Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Wednesday 20 August 2014
Lafayette Company Fined for Defrauding USDARead the Press Release
OAKLAND – Z.A.S. International, Inc. was sentenced yesterday to an $18,000 fine and ordered to pay the U.S. Department of Agriculture $17,985.34 in restitution for theft of government funds, announced United States Attorney Melinda Haag and Special Agent in Charge Lori Chan, USDA Office of Inspector General, Investigations.
Z.A.S. International pleaded guilty on Aug. 12, 2014, to one count of theft of government funds. According to the plea agreement, Z.A.S. admitted that, between 2009 and 2011, it defrauded the USDA of $17,985.34 by inflating travel costs that were reimbursed by the USDA. According to court documents, Z.A.S., based in Lafayette, Calif., is in the business of trading and marketing food products internationally. It participated in the USDA’s Market Access Program, which assists small businesses and cooperatives with marketing and promoting American agricultural goods and commodities in foreign markets, including through reimbursement of travel costs for international trade conferences. Z.A.S. defrauded the government by purchasing high-priced airline tickets for travel to trade conferences, requesting refunds of those tickets, and subsequently purchasing significantly lower-fare tickets that its employees actually used for travel. Z.A.S., however, applied for and received reimbursement for the higher-fare tickets.
Z.A.S. was charged in a criminal Information on Aug. 12, 2014, and pleaded guilty that same day to violating Title 18, United States Code Section 641, a Class A misdemeanor. The sentence today was handed down by the Honorable Kandis A. Westmore, United States Magistrate Court Judge, who fined the defendant $18,000, and also ordered it to pay $17,985.34 in restitution and a special assessment of $125. In sentencing Z.A.S., the Court stressed the need to deter such conduct by other participants in government programs, but noted the company’s full cooperation with the government’s investigation. Z.A.S. International indicated that it would pay the fine, restitution, and special assessment today.
Assistant U.S. Attorney Andrew S. Huang prosecuted this case with the assistance of Vanessa Quant. The prosecution is the result of an investigation by the United States Department of Agriculture, Office of the Inspector General, and is believed to be the first prosecution in the nation of a Market Access Program participant.
(Z.A.S. information )
Justice Department Sues to Stop South Florida Tax Return Preparer Engaged in Fraud and Earned Income Credit SchemesRead the Press Release
The United States has asked a federal court in Miami to permanently bar a South Florida man and his two Miami businesses, Ebenezer Tax Services Inc. and Primo Tax Service Inc., from preparing federal income tax returns for others, the Justice Department announced today. He is alleged to have defrauded the government out of more than $20 million.
Ernice Joseph, of Broward County, Florida, and his businesses are alleged to have prepared federal income tax returns that unlawfully understate income tax liabilities and overstate refunds through a variety of schemes. The complaint alleges that Joseph and his businesses prepared returns that unlawfully claim the Earned Income Tax Credit by reporting fictitious businesses or business income on clients’ Schedule C – Profit or Loss From Business. Joseph and his businesses prepare returns that claim education and other credits to which the taxpayers are not entitled in order to overstate their refunds. According to the complaint, the Internal Revenue Service (IRS) examined 76 returns prepared by Joseph and/or Ebenezer Tax Services and found that 74 contained a deficiency. The complaint alleges that, altogether, Joseph and Ebenezer Tax Service’s activities may have caused more than $20 million in loss to the U.S. Treasury. In addition, the complaint alleges that the revenue lost from Primo Tax Service’s activities could exceed $25 million.
Return-preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2014 . The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of fraudulent tax preparers. Information about these cases is available on the Justice Department website . An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page . If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. Ernice Joseph, et al.
Complaint for Permanent InjunctionJustice Department Reaches Agreement with the City of Baltimore to Prevent Disability DiscriminationRead the Press Release
The Justice Department today announced that it has reached an agreement with the city of Baltimore, Maryland, to end hiring practices that discriminate against people with disabilities. The agreement, filed as a consent decree along with a complaint in the U.S. District Court for the District of Maryland, resolves allegations by the department that the city engaged in a pattern or practice of discrimination under the Americans with Disabilities Act (ADA). Title I of the ADA prohibits employers from discriminating against individuals on the basis of disability in various aspects of employment, including hiring.
The department alleges that the city required job applicants, including an individual complainant, to submit to a medical examination and answer disability-related inquiries before the city made conditional offers of employment. Under the ADA, employers may not require applicants to submit to medical exams or answer disability-related inquiries before making conditional offers of employment. The department also alleges that the city refused to hire the complainant for a fire dispatcher position because of her disability, even though she was already working successfully as a dispatcher elsewhere and required no accommodations.
The consent decree must be approved by the court, and requires the city to:
· pay $65,000 to the complainant in compensatory damages;
· adopt new policies and procedures regarding the administration of pre-employment medical examinations and inquiries;
· provide training on the ADA to all employees who participate in making personnel decisions related to pre-employment medical examinations and inquiries;
· ensure that the city’s contract with any medical examiner provides that the examiner is required to comply with the ADA in conducting medical examinations and certify that it has reviewed ADA training materials;
· provide periodic reports to the department on compliance; and
· designate an employee to address ADA compliance matters.
“The Justice Department will not tolerate discriminatory, outdated stereotypes that prevent individuals with disabilities from being hired for positions for which they are qualified,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division.
Those interested in finding out more about the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov.
Jury Convicts Independence Woman of Firearms-related ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Independence, Mo., woman was convicted in federal court today for her role in a conspiracy to illegally make firearms available to her boyfriend, a convicted felon.
Candice Loyd, 29, of Independence, was found guilty of the charges contained in a Sept. 25, 2013, federal indictment. Loyd was convicted of one count of conspiracy and two counts of aiding and abetting a felon to possess a firearm.
Evidence introduced during the trial indicated that the purpose of the conspiracy was for Loyd to obtain firearms for her live-in boyfriend and the father of two of her children, Joshua Stamps, because he was a convicted felon who could not legally purchase firearms for himself.
In a separate and unrelated case, Stamps pleaded guilty on June 12, 2014, to leading a $1.2 million arson and insurance fraud conspiracy and to using fire to commit a federal crime (mail fraud). Stamps and his co-conspirators bought, over-insured and burned five houses, all in Kansas City, Mo. The total actual loss to insurance companies in the scheme was $434,938, while the total intended loss was $1,196,840. Stamps, who has not yet been sentenced, is subject to a mandatory minimum sentence of 10 years in federal prison without parole, up to 25 years in federal prison without parole, and must pay a money judgment of $434,938.
Stamps was originally charged as a co-defendant with Loyd in this separate indictment. However, under the terms of his plea agreement in the arson case, the charges against Stamps in this indictment will be dismissed.
When Kansas City, Mo., police officers executed a search warrant at Loyd’s residence on April 9, 2013, she told officers that firearms were kept in a safe in the children’s bedroom. Loyd initially claimed to be the owner of the two firearms that were found in the safe, a Taurus 9mm pistol (that she purchased in 2008) and a Ruger .40-caliber pistol. Loyd could not give a combination to the safe, and eventually admitted to police that Stamps had access to the safe and the combination to the safe. When officers forced the safe open, they recovered the two firearms, ammunition and documents belonging to both Loyd and Stamps.
Under federal statutes, Loyd is subject to a sentence of up to 25 years in federal prison without parole, plus a fine up to $750,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
Following the presentation of evidence, the jury in the U.S. District Court in Kansas City, Mo., deliberated for about an hour before returning the guilty verdict to U.S. District Judge Dean Whipple, ending a trial that began Tuesday, Aug. 19, 2014.
This case is being prosecuted by Assistant U.S. Attorney Kathleen D. Mahoney. It was investigated by the Kansas City, Mo., Police Deparment.Inmate Charged with Possessing Cell Phone in PrisonRead the Press Release
ERIE, Pa. - An inmate at the McKean Federal Correctional Institution in Bradford, Pennsylvania, has been indicted by a federal grand jury in Erie on a charge of possession of contraband in prison, United States Attorney David J. Hickton announced today.
The one-count indictment named Jose I. Aquino, 31, as the sole defendant.
According to the indictment presented to the court, on or about June 14, 2014, Aquino was in possession of contraband, namely a cell phone.
The law provides for a maximum total sentence of one year in prison, a fine of $100,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
Officers of the McKean Federal Correctional Institution 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.
Inmate at McKean Indicted for Possessing Contraband in PrisonRead the Press Release
ERIE, Pa. - An inmate at the McKean Federal Correctional Institution in Bradford, Pennsylvania, has been indicted by a federal grand jury in Erie on a charge of possession of contraband in prison, United States Attorney David J. Hickton announced today.
The one-count indictment named Keith Hightower, 29, as the sole defendant.
According to the indictment presented to the court, on or about May 9, 2014, Hightower was in possession of contraband, namely a weapon.
The law provides for a maximum total sentence of five years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
Officers of the McKean Federal Correctional Institution 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.
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney's Office today 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 August 20, 2014, and entering pleas of Not Guilty were:
PATRICIA ANN WEBB, a 56-year-old resident of Columbus, appeared on charges of wire fraud and filing false tax returns. If convicted of the most serious charges contained in the indictment, WEBB faces 20 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Internal Revenue Service and the Federal Bureau of Investigation. PACER Case Reference: 14-75
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: Kansas Man Created False Identities in Scheme to Re-sell DVDs and Blue-ray MoviesRead the Press Release
WICHITA, KAN. – A Derby, Kan., man has been indicted on federal charges of creating dozens of false identities in order to qualify for discounts on the purchase of DVD and Blue-ray movies by joining the Disney Movie Club and Columbia House DVD Club and then re-selling the movies, U.S. Attorney Barry Grissom said today.
Harvey C. Self, 45, Derby, Kan., is charged with nine counts of mail fraud, one count of money laundering and two counts of tax fraud. The indictment alleges Self resold DVDs and Blue-ray movies on eBay and Amazon and collected payments using PayPal.
The indictment alleges the U.S. Postal Inspection Service has identified 28 different mailing addresses Self created at post offices or commercial carrier boxes in Derby, Kechi, Andover, Haysville, Peck, Benton, Winfield, Valley Center, Udall, Oxford, Clearwater, Mulvane, Wichita, Augusta and Goddard. The list of false names he is alleged to have used incudes Michael Wittman, Jamie Davis, Stephanie Vogel, Jossalyn Hanna, Phil Scott, Scott Philips, Greg Clark, Joe Green, Jimmy Jackson, John Foster, Will Enos, Kevin Griffin, Travis Powell, Jennifer Lewis, Kami Anderson, Savannah Clayton and Jessie Hannaself.
The indictment alleges that investigators seized 2,833 DVDs and Blu-ray discs when they served a search warrant at Self’s home in Derby.
If convicted, he faces a maximum penalty of 20 years and a fine up to $250,000 on each count of mail fraud, a maximum penalty of 20 years and a fine up to $500,000 on the money laundering count and a maximum penalty of three years and a fine up to $100,000 on each tax fraud count. The FBI, the U.S. Postal Inspection Service, the Defense Criminal Investigative Service, Homeland Security Investigations and the Internal Revenue Service investigated. Assistant U.S. Attorney Aaron Smith is prosecuting.
OTHER INDICTMENTS
Chrystal M. Scherbarth, 30, Altoona, Kan., the former city clerk of the City of Altoona, is charged with three counts of bank fraud. The crimes are alleged to have occurred from June 2011 to November 2013 in Altoona.
The indictment alleges Scherbarth used her access to the city payroll system to embezzle money from the city. The indictment alleges she overpaid herself by raising her own salary, issuing unauthorized checks to herself and paying herself for vacation and sick leave she had not earned. The indictment also alleges the City of Altoona identified more than $36,000 worth of unauthorized charges on a credit card used by Scherbarth.
If convicted, she faces a maximum penalty of 30 years in federal prison and a fine up to $1 million. The Kansas Bureau of Investigation and the FBI investigated. Assistant U.S. Attorney Aaron Smith is prosecuting.
Melchor Ramirez-Romero, 39, a citizen of Mexico who has been living in Liberal, Kan., is charged with one count of unlawfully re-entering the United States after being deported. He was found July 31, 2014, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement’s Enforcement and Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Auner Gumercindo Vail-Lucas, 30, a citizen of Guatemala, is charged with unlawfully re-entering the United States after being deported. He was found Aug. 7, 2014, in Allen County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement’s Enforcement and Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Teresa Magna, 51, Spring Valley, Calif., is charged with one count of distributing methamphetamine and one count of interstate travel in furtherance of drug trafficking. The crime is alleged to have occurred Aug. 6, 2014, in Russell County, Kan
If convicted, she faces a penalty of not less than five years and not more than 40 years and a fine up to $5 million on the distribution charge, and a maximum penalty of five years and a fine up to $250,000 on the other count. The Drug Enforcement Administration investigated. Assistant U.S. Attorney David Lind is prosecuting.
Brandi Meadows, 31, Oklahoma City, Okla., is charged with one count of possession with intent to distribute methamphetamine, and one count of interstate travel in furtherance of drug trafficking. The crime is alleged to have occurred Aug. 11, 2014, in Sedgwick County, Kan.
If convicted, she faces a penalty of not less than 10 years and a fine up to $4 million on the possession count and a maximum penalty of five years and a fine up to $250,000 on the other count. The Drug Enforcement Administration investigated. Special Assistant U.S. Attorney Michelle Jacobs is prosecuting.
Crystal Zoe Amarillas-Norzagaray, 23, Tuscon, Ariz., and Pilar Angel Leon-Beltran, 35, Tuscon, Ariz., are charged in a superseding indictment with one count of conspiracy to distribute 103 kilograms of marijuana and one count of possession with intent to distribute 103 kilograms of marijuana. In addition, Leon-Beltran is charged with one count of aggravated illegal re-entry and one count of interstate travel in furtherance of drug trafficking. In addition, Amarillas-Norzagaray is charged with one count of interstate travel in furtherance of drug trafficking. The crimes are alleged to have occurred Dec. 30, 2013, in Ellis County, Kan.
Upon convictions, the crimes carry the following penalties:
Conspiracy, possession with intent to distribute: A maximum penalty of 20 years and a fine up to $1 million.
Aggravated re-entry: A maximum penalty of 20 years and a fine up to $250,000.
Interstate travel in furtherance of drug trafficking: A maximum penalty of five years and a fine up to $250,000.The Drug Enforcement Administration investigated. Special Assistant U.S. Attorney Michelle Jacobs is prosecuting.
Hector Manuel Briceno, 25, Paramount, Calif., is charged with one count of possession with intent to distribute methamphetamine and one count of interstate travel in furtherance of drug trafficking. The crimes are alleged to have occurred Aug. 17, 2014, in Sherman County, Kan.
