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7 October 2014
Stockbroker Indicted for Scheme to Defraud Clients of More Than $1 MillionRead the Press Release
Baltimore, Maryland – A federal grand jury indicted Gary Clark Steciuk, age 39, of Buffalo Grove, Illinois and Heber Springs, Arkansas, today on charges of mail fraud, securities fraud and money laundering, related to a scheme to defraud his clients of more than $1 million.The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to the five count indictment Steciuk was a stockbroker, who worked primarily out of his home in Buffalo Grove. Steciuk was authorized to sell securities, such as stocks, bonds, option, mutual funds and variable annuities. In approximately 2009, Steciuk established a business, College Funding Solutions, ostensibly to provide investment advice to clients interested in investing and saving for college expenses, and opened a business bank account in the name of the business.
The indictment alleges that from January 2008 through August 2014, Steciuk embezzled funds from his clients’ investment accounts. These accounts were established and funded with client retirement funds and were maintained by the issuers of the annuities. The indictment alleges that Steciuk used a variety of methods to embezzle the funds. For example, Steciuk allegedly submitted forged forms to change his clients’ address at the firm that issued the annuities to a post office box in Hampstead, Maryland, that Steciuk controlled, then directed the firm to send funds from his clients’ accounts by check to the post office box. Steciuk then allegedly forged the clients’ signatures on the back of the check, which were in the clients’ names, and deposited the checks into bank accounts he controlled. In addition, the indictment alleges that: Steciuk created fraudulent and unauthorized loans from the clients’ annuities for his benefit; used forged transfer forms and forged checks to make unauthorized withdrawals; and liquidated the annuities in their entirety and stole the proceeds.
The total loss resulting from the fraudulent scheme is alleged to be at least $1,064,501, and the indictment seeks forfeiture of that amount, as well as property in Buffalo Grove, Illinois, Westminster, Maryland and Maui, Hawaii.
Steciuk faces a maximum sentence of 20 years in prison for mail fraud, each of three counts of securities fraud and for money. An initial appearance is scheduled for October 10, 2014, in U.S. District Court in Baltimore. Steciuk is detained.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Gregory R. Bockin, who is prosecuting the case.
St. Louis County Man Pleads Guilty to Tax ChargesRead the Press Release
St. Louis, MO – RAJU MUKHI pled guilty to failing to file a report to the IRS on his foreign financial accounts and for filing false tax returns.
United States citizens are required to report income from foreign countries, such as bank accounts, securities and any other financial accounts on their tax returns. If the value is more than $10,000, they are required to file a Report of Foreign Bank and Financial Accounts, Form TD F90-22.1 (FBAR).
According to court documents, Mukhi failed to disclose the existence of Clariden Bank and Goldman, Sachs & Company Bank-Singapore accounts and the income earned in these accounts, to his tax preparers for the years 2006 and 2008. Additionally, Mukhi, failed to file an FBAR disclosing that he had financial accounts in Singapore and Switzerland for years 2007-2010."Every honest American who pays his or her taxes should be offended that a select few use anonymous offshore accounts to avoid paying their fair share," said Sybil A. Smith, Special Agent in Charge, IRS Criminal Investigation. "It is our duty to the American taxpayer to use all lawful means to identify and prosecute those who use offshore accounts to evade their taxes."
Mukhi, St. Louis, MO, pled to one felony count of filing false tax returns and one felony count of failure to file reports of foreign bank and financial accounts. He appeared before United States District Judge Audrey G. Fleissig. Sentencing has been set for January 15, 2015.
Each count of filing false tax returns carries a maximum penalty of three years in prison and/or fines up to $100,000; each of the other counts carry a maximum penalty of five years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Dianna Collins is handling the case for the U.S. Attorney's Office.
Seven More Individuals Indicted for Conspiracy to Distribute Synthetic DrugsRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that seven more individuals have been charged along with the original eight individuals and a business previously indicted by a federal grand jury for their roles in a conspiracy to distribute synthetic marijuana, commonly referred to as K2.
Wesley Adam Upchurch, 27, of Columbia, Mo., Jimmy Dean Moore, 49, and his wife, Tina Irene Moore, 44, owners of Moore-4-You in Queen City, Mo., Sharon Elizabeth Harrington, 27, of Bunceton, Mo., Travis Scott Lovett, 34, of Purdin, Mo., Jessica Lynn Lovett, 31, of Bucklin, Mo., and Michael Sosnowski, 29, of Jefferson City, Mo., were charged in a 13-count indictment returned under seal by a federal grand jury in Jefferson City, Mo., on Thursday, Oct. 2, 2014. That indictment was unsealed and made public today upon the arrest and initial court appearance of Upchurch.
The superseding indictment replaces an Oct. 18, 2013, federal indictment; the superseding indictment contains additional charges and includes the original defendants: Matthew Ashby Hawkins, 39, his brother, Patrick Ross Hawkins, 32, and his sister, Molly Jane Carmichael, 37, all of Columbia, Alexander Vladimir McMillin, 29, of Columbia, Kent Allen Holtz, 43, of Kaiser, Mo., Chadwick James Schlicht, 44, of Osage Beach, Mo., Charles Sterling Austin, Jr., 61, of St. Charles, Mo., Scott Wesley Hanson, 48, of Versailles, Mo., Thomas Lee McCormack, 29, of Jefferson City, and Puff N Snuff, a retail business in Eldon, Mo.
The federal indictment alleges that all of the defendants participated in a conspiracy to distribute a controlled substance analogue, also known as synthetic marijuana or K2, between March 1, 2011, and Oct. 2, 2013. K2 is a mixture of plant material that has been sprayed or mixed with a synthetic chemical compound similar to THC (tetrahydrocannabinol), the psychoactive ingredient in marijuana. K2 products are often labeled as “incense,” but in reality are intended for human consumption as a drug.
The federal indictment also alleges that Upchurch, McMillin, Matthew Hawkins, Patrick Hawkins, Carmichael, Austin, Tina Moore, Jimmy Moore, Travis Lovett, Jessica Lovett, and Puff n Snuff participated in a conspiracy to commit mail fraud. They allegedly conspired to defraud the Food and Drug Administration and the public by making false representations that “Mayan” and “4Bidden” products were “incense” and “not for human consumption.” In reality, the indictment says, these products were synthetic marijuana intended for human consumption as a drug and were delivered by commercial carrier such as Federal Express.
The indictment also charges McMillin, Matthew Hawkins, Patrick Hawkins, Carmichael, Austin and Sosnowski with participating in a money-laundering conspiracy from Dec. 7, 2011, to Oct. 2, 2013. According to the indictment, they conspired to engage in financial transactions that involved the proceeds of the drug-trafficking conspiracy.
In addition to the criminal conspiracies, the indictment charges McMillin, Holtz and Hanson with one count each of distributing a controlled substance analogue. McMillin, Hanson and McCormack are also each charged with one count each of possessing a controlled substance analogue with the intent to distribute.
Holtz, Austin, Hanson and McCormack are also charged with one count each of maintaining a place for the purpose of storing and distributing a controlled substance analogue.
The indictment also contains a forfeiture allegation, which would require the defendants to forfeit to the government any property derived from the proceeds of the alleged conspiracies, or used to facilitate the alleged conspiracies, including $423,327 seized from Puff N Snuff’s bank account, $177,398 seized from Order Refill’s bank account (controlled by McMillin, Matthew Hawkins, Patrick Hawkins and Carmichael), $14,215 seized from Mozark Products’ bank account (controlled by Sosnowski) and $82,149 seized from McMillin.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Special Assistant U.S. Attorney Stuart J. Zander. It was investigated by the Drug Enforcement Administration, IRS-Criminal Investigation, the Department of Homeland Security, the Columbia, Mo., Police Department, the MUSTANG Task Force, the LANEG Drug Task Force, the Cole County, Mo., Sheriff’s Department, the Morgan County, Mo., Sheriff’s Department, the Camden County, Mo., Sheriff’s Department and the Camdenton, Mo., Police Department.- Santeria Follower and Others Head to Prison on Federal Drug Charges
San Diego Man Charged with Sexual Exploitation of a MinorRead the Press Release
DES MOINES, IA – On October 7, 2014, David Anthony Lavera, age 33, of San Diego, California, had his initial appearance and arraignment on federal child pornography charges in the U.S. District Court for the Southern District of Iowa, announced United States Attorney Nicholas A. Klinefeldt. Trial was set for December 1, 2014.
Lavera was indicted by a federal grand jury on charges of knowingly producing child pornography, or sexual exploitation of a minor, as well as knowingly possessing child pornography. If convicted on the production/sexual exploitation charge, Lavera faces a sentence of no less than 15 and no more than 30 years in federal prison, plus between 5 years and a life term of supervised release. If convicted on the possession of child pornography charge, the potential punishment is up to 20 years in prison, and between 5 years and a life term of supervised release. Both crimes carry a maximum $250,000 fine as a potential punishment, as well.
Lavera was taken into federal custody on Monday, October 6, 2014 by the U.S. Marshals Service. At the court appearance, U.S. Magistrate Judge Ross Walters ordered Lavera to remain in federal custody pending trial.
An indictment is merely an accusation, and Lavera is presumed innocent until and unless proven guilty.
The case has been investigated by a team that includes agents with Homeland Security Investigations at the U.S. Department of Homeland Security, the Jasper County Sheriff’s Office, the Iowa Department of Criminal Investigation, the Newton, Iowa, Police Department, and the Baxter, Iowa, Police Department.
The case is being prosecuted by the United States Attorney’s Office for the Southern District of Iowa as part of the U.S. Department of Justice’s “Project Safe Childhood” initiative, which was started in 2006 as a nation-wide effort to combine law enforcement investigations and prosecutions, community action, and public awareness in order to reduce the incidence of sexual exploitation of children.
Any persons having knowledge of a child being sexually abused are encouraged to call the Iowa Sexual Abuse Hotline at 1-800-284-7821.
(Download Press Release)
- Procurement and Sales Manager Arrested for Embezzling from Former Employer
Pennsylvania Priest Indicted for Traveling to Honduras to Sexually Abuse Minor Boys in OrphanagesRead the Press Release
WASHINGTON— A Pennsylvania Roman Catholic priest was indicted today in the Western District of Pennsylvania and charged with foreign travel to engage in illicit sexual conduct with minors and possession of child pornography.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney David J. Hickton of the Western District of Pennsylvania made the announcement.
Joseph D. Maurizio Jr., 69, a priest at the Diocese of Altoona-Johnstown, was originally charged by criminal complaint and arrested on Sept. 25, 2014. He has been in custody since his arrest.
According to allegations in the indictment and complaint, each year between 1999 and 2009, Maurizio traveled from Pennsylvania to Honduras to assist a non-profit organization that provides services to children there. While he was in Honduras, Maurizio provided money or candy to minor boys in an orphanage and engaged in unlawful sexual activities. Maurizio is also charged with possession of material depicting minors engaging in sexually explicit conduct.
Following search warrants executed on Sept. 12, 2014, at the rectory at Our Lady Queen of Angels Church in Central City, Pennsylvania, and a farm owned by Maurizio in Windber, Pennsylvania, law enforcement seized various computers and electronic devices, including a hard drive allegedly containing images depicting minors engaging in sexually explicit conduct.
The charges in the complaint and indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The case is being investigated by HSI’s Pittsburgh Office and prosecuted by Criminal Division Trial Attorney Amy E. Larson of the Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Stephanie Haines of the Western District of Pennsylvania.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Penn Hills Man Conspired to Distribute Cocaine in Western PARead the Press Release
PITTSBURGH, PA - A Penn Hills man pleaded guilty in federal court to a charge of violating federal narcotics laws, United States Attorney David J. Hickton announced today.
Paul Davis, 40, pled guilty to one count before Chief United States District Judge Joy Flowers Conti.
In connection with the guilty plea, the court was advised that from in and around December 2012, and continuing thereafter to in and around January 2013, in the Western District of Pennsylvania, Davis conspired to distribute and possess with the intent to distribute 500 grams or more of cocaine.
Judge Conti scheduled sentencing for Feb. 6, 2015 at 2 p.m. The law provides for a total sentence of up to 40 years in prison, a fine of up to $5,000,000, 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.
Assistant United States Attorney Jonathan B. Oritz is prosecuting this case on behalf of the government.
The Drug Enforcement Administration, the Pennsylvania State Attorney General's Office, the Internal Revenue Service Criminal Investigation Division, the Pittsburgh Bureau of Police, and the Allegheny County District Attorney's Narcotics Enforcement Team conducted the investigation that led to the prosecution of Paul Davis.
