. Following his prison sentence, Judge Blackburn ordered Delling to spend 15 years on supervised release. The defendant appeared at the sentencing hearing in custody, and was remanded at its conclusion.
Delling was first charged by Criminal Complaint on January 30, 2014. He was indicted by a federal grand jury in Denver on February 10, 2014. He entered a guilty plea to the indicted charge, failing to register as a sex offender, on July 8, 2014. He was sentenced on October 16, 2014.
According to court documents, including the stipulated facts contained in the plea agreement, beginning on March 10, 2008, in the state of Arkansas, Delling was required to register under the Sex Offender Registration and Notification Act, as he was a sex offender. Delling subsequently moved to Colorado without notifying law enforcement officers. When a verification check was conducted by law enforcement officers in Arkansas, they determined that the defendant no longer resided at his registered address. A non-extraditable warrant was issued, and the U.S. Marshal’s Service in Arkansas launched a fugitive investigation.
During the subsequent investigation, the U.S. Marshal’s Service obtained a current telephone number for the defendant. Delling was contacted by phone on October 21, 2013, and informed agents that when he first moved to Colorado he lived in a camp ground in Nederland, Colorado, and worked in Boulder, Colorado. At the time he was contacted, he stated that he was currently living at a homeless shelter in Boulder, and that he knew he needed to register yet had not because he did not want to go to jail. Delling was informed that he needed to register in Colorado.
Delling was arrested nine days later on October 20, 2013, after neither registering in Colorado nor changing his registration in Arkansas. Records show that Delling had resided in Colorado from at least September 23, 2013 to October 30, 2013. The defendant had been employed with a “Ready to Work” program in Colorado, with which he had falsely reported “no” to questions of “have you been in jail or prison” and “Convicted of a Sex Offense”. The defendant said that he knew he had to register as a sex offender in Colorado but feared being arrested if he registered.
“Sex offenders are required to register in the communities they reside in so that local law enforcement and area residents are aware of their presence,” said U.S. Attorney John Walsh. “When a sex offender fails to register, no matter the excuse, that person is violating the law by not notifying the authorities or their neighbors of their residence and prior sex conviction.”
“I am extremely proud of the work of our deputy marshals on this case,” said U.S. Marshal John L. Kammerzell. “As an agency, we take these cases very seriously with the safety of the community as our highest priority.”
This case was investigated by the U.S. Marshals Service.
Delling was prosecuted by Assistant U.S. Attorney David Tonini.
2014 Eastern District Election Officer AppointedRead the Press Release
United States Attorney Thomas G. Walker announced today that Assistant United States Attorney (AUSA) Dennis M. Duffy will lead the efforts of his Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 4, 2014, general elections. AUSA Duffy has been appointed to serve as the District Election Officer (DEO) for the Eastern District of North Carolina, and in that capacity is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
United States Attorney Walker said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud. The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on Election Day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 4, 2014, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Walker stated that AUSA/DEO Duffy will be on duty in this District while the polls are open. He can be reached by the public at the following telephone number 919-856-4847.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on Election Day. The local FBI field office can be reached by the public at 919-380-4500.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
United States Attorney Walker said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division.”
20 October 2014
White Plains Area Man Sentenced to 151 Months Federal PrisonRead the Press Release
Man sentenced to federal prison for distributing cocaine in North Country
PLATTSBURGH, NEW YORK – On October 16, 2014, ROBERTO DELGADO, 35, of Ossining, New York was sentenced to 151 months in federal prison by United States District Court Judge Glenn Suddaby in Syracuse, New York announced United States Attorney Richard S. Hartunian and Drug Enforcement Administration Acting Special Agent in Charge James J. Hunt.
United States Attorney Hartunian said, “Keeping the supply of illegal drugs out of our communities is essential. We praise the work of our partner law enforcement agencies.”
“This sentencing is a result of collaboration between law enforcement to identify, investigate and arrest those responsible for supplying cocaine to our communities,” said DEA Acting Special Agent in Charge Hunt.
In March 2013, Delgado pled guilty to conspiracy to possess with intent to distribute and to distribute five kilograms or more of cocaine in the Northern District of New York, specifically in the Lake Placid area.
The sentence also includes a $15,000 fine, an eight year term of supervised release after the defendant completes his 151 month term of imprisonment, and a $100 special assessment.
The case was investigated by the Drug Enforcement Administration, New York State Police, and Lake Placid Police Department, the Saranac Lake Police Department, the Plattsburgh Police Department, the Clinton County Sheriff’s Office, the Franklin County District Attorney’s Office, and the Essex County District Attorney’s Office. Assistant United States Attorney Katherine Kopita prosecuted the case.
West Virginia Couple Guilty of Stealing from Elderly Victim to Purchase Beach HouseRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistWHEELING, WEST VIRGINIA – A Wetzel County couple was convicted in federal court of stealing nearly $400,000.00 from a 90-year-old victim in order to purchase a vacation home in the Outer Banks, United States Attorney William J. Ihlenfeld, II, announced today.
Following a 3 day trial, Timothy Summers, 67, and Lea Ann Summers, 52, of Proctor, West Virginia, were found guilty of one count of conspiracy to commit mail fraud, four counts of mail fraud, one count of securities fraud, and one count of interstate transportation of stolen property.
Evidence presented at trial showed that the couple collaborated to liquidate a significant portion of the victim’s investment holdings in PPG Industries stock. In late 2013, Lea Ann Summers called the stock holding company, Computershare, impersonating the victim, and sold 2,175 shares of PPG Industries stock.
