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1 October 2014
Two More Ironworkers Plead GuiltyRead the Press Release
PHILADELPHIA- Two members of the Ironworkers Local 401 pleaded guilty today to their roles in incidents that caused destruction to construction sites. Daniel Hennigar, 54, of Philadelphia, pleaded guilty to maliciously damaging property by means of fire. James Zinn, 28, of Philadelphia, pleaded guilty to conspiracy to commit extortion which interferes with interstate commerce. U.S. District Court Judge Michael Baylson scheduled a sentencing hearing for Hennigar for January 28, 2015 and January 21, 2015, for Zinn.
On December 20, 2012, Hennigar drove two other ironworkers, James Walsh and William Gillin, to the Quaker Meetinghouse under construction. Walsh and Gillin used an acetylene torch and gasoline to cause significant damage to the construction site in retaliation for the contractor’s failure to hire union ironworkers.
Zinn admitted to his role in a series of incidents during which members of the union damaged non-union construction sites in an attempt to force non-union contractors to hire union ironworkers. Those incidents included $25,000 in damage to the Wallingford Elementary School construction site and $25,000 in damage at a Merion East Golf Course in Ardmore, PA.
Hennigar faces a five year mandatory minimum term of imprisonment. Each defendant faces a statutory maximum sentence of 20 years in prison, three years of supervised release, a $250,000 fine, a $100 special assessment, and possible restitution.
The case was investigated jointly by the Federal Bureau of Investigation and Department of Labor Office of Inspector General, with assistance provided by the Philadelphia Police Department Corruption Task Force, East Whiteland Township Police Department, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Employee Benefit Security Administration. It is being prosecuted by Assistant United States Attorney Robert Livermore with legal assistance provided by Gerald Toner, Acting Deputy Chief for Labor-Management Racketeering, Organized Crime and Gang Section at the Department of Justice.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PATTY HARTMAN, Media Contact, 215-861-8525Two Mobridge Men Charged with Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Brendan V. Johnson announced that two Mobridge, South Dakota, men have been indicted by a federal grand jury for Conspiracy to Distribute and Possess with Intent to Distribute a Controlled Substance, and Possession with Intent to Distribute a Controlled Substance.
Aaron Sackreiter, age 34, and Stanley Schily, age 59, were indicted on September 16, 2014. They appeared before U.S. Magistrate Judge William D. Gerdes on September 24, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is a mandatory minimum sentence of 5 years and a maximum of 40 years in custody and/or a $2,000,000 fine, at least 4 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between December 1, 2013, and July 1, 2014, Sackreiter and Schily knowingly and intentionally combined, conspired, confederated and agreed to distribute, and possessed with intent to distribute, a mixture and substance containing 50 grams or more of a detectable amount of methamphetamine, a Schedule II controlled substance.
The charges are merely an accusation and Sackreiter and Schily are presumed innocent until and unless proven guilty.
The investigation is being conducted by the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney Jay Miller is prosecuting the case.
Sackreiter and Schily were released on bond. Trial has been set for November 4, 2014.
Two Men Charged with Fraud for Looting Hedge FundsRead the Press Release
LAS VEGAS, Nev. – Two men have been charged with conspiracy and fraud for engaging in a scheme to misappropriate $34 million from two Florida-based hedge funds during 2008 to 2010, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Robert Buckhannon, 53, of Las Vegas, and Terry Rawstern, 66, of Aberdeen, S.D., are charged in a criminal indictment with one count of conspiracy to commit wire fraud and one count of wire fraud. Buckhannon, who was arrested by FBI agents yesterday in Henderson, Nev., pleaded not guilty this afternoon at an arraignment before U.S. Magistrate Judge George Foley, and was released on a personal recognizance bond pending trial. Rawstern’s arraignment is scheduled for tomorrow, Oct. 2 at 3:00 p.m. If convicted, the defendants face up to 30 years in prison on the conspiracy charge, up to 20 years in prison on the wire fraud charge, and fines of up to $1 million on each count.
“We have been working with our federal, state and local partners to investigate and prosecute persons who commit significant financial crimes,” said U.S. Attorney Bogden. “Often these cases take considerable time and resources to investigate and litigate, but the American people deserve to know that we are working diligently to catch the perpetrators.”
According to the indictment, from April 2008 through April 2010, Buckhannon and Rawstern and co-conspirators were managing members of two Bradenton, Florida-based hedge funds, Arcanum Equity Fund, LLC and Vestium Equity Fund, LLC. The defendants allegedly engaged in a fraudulent scheme to misappropriate $34 million they raised from investors by misrepresenting how they would use the investors’ funds and misrepresenting that there were safeguards over the investors’ money, such as an independent trustee and independent fund administrator. The defendants then looted and bankrupted the hedge funds by taking payments on false and fictitious profits and taking improper and undisclosed loans. The indictment states that as a result of the defendants’ conduct, investors lost approximately $13.1 million. In April 2010, the hedge funds voluntarily filed for Chapter 7 bankruptcy and are now under the control of court-appointed trustees.
The case is being investigated by the FBI, and prosecuted by Assistant U.S. Attorney Kathryn C. Newman.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.com.
Two Defendants Plead Guilty in Conspiracy to Defraud XeroxRead the Press Release
Rochester, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Anthony Fretto and Daniel Streff, both of Webster, NY, who are named defendants in the federal indictment charging Clarkson Auto Electric, Inc. and nine individuals in a scheme to defraud the Xerox Corporation, pleaded guilty before U.S District Judge Frank p. Geraci to mail fraud and money laundering conspiracy. The charges carry a maximum penalty of 20 years in prison, a fine of $250,000 or both.
Assistant U.S. Attorneys Bradley E. Tyler and Marisa J. Miller, who are handling the case, stated that Fretto is a principal owner of Clarkson Auto Electric, Inc. and Streff is a former Xerox forklift mechanic. The defendants conspired with others to submit false invoices to the Xerox Corporation requesting payment for new forklift parts that had not been delivered to Xerox, and for forklift part repairs that had not been done. Fretto then conspired with others to launder the illegally obtained proceeds received from Xerox.
Four of the nine defendant charged in the case have been convicted. 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.
Sentencing for both defendants is scheduled for January 6, 2015, at 3:00 p.m. before Judge Geraci.
The pleas are the culmination of an investigation on the part of 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, and the U.S. Postal Inspection Service, under the direction of Special Agent in Charge Shelly Binkowski.Trans Energy Convicted of Clean Water Act ViolationsRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Tara Tighe, Public Affairs SpecialistWHEELING, WEST VIRGINIA – Trans Energy, Inc. entered guilty pleas to three violations of the Clean Water Act in connection with its natural gas drilling activity in Northern West Virginia, according to United States Attorney William J. Ihlenfeld, II.
Trans Energy pled guilty this afternoon to three counts of “Negligent Discharge of Pollutants without a Permit,” admitting that it dumped pollutants into waterways found in Marshall County, West Virginia. The company agreed that it discharged materials such as rock, sand, soil and stone into streams at Wolf Run, the North Fork of Grave Creek, and the Left Fork of Maggoty Run, all for the purpose of creating impoundments. The water from the impoundments was subsequently used by Trans Energy for Marcellus Shale drilling activity. Trans Energy admitted that it failed to properly train and supervise its employees and that it relied upon the unsubstantiated representations of a nearby property owner when determining whether environmental laws were being followed.