If convicted, he faces a penalty of not less than 10 years and fine up to $4 million on the possession charge, and a maximum penalty of 5 years and a fine up to $250,000 on the other count. The Drug Enforcement Administration investigated. Assistant U.S. Attorney Michelle Jacobs is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Indictment Charges Brothers, Former Operators of Peoria Service Station, with $6.1 Million Tax FraudRead the Press Release
Mail Fraud, Filing False Tax Returns, Benefits Fraud,
and Bank Fraud Also ChargedPeoria, Ill. – A federal grand jury today charged two brothers who formerly owned and operated a Fast Stop service station in Peoria, Ill., with conspiracy to commit tax fraud and mail fraud, as announced by U.S. Attorney Jim Lewis, Central District of Illinois. Shaher M. Mizyed, 50, of Naperville, Ill., and Mohammad M. Mizyed, 46, of the 2800 block of West Playden, Peoria, Ill., are both charged with conspiracy to commit tax fraud resulting from failure to report to the IRS approximately $6.1 million in gross receipts received and conspiracy to commit mail fraud related to approximately $200,000 in medical and other benefits fraudulently obtained from the state of Illinois.
According to the indictment, at various times during the alleged conspiracy, from 2006 to 2011, one or the other of the brothers was identified as the owner of Tira Oil LLC, which operated the Fast Stop gas station and convenience store located at 3606 N. Prospect Road in Peoria. The indictment alleges that on a daily basis one of the brothers opened the business, and reviewed and recorded the previous day’s sales receipts. To divert corporate receipts to their own use, the indictment alleges that not all the cash generated from the business’s operation was deposited into Tira Oil’s bank account. The two allegedly split the remaining cash for personal use as well as to pay some business expenses. Further, to conceal the scheme, false information was reported to the accountant who prepared the tax returns for Tira Oil. The indictment alleges that Tira Oil owes approximately $171,000 in corporate income taxes resulting from failure to report the additional gross receipts to the IRS
The men are charged with conspiracy to commit mail fraud related to allegations that from 2003 to December 2013, members of the conspiracy concealed income and provided false information to the Illinois Department of Human Services to obtain approximately $200,000 in medical and other benefits. To further the conspiracy, false information and forms were submitted to DHS that reported hours worked and hourly wages for Shaher and Mohammad in amounts ranging from $225.00 per week, $400.00 – 450.00 every two weeks, and gross monthly income of $800.00.
Shaher is charged with four counts of mail fraud related to submission of Illinois Sales and Use Tax Returns to the state of Illinois that allegedly substantially under-reported the amount of gas and other goods sold at Tira Oil. According to the indictment, in April 2010, during an investigation by the Illinois Department of Revenue, revenue agents served Shaher with a formal demand for production of books and records; despite the formal demand, Shaher did not produce all the books and records as required.
In February 2011, Shaher allegedly represented to Illinois Department of Revenue agents that sales records of Tira Oil had been destroyed in a fire at his home, when, in fact, the sales receipts were found at the Fast Stop gas station during execution of a search warrant on Feb. 28, 2012. As a result of Shaher’s alleged failure to report approximately $4.3 million in sales of gas and other goods by Tira Oil, the state of Illinois was defrauded of approximately $347,000 in state tax revenues.
Shaher Mizyed is charged with one count of bank fraud for allegedly providing a false 2007 tax return to the bank in March 2009, in support of an application to refinance his home mortgage in the amount of approximately $328,500. In fact, the indictment alleges the tax return provided to the bank was not the the tax return Shaher had filed with the IRS.
Mohammad Mizyed is also charged with bank fraud for allegedly providing false 2007 and 2008 tax returns to the bank in support of his request for a mortgage of approximately $319,000 to purchase his home in October 2009. The tax returns Mohammad provided to the bank were allegedly not the returns he had filed with the IRS.
In addition to the two conspiracy charges, Shaher is charged with three counts of filing false corporate tax returns; two counts of filing false amended corporate tax returns; four counts of mail fraud; and, one count of bank fraud. Mohammad is also charged with two counts of filing false personal tax returns and one count of bank fraud, in addition to the two conspiracy charges.
If convicted, the maximum statutory penalty for conspiracy to defraud the United States and to violate tax laws is up to five years in prison; for filing false or amended corporate or personal tax returns, the penalty is up to three years in prison; for bank fraud the penalty is up to 30 years in prison; up to five years in prison for conspiracy to commit mail fraud, and for each count of mail fraud, the statutory penalty is up to 20 years in prison.
The case is being prosecuted by Supervisory Assistant U.S. Attorney Darilynn J. Knauss and Special Assistant U.S. Attorney Eugene Bian of the Office of the Illinois Attorney General. The charges are the result of investigation by Internal Revenue Service Criminal Investigation, the Federal Bureau of Investigation and the Illinois Department of Revenue.
The defendants will be given a notice to appear in federal court on a date to be determined by the U.S. Clerk of the Court.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.
Guardian of Justice AwardRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that two Kansas City, Mo., police detectives and an agent with the U.S. Department of Agriculture have received the Guardian of Justice Award.
Kansas City Police Department Detectives Josh Davis and James Svoboda and USDA Special Agent David Colegrove were honored on Thursday, Aug. 14, 2014, during the 12th Annual LECC Training Seminar in Springfield, Mo.
Josh Davis & James Svoboda
Davis and Svoboda were recognized for their investigative excellence, selfless collaboration, tireless trial support, commendable diligence and professionalism, and noteworthy assistance in the successful prosecution of a dozen defendants involved in a 10-year long drug-trafficking conspiracy that resulted in the death of one individual and the distribution of more than three kilograms of heroin in the Kansas City area.
The lead defendant, Timothy M. Kirlin, also known as “Jim Curlon,” 34, of Kansas City, was found guilty at trial of all nine counts contained in an Oct. 16, 2013, federal indictment. Kirlin was found guilty of participating in a conspiracy to distribute 1,000 grams or more of heroin, as well as cocaine, from Jan. 1, 2002, to Feb. 3, 2012.
On March 5, 2002, Kirlin distributed heroin to Joshua Webb, and the use of this heroin by Webb resulted in his death.
Kirlin traveled to Dallas, Texas, at least once a month to purchase heroin and other drugs for resale in the Kansas City area. The usual amount that Kirlin would purchase in Dallas was four ounces of heroin, although he bought more on occasion. He sometimes transported the heroin back to Kansas City by hiding it in his rectum. Because Kirlin had been shot in the head, he was unable to drive himself, and would ride the bus to Texas and frequently enlist the aid of others in the conspiracy to drive him from place to place.
In addition to the conspiracy, Kirlin was found guilty of being a felon in possession of explosives. Kirlin, who has two prior felony convictions for possession of a controlled substance, was in possession of four sticks of explosives (along with manuals on how to build explosive devices) on Feb. 2, 2012. Kirlin was also convicted of six counts of distributing heroin and one count of possessing heroin with the intent to distribute.
Kirlin, who has not yet been sentenced, is subject to a mandatory sentence of life in federal prison without parole. One co-defendant was convicted with Kirlin at trial and 10 co-defendants pleaded guilty.
David Colegrove
Colegrove was recognized for his investigative excellence, selfless collaboration, tireless trial support, commendable diligence and professionalism, and noteworthy assistance in the successful prosecution of eight defendants involved in a scheme to steal nearly $1 million worth of trucks and trailers and their cargo in a multi-state area.
The lead defendant, Kenneth Ray Borders, 43, of Kansas City, Mo., and two co-conspirators were found guilty at trial of participating in a conspiracy that involved the theft of commercial trucks and trailers and their cargo in Missouri, Kansas, Florida, Arkansas, Oklahoma, and Nebraska. They worked together to steal trucks, trailers, and cargo and then dispose of them. Sometimes they used the trucks and trailers themselves to make money by hauling loads for customers and sometimes they sold the stolen trucks and trailers.
The conspiracy involved the thefts of five Freightliner trucks and 17 trailers between 2005 and 2011. The stolen trailers included refrigerated trailers containing such cargo as 39,000 pounds of meat, 565 boxes of beef valued at $149,790, $125,000 worth of frozen ribs, and several refrigerated trailers that each contained tens of thousands of dollars’ worth of frozen chicken, including a load of frozen chicken wings valued at $59,706. Also stolen were utility trailers containing such cargo as Budweiser beer valued at $16,657, Nike shoes valued at $217,353 and 21,018 pounds of Little Sizzler sausages.
Stolen cargo was sold cheaply to anyone who would buy it. Some of the cargo was sold out of the back of the trailer; some of it was sold to a tow truck driver or a convenience store operator to resell.
Jon Dirk Dickerson, 56, of Raytown, Mo., and his son, Kyle Wayne Dickerson, 31, of Holden, Mo, were also convicted at trial. The Dickersons used the stolen trucks and trailers in their own trucking business, sometimes just for replacement parts with the remains sold for scrap. Since they had little financial investment in the stolen trucks and trailers, and knew that they had a readily-available and cheap supply of stolen trucks and trailers, they had little incentive to maintain and repair their fleet. As a result, their fleet wore out and had safety issues, such as problems with brakes and tires. When their fleet wore out, they simply replaced them with more stolen trucks and trailers. The Dickersons did not bother to maintain and repair their trucks and trailers but continued to operate them in interstate commerce. As a result, DOT/FMCSA and other law enforcement repeatedly cited their company and drivers for failing inspections and violating regulations. The company's compliance reviews led to unsatisfactory safety ratings which led to a total of $450,000 in fines and numerous “out of service orders” directing them to cease operating in interstate commerce. The Dickersons just ignored the orders and the fines.
Three additional co-defendants pleaded guilty to receiving stolen goods and two additional defendants pleaded guilty in separate, but related, cases to their roles in the conspiracy.
Guardian of Justice Award
The annual Guardian of Justice Award recognizes a state or local officer as well as a federal agent for investigative excellence, selfless collaboration, tireless trial support, commendable diligence and professionalism, and noteworthy assistance to prosecution. The prestigious law enforcement award is presented by the U.S. Attorney’s Office each year during the law enforcement training conference.Former Saratoga County Deputy Sheriff Pleads Guilty to Drug ChargeRead the Press Release
Transported a Confidential Source Who Claimed to Possess Cocaine in an FBI Sting
ALBANY, NEW YORK —CHARLES E. FULLER, age 46, of Corinth, New York, pled guilty today in Albany before Chief United States District Court Judge Gary L. Sharpe to one count of attempting to aid and abet the possession with intent to distribute a controlled substance, announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent-in- Charge, Federal Bureau of Investigation, Albany Division. Fuller faces at least five years of imprisonment and up to forty years of imprisonment.
During the plea hearing, Fuller admitted that in February of 2014, while he was employed as a Saratoga County Deputy Sheriff, he accepted a total of $5,000 from a confidential source supervised by the Federal Bureau of Investigation as payment for transporting the confidential source while the source was carrying what Fuller believed to be cocaine. The source actually had imitation cocaine. The defendant made two trips from Albany to Warren County: one on February 19, 2014 and one on February 27, 2014. During the first trip, the defendant drove the source with what he believed to be 250 grams of cocaine in return for $1,000, and during the second trip, the defendant transported the source with what he believed to be one kilogram of cocaine in return for $4,000.
Sentencing is scheduled for December 18, 2014, at 1:00 p.m. in Albany, New York. This case was investigated by the Federal Bureau of Investigation. This case is being prosecuted by Assistant United States Attorney Daniel Hanlon.
Former San Ysidro School District Superintendent Pleads Guilty to Extracting Political Contributions from Prospective Contractor by Threatening to Withhold WorkRead the Press Release
SAN DIEGO – Former superintendent of the San Ysidro School District Manuel Paul pled guilty today in federal court to deprivation of benefits for political contributions. Paul worked in the San Ysidro School District (“SYSD”) for 38 years as a teacher, principal, and superintendent, a post he held from 2007 until his resignation in 2013.
According to court documents, Paul had several duties as superintendent, including recommending contractors for consideration and approval by the SYSD Governing Board for SYSD construction projects.
Paul admitted in his plea agreement to requesting that a contractor (“Contractor A”) make $3,600 in campaign contributions to three political candidates for the 2010 Board election, identified in the plea agreement as Candidates A, B, and C. Paul admitted that he made clear that Contractor A’s inclusion on the list of potential contractors for future District building projects was contingent on Contractor A making the payment. According to the plea agreement, shortly thereafter – and only two months before the 2010 Board election – Paul accepted $2,500 in cash from Contractor A in the parking lot of a Chula Vista restaurant. Paul admitted that he then contributed a portion of the $2,500 to the political campaigns of Candidates A, B, and C by purchasing campaign signs from a print shop in Tijuana. According to court documents, Candidates A, B, and C won the three open seats.
Charging documents allege that almost two years later, in July 2012, Paul provided Candidates A, B, and C a receipt for the purchase of $1,401 in campaign signs for the 2010 election. The receipt lists a third party as the purchaser of the signs.
Simultaneous with his guilty plea, Paul also entered into a stipulation with California’s Fair Political Practices Commission, in which he admitted to receiving a gift in excess of the annual gift limit by accepting the $2,500 from Contractor A. As part of his settlement with the FPPC, Paul agreed to pay a $5,000 fine. The stipulation will be considered by the FPPC at its October hearing.
United States Attorney Laura E. Duffy stressed that her office will continue to pursue vigorously any criminal activity that seeks to introduce illegal money into campaigns. “Today’s guilty plea is a stark reminder that illegal money in our elections – regardless of the amount – is a threat to our democratic form of government and will be treated as such by our office. All citizens of our district have the right to elections free from dollars obtained through coercion.”
FBI Special Agent in Charge, Daphne Hearn, commented, "We demand the best from our public servants and expect them to deal honestly and fairly when conducting the public's business. Mr. Paul did not do that, and will now be held accountable for his actions." The FBI encourages the public to report allegations of public corruption to the FBI public corruption hotline at telephone number (877) NO - BRIBE (662-7423).
United States Magistrate Judge William V. Gallo ordered Paul to appear on November 18, 2014, for sentencing.
DEFENDANT Case Number: 14CR2351-H Manuel Paul Age: 63 Bonita, CA CHARGESDeprivation of Benefit for Political Contribution – Title 18, U.S.C., Section 601
INVESTIGATING AGENCY
Maximum penalty: 1 year imprisonment and $100,000 fineFederal Bureau of Investigation
*Indictments and complaints are not evidence that the defendant committed the crime charged. All defendants are presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.
Former Los Alamos National Laboratory Worker Sentenced for Violating Atomic Energy Act ViolationsRead the Press Release
ALBUQUERQUE – The Justice Department today announced that a former contract employee at the Los Alamos National Laboratory (LANL) was sentenced this morning for conspiring to violate the Atomic Energy Act by communicating classified nuclear weapons data to a person believed to be a Venezuelan government official, and making false statements to the FBI.
Marjorie Roxby Mascheroni, 71, of Los Alamos, N.M., was sentenced by U.S. District Judge William P. Johnson to a year and a day in federal prison followed by three years of supervised release based on a guilty plea entered in June 2013. Her husband, Pedro Leonardo Mascheroni, 79, a naturalized U.S. citizen from Argentina who is also a former LANL employee, also entered a guilty plea in June 2013, and is in federal custody pending his sentencing hearing.