Mrs. Summers then arranged for the proceeds of the sale, approximately $397,030.15, to be sent to herself rather than the victim. Timothy Summers deposited the proceeds and transferred the money into a bank account which he shared only with his wife. The couple then travelled to North Carolina and purchased a beach house in the Outer Banks for $243,173.61.
The couple faces up to 20 years in prison for each of the five mail fraud counts, up to 20 years in prison for the securities fraud count, and up to 10 years in prison for the interstate transportation of stolen property count. They also face a fine of up to $250,000 for each of the seven counts. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Assistant U.S. Attorneys David Perri and Michael Stein prosecuted the case on behalf of the government. The Federal Bureau of Investigation led the investigation.
Chief U.S. District Judge John Preston Bailey presided.
Washington County Man Pleads Guilty in Money Laundering SchemeRead the Press Release
PITTSBURGH - A Monessen resident has pleaded guilty in federal court to charges of money laundering, United States Attorney David J. Hickton announced today.
Steven Mensah Yawson, 37, pleaded guilty to 10 counts before United States District Judge Gustave Diamond.
In connection with the guilty plea, in 2012, Yawson conspired with others to steal identities which were later used to open credit cards and to purchase merchandise and gift cards in Western Pennsylvania. Yawson wired proceeds from the fraud to an individual in Accra, Ghana.
Judge Diamond scheduled the sentencing for Feb. 18, 2015 at 10 a.m. The law provides for a maximum total sentence of not more than 20 years in prison and $500,000. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Gregory C. Melucci is prosecuting this case on behalf of the government.
The Western Pennsylvania Financial Crimes Task Force (WPFCTF), conducted this investigation. The WPFCTF was established as a collaborative, multi-agency effort to effectively combat financial crimes, including identity fraud, in Western Pennsylvania. Partnering in this effort are the United States Attorney's Office for the Western District of Pennsylvania, the United States Secret Service, the United States Postal Inspection Service, the Department of Homeland Security, the Allegheny County District Attorney's Office, the Allegheny County Police Department, the City of Pittsburgh Bureau of Police and the Pennsylvania State Police.
Virginia Man Pleads Guilty to Traveling into the District of Columbia to Engage in Illicit Sexual Conduct with A MinorRead the Press Release
WASHINGTON – Michael Angel Gutierrez, 50, of Lorton, Va., pled guilty today to a federal charge of traveling interstate to engage in illicit sexual conduct with a minor, announced U.S. Attorney Ronald C. Machen Jr., Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Gutierrez entered the guilty plea in the U.S. District Court for the District of Columbia. The Honorable James E. Boasberg scheduled sentencing for Jan. 8, 2015. Gutierrez faces a maximum sentence of 30 years in prison and a potential fine of up to $250,000.
According to the government's evidence, on Aug. 28, 2014, Gutierrez contacted an undercover officer with the FBI's Child Exploitation Task Force, who had posted an ad on a social network site. Over the next few days, Gutierrez engaged in e-mail, phone, and text message conversations with the undercover officer, whom the defendant believed was the father of an under-aged girl. During this period of time, Gutierrez arranged with the undercover officer to meet for the purpose of engaging in sexual acts with the child.
On Sept. 3, 2014, Gutierrez traveled from his apartment in Virginia to a pre-arranged meeting place in Washington, D.C. When he arrived at the meeting place, he was arrested.
This case was brought was part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, 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 identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
In announcing the guilty plea, U.S. Attorney Machen, Assistant Director in Charge McCabe, and Chief Lanier praised the work of the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also commended the efforts of Assistant U.S. Attorney Ari Redbord, who is prosecuting the case.
14-234Virginia Man Pleads Guilty to Traveling into the District of Columbia to Engage in Illicit Sexual Conduct with A MinorRead the Press Release
WASHINGTON – Michael Angel Gutierrez, 50, of Lorton, Va., pled guilty today to a federal charge of traveling interstate to engage in illicit sexual conduct with a minor, announced U.S. Attorney Ronald C. Machen Jr., Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Gutierrez entered the guilty plea in the U.S. District Court for the District of Columbia. The Honorable James E. Boasberg scheduled sentencing for Jan. 8, 2015. Gutierrez faces a maximum sentence of 30 years in prison and a potential fine of up to $250,000.
According to the government's evidence, on Aug. 28, 2014, Gutierrez contacted an undercover officer with the FBI's Child Exploitation Task Force, who had posted an ad on a social network site. Over the next few days, Gutierrez engaged in e-mail, phone, and text message conversations with the undercover officer, whom the defendant believed was the father of an under-aged girl. During this period of time, Gutierrez arranged with the undercover officer to meet for the purpose of engaging in sexual acts with the child.
On Sept. 3, 2014, Gutierrez traveled from his apartment in Virginia to a pre-arranged meeting place in Washington, D.C. When he arrived at the meeting place, he was arrested.
This case was brought was part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, 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 identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
In announcing the guilty plea, U.S. Attorney Machen, Assistant Director in Charge McCabe, and Chief Lanier praised the work of the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also commended the efforts of Assistant U.S. Attorney Ari Redbord, who is prosecuting the case.
14-234Virginia Executive Indicted for Fraudulently Receiving Confidential Information About VA Construction ProjectsRead the Press Release
A 23-count indictment was filed charging a Virginia executive with providing things of value to the former director of the Cleveland and Dayton Veterans Affairs Medical Center in exchange for confidential information about VA construction projects, law enforcement officials said.
Mark S. Farmer, 54, of Arlington, Virginia was charged with one count of conspiracy to commit mail fraud, wire fraud and theft of government property; two counts of wire fraud; six counts of embezzlement and theft; one count of violating the Hobbs Act and 13 counts of mail fraud.