“Altering wetlands can significantly impact water quality and wildlife,” said David G. McLeod, Jr., Special Agent in Charge of EPA’s criminal enforcement program in West Virginia. “By holding violators accountable, EPA is protecting valuable wetlands as well as the communities around them. This case is a direct result of the strong working relationship between our federal and state enforcement partners.”
The plea agreement calls for Trans Energy to pay a fine of $200,000 for each conviction, for a total fine of $600,000. It also requires that Trans Energy be placed onto probation for two years and be under the supervision of the Court during that time period. The parties agreed that separate violations committed by Trans Energy and occurring in connection with two other impoundments constructed in Marshall County would be addressed by civil penalties.
John G. Corp, President of Trans Energy, signed the plea agreement on behalf of the company, which was formed and organized pursuant to the laws of the State of Nevada.
The Clean Water Act, also known as the Federal Water Pollution Control Act, was enacted by Congress to restore and maintain the integrity of the Nation’s waters. It prohibits the discharge of any pollutant from a point source into the waters of the United States without a permit. Discharges of dredged or fill material into waters of the United States are prohibited unless authorized by a permit issued by the U.S. Army Corps of Engineers.
The case was investigated by the U.S. Environmental Protection Agency, Criminal Investigation Division. It is being prosecuted by David J. Perri, Assistant United States Attorney, and Perry D. McDaniel, Special Assistant United States Attorney.
U.S. Magistrate Judge James E. Seibert presided.
Three Enter Guilty Pleas in Shaw Air Force Base SchemeRead the Press Release
Contact Person: DeWayne Pearson (803) 929-3000
Columbia, South Carolina ---- James Autry “Audi” Clemens, age 60 of Johnston, SC, Larry Baker, age 64 of Cameron, SC and Steven Crandall, age 59 of Salisbury, NC entered guilty pleas to theft of government funds in violation of Title 18, United States Code, Section 641 in connection with their scheme to defraud Shaw Air Force Base through various construction contracts. Clemens entered an additional guilty plea to one count of money laundering in violation of Title 18, United States Code, Section 1956(a)(1)(B)(i) for his role in the scheme. According to facts presented during the guilty plea hearing, the men would inflate costs of construction projects by submitting invoices that falsely claimed that additional workers and resources were used to complete construction jobs on the base. The men would then split the fraudulent payments between themselves. The maximum penalty Baker and Crandall face is 10 years imprisonment and a fine of $250,000. Clemens faces a maximum penalty of 20 years imprisonment and a fine of $500,000.
"Mr. Clemens guilty plea is significant in sending a message that while fraud involving government contracts may be initially lucrative, nothing lasts forever and the consequences are serious. We and our law enforcement partners will work continuously to uncover this type of criminal activity." said Thomas J. Holloman III, Special Agent in Charge, IRS Criminal Investigation. The case was also investigated by agents of the United States Air Force and was prosecuted by Assistant United States Attorney T. DeWayne Pearson of the Columbia office.Springfield Man Sentenced for Crack Cocaine, FirearmRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., man was sentenced in federal court today for illegally possessing crack cocaine and a firearm.
Ulysses Johnson, 37, of Springfield, was sentenced by U.S. District Judge M. Douglas Harpool to 12 years and six months in federal prison without parole.
On April 7, 2014, Johnson pleaded guilty to being a felon in possession of a firearm and to possessing crack cocaine with the intent to distribute. An undercover Springfield police officer purchased crack cocaine from Johnson on three separate occasions in December 2011 and January 2012. Officers executed a search warrant at Johnson’s residence on Jan. 18, 2012, and found a loaded FIE Tanfoglio .22-caliber revolver in the nightstand of the master bedroom, a partial box of .357-caliber and .22-caliber ammunition the hallway bathroom and a large bag that contained 12.64 grams of crack cocaine, divided into eight smaller individual baggies, hidden in an oven mitt in the kitchen. Johnson was placed under arrest.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearms or ammunition. Johnson has prior felony convictions for aggravated robbery and taking a driving a vehicle without consent, two prior felony convictions for delivery of a controlled substance and two prior felony convictions for possession of THC.
This case was prosecuted by Assistant U.S. Attorneys Ami Harshad Miller and Cindy Hyde. It was investigated by the Springfield, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Soto-Vasquez Brothers Each Sentenced to Ten Years in Federal Prison for Drug DealingRead the Press Release
PORTLAND, Ore. -- United States District Judge Anna J. Brown sentenced, in separate proceedings, Jose Antonio Soto-Vasquez, 29, and Jesus Manuel Soto-Vasquez, 27, each to ten years in federal prison on Wednesday, October 1, 2014. Earlier this year, both co-defendants pleaded guilty to conspiracy to distribute and possess with intent to distribute methamphetamine.
“The sentences in this case reflect the seriousness of federal sentencing for drug distribution,” said U.S. Attorney Amanda Marshall.
Both brothers were investigated by the Drug Enforcement Administration (DEA) as part of drug distribution ring operating in Salem, Oregon and were arrested in 2013. They admitted to officers that they had been active in a southern Oregon outdoor marijuana grow and had returned to Salem where they distributed marijuana and methamphetamine. Each defendant was found by the court to have possessed a firearm in connection with the offense. The quantity of methamphetamine they possessed for sale subjected them to a ten-year mandatory minimum sentence.
The case was investigated by the Salem office of the DEA and prosecuted by Assistant U. S. Attorney Thomas H. Edmonds.
Seattle Man, Nicholas Saine, Sentenced for Possession of Child PornographyRead the Press Release
U.S. Attorney Kenneth Polite announced that NICHOLAS SAINE, age 27, a resident of Seattle, Washington, was sentenced today for possession of child pornography.
According to court documents, in November 2013, SAINE was arrested by special agents with the United States Department of Homeland Security, Homeland Security Investigations (“HSI”) and the United States Postal Inspection Service after they determined that SAINE possessed videos depicting the sexual exploitation of children on the Internet. SAINE had received the videos through websites operated by Johnathan Johnson, who was based in Abita Springs, Louisiana. On April 30, 2014, SAINE entered a plea of guilty to knowingly possessing several videos depicting the sexual exploitation of children.
U.S. District Judge Kurt Engelhardt sentenced SAINE to 37 months imprisonment, five years of supervised release, and ordered that SAINE will have to register as a sex offender.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by Homeland Security Investigations and the U.S. Postal Inspection Service. The prosecution of this case is being handled by Project Safe Childhood Coordinator and Fraud Unit Chief, Assistant U. S. Attorney Brian M. Klebba.
Santa Clara Pueblo Man Pleads Guilty to Federal Assault ChargesRead the Press Release
ALBUQUERQUE – Brandon Tafoya, 23, a member of the Santa Clara Pueblo who resides in Espanola, N.M., pleaded guilty this morning to two counts of assault resulting in serious bodily injury.
Tafoya was arrested on Nov. 5, 2013, on an indictment charging him with two counts of assault resulting in serious bodily injury. The indictment alleged that Tafoya knowingly drove a vehicle while under the influence of alcohol on April 11, 2013, in Santa Clara Pueblo in Rio Arriba County, N.M., and recklessly crashed into another vehicle causing two women to suffer serious bodily injuries.
During today’s proceedings, Tafoya pled guilty to the indictment and admitted assaulting the victims by crashing into their vehicle while he was driving under influence of alcohol. Tafoya acknowledged that as a result of the assaults, the victims sustained internal injuries, cuts and lacerations. One of the victims also sustained a hip fracture and a pelvic fracture.