North Platte Man Convicted of Failing to Register as a Sex OffenderRead the Press Release
United States Attorney Deborah R. Gilg announced that Johnny Michael Castro, age 33 and formerly of North Platte, Nebraska, was sentenced on October 3, 2014, to a 30 month term of imprisonment for failing to register as a sex offender in the State of Nebraska after relocating here in early 2014. After his release from prison, Castro will be required to serve a five year term of supervised release and be registered as a sex offender.
SORNA, also known as the Adam Walsh Protection and Safety Act, requires that a convicted sex offender register in each jurisdiction where the offender resides, where the offender is employed, or where the offender is a student, and that the sex offender maintain current registrations. Castro was required to register as a sex offender because he had been convicted of sexual battery in 2001 in the Superior Court for Sacramento County, California. This conviction required that Mr. Castro register as a sex offender in the state of California, and by federal law, in any other state to which he moved.
This case was investigated by the United States Marshals Service.
New Orleans Woman, Kwanza Wells, Pleads Guilty to Conspiracy to Commit Wire FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that KWANZA WELLS, age 34, a resident of New Orleans, pled guilty today to a one-count bill of information for conspiracy to commit wire fraud.
According to the bill of information, beginning in or about October 2010 and continuing until in or about November 2010, WELLS willfully conspired to device a scheme to obtain money by means of fraudulent representations and to defraud the Gulf Coast Claims Facility (GCCF), which was established by BP Exploration and Production, Inc. (BP) concerning the April 10, 2010 explosion on the Deepwater Horizon; and as a result of WELLS false and fraudulent representations and documentation, the GCCF paid her approximately $19,500, in violation of Title 18, United States Code, Section 371.
WELLS faces a maximum term of imprisonment of five years and a fine of up to $250,000, three years supervised release after imprisonment, and a $100 special assessment. U.S. District Judge Jay C. Zainey set sentencing for January 13, 2015.
U.S. Attorney Polite praised the work of the Secret Service and FBI in investigating this matter. Assistant United States Attorney Irene Gonzàlez is in charge of the prosecution.
(Download Factual Basis )
New Jersey Man Pleads Guilty to Traveling with the Intent to Engage in Sexual Activity with A MinorRead the Press Release
ALEXANDRIA, Va. – Rolando Feliciano, 49, of Elizabeth, New Jersey, pleaded guilty today to charges relating to engaging in sexual activity with a 13-year old girl from Fairfax County, Va.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Colonel Edwin C. Roessler, Jr., Chief of Police of the Fairfax County Police Department; and Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the plea was accepted by U.S. District Judge Gerald Bruce Lee.
According to documents filed with the court, in July 2013, Feliciano used the website Facebook to contact the 13-year old girl. Between July 2013 and March 2014, he had nearly daily contact with her using Facebook, Skype, and Facetime. During their conversations, Feliciano repeatedly requested that she send him sexually explicit photographs and videos. In addition, on three occasions Feliciano drove from New Jersey to Virginia to meet with the girl. On two of those occasions he picked her up at her middle school, drove to a nearby park and engaged in sexual activity with her.
Feliciano was charged in a Superseding Information on October 7, 2014 with travel with intent to engage in illicit sexual contact with a minor, and receipt of child pornography. Feliciano faces a maximum penalty of 30 years in prison when he is sentenced on January 9, 2015. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
This case was investigated by the Fairfax County Police Department, and FBI’s Washington Field Office. Assistant U.S. Attorney’s Matt Gardner and Whitney Russell are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-261.
Native Mob Gang Leader Sentenced to 43 Years in PrisonRead the Press Release
United States Attorney Andrew M. Luger today announced the sentence last week of WAKINYON WAKAN MCARTHUR, a/k/a “Kon,” a/k/a “Killa,” 36, the former leader of the Native Mob, to 43 years in prison. WILLIAM EARL MORRIS, 27, and ANTHONY FRANCIS CREE, 27, were also sentenced to 35 years and approximately 24 years respectively. The defendants were convicted by a jury on March 19, 2013, after a trial lasting nearly seven weeks. They were sentenced today in U.S. District Court in Minneapolis before United States District Court Judge John R. Tunheim.
As proven at trial, the Native Mob is a regional criminal organization that originated in Minneapolis in the early 1990s. Members routinely engage in drug trafficking, assault, robbery, and other violent crime, including murder. Membership is estimated at 200, with new members, including juveniles, regularly recruited from communities with large, male, Native American populations. Association with the gang is often signified by wearing red and black clothing or sporting gang-related tattoos. According to the 2011 National Gang Threat Assessment, the Native Mob is one of the largest and most violent Native American gangs in the U.S. and is most active in Minnesota and Wisconsin.
As proven at trial and according to documents filed in court, since at least the mid-1990s, MCARTHUR, MORRIS, CREE, and others have conspired to engage in criminal activity through the Native Mob, in violation of the federal Racketeer Influenced and Corrupt Organizations (RICO) Act. The primary objective of the Native Mob is to preserve, protect, promote, and enhance its power, territory, and finances, which gang members sought to accomplish by distributing illegal drugs, including crack cocaine. Native Mob members also provide financial support to other members, including those incarcerated; share with one another police reports, victim statements, and other case discovery; hinder or obstruct officials from identifying or apprehending those wanted by the law; and intimidate witnesses to Native Mob crimes. Moreover, they maintain and circulate firearms for gang use and commit acts of violence, including murder, against individuals associated with rival gangs.
In addition to MCARTHUR, MORRIS, and CREE, 25 other defendants have pleaded guilty or been convicted of conspiracy and other crimes related to their membership in the Native Mob. Those defendants were sentenced to between 2 ½ and 43 years in prison for their crimes.
This case was the result of a long-term, cross-jurisdictional investigation conducted by numerous local, state, federal, and tribal law enforcement officers. These agencies include representatives from the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; the U.S. Drug Enforcement Administration; the U.S. Bureau of Indian Affairs; the FBI-funded Headwaters Safe Trails Task Force; the Paul Bunyan Drug Task Force; the Minnesota Department of Corrections; the Minnesota Bureau of Criminal Apprehension; the Carlton County Sheriff’s Office; the Mille Lacs Tribal Police Department; the Bemidji Police Department; and the Minneapolis Police Department. These investigators were assisted by those from—in alphabetical order—the Becker County Sheriff’s Office, the Beltrami County Sheriff’s Office, the Carlton County Attorney’s Office, the Cass County Attorney’s Office, the Cass County Sheriff’s Office, the Crow Wing County Sheriff’s Office, the Douglas County Sheriff’s Office of Wisconsin, the Duluth Police Department, the Fon du Lac Tribal Police Department, the Fridley Police Department, the Itasca County Sheriff’s Department, the Hennepin County Attorney’s Office, the Hennepin County Sheriff’s Office, the Hubbard County Sheriff’s Office, the Leech Lake Tribal Police Department, the LCO Reservation Police Department, the Lower Sioux Tribal Police Department, the Mahnomen County Sheriff’s Office, the Minnesota State Patrol, the Mille Lacs County Attorney’s Office, the Mille Lacs County Sheriff’s Office, the New Brighton Police Department, the North Central Drug Task Force, the Prior Lake Police Department, the Red Lake Tribal Police Department, the Redwood County Sheriff’s Office, the Richfield Police Department, the Sherburne County Sheriff’s Office, the St. Paul Police Department, the U.S. Marshals Service, the Minneapolis Violent Offender Task Force, the Washington County Sheriff’s Office, and the White Earth Tribal Police Department.
This case was prosecuted by Assistant U.S. Attorneys Andrew R. Winter and Steven L. Schleicher.
Defendant Information: WAKINYON WAKAN MCARTHUR, 36
Cass Lake, Minn.
Convicted: • Conspiracy to Participate in Racketeering Activity, 1 count
• Conspiracy to Use and Carry Firearms During and in Relation to a Crime of Violence, 1 count
• Conspiracy to Distribute and Possess With Intent to Distribute Controlled Substances, 1 count
• Distribution of a Controlled Substance, 1 count
• Use and Carrying of a Firearm During and in Relation to a Crime of Violence, 2 counts
Sentenced: • 43 years in federal prison
ANTHONY FRANCIS CREE, 27
Cass Lake, Minn.
Convicted: • Conspiracy to Participate in Racketeering Activity, 1 count
• Conspiracy to Use and Carry Firearms During and in Relation to a Crime of Violence, 1 count
• Attempted Murder in Aid of Racketeering, 1 count
• Assault with a Dangerous Weapon in Aid of Racketeering, 1 count
• Use and Carrying of a Firearm During and in Relation to a Crime of Violence, 1 count
• Conspiracy to Distribute and Possess With Intent to Distribute Controlled Substances, 1 count
Sentenced: • 24 1/3 years in federal prison
WILLIAM EARL MORRIS, 27
Cass Lake, Minn.
Convicted: • Attempted Murder in Aid of Racketeering, 1 count
• Assault with a Dangerous Weapon in Aid of Racketeering, 1 count
• Use and Carrying of a Firearm During and in Relation to a Crime of Violence, 1 count
• Armed Career Criminal in Possession of a Firearm, 1 count
Sentenced: • 35 years in federal prison###
Mississippi Man Pleads Guilty to Paying Bribes to Employees at Military Base for Freight BusinessRead the Press Release
A former driver for a national trucking company pleaded guilty today to bribery charges, admitting that he bribed employees in the Traffic Office at the Marine Corps Logistics Base Albany (MCLB-Albany) in order to obtain lucrative freight hauling business, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia.
David R. Nelson, 54, of Lucedale, Mississippi, pleaded guilty today before U.S. District Judge W. Louis Sands in the Middle District of Georgia to one count of bribery of a public official.
During his guilty plea, Nelson, a former driver for a large transportation company based in Louisville, Kentucky, admitted to paying more than $100,000 in bribes between 2006 and 2012 to officials in the Traffic Office at MCLB-Albany in exchange for obtaining freight shipments from the base to destinations on the West Coast. The bribes started at $500 for each shipment, but later grew to as much as $1,500 per shipment. From the money he made from these freight shipments, Nelson purchased a $50,000 specially-modified trailer that allowed him to carry multiple Protected Security Service loads on a single trip.
As part of his plea agreement with the United States, Nelson agreed to forfeit the proceeds he received as a result of the bribery scheme, as well as to pay full restitution to the Department of Defense. Sentencing will be scheduled at a later date.
The case is being investigated by the Naval Criminal Investigative Service and the Defense Criminal Investigative Service. The case is being prosecuted by Trial Attorneys Richard B. Evans, J.P. Cooney and John Keller of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia.
Mississippi Man Pleads Guilty to Paying Bribes to Employees at Military Base for Freight BusinessRead the Press Release
WASHINGTON – A former driver for a national trucking company pleaded guilty today to bribery charges, admitting that he bribed employees in the Traffic Office at the Marine Corps Logistics Base Albany (MCLB-Albany) in order to obtain lucrative freight hauling business, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia.David R. Nelson, 54, of Lucedale, Mississippi, pleaded guilty today before U.S. District Judge W. Louis Sands in the Middle District of Georgia to one count of bribery of a public official.
During his guilty plea, Nelson, a former driver for a large transportation company based in Louisville, Kentucky, admitted to paying more than $100,000 in bribes between 2006 and 2012 to officials in the Traffic Office at MCLB-Albany in exchange for obtaining freight shipments from the base to destinations on the West Coast. The bribes started at $500 for each shipment, but later grew to as much as $1,500 per shipment. From the money he made from these freight shipments, Nelson purchased a $50,000 specially-modified trailer that allowed him to carry multiple Protected Security Service loads on a single trip.
As part of his plea agreement with the United States, Nelson agreed to forfeit the proceeds he received as a result of the bribery scheme, as well as to pay full restitution to the Department of Defense. Sentencing will be scheduled at a later date.
The case is being investigated by the Naval Criminal Investigative Service and the Defense Criminal Investigative Service. The case is being prosecuted by Trial Attorneys Richard B. Evans, J.P. Cooney and John Keller of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia.
Massachusetts Man Sentenced to 15 Years in Prison for Cocaine Trafficking ConspiracyRead the Press Release
Contact: Daniel J. Perry
Assistant United States Attorney
Tel: (207) 780-3257
Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Brian
Wilkerson, 36, of Dorchester, Massachusetts was sentenced yesterday in U.S. District Court by
Judge George Z. Singal to 15 years in prison and eight years of supervised release for conspiring to distribute cocaine. Wilkerson pleaded guilty on October 28, 2013.