Farmer was employed at an integrated design firm that performed work for the VA. He worked in several different capacities, including associate principal. The business is identified in the indictment only as “Business 75”.
Farmer and Business 75 received VA records and things of value, including non-public information concerning the VA and streamlined access to public information concerning the VA, which William Montague had embezzled and stolen without authority from the VA. This was done to give Farmer and Business 75 an advantage over other companies in the awarding and administration of VA business.
Montague, the former director of the Cleveland and Dayton Veterans Affairs Medical Center, pleaded guilty earlier this year to 64 counts related to his role in the conspiracy. He is awaiting sentencing.
“Bribing a public official to obtain internal government documents and information for a competitive business advantage is illegal,” said Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland Office. “The FBI will continue to root out corruption at all levels.”
“Contractors and employees conspiring to defraud the VA is particularly intolerable as the VA struggles to effectively serve our nation's veterans,” said Gavin McClaren, U.S. VA OIG, Resident Agent in Charge, Cleveland.
Farmer asked Montague to obtain information concerning VA contracts and business, including VA records. Montague used his power and influence at the VA to gain access to VA employees in ways that Farmer and Business 75 could not. Montague gave false and misleading information to VA employees about Montague’s reasons for requesting VA records and information, according to the indictment.The case was prosecuted by Assistant United States Attorneys Antoinette T. Bacon following an investigation by the FBI and United States Department of Veterans Affairs – Office of Inspector General.
If convicted, the defendant’s sentence will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.Upshur County Man Conceals Armed Robbery Suspect, Sentenced to Four Months in PrisonRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – Dustin Tyler Moore, 24, of Buckhannon, West Virginia, was sentenced to four months in prison after he harbored and concealed a wanted armed robbery suspect, United States Attorney William J. Ihlenfeld, II, announced today.
Moore pled guilty in August 2014 to one count of “Concealing Person from Arrest” after a United States Marshals Service investigation revealed that Moore used his vehicle to transport an armed robbery suspect for whom the Harrison County Sheriff’s Department had obtained a felony arrest warrant.
Assistant U.S. Attorney Zelda Wesley prosecuted the case on behalf of the government.
U.S. District Judge Irene M. Keeley presided.
U.S. Attorney Booth Goodwin, Law Enforcment Officials and Treatment Professionals to Announce Law Enforcement Treatment Referral Initiative Arising Out of Recent RoundupRead the Press Release
CHARLESTON, W.Va. –U.S. Attorney Booth Goodwin and various state and local law enforcement officials will discuss recent efforts by law enforcement to refer addicts to treatment at a press conference on Tuesday, October 21, 2014, at 2:00 p.m. at Prestera, PARC East, 1143 Dunbar Avenue in Dunbar, West Virginia.
WHO:
United States Attorney Booth Goodwin
Charles Miller, Chief of Staff, Kanawha County Prosecutor’s Office
Chief Brent Webster, Charleston Police Department
Sheriff John Rutherford, Kanawha County Sheriff’s Department
Eric Johnson, Commander, Metropolitan Drug Enforcement Network Team (MDENT)
Deputy Director Kenny Burner, Appalachia HIDTA
Dana Petroff, Director of Addiction Services, Prestera
Kate Luikart, Regional Director, Prestera
Deputy Secretary James Rubenstein, West Virginia Department of Military Affairs and Public Safety and
Commissioner, West Virginia Division of Corrections
WHERE: Prestera – PARC East
1143 Dunbar Avenue
Dunbar, WV
WHEN: Tuesday, October 21, 2014 at 2:00 p.m.Two Virginia Men Sentenced on Firearms ChargesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA – Two Virginia men with prior felony convictions were sentenced in federal court for unlawful possession of firearms, United States Attorney William J. Ihlenfeld, II, announced today.
In late 2013, convicted felons Micky Knight Matheson, 34, and Joshua Thomas Smith, 30, both of Winchester, Virginia, pawned four shotguns and a rifle near Martinsburg, West Virginia.
Smith was sentenced to 80 months in prison. He was previously convicted of the felony offense of distribution of cocaine in the Circuit Court for the City of Winchester, Virginia. Matheson was sentenced to 57 months in prison. He was previously convicted of the felony offenses of credit card theft, robbery, conspiracy to commit robbery, forgery, uttering, and credit card fraud in the Circuit Court for the City of Winchester, Virginia.
Smith and Matheson each pled guilty in July 2014 to one count of “Felon in Possession of a Firearm” after an investigation led by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Assistant U.S. Attorney Jarod Douglas prosecuted the cases on behalf of the government.
U.S. District Judge Gina M. Groh presided.
Two Sentenced on Theft, Fraud ChargesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA – Two Martinsburg area women were sentenced in federal court on theft and fraud charges, United States Attorney William J. Ihlenfeld, II, announced today.
Brenda Carmody, 49, of Bunker Hill, West Virginia, was sentenced to three years of probation and a $500.00 fine after she stole more than $2,000.00 while employed at the Rippon, WV Post Office. Carmody pled guilty to one count of “Misappropriation of Postal Funds” in July 2014 after a United States Postal Inspection Service investigation revealed that she stole monies from a cash drawer and post office box rental fees totaling $2,031.91.
Martina Roberts, 41, of Martinsburg, was sentenced to two years of probation after she filed for personal bankruptcy and subsequently forged the bankruptcy trustee’s signature to authorize a line of credit to purchase a new car. Roberts pled guilty to one count of “Bankruptcy Fraud – Falsification of Documents” in July 2014.