Under the terms of his plea agreement, Tafoya will be sentenced to a prison term not to exceed three years, including two years at a rehabilitation program and a year in a transitional half-way house or such other program that may be designated by the U.S. Probation Office.
This case was investigated by the Northern Pueblos Agency of the BIA’s Office of Justice Services and the Santa Clara Tribal Police Department and is being prosecuted by Assistant U.S. Attorney Presiliano A. Torrez.
San Antonio Man Sentenced to Federal Prison in Aggravated Identity Theft and Mail Fraud SchemeRead the Press Release
In San Antonio today, 31-year-old Michael Floyd White was sentenced to 39 months in federal prison followed by three years of supervised release and ordered to pay $112,362 restitution for his role in an aggravated identity theft and mail fraud scheme announced United States Attorney Robert Pitman and Special Agent in Charge Steven McCullough, Internal Revenue Service Criminal Investigation, San Antonio Field Office.
By pleading guilty to one count of mail fraud and one count of aggravated identity theft, White admitted that from January 2011 to February 2012, he and 30–year-old co-defendant Sasha Cher-Von Beckett knowingly devised a scheme to defraud the Internal Revenue Service by submitting fraudulent Income Tax returns seeking refunds totaling approximately $160,000. Throughout the scheme, White and Beckett would use names, dates of birth and social security numbers of other individuals to electronically file numerous Income Tax returns, then collect the refunds by using the debit card option and having those debit cards mailed directly to them.
Beckett awaits sentencing after pleading guilty to the one count each of mail fraud, aggravated identity theft and access device fraud. She faces up to 20 years in federal prison for mail fraud and access device fraud. She also faces a mandatory two years in federal prison for aggravated identity theft. Beckett is scheduled to be sentenced at 1:30pm on October 22, 2014, before United States District Judge Xavier Rodriguez.
“IRS Criminal Investigation continues our emphasis on vigorously investigating refund fraud and identity theft. This deliberate fraud can impede honest taxpayers from receiving their lawful refund and causes monetary loss to the U.S. Treasury. Today’s sentencing of Mr. White should serve as a strong warning to those who are considering similar illegal conduct. Those who engage in these fraudulent activities will be held accountable for their criminal actions,” stated IRS Criminal Investigation Special Agent in Charge Steven McCullough.
This case was investigated by special agents with the IRS Criminal Investigation together with the San Antonio Police Department. Assistant United States Attorney Tom Moore is prosecuting this case on behalf of the Government.
Red Valley Man Sentenced to 153 Months for Involuntary Manslaugther and Use of A Firearm in A Crime of ViolenceRead the Press Release
PHOENIX – On Sept. 29, 2014, Joe Arviso Benally, 51, of Red Valley, Ariz., was sentenced by U.S. District Judge G. Murray Snow to 153 months’ imprisonment followed by five years of supervised release. Benally was found guilty by a federal jury on July 9, 2014, of involuntary manslaughter and use (discharge) of a firearm in a crime of violence, the offense occurred on the Navajo Nation Indian Reservation.
The evidence at trial was that Benally, after an argument, retrieved his .270 caliber hunting rifle, loaded it, and shot the victim in the chest, killing him.
The investigation in this case was conducted by Federal Bureau of Investigation and the Navajo Nation Department of Public Safety. The prosecution was handled by Christina Covault and Melissa Karlen, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-13-8095-PCT-GMS
RELEASE NUMBER: 2014-056_BenallyFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.Rapid City Man Pleads Not Guilty to Assaulting His Intimate Partner with A KnifeRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rapid City, South Dakota, man has been indicted by a federal grand jury for Assault with a Dangerous Weapon, Assault by Strangulation and Suffocation, and Assault Resulting in Substantial Bodily Injury to an Intimate Partner.
Isaac White Crane, age 29, was indicted on September 23, 2014. He appeared before U.S. Magistrate Judge Veronica L. Duffy on September 26, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is 10 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to White Crane using a knife to cause substantial bodily injury to his intimate and dating partner on January 8, 2014, near Kyle. He also strangled and suffocated her.
The charges are merely accusations and White Crane is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Kathryn N. Rich is prosecuting the case.
White Crane was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Portsmouth Woman Sentenced to 15 Years for Her Role in Conspiracy to Produce Child PornographyRead the Press Release
NORFOLK, Va. – Nina Renee Calderon, 23, of Portsmouth, Virginia, was sentenced today to 15 years in prison, followed by lifetime supervised release, for production of child pornography.
Dana J. Boente, United States Attorney for the Eastern District of Virginia and Clark Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Washington, D.C., Field Office, made the announcement after sentencing by U.S. District Judge Robert G. Doumar.
Calderon pleaded guilty on May 7, 2014. According to court documents, Calderon became involved in a conspiracy to produce child pornography when she was contacted by coconspirator Robert Harold Scott, Jr. under his assumed online identity of “Mike Pyro.” Scott would routinely communicate with women in and around the Tidewater area to set up “sex parties,” where the women would work as prostitutes and Scott would pay them for their services. In reality, Scott would not pay them and, at times, extort the women by threatening to publish sexually explicit videos they had created for the promise of additional money. In addition to the adult parties, Scott was found to be conspiring with and producing child pornography with several different women, including Calderon. Law enforcement found that, when discussing the sex parties, sometimes Scott would request these women to produce child pornography and was very specific as to the sex acts he wanted done on camera. Calderon complied in return for the promise of money. Specifically, Calderon produced child pornography with a 2 year old female child.
This case was investigated by Homeland Security Investigations. Assistant U.S. Attorney Elizabeth M. Yusi prosecuted the case.A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:13-cr-164.
Pine Ridge Man and Woman Indicted for Assault on A Federal OfficerRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pine Ridge, South Dakota, man and woman have been indicted by a federal grand jury for Assault on a Federal Officer.
Trivian Bad Wound, age 50, and Donroy Big Crow, age 57, were indicted on September 23, 2014. They appeared before U.S. Magistrate Judge Veronica L. Duffy on September 26, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is 8 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to Bad Wound and Big Crow assaulting a law enforcement officer employed with the Oglala Sioux Tribe Department of Public Safety on March 18, 2014, near Pine Ridge.
The charge is merely an accusation and Bad Wound and Big Crow are presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Kathryn N. Rich is prosecuting the case.
Bad Wound was released on bond. Big Crow was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Pierre Woman Charged with Acquisition of A Controlled Substance by MisrepresentationRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pierre, South Dakota, woman has been indicted by a federal grand jury for Acquisition of a Controlled Substance by Misrepresentation, Fraud, Forgery, Deception, and Subterfuge.
Terri Lee Morin, age 42, was indicted on September 16, 2014. She appeared before U.S. Magistrate Judge Mark A. Moreno on September 25, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 4 years in custody and/or a $250,000 fine, 1 year of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between January 13, 2012, and March 13, 2014, Morin knowingly and intentionally acquired and obtained possession of the controlled substances Zolpidem and Lorazepam by misrepresentation, fraud, forgery, deception, and subterfuge.The charge is merely an accusation and Morin is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Office of the Inspector General of the U.S. Department of Health and Human Services. Assistant U.S. Attorney Jay Miller is prosecuting the case.
Morin was released on bond pending trial. A trial date has not been set.