According to court filings, Mascheroni, a Ph.D. physicist, worked as a scientist at LANL from 1979 to 1988 and held a security clearance that allowed him access to certain classified information, including “Restricted Data.” Roxby Mascheroni worked at LANL between 1981 and 2010, where her duties included technical writing and editing. She also held a security clearance at LANL that allowed her access to certain classified information, including “Restricted Data.” As defined under the Atomic Energy Act, “Restricted Data” is classified information concerning the design, manufacture or use of atomic weapons; the production of special nuclear material; or the use of special nuclear material in the production of energy.
Mascheroni and Roxby Mascheroni were indicted in Sept. 2010, and charged with conspiracy to communicate and communicating Restricted Data to an individual with the intent to secure an advantage to a foreign nation. The indictment also charged the couple with conspiracy to convey and conveying classified Restricted Data. It also charged Mascheroni with concealing and retaining U.S. records with the intent to convert them to his own use and gain, and both defendants with making false statements.
Roxby Mascheroni pled guilty to Count 6 of the indictment, charging her with conspiracy, and Counts 16 through 22, charging her with making false statements. She also pleaded guilty to an information charging her with conspiracy to communicate Restricted Data. In entering her guilty plea, Roxby Mascheroni admitted that between Oct. 2007 and Oct. 2009, she conspired with Mascheroni to convey Restricted Data belonging to the United States to another person with reason to believe that the information would be used to secure an advantage to Venezuela. She also admitted making materially false statements to the FBI when she was interviewed in Oct. 2009.
Mascheroni pleaded guilty to Counts 7 and 8 of the indictment, charging him with conversion of government property, and Counts 10 through 15, charging him with making false statements. Mascheroni also pleaded guilty to an information charging him with two counts of communication of Restricted Data and one count of retention of national defense information. Mascheroni admitted that in Nov. 2008 and July 2009, he unlawfully communicated Restricted Data to another individual with reason to believe that the data would be utilized to secure an advantage to Venezuela. He also admitted unlawfully converting Department of Energy information to his own use and selling the information in Nov. 2008 and July 2009, and failing to deliver classified information relating to the United States’ national defense to appropriate authorities and instead unlawfully retaining the information in his home. Finally, Mascheroni admitted making materially false statements to the FBI when he was interviewed in Oct. 2009.
The indictment in this case did not allege that the government of Venezuela or anyone acting on its behalf sought or was passed any classified information, nor did it charge any Venezuelan government officials or anyone acting on their behalf with wrongdoing. The indictment also did not allege any wrongdoing by other individuals working at LANL.
This investigation was conducted by the FBI’s Albuquerque Division with assistance from the Department of Energy and LANL. The prosecution is being handled by Assistant U.S. Attorneys Fred J. Federici, Dean Tuckman and Holland S. Kastrin of the U.S. Attorney’s Office for the District of New Mexico, and Acting Section Chief Kathleen Kedian and Trial Attorney David Recker of the Counterespionage Section of the Justice Department’s National Security Division.
Former Lonsdale Debt Collector Sentenced to 175 Months in Prison for Attempting to Steal More Than $700,000 Through Identity Theft and FraudRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of KHEMALL JOKHOO, 36, to 175 months in federal prison for attempting to steal more than $700,000 by using the identities of more than 60 victims. On November 5, 2013, a jury in United States District Court in Minneapolis convicted JOKHOO of all the charges presented to them, including Aggravated Identity Theft, Bank Fraud, Mail Fraud, Wire Fraud, and False Personation of an Officer or Employee of the United States.“Identity theft is a widespread problem,” said U.S. Attorney Luger. “Working with our partners in local and federal law enforcement, including the Minnesota Financial Crimes Task Force, we stopped this defendant from targeting additional victims. Only through continued partnership among law enforcement officials will we stem the tide of financial fraud and identity theft. There is more work to be done.”
As proven at trial and according to documents filed in court, JOKHOO, formerly registered as a debt collector, was the owner and sole employer of First Financial Services, Inc. (First Financial), a collection agency licensed in Minnesota from May 9, 2002, until November 3, 2009. As a debt collector, the defendant had access to sensitive credit information, including social security numbers, bank account information, dates of birth, addresses, and other identifying information of the victims of his scheme. JOKHOO used this information to harass and intimidate victims and to demand payment to him for purported debts. When he could not convince victims to pay him, JOKHOO impersonated victims, using their bank account and other identifying information to take over and steal directly from their accounts.
According to documents filed in court, JOKHOO, in addition to using intimidation tactics, threatened victims with physical harm if they did not pay him. With regard to one victim, a disabled veteran, the defendant threatened to “push his wheelchair over the bridge,” if he did not pay. JOKHOO also targeted elderly victims as part of his scheme. Assistant U.S. Attorney Lola Velazquez-Aguilu said: “The term ‘identity theft’ seems an inadequate description for what the defendant did to the victims in this case. He used their identifying information not only to steal their money, but also to terrorize them, taking pleasure in making other human beings feel completely powerless and without worth. This defendant’s sentence
sends an important message to debt collectors who use their positions of trust to steal.”Assistant U.S. Attorneys Velazquez-Aguilu and LeeAnn K. Bell prosecuted this case.
The Minnesota Financial Crimes Task Force, Minnesota Department of Commerce, United States Postal Inspection Service, and Lonsdale Police Department conducted the investigation.
The Minnesota Financial Crimes Task Force was established under state law, and is comprised of local, state, and federal law enforcement investigators, who work to combat the growing trend of cross-jurisdictional financial crimes.
Defendant Information:KHEMALL JOKHOO
Lonsdale, MN
Convicted:
• Bank Fraud, 11 counts
• Aggravated Identity Theft, 10 counts
• Mail Fraud, 9 counts
• Wire Fraud, 2 counts
• False Personation of an Officer or Employee of the United States, 1 count
Sentenced:
• 175 Months in federal prison
• 5 years supervised releaseFormer Hillsborough County Resident Pleads Guilty to Conspiracy to Commit Bank, Wire and Mail FraudRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Brendan Bolger (40, Chicago, IL) today pleaded guilty to conspiracy to commit wire, mail and bank fraud. Bolger faces a maximum penalty of 30 years in federal prison.
According to the plea agreement, in 2005, entities controlled by co-conspirators entered into a contract to purchase The Arbors, an apartment complex in Hillsborough County, Florida. The new owners of The Arbors then engaged in a plan to convert the complex from rental apartment units to condominium units. The developers financed their purchase of The Arbors with a loan from Corus Bank, a financial institution whose deposits were then insured by the FDIC. The loan agreement imposed strict conditions upon the timing of the conversion process. It required that the developers could not file a Declaration of Condominium or close on any condominium unit unless they had sales on 80 units and closed on all of them within 45 days of the closing on the sale of the first condominium unit. The Corus loan agreement also specified that Corus was to receive 100% of the net proceeds of the sale of the first 80 units and that all of these events had to occur within one year of the loan agreement. The Corus loan agreement also set forth substantial financial penalties for the developers if they failed to satisfy these requirements.
Bolger aided the developers in the sale of numerous condominium units at The Arbors through his company, Capital Management Guarantee, LLC. In order to induce buyers to purchase units at The Arbors, Bolger created an addendum to the purchase contract that offered buyers various incentives such as rental supplements, money to defray maintenance costs and a design credit to upgrade the unit’s amenities. When the buyers cancelled the design credit within 10 days of signing the addendum, Bolger paid a kickback for the amount of the design credit to the buyer from Capital Management’s bank account. In this manner, Bolger and other co-conspirators failed to disclose to both Corus Bank and to the purchasers’ mortgage lenders material facts about the financing of the sale of The Arbors condominium units.
Bolger has agreed to forfeit specific property, including but not limited to, a combined forfeiture money judgment of $18,394,134.00 which represents $4,322,264 associated with the fraud perpetrated on Corus Bank and $14,071.870 associated with the fraud perpetrated on the mortgage lenders.
This case was investigated by the Federal Bureau of Investigation and the Federal Housing Finance Agency Office of Inspector General. It is being prosecuted by Assistant United States Attorney Jay Hoffer and Special Assistant United States Attorney Chris Poor.
Former Hell's Angels Member Pleads Guilty to Methamphetamine TraffickingRead the Press Release
Rochester, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Richard E. Riedman, 40, of Webster, NY, pleaded guilty before U.S. District Judge Charles J. Siragusa to conspiracy to distribute and possession with intent to distribute, methamphetamine. The charge carries a maximum penalty of 20 years in prison, a fine of $1,000,000, or both.
Assistant U.S. Attorney Brett A. Harvey, who is handling the case, stated that the charges stemmed from a joint federal, state and local investigation, which revealed that the defendant was responsible for obtaining quantities of methamphetamine from drug suppliers, including fellow Rochester Hell’s Angels member James H. McAuley, Jr., and distributing those drugs to others in the Western District of New York between 2004 and 2010.
This case was part of a larger investigation that resulted in the indictment and arrest of members and associates of the Rochester and Monterey (California) Hell's Angels for drug trafficking and racketeering-related offenses in February 2012. Along with Riedman, Monterey (California) Hell's Angels President Richard W. Mar, Rochester Hell's Angels members James H. McAuley, Jr., of Oakfield, NY, and Jeffrey A. Tyler, of Rochester, NY, and Donna Boon, of Oakfield, NY, and Gordon L. Montgomery, of Batavia, NY, are charged with conspiracy to possess with intent to distribute, and to distribute, 500 grams or more of methamphetamine. Another defendant, Paul Griffin, of Blasdell, NY, was convicted of conspiracy to distribute, and to possess with intent to distribute, 50 grams or more of methamphetamine.
McAuley, Rochester Hell's Angels member Robert W. Moran, Jr. a/k/a Bugsy, of Rochester, along with Gina Tata, of Rochester, are charged in the same indictment with assault with a dangerous weapon in aid of racketeering activity. Moran and Tata are also charged with conspiracy to commit assault with a dangerous weapon in aid of racketeering activity, and Tata and Timothy M. Stone, of Gates, NY, are charged with being accessories after the fact to the assault and conspiracy.
The plea is the culmination of an investigation on the part of the Federal Bureau of Investigation, the Genesee County Sheriff's Office, under the direction of Sheriff Gary T. Maha, the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, the New York State Police, under the direction of Major Scott Crosier, the City of Batavia Police Department, under the direction of Chief Shawn Heubusch, and the Village of LeRoy Police Department, under the direction of Chief Christopher K. Hayward.
Sentencing is scheduled for November 24, 2014, at 10:00 a.m. before Judge Siragusa.Former Department of Public Safety Employee and Co-conspirators Plead Guilty to Identity Theft ChargesRead the Press Release
Hattiesburg, Miss - Former Mississippi Department of Public Safety employee Yolanda Jean Perkins, 48, of Laurel, Lorena Gomez, 33, of Laurel, and Jose Martel Rivera, 32, an illegal alien from Mexico, all pled guilty in federal court on August 18, 2014, to conspiracy to commit identity theft, announced U.S. Attorney Gregory K. Davis and Raymond Parmer, Special Agent in Charge of Homeland Security Investigations.
The conspiracy involved the sale by Gomez and Rivera of authentic Texas birth certificates with matching social security cards to illegal aliens, and the subsequent purchase of Mississippi drivers’ licenses and state IDs, with the assistance of Perkins who worked at the Laurel driver’s license bureau.
“Fraudulent documents threaten the security of all citizens by making it easier for criminals to commit a range of offenses from identity theft to potential terrorism,” said Raymond R. Parmer, Jr., Special Agent in Charge of HSI New Orleans. “Further, this scheme created a nightmare scenario in which citizens could have been held responsible for driving infractions or criminal acts committed by aliens possessing fraudulent identity documents in their names. These criminals willingly stole identities and threatened national security all in the name of a quick buck. These guilty pleas show HSI and its state partners will continue to investigate and seek prosecution of these cases wherever they occur.” Parmer oversees a five-state area of operations to include Mississippi, Alabama, Arkansas, Louisiana, and Tennessee.
The defendants will be sentenced by U.S. District Judge Keith Starrett on October 27, 2014. The maximum penalty for conspiracy is 15 years in prison and $250,000 fine.
This case is the result of an investigation by Homeland Security Investigations and the Mississippi Bureau of Investigation. Assistant U.S. Attorney Annette Williams is prosecuting the case.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:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
Help us combat the proliferation of sexual exploitation crimes against children.
Former Chief Merchandising Officer of Aeropostale, Inc. Sentenced to 8 Years in Prison for $25 Million Bribery SchemeRead the Press Release
Christopher Finazzo, the former Executive Vice President and Chief Merchandising Officer of national teenage clothing retailer Aéropostale, Inc. (“Aéropostale”), was sentenced in federal court in Brooklyn, New York, to 8 years in prison. In April 2013, Finazzo was convicted of all 16 counts of fraud and bribery, following a three-week jury trial, for directing more than $350 million in t-shirt and fleece business to South Bay Apparel Inc. (“South Bay”), a company owned by Hollywood movie producer Douglas Dey, in exchange for receiving more than $25 million in kickbacks from Dey. As part of the sentence, Finazzo was also sentenced to 3 years’ supervised release, ordered to forfeit more than $25 million to the government, and pay $13,690,822.94 in restitution to Aéropostale, a publicly traded company on the New York Stock Exchange. Dey pleaded guilty in September 2012 to conspiracy to violate the Travel Act through commercial bribery for his role in the scheme and was sentenced on August 6, 2014 to 42 months in prison.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“For over a decade, Christopher Finazzo abused his position of power at Aéropostale and betrayed the trust placed in him by the company, its investors, and its employees by lining his own pockets at his employer’s expense. To succeed in this decade-long kickback scheme, Finazzo lied on numerous disclosure forms and caused Aéropostale to make false filings with the Securities and Exchange Commission. These lies and false representations compromised the financial well-being of a publicly-traded retail company. Those who seek to commit corporate fraud by abusing their positions of trust are on notice that they will be held accountable for their crimes,” stated United States Attorney Lynch. Ms. Lynch thanked the FBI and the Securities and Exchange Commission for their assistance.
Shortly after Finazzo was hired by Aéropostale in July 1996, he and Dey entered into a fraudulent scheme whereby Finazzo directed Aéropostale’s graphic t-shirt business to South Bay in exchange for splitting South Bay’s profits with Dey. From 1996 to 2006, Finazzo caused Aéropostale to buy more than $350 million in t-shirt and fleece merchandise from South Bay, often for significantly higher prices and lower quality than was available from other suppliers. In exchange, Dey paid Finazzo more than $25 million in bribes and kickbacks, equaling approximately 50% of South Bay’s profits. In 2005 alone, at the peak of the business between Aéropostale and South Bay, Dey paid Finazzo more than $13 million in kickbacks. The kickbacks were paid through C&D Retail Consultants, a shell consulting corporation set up by Finazzo, and through companies jointly-owned by Finazzo and Dey.