Assistant U.S. Attorney David Perri prosecuted Carmody and Assistant U.S. Attorney Andrew Cogar prosecuted Roberts on behalf of the government.
U.S. District Judge Gina M. Groh presided.
Two Sentenced for Drug TraffickingRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA – Two Martinsburg area men were sentenced in federal court on drug trafficking charges, United States Attorney William J. Ihlenfeld, II, announced today.
Delmar Hoza Curry, 33, of Martinsburg, West Virginia, was sentenced to 10 months in prison and six months of supervised release, for possession with intent to distribute crack cocaine. Curry pled guilty in July 2014 to one count of “Possession with Intent to Distribute Cocaine Base” following an investigation led by the Eastern Panhandle Drug & Violent Crimes Task Force, a HIDTA-funded initiative.
John Earl Mitchell, 29, of Harper’s Ferry, West Virginia, was sentenced to time served since June 2014 and five years of supervised release for his role in distributing crack cocaine and Methylone, an amphetamine, near Martinsburg, West Virginia. Mitchell pled guilty in July 2014 to one count of “Drug Conspiracy” after an investigation led by the Martinsburg Police Department.
Assistant U.S. Attorney Jarod Douglas prosecuted the cases on behalf of the government.
U.S. District Judge Gina M. Groh presided.
Two Sentenced for Conspiring to Grow MarijuanaRead the Press Release
ERIE, Pa. - A resident of Frewsburg, New York and a resident of Randolph, New York, have been sentenced in federal court to on their conviction of violating federal drug laws, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed a sentence of time served and a $2,000 fine on William Kamholtz, 59, of Frewsburg, New York and a sentence of 1 day in jail, 9 months home detention and a $3,000 fine on James Leach, 62, of Randolph, New York.
According to information presented to the court, Kamholtz and Leach conspired to manufacture and possessed with intent to distribute marijuana plants.
Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the United States Forest Service Law Enforcement and Investigations, the McKean County Drug Task Force, the Southern Tier Drug Task Force, the Cattaraugus County Drug Task Force and the United States Drug Enforcement Administration for the investigation leading to the successful prosecution of Kamholtz and Leach.
Two Newark, N.J. Men Plead Guilty to Smuggling Marijuana and Cell Phones into Federal Detention FacilityRead the Press Release
TRENTON, N.J. – Two Newark men today admitted their involvement in a scheme to smuggle contraband, including marijuana and cell phones, into the Essex County Jail, a federal pretrial detention facility, U.S. Attorney Paul J. Fishman announced.
Darsell Davis, 29, pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of conspiring with others to commit extortion under color of official right. Dwayne Harper, 30, pleaded guilty before Judge Cooper to an information charging him with one count of conspiring to smuggle contraband into the Essex County Jail. Davis has been released on bail and Harper remains in custody.
According to the documents filed in this case and other cases and statements made in court:
On multiple occasions between September 2013 and May 2014, Stephon Solomon, 26, a corrections officer at the Essex County Jail, smuggled contraband – including cell phones, tobacco, and marijuana – to Quasim Nichols, 29, a federal pretrial detainee at the Essex County Jail, in exchange for cash bribes. Davis and Harper aided the smuggling scheme by collecting the contraband to be smuggled into the jail. After receiving contraband and cash bribes from Davis, Solomon smuggled the contraband to Nichols, who ultimately sold some of the marijuana and cell phones to other inmates. The inmates purchased the contraband by having friends and family send Western Union money transfers to Nichols, who then enlisted Davis and others to retrieve those payments for him. Davis obtained at least $4,300 in Western Union payments over the course of the conspiracy.
Charges against Nichols are still pending. The charges and allegations against Nichols are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Solomon pleaded guilty on Oct. 1, 2014, to one count of conspiring to commit extortion under color of official right and awaits sentencing on Jan. 21, 2015. He has been released on bail.
The charge of conspiring to commit extortion under color of official right, to which Davis pleaded guilty, carries a maximum potential penalty of 20 years in prison and a maximum fine of $250,000. Davis also will forfeit $4,300, consisting of his proceeds from the conspiracy. The charge of conspiring to provide contraband, including marijuana, to inmates at the Essex County Jail, to which Harper pleaded guilty, carries a maximum potential penalty of five years in prison and a maximum fine of $250,000.
Davis and Harper are set to be sentenced before Judge Cooper on Feb. 11, 2015, and Feb. 4, 2015, respectively.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and investigators with the Internal Affairs Division of the Essex County Jail, under the leadership of Warden Roy Hendricks, with the investigation leading to today’s guilty pleas.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division and Robert Frazer of the Criminal Division, Organized Crime/Gangs Unit, in Newark.
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Defense counsel: Davis: Maria Noto Esq., Matawan, N.J.
Dwayne Harper: Michael Pedicini Esq., Morristown, N.J.Davis, Darsell Information
Harper, Dwayne InformationTwo FCI Morgantown Inmates Convicted of Possessing ContrabandRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – Two inmates at the Federal Correctional Institute, Morgantown were convicted and sentenced in federal court for possession of prohibited objects, United States Attorney William J. Ihlenfeld, II, announced today.
James Robinson, 42, pled guilty today to one count of “Possession of a Prohibited Object” after he was discovered in possession of marijuana while incarcerated at FCI Morgantown. Robinson was sentenced to an additional four months in prison.
Dominick Jordan, 34, pled guilty today to one count of “Possession of a Prohibited Object” after he was discovered in possession of a cell phone while incarcerated at FCI Morgantown. Jordan was sentenced to an additional three months in prison.