Philadelphia Woman Sentenced to Prison for Participating in Heroin Trafficking ConspiracyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Philadelphia resident was sentenced today to serve six months in prison for her role in a heroin trafficking conspiracy by U.S. District Court Judge Malachy E. Mannion.
According to United States Attorney Peter Smith, the defendant, Linda Reyes, age 24, previously admitted that she conspired with others, including an inmate at the Waymart State Prison, to distribute and possess with intent to distribute heroin during November 2013 through March 2014.
Reyes was indicted by a federal grand jury on March 11, 2014, as a result of an investigation by special agents and task force officers of the Federal Bureau of Investigation and Scranton Police.
Judge Mannion ordered Reyes to serve three years of supervised release following her prison sentence, and spend the first six months of supervised release on home confinement. Reyes must also pay a special assessment of $100.
Reyes’ two co-defendants, Luis Morales and Eudy Gonzalez, have also pleaded guilty to participating in the heroin conspiracy and are awaiting sentencing.
The case was prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Pennsylvania Man Sentenced on Firearm ChargeRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Robert Reed, 49, of Bradford, PA, who was convicted of conspiracy to transport firearms outside state of residency, was sentenced to time served and two years supervised release by Chief U.S. District Judge William M. Skretny.
Assistant U.S. Attorney Mary Catherine Baumgarten, who handled the case, stated that on October 7, 2008, the defendant, in exchange for crack cocaine, attempted to purchase a .45 caliber firearm for co-defendant Juan Lopez. However, the sales clerk was suspicious of the defendant’s behavior and refused to sell the firearm to Reed. At the time of the attempted purchase, the defendant knew that Lopez intended to bring the firearm into New York State to use it for an unlawful purpose.
Reed was arrested, along with Juan Lopez, Robert Reed, Jacqueline Runyan, Trisha Amidon, Robert Johnson, Misty Mihalko, Amy Hollingsworth, and Brett Abrams. Juan Lopez recruited the co-defendants residing in Pennsylvania to purchase firearms for him in exchange for cocaine and money. As a convicted felon, Lopez was unable to purchase guns on his own, prompting the need for the straw purchases. Lopez went to stores that sold guns in Pennsylvania with some of the co-defendants to select the firearms he wanted them to purchase. Lopez then brought the guns purchased in Pennsylvania back to the Buffalo area. Some of the firearms were recovered after being used in various crimes in Buffalo.
All of the defendants have been convicted and sentenced except for Juan Lopez who is scheduled to be sentenced by Judge Skretny on November 5, 2014 at 2:00 p.m.
Today’s sentencing is the culmination of an investigation by Special Agents of the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge James S. Higgins, New York Field Division.Pawtucket Drug Trafficker Sentenced to Federal Prison on Drug and Firearm ChargesRead the Press Release
PROVIDENCE, R.I. – Graviel Santos, 32, of Pawtucket, was sentenced on Wednesday to 84 months in federal prison on drug trafficking and firearm charges, announced United States Attorney Peter F. Neronha and Pawtucket Police Chief Paul King.
At sentencing, U.S. District Court Judge Mary M. Lisi also ordered Santos to serve three years’ supervised release upon completion of his prison term and to pay a fine of $1,000. Santos pleaded guilty in April 2014 to one count each of possession of heroin with the intent to distribute, possession of crack cocaine and being a felon in possession of a firearm.
According to information presented to the court by the government at the time of Santos’ guilty plea, in November 2013, members of the Pawtucket Police Special Squad completed an investigation into drug trafficking activities from an apartment where Santos and his girlfriend resided. Detectives conducted a court authorized search of the apartment on November 4, 2013, during which time they seized nearly 25 grams of heroin, 3 grams of crack cocaine, a loaded .45 caliber handgun and numerous items used in the packaging and distribution of illegal drugs.
The firearm was located inside a bin containing men’s clothing, within easy reach of the defendant who was lying on a couch when detectives entered the apartment.
According to information presented to the court, the defendant previously was convicted in Rhode Island state court on drug and domestic violence charges.
Santos has been detained since his arrest on November 4, 2013.
The case was prosecuted by Assistant U.S. Attorney Pamela E. Chin.
ATF and DEA agents assisted Pawtucket detectives in the investigation of this matter.
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[email protected]Pamela Smith Imprisoned for Woodstock Inn EmbezzlementRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Pamela Smith, 58, of Barnard, was sentenced on September 22, 2014 in United States District Court in Brattleboro to 15 months of imprisonment following her guilty plea to a charge of wire fraud. U.S. District Judge J. Garvan Murtha ordered that Smith serve a three-year term of supervised release following completion of her prison term and pay restitution in the amount of $228,675. The court directed Smith to surrender to the Bureau of Prisons on October 28 to begin serving her sentence.
On February 18, 2014, the United States Attorney filed a one-count information charging
Smith with wire fraud. According to the information, between approximately 2007 and early 2013, Smith was employed by the Shire Riverview Motel in Woodstock, Vermont. Smith worked part-time as a clerk and also performed bookkeeping services for the inn. Beginning no later than 2009 and continuing until early 2013, Smith embezzled not less than $210,000 from Shire Riverview. She did this by writing unauthorized checks to herself from the inn's checking account, then depositing the checks into her personal bank account; by stealing cash payments made by motel guests; and by using Shire Riverview funds to pay her personal expenses, including credit card, gasoline, fuel oil and telephone and Internet service bills. Smith used about $40,000 in stolen funds to pay for improvements to a house in Barnard.As part of her plea, Smith agreed to forfeit to the United States about $40,000 in improvements to the Barnard residence. At the time of sentencing Smith had already repaid the victim about $121,000.
This case was investigated by the Woodstock Police Department and the Federal Bureau of Investigation.
Smith is represented by George Ostler and Cabot Teachout. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Oglala Man Sentenced for Simple AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that an Oglala, South Dakota, man convicted of Simple Assault was sentenced on September 25, 2014, by U.S. Magistrate Judge Veronica L. Duffy.
Leon Eagle, age 21, was sentenced to 6 months of probation and ordered to pay a $10 special assessment to the Federal Crime Victims Fund.
Eagle was indicted for Felony Child Abuse and Neglect by a federal grand jury on March 18, 2014. He pled guilty to Simple Assault on July 10, 2014.
The conviction relates to an incident at Oglala in September of 2012, when Eagle was in an argument with some people and knocked the one-year-old victim to the ground.
This case was investigated by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Eric Kelderman prosecuted the case.
Norfolk Man Sentenced to 54 Months for Wire Fraud and False ClaimsRead the Press Release
NORFOLK, Va. –Travis Hager, 24, of Norfolk, Virginia, was sentenced today to 54 months in prison, followed by five years of supervised release, following his guilty plea on June 4, 2014, for wire fraud and false claims against the United States.
Dana J. Boente, United States Attorney for the Eastern District of Virginia and Thomas J. Kelly, Special Agent in Charge, Washington D.C. Field Office, IRS-Criminal Investigations, made the announcement after sentencing by U.S. District Judge Raymond A. Jackson.
According to court documents, Travis Hager, along with his co-conspirator Donte Demus, stole the identities of individuals and used them to file false federal income tax returns. While incarcerated in a Virginia Beach jail, Hager stole the identities of a number of fellow inmates and provided them to Demus by using the jail’s phone system. Demus then provided the identities to a third unidentified accomplice who filed the false returns. The conspirators would request the tax refund be loaded on a prepaid debit card and mailed to Norfolk, Virginia where Demus would retrieve them and spend the funds. In total, Hager, Demus, and their accomplice claimed fraudulent tax refunds from the U.S. Government in the amount of $163,953.