Finazzo’s lies and omissions about his relationship with Dey on numerous disclosure forms, which he was required to complete as a senior officer of Aéropostale, caused Aéropostale to make multiple false filings with the SEC. Finazzo completely controlled Aéropostale’s business with South Bay and favored Dey and South Bay to the detriment of Aéropostale’s profit margins. For example, Finazzo refused to comply with Aéropostale’s then Chief Executive Officer Julian Geiger’s directive to place 25% of the t-shirts orders with overseas vendors at a significantly lower cost than what Aéropostale paid South Bay, thereby costing Aéropostale approximately $6 million.
When Aéropostale’s employees sought to lower the price of t-shirts purchased from South Bay or hold South Bay accountable for poor quality and late deliveries, Finazzo stepped in and quashed their efforts. For example, when a graphic t-shirt merchant questioned South Bay’s cost structure, Finazzo emailed the head of Aéropostale’s men’s division and stated, “I would like to let you know that if I hear that [the merchant] is talking trash about South Bay to other people in the company, I will not tolerate that, and I will be swift in my actions.” Similarly, when other employees questioned South Bay’s effective monopoly on the t-shirt business, Finazzo sent an email to his senior staff stating, “Last night when I could not sleep I decided that as long as I’m here we will run the business as we started it with our key vendors … I will not change our vendor structure or the way we set up this business and I guess I can make that decision. I want South Bay to be the main t-shirt supplier.”
The sentence was imposed by United States District Judge Roslynn R. Mauskopf.
The government’s case was prosecuted by Assistant United States Attorneys Winston M. Paes and Claire Kedeshian.
This prosecution was the result of efforts 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 is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets, and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.
The Defendant:
CHRISTOPHER FINAZZO
Age: 57
Garden City, New York
E.D.N.Y. Docket No. 10-CR-457
Former Buffalo Woman Pleads Sentenced on Drug ChargeRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Jacquelyn Witman, 32, formerly of Buffalo, N.Y., now residing in the Atlanta, Georgia, who was convicted of conspiracy to possess with intent to distribute, and to distribute, marijuana, was sentenced to time served, six months home detention and two years supervised release by Chief U.S. District Court Judge William M. Skretny.
Assistant U.S. Attorney Timothy C. Lynch, who handled the case, stated that between 2010 and February 2011, the defendant conspired with others to distribute marijuana. On February 21, 2011, Witman attempted to board a flight at the Buffalo Niagara International Airport to Arizona. During a security screening, screeners found $21,150 in U.S. currency, money the defendant admitted was the proceeds of marijuana sales.
During the investigation, law enforcement officers seized approximately $1,000,000 in U.S. currency.
Other defendants charged in the case include Shane Grafman, of Phoenix, Arizona and Elijah Chaffino, of Tempe Arizona, who have been convicted and are awaiting sentencing. Charges are still pending against defendants Jordan Ali, formerly of Alden, N.Y, Jason Nati and Gabriel Rodriguez, both of Buffalo, N.Y. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The sentencing is the culmination of investigation by the Drug Enforcement Administration, under the direction of James J. Hunt, Acting Special Agent in Charge, New York Field Division; Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero; Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Acting Special Agent in Charge, New York Field Office; United States Postal Service Inspection Service, under the direction of Acting Inspector-in-Charge Shelly A. Binkowski; Federal Bureau of Investigation; Buffalo Police Department, under the direction of Commissioner Daniel Derenda; Erie County Sheriff's Department, under the direction of Sheriff Tim Howard; Niagara Frontier Transit Authority, under the direction of Chief George Gast; Tempe, Arizona Police Department; Apache County, Arizona Sheriff's Department; and Oklahoma State Police.Food Service Company Manager Indicted on Charges of Embezzling over $400,000 in Customer PaymentsRead the Press Release
Baltimore, Maryland - A federal grand jury today indicted Cesar Raphael Barretto, age 43, of Severn, Maryland, on charges of wire fraud, in connection with a scheme embezzle over $400,000 from the company where he worked.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office.According to the indictment, Barretto was a territory manager for U.S. Foods, Inc., a company that distributed food and supplies to restaurants, hospitals, hotels, and other businesses. Barretto worked out of the U.S. Foods office in Severn, where he was responsible for helping customers place orders for U.S. Foods products. Barretto transmitted customer orders to the company electronically. The orders were then sent to a regional distribution center where they were picked up by the customer, or picked up and delivered to the customer by Barretto. In addition, Barretto tracked the sales of products in his region and was responsible for collecting the balances due on customers’ invoices. When Barretto received a payment from a customer, he deposited it into the U.S. Foods bank account and emailed the company a collection report, which credited the customer’s account.
The nine count indictment alleges that from June 2010 through July 2012, Barretto defrauded one of U.S. Food’s customers, American Pollo Restaurant Group, by diverting over $400,000 in payments he received on their account to pay for cases of food that Barretto ordered for himself under the account of another U.S. Foods customer, a bakery located in Langley, Maryland, without that customer’s knowledge.
Specifically, the indictment alleges that Barretto ordered cases of food from U.S. Foods for his own personal use, using the bakery customer’s account. According to the indictment, Barretto paid for the unauthorized purchases by diverting a portion of the payments received from American Pollo to the bakery customer’s account. The indictment alleges that in collection reports emailed to U.S. Foods, Barretto falsely listed some of American Pollo’s payments as credits to the bakery customer’s account, thereby paying off the outstanding balances created in that account by Barretto’s unauthorized purchases. Barretto then allegedly sold the products he obtained with the embezzled funds to a restaurant in Laurel, Maryland, in exchange for cash.
The indictment alleges that Barretto paid for more than 300 unauthorized food purchases from U.S. Foods by creating and submitting false collection reports that transferred approximately $414,313.01 in collection payments from American Pollo to the bakery customer’s account. The indictment seeks the forfeiture of the proceeds of the scheme, which is at least $414,313.01.
Barretto faces a maximum sentence of 20 years in prison for each of nine counts of wire fraud. An initial appearance for Barretto has not yet been.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised the U.S. Secret Service for its work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Martin J. Clarke, who is prosecuting the case.
Federal Jury Finds Kirtland, N.M., Man Guilty on Sexual Assault ChargesRead the Press Release
ALBUQUERQUE – A federal jury sitting in Santa Fe, N.M., returned a verdict this afternoon finding Steven Michael John guilty on sexual abuse charges after a three-day trial. The jury’s verdict was announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Carol K.O. Lee of the FBI’s Albuquerque Division, and Director John Billison of the Navajo Nation Division of Public Safety.
John, 21, an enrolled member of the Navajo Nation who resides in Kirtland, N.M., was arrested on July 24, 2013, on a criminal complaint alleging sexual abuse charges. John was indicted on Aug. 14, 2013, and charged with attempted aggravated sexual abuse and abusive sexual contact. The indictment alleged that John attempted to force the victim to engage in a sexual act at a location within the Navajo Indian Reservation in San Juan County, N.M., on July 18, 2013. It also alleged that John engaged in sexual contact with the victim on that day.
Trial of this case began on Aug. 18, 2014, and concluded this afternoon when the jury returned a guilty verdict on both counts of the indictment.
The evidence at trial established that on the afternoon of July 18, 2013, John broke into a residence in Sanostee, N.M., and attempted to rape a 16- year-old Navajo girl. The victim was taking a shower when John entered the residence and attacked her. Although the victim resisted John’s attack and was able to prevent John from raping her, John groped the victim’s naked body during their struggle. After John fled from the residence, the victim called 911 and reported the assault. The evidence presented to the jury included the victim’s recorded 911 telephone call, photographs of the injuries the victim suffered as she struggled against John’s attack, and the testimony of medical professionals who treated the victim after the assault.
John faces a statutory maximum penalty of life imprisonment when he is sentenced. His sentencing hearing has yet to be scheduled.
This case was investigated by the Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety. The case is being prosecuted by Assistant U.S. Attorney Jennifer M. Rozzoni with assistance from Kristopher N. Houghton, Esq., a contractor with the U.S. Attorney’s Office.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Federal Jury Convicts San Antonio Man for Sex Trafficking of MinorsRead the Press Release
In San Antonio today, a federal jury convicted 38–year-old Marcus Deshawn Wright for his role in prostituting two minor females last year announced United States Attorney Robert Pitman, Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division and Texas Attorney General Greg Abbott.
The jury convicted Wright of two counts of sex trafficking of minors and one count of production of child pornography. Evidence presented during the trial revealed that Wright and his codefendants, 22-year-old Malcolm Deandre Copeland and 20-year-old Amber Doak, both of San Antonio, were involved in a scheme beginning in August 2013 to entice and encourage minors into engaging in sexual acts for money. Wright recruited two minor females to engage in commercial sex in San Antonio and Corpus Christi for his financial gain. Wright also produced multiple videos which depicted sexual activity involving a minor.
Wright, who remains in federal custody, faces between ten years and life in federal prison for sex trafficking of minors and between 15 and 30 years in federal prison for production of child pornography. He is scheduled to be sentenced on January 16, 2015.On July 23, 2014, a federal jury convicted Copeland of two counts of sex trafficking of minors. Doak pleaded guilty in March 2014 to one count of sex trafficking of minors. Each faces between ten years and life in federal prison. Sentencing for Copeland and Doak is scheduled for December 4, 2014, and September 12, 2014, respectively.
The remaining co-defendant—41–year-old New Hampshire resident Raymond Valas—awaits jury selection and trial scheduled for November 17, 2014, before U.S. Chief District Judge Fred Biery. Valas is charged with one count of sex trafficking of a minor.
This case was investigated by the Federal Bureau of Investigation (FBI) together with the San Antonio Police Department. Assistant United States Attorney Bettina Richardson and Special Assistant United States Attorney Geoff Barr from the Texas Attorney General’s Office are prosecuting this case on behalf of the Government.
Federal Inmate Charged with Possessing WeaponRead the Press Release
ERIE, Pa. - An inmate at the McKean Federal Correctional Institution in Bradford, Pennsylvania, has been indicted by a federal grand jury in Erie on a charge of possession of contraband in prison, United States Attorney David J. Hickton announced today.
The one-count indictment named Oscar Acosta-Levario, 32, as the sole defendant.
According to the indictment presented to the court, on or about June 10, 2014, Acosta-Levario was in possession of contraband, namely a weapon.
The law provides for a maximum total sentence of five years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
Officers of the McKean Federal Correctional Institution 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.
Father and Son Business Owners Facing Tax, Currency Structuring ChargesRead the Press Release
ERIE, Pa. - Two residents of Warren, Pennsylvania have been indicted by a federal grand jury in Erie on charges of violating federal tax and currency transaction laws, United States Attorney David J. Hickton announced today.
The eighteen-count indictment named Randall Branch, 62 and John Branch, 43, as defendants.
According to the indictment presented to the court, the defendants conspired to defraud the United States by impeding, impairing, obstructing, and defeating the lawful Government functions of the Internal Revenue Service; conspired to structure financial transactions to avoid currency transaction reporting requirements, and failed to file income tax returns for the years 2009, 2010 and 2011.
According to the Indictment, the father and son defendants owned a business through which they sold oil and natural gas through various brokers. Between 2006 and 2012, the Indictment alleges, that the defendants received combined gross income from their oil and natural gas business in excess of $6,900,000.00. It was a part of the conspiracy that despite their business income, the defendants stopped filing tax returns with the IRS after 1997, began to dispute their obligation to pay taxes, and challenged the authority of the IRS to assess and collect taxes. As part of the conspiracy, the defendants avoided the financial threshold reporting requirements on the FinCEN Form 104, Currency Transaction Report (CTR) and impeded the function of the IRS to assess and collect taxes by structuring approximately $2,649,210 in financial transactions. According to the Indictment, the defendants did so by requiring certain business receipts to be broken down and issued in checks made out in amounts less than $10,000.00. The defendants then allegedly cashed those checks, regularly doing so with multiple checks, at different bank branches, on the same day. The defendants also used their business receipt checks to obtain bank teller checks to pay certain expenses and to make purchases of various assets including real estate and vehicles. Further, according to the Indictment, the defendants used cash and business receipt checks to fund wire transfers for the purchase of approximately $484,367.00 of precious metals, further attempting to impede the function of the IRS to assess and collect taxes.
The law provides for a maximum total sentence of 63 years in prison, a fine of $3,300,000 or both for each defendant. 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 defendants.
Assistant United States Attorney Marshall J. Piccinini is prosecuting this case on behalf of the government.
The Internal Revenue Service, Criminal Investigation, 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.
Falls Church Man Indicted for Sex Trafficking 17-Year-Old Runaway GirlRead the Press Release
RICHMOND, Va. – Alan Cooley, 34, of Falls Church, Virginia, was indicted by a federal grand jury yesterday for engaging in the sex trafficking of a child and transporting a minor across state lines for prostitution.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement.
According to court records, on March 26, 2014, the FBI was alerted that the Spotsylvania County Sheriff’sOffice had received a tip that a juvenile female allegedly was engaged in prostitution for a pimp known as “Midas,” later identified as Cooley. In the early morning hours of March 26, law enforcement located the juvenile in a hotel room in Dumfries, Virginia. During a subsequent interview, the juvenile revealed that she had run away from her home in North Carolina and had been recruited initially by a pimp in Charlotte to engage in prostitution. After two weeks of working for the Charlotte pimp, the juvenile allegedly was transported by Cooley to Fredericksburg, Virginia to engage in further prostitution.
According to court records, once Cooley, the juvenile and another adult prostitute arrived in Virginia, Cooley allegedly posted advertisements for the juvenile in the escorts section on Backpage.com. Cooley also is alleged to have used physical force and threats of violence against the juvenile, including hitting her in the face multiple times when the juvenile refused to engage in certain sex acts with a customer. When police first knocked on the Dumfries hotel room where Cooley and the juvenile were staying on March 26, Cooley is alleged to have violently prevented the victim from opening the door and threatened to kill her if she talked to the police.
Cooleyfaces a maximum penalty of life in prison if convicted.
This case was investigated by the FBI’s Richmond Field Office, with assistance from the Spotsylvania County Sheriff’s Office and the Prince William County Police Department. Assistant U.S. Attorney Heather L. Hart is prosecuting the case.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:14-cr-110.
FBI Investigation Leads to Fraud Charges Against Erie ManRead the Press Release
ERIE, Pa. – A resident of Erie, Pennsylvania, has been indicted by a federal grand jury in Erie on charges of wire fraud, United States Attorney David J. Hickton announced today.
The eight-count indictment named John Paul Donico, 65, as the sole defendant.
According to the indictment presented to the court, from in and around May 2011, to in and around July 2012, Donico fraudulently obtained $350,000 from a Mexican construction company by promising to obtain financing for the construction of a rock crushing plant which he never obtained.
The law provides for a maximum total sentence of 160 years in prison, a fine of $2,000,000, 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 Christian A. Trabold is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation 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.