Assistant U.S. Attorney Shawn Morgan prosecuted the cases on behalf of the government. Both cases were investigated by the Federal Bureau of Prisons and the Special Investigative Services Unit at FCI Morgantown.
U.S. Magistrate Judge John S. Kaull presided in the Jordan case. U.S. District Judge Irene M. Keeley presided in the Robinson case.
- Tomball Man Gets 30-Year Sentence for Producing/Distributing Child Pornography
Todd County, Kentucky, Man Guilty of Coercing Minors to Engage in Sexually Explicit Conduct and Receiving Child PornographyRead the Press Release
BOWLING GREEN, Ky. – A Todd County, Kentucky man pleaded guilty today, in U.S. District Court to charges of persuading, inducing and coercing two minor females to engage in sexually explicit conduct and with receiving child pornography announced David J. Hale, United States Attorney for the Western District of Kentucky.
Jesse Sanford Williams, age 34, pleaded guilty to all three counts of the indictment before U.S. Magistrate Judge H. Brent Brennenstuhl in Bowling Green. Williams was arrested on March 7, 2014, by federal agents in Kentucky, following an investigation that began in the state of Washington on March 28, 2013. In court, Williams admitted to blackmailing, by threat, at least two minor, teen girls, in order to receive sexually explicit images of them, by means of multiple Gmail and Yahoo internet accounts. The activities took place between June 2011 and March 2013. Victim-1 lived in Washington, and was 13 years of age at the onset of the Internet threats. Victim-2 lived in Todd County, and was approximately the same age. At all times, Williams concealed his age and identity from the victims. A subpoena of email accounts determined all email accounts shared the same Internet Protocol (IP) address from an account located at Logan Aluminum, a large manufacturing facility located near Russellville, Kentucky. The FBI was able to identify Williams from shift schedules, IP login times and other materials obtained in the investigation. Further, Williams admitted to knowingly receiving child pornography between June 2011 and March 2013.
If convicted at trial, Williams faced a combined sentence of at least 15 years, but no more than 80 years in prison, a fine of $750,000 and a term of supervised release including up to life. Williams is scheduled for sentencing before Senior Judge Thomas B. Russell on February 4, 2015, in Bowling Green.
This case is being prosecuted by Assistant United States Attorney Marisa Ford and is being investigated by the Federal Bureau of Investigation (FBI) Louisville and Seattle Divisions and police in Washington State.
Three Missouri Men Plead Guilty to Child PornRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that three Missouri men pleaded guilty in federal court today, in separate and unrelated cases, to charges involving child pornography.
USA v. Allison
Larry Allison, 50, of Weaubleau, Mo., pleaded guilty before U.S. District Judge M. Douglas Harpool to using a minor to produce child pornography.
By pleading guilty, Allison admitted that he used a minor, identified in the federal indictment as “Jane Doe,” to produce child pornography in January 2014.
Under federal statutes, Allison is subject to a mandatory minimum sentence of 15 years in federal prison without parole, up to a sentence of 30 years in federal prison without parole, plus a fine up to $250,000 and an order of restitution to his victim. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the Springfield, Mo., Police Department, the Hickory County, Mo., Sheriff’s Department and the FBI.
USA v. Kern
Paul D. Kern, 22, of Republic, Mo., pleaded guilty before U.S. District Judge M. Douglas Harpool to possessing child pornography.
According to today’s plea agreement, Kern contacted the Republic, Mo., Police Department on Nov. 1, 2012, to report that he had just received a warning pop-up on his computer ostensibly generated by the FBI while he was visiting a Web site featuring child pornography. He brought his computer to the police station and investigators conducted a forensic preview of the computer that located several images of child pornography.
Kern’s computer contained 55 images and five videos of child pornography. Kern admitted that he had been viewing child pornography for over six months.
Under the terms of today’s plea agreement, the government will not seek a sentence greater than five years in federal prison without parole; Kern will not seek a sentence less than two years in federal prison without parole. Kern is also subject to a fine up to $250,000 and an order of restitution to his victims. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the Republic, Mo., Police Department.
USA v. May
Christopher May, 29, of Fair Grove, Mo., pleaded guilty before U.S. District Judge M. Douglas Harpool to receiving and distributing child pornography over the Internet between Nov. 29, 2012, and March 26, 2013.
Under federal statutes, May is subject to a mandatory sentence of five years in federal prison without parole, up to a sentence of 20 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the Nixa, Mo., Police Department, the Fair Grove, Mo., Police Department, and U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Thornton Woman Pleads Guilty and Aiding and Assisting in the Preparation of False Tax ReturnsRead the Press Release
DENVER – Geraldine Juanita Sotelo, age 64, of Thornton, Colorado, pled guilty last week before U.S. District Court Judge R. Brooke Jackson to aiding and assisting in the preparation of false tax returns, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Judge Jackson is scheduled to sentence Sotelo on January 26, 2015. Sotelo was indicted by a federal grand jury in Denver on January 28, 2014.
According to information contained in the plea and indictment, Sotelo began preparing and filing tax returns for clients around 1999 under the name J&G Bilingual Services in Thornton, Colorado. Sotelo was a co-owner and the manager of the business. J&G Bilingual Services typically followed a set procedure in preparing a tax return for a client. The client would come into J&G's office, met with one of Sotelo's employees, and provided information about his or her income and expenses. The J&G employee entered the information into a computer, and a software program generated a draft of the client's tax return. The draft then was reviewed by Sotelo.