Donte Demus pleaded guilty on September 3, 2014 and is scheduled to be sentenced on December 4, 2014.
This case was investigated by Internal Revenue Service-Criminal Investigations. Assistant U.S. Attorney Joseph Kosky prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-43.
New York Man Imprisoned 69 Months for Heroin TraffickingRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that on September 29, 2014, Devon Cruz, 29, of New York, was sentenced by Chief United States District Judge Christina Reiss to sixty-nine months imprisonment on his guilty plea to a charge of conspiracy to distribute 100 grams or more of heroin. Chief Judge Reiss also ordered that Hercules serve four years on supervised release after his incarceration ends.
According to court documents, Cruz, along with Joshua Rose, 21, and Charles Hercules, 23, both of New York, trafficked approximately one kilogram of heroin from New York to Rutland from early 2012 to February 2013. The three New York men sold the heroin in Rutland primarily through several heroin-addicted local residents, including Alan H. Willis, II, 42, of Tinmouth, and Evan Murphy, 23, of Rutland. During a joint investigation by the Vermont Drug Task Force (VDTF), the Drug Enforcement Administration (DEA), and the Federal Bureau of Investigation (FBI), investigators used confidential informants to make controlled buys of the heroin from Willis and Murphy in the Rutland area.
On July 24, 2013, a grand jury returned an indictment charging Cruz, Rose, Hercules, Willis, Murphy, and Jean Marie Phillips, 47, of Rutland, with conspiracy to distribute 100 grams or more of heroin. All of the defendants have entered guilty pleas to the conspiracy charge, except Phillips, who pled guilty to aiding and abetting Rose=s possession with intent to distribute heroin. On April 28, 2014, Willis was sentenced to 37 months imprisonment. On May 9, 2014, Phillips was sentenced to 13 months imprisonment. On August 26, 2014, Murphy was sentenced to 60 months imprisonment. On August 27, 2014, Hercules was sentenced to 39 months imprisonment. Rose is scheduled for sentencing on October 30.
United States Attorney Tristram J. Coffin commended the joint investigation by the VDTF, DEA and FBI, and thanked the Vermont Attorney General=s Office for its cooperation. Burlington attorney Richard Bothfeld represented Cruz. The case is being prosecuted by Assistant U.S. Attorney Craig S. Nolan.
Nenahnezad Man Sentenced to Prison for Federal Arson ConvictionRead the Press Release
ALBUQUERQUE – Gregory Bitsilly, 28, an enrolled member of the Navajo Nation who resides in Nenahnezad, N.M., was sentenced this afternoon to 24 months in federal prison followed by five years of supervised release for his arson conviction.
Bitsilly was arrested in March 2014, on a criminal complaint charging him with arson. He was indicted on that same charge in April 2014. According to court filings, Bitsilly set fire to the residence he shared with his wife and children on March 24, 2014, because his wife was attempting to leave him for being physically abusive. The residence and its contents were a total loss.
On June 25, 2014, Bitsilly admitted willfully and maliciously setting fire to the home he resided in with his wife and children on March 24, 2014.
This case was investigated by the Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety and was prosecuted by Special Assistant U.S. Attorney David Adams.
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.
National Institute of Justice Invests $63 Million to Support School Safety Research, Arizona Awarded $4,999,442Read the Press Release
PHOENIX – The Office of Justice Programs’ National Institute of Justice (NIJ) today announced it has awarded nearly $63 million to school districts and research organizations through the Comprehensive School Safety Initiative (CSSI). CSSI is a large-scale, multi-agency research effort to build knowledge about effective approaches to increasing school safety nationwide.
Through the Initiative, 24 research projects receive funding under two different solicitations. The first, “Investigator-Initiated Research,” includes nine awards to research organizations totaling more than $18 million. The second, “Developing Knowledge about What Works to Make Schools Safe,” provides more than $45 million to 15 school districts and their research partners.
“We are proud that within our District, the University of Arizona, in partnership with the Arizona Department of Education, has been selected to research and evaluate the impact and effectiveness of the school resource officer (SRO) training and activities,” said U.S. Attorney John S. Leonardo, “This evaluation of the role of those in the SRO positions will be directed to 45 overall schools around the state in an effort to determine the most effective way to enhance the school safety of our students.”
“We know a great deal about how to make schools safe in general but very little about the specifics for various settings and populations,” said Dr. William J. Sabol, Acting Director of NIJ. “With this $63 million investment, the nation will gain an understanding of school safety that is scientifically sound, practical, and that can be easily interpreted and used by schools.”
President Obama’s January 2013 plan to end gun violence emphasized keeping guns out of potentially dangerous hands and recognized that additional actions are needed to make our schools safer. CSSI was launched in early 2014 in response to a Congressional request for a broad, research-based effort to increase safety in the nation’s schools.
The initiative has three primary goals: to collect national-level data; to convene stakeholders to identify and share best practices; and to conduct innovative research and evaluate pilot projects in school districts. The programs and policies within CSSI are designed to produce evidence about what works in such areas of school safety as effectiveness of school resource officers and mental health professionals, violence and bullying reduction, and effectiveness of such restorative justice interventions as youth courts. The initiative will also examine potential unintended consequences of school safety efforts, including the excessive use of exclusionary discipline and arrests of students.Although NIJ has primary responsibility for CSSI, the program is a collaborative effort among more than 20 federal partners, including the Departments of Justice, Education, Health and Human Services, Homeland Security, and the Treasury. This partnership will allow the federal government to make a significant impact on school safety by investing limited funds in research that has practical applications for every school in the nation. By determining what interventions work best for specific schools and students, CSSI will provide professionals with a body of knowledge to help them make decisions about which programs will be most effective — and most cost effective — for their particular schools and their challenges.
A list of the awards and more information about CSSI are available at www.nij.gov, keywords: “School Safety.”
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.National Institute of Justice Awards Nearly $2 Million to Baltimore County Public Schools to Support School Safety ResearchRead the Press Release
Baltimore – The Office of Justice Programs’ National Institute of Justice (NIJ) today announced it has awarded the Baltimore County Public Schools and its research partner, the University of Maryland at Baltimore, $1,965,158 to study school safety by focusing on students with emotional and behavioral health issues. NIJ received more than 100 applications from school districts and their research partners around the country, and made 15 awards to the highest scoring, most relevant and rigorous studies.Schools across the country are struggling with how to formulate comprehensive and effective programs to address the mental health needs of students and thereby help preserve school safety. The study in Baltimore, known as “Promoting School Safety: A Comprehensive Emotional and Behavioral Health Model,” will employ a randomized controlled study design involving 44 schools to evaluate the impact of a new comprehensive emotional and behavioral health crisis response and prevention (EBH-CRP) intervention on school safety. This project will build on existing school and community resources to implement a streamlined emotional and behavioral health crisis response and prevention protocol and comprehensive continuum of services, including universal prevention, early identification, assessment and service linkage, crisis response and post-crisis relapse prevention. The research conducted by the University of Maryland at Baltimore will generate evidence about the effectiveness of a large-scale, multifaceted, mental-health-focused intervention.