Erie Man Charged with Possessing Unregistered Firearms. Manufacturing Explosive DevicesRead the Press Release
ERIE, Pa. - A resident of Erie, Pennsylvania has been indicted by a federal grand jury in Erie on charges of violating federal gun laws, United States Attorney David J. Hickton announced today.
The two-count indictment, returned on August 19, and unsealed today, named Gerald Szymanowski, 66, as the sole defendant.
According to the indictment presented to the court, on or about June 19, 2014, Szymanowski possessed approximately 38 unregistered firearms, including machineguns, silencers and destructive devices not registered to him in the National Firearms Registration and Transfer record and manufactured approximately 372 devices of varying sizes containing explosive materials.
The law provides for a maximum total sentence of 20 years in prison, a fine of $500,000, 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 Marshall J. Piccinini is prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms and Explosives 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.
Enoch B. Morelock AwardRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that Sgt. Marcus Burke of the Claycomo, Mo., Police Department has received the 2014 Enoch B. Morelock Award.
The Enoch B. Morelock Award is an annual recognition of outstanding moral character, service to law enforcement and service to the community. Sgt. Burke was honored on Thursday, Aug. 14, 2014, during the 12th Annual LECC Training Seminar in Springfield, Mo. The prestigious law enforcement award, presented annually by the U.S. Attorney’s Office, is named in honor of Sullivan County Sheriff Enoch B. Morelock, who was the first recorded line of duty death in the Western District of Missouri on Dec. 19, 1847.
Today’s police officer must be able to do more than write tickets or answer calls. Being a police officer requires being involved in your community. That is what Sgt. Burke exhibits in his small town on a daily basis. He is a well-respected member of the department and the community.
For example, a young boy in his town, whom the officer didn’t know, was diagnosed with brain cancer and told Sgt. Burke in 2010 that when he was cured he wanted to grow up and be a police officer. Sgt. Burke followed the boy’s progress and made regular visits to his home to check on him. In May 2011, Sgt. Burke coordinated with his chief and the city council to make a special presentation designating this boy as an honorary police officer. The city provided him with a police department t-shirt and ball cap; Sgt. Burke even bought the boy a duty belt with his own money.
Sgt. Burke took both on-duty and off-duty time to attend treatments with the young boy at home and in the hospital. In 2012, the boy was pronounced in a cancer-free remission status; however, earlier this year the cancer returned and moved to his spine. Sgt. Burke contacted the chief about providing an escort for the boy to the hospital for the first of many chemotherapy treatments. The chief approved and this event was carried by several TV stations in the area.
“Just show him, since he is an honorary police officer, that he is part of our family of law enforcement, and in this family no one fights alone,” Sgt. Burke was quoted in one interview. So into the front seat the boy jumped, fastened his seat belt, turned on the siren and away they went to the hospital. The boy’s father says Sgt. Burke gives their family a lot of support, which makes their situation a little easier on the family and on his son.
Enoch B. Morelock Award
Sullivan County Sheriff Enoch B. Morelock was the first recorded line of duty death in the Western District of Missouri on Dec. 19, 1847, in Sullivan County. Sheriff Morelock was shot and killed during a court‑ordered sale of the accused=s property. The accused killer, Patrick McIntry, was charged with 1st Degree Murder but was later acquitted. Within a year Mr. McIntry was found shot to death on the banks of a local river.
The annual Enoch B. Morelock Award recognizes individuals with outstanding moral character, service to law enforcement and to the community outside of law enforcement. Recipients may include officers from local police departments, sheriffs= offices, state agencies, or federal agencies as well as investigators from prosecutors= offices.
Delaware Man Pleads Guilty in Federal Court to Heroin DistributionRead the Press Release
Charleston, W.Va. – United States Attorney Booth Goodwin announced today that Bobby Evans, 29, of Delaware, entered a guilty plea in federal court in Charleston to distributing heroin. Evans admitted that on May 28, 2014, he met a confidential informant (CI) at Tudors Biscuit World on Washington Street East, in Charleston and sold heroin to the CI for $60.00. Evans also admitted that he had previously sold cocaine base (crack) to the same CI on May 27, 2014 in front of his residence on Washington Street East in Charleston. On May 29, 2014, officers executed a search warrant at the house where Evans was staying and found $40.00 of the money used by the CI to buy the heroin, additional heroin, and a gun.
Evans faces up to 20 years in prison when he is sentenced on November 13, 2014, by United States District Court Judge John T. Copenhaver, Jr.
The case was investigated by the Metropolitan Drug Enforcement Network Team. Assistant United States Attorney Monica D. Coleman is in charge of the prosecution. The case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The United States Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin.Dalton Man Faces Child Pornography ChargesRead the Press Release
Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, announced today that Ryan P. Collins, a 31 year-old male from Dalton, Ohio, was charged with receiving, distributing and possessing visual depictions of minors engaged in sexually explicit conduct.
The indictment charges that from on or about November 17, 2012, through on or about February 19, 2013, Collins knowingly received and distributed in interstate and foreign commerce, by computer, numerous computer files, which files contained visual depictions of real minors engaged in sexually explicit conduct.
The indictment also charges that on February 28, 2013, Collins possessed a computer that contained child pornography.
If convicted, the sentence in this case will be determined by the court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Michael A. Sullivan. The case was investigated by the Canton Office of the Federal Bureau of Investigation and the Canton Police Department.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
DBSI Founders Douglas L. Swenson and Mark A. Ellison Sentenced for Defrauding Thousands of InvestorsRead the Press Release
Court Orders Forfeiture of Over $228 Million in Fraud Proceeds
BOISE – DBSI founders Douglas L. Swenson, 66, of Meridian, Idaho, and Mark A. Ellison, 66, of Boise, Idaho, were sentenced today in federal court in Boise to federal prison terms for defrauding DBSI investors. Chief U.S. District Judge B. Lynn Winmill sentenced Swenson, DBSI’s former CEO, to 240 months in prison, followed by three years of supervised release and a $7,800 special assessment. His restitution will be ordered within 90 days. Judge Winmill sentenced Ellison, who previously served as DBSI’s General Counsel, to 60 months in prison, followed by three years of supervised release, and a $4,400 special assessment for his part in the fraud. His restitution also will be ordered within 90 days.
At sentencing, Judge Winmill found that the defendants were responsible for losses of more than $100 million. He also determined that there were more than 250 victims of the fraud. In sentencing Douglas Swenson, Judge Winmill noted that the losses in the case were staggering and that deterrence was an important consideration in a white collar case. He also stated that by 2006 or 2007, Swenson had to know that the company was making false statements.
Both Swenson and Ellison were convicted by a federal jury on April 14, 2014, of 44 counts of securities fraud. Douglas Swenson was convicted of an additional 34 counts of wire fraud. Their co-defendants, David D. Swenson, 38, of Boise, Idaho, and Jeremy A. Swenson, 41, of Meridian, Idaho, also former principals of DBSI and both sons of Douglas Swenson, were found guilty of 44 counts of securities fraud. They are scheduled to be sentenced on August 21, 2014.
During the 42-day trial, the jury heard evidence that DBSI, founded in 1979 and headquartered in Meridian, Idaho, sold a range of security investments, including bonds, notes, and Tenant-in-Common interests (TIC investments) in both improved and unimproved real estate. Until DBSI’s bankruptcy in November 2008, the defendants represented to investors that DBSI was a highly profitable company with a net worth in excess of $105 million, and that it operated a successful business model that minimized risk to its investors and paid fixed returns as high as of 9.5%.
The United States presented evidence that at trial that these representations were false. DBSI’s various businesses were almost entirely unprofitable and dependent on new investor funds in order to continue operations. DBSI’s represented net worth of more than $105-million in 2007 and 2008, was the result of deliberate accounting decisions directed and approved by the defendants, all of whom have advanced degrees in accounting.
The jury heard evidence that although the defendants knew of DBSI’s true financial condition, they withheld accurate financial information and took steps to conceal DBSI’s insolvency from investors, financial advisors, broker dealers, due diligence officers, and DBSI employees. In Private Placement Memoranda and other disclosures provided to prospective investors, the defendants misrepresented DBSI Housing’s income and net worth through deceptive accounting practices; failed to disclose DBSI’s cash shortages and deteriorating finances; misrepresented the likelihood of repayment on large investments in technology start-up companies; and failed to disclose DBSI’s dependence on new investor money to meet its existing obligations.
The jury also heard evidence that DBSI collected monies from investors called “Accountable Reserves” which it explicitly represented belonged to its investors and would only be used for specific expenses. The defendants diverted at least $80 million in investor’s Accountable Reserves for purposes other than those disclosed, including payment of the promised fixed investment returns to existing investors, operation expenses, and investments in technology start-up companies.
“Today’s significant sentences for Douglas Swenson and Mark Ellison send the clear message that those who induce investors to trust them with their money, in some instances with their life savings, have a solemn and legal obligation to be honest and truthful,” said Wendy J. Olson, U.S. Attorney for Idaho. “The losses caused by these defendants’ criminal conduct represent the greatest losses in any fraud case every prosecuted in the District of Idaho. It is appropriate that the protagonist of that fraud, Douglas Swenson, also receive the most serious sentence. The U.S. Attorney’s Office extends its heartfelt sympathies to those who were victims of this fraud, including, of course, to those investors who appeared in Court today to describe the devastating impact these crimes have had on their lives. We will continue to make every effort to insure that as many of the proceeds of these frauds as possible are recovered and returned to the victims.”
“When you knowingly mix deceit and trickery into the financial well-being of individuals, you create a recipe for devastation that could last a lifetime,” said Stephen Boyd, IRS Criminal Investigation Special Agent in Charge for the state of Idaho. “Today’s sentencing demonstrates how federal law enforcement will band together to help put an end to the criminal behavior of those who prey on investors. IRS Criminal investigators will continue to use their financial expertise to identify and trace funds in these types of investor fraud schemes.”
Concord Township Man Indicted for Defrauding Cleveland Credit Union Out of $2.3 MillionRead the Press Release
A seven-count federal indictment was returned charging a Concord Township man defrauding Taupa Lithuanian Credit Union out of $2.3 million, law enforcement officials said.
John Struna, 51, was indicted on one count of conspiracy to commit bank fraud, one count of bank fraud, one count of making false statements and four counts of money laundering.
The indictment was announced by Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office, and Kathy Enstrom, Special Agent in Charge of the Internal Revenue Service – Criminal Investigations.
“Most people learn early in life that there is no such thing as free money,” Dettelbach said. “This defendant is charged as part of a group that used others' hard earned savings as a personal piggy bank. Mr. Struna’s greed has caught up with him with this indictment.”
“John Struna willfully overdrew his credit union accounts to the tune of $2.3 million through his relationship with a corrupt executive at the credit union,” Anthony said.
“Fraud schemes harm everyone, especially those where someone, for their own personal benefit, has taken what belonged to others,” Enstrom said. “IRS Criminal Investigation is committed to unraveling financial transactions and money laundering schemes where individuals attempt to conceal the true source of their money.”
The National Credit Union Administration and the Ohio Department of Commerce took possession of Taupa last year and placed it into receivership due to its insolvency. Taupa, based in Cleveland, had about 1,150 members and assets of approximately $24 million, according to court records.
Credit union CEO Alex Spirikaitis, former teller Michael Ruksenas and Vytas Apanavicius have previously been found guilty for their roles in conspiracies related to defrauding the credit union.
Struna maintained both personal and corporate accounts at Taupa dating back to 1995. He began a conspiracy with Spirikaitis in 2002 and continued through 2013, during which time Spirikaitis caused Taupa to make approximately 46 fraudulent transfers into Struna’s accounts, according to the indictment.
In 2011, Struna requested and received $112,105 from Spirikaitis for the purchase of a condominium located in Ft. Myers, Florida. At no time did Struna submit any credit applications or loan documents, according to the indictment.
The fraudulent transfers totaled approximately $2.3 million. From 2002 through 2013, Struna repaid only approximately $15,000 of the $2.3 million Spirikaitis transferred into his accounts, according to the indictment.
The indictment also seeks to forfeit a 2014 Jeep Wrangler Unlimited, a 2014 Mazda 6 and the lost money.
This case is being prosecuted by Assistant United States Attorney Robert J. Patton and Special Assistant United States Attorney Derek Kleinmann. The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service.
If convicted, the defendant’s sentence will be determined by the court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Colorado Springs Man and Member of "North American Man-Boy Love Association" Sentenced to Federal Prison for Possession of Child PornographyRead the Press Release
DENVER – U.S. District Court Judge Christine M. Arguello recently sentenced Clifton Brett Bennett, age 56, of Colorado Springs, Colorado, to serve 57 months in federal prison, followed by 10 years of supervised release, the U.S. Attorney’s Office, the U.S. Postal Inspection Service, and the Colorado Springs Police Department – Internet Crimes Against Children Task Force (ICAC) announced. Once released the defendant will also have to register as a sex offender. Further, Bennett, who appeared at the hearing in custody, was remanded after the sentence was pronounced.
Bennett was indicted by a federal grand jury in Denver on September 25, 2013. He pled guilty before Judge Arguello on May 1, 2014. He was sentenced on August 18, 2014.
According to court records, between November 1, 2008 and April 15, 2011 Bennett knowingly received material that contained child pornography. Further, on January 23, 2013, Bennett knowingly possessed child pornography. According to a state affidavit of probable cause, a United States Postal Inspector contacted an ICAC detective regarding a child pornography investigation. Postal Inspectors had identified an individual who lived in Colorado Springs who made over $4,000 in purchases for over 100 child pornography videos over a number of years. Follow up investigation determined the individual was Clifton Bennett.
A search warrant was executed at Bennett’s residence. During the execution of the warrant a detective conducted a forensic preview of the computer, and found images of prepubescent boys who were nude and posed in sexually explicit positions with their genitals exposed. They also found DVDs containing child pornography – many of which were delivered via U.S. Mail from New York. He also allegedly bought and downloaded child pornography as well. Investigators also determined that Bennett was a member of the “North American Man-Boy Love Association.” Following the execution of the search warrant Bennett was arrested and held in state custody. Once the federal indictment was returned the state dismissed their case in its entirety.
This case was investigated by the United States Postal Inspection Service and the Colorado Springs Police Department -- Internet Crimes Against Children Task Force (ICAC).
Bennett was prosecuted by Assistant U.S. Attorney Valeria Spencer.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about PSC, please visit http://www.justice.gov/psc/ For more information about Internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab "resources."
Colorado Man Pleads Guilty to Illegally Trafficking in PaddlefishRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Colorado man has pleaded guilty in federal court to illegally trafficking in paddlefish caviar after being caught in an undercover operation in the Warsaw, Mo., area.
During March and April 2011, the U.S. Fish and Wildlife Service and the Missouri Department of Conservation conducted a covert investigation, “Operation Roadhouse,” centered on an area known as the Roadhouse in Warsaw. As part of the covert operation, state and federal officers operated a paddlefish snagging business. Covert officers also sold paddlefish to people who were interested in buying them.