For tax returns during the years 2007, 2008, and 2009, Sotelo would make changes to draft returns during her reviews or directed her employees to make change which often included increased charitable contributions, unreimbursed employee expenses, personal property taxes, and other itemized deductions without discussing the changes with the clients. Each of the twenty-six returns mentioned in the Indictment requested a refund, in amounts ranging from $1,282 to $7,140, and each was false in more than one respect. On Schedule A of all twenty-six returns were false itemized deductions, overstating the amount clients paid in personal property taxes and the amounts of their gifts to charities. All but two schedules misstated unreimbursed employee expenses and two schedules falsified medical and dental expenses.
Seven of the twenty-six returns misrepresented that taxpayers were eligible for credits for child and dependent care expenses. To support the claim for child and dependent care expenses each return included Form 2441, which listed the care provider's name, SSN and the amount the taxpayer paid to the provider during the tax year. When Sotelo and her employees, acting at her direction, falsified that information, they sometimes consulted what they called the "baby sitter list." The list contained information under three column headings: (1) "NAME," (2) "BABY SITTER SSN/ EIN," and (3) "ZIP CODE." At an employee meeting during the relevant time, Sotelo announced that J&G had to stop using the baby sitter list because "the IRS is catching on."
The tax loss resulting from the false entries on the twenty-six returns was $71,978. In April 2010, two IRS special agents interviewed Sotelo, who at first claimed that all of the information on J&G-prepared returns came from the clients and the returns did not contain false entries. When one of the agents told her that her statements were not consistent with what the IRS had learned, Sotelo admitted that she did "fudge" numbers on her clients' returns.
Sotelo pled guilty to one count of aiding and assisting in the preparation of false tax return, which carries a penalty of not more than 3 years in federal prison, and a fine of up to $100,000.
This case was investigated by Internal Revenue Service – Criminal Investigation with assistance from the Special Enforcement Program of the Internal Revenue Service and prosecuted by the Economic Crime Section of the U.S. Attorney’s Office’s Criminal Division.
Thermacore, Inc., Agrees to Pay $965,000 to Resolve False Claims Act AllegationsRead the Press Release
PHILADELPHIA - Thermacore, Inc. (“Thermacore”) has agreed to a $965,000.00 settlement to resolve allegations of fraud arising as part of the Federal government’s Small Business Innovation Research (“SBIR”) program. According to the United States, Thermacore is responsible for duplicate SBIR awards submissions. The United States contends that these submissions, and the attendant certifications, constituted false statements to the Federal government. The settlement was announced today by First Assistant United States Attorney Louis Lappen. Thermacore denies the allegations.
Thermacore acquired k Technology Corporation (“kTC”) on August 7, 2009. Through the SBIR program, kTC had submitted a project proposal to the National Aeronautics and Space Administration (“NASA”), on September 4, 2008, and submitted a duplicate proposal to the United States Air Force (“Air Force”) on September 24, 2008. Through the SBIR program, the agencies provide small businesses with incentives to profit from the commercialization of technology that would benefit the Federal government.
The SBIR program has requirements aimed to combat fraud, waste, and abuse. As part of these requirements, both NASA and the Air Force mandate that the same or essentially equivalent research may not be funded by more than one agency and that submissions under the SBIR Program must be certified as being non-duplicative. Under the SBIR Program, therefore, it is unlawful to receive funding for essentially equivalent work already funded under any government program or to falsely certify that work is non-duplicative.
The investigation was prompted by NASA’s proactive initiative to identify potential fraud in its SBIR contracts. “The proactive efforts of agencies like NASA are critical to identifying potential fraud and safeguarding limited government resources,” said Lappen.
Since its enactment in 1982, as part of the Small Business Innovation Development Act, SBIR has helped thousands of small businesses to compete for federal research and development awards which have enhanced the nation’s defense.
Under the parties’ settlement agreement, Thermacore will pay $500,000 to the United States. An additional $465,000.00 will be allocated and used for ongoing compliance efforts by Thermacore. Thermacore has already initiated an upgrade to its Ethics and Compliance Program which efforts are continuing.
The investigation was conducted by NASA, the Air Force, and the Department of Defense. The case is being handled by Assistant U.S. Attorney Veronica J. Finkelstein and auditor Lawrence M. Kutys.
Click here to view the settlement agreement.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Terlingua Woman Sentenced to Maximum Ten Years in Federal Prison for Collecting Deceased Father's Social Security BenefitsRead the Press Release
In Pecos on Friday, United States District Judge Robert A. Junell sentenced a 49-year-old Terlingua, TX, woman to the statutory maximum of ten years in federal prison for stealing over $245,000 in Social Security benefits paid to her deceased father announced Robert Pitman, United States Attorney.
In addition to the prison term, Judge Junell ordered Judith Maria Broughton to pay restitution to the federal government in the amount of $245,226 and be placed under supervised release for a period of three years after completing her prison term.
On July 3, 2014, Broughton pleaded guilty to a one count Information charging her with willfully and knowingly stealing Social Security Administration Retirement Insurance Benefits. By pleading guilty, Broughton admitted that she forged her father’s signature causing SSA benefits paid in the name of her father, Luther D. Broughton, to be electronically deposited into a joint checking account. From June 1990 to August 2011, she collected the funds deposited into the account even after his death. Broughton further admitted to converting those monies to her own personal use.
According to court records, Luther Broughton died in June 1990 and the defendant leased a storage unit in Lexington, KY, to conceal his death. A search of the storage unit on January 8, 2014, revealed the mummified remains of Luther D. Broughton as well as his personal belongings including an automobile. Also, the defendant’s mother, Mary Elizabeth Broughton’s, Social Security benefits were being electronically deposited into a joint checking account with the defendant. Mary Elizabeth Broughton’s whereabouts have not been determined and her SSA benefits have been suspended.