Nationally, NIJ awarded nearly $63 million to school districts and research organizations through the Comprehensive School Safety Initiative (CSSI) to fund 24 research projects under two different solicitations. The first, “Investigator-Initiated Research,” includes nine awards to research organizations totaling more than $18 million. The Baltimore County Schools was awarded money under the second solicitation, “Developing Knowledge about What Works to Make Schools Safe,” under which NIJ provided more than $45 million to 15 school districts and their research partners. CSSI is a large-scale, multi-agency research effort to build knowledge about effective approaches to increasing school safety nationwide.
“We know a great deal about how to make schools safe in general but very little about the specifics for various settings and populations,” said Dr. William J. Sabol, Acting Director of NIJ. “With this $63 million investment, the nation will gain an understanding of school safety that is scientifically sound, practical, and that can be easily interpreted and used by schools.”
President Obama’s January 2013 plan to end gun violence emphasized keeping guns out of potentially dangerous hands and recognized that additional actions are needed to make our schools safer. CSSI was launched in early 2014 in response to a Congressional request for a broad, research-based effort to increase safety in the nation’s schools.
The initiative has three primary goals: to collect national-level data; to convene stakeholders to identify and share best practices; and to conduct innovative research and evaluate pilot projects in school districts. The programs and policies within CSSI are designed to produce evidence about what works in such areas of school safety as effectiveness of school resource officers and mental health professionals, violence and bullying reduction, and effectiveness of such restorative justice interventions as youth courts. The initiative will also examine potential unintended consequences of school safety efforts, including the excessive use of exclusionary discipline and arrests of students.
Although NIJ has primary responsibility for CSSI, the program is a collaborative effort among more than 20 federal partners, including the Departments of Justice, Education, Health and Human Services, Homeland Security, and the Treasury. This partnership will allow the federal government to make a significant impact on school safety by investing limited funds in research that has practical applications for every school in the nation. By determining what interventions work best for specific schools and students, CSSI will provide professionals with a body of knowledge to help them make decisions about which programs will be most effective — and most cost effective — for their particular schools and their challenges.
A list of the awards and more information about CSSI are available at www.nij.gov, keywords: “School Safety.”
Member of N.J. Army National Guard Arrested for Alleged Sexual AbuseRead the Press Release
TRENTON, N.J. – A Hunterdon County, New Jersey, man was arrested at his home by U.S. Marshals this morning on a charge that he allegedly sexually abused a woman at Joint Base McGuire-Dix-Lakehurst, U.S. Attorney Paul J. Fishman announced.
Ioannis V. Karazoupis, 27, of Flemington, New Jersey, a member of the N.J. Army National Guard, is charged by indictment with sexual abuse. He is scheduled to appear this afternoon before U.S. Magistrate Judge Lois H. Goodman in Trenton federal court.
According to the indictment:
On May 4, 2014, Karazoupis engaged in a sexual act with a person who at the time was incapable of appraising the nature of the conduct and was physically incapable of declining participation and communicating unwillingness to engage in a sexual act. At the time of the alleged offense, Karazoupis’ National Guard unit was at Joint Base McGuire-Dix-Lakehurst for training.
The sexual abuse charge with which Karazoupis is charged carries a maximum potential penalty of life in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the U.S. Army Criminal Investigation Command, under the leadership of Special Agent in Charge John P. Gueli, with the investigation leading to the indictment.
The government is represented by Assistant U.S. Attorney Fabiana Pierre-Louis of the U.S. Attorney’s Office Criminal Division in Trenton.
The charges and allegations contained in the indictment are merely accusations and the defendant is considered innocent unless and until proven guilty.
14-353
Defense counsel: Jerome A. Ballarotto Esq., Trenton, N.J.
Karazoupis, Ioannis Indictment
Mason City Mother and Son Charged with Conspiracy to Make and Distribute MethamphetamineRead the Press Release
Peoria, Ill. – A Mason City, Ill., woman, Denise A. Taylor, 42, of the 400 block of S. Keefer Street, appeared in federal court today in Peoria, as announced by Jim Lewis, U.S. Attorney for the Central District of Illinois. Taylor was arrested yesterday on the indictment returned by the grand jury last week but sealed pending her arrest and court appearance. The indictment charges Taylor and her son, Brendin L. Williams, 23, with one count of conspiracy to manufacture and distribute more than 500 grams of methamphetamine from 2010 to the present. Williams is currently in the custody of the Illinois Department of Corrections and is expected to make his initial appearance in federal court on Oct. 9, 2014.
U.S. Magistrate Judge Jonathan E. Hawley ordered that Taylor be detained in the custody of the U.S. Marshals service and set the case for detention hearing on Oct. 9, at 1:00 p.m. Trial is scheduled on Dec. 1, 2014, before U.S. District Judge Michael M. Mihm.Taylor’s boyfriend, Teddy Lee, Jr., 25, also of the 400 block of S. Keefer Street, Mason City, is tentatively scheduled for trial on Oct. 14, 2014. The grand jury charged Lee in late July with participating in a conspiracy to manufacture more than 50 grams of meth, possession of a firearm by a felon, and possession of a stolen firearm. Lee was ordered to remain in the custody of the U.S. Marshals Service pending trial.
“Law enforcement is on the front line, protecting the community from people who make and distribute methamphetamine,” said U.S. Attorney Lewis. “We appreciate this opportunity to work with law enforcement and protect this community.”
“This is yet another example of superb cooperation by the Mason County Sheriff’s Office with the investigators of ‘Operation Copperhead’ and the U.S. Attorney’s Office,” said Mason County Sheriff Paul Gann. “These defendants now face federal charges related to the manufacture of methamphetamine, but we’re not done yet.”
The cases are being prosecuted by Assistant U.S. Attorney K. Tate Chambers in coordination with the Mason County State’s Attorney’s Office. The charges are the result of an ongoing investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Mason County Sheriff’s Office; the Tazewell County Sheriff’s Office; and, the Pekin Police Department.
Members of the public are reminded that an indictment is merely an accusation; the defendants are presumed innocent unless proven guilty.If convicted, the statutory maximum penalty for conspiracy to manufacture methamphetamine, if the defendant has no prior felony drug convictions, is 10 years to life in prison and fines of up to $4,000,000. With one prior felony drug conviction, the penalty increases to 20 years to life in prison and fines of up to $8,000,000; with two or more prior felony drug convictions, the penalty is life in prison. The maximum penalty for the offenses of felon in possession of a firearm and possession of a stolen firearm is 10 years in prison and a fine of $250,000.
Manhattan U.S. Attorney Announces Arrest of Former NYPD Officer for Fraudulently Obtaining Disability BenefitsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Edward J. Ryan, the Special Agent in Charge of the United States Social Security Administration, Office of the Inspector General, announced that JAMES CARSON, a former New York City Police Department (“NYPD”) officer, was arrested today for a scheme to fraudulently obtain disability benefits from the Social Security Administration (“SSA”). CARSON allegedly claimed to the SSA that he was unemployed since 1990 and could not work due to disability. However, since at least 2004, at the same time he was collecting disability benefits, he was working full time as the Director of Security for an international watchmaker and luxury watch retailer headquartered in New York, New York (the “Company”). CARSON was arrested earlier this morning at his residence in Yorktown, New York, and will be presented later today in Manhattan federal court before U.S. Magistrate Judge Andrew J. Peck.