According to court records, from early 2012 until June 2013, Wilkerson supplied kilogram quantities of cocaine to David Goyette in Auburn, Maine. Goyette and others distributed the cocaine to customers in the greater Lewiston/Auburn area. Goyette pleaded guilty to conspiracy and cocaine distribution charges on August 29, 2014 and awaits sentencing.This case results from a joint investigation conducted by the United States Drug
Enforcement Administration, the Maine Drug Enforcement Agency, the Lewiston and Auburn
Police Departments and the ongoing effort of the Organized Crime Drug Enforcement Task
Forces (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.Manhattan Woman Pleads Guilty in Marriage Fraud SchemeRead the Press Release
TOPEKA, KAN. - A Manhattan woman pleaded guilty Monday to taking part in a marriage fraud scheme, U.S. Attorney Barry Grissom said.
Jacqueline Michaelle Reed, 48, Manhattan, Kan., pleaded guilty to one count of conspiracy to commit marriage fraud. In her plea, Reed, who is a United States Citizen, admitted she entered into a marriage contract with co-defandant Yun Chiu for the purpose of evading U.S. immigration laws. Chiu was a foreign national who was seeking lawful permanent residency status in this country. Their arrangement was part of a conspiracy led by Quong Bow Low, who was paid for helping aliens seek residency. Low’s fees covered such services as coaching the defendants as to how to answer questions during an immigration interview so that officials would believe the couple had entered in a valid marriage.
Reed and Chiu submitted fraudulent paperwork to immigration authorities, including a marriage license that never was filed with the state of Kansas, as well as a false declaration they were in a valid marriage and resided together at the same address in Lawrence, Kan.
Reed is set sentencing Jan. 12. She faces a maximum penalty of five years in federal prison and a fine up to $250,000.
Co-defendants include: Yun Chiu is set for trial Nov. 12.
Quong Bow Low is set for sentencing Nov. 14.Grissom commended the Department of Homeland Security and Assistant U.S. Attorney Christine Kenney for their work on the case.
Man Sentenced in Manhattan Federal Court to Two Consecutive Life Terms for February 2000 Double Murder in the BronxRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOE FERNANDEZ was sentenced today in Manhattan federal court to two consecutive terms of life in prison by U.S District Judge Alvin K. Hellerstein. FERNANDEZ was found guilty on March 7, 2013, following a three-week jury trial, of conspiring to commit a murder-for-hire and using a firearm in furtherance of a crime of violence, with death resulting. FERNANDEZ was convicted for his role in the murders of Arturo Cuellar (“Cuellar”) and Ildefonso Vivero Flores (“Flores”) in the Bronx on February 22, 2000.
Manhattan U.S. Attorney Preet Bharara said: “Joe Fernandez was convicted last year of a ruthless double murder he committed nearly 15 years ago. For $40,000 he ambushed two men and shot them multiple times at close range. Today he learned the price for his wanton disregard for human life. He will spend the rest of his life in prison.”
According to the evidence presented at trial, statements made during other court proceedings including today’s sentencing, and other court documents:
In late 1999 and early 2000, a drug trafficking organization in New York City (the “New York DTO”) was receiving large quantities of cocaine from a Mexican drug trafficking organization (the “Mexican DTO”). In or about February 2000, Cuellar and Flores, two representatives of the Mexican DTO, coordinated the delivery of approximately 274 kilograms of cocaine to the New York DTO. The cocaine was distributed to members of the New York DTO, who sold the drugs on the street, while Cuellar and Flores remained in New York City waiting to receive payment for the drugs.
Instead of paying Cuellar and Flores, however, members of the New York DTO conspired to murder Cuellar and Flores and keep the drug proceeds. On February 21, 2000, members of the New York DTO hired a hitman, co-defendant Patrick Darge (“Darge”), to kill Cuellar and Flores the next day. That same evening, Darge hired FERNANDEZ to serve as his backup during the murders in the event something went wrong. Darge agreed to pay FERNANDEZ $40,000 for this role as a backup during the murders.
On February 22, 2000, Cuellar and Flores were escorted to an apartment building at 3235 Parkside Place in the Bronx, under the ruse that they would be receiving payment for the cocaine at an apartment in that building. Darge and FERNANDEZ, both armed with firearms, were waiting in the lobby of that building for Cuellar and Flores to arrive. Upon Cuellar and Flores’s entrance into the lobby of 3235 Parkside Place, Darge approached Cuellar from behind and fired a gunshot into Cuellar’s skull. Darge’s gun jammed after that shot, at which point FERNANDEZ fired fourteen gunshots, nine of which connected into the bodies of Cuellar and Flores. Cuellar and Flores died as a result of their gunshot wounds.
As negotiated, Darge paid FERNANDEZ $40,000 for his role in the February 22, 2000, murders.
FERNANDEZ, 38, was convicted of one count of participating in a murder-for-hire conspiracy, with death resulting, in violation of Title 18, United States Code, Section 1958, and one count of using a firearm arm in furtherance of a crime of violence, causing death, in violation of Title 18, United States Code, Section 924(j). In addition to the two consecutive prison terms of life, FERNANDEZ was ordered to pay a $200 special assessment fee.
The investigation was conducted by the Drug Enforcement Administration’s New York Drug Enforcement Task Force (the “Task Force”) and the New York City Police Department (“NYPD”). Mr. Bharara thanked the Task Force and the NYPD for their work in the investigation.
The case is being handled by the Office’s Violent and Organized Crimes Unit and Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Todd Blanche, John P. Cronan, and Russell Capone are in charge of the prosecution.
Local Man Pleads Guilty to Aggravated Identity Theft, Used Deceased Children’s Identities to File False Income Tax ReturnsRead the Press Release
CINCINNATI, OHIO – Christopher K. Smith, 28, of Cincinnati, Ohio, pleaded guilty one count of aggravated identity theft relative to filing false federal income tax returns with the Internal Revenue Service (IRS) using the stolen identities belonging to deceased individuals, including children. Smith faces a mandatory prison term of two years and a fine of up to $250,000, or twice the amount of the gain or loss.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, announced the guilty plea entered before U.S. District Judge Michael R. Barrett.
According to court documents, between February 2012 and June 2012 Christopher Smith electronically submitted at least five false income tax returns to the IRS for the 2011 income tax year using at least ten stolen identities, all but one of which belonged to deceased individuals, including children. Smith attempted to file at least three more false income tax returns using nine other stolen identities, but these returns were rejected by the IRS.
Smith prepared and filed the false income tax returns in Fairfield, Ohio. The income tax returns contained fabricated information as it related to the taxpayer, including addresses, dependents, occupations, income amounts and education expenses. The inclusion of this false information often qualified the taxpayer listed on the return to receive the Earned Income Credit, Additional Child Tax Credit and Education Credit, which resulted in even greater refund amounts.
Smith primarily used the stolen identities of deceased persons-using the names and Social Security numbers of adults as the taxpayers and the names and Social Security numbers of children as the dependents. He further indicated on the returns that the children had passed away during the tax year. In at least four instances, including his own 2011 tax return, Smith had to change the names and Social Security numbers used as dependents on each return, until they were accepted by the IRS, as some of the victims' information had already been sent to the IRS.
Smith prepared and electronically submitted a false federal income tax return using his own name as a taxpayer and the stolen identity of an individual, falsely claiming the stolen identities of this individual’s daughter and son. This then allowed him to falsely qualify for the Earned Income Tax Credit and Additional Child Tax Credit. Smith claimed, and received on a prepaid debit card, a fraudulent refund in the amount of $7,482. Both the children’s identities were those of children who had died in 2011. Neither of the children’s parents had given Smith permission to use their child’s Social Security number of claim their child on his tax return.
The total intended loss for this scheme was $41,522. For restitution purposes, Smith owes the IRS $9,344.
Smith was detained, and a sentencing date is yet to be scheduled.
“Identity theft, especially involving the use stolen identities of deceased individuals and children, is a contemptible modern-day scourge,” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Individuals who commit refund fraud and identity theft with this degree of trickery, dishonesty and deceit, deserve to be punished to the fullest extent of the law.”
U.S. Attorney Stewart commended the investigation by IRS and Assistant United States Attorney Jessica W. Knight, who is prosecuting this case.
Local Dentist, Dr. Glenn V. Schmidt, Sentenced for Failing to Pay TaxesRead the Press Release
The United States Attorney’s Office announced that DR. GLENN V. SCHMIDT, age 65, a resident of New Orleans, Louisiana, was sentenced today after he previously entered a guilty plea to a bill of information on July 8, 2014. According to court documents, SCHMIDT admitted that he had failed to pay the appropriate amount of taxes for the second quarter of the 2009 tax year in the amount of $24,252.52. SCHMIDT entered a guilty plea as part of the Internal Revenue Service’s Expedited Plea Program. Under this program, defendants are allowed to plea to the major count of the charging document but must make full restitution to the government.
U.S. District Judge Jay C. Zainey sentenced SCHMIDT to 5 years of probation, restitution of $306,724.78 to the government, and 300 hours of community service for failing to pay withholding and FICA taxes to the Internal Revenue Service. The community service will consist of free dental care to the homeless, veterans and young runaways through various community organizations to be coordinated with U.S. Probation.
The U.S. Attorney’s Office praised the work of the Internal Revenue Service-Criminal Investigation Division in investigating this matter. Assistant United States Attorney Edward J. Rivera is in charge of the prosecution.
Leader of Howard County Bloods Gang Pleads Guilty to Racketeering Conspiracy and Gun ChargesRead the Press Release
19 Defendants Have Pleaded Guilty to Federal Racketeering and Drug Conspiracies
Baltimore, Maryland – Anthony Preston, a/k/a “40,” or “Tone,” age 27, of Laurel, in Howard County Maryland, pleaded guilty today to conspiring to participate in a racketeering conspiracy, and using and carrying a firearm during and in relation to a crime of violence, in connection with his membership in the Bloods gang operating primarily out of Howard County, Maryland.The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Howard County Police Chief Gary L. Gardner; Baltimore Police Commissioner Anthony W. Batts; and Howard County State’s Attorney Dario Broccolino.
According to his plea agreement, Preston was a member of the Bloods since at least 2007. Preston has supported fellow incarcerated gang members, participated in gang meetings and discussions regarding gang sanctions, and planned retaliation against gang members suspected of cooperation. Preston is a leader of the “Swann” set, a sub-group of the Bloods. Preston achieved the rank of “O.Y.G” or “O.G.,” (Original Young Gangster or Original Gangster), terms used for a leader in the gang with authority over other Bloods members.Preston and his co-defendants were identified as members of the Bloods as the result of a long term investigation conducted by ATF and the Howard County Police Department. The investigation included four court ordered wiretaps on gang members’ cell phones. The Bloods, a national criminal street gang with members operating in and around Howard County, Maryland, committed violent acts within the gang to maintain discipline, and against rival gangs.
The investigation began with an assault and robbery of an ATF confidential informant in Columbia, Maryland, on November 8, 2011. The ATF was planning a controlled purchase of firearms from co-defendant and fellow gang member Michael Johnson, a/k/a “Ace,” a/k/a “Bloody Mike” after Johnson provided via text two photos of firearms, an assault rifle and a handgun, available for purchase by the CI. Instead, Johnson directed other gang members to rob the CI. Investigation revealed that Preston had been in contact with Johnson on the day of the robbery and was photographed holding the same rifle pictured in the texts sent to the ATF CI.
Among his criminal activities as a gang member, Preston admitted that he: attended gang meetings, supported incarcerated gang members, participated in discussion regarding gang sanctions, and planned and executed retaliation against others who he felt undermined his authority within the gang. Preston also planned, participated and approved of acts of violence, and was a leader in drug trafficking to and with fellow gang members. Preston, and his Bloods associates, regularly carried firearms in connection with and in furtherance of their unlawful acts. Preston admitted to directing or participating in at least 4 assaults, including a March 18, 2012, assault over a drug debt during which Preston threatened to later return and “shoot up the place,” a February 21, 2013, attempted assault of an individual causing problems with members and associates of Preston’s set, an April 12, 2013, attempted assault of someone Preston described as a “fake Blood,” and an April 20, 2013, assault of a former gang member with a knife and mace in a convenience store. The convenience store assault was captured on video, and Preston is seen hitting the girlfriend of the gang member in her face and attempting to spray her with mace. Citizens, including a young child, were injured by the mace sprayed by Preston during the assault. Preston was later overheard by law enforcement admitting to the assault and stating that if he’d had his gun with him Preston would have killed the man.
Preston also admitted that he began selling drugs, including crack cocaine and oxycocone, as early as 2007. Between February and May 2013, Preston was intercepted on numerous wiretap calls with other co-defendants discussing narcotics sales. Two co-defendants each supplied Preston with at least 9000 mg of Oxycodone.