Felix Baravik, 49, of Aurora, Colorado, pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth o Tuesday, Aug. 19, 2014, to illegally trafficking in paddlefish, in violation of the Lacey Act.
By pleading guilty, Baravik admitted that he traveled from Colorado to Missouri on April 16, 2012. On that day, he and his co-conspirators met with covert agents posing as fishermen who had a boat, which they were going to use to fish for paddlefish. During that conversation, conspirators exchanged telephone numbers with the covert agents and Baravik told the covert agents to call if they caught a paddlefish.
The next day, conspirators arranged to purchase female paddlefish from covert agents. Baravik participated in the conversations regarding the paddlefish.
On April 18, 2012, Baravik and a co-conspirator went fishing for paddlefish with the covert agents. During the fishing trip, the conspirators exceeded the Missouri daily take limit. The conspirators kept the paddlefish that they took and processed them by removing the eggs from the carcass, and further processed the eggs to make caviar.
On April 20, 2012, Baravik and the other conspirators transported the paddlefish and paddlefish eggs that they acquired from Missouri to Colorado.
Under the terms of the plea agreement, the government and Baravik agree to jointly recommend to the court a sentence of three years of probation and a $5,000 fine. The first six months of probation will be served as home detention, and Baravik shall not fish, or accompany anyone fishing, anywhere in the world during the term of his probation. Baravik must also perform 500 hours of community service. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
USA v. Nahapetyan
In a separate case arising from the same investigation, Bogdan Nahapetyan, 35, of Lake Ozark, Mo., pleaded guilty on Nov. 12, 2013, to the same offense.
Nahapetyan had numerous interactions and conversations with undercover investigators concerning the purchase of female paddlefish and paddlefish eggs. Although the investigators informed Nahapetyan numerous times that the purchase of paddlefish was illegal in the state of Missouri, Nahapetyan arranged to purchase numerous female paddlefish and multiple pounds of paddlefish eggs. For example, on April 24, 2012, Nahapetyan negotiated with the undercover investigators to purchase 80 pounds of paddlefish eggs and five female paddlefish for $4,625. While loading the purchased caviar and female paddlefish into their van, Nahapetyan placed an additional order with the undercover investigators for more fish and caviar.
Under federal statutes, Nahapetyan is subject to a sentence of up to one year in federal prison without parole, plus a fine up to $100,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
Paddlefish Trafficking
The American paddlefish (Polydon spathula), also called the Mississippi paddlefish or the “spoonbill,” is a freshwater fish that is primarily found in the Mississippi River drainage system. Paddlefish eggs are marketed as caviar. Paddlefish were once common in waters throughout the Midwest. However, the global decline in other caviar sources, such as sturgeon, has led to an increased demand for paddlefish caviar. This increased demand has led to over-fishing of paddlefish, and consequent decline of the paddlefish population.
Missouri law prohibits the transportation of paddlefish eggs which have been removed or extracted from a paddlefish carcass. Missouri law also prohibits the sale or purchase, or offer of sale or purchase, of paddlefish eggs. There are also several restrictions on the purchase and possession of whole paddlefish in Missouri.
The Lacey Act is a federal statute which makes it unlawful for any person to import, export, transport, sell, receive, acquire or purchase fish that were taken, possessed, transported or sold in violation of any law or regulation of any state, or to attempt to do so. Such conduct constitutes a felony crime if the defendant knowingly engaged in conduct involving the purchase or sale, offer to purchase or sell, or intent to purchase or sell, fish with a market value in excess of $350, knowing that the fish were taken, possessed, transported or sold in violation of, or in a manner unlawful under, a law or regulation of any State.
This case is being prosecuted by Trial Attorney James B. Nelson of the Department of Justice’s Environmental Crimes Section and Supervisory Assistant U.S. Attorney Lawrence E. Miller of the U.S. Attorney’s Office for the Western District of Missouri. It was investigated by the U.S. Fish and Wildlife Service and the Missouri Department of Conservation, with assistance by the Oklahoma Department of Wildlife Conservation.
Charleston Man Sentenced to More Than Six Years as A Felon in Possession of A FirearmRead the Press Release
Charleston, W.Va. – United States Attorney Booth Goodwin announced that Mark A. Johnson, Jr., 24, of Charleston, West Virginia, was sentenced today in federal court to six years and six months’ imprisonment for being a convicted felon in possession of a firearm. In November of 2013, while on federal supervised release for a prior conviction for being a felon in possession of a firearm, Johnson got into an argument with his girlfriend outside of the Town Center Mall. A construction worker attempted to intervene, and Johnson pulled a handgun and threatened to kill him. Johnson was later arrested and has been in federal custody since December of 2013. In January of 2014, Johnson was sentenced to an additional six months of imprisonment for violating the terms of his supervised release. Today’s sentence imposes an additional six years and six months of imprisonment to be served consecutively to the six month sentence for the supervised release violation. In deciding on the appropriate sentence, the sentencing court considered that Johnson had tried to convince two witnesses to lie for him and to say he did not have a real gun when he threatened the construction worker last November.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime. This case was investigated by the Charleston Police Department and the United States Department of Alcohol, Tobacco, Firearms and Explosives.
Cedar Rapids Man Sentenced for Possession of A Firearm by A FelonRead the Press Release
A man who unlawfully possessed a firearm was sentenced today to almost three years in federal prison.
Ramius Hardiman, age 21, from Cedar Rapids, Iowa, received the prison term after a May 23, 2014, guilty plea to one count of possession of a firearm by a felon.
At the plea hearing, Hardiman admitted that on May 8, 2013, he possessed a Taurus 9mm pistol. Hardiman is prohibited from possessing firearms due to his felony conviction for Involuntary Manslaughter in October 2011.
Hardiman was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Hardiman was sentenced to 34 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Hardiman is being held in the United States Marshal’s custody until he can be transported to a federal prison.
This case was prosecuted as part of Project Safe Neighborhoods, a cooperative local, state and federal program aimed at the enhanced prosecution of gun crimes. The case was prosecuted by Assistant United States Attorney Daniel C. Tvedt and was investigated by the Cedar Rapids Police Department, the Federal Bureau of Investigation, and the Bureau of Alcohol, Tobacco, and Firearms.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 13-CR-37.
Canton Man Faces Child Pornography ChargesRead the Press Release
Shane C. Albert, 23, of Canton, Ohio, was charged with receiving, distributing and possessing visual depictions of minors engaged in sexually explicit conduct, Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment charges that from on or about May 1, 2012, through on or about March 7, 2013, Albert knowingly received and distributed in interstate and foreign commerce, by computer, numerous computer files, which files contained visual depictions of real minors engaged in sexually explicit conduct.
The indictment also charges that on May 1, 2013, Albert possessed a computer that contained child pornography.
If convicted, the sentence sentence in this case will be determined by the court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Michael A. Sullivan. The case was investigated by the Canton Office of the Federal Bureau of Investigation and the Canton Police Department.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Canadian Drug Kingpin with Ties to the Rizutto and Bonanno Crime Families, the Hells Angels, and the Mexican Sinaloa Cartel Sentenced to 27 Years for Leading A Billion Dollar Narcotics Trafficking EnterpriseRead the Press Release
Jimmy Cournoyer, the leader of a massive international drug trafficking enterprise with ties to La Cosa Nostra, the Hells Angels, and the notorious Sinaloa Cartel in Mexico, was sentenced earlier today to 27 years in prison by the Hon. Raymond J. Dearie. Cournoyer previously pled guilty to being the leader of a continuing criminal enterprise, conspiracies to manufacture, import, and distribute marijuana, conspiracies to export and distribute cocaine, substantive cocaine distribution, and a conspiracy to launder the proceeds of narcotics trafficking. As part of his sentence, Cournoyer agreed to a $1 billion forfeiture money judgment and will forfeit $10,871,120 in narcotics proceeds that federal agents seized from multiple locations in New York, California, Pennsylvania, and Kansas during the multi-year investigation.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York and James J. Hunt, Acting Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division.
“With the assistance of our law enforcement partners across the United States and in Canada, the United States Attorney’s Office for the Eastern District of New York was able to bring to justice a prolific drug kingpin with ties to some of the most powerful organized crime groups in the world,” stated United States Attorney Lynch. “Jimmy Cournoyer used Native American Reservations to violate the security of our national borders and smuggled more than $1 billion worth of deadly narcotics and firearms between the United States, Canada, and Mexico. Today’s sentence sends a powerful message to those engaged in international organized crime: law enforcement is committed to tracking down and dismantling dangerous criminal organizations wherever they are located, and the penalty for engaging in such conduct is severe.”
DEA Acting Special Agent-in-Charge James Hunt praised the men and women of the U.S. Attorney’s Office, Eastern District of New York for their diligent work in this investigation and stated, "This sentence is a message to drug distributors who profit millions while pushing drugs and violence through our country and abroad. Today, law enforcement's efforts have led to twenty seven years in prison for Jimmy Cournoyer and mark the end of his drug empire."
According to the indictment and other court filings submitted by the government, Cournoyer was the principal leader of a Montreal-based drug distribution organization affiliated with the Rizutto and Bonanno crime families, the Hells Angels, and the Sinaloa Cartel. A superseding indictment charged Cournoyer with trafficking more than $1 billion worth of marijuana, cocaine, and ecstasy into the United States between 1998 and 2012. Cournoyer’s organization transported tens of thousands of pounds of marijuana from outdoor growers in British Colombia to Montreal, Canada, and controlled numerous warehouses in and around Montreal for the manufacture of ecstasy and hydroponic marijuana. The drugs were smuggled into the United States using transportation networks run by the Hells Angels and Native American co-conspirators from the Akwesasne Mohawk Reservation along the U.S./Canadian border. Once the drugs were sold in the United States, much of it by distributors tied to the Bonanno crime family in New York, the organization used millions of dollars in drug proceeds to purchase cocaine from the powerful Sinaloa Cartel in Mexico for exportation to and distribution in Canada by members and associates of the Rizzuto crime family. Cournoyer was also charged with witness tampering in connection with his attempts to dissuade co-conspirators from cooperating with law enforcement by, among other things, establishing a $2 million “hit fund” set aside to murder or otherwise retaliate against any individuals who cooperated with the government.
During the course of the government’s investigation, law enforcement agents in the United States and Canada seized hundreds of pounds of marijuana, 83 kilograms of cocaine, 60,000 MDMA pills, multiple firearms and ammunition, more than 800 marijuana plants, and nearly $11,000,000 in narcotics proceeds from Cournoyer’s criminal enterprise. In total, more than 100 defendants have pled guilty to narcotics trafficking charges since the investigation commenced in 2007.
United States Attorney Lynch extended her grateful appreciation to the Drug Enforcement Administration, the Nassau County Police Department, the Laval Police Service, Laval, Quebec, and the Department of Justice Office of International Affairs for their extraordinary work on this nearly seven-year investigation. Ms. Lynch further thanked the New York City Police Department; New York State Police; Surete Du Quebec; Montreal Police Department; Peel Regional Police Department, Ontario; Delta Police Department, British Colombia; Royal Canadian Mounted Police - Swift Current Division; Ontario Provincial Police; Akwesasne Mohawk Police Service; Akwesasne Tribal Police; Beverly Hills Police Department; Santa Ana Police Department; Anaheim Police Department; Costa Mesa Police Department; U.S. Border Patrol, and Philadelphia Police Department for their important contributions to the successful outcome.
The government’s case is being prosecuted by Assistant United States Attorneys Steven L. Tiscione, Amir H. Toossi and Tanisha Payne.
The Defendant:
JIMMY COURNOYER
Age: 34
CEO of Local Nurse Care Provider Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO – SUSAN WINEBARGER was sentenced to thirty-eight (38) months imprisonment for embezzling more than $600,000 from company accounts and falsifying documents to conceal the embezzlement. Winebarger was also ordered to pay restitution of $699,897 to the company.
According to court documents, Winebarger was Chief Financial Officer, then Chief Executive Officer of VNA-TIP of Bridgeton, Missouri. VNA-TIP provides visiting nurse care, hospice care and related patient care service in Missouri and Illinois. In this capacity, she ran the day-to-day business and financial operations of VNA-TIP, including reconciling bank statements and having full access to bank checks for the company’s operating and payroll accounts. Winebarger also directly coordinated payments to the outside Administrator for VNA-TIP’s employee 401(k) plan. Between January 2008 and December 2013, Winebarger embezzled approximately $600,000 from VNA-TIP accounts. Without company authority, Winebarger issued more than two hundred (200) checks to herself from both the operating account and its payroll account and deposited those checks into her personal bank accounts. She also used the company debit card to purchase personal items. In order to conceal her scheme, she made sure she received all the bank account statements, which she altered for submission to VNA-TIP auditors. She also falsified internal financial reports, including monthly profit and loss statements submitted to the shareholders and board members. Winebarger failed to remit moneys withheld from VNA-TIP employees’ paychecks for their individual 401 (k) retirement accounts to the plan administrator so that the cash reserves would be falsely inflated in order that VNA-TIP shareholders, board members and auditors would not be aware of the true financial status of the company and potentially discover her theft and embezzlement. She also failed to remit state and federal withholding taxes, social security and Medicare funds.
Winebarger, Highland, IL, pled guilty to two felony counts of wire fraud in May. She appeared today for sentencing before United States District Judge John A. Ross.This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Hal Goldsmith handled the case for the U.S. Attorney's Office.
Berkshire Hathaway to Pay $896,000 Civil Penalty for Violating Antitrust Premerger Notification RequirementsRead the Press Release
Berkshire Hathaway Inc. has agreed to pay an $896,000 civil penalty to settle charges that it violated premerger reporting and waiting requirements when it acquired voting securities of USG Corp., the Department of Justice announced today.
The Justice Department’s Antitrust Division, at the request of the Federal Trade Commission, filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., against Berkshire Hathaway for violating the notification requirements of the Hart-Scott-Rodino (HSR) Act of 1976. At the same time, the department filed a proposed settlement that, if approved by the court, will settle the charges.
Berkshire Hathaway is a Delaware corporation with its headquarters in Omaha, Nebraska. As a result of its acquisition of USG voting securities in December 2013, Berkshire Hathaway held approximately 28 percent of USG voting securities, valued at more than $950 million.
USG is a Delaware corporation with its headquarters in Chicago, Illinois.The HSR Act of 1976, an amendment to the Clayton Act, imposes notification and waiting period requirements for transactions meeting certain size thresholds so that they can undergo premerger antitrust review.
Federal courts can assess civil penalties for premerger notification violations under the HSR Act in lawsuits brought by the Department of Justice. For a party in violation of the HSR Act the maximum civil penalty is $16,000 a day.