Manhattan U.S. Attorney Preet Bharara said: “Not only did James Carson allegedly tell a series of lies to pocket disability benefits to which he was not entitled, but he then took sophisticated steps to conceal his fraudulently obtained income from the Social Security Administration. I would like to thank the Social Security Administration, Office of the Inspector General, for their work in bringing Carson’s alleged scheme to its proper end.”
Special Agent in Charge Edward J. Ryan said: “The investigation outlined in this criminal complaint demonstrates just one of the many actions our office is taking on a daily basis to ensure that the Social Security Disability Insurance Trust Fund is preserved for its intended purpose, providing a safety-net for the truly disabled, not lining the pockets of scammers and thieves. As always, it is particularly troubling when these types of crimes are committed by individuals who were once entrusted with upholding the law, and who are already receiving generous tax-payer financed pensions. Our office greatly appreciates the continued support and the priority given to these cases by the United States Attorney’s Office for the Southern District of New York.”
According to the allegations contained in the Complaint unsealed today:
In approximately 1990, CARSON left his job as a police officer with the NYPD due to a back injury and began receiving Social Security Disability Insurance (“SSD”). This disability benefit is only available to individuals who have a qualifying disability and are unable to work in any profession.
On multiple forms submitted to the SSA, CARSON claimed that he could not work due to a herniated disc and that he had not earned any income since 1990, when he began receiving SSD benefits. For example, in April 2014, CARSON reported to an SSA office for an interview related to his continued receipt of SSD benefits and filled out forms stating, among other things, that he: had not worked since leaving the NYPD in 1990; had “no other income” during that time; and had done “no work at all since my disability began.” CARSON further claimed that his typical day consisted of the following: “[I g]et out of bed. I have breakfast, I walk around backyard [and] deck. Wait for wife to come home from work. I lay down a lot. I rely on my wife to go places – she drives mostly.” In another form also submitted to the SSA that day, CARSON stated that “[m]y wife has to do the driving,” and that he could not drive due to “severe pain [and] weakness.” In response to a question asking about places he goes on a regular basis, CARSON claimed, “I don’t really go anywhere on a regular basis.” When CARSON attended the SSA interview in April 2014, he was limping and walking with a cane, and claimed in written forms that he always uses a cane.
In fact, since at least 2004, CARSON allegedly has been working full time as the Director of Security at the Company – an international watchmaker and luxury watch retailer. CARSON has been observed on multiple occasions driving to and from work, walking up stairs without difficulty, and walking without a cane. Further, EZ Pass records show that CARSON frequently travels back and forth between his residence and his office, typically at around 8:00 a.m. and 5:00 p.m. In 2010, CARSON received the Loss Prevention Case of the Year Award from the National Retail Federation for his role in an investigation into credit card schemes targeting the Company.
In order to prevent the SSA from discovering that he was gainfully employed while claiming to be unemployed due to a disability, CARSON took steps to conceal the income he was receiving from the Company. Rather than get paid directly by the Company, CARSON arranged for his compensation to be paid first to a corporation associated with his relative, and then paid from that corporation to CARSON’s relative as purported wages. Since 2004, CARSON has collected approximately $306,431 in disability benefits.
CARSON, 50, of Yorktown, New York, is charged with one count of theft of government property, which carries a maximum sentence of 10 years in prison, one count of making false statements, which carries a maximum sentence of five years in prison, and one count of failing to report income, which carries a maximum sentence of five years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the United States Social Security Administration, Office of the Inspector General.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Special Assistant United States Attorney Daniel Tracer is in charge of the prosecution.
The charges contained in the Complaint are merely accusations. The defendant is presumed innocent unless and until proven guilty.
U.S. v. James Carson Complaint
Licensed Clinical Social Worker Pleads Guilty to Defrauding Insurance CompaniesRead the Press Release
Buffalo, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Eugene Domenico, 61, of Lockport, NY, pleaded guilty to three counts of theft from a health care benefit program, before Chief U.S. District Judge William M. Skretny. The charges carry a maximum penalty of three years in prison and a fine of $100,000 or both.
Assistant U.S. Attorney Michael DiGiacomo, who is handling the case, stated that the defendant, a licensed clinical social worker in private practice, devised a scheme to charge various health care insurance providers, including Blue Cross Blue Shield, for services that were not rendered. For example, Domenico billed Blue Cross Blue Shield for services allegedly provided to a patient on January 6, 2011, knowing that services were never provided. The total loss to insurance companies was $100,286.35.
“As we said earlier this week, fraud in the health care industry drives up costs for the rest of the public,” said U.S. Attorney Hochul. “This second conviction in less than a week demonstrates that our Office will continue to vigorously prosecute this type of fraud.”
Sentencing is scheduled for February 4, 2015, at 9:00 a.m. before Judge Skretny.
The plea is the culmination of an investigation by the Federal Bureau of Investigation’s Health Care Fraud Task Force.Leader and Organizer of $49.6 Million Mortgage Fraud Scheme Sentenced to 27 Years and Three Months in PrisonRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Fred W. Gibson, Principal Deputy Inspector General, Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG), Atlanta Regional Office, announce that Domenico “Dom” Rabuffo, 78, of Miami, was sentenced by Chief United States District Judge K. Michael Moore for his role as a leader and organizer of a $49.6 million bank fraud and wire scheme, perpetrated from approximately 2003 through 2008. Domenico Rabuffo was sentenced to 27 years and three months in prison for his role in the fraud scheme.
On July 3, 2014, Domenico Rabuffo and three co-defendants, Mae Rabuffo, 75, of New York, Raymond E. “Ray” Olivier, 52, of Land O’ Lakes, Florida, and Curtis Allen Davis, 52, of Tampa, were convicted of conspiracy to commit bank fraud and wire fraud after an 11 day-jury trial before Chief Judge Moore. Domenico Rabuffo, Olivier, and Davis were also convicted of various bank fraud offenses.
According to the indictment and evidence at trial, from 2003 to 2008, Rabuffo and his co-defendants conspired to perpetrate a complex $49.6 million mortgage fraud scheme against various FDIC-insured lenders, including Bank of America, Regions Bank, SunTrust Bank, and Wachovia Bank. Rabuffo and his ex-wife Mae Rabuffo used shell companies to acquire ownership and control of a purported residential property development known as Hampton Springs, located in Cashiers, North Carolina. Then, Rabuffo, Olivier, and Davis recruited numerous straw borrowers to purchase building lots in the development. Several of the straw borrowers testified at the trial. According to their testimony and other evidence, Domenico Rabuffo paid the borrowers to obtain lot purchase loans and construction loans for building lots in Hampton Springs. To obtain the loans, Domenico Rabuffo, Mae Rabuffo, Olivier, Davis, and other conspirators, submitted fraudulent loan applications and related documents to the lenders and the lenders’ closing agents.
Among other things, the loan applications and settlement statements for the lot loans contained fraudulent statements that the borrowers paid earnest money deposits and cash due at the closing. In fact, the deposits and cash-to-close were paid by Domenico Rabuffo and Mae Rabuffo using proceeds from the fraudulent scheme. Further, Domenico Rabuffo and Mae Rabuffo sent fraudulent correspondence to the closing agents, including letters bearing the forged signatures of borrowers, to create the false impression that the deposits and cash due at closing had been supplied by the borrowers from their own funds.