On May 8, 2013, law enforcement executed multiple search warrants and arrested approximately 20 individuals connected with the Bloods gang, including Preston. A search warrant executed at Preston’s residence recovered, among other things, a .22 caliber revolver, with one live round of ammunition, brass knuckles, various prescription pills, marijuana, $1,222 in cash, and several cellular telephones. Preston has prior convictions for armed robbery and attempted armed robbery, and, as a result, was prohibited from possessing a firearm.
Preston and the government have agreed that if the Court accepts the plea agreement, Preston will be sentenced to 20 years in prison. U.S. District Judge George L. Russell III scheduled sentencing for February 6, 2015, at 11:30 a.m.
To date, 19 defendants have pleaded guilty to their roles in the racketeering and drug conspiracies. Judge Russell has sentenced co-defendants Michael Dominique Johnson, a/k/a "Ace", age 20, of Columbia, Maryland to 205 months in prison and Kenneth Ragan-Armstrong, a/k/a "Keezy," age 23, of Savage and Laurel, Maryland, to 193 months in prison; and David Jerome Robertson, age 23, of Columbia, Maryland to 81 months in prison. Co-defendants Giovanni Wright, a/k/a "G," age 22, of Elkridge, Maryland, Ryan Gladden, a/k/a "Fats," age 26, and Kyle Austin, a/k/a "Fowdy," age 23, pleaded guilty to their roles in the conspiracy and are scheduled to be sentenced on January 16, 2015; December 12, 2014; and December 22, 2014, respectively.
Mr. Rosenstein commended the ATF, Howard County Police Department, Baltimore Police Department and Howard County State’s Attorney’s Office for their work in this investigation and prosecution. Mr. Rosenstein thanked Assistant U.S. Attorneys Rachel M. Yasser and Sandra Wilkinson, who are prosecuting the case.Last of 4 Methamphetamine Traffickers Sentenced to PrisonRead the Press Release
SACRAMENTO, Calif. — The last of four methamphetamine traffickers, Jose Angel Martinez Chairez, 39, was sentenced today to 10 years in prison, United States Attorney Benjamin B. Wagner announced.
On July 29, 2014, Angel Martinez Diaz, 27, was sentenced to 10 years in prison and Jose Ramirez Verduzco, 29, was sentenced to 13 years in prison. On August 12, 2014, Jose Maria Villareal, 26, was sentenced to 11 years and three months in prison. All four defendants formerly resided in San Jose.
According to court documents, on July 10, 2013, the four defendants travelled in two vehicles from San Jose to a shopping center just off Interstate Highway 5 in Anderson, to sell a large quantity of crystal methamphetamine to an individual who purported to be interested in purchasing the drugs. In reality, that person was a confidential informant working for law enforcement agents. Under surveillance by the agents, the informant met with Martinez Diaz, Martinez Chairez, and Villareal who showed him a one-kilogram package of crystal methamphetamine represented to be a sample of the total 14 kilograms brought to sell to the CI. After a short discussion, the remaining drugs were brought up to the site in a second vehicle with a hidden compartment. Law enforcement agents watched as the defendants showed the remaining methamphetamine, after which the agents closed in and arrested the four defendants.
A total of 13.868 kilograms (30.5 pounds) of 99 percent pure crystal methamphetamine was seized. This represents approximately 2,760 dosage units according to documents filed in the case. That amount of drugs was three times the top level of the U.S. Sentencing Guidelines Drug Table, even taking into account the recent amendments passed by the U.S. Sentencing Commission which increased the amount of drugs needed to reach this highest level.
According to U.S. Attorney Benjamin Wagner, “Methamphetamine is, by far, the largest drug problem faced in California in terms of the number of people abusing it and the detrimental impact it has on society. A 2013 study commissioned by the Office of National Drug Control Policy titled “Adam II” showed that slightly over 50 percent of the recently arrested inmates at the Sacramento County Jail tested positive for methamphetamine. That was an increase of 10 percent over the prior year. Additionally, the increase in both the quantity and quality of the methamphetamine seized in the last three years in the drug cases prosecuted by this office shows a marked increase in the availability of high purity crystal methamphetamine, which is often traced back to drug trafficking organizations in Mexico.”
This case was the product of an investigation by the U.S. Drug Enforcement Administration –Redding Resident Office and the Shasta County Interagency Narcotics Task Force. Assistant United States Attorney Richard Bender prosecuted the case.
- Laredo Jury Convicts South Carolina Man for Alien Trafficking
Key West Family Pleads Guilty to Drug TraffickingRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office, announce that defendants Juan Francisco Soca, Sr., 64, of Stock Island, pled guilty yesterday to one count of possession with the intent to distribute cocaine, in violation of Title 21, United States Code, Section 841(a)(1), and his son, Juan Francisco Soca, Jr., 43, of Key West, pled guilty to conspiracy to possess with the intent to distribute cocaine, in violation of Title 21, United States Code, Section 846. Sentencing is scheduled for December 15, 2014, at 2:00 p.m., before U.S. District Judge Jose Martinez. At sentencing, Juan Francisco Soca, Sr., faces up to 40 years in prison and Juan Francisco Soca, Jr., faces up to life in prison. Jose Antonio Soca, 38, of Stock Island, a cousin of Juan Francisco Soca, Jr., who had previously pled guilty to conspiracy to possess with the intent to distribute cocaine, was sentenced yesterday by Judge Martinez to 55 months in prison.
According to court documents, Juan Francisco Soca, Jr. and Jose Antonio Soca each sold cocaine to a confidential source on separate occasions, and based on those transactions, law enforcement officers obtained and executed a search warrant for the mobile homes where Juan Francisco Soca, Sr. and Jose Antonio Soca lived on Stock Island. Law enforcements officers found $235,398 in cash hidden inside pipes, 7.5 grams of cocaine base, and 3,084 grams of cocaine buried in the yard of Juan Francisco Soca, Sr. On the adjoining property of Jose Antonio Soca, officers found approximately 5,880 grams of cocaine, 570 30-mg oxycodone tablets, 1,332 alprazolam tablets, and $4,370 in cash.
During the arrest of Soca, Jr. on January 29, 2014, outside of his apartment located in Key West, officers found him in possession of 360 30-mg oxycodone tablets and $12,493 in cash. Of this money, $1,305 matched the prerecorded currency that the confidential source had given to Soca, Jr. during the transaction on January 28, and $200 matched the currency given by the confidential source to Jose Antonio Soca during the transaction on January 23. During a consensual search of the storage unit at Soca, Jr.’s apartment, officers found 164 oxycodone pills. Officers also executed a search warrant at a shed located at the Stock Island Lobster Company where Soca, Jr. had engaged in a cocaine transaction with the confidential source. During the search, the officers found 19 grams of cocaine, 958 grams of marijuana, and 132 30-mg oxycodone tablets.
Mr. Ferrer commended the investigative efforts of ICE-HSI, the Key West Police Department and the Monroe County Sheriff’s Office. This case is being prosecuted by Assistant U.S. Attorney Michael Thakur and Special Assistant U.S. Attorney Mark Wilson.
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.
Key Player in Advance Pay Scheme Gets 16 Years for Stealing Millions from Hopeful EntrepreneursRead the Press Release
PHILADELPHIA – Matthew McManus, 46, of Glenside, Pennsylvania, was sentenced today to 16 years in prison for his role in an advance fee fraud scheme that defrauded hundreds of victims searching for commercial financing from Remington Financial Group. McManus was one of six people charged in the scheme. He was convicted at trial on February 19, 2014. His co-defendants all pleaded guilty. The scheme defrauded more than 1,900 victims out of more than $26 million. In addition to the prison term, U.S. District Court Judge William Yohn ordered restitution of $17,774,174, three years of supervised release, and an $800 special assessment.
Andrew Bogdanoff, of Scottsdale, Arizona, was the founder and chairman of Remington Financial Group (later renamed Remington Capital) and ran the company with McManus until 2008 in Arizona and Pennsylvania. After McManus left the company in 2008, defendant Shayne Fowler, also of Scottsdale, replaced McManus as Bogdanoff=s right-hand man. Defendant Joel Nathanson, of San Diego, California, was one of Remington=s most proficient employees and helped Remington defraud many victims. Defendant Frank Vogel, of Rochester Hills, Michigan, was a Michigan‑based broker who referred numerous victims to Remington in exchange for large kickbacks. Aaron Bogdanoff, also of Scottsdale, was also charged in the conspiracy.
Between 2005 and 2011, the defendants fraudulently induced hundreds of people to pay Remington fees in excess of $10,000 a piece, based on false representations that Remington had lenders and/or investors ready to provide financing for the victims= projects. To facilitate this fraud, the defendants issued each victim a Aletter of interest,@ commonly referred to as an LOI. Almost every LOI Remington issued stated that Remington had a lender or investor interested in financing the victim=s project. Remington issued an LOI to every victim even though no Remington employee had spoken to any funding source and Remington knew that it was unlikely to find funding for the project.
The LOI was written to fraudulently lead victims to believe that Remington either was an actual lender or had spoken to lenders that had already expressed interest in the customer's project. Neither was true. Additionally, the financing terms Remington included in the LOI were unrealistic and were used solely to induce customers to pay Remington's advance fees. In addition to the false representations in the LOI, the defendants and other Remington employees also told victims the following lies to further induce victims to pay Remington=s fees: a) Remington had five investors or lenders interested in their project; b) Remington was the actual lender for the project; c) Remington funded or Aclosed@ 80 percent of its deals; d) the victim would get funding for the project once the advance fee was paid and/or; e) Remington would provide funding through its funding source Northbridge. After a customer paid Remington=s fee, McManus and Andrew Bogdanoff instructed Remington employees to find problems with the projects so that Remington could blame its failure to provide financing on the victim. The defendants did this to help protect Remington from civil and criminal complaints.
After the FBI and IRS conducted search warrants in Arizona and Colorado in March 2011, defendant Matthew McManus attempted to distance himself from the fraudulent scheme by obstructing justice and lying to federal agents. He was convicted of these charges, as well.
Some of the defendants used sophisticated means to perpetuate the fraud. For instance, in 2010, defendants Fowler and Andrew Bogdanoff used Remington's website to advertise an anti‑fraud policy and stated falsely that Remington had recently provided information to the Federal Bureau of Investigation and local law enforcement authorities about a suspected email scam. Remington posted this information to ensure that if potential customers used an internet search engine to search for allegations about Remington's fraud, they would be directed to Remington's website rather than third‑party internet sources that contained negative information about Remington.
Andrew Bogdanoff is serving a 220 month prison sentence; Shane Fowler was sentenced to 21 months in prison; Joel Nathanson was sentenced to 12 months and one day in prison; Aaron Bogdanoff was sentenced to two years of probation; Frank Vogel will be sentenced in the Eastern District of Michigan on December 3, 2014.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigations with assistance from the Pennsylvania Securities Commission. It was prosecuted by Assistant United States Attorney David Axelrod.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Kathy Winters Sentenced to 40 Months in Prison for Theft of Government FundsRead the Press Release
KNOXVILLE, Tenn. – On Oct. 7, 2014, Kathy Winters, 58, of Harriman, Tenn., was sentenced by the Honorable Pamela Reeves, U.S. District Court Judge, to serve 40 months in prison. Upon her release from prison, she will be under supervision of the U.S. Probation Office for three years. She was also ordered to pay a total of $428,076.94 in restitution, which represented the amount taken from three separate entities discussed below.
In May 2014, Winters pleaded guilty to a one-count information charging her with theft of government funds from the U.S. Department of Education. According to the plea agreement on file with U.S. District Court, Winters served as treasurer for the Tennessee Attendance Supervisors Steering Committee (TASSC), an organization that provides training and information to aid school attendance personnel in improving their professional competencies.
In the fall of 2012, the Tennessee Comptroller of the Treasury became aware of irregularities in the TASSC bank account and an investigative audit followed. The audit revealed that $82,636.79 was missing from the TASSC bank account during the time Winters had access to the funds. The investigation expanded to two additional entities when investigators found that she also served as federal projects administrative assistant for the Alcoa City School District and treasurer for East Tennessee Attendance Supervisors Association (ETASA), an association that provides opportunities for the continuous study of attendance problems. This broadened investigation revealed that ETASA suffered financial losses of $1,236.36. Additionally, Alcoa City School District suffered $344,203.79 in financial losses, which included federal grant money paid to the school district for special education expenses.
Winters took the money by creating false invoices which demanded payment to TASSC or ETASA, forging an approving official’s signature to the invoices, and forwarding them to Alcoa City for payment. Winters endorsed the checks issued by Alcoa City as payment for the false invoices. She then either deposited the funds into her personal account or into either the TASSC or ETASA account and then withdrew the money by a check payable to her or through an ATM withdrawal.