This case was investigated by special agents with the Social Security Administration-Office of Inspector General with assistance from the Brewster County Sheriff's Office and law enforcment in Lexington, KY. Assistant United States Attorney James J. Miller, Jr. prosecuted this case on behalf of the Government.
- Tax Preparation Business Owner Sentenced for Tax Fraud
Suburban Dermatologist Convicted of Cheating Medicare and Private Insurers of $2.6 Million in Health Care Fraud SchemeRead the Press Release
CHICAGO — A dermatologist in west suburban Lombard was convicted today of defrauding Medicare and private health insurers by submitting false claims for more than 800 patients resulting in losses totaling more than $2.6 million. The defendant, DR. ROBERT KOLBUSZ, falsely diagnosed patients with actinic keratosis, or sun-induced skin lesions that have potential to become cancerous, and then billed public and private health insurers for treatments that were ineffective and falsely documented.
Kolbusz, 57, of Oak Brook, owns and operates the Center for Dermatology and Skin Cancer, Ltd., in Lombard and formerly located in Downers Grove. He was found guilty of three counts of wire fraud and three counts of mail fraud by a jury that began deliberating on Friday after a four-week trial in U.S. District Court.
Kolbusz remains free on bond pending sentencing, which was scheduled for Feb. 13, 2015, by U.S. District Judge John Z. Lee. Kolbusz faces a maximum penalty of 20 years in prison and a $250,000 fine on each count, or an alternate fine totaling twice the gross fraud loss or twice the gain, whichever is greater. The Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
According to the evidence at trial, between 2003 and 2010, Kolbusz falsely documented hundreds of patients’ records to support medically unnecessary, cosmetic treatments he ordered. He typically billed for removing 15 or more lesions from hundreds of repeat patients, many for whom he treated on at least 10 or more occasions, and received insurance payments of up to $352.40 per treatment. Overall, he falsely claimed to have removed more than 150 pre-cancerous lesions from each of approximately 350 Medicare patients, more than 450 patients covered by Blue Cross and Blue Shield, and additional patients covered by Aetna and Humana health insurance. In fact, Kolbusz usually provided treatments that were merely cosmetic and that were not eligible for insurance payments.
Eight patients, several employees, and an expert witness testified for the government, while Kolbusz testified in his defense. One patient, who was a teenager at the time, testified that she thought only that she was getting her freckles lightened while Kolbusz claimed that he had destroyed approximately 491 pre-cancerous lesions on her skin.
The guilty verdict was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Lamont Pugh III, Special Agent-in-Charge of the U.S. Department of Health and Human Services Office of Inspector General in Chicago; and James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor Office of Inspector General in Chicago.
The government is being represented by Assistant U.S. Attorneys Stephen Chahn Lee, Abigail Peluso, and Jessica Romero.
Rosebud Woman AcquittedRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rosebud, South Dakota, woman was acquitted of Arson on October 9, 2014, as a result of a federal jury trial in Pierre, South Dakota. Mary Peneaux was indicted by a federal grand jury in November 2013.
The charge related to the alleged arson of a residence in Rosebud.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Rosebud Sioux Tribe Law Enforcement Services. The U.S. Attorney's Office prosecuted the case.
Rapid City Man Sentenced for Felon in Possession of A FirearmRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rapid City, South Dakota, man convicted of Felon in Possession was sentenced on October 15, 2014, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Jesse D. Grimm, age 32, was sentenced to 12 months and one day in custody, 3 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Grimm was indicted for Felon in Possession by a federal grand jury on March 18, 2014. He pled guilty on June 26, 2014.
On January 20, 2014, Grimm possessed a Glock Model 27, which was inside a backpack in his pickup truck near Rapid City. Grimm was previously convicted of a felony of Aggravated Assault (Domestic Abuse) on January 2, 2009.
This case was investigated by the Division of Criminal Investigation and the Rapid City Police Department. Assistant U.S. Attorney Ted L. McBride prosecuted the case.Grimm was immediately turned over to the custody of the U.S. Marshals Service.
Rapid City Man Sentenced for False StatementRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rapid City, South Dakota, man convicted of False Statement was sentenced on October 15, 2014, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Justin Robert Yellow Elk, age 29, was sentenced to 8 months in custody, 3 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Yellow Elk was indicted for Concealing Person from Arrest and False Statement by a federal grand jury on March 18, 2014. He pled guilty to False Statement on June 6, 2014.
The conviction stems from when Yellow Elk, who was an employee at Community Alternatives of the Black Hills (CABH) in 2012, gave false statements to a Federal Bureau of Investigation (FBI) agent during a CABH escape investigation in April 2013.
This case was investigated by the FBI. Assistant U.S. Attorney Sarah Collins prosecuted the case. Yellow Elk was immediately turned over to the custody of the U.S. Marshals Service.
Project Safe ChildhoodRead the Press Release
Nottingham Man Pleads Guilty To Child Pornography PossessionCONCORD, NEW HAMPSHIRE: Ryan Rathe, 28, of Nottingham, pled guilty in United States District Court for the District of New Hampshire to possessing child pornography, announced U.S. Attorney John P. Kacavas.
The investigation into Rathe began in 2010, when the Department of Homeland Security (DHS) received information from the New Hampshire Crimes Against Children Task Force that an undercover officer had intercepted images of child pornography being made available by a computer user in Nottingham, New Hampshire.