Albuquerque Man Sentenced to Almost Twenty-Seven Years for Armed Bank Robbery Spree in 2013Read the Press Release
ALBUQUERQUE – James Charles Mollohan, 36, of Albuquerque, N.M., was sentenced this afternoon to 332 months (26.83 years) in prison followed by five years of supervised release for his conviction on four armed bank robbery charges and using a firearm in relation to a crime of violence. The sentence was announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Carol K.O. Lee of the FBI’s Albuquerque Division, and Chief Gorden E. Eden, Jr., of the Albuquerque Police Department.
U.S. Attorney Damon P. Martinez said that Mollohan was prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
“The FBI has been taking dangerous bank robbers off the streets since the days of John Dillinger and Pretty Boy Floyd. Anybody who thinks he or she can become America's newest Public Enemy #1 better brush up on some history and find another line of work fast,” said FBI Special Agent in Charge Carol K.O. Lee. “The FBI is proud of its partnership with the Albuquerque Police Department, the New Mexico Corrections Department Probation and Parole and the U.S. Attorney's Office. Together, we are making a difference in our communities.”
“The Albuquerque Police Department is indebted to our federal law enforcement partners who recognized the extreme danger James Charles Mollohan was to our community,” said APD Chief Gorden Eden. “As a result of this federal anti-violence initiative, Mollohan will no longer threaten our community.”
Mollohan was arrested on Feb. 1, 2013, on a criminal complaint charging him with the armed robbery of the New Mexico Educators Federal Credit Union branch located at 3205 Coors Blvd. NW in Albuquerque. On that day, Mollohan approached a bank teller, pointed a handgun at the teller, and demanding money. As the teller opened the cash drawer in response to Mollohan’s demand, the teller surreptitiously activated an alarm before handing cash to Mollohan. Mollohan was arrested in the vicinity of the bank shortly thereafter by an FBI agent and an APD officer who were in the area and responded to a radio transmission alerting them of the bank robbery. Mollohan was in possession of a loaded semi-automatic handgun and a significant amount of cash when he was arrested.
On March 7, 2014, Mollohan pled guilty to a five-count felony information charging him with four counts of armed bank robbery and possession of a firearm in relation to a crime of violence. In entering his guilty plea, Mollohan admitted robbing at gunpoint the following Albuquerque-area banks: the Bank of Albuquerque branch located at 3301 Coors Blvd. NW on Jan. 12, 2013; the New Mexico Bank and Trust branch located at 6201 Riverside Plaza Lane on Jan. 29, 2013; and New Mexico Educators Federal Credit Union located at 3205 Coors Blvd. NW on Jan. 29, 2013 and again on Feb. 1, 2013.
This case was investigated by the Albuquerque office of the FBI and the Albuquerque Police Department with assistance from the Probation and Parole Division of the New Mexico Corrections Department, and was prosecuted by Assistant U.S. Attorney Charles L. Barth.
Tuesday 19 August 2014
U.S. Postal Inspection Service Delivers $14 Million to Victims of Mass Marketing ScamRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that today the U.S. Postal Inspection Service is delivering over 3400 checks to victims of marketing schemes by MoneyGram agents and others.
The distribution payments were made from a $100 million fund paid by MoneyGram as part of a settlement with the U.S. Department of Justice and the U.S. Attorney’s Office for the Middle District of Pennsylvania in 2012. The settlement was approved by Chief U.S. District Court Judge Christopher C. Conner.
The U.S. Postal Inspection Service’s announcement, with additional information about the fund, can be found at postalinspectors.uspis.gov.
U.S. Attorney Finley Addresses VITA Awards Luncheon AttendeesRead the Press Release
LAFAYETTE, La.–United States Attorney Stephanie A. Finley was the keynote speaker at the Volunteer Instructors Teaching Adults (VITA) awards luncheon held today at the Petroleum Club.
“I am honored that VITA invited me to speak at the luncheon celebrating the achievements of their students and tutors,” Finley said. “The work that VITA does to promote literacy in Acadiana by teaching reading and writing skills to adults is remarkable. The investment that tutors make in the lives of their students gives them a solid foundation to excel in every aspect of their lives. If you help people develop a passion for learning, they will never cease to grow. VITA volunteers, not only improve the education of those participating, but the quality of the communities where we live.”
Finley told the tutors present that they play a vital role in educating the adult population. The situation for those who cannot read and write is difficult. She talked about the difficulty for those who lack these skills and how challenging it is for them to improve their lives and the lives of their loved ones. Finley has seen firsthand the difficulties of those who cannot read or write. Many of them navigate their way through the justice system, and added that 63 percent of inmates cannot read. Finley thanked the tutors present for volunteering and urged them to press on to help more students because their work makes a difference. She also encouraged the students present to continue their education in order to achieve their fullest potential and fulfill their hopes and dreams.
The organization recognized two tutors and a student who have made remarkable achievements in the past year with awards. They honored VITA tutors, Wendee Herold with the Martin Award and Phyllis Ledet with the 2014 Donna Groth Delhomme Memorial Award. McKinley Milligan, a student with VITA, was presented with the 2014 Don Littlefield Memorial Award. Milligan was injured years ago, but through the help of family, friends, therapy and the VITA program, he has obtained his high school equivalency degree.
The VITA organization matches tutors to students for two-hour sessions twice a week to help those who need help with English reading skills. The organization tutors adult students who are no longer in school and English as a Second Language (ESL) students. VITA is always seeking tutors and students. To find out more, call 337-234-4600 or visit http://vitalaf.org/
Volunteer Instructors Teaching Adults Inc. was incorporated in May 1982 as a non-profit, community-based adult literacy program and was organized through the collaborative efforts of members of the Lafayette Parish School Board, RSVP, Altrusa Club, Lafayette Public Library, and community leaders in the fields of business and education. VITA is a member of ProLiteracy America, the nation’s largest volunteer literacy organization. Programs and services are financed by funds from the United Way, Lafayette Parish School System, Louisiana Department of Education, foundation grants, private donations and fundraising events.
Finley is the first female U.S. Attorney to serve in Louisiana. She was selected by President Barack Obama in January of 2010, after being recommended by U.S. Senator Mary Landrieu, and confirmed by the U.S. Senate in June of 2010. United States Attorney Finley was sworn into office on June 2, 2010 to serve the Western District of Louisiana as the chief law enforcement officer for 42 of the state’s 64 parishes. In addition to her duties as the U.S. Attorney, Finley is a Lieutenant Colonel in the U.S. Air Force, and currently serves as Vice Chair of Attorney General Eric Holder’s Advisory Committee’s Office of Management and Budget Committee.
Title Agents Indicted for Embezzling Clients' FundsRead the Press Release
Over one million dollars allegedly swindled by two title agents
INDIANAPOLIS – Josh J. Minkler, the Acting United States Attorney, announced today that Adam Mears, 41 of Carmel and Patrick Hayden, 37 of Greensburg were indicted in separate investigations for embezzling money from their clients. Both face five counts of wire fraud.
“When individuals violate the people’s financial trust, it shakes the foundation of our communities,” said Acting United States Attorney Josh J. Minkler. “Our office works closely with our state and local partners to help maintain the public’s confidence in local leaders.”
According to the indictments, both Mears and Hayden were title agents and controlling members of their respective companies. Mears was a co-owner of First Title, operating in Indianapolis. Hayden was the co-owner of Mainstreet Title operating out of Greensburg.
In these positions, both were required by law to maintain an escrow account which was to be exclusively used to hold client funds and pay expenses associated with real estate closings. Despite these responsibilities, Mears is alleged to have embezzled $648,219.43 from First Title by utilizing the user name and password of another employee to create false user accounts. He then is alleged to have used the money to pay business and personal expenses.
Hayden is alleged to have embezzled $448,172.01 from his clients by diverting funds normally used to pay off existing mortgages, appraisals, title work or other liens on a property. Current closings were being funded by deposits from future closings. The alleged stolen funds were used to finance another business and support a drug habit.
The Indiana Department of Insurance’s (IDOI) routine examination of these agencies revealed improprieties in the appropriation of funds which were communicated to the Indiana State Police and the U.S. Secret Service. IDOI Commissioner Stephen W. Robertson warned, “Insurance fraud is a serious crime which will not be tolerated. IDOI will investigate all claims of fraud and as in this case, partner with local and federal law enforcement to ensure that these types of crimes against Hoosier consumers are prosecuted to the fullest extent of the law.”
According to Assistant United States Attorney Brad Shepard who is prosecuting the case for the government, both men face up to 20 years in federal prison for each count if convicted.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Mears and Hayden had their initial appearances today before a magistrate judge. Mears was released. Hayden is being held for a detention hearing tomorrow (8/20).
Three South Florida Residents Charged in Conspiracy to Distribute Illegal Drugs, SteroidsRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, David W. Bourne, Special Agent in Charge, U.S. Food and Drug Administration (FDA), Office of Criminal Investigations, Miami Field Office, and Ric Bradshaw, Sheriff, Palm Beach Sheriff’s Office (PBSO), announce that Frank Fiore, 59, of Parkland, Gary Lee Jones, 55, of Boca Raton, and Anthony Carbone, 32, of Deerfield Beach, have been charged with conspiring to possess Alprazolam, a controlled substance, with the intent to distribute it, conspiring to traffic in counterfeit Xanax, distributing Alprazolam, and trafficking in counterfeit Xanax. In addition, Fiore and Carbone have been charged with conspiring to possess anabolic steroids and 500 grams or more of cocaine with the intent to distribute them, distributing anabolic steroids, and attempting to possess 500 grams or more of cocaine with the intent to distribute it. Jones has also been charged with possession of a firearm after conviction for a felony.
According to the allegations in the complaints and indictment, the defendants initially sold an undercover officer counterfeit Xanax. The tablets contained Alprazolam, which is the active ingredient in Xanax and is a Schedule IV controlled substance. In addition, Jones, who has a prior felony conviction, sold the undercover officer a ROMARM Wassenaar Arrangement Semiautomatic Rifles, a Romanian variant of the AK-47 rifle, for $1,000 cash. Fiore and Carbone then sold a second undercover officer various anabolic steroids. Carbone, with Fiore’s assistance, also attempted to buy a kilogram of cocaine from a second undercover officer. During the course of these drug dealings, Fiore also asked the undercover officer to kill an associate of Fiore’s and to “beat up” another associate.
Evidence at trial established that Burke and Garland created fictitious companies, including Next Level Development, and used an abandoned coin laundry in Delray Beach, to create an empire of fraudulently obtained investment properties. The abandoned coin laundry had a mailbox that served as the official address for the defendants, various fake companies, and other conspirators and fictitious individuals. Trial evidence established that Burke and Garland used fake documents, including false wage and tax documents, and false claims of employment and income, to obtain bank loans for investment properties in low-income neighborhoods. Garland was held out as the “President” of Next Level, and would sell properties to Burke, using his alias, “David Middleton.” The defendants would then enroll the properties in the U.S. Department of Housing and Urban Development (HUD), Section 8 voucher program, and obtain proceeds from HUD and from low-income tenants. The defendants then used false claims of status for Burke and also for the fake name, “David Middleton,” as total and permanent disabled veterans to avoid property taxes on various fraudulently obtained properties. Burke and his fake alias were neither veterans nor disabled. Trial evidence established that the loans and rental proceeds totaled millions of dollars.
If convicted, Fiore faces maximum possible statutory sentences of 40 years in prison for conspiring to possess controlled substances with the intent to distribute them; 40 years in prison for attempting to possess cocaine with the intent to distribute it; 20 years in prison for conspiring to traffic in counterfeit Xanax; 20 years in prison for each of the four counts of trafficking in counterfeit Xanax; 10 years in prison for each of the two counts of distributing anabolic steroids; and five years in prison for each of the four counts of distributing Alprazolam.
If convicted, Jones faces maximum possible statutory sentences of 20 years in prison for conspiring to traffic in counterfeit Xanax; 20 years in prison for each of the two counts of trafficking in counterfeit Xanax; 10 years in prison for possession of a firearm after conviction for a felony; five years in prison for conspiring to possess Alprazolam with the intent to distribute it; and five years in prison for each of the three counts of distributing Alprazolam.
If convicted, Carbone faces maximum possible statutory sentences of 40 years in prison for conspiring to possess controlled substances with the intent to distribute them; 40 years in prison for attempting to possess cocaine with the intent to distribute it; 20 years in prison for conspiring to traffic in counterfeit Xanax; 20 years in prison for each of the four counts of trafficking in counterfeit Xanax; 10 years in prison for each of the three counts of distributing anabolic steroids; and five years in prison for each of the two counts of distributing Alprazolam.
Mr. Ferrer commended the investigative efforts of FDA–Office of Criminal Investigations and PBSO. This case is being prosecuted by Assistant U.S. Attorney Marc Osborne.
An indictment and information is only an accusation and a defendant is presumed innocent unless and until proven guilty.
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.
Teacher Certification Scam Investigation Comes to A Close; Nets Thirteenth Guilty Plea and Fortieth Agreement to Pay Restitution and Cease TeachingRead the Press Release
Memphis, TN – United States Attorney for the Western District of Tennessee, Edward L. Stanton III, announced that Janett Dixon, 48, of Northport, Alabama; Corey Holmes, 37, of Metcalfe, Mississippi; Nia Kimble-Harris, 39, of Memphis, Tennessee; and Charles Ray Lee, 32, of Magee, Mississippi; have entered diversion agreements in the two-decade teacher certification testing scam led by ringleader Clarence Mumford, Sr., 61, of Memphis, who pled guilty in the scheme last year.
U.S. Attorney Stanton also announced the June guilty plea and sentencing of former Hillcrest High School and Byhalia High School boys basketball coach James O. Sales, 40, of Memphis.
Sales’s guilty plea is the thirteenth in a case opened by the United States Attorney’s Office in August 2011, and the four diversion agreements – which include agreements to cease teaching and to pay restitution where teaching jobs were obtained – bring the total number of diversion agreements to 40.
“Clarence Mumford and those he used in this tragic scam cheated the honest and dedicated tea
chers in our communities, and, tragically, the parents and children who deserve qualified teachers in their classrooms. Crimes such as these undermine our educational institutions and strike at the fabric of our society,” stated U.S. Attorney Stanton. “We are proud to have partnered with the U.S. Secret Service, the Tennessee Bureau of Investigation, and the Shelby County District Attorney General’s Office to expose this scheme and send the message that if you are defrauding our communities we will work together and we will bring you to justice.”The Teacher Certification Testing Scam
Mumford, Sr., the ringleader who pled guilty last year, was a teacher, guidance counselor, and assistant principal at schools in Arkansas, Mississippi and Tennessee.
The scam began in the mid-1980s, when Mumford began altering score reports for teachers with failing certification test scores. Teachers used the altered score reports to obtain licenses and jobs. Mumford changed the scam in the 1990s, when Educational Testing Service, which manages the certification tests, began sending scores directly to state boards of education. Mumford hired John Bowen, who was a substitute teacher at Humes Junior High School when Mumford was the assistant principal, to take examinations on behalf of failing teachers. At the time, Mumford charged approximately $600 per exam, paying $200 to Bowen.