In addition to the invoice scheme, Winters made unauthorized personal charges on Alcoa City School District credit cards and falsified travel reimbursement requests for unauthorized travel. In both instances, she forged signatures of approving officials and submitted the credit card billing statements and travel claims to the Alcoa City for payment.
“Those who are entrusted with public funds and choose to embezzle them for their own personal use will be aggressively investigated and prosecuted,” said U.S. Attorney Bill Killian.
Agencies involved with this investigation included the Tennessee Comptroller’s Office, Financial Compliance Unit and Tennessee Bureau of Investigation. Assistant U.S. Attorney Brooklyn Sawyers represented the United States.
Justice Department Sues Three Owners of Memphis-Area Tax Return Preparation StoresRead the Press Release
The United States filed a civil injunction suit in Memphis, Tennessee, to bar three individuals from owning or operating a tax return preparation business or preparing tax returns for others, the Justice Department announced today.
Shandon Allen, Tabitha Tunstall and Shewanda Hamilton previously managed Mo’ Money Taxes stores in Memphis, but more recently have prepared tax returns under the names Southern King Taxes, Tabitha’s Taxes, LaQuita’s Professional Tax Service and Cash King Tax Service, according to the complaint. The United States previously obtained an injunction permanently barring the owners of Mo’ Money Taxes, Markey Granberry and Derrick Robinson, as well as a former Mo’ Money manager, Eumora Reese, from preparing tax returns for others and owning or operating a tax return preparation business.
The complaint alleges that the defendants and their employees prepare fraudulent tax returns that cause their customers to incorrectly report their federal tax liabilities and underpay their taxes. According to the complaint, the defendants and their employees prepare federal tax returns on which they falsely claim the Earned Income Tax Credit, improper filing status and bogus education credits. Additionally, the defendants and their employees allegedly improperly prepare tax returns using paystubs rather than W-2 forms, fabricate bogus W-2 forms and file tax returns without customers’ consent while charging deceptive and unconscionable fees, according to the suit.
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. Shandon Allen, et al.
Complaint for Permanent Injunction and Other ReliefIron Station, N.C. Man Sentenced in Connection with Home BurglariesRead the Press Release
STATESVILLE, N.C. – On Monday, October 6, 2014, U.S. District Judge Richard L. Voorhees sentenced Miquan Limik Smith, 27, of Iron Station, N.C. to 63 months in prison, followed by 24 months of supervised release for conspiracy to receive stolen firearms by committing burglaries and violating other federal firearms laws, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division and Sheriff Phillip H. Redmond of the Iredell County Sheriff’s Office join U.S. Attorney Tompkins in making today’s announcement.
According to court documents and yesterday’s sentencing hearing, on or about January 31, 2013, Smith and his co-conspirator, Trishton Philemon Johnson, 26, of Charlotte, carried out two home burglaries in Iredell County, stealing firearms and other items of value. Court records show that law enforcement officers were alerted to the break-ins, identified the vehicle the defendants were in, and pulled the vehicle over on Interstate 77 in Iredell County. According to court records, the defendants drove off and, after a high speed chase, law enforcement officers stopped the vehicle. Johnson was arrested at the vehicle stop but Smith, who had fled the scene on foot, was arrested shortly thereafter.
Johnson pleaded guilty in July 2013 to one count of receiving stolen firearms and aiding and abetting. He was sentenced in March 2014 to 24 months in prison, followed by two years of supervised release.
In November 2013, a federal jury convicted Smith on all charged violations, including one count of conspiracy to receive stolen firearms by committing burglaries, one count of receiving stolen firearms, and one count of possession of a firearm by a felon.
Smith has been in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by ATF and the Iredell County Sheriff’s Office. The case was prosecuted by Assistant United States Attorneys Jennifer L. Dillon and Kenneth M. Smith of the U.S. Attorney’s Office in Charlotte.
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney's Office announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Judge Ostby in Billings on October 7, 2014, and entering pleas of Not Guilty were:
JEDIA JAMES BARSNESS, a 23-year-old resident of Billings, appeared on charges of aiding and abetting in false statement during a firearms transaction. If convicted of the charge contained in the indictment, BARSNESS faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. PACER Case Reference: 14-92
Appearing before U.S. Magistrate Judge Strong in Great Falls on October 7, 2014, and entering pleas of Not Guilty were:
RAED AROOK, a 38-year-old resident of Israel, appeared on charges of illegal re-entry. If convicted of the charge contained in the indictment, AROOK faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the U.S. Border Patrol. PACER Case Reference: 14-91
RONALD JOSEPH FOURHORNS, a 31-year-old resident of Browning, appeared on charges of bank robbery, theft, conspiracy to tamper with a witness by intimidation, threats, and corrupt persuasion, and tampering with a witness by intimidation, threats, and corrupt persuasion. If convicted of the most serious charges contained in the indictment, FOURHORNS faces 20 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference: 14-52
RAYMOND EUGENE RUSSETTE, a 38-year-old resident of Wolf Point, appeared on charges of conspiracy to possess with intent of distribute methamphetamine, possession with intent to distribute methamphetamine, and distribution of methamphetamine. If convicted of the most serious charges contained in the indictment, RUSSETTE faces 40 years in prison, $5,000,000 in fines and 4 years supervised release. The case was investigated by the Bureau of Indian Affairs. PACER Case Reference: 14-93
Appearing before U.S. Magistrate Judge Strong in Great Falls on October 6, 2014, and entering pleas of Not Guilty were:
JOE LONG KNIFE, a 38-year-old resident of Hayes, appeared on charges of kidnapping, aggravated sexual abuse, assault with a dangerous weapon, assault resulting in serious bodily injury, and strangulation. If convicted of the most serious charges contained in the indictment, LONG KNIFE faces life in prison, $250,000 in fines and 5 years supervised release. The case was investigated by Federal Bureau of Investigation. PACER Case Reference: 14-92
Appearing before U.S. Magistrate Judge Ostby in Billings on October 2, 2014, and entering pleas of Not Guilty were:
DAVID LEE GOFFENA, a 46-year-old resident of Roundup, appeared on charges of conspiracy to possess with intent to distribute methamphetamine, distribution of methamphetamine, and conspiracy to money launder. If convicted of the most serious charges contained in the indictment, GOFFENA faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by Federal Bureau of Investigation, Eastern Montana HIDTA and Montana Division of Criminal Investigations. PACER Case Reference: 14-38
KIRSTA ELAINE GOFFENA, a 38-year-old resident of Roundup, appeared on charges of conspiracy to possess with intent to distribute methamphetamine, distribution of methamphetamine, and conspiracy to money launder. If convicted of the most serious charges contained in the indictment, GOFFENA faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by Federal Bureau of Investigation, Eastern Montana HIDTA and Montana Division of Criminal Investigations. PACER Case Reference: 14-38
Appearing before U.S. Magistrate Judge Lynch in Missoula on October 2, 2014, and entering pleas of Not Guilty were:
JARED THOMAS ATCHLEY, a 24-year-old resident of Helena, appeared on charges of possession of an unregistered firearm. If convicted of the charge contained in the indictment, ATCHLEY faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by Bureau of Alcohol, Tobacco, Firearms and Explosives and the Montana Highway Patrol. PACER Case Reference: 14-06
Appearing before U.S. Magistrate Judge Ostby in Billings on September 30, 2014, and entering pleas of Not Guilty were:
DAVID DELCARMEN, a 32-year-old resident of Los Angeles, California, appeared on charges of conspiracy to possess with intent to distribute methamphetamine and possession with intent to distribute methamphetamine. If convicted of the most serious charges contained in the indictment, DELCARMEN faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by Federal Bureau of Investigation, Eastern Montana HIDTA and Montana Division of Criminal Investigations. PACER Case Reference: 14-38
HEATHERLYN KYRIE FORE, a 26-year-old resident of Taft, California, appeared on charges of conspiracy to possess with intent to distribute methamphetamine and possession with intent to distribute methamphetamine. If convicted of the most serious charges contained in the indictment, FORE faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by Federal Bureau of Investigation, Eastern Montana HIDTA and Montana Division of Criminal Investigations. PACER Case Reference: 14-38
CATHRINE SUE NEEL, a 50-year-old resident of Taft, California, appeared on charges of conspiracy to possess with intent to distribute methamphetamine and possession with intent to distribute methamphetamine. If convicted of the most serious charges contained in the indictment, NEEL faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by Federal Bureau of Investigation, Eastern Montana HIDTA and Montana Division of Criminal Investigations. PACER Case Reference: 14-38
Appearing before U.S. District Judge Watters in Billings on September 30, 2014, and entering pleas of Not Guilty were:
DAVID LEE BARNARD, JR, a 43-year-old resident of Billings, appeared on charges of conspiracy to possess with intent to distribute methamphetamine, possession with intent to distribute methamphetamine, distribution of methamphetamine, possession of a firearm in furtherance of a drug trafficking crime, and conspiracy to commit money laundering. If convicted of the most serious charges contained in the indictment, BARNARD faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by Federal Bureau of Investigation, Eastern Montana HIDTA and Montana Division of Criminal Investigations. PACER Case Reference: 14-38
EUGENE VERNON LAROCHE, a 48-year-old resident of Fairview, appeared on charges of use of a communication device to facilitate a felony drug trafficking offense. If convicted of the charge contained in the indictment, LAROCHE faces 4 years in prison, $250,000 in fines and 1 year supervised release. The case was investigated by the Drug Enforcement Administration, Montana Division of Criminal Investigations, Sidney Police Department, Richland County Sheriff's Office, Federal Bureau of Investigation, U.S. Border Patrol, Montana Highway Patrol and Sweetgrass County Sheriff's Office. PACER Case Reference: 14-43
Appearing before U.S. Magistrate Judge Lynch in Missoula on September 30, 2014, and entering pleas of Not Guilty were:
ALLEN J. RANKIN, a 41-year-old resident of St. Ignatius, appeared on charges of wire fraud, aggravated identity theft and mail theft. If convicted of the most serious charges contained in the indictment, RANKIN faces 20 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the U.S. Postal Service, Missoula Police Department, Missoula County Sheriff's Office, Billings Police Department, Laurel Police Department and Lake County Sheriff's Office. PACER Case Reference: 14-33
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court's calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Indictment adds Charges against KC Man for Throwing Molotov Cocktails at Congressional OfficeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man previously charged in federal court with throwing Molotov cocktails at the local congressional office of U.S. Rep. Emanuel Cleaver II was indicted by a federal grand jury today on additional charges.
Eric G. King, 28, of Kansas City, was charged in a four-count indictment returned by a federal grand jury in Kansas City, Mo. Today’s indictment replaces a federal criminal complaint that was filed against King on Sept. 17, 2014.
Today’s indictment contains the original charge against King of using a dangerous instrument to forcibly intimidate and interfere with a federal official engaged in the performance of his official duties. The indictment also charges King with one count of attempted arson for attempting to damage or destroy the building, one count of using explosive materials to commit a felony (arson) and one count of illegally possessing an incendiary device.
On Sept. 11, 2014, at 2:52 a.m., a window was broken and two Molotov cocktails were thrown at Cleaver’s congressional office located at 101 W. 31st Street, Kansas City, Mo. The office was unoccupied at the time of the incident. A hammer used to break the window was recovered from the scene, as well as two broken Molotov cocktails. There was not any fire damage done to the building.
According to an affidavit filed in support of the original criminal complaint, video footage shows King retrieve two bottles with a white ignition source from his backpack, then walk around the parking lot for a few minutes in an effort to hide from cars that were passing by. The footage allegedly shows King throwing a hammer through the west window and lighting the devices. The first device thrown appears to bounce off the side of the building. The second device is ignited and is thrown at the window. King allegedly sprints away from the office.
King was arrested as he was leaving his apartment on Sept. 16, 2014.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Patrick C. Edwards. It was investigated by the FBI and the Kansas City, Mo., Police Department, the Federal Protective Service and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Grand Jury Charges Seven People in Oxy Trafficking ConspiracyRead the Press Release
PITTSBURGH – A federal grand jury returned a superseding indictment today against residents of Pennsylvania and Detroit, Michigan, on charges of violating the federal narcotics laws, United States Attorney David J. Hickton announced today.
The seven-count superseding indictment named:
- Telano Lanard White, 32, of Jackson, Michigan;
- Brandy Marie Bara, a/k/a Brandy Marie White, 33, of Turtle Creek, PA;
- Tarrance Mays, Jr., 30, of Fraser, Michigan;
- Lamont Eric Whitfield, 33, of Novi, Michigan;
- Corey Manuel Rodriguez, 28, of Pittsburgh, Pennsylvania;
- Nicole Goughler, 42, of Pittsburgh, PA; and
- Max Matthew Guardalabene, 29, of Pittsburgh, PA.