Based on information provided by the task force, DHS conducted further investigation and secured a search warrant for Rathe’s residence in Nottingham. Computer evidence seized from Rathe’s home was examined and found to contain multiple images depicting young children engaged in illicit sexual acts.
United States Attorney Kacavas said, “Identifying, finding, and prosecuting predators like the defendant has been, and will continue to be, among the highest priorities of my office.”
Rathe, who is scheduled for sentencing in January 2015, faces a maximum prison term of ten years, followed by no less than five years of supervised release, and a maximum fine of $250,000.
The case was investigated by the Department of Homeland Security, Homeland Security Investigations, in conjunction with the New Hampshire Crimes Against Children Task Force (NH ICAC) and the Massachusetts State Police and is being prosecuted under Project Safe Childhood, a nationwide initiative by the U.S. 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 better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
This is case is being prosecuted by Assistant United States Attorney Nick Abramson.President of Houston Hospital and Three Others Convicted in $158 Million Medicare Fraud SchemeRead the Press Release
A federal jury in Houston today convicted the president of Riverside General Hospital (Riverside), his son, and two others for their participation in a $158 million Medicare fraud scheme involving false claims for mental health treatment. Ten defendants have now been convicted in connection with the Riverside fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge Lucy R. Cruz of the Internal Revenue Service – Criminal Investigation’s (IRS-CI) Houston Field Office and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement. U.S. District Judge Lee H. Rosenthal of the Southern District of Texas presided over the trial.
“The former president of Riverside hospital, his son, and their co-conspirators systematically defrauded Medicare, treating mentally ill and disabled Americans like chits to be traded and cashed out to pad their own pockets,” said Assistant Attorney General Caldwell. “For over six years, the Gibsons and their co-conspirators stuck taxpayers with millions in hospital bills, purportedly for intensive psychiatric treatment. But the ‘treatment’ was a sham – some patients just watched television all day, others had dementia and couldn’t understand the therapy they supposedly received, and other patients never even went to the hospital at all. Today’s verdict sends another powerful message that the department will hold accountable anyone who seeks personal profits at the expense of America’s most vulnerable citizens.”
Earnest Gibson III, 70, the former president of Riverside, Earnest Gibson IV, 37, the operator of one of Riverside’s satellite locations, and Regina Askew, 49, a group home owner, were each convicted of conspiracy to commit health care fraud and conspiracy to pay kickbacks, as well as related counts of paying and receiving illegal kickbacks. Robert Crane, 58, a patient recruiter, was convicted of conspiracy to pay and receive kickbacks. Gibson III and Gibson IV were also convicted of conspiracy to commit money laundering. Gibson III was acquitted of two substantive counts of paying and receiving illegal kickbacks.
According to evidence presented at trial, Gibson III, Gibson IV, and Askew operated a scheme to defraud Medicare beginning in 2005 and continuing until June 2012. The defendants caused the submission of false and fraudulent claims for partial hospitalization program (PHP) services to Medicare through the hospital. A PHP is a form of intensive outpatient treatment for severe mental illness.
Specifically, evidence at trial demonstrated that the Medicare beneficiaries for whom Riverside and its satellite locations billed Medicare for PHP services did not qualify for or need PHP services. Moreover, the Medicare beneficiaries rarely saw a psychiatrist and did not receive intensive psychiatric treatment. In fact, some of the Medicare beneficiaries were suffering from Alzheimer’s and could not actively participate in any treatment even if they actually qualified to receive PHP services. Nevertheless, Gibson III, Gibson IV and Askew submitted claims for reimbursement to Medicare claiming that PHP services were provided to the Medicare beneficiaries.
Evidence presented at trial also showed that Earnest Gibson III paid kickbacks to patient recruiters and to owners and operators of group care homes, including Askew, in exchange for those individuals delivering ineligible Medicare beneficiaries to the hospital’s PHPs. Gibson IV also paid patient recruiters, including Crane and others, in exchange for those individuals delivering ineligible Medicare beneficiaries to the specific PHP operated by Gibson IV.
Approximately $158 million in claims to Medicare were submitted for PHP services purportedly provided by the hospital to the recruited beneficiaries, when in fact, the PHP services were medically unnecessary or never provided. The proceeds from the health care fraud were used to promote the fraud scheme by paying kickbacks to patient recruiters and group home owners in exchange for their sending Medicare beneficiaries to the hospital’s PHPs.
Gibson III, Gibson IV, Askew and Crane are scheduled to be sentenced on Feb. 17, 2015.
Others involved in the fraudulent scheme have already pleaded guilty and are awaiting sentencing. Mohammad Khan, an assistant administrator at the hospital, who managed many of the hospital’s PHPs, pleaded guilty to conspiracy to commit health care fraud, conspiracy to defraud the United States and to pay illegal kickbacks, and five counts of paying illegal kickbacks. William Bullock, an operator of a Riverside satellite location, as well as Leslie Clark, Robert Ferguson, Waddie McDuffie, and Sharonda Holmes, who were all involved in paying or receiving kickbacks, have also pleaded guilty to their roles in the scheme.
The case was investigated by the FBI, IRS-CI, and Texas MFCU, with assistance from the U.S. Department of Health and Human Services, Office of Inspector General’s (HHS-OIG) Dallas Regional Office, the Railroad Retirement Board, Office of Inspector General’s Chicago Field Office and the Office of Personnel Management’s Office of Inspector General, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas. The case is being prosecuted by Assistant Chiefs Laura M.K. Cordova and Jennifer L. Saulino and Trial Attorney Ashlee C. McFarlane of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.