Over time, demand for Mumford’s services grew as his name was passed by word of mouth among teachers and coaches in the Memphis City and Shelby County Schools and into Mississippi and Arkansas. Mumford’s market focused on teachers who were teaching on temporary licenses but were unable to pass the certification tests. These teachers, who had obtained college degrees but could not pass the exams, were willing to pay substantial sums to avoid losing their teaching – and in many cases, coaching – jobs.
Mumford identified targets of his services in various ways, such as searching the Tennessee Department of Education website for teachers whose temporary licenses were expiring, asking people who used his services whether they knew anyone else who needed passing scores, and attending meetings where teachers discussed their licensing issues. Once he identified potential customers, he contacted them, sometimes initially using the pretense that he would tutor them before soliciting them to pay stand-ins to take their exams. Some of the customers knew exactly what they were getting into from the outset, while others had simply heard generally that Mumford could help them get a passing score.
By 2010, Mumford was charging teachers approximately $2,500 to $3,000 and paying the stand-ins up to $600 to $800 per exam. In addition to Bowen, he had hired Steve Holmes, Felippia Kellogg, Nia Kimble-Harris, Devin Rutherford, Carlos Shaw, Jeryl Shaw, Shantell Shaw and his son, Clarence Mumford, Jr., to take examinations.Proctors Catch Stand-ins Taking Exams
Unbeknownst to Mumford at the time, the scheme began to unravel on June 13, 2009 when proctors for examinations given at Arkansas State University-Jonesboro caught several of Mumford’s stand-ins taking tests.
During the first session of tests on that date, Shantell Shaw, who was wearing a pink New York Yankees baseball cap, tested in the name of Marshay Thornton, then a Memphis City Schools teacher. The proctor for that examination went to visit another proctor during the second session of tests. She noticed the name Marshay Thornton on the second proctor’s examinee list but did not see Shantell Shaw in her pink ball cap. The first proctor asked the second proctor where Marshay Thornton was, and the second proctor identified a man who had identified himself as Marshay Thornton. This man turned out to be John Bowen.
Upon further investigation, the proctors determined that John Bowen had taken a test that morning in the name of Ellix Brooks (who also goes by the name Ellix Wilson). They found that Carlos Shaw was taking a test in the second session in the name of Ellix Brooks. They also found that Carlos Shaw had taken a test in the first session in the name of James Sales. Investigators later determined that Nia Kimble-Harris was also taking an examination at Arkansas State that day.
Shantell Shaw, Carlos Shaw and Nia Kimble-Harris managed to get away before university police officers arrived. The officers gave Bowen a persona non grata notice and criminal trespass warning, and Bowen was forced to call Mumford to come to Jonesboro to pick him up.
The incident was reported to Educational Testing Services, which looked into the tests and cancelled the relevant scores. Eventually, in 2010, the Tennessee Bureau of Investigation was notified and asked to investigate.
Meanwhile, Mumford had suspended the scheme for several months after the Arkansas State incident. By early 2010, though, he resumed the scheme, apparently believing the incident had escaped the attention of law enforcement.Law Enforcement Investigation
After receiving the request to investigate, the TBI interviewed participants in the Jonesboro testing and, in the fall of 2010, obtained a search warrant for Mumford’s home. At the home, investigators found a variety of sources of information that identified additional participants in the scheme, including identification documents used to create fake IDs and correspondence from teachers involved in the scheme. They also found several thousand dollars in cash.
After investigators learned that participants in several states were involved, the case was presented to the United States Attorney’s Office, which began a federal investigation. The TBI remained the lead investigative agency, and the United States Secret Service joined the investigation.
State and federal investigators subpoenaed bank and phone records and conducted hundreds of interviews to attempt to unravel the entire scheme, traveling across western Tennessee and down through Mississippi to the delta. They found that Mumford’s name had been passed along by word of mouth to dozens of teachers in Tennessee, Mississippi and Alabama.Mumford’s Manipulation of Participants
Investigators learned that Mumford had manipulated people to bring them into the scheme. For example, Shantell Shaw informed investigators that Mumford was her mentor when she was a new teacher. Mumford told Ms. Shaw that he knew a woman who had failed to pass an examination numerous times and was in danger of losing her job. He asked Ms. Shaw to take the examination for the woman, and Ms. Shaw refused several times. Finally, after he persuaded Ms. Shaw to meet the woman, Ms. Shaw relented and took the exam. He used a similar approach with Felippia Turner-Kellogg, telling her of teachers who would lose their jobs if she did not help out.
Mumford also persuaded some teachers to use his services by initially luring them with an agreement to tutor them. After meeting with them, he would tell them that tutoring would not work out but that he could get the exams passed for a fee. Frances Jones is one example. After meeting with Ms. Jones for a short while for purported tutoring services, Mumford told her that she should just pay him to have the test taken for her. He told her that tutoring would not work out. She needed the score to keep her job. It did not work out for Ms. Jones. She paid Mumford $3,000, but the stand-in left the testing facility because the stand-in feared the proctor was suspicious of the fake ID Mumford had provided. Mumford then demanded an additional $3,000 for a second exam even though his stand-in had not taken the first. Desperate, Ms. Jones paid the additional $3,000. But this time the scores were cancelled after ETS detected a large score increase compared to Ms. Jones’s previous tests and identified handwriting discrepancies. Mumford did not refund any of Ms. Jones’s money.Dozens of Teachers and Examinations Identified – Additional Evidence Destroyed
Investigators identified approximately 100 examinations taken on behalf of at least 50 individuals. However, although many of the examinations and participants were identified based on materials found during the search warrant at Mumford’s house in the fall of 2010, they also learned that after the Jonesboro incident in 2009, Mumford had taken boxes of testing documentation and evidence to a in Mississippi farm and burned the items. Had those items not been destroyed, investigators may well have been able to identify many more participants and examinations.
Of those involved in the scheme, Mumford enabled many teachers who had failed examinations numerous times, and enabled them to teach in already struggling districts. Carlo McClelland failed the Reading and Writing examinations eleven times before Mumford had the tests passed for him. Marshay Thornton had failed biology eight times. Jacqueline Hill, Willie Knox and Taponsa Wells had each failed examinations seven times before Mumford had the tests passed for them.
In 2012, the Memphis City Schools – the central location of the scheme – had the highest percentage of all school districts in Tennessee of students below basic proficiency levels in Reading and Science. Nine Mississippi districts that had hired teachers enabled by Mumford were characterized as “Low Performing.” At least 22 school districts in Tennessee, Mississippi, and Alabama – and thousands of students in those districts – were victimized by the scheme.Coaching Connection
Notably, as Mumford’s name passed by word of mouth through the coaching community, a number of former athletes and coaches became involved in the scheme. Basketball coaches who pled guilty or were diverted in the scheme included Corey Alexander, Samuel Campbell, Yanesha Coleman, Jerome Martin, Rondavius Milam, Shelvie Rose, James Sales, Shunnica Scott, Roosevelt Taylor and Jermaine Johnson, who coached Melrose High School to a state championship in 2010. Football coaches included Ellis Brooks, Keiver Campbell, Lavante Epson, Willie Knox, Jadice Moore, Corey Holmes, Carlo McClelland, Cedrick Wilson and Devin Rutherford, who coached White Station High School to a state championship in 2009.
Several of the coaches had also been professional athletes. Cedrick Wilson starred at the University of Tennessee before later playing for the Pittsburgh Steelers and winning a Super Bowl ring. Corey Holmes played for several years in the Canadian Football League, winning the league’s Most Outstanding Special Teams Player in 2005. He later became the mayor of Metcalfe, Mississippi. Lavante Epson played for several years in the Arena Football League, and Keiver Campbell played minor league baseball. Dante Dowers, who acted as a middleman in the scam, was on the Baltimore Ravens practice squad in 1996.Results of Investigation
To this point, 13 participants have been convicted of felonies, 10 of them serving time in prison. An additional 40 have reached diversion agreements that will result in losses of teaching licenses and an agreement not to even attempt to teach for at least five years. The agreements require those who got teaching jobs using Mumford’s services to pay restitution to the school districts that employed them.
Clarence Mumford – the ringleader – is currently serving a seven-year sentence in federal prison.
This investigation is being conducted by the Tennessee Bureau of Investigation and the United States Secret Service. Assistant U.S. Attorney John Fabian and Special Assistant U.S. Attorney Kirby May represent the government.Tampa Man Sentenced to More Than Four Years in Prison for Stolen Identity Refund FraudRead the Press Release
Tampa, Florida – U.S. District Judge Susan C. Bucklew sentenced Hantz Saint Marc today to four years and six months in federal prison for theft of government property and aggravated identity theft. Saint Marc pleaded guilty on February 19, 2014.
According to court documents, Saint Marc engaged in stolen identity refund fraud from April 2009 to May 2011, with two co-conspirators. In particular, in May 2011, Saint Marc stayed in one of two rented hotel rooms where lists of identifying information and pre-paid debit cards containing fraudulently-obtained tax refunds were found. Also found in both rooms were medical records stolen from the James A. Haley Veterans Hospital. The records contained the identifying information of U.S. veterans. At sentencing, he was found responsible for fraudulent tax returns requesting nearly $300,000 of government funds and victimizing more than 45 veterans.
This case was investigated by the Department of Veterans Affairs, Office of the Inspector General, the Internal Revenue Service – Criminal Investigation, and the Tampa Police Department. It is being prosecuted by Assistant United States Attorney Sara C. Sweeney.
St. Charles Woman Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO – DANIELA SPIRIDON was sentenced to 78 months in prison involving a real estate scheme related to the purchase or sale of properties. In addition to the prison sentence, she was also ordered to pay $2,499,988 restitution and a fine of $5,000.
According to court documents, Spiridon was affiliated with several businesses from an office in Chesterfield, Missouri, which included A & AD Investments, LLC; CDRS ESC Investments; Sentrix Loan Production Office and others. As part of the scheme, Spiridon fraudulently offered to assist buyers in the purchases of properties that were acquired by lenders through foreclosure and held in inventory, known as Real Estate Owned (REO) properties. She offered to broker purchases or arrange for financing related to the purchase or sale of the REO properties. She had potential buyers place deposits on the properties, which she was to put into an escrow account, but she actually put the monies in a non-escrow account in one of her own companies. She often used buyers’ funds for personal expenses and to reimburse other buyers who demanded their funds be returned rather than to secure real property or financing.Spiridon, St. Charles, MO, pled guilty last September to six felony counts of wire fraud. She appeared today for sentencing before United States District Judge John A. Ross.
This case was investigated by the Federal Bureau of Investigation, Postal Inspection Service and Federal Housing Finance Agency-Office of Inspector General. Assistant United States Attorney Rob Livergood is handling the case for the U.S. Attorney's Office.Samsung Electronics America Agrees to Pay $2.3 Million to Resolve False Claims Act AllegationsRead the Press Release
Samsung Electronics America Inc. (Samsung) has agreed to pay $2.3 million to resolve allegations that it caused the submission of false claims for products sold on General Service Administration (GSA) Multiple Award Schedule (MAS) contracts in violation of the Trade Agreements Act of 1979 (TAA), the Justice Department announced today. Samsung is an electronics distributor and marketer headquartered in Ridgefield Park, New Jersey.
“The Department of Justice is committed to protecting public funds and guarding against abuse of federal procurement programs,” said Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division. “This settlement upholds important trade priorities by ensuring that the United States only uses its buying power to purchase from countries that trade fairly with us.”
MAS contracts are contracts awarded by GSA to multiple companies supplying comparable products and services. Once GSA negotiates and awards the contract, any federal agency may purchase under it. Like many other federal procurement contracts, GSA MAS contracts require the vendor to certify that all products it offers for sale comply with the TAA. The TAA generally requires the United States to purchase products made in the United States, or another designated country with which the United States has a trade agreement.
Samsung has authorized resellers who hold GSA MAS contracts. Samsung certifies to the authorized resellers that Samsung will provide TAA compliant products and the resellers in turn list those products on the resellers’ GSA MAS contracts. The settlement resolves allegations that, from January 2005 through August 2013, Samsung caused resellers of its products to sell items on their GSA MAS contracts in violation of the TAA by knowingly providing inaccurate information to the resellers regarding the country of origin of the goods. The United States alleges that Samsung represented to the resellers, who in turn represented to federal agencies, that the specified products were made in TAA designated countries, generally Korea or Mexico, when the specified products were in fact manufactured in China, which is not a TAA designated country.
“It is unacceptable to sell unauthorized foreign electronics to the United States,” said GSA Acting Inspector General Robert C. Erickson. “We expect all companies doing business with the federal government to comply with contracting laws.”
The allegations resolved by the settlement were originally brought in a lawsuit filed by Robert Simmons, a former Samsung employee, under the False Claims Act’s whistleblower provisions, which permit private parties to sue for false claims on behalf of the United States and to share in any recovery. Mr. Simmons’ share of the settlement has not yet been determined.
The investigation and settlement were the result of a coordinated effort among the U.S. Attorney’s Office for the District of Maryland, the Commercial Litigation Branch of the Justice Department’s Civil Division and the GSA’s Office of Inspector General.
The case is United States ex rel. Simmons v. Samsung Electronics America, Inc. et al., No. AW-11-2971 (D. Md.). The claims resolved by the settlement are allegations only and there has been no determination of liability.
Rothstein Associate Pleads Guilty to Conspiracy to Commit Wire FraudRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Donnell Young, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Frank Preve, 70, of Coral Springs, pled guilty today in Ft. Lauderdale before U. S. District Judge James I. Cohn to conspiracy to commit wire fraud, in violation of 18 U.S.C. § 371. At his sentencing, scheduled for December 12, 2014, Preve faces a maximum statutory sentence of up to five years in prison.
In 2009, it was discovered that the law firm of Rothstein, Rosenfeldt and Adler, P.A. (RRA) was being utilized by its Chairman and Chief Executive Officer, Scott W. Rothstein, to commit a massive Ponzi scheme stemming from the sale of fictitious confidential settlements. In a written factual stipulation filed in connection with his guilty plea, Preve admitted that he worked for a number of companies, referred to as “the Banyon Group,” which solicited lenders and investors into the confidential settlement business being offered by Rothstein. The defendant further admitted that, from on or about July 9, 2009 through October 31, 2009, he defrauded investors by not disclosing that Rothstein had failed to make payments that were due to the Banyon Group, that Rothstein had frozen certain bank accounts that were holding investor funds, that certain paperwork was not being prepared, and that verification of the investments was not taking place, all in violation of a private placement memorandum which had been circulated to potential investors by the Banyon Group. The defendant further admitted that, through these material misrepresentations and omissions, Preve caused more than $20 million to be paid by investors to the Banyon Group.
Mr. Ferrer commended the investigative efforts of the IRS-CI and FBI. This case is being prosecuted by Assistant U.S. Attorneys Lawrence D. LaVecchio, Paul F. Schwartz, and Jeffrey N. Kaplan.
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.