The superseding indictment expanded the period of the drug conspiracy to the Spring of 2011 to July 10, 2014 (the conspiracy charged in the original indictment spanned only May 13, 2014 to July 10, 2014). The superseding indictment also added significant forfeiture allegations which seek the forfeiture of, among other items, a Bentley Continental automobile and four other vehicles, more than $80,000 worth of jewelry, expensive Rolex watches, and $31,882 in U.S. currency. No additional defendants or charges were brought in the superseding indictment.
With respect to each count of the superseding indictment, the law provides for a maximum total sentence of 20 years in prison, a fine of $1,000,000 or both. 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 Stephen R. Kaufman is prosecuting this case on behalf of the government.
The Drug Enforcement Administration, Federal Bureau of Investigation, Pennsylvania Attorney General’s Office, Pennsylvania State Police, and the Pittsburgh Bureau of Police conducted the investigation leading to the superseding indictment.
Former Virginia Beach Probation Officer and Husband Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
NORFOLK, Va. – Katherine M. Kephart, 31, of Norfolk, Va., was sentenced today to 78 months in prison for conspiracy to distribute and possess with intent to distribute five (5) grams or more of methamphetamine, commonly known as “ice.” Kephart’s husband, Charles M. Kephart, 43, of Norfolk, Va., was sentenced on January 23, 2014 to 78 months in prison for conspiracy to distribute and possess with intent to distribute five (5) grams or more of methamphetamine, commonly known as “ice.”
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia and Royce E. Curtin, Special Agent in Charge, Federal Bureau of Investigation Norfolk Office, made the announcement after sentencing by United States District Judge Arenda L. Wright Allen.
Katherine Kepart previously waived indictment and pled guilty on August 13, 2013. According to court documents, in November of 2012, a cooperating source informed the FBI that Katherine Kephart and her husband were involved in methamphetamine trafficking. The Kepharts were alleged to be obtaining quantities of methamphetamine from sources in the Ashville, North Carolina area and distributing in Virginia. They regularly used methamphetamine and associated with known methamphetamine traffickers. Katherine Kephart, who was a Virginia state probation and parole officer employed by the Virginia Beach Probation Office during this time, utilized her office facilities to further her husband’s drug trafficking activities. She also traveled with her husband to North Carolina to procure methamphetamine and distributed methamphetamine on multiple occasions. On February 28, 2013, Charles Kephart was arrested after he purchased 14 grams of methamphetamine during a controlled sale with the undercover officer. The FBI then executed a federal search warrant on the Kepharts’ residence in Norfolk. The search yielded drug paraphernalia, including at least seven small plastic bags or baggies, a piece of aluminum foil, four glass pipes, a spoon, two straws, a razor blade and an electronic scale. Many of these items later tested positive for methamphetamine residue.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Darryl J. Mitchell is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
Former United Commercial Bank Senior Vice President Pleads Guilty to ConspiracyRead the Press Release
OAKLAND – Thomas Yu pleaded guilty in federal court in San Francisco to charges of conspiracy to commit false bank entries, reports, and transactions related to his preparation of false and misleading reports, announced U.S. Attorney Melinda Haag; Federal Deposit Insurance Corporation, Office of the Inspector General, Special Agent in Charge Wade Walters; Office of the Special Inspector General for the Troubled Asset Relief Program, Special Agent in Charge Scott O'Briant; Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau, Office of the Inspector General, Special Agent in Charge Scott Redington; and FBI Special Agent in Charge David J. Johnson.
Yu, 51, of San Ramon, Calif., is a former Senior Vice President of United Commercial Bank (UCB). UCB was a commercial bank headquartered in San Francisco, Calif., with branch offices throughout the United States as well as in China and Taiwan. Until 2009, its holding company, UCBH Holdings, Inc., was publicly traded on NASDAQ.
On Nov. 6, 2009, UCB was taken over by the Federal Deposit Insurance Corporation (FDIC). According to the March 11, 2014 Superseding Indictment, FDIC estimates that there will be approximately $1.1 billion in losses as a result of the bank’s failure. In addition, the Troubled Asset Relief Program (TARP) provided approximately $297 million in federal funds to UCB on Nov. 14, 2008, during the 2008 financial crisis. None of the TARP funds have been repaid.
According to the Plea Agreement, Yu prepared false and misleading quarterly loan loss allowance reports in which the bank calculated the loss reserves it was required to recognize as part of its quarterly financial reporting in the third and fourth quarters of 2008. By failing to properly downgrade poor performing loans, Yu admitted that he helped the bank avoid required loan loss reserves that enabled the bank to artificially inflate its reported earnings to the public. The conviction followed a change of plea hearing today before the Honorable Jeffrey S. White, United States District Court Judge.
Yu is currently released on a $500,000 appearance bond secured by real property. Yu’s sentencing hearing before Judge White has not been scheduled. The maximum statutory penalty for a conviction for conspiracy in violation of 18 U.S.C. § 371 is five years in prison and a fine of $250,000, plus restitution. However, any sentence will be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Adam A. Reeves and Robert David Rees are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Denise Oki, Phillip Villanueva and Bridget Kilkenny. The prosecution is the result of an investigation by the FDIC, Office of the Inspector General; the Special Inspector General of the Troubled Asset Relief Program; the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau, Office of the Inspector General; and the Federal Bureau of Investigation.
Former Puerto Rico Officer and Civilian Plead Guilty for July 2012 Robbery in Puerto RicoRead the Press Release
A former Police of Puerto Rico (POPR) sergeant and a civilian have pleaded guilty for their involvement in a July 2012 robbery in Bayamon, Puerto Rico, and an additional POPR officer has pleaded guilty to lying to federal agents, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico.
Jorge Fernandez-Aviles, 49, a POPR sergeant, pleaded guilty today to robbery and firearms charges for his role in a July 2012 robbery in Bayamon, Puerto Rico. On Oct. 3, 2014, David Figueroa, 32, a civilian, pleaded guilty to robbery and civil rights charges for his involvement in the robbery. Alexander Mir-Hernandez, 40, a POPR officer, also pleaded guilty on Oct. 3, 2014, to one count of false statements for lying to federal agents about his role in the July 2012 robbery and to a civil rights crime for an unrelated December 2013 robbery. Sentencing for all three is scheduled for Jan. 9, 2015.
Pedro Lopez-Torres, 35, and Luis Ramos-Figueroa, 38, were each POPR officers and were charged by information on June 25, 2014, for their roles in the July 2012 robbery and other crimes. Lopez and Torres pleaded guilty before U.S. District Judge José A. Fusté the same day. Fernando Reyes-Rojas, a civilian, has been indicted for robbery, drug, and firearms charges for his involvement in the July 2012 robbery. Reyes-Rojas is scheduled for trial on Nov. 3, 2014.
According to court documents, on July 14, 2012, Sergeant Fernandez-Aviles and Officers Lopez-Torres and Ramos-Figueroa, armed with their POPR weapons, went with Figueroa, Ramos-Figueroa’s cousin, to the airport, where they picked up a marked patrol car from Officer Mir before a planned home robbery. They drove the patrol car to meet Reyes-Rojas and then went together to the location of the robbery.
Upon entering the house, the officers identified themselves as police, falsely claimed they were executing a search warrant, and ordered several individuals in the garage to the ground and searched for weapons. While Figueroa watched the occupants, Sergeant Fernandez, Officer Lopez-Torres, Officer Ramos-Figueroa, and Reyes-Rojas searched the property, and Reyes-Rojas found cocaine in a shed in the backyard. A few days later, Reyes-Rojas met with Lopez-Torres and gave him money from the proceeds of the sale of the cocaine he took on the day of the robbery. Officer Lopez-Torres split the money with Sergeant Fernandez-Aviles and Officer Ramos-Figueroa.
In June 2014, Officer Mir was interviewed by Special Agents of the Federal Bureau of Investigation and falsely claimed that he did not recognize a photograph of Officer Lopez-Torres; that he had not met with Officer Lopez-Torres in more than six months; and that he did not provide the patrol car that was used to commit the July 2012 robbery.
An indictment is merely an allegation, and a defendant is presumed innocent unless and until proven guilty.
This case was investigated by the FBI’s San Juan Division and is being prosecuted by Trial Attorney Heidi Boutros Gesch of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Mariana Bauza of the District of Puerto Rico.
Former President Pleads Guilty to Embezzling from UnionRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former president of the union representing Jackson County Department of Corrections employees pleaded guilty in federal court today to a wire fraud scheme in which he embezzled tens of thousands of dollars from the union local.
Jesse E. Morgan, 39, of Kansas City, Mo., pleaded guilty before U.S. Chief District Judge Greg Kays to one count of wire fraud.
Morgan was president of the American Federation of State, County and Municipal Employees (AFSCME) Local 1707 from 2008 through Oct. 20, 2012.
By pleading guilty today, Morgan admitted that he engaged in a wire fraud scheme during most of his tenure as president, from November 2008 through Oct. 22, 2012, to steal from AFSCME Local 1707. Morgan issued checks from Local 1707 to third parties for his benefit or himself; made electronic transfers from Local 1707 bank accounts to pay personal expenses; made unauthorized ATM withdrawals from Local 1707 bank accounts; and made unauthorized counter withdrawals from Local 1707 checking and savings accounts.
The government believes the theft exceeded $120,000 but was less than $200,000. Morgan admitted in today’s plea agreement that the loss exceeds $70,000. The federal indictment alleged that the loss was more than $185,000.
Under the terms of today’s plea agreement, Morgan must pay restitution to Local 1707 for the total amount of the loss. If there is no agreement as to the amount of loss, the court will decide the matter by a preponderance of the evidence.
Under federal statutes, Morgan is subject to a sentence of up to 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 Paul S. Becker. It was investigated by the U.S. Department of Labor – Office of Labor-Management Standards.Former Federal Employee Charged with Defrauding Compensation FundRead the Press Release
PITTSBURGH – A McKeesport resident has been indicted by a federal grand jury in Pittsburgh on charges of wire fraud, federal employees’ compensation fraud and theft of government money, United States Attorney David J. Hickton announced today.
The 10-count indictment named Robert M. Sulesky, 52, as the sole defendant.
According to the indictment, Sulesky was a former, civilian equipment operator for the United States Department of the Army (DOA) who collected wage loss benefits under the Federal Employees’ Compensation Act. From Dec. 19, 2007, until July 26, 2012, Sulesky engaged in a scheme to defraud the United States Department of Labor and the DOA in order to receive, and to continue to receive, his compensation benefits at the higher rate reserved for employees with eligible dependents. It was part of the scheme that Sulesky made false and fraudulent statements concerning his marital status. Among the false statements submitted by Sulesky to the federal government as part of the scheme, Sulesky submitted a statement on Aug. 27, 2011 in which he falsely represented that he was married and was living with his wife, knowing that his divorce from his wife became effective on Nov. 21, 2009 and that he was not living with a spouse.
Sulesky faces a maximum sentence of 20 years imprisonment and a fine of $250,000 for each of the seven counts charging him with wire fraud, a maximum sentence of five years imprisonment and a fine of $250,000 for each of the two counts charging him with federal employees’ compensation fraud, and a maximum sentence of 10 years imprisonment and a fine of $250,000 for the one count charging him with theft of government money. 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 Mary McKeen Houghton is prosecuting this case on behalf of the government.
The Department of Labor, Office of Inspector General conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Former Chancery Judge Pleads Guilty to Federal Obstruction of JusticeRead the Press Release
Jackson, Miss. -- Joe Dale Walker, 61, of Monticello, Mississippi, pled guilty today in U.S. District Court to a criminal information charging him with obstruction of justice, announced U.S. Attorney Gregory K. Davis and FBI Special in Agent in Charge Don Alway.
Walker was charged with instructing a federal grand jury witness to destroy documents and then lying to FBI agents. He will be sentenced by Senior U.S. District Judge David C. Bramlette III on January 8, 2015 at 1:30 p.m. in Jackson, Mississippi. He faces a maximum penalty of twenty years in federal prison and a $250,000 fine.
From 2010 to the present, the defendant, Joe Dale Walker, was the elected Chancellor for the Thirteenth Chancery Court District of Mississippi, covering Covington, Jefferson Davis, Lawrence, Simpson and Smith Counties. In June 2011, Judge Walker directed the attorney he had appointed for a conservatorship to solicit bids from local contractors for the construction of a home for the ward. Five bids for construction of the home were obtained, including a bid from Judge Walker’s nephew, Chad Teater d/b/a C.T. Construction. Judge Walker reviewed the bids in his chambers and, upon discovering that Teater’s bid was much lower than the other bids, Walker instructed Teater to raise his bid. Teater subsequently submitted another bid which was $23,500 more than his original bid but still lower than the other bids. Due to his nephew’s involvement as a bidder for the Newsome house, Walker transferred the case to another Chancellor for the limited purpose of accepting and approving bids for the construction of the Newsome home. After signing an order awarding the contract to Teater, the case was transferred back to Walker.
Prior to August 7, 2013, a grand jury subpoena was served upon a witness to appear before a Federal Grand Jury on September 4, 2013, and to bring any and all documents relating to the Conservatorship. On August 7, 2013, Walker met with the witness and was informed of the Federal Grand Jury subpoena. During this meeting, Walker and the witness discussed the original bid from Teater, the fact that it was lower than the other bids and that Walker had instructed the witness to tell Teater to raise his bid. Walker also asked the witness about original bid and any existing copies.
When interviewed by agents of the Federal Bureau of Investigation on March 25, 2014, Walker denied ever talking with the witness about two bids submitted by Teater and denied ever telling the witness that Teater’s original bid needed to be “somewhere else” in response to the Federal Grand Jury subpoena.
This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Mike Hurst.If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
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Former CEO of San Francisco Technology Start-Up Pleads Guilty to Wire FraudRead the Press Release
SAN FRANCISCO – Jonathan Edward Mills, the former Chief Executive Officer of a San Francisco-based technology company, pleaded guilty in federal court in San Francisco today to two counts of wire fraud, United States Attorney Melinda Haag announced.
Mills founded Motionloft, Inc., in 2010, and he served as its CEO until he was fired in December 2013. In pleading guilty, Mills admitted that he falsely told victims that Motionloft was soon to be acquired by a well-known multinational company based in Silicon Valley. Mills told his victims that in exchange for providing him money to be invested in Motionloft, these investors would earn an ownership stake in Motionloft and massive profits upon completion of the imminent acquisition. In furtherance of his scheme, Mills claimed that the acquiring company had agreed to pay hundreds of millions of dollars to acquire Motionloft. When the purported acquisition failed to materialize, Mills told his victims a series of false excuses, including blaming lawyers, blaming the government shutdown, and blaming financial institutions. In pleading guilty, however, Mills admitted that not only was there no such acquisition planned, but Mills spent substantial amounts of his victims’ money on his own personal expenses such as vacations and other entertainment. In all, Mills admitted that he caused his victims to lose approximately $765,000.
Mills, 30, of San Francisco, was arrested on February 19, 2014, after a Criminal Complaint was filed against him. He was indicted by a federal Grand Jury on March 13, 2014. In that Indictment, he was charged with two counts of wire fraud, in violation of Title 18, United States Code, Section 1343, and four counts of money laundering, in violation of Title 18, United States Code, Section 1957. Pursuant to the Plea Agreement, Mills pleaded guilty to both counts of wire fraud.
Mills’ sentencing hearing is scheduled for February 3, 2015, before The Honorable Richard Seeborg, U.S. District Court Judge, in San Francisco. The maximum statutory penalty for each count of wire fraud, in violation of Title 18, United States Code, Section 1343, is 20 years in prison, a fine of $250,000, plus restitution. Any sentence, however, will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Doug Sprague is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Rawaty Yim and Muffy Mallory. The prosecution is the result of a two-month investigation by the Federal Bureau of Investigation.
(Mills indictment )
Former Bristol Resident Admits Operating $1.8 Million Investment SchemeRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that STEPHEN GOODRICH, 57, of Rocky Hill, waived his right to indictment and pleaded guilty today before U.S. Magistrate Judge Donna F. Martinez in Hartford to one count of mail fraud and one count of subscribing to a false tax return. The charges stem from GOODRICH’s operation of an investment scheme that defrauded investors out of more than $1.8 million.
According to court documents and statements made in court, GOODRICH formerly resided in Bristol where he conducted an investment business using the name Goodrich Financial. Although GOODRICH was not a licensed or registered investment adviser, he provided a business card to some investors that falsely represented that he was licensed to conduct an investment business. Beginning in approximately 2006 and continuing to approximately November 2012, GOODRICH engaged in a scheme to defraud individuals who had provided him with investment funds by failing to invest the funds as represented, and by using some of the investment funds for his personal use. At times, GOODRICH also used new investor funds to return the principal investment to older investors as is often done in Ponzi schemes. In order to prevent his investors from becoming aware of the scheme, GOODRICH provided written performance summaries to his investors that falsely represented the value of their investments. More than ten investors collectively lost more than $1.8 million as a result of this scheme.
During the years 2007 to 2011, GOODRICH used more than $600,000 of the investors’ funds for his personal use without disclosing this income on his federal tax returns. As a result, GOODRICH owes $239,443 in additional federal taxes, plus interest and penalties.
GOODRICH is scheduled to be sentenced by U.S. District Judge Alvin W. Thompson on December 30, 2014, at which time he faces a maximum term of imprisonment of 23 years, a fine of up to approximately $3.6 million and an order of restitution.
GOODRICH is released on a $25,000 bond.
This matter is being investigated by the Internal Revenue Service – Criminal Investigation Division, the Federal Bureau of Investigation and the U.S. Postal Inspection Service, with the assistance of the Connecticut Department of Banking. The case is being prosecuted by Senior Litigation Counsel Richard J. Schechter.
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]Florida Woman Pleads Guilty to Mail Fraud in LSU Health Sciences Center Bribery SchemeRead the Press Release
SHREVEPORT, La. –United StatesAttorney Stephanie A. Finley announced today that a Florida woman pleaded guilty to mail fraud in connection with a bribery scheme involving a former staff member at Louisiana State University Health Sciences Center (LSUHSC).
Rita M. Myler, 52, of Miramar Beach, Fla., pleaded guilty Monday before U.S. District Court Judge S. Maurice Hicks Jr. to one count of mail fraud. According to evidence presented at the guilty plea, Myler paid LSUHSC’s Human Leukocyte Antigen (HLA) laboratory assistant director Anthony Roggero kickbacks so that he would continue buying products from her company Sangre Biologicals. From July 2001 to July 2008, Myler mailed cash kickbacks to Roggero’s residence after LSUHSC would make a payment to her company. Sangre Biologicals received more than $540,000 from LSUHSC during the course of the scheme. The HLA laboratory played a critical support role for solid organ and bone marrow transplants, performing cross matching and tissue typing analyses. A former director of the HLA laboratory sought and obtained authority for Roggero to purchase up to $5,000 in Sangre products per month.
Myler faces up to 20 years in prison, five years supervised release, a $250,000 fine, and restitution. A sentencing date of January 26, 2015 was set. Roggero pleaded guilty on October 31, 2012 to one count of mail fraud for his role. Roggero’s sentencing date is November 10, 2014.
The FBI conducted the investigation. Assistant U.S. Attorney Cytheria D. Jernigan is prosecuting the case.
Florida Man Sentenced to Mandatory Two Years for Federal Income Tax Refund Fraud Scheme and Ordered to Pay $184,486.64Read the Press Release
The United States Attorney Kenyen R. Brown announces that Allen L. Bryant, a 48 year old resident of Jasper, Florida was sentenced today. Mr. Bryant pled guilty on June 16, 2014, to aggravated identity theft. Mr. Bryant received a mandatory two years of incarceration followed by one year of supervised release. Mr. Bryant participated in the scheme using the identities of deceased victims, their names, dates of birth and social security numbers to file for federal income tax refunds. He directed that the refunds be wired into his personal checking account.
Special Agents of the Internal Revenue Service/Office of Inspector General investigated the case and presented it to the U.S. Attorney's Office for prosecution. The prosecutor assigned to the case is Assistant United States Attorney, Gina S. Vann.
FCI Berlin Inmate Pleads Guilty ToRead the Press Release
Federal Weapon Possession Charge
CONCORD, NEW HAMPSHIRE – CONCORD, N.H. – Myron Armstrong, 38, an inmate at the Federal Correctional Institution in Berlin, New Hampshire, has entered a guilty plea in the United States District Court for the District of New Hampshire to one count of possessing a weapon in a federal correctional facility, announced United States Attorney John P. Kacavas.
In January 2014, Armstrong fashioned a makeshift weapon out of a combination lock and a sock, which he subsequently used to assault another inmate. Armstrong – who faces a maximum sentence of five additional years in prison and criminal fines of up to $250,000 – will be sentenced in January of 2015.
This prosecution arose from an investigation by the Federal Bureau of Investigation, in collaboration with the Federal Correctional Institution in Berlin, New Hampshire. The case is being prosecuted by Assistant United States Attorney Nick Abramson.Employee of Essex County Contractor Admits Tax ChargesRead the Press Release
TRENTON, N.J. – An employee of several related Parsippany, New Jersey-based construction companies today admitted underreporting significant amounts of cash income on his tax return, U.S. Attorney Paul J. Fishman announced.
Frank Chimento III, 46, of Verona, N.J., pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of subscribing to a false personal federal income tax return in 2007.
According to the documents filed in this case and statements made in court: Chimento Construction, Chimento Construction Services, and FAC Construction, were commingled companies specializing in commercial masonry and concrete work (the “Chimento Companies”). From 2008 through 2011, the Chimento Companies’ primary construction job was the Palmer Square project in Princeton, New Jersey. Chimento Companies operated a cash payroll for a significant portion of the wages paid to employees during the period 2006 through 2011. Chimento worked for the Chimento Companies for more than 10 years and was one of the employees who received cash wages.
In 2007, Chimento briefly operated his own excavation business. An analysis of his bank accounts showed payments in 2007 from the Chimento Companies totaling $85,860. Chimento failed to report $45,860 of that income on his 2007 federal personal income tax return. He also admitted in court that he did not file individual income tax returns for 2008 through 2011 although he received approximately $100,000 in cash wages in 2008, and a total of $351,788 in cash wages during the years 2009 through 2011.The count of subscribing to a false tax return is punishable by a maximum potential penalty of three years in prison and a $250,000 fine. As part of his guilty plea, Chimento agreed to make full restitution to the IRS for all losses resulting from the filing of false tax returns. Sentencing is scheduled for Jan. 13, 2015.
U.S. Attorney Fishman credited special agents of the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Cheryl Garcia New York Regional Office; and special agents of IRS-Criminal Investigation, under the leadership of Acting Special Agent in Charge Jonathan D. Larsen, for the investigation leading to today’s guilty plea. He also thanked the N.J. Department of Labor and Workforce Development, under the leadership of Commissioner Harold J. Wirths, for its assistance in the investigation.The government is represented by Senior Litigation Counsel Leslie Faye Schwartz of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
14-363Defense counsel: Paul John Casteleiro Esq., Hoboken, N.J.
ChimentoIII, Frank Information
East Pittsburgh Felon Sentenced to 15 Months in Prison for Possessing Ammunition, Fake Social Security CardRead the Press Release
PITTSBURGH - A resident of East Pittsburgh, Pa., has pled guilty and been sentenced in federal court to 15 months imprisonment on his conviction of possession of ammunition by an illegal alien and use of a false Social Security number, United States Attorney David J. Hickton announced today.
United States District Judge Nora Barry Fischer imposed the sentence on Guillermo Manuel Justo, a/k/a Rolando Velez Latore, 38.
According to information presented to the court, Justo, an illegal alien, on May 28, 2014, unlawfully possessed 81 rounds of .40 caliber Smith and Wesson ammunition and a social security card which falsely identified him as Rolando Velez Latore.
Prior to imposing sentence, Judge Fischer denied defendant’s motion for a sentence of “time served” and stated that it “was troubling” that, among other things Justo had pled guilty (and received probation) in a related gun case – while falsely representing his identity (as Rolando Velez Latore) to the Common Pleas Court.
Assistant United States Attorney Leo M. Dillon prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Homeland Security Investigations for the investigation leading to the successful prosecution of Justo.
Drug Trafficker Sentenced to 12 Years in PrisonRead the Press Release
PHOENIX – On Oct. 6, 2014, Everardo Duarte, 38, of Sonora, Mexico, was sentenced by U.S. District Judge G. Murray Snow to 12 years imprisonment. Duarte pleaded guilty on July 21, 2014 to possession with intent to distribute methamphetamine.
The year-long Organized Crime Drug Enforcement Task Force investigation into Duarte’s Drug Trafficking Organization (DTO) was initiated in July 2012 and was conducted primarily in Flagstaff. On July 16, 2013, the defendant and his two co-defendants, Dustin Heath Ash and Mitchell Allan McKinnon, were charged with possession with intent to distribute methamphetamine, possession with intent to distribute heroin, and conspiracy charges. Kevin Lynn Bickford was charged in a separate indictment with possession with intent to distribute methamphetamine.
The organization imported methamphetamine from Mexico into the United States, where it was ultimately distributed in Flagstaff, along with heroin. Co-defendants Ash, McKinnon, and Bickford were previously sentenced to terms of imprisonment.
The investigation in this case was initiated by the METRO Northern Arizona Narcotics Task Force, an organization made up of officers from the Flagstaff Police Department and the Coconino County Sheriff’s Office. The case was adopted federally by the FBI’s Northern Arizona Safe Streets Task Force, of which METRO is a part, working closely also with partners from the Bureau of Indian Affairs and the Drug Enforcement Administration. The prosecution was handled by Dimitra H. Sampson, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-13-8158-PCT-GMS
RELEASE NUMBER: 2014-058_DuarteFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.Defense Contractor Agrees to Pay $13.7 Million to Settle Allegations of OverbillingRead the Press Release
DRS Technical Services Inc. (DRS) has agreed to pay $13.7 million to settle allegations that it violated the False Claims Act by knowingly overbilling the government for work performed by DRS personnel who lacked the job qualifications required by the contract, the Justice Department announced today. DRS is located in Herndon, Virginia, and is a subsidiary of DRS Defense Solutions LLC.
DRS designs, integrates, operates and maintains satellite and wireless network solutions and telecommunication services and security systems for government and private sector customers. DRS C3 & Aviation Company, which is headquartered in Gaithersburg, Maryland, is an indirect subsidiary of DRS and provides services to government agencies, including aircraft maintenance, logistics and depot support, and engineering support. Between March 2003 and Dec. 31, 2012, DRS and its predecessors were awarded time and materials contracts for services and supplies to be provided to the Army’s Communication and Electronics Command (CECOM) in Iraq and Afghanistan, and to the Coast Guard for aircraft maintenance.
“Contractors that fail to provide qualified labor as promised are not entitled to bill the government as though they had,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “The Department of Justice will pursue contractors that claim taxpayer funds to which they are not entitled.”
The alleged labor mischarging occurred on the Rapid Response or “R2” contract issued by the U.S. Army Communication and Electronics Command (CECOM) located at the Aberdeen Proving Ground in Maryland. The U.S. Army used the R2 contract to purchase a variety of goods and services needed to support U.S. forces in Iraq, Afghanistan and elsewhere on a quick turnaround basis. The settlement also resolves labor mischarging on a similar U.S. Coast Guard contract.
The government contends that from Jan. 1, 2003, to Dec. 31, 2012, DRS billed CECOM for work performed by individuals whose job qualifications did not meet all the qualifications prescribed by the contracts for the labor categories under which their efforts were billed, thereby falsely increasing the amount of money DRS claimed and CECOM paid. Similarly, from Dec. 19, 2009, to Dec. 18, 2011, the government contends that DRS charged the Coast Guard’s Aviation Logistics Center for work performed by individuals whose job qualifications did not meet the qualifications prescribed by the contract, again, thereby inflating the cost of the services provided.
“Companies that submit false bills to the government must be held accountable,” said U.S. Attorney Rod J. Rosenstein for the District of Maryland.
“This settlement is yet another example of the tenacity and hard work of our Army CID agents,” said Director Frank Robey of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit (MPFU). “It is a testament to MPFU's continued resolve to hold companies accountable for the work they do for the U.S. government.”
The settlement was the result of a coordinated effort by the U.S. Attorney’s Office for the District of Maryland, the Civil Division, the Defense Contract Audit Agency, the Army’s Criminal Investigative Command’s MPFU and the Department of Defense Office of Inspector General’s Defense Criminal Investigative Service.
The claims resolved by the settlements are allegations only and there has been no determination of liability.
Defense Contractor Agrees to Pay $13.7 Million to Settle Allegations of OverbillingRead the Press Release
Baltimore – DRS Technical Services, Inc. has agreed to pay $13.7 million to settle allegations that it violated the False Claims Act by overbilling the government for work performed by DRS personnel who lacked the job qualifications required by contract.The settlement was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office, an investigative arm of the Department of Defense – OIG; Frank Robey, Director of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit; and the Defense Contract Audit Agency (DCAA), an audit arm of the Department of Defense;.
“Companies that submit false bills to the government must be held accountable,” said U.S. Attorney Rod J. Rosenstein.
“Contractors that fail to provide qualified labor as promised are not entitled to bill the government as though they had,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “The Department of Justice will pursue contractors that claim taxpayer funds to which they are not entitled.”DRS Technical Services, Inc. (DRS) is principally located in Herndon, Virginia and is a subsidiary of DRS Defense Solutions LLC. DRS designs, integrates, operates and maintains satellite and wireless network solutions and telecommunication services and security systems for government and private sector customers. DRS C3 & Aviation Company, which is headquartered in Gaithersburg, Maryland, is an indicrect subsidiary of DRS and provides services to government agencies, including aircraft maintenance, logistics and depot support, and engineering support. Between March 2003 and December 31, 2012, DRS and its predecessors were awarded time and materials contracts for services and supplies to be provided to the Army’s Communication and Electronics Command (CECOM) in Iraq and Afghanistan, and to the Coast Guard for aircraft maintenance.
The government contends that from January 1, 2003 to December 31, 2012, DRS billed CECOM for work performed by individuals whose job qualifications did not meet all the qualifications prescribed by the contracts for the labor categories under which their efforts were billed, thereby falsely increasing the amount of money DRS claimed and CECOM paid. Similarly, from December 19, 2009 to December 18, 2011, the government contends that DRS charged the Coast Guard’s Aviation Logistics Center for work performed by individuals whose job qualifications did not meet the qualifications prescribed by the contract, again, thereby inflating the cost of the services provided.
“This settlement is yet another example of the tenacity and hard work of our Army CID agents,” said Director Frank Robey of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit (MPFU). “It is a testament to MPFU's continued resolve to hold companies accountable for the work they do for the U.S. government.”
The claims resolved by the settlements are allegations only and there has been no determination of liability.
The settlement was the result of an investigation by the U.S. Attorney’s Office for the District of Maryland, the Justice Department’s Civil Division, DCAA, DCIS and the Army’s CID Investigative Command’s MPFU. Assistant U.S. Attorney Tarra DeShields handled the case.Couple Pleads Guilty to $99,000 Social Security FraudRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Nevada, Mo., husband and wife pleaded guilty in federal court today to making false statements as part of a $99,000 scheme to defraud Social Security.
Reta Jo Carpenter, 53, and her husband, Oren Daniel Carpenter, 52, both of Nevada, each waived their right to a grand jury and pleaded guilty in separate appearances before U.S. Magistrate Judge David P. Rush to making false statements to a federal government agency.
According to today’s plea agreement, Reta Carpenter is unemployed, disabled and married to Oren Carpenter (an employee of the Nevada R-5 School District). She had been receiving Supplemental Security Income (SSI) benefits since 1990.
The Carpenters admitted today that Reta Carpenter falsely stated on her benefit application in 1997 that Oren Carpenter no longer resided with her. As a result, the Social Security Administration removed Oren Carpenter from the household in its records, and Oren Carpenter’s annual income was no longer considered in determining Reta Carpenter’s eligibility for SSI benefits. This resulted in overpayments to Reta Carpenter totaling $99,411 as of August 23, 2012.
Reta Carpenter later repeated this claim on written forms, and both Reta and Oren Carpenter repeated this claim in interviews with federal agents.
Under federal statutes, Reta and Oren Carpenter are each subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
These cases are being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. They were investigated by the Social Security Administration, Office of Inspector General.Clifton, N.J., Ambulance Service Provider Arrested, Charged with Health Care FraudRead the Press Release
Company In Top 3 Percent of Transport Provider Medicare Earners After Operator Barred From Medicare Participation for Previous Crime
NEWARK, N.J. – A Passaic County man who operates a lucrative New Jersey ambulance company was arrested this morning at his home by special agents of the FBI and the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) on charges he ran the service after being barred from doing business with Medicare and laundered government payments, U.S. Attorney Paul J. Fishman announced.
Imadeldin Awad Khair, 54, of Paterson, New Jersey, is charged by complaint with one count of health care fraud and one count of money laundering. He is expected to appear today before U.S. Magistrate Judge Michael A. Hammer in Newark federal court.
According to the criminal complaint unsealed today:
As a result of his 2003 conviction on a New Jersey state health care charge, Khair was excluded from participating in any capacity in Medicare, Medicaid, or other federal health care program for a minimum period of 11 years.
Despite this, Khair has – since 2011 – been an operator and a de facto owner of K & S Invalid Coach, a licensed ambulance and wheelchair transportation service operating out of Clifton, New Jersey. Nearly all of K & S’ patients are Medicare beneficiaries requiring regular transportation to dialysis treatment. Since September 2011, Medicare Part B has paid more than $6 million in claims submitted by K & S. Thus far in 2014, K & S has been in the top 3 percent of the more than 400 ambulance transport providers in the state of New Jersey, as measured by receipt of payments from Medicare.
Since 2011, Khair and others at K & S have concealed his involvement at K & S from Medicare, including his substantial control over K & S’s bank accounts and operations, including the authority to hire and terminate employees, determine employee salaries, and enforce company policies. Since 2011, Khair has received more than $485,000 from K & S, and additional funds have been transferred to his wife.
After Medicare had directly deposited the money into a bank account in the name of K & S, Khair transferred money to various other accounts. In particular, on Nov. 15 2012, Khair wrote a check for $15,500 against a K & S operating account, made payable to an individual with the initials “E.A.,” endorsed by Khair, and deposited into an account in the name of E.A. Including this and other transactions from K & S operating accounts, Khair caused more than $86,000 to be transferred to that account. On Feb. 8, 2013, Khair caused a wire transfer in the amount of $86,295 to be made from the bank account in the name of E.A. for the purpose of completing a real estate transaction through which the property in which Khair resides was nominally transferred to E.A.
In filing the complaint, the United States is seeking to forfeit the property as proceeds and property involved in money laundering.
Each of the two counts with which Khair is charged carry a maximum potential penalty of 10 years in prison and a fine of $250,000, or twice the gain or loss from the offense.U.S. Attorney Fishman credited special agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and HHS-OIG, under the direction of Special Agent in Charge Thomas O’Donnell, with the ongoing investigation leading to these charges.
The government is represented by Assistant U.S. Attorneys Danielle Alfonzo Walsman and Danielle M. Corcione of the U.S. Attorney’s Health Care and Government Fraud Unit, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
The charges and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.
U.S. Attorney Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $540 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
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Khair, Imadeldin Awad Complaint
Citrus Heights Man Sentenced for Child Pornography CrimeRead the Press Release
SACRAMENTO, Calif. — Jason Carlsen, 41, of Citrus Heights, was sentenced today by United States District Judge John A. Mendez to five years in prison for possession of child pornography, United States Attorney Benjamin B. Wagner announced.
According to court documents, in August 2013, Carlsen was found with hundreds of images and videos showing child pornography on his cellphone. Carlsen used file sharing programs to send and receive child pornography with others, and in May 2013, he sent a series of text messages to a recipient in Kentucky that included sexually explicit photographs of a juvenile believed to be approximately 13 years old. Carlsen has been in custody since his arrest in March 2014, and on May 13, 2014, he pleaded guilty to the possession of child pornography charge.
This case was the product of an investigation by the Federal Bureau of Investigation and the Sacramento County Sheriff’s Department. Assistant United States Attorneys Kyle Reardon and Christopher S. Hales prosecuted the case.
Charleston Women Sentenced for Defrauding Crisis MinistriesRead the Press Release
Contact Person: Rhett DeHart (843) 727-4381
Columbia, South Carolina ---- United States Attorney Bill Nettles stated today that Carol Libby, age 56, was sentenced today in federal court in Charleston, South Carolina, for Wire Fraud, a violation of 18 U.S.C. § 1343. United States District Judge Richard M. Gergel of Charleston sentenced Libby to 48 months imprisonment and 3 years supervised release.
Evidence presented at her guilty plea hearing established that Libby was the Chief Financial Officer (CFO) of Crisis Ministries, the largest homeless charity in South Carolina. From 2006-2013, Libby, a certified public accountant (CPA), embezzled more than $440,000 from the charity. To execute the fraud, Libby caused more than 400 unauthorized checks to be issued to actual vendors and suppliers of Crisis Ministries. She then forged the names of the vendors on the back of the checks and wrote her bank account number under the forged endorsements. Through a series of financial manipulations involving wire communications, Libby caused the unauthorized checks to be deposited into bank accounts over which she had control.
The case was investigated by agents of the United States Secret Service and Charleston Police Department. Assistant United States Attorney Rhett DeHart of the Charleston office prosecuted the case.