Olivier and Davis recruited straw borrowers for the fraud scheme and submitted fraudulent loan applications to the lenders. Further, Olivier and Davis caused their private companies to be disclosed as the employers of straw borrowers whose actual employment was inconsistent with the inflated income stated on their loan applications. Then, when they were contacted by the lenders, Olivier and Davis provided fraudulent verifications of employment for those borrowers.
Mae Rabuffo, Davis, and Olivier are scheduled to be sentenced on October 30, 2014, also before Chief Judge Moore.
Three other defendants, Diane M. Hayduk, 64, of Miami, Victor Miguel Vidal, 49, of Miami, and Lazaro Jesus Perez, 44, of Miami Springs, pled guilty to the charged conspiracy and agreed to assist the United States. Hayduk assisted Domenico Rabuffo and Mae Rabuffo with the misappropriation of loan proceeds and the transmission of fraudulent correspondence to the lenders and the closing agents. Vidal served as a loan officer at SunTrust Mortgage, where he sponsored fraudulent loan applications for lots in Hampton Springs, including fraudulent applications for $33 million in construction loans. Perez furnished fictitious accountant’s letters to Vidal, in support of fraudulent loan applications submitted to SunTrust Mortgage. Hayduk, Vidal, and Perez were sentenced in September, 2014. Hayduk was sentenced to 40 months in prison, Vidal was sentenced to 64 months in prison and Perez was sentenced to 30 months in prison.
Mr. Ferrer commended the investigative efforts of the FBI and FDIC-OIG. This case was prosecuted by Assistant United States Attorneys Dwayne E. Williams and Jerrob Duffy.
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.
Lawrenceville Tax Return Preparer Sentenced for Filing False Tax ReturnsRead the Press Release
ATLANTA - Laura Romina Delgado has been sentenced for filing false tax returns that claimed over $3.6 million in fraudulent refunds.
“Honest, hard-working taxpayers who file their tax returns and pay their fair share of taxes should be assured that those who try to profit by filing false returns will be prosecuted to the fullest extent of the law,” said United States Attorney Sally Quillian Yates.
“The sole objective of Ms. Delgado’s scheme was to unjustly enrich herself at the expense of the IRS,” stated Veronica F. Hyman-Pillot, Special Agent in Charge, IRS Criminal Investigation. “We will continue to pursue individuals like Delgado, who abuse positions of trust to commit crimes and ruin the lives of innocent citizens by misusing their identities.”
According to United States Attorney Yates, the charges, and other information presented in court: Delgado operated a business named Servicios Hispanos in Norcross, Ga., which offered various financial and legal services, mainly to members of the Hispanic community. Between January 2013 and May 2014, Delgado electronically filed approximately 1,300 federal income tax returns, claiming over $3.6 million in fraudulent refunds.
Many of the fraudulent returns filed by Delgado were in the names of individuals who were not documented to work in the United States. In some instances, she assisted these individuals in obtaining Individual Tax Identification Numbers (ITINs) from the IRS to facilitate the fraud. Delgado also submitted false and misleading W-2 forms with the returns she filed and assisted in negotiating U.S. Treasury checks representing the proceeds of the fraud. She also notarized and filed fraudulent ITIN applications.
Delgado, 33, of Lawrenceville, Ga., was sentenced to four years, three months in prison, to be followed by three years of supervised release. She was ordered to pay restitution in the amount of $2,148,440, and a special assessment of $100. Delgado was convicted on these charges on July 7, 2014, after she pleaded guilty to a criminal indictment charging her with wire fraud.
This case was investigated by the Internal Revenue Service Criminal Investigation and the Drug Enforcement Administration.
Assistant United States Attorneys J. Russell Phillips and Michael Brown prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Latrobe Postal Service Employee Sentenced to Prison, Ordered to Pay Restitiution for Stealing Money Orders and CashRead the Press Release
PITTSBURGH – A former Postal Service employee was sentenced today in federal court to six months imprisonment, three years supervised release and restitution of $55,362.90 on her conviction of misappropriation of postal funds by a postal employee, United States Attorney David J. Hickton announced today.
Senior United States District Judge Maurice B. Cohill imposed sentence upon Jessica L. Croyle, of Greensburg, Pa.
According to information presented to the court, from Nov. 1, 2012, to July 19, 2013, Croyle, while employed with the United States Postal Service at the Latrobe, Pennsylvania Post Office, wrongfully converted to her own use, postal money orders and cash having a total value of $55,362.90.
Assistant United States Attorney Mary McKeen Houghton prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the United States Postal Service, Office of Inspector General, for the investigation that led to the successful prosecution of Croyle.
Justice Department Sues to Stop Tennessee Man from Preparing Tax ReturnsRead the Press Release
The United States filed a civil injunction suit against a Hixson, Tennessee, man to enjoin him from preparing federal income tax returns for others, the Justice Department announced today.
According to the complaint filed in the U.S. District Court for the Eastern District of Tennessee, Kevin Walker is alleged to have prepared federal income tax returns for his customers with fake businesses; reported false profits, losses and expenses; improperly claimed false employee business expenses and falsely claimed the Earned Income Tax Credit and education-related tax credits. According to the complaint, two returns prepared over a two-year period for one customer claimed bogus receipts, but no expenses, from a fictitious business so as to maximize tax refunds based on the Earned Income Tax Credit. As a result, the customer erroneously received income tax refunds of more than $6,000 for the two years. The Internal Revenue Service (IRS) estimates that Walker’s activities over the last five years have cost the U.S. Treasury as much as hundreds of thousands of dollars in lost income tax revenue.
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 unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. Kevin M. Walker
Complaint for Preliminary and Permanent InjunctionJury Convicts Gang Member in South Francisco Triple HomicidesRead the Press Release
SAN FRANCISCO – Victor Flores, Benjamin Campos-Gonzalez, and Armando Acosta were convicted of racketeering conspiracy by a federal jury yesterday, announced United States Attorney Melinda Haag, Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Acting Special Agent in Charge Tatum King, and FBI Special Agent in Charge David J. Johnson.
In addition, the jury also convicted Flores of three counts of racketeering murder and four counts of racketeering attempted murder for his involvement in a Dec. 22, 2010, shooting in South San Francisco, Calif., as well as the attempted murder of three federal agents whom he shot and seriously wounded when the agents sought to arrest him on May 3, 2012. Acosta was also convicted of being an accessory-after-the-fact to murder, as well as various obstruction offenses. A fourth defendant, Mario Bergren, was acquitted of the charges against him.
The guilty verdict followed a three-month jury trial before the Honorable Susan Illston, United States District Court Judge, in San Francisco. The jury found that Flores, 23, of Petaluma, Campos-Gonzalez, 24, of San Mateo, and Acosta, 29, of South San Francisco, conspired to conduct the affairs of a racketeering enterprise, the 500 Block/C Street Gang. The 500 Block/C Street Gang was a Norteño gang based in South San Francisco that engaged in drug dealing, robbery, obstruction of justice, and crimes of violence, including one of the most violent single crimes in South San Francisco history.
According to the evidence presented at trial, during the evening of Dec. 22, 2010, Flores, along with fellow 500 Block/C Street gang member Joseph Ortiz shot at seven victims, whom they perceived to be rival gang members as the victims walked down Eighth Lane in South San Francisco. Gonzalo Avalos, Omar Cortez, and Hector Flores were killed while three of the others were wounded. Acosta was also convicted of being an accessory-after-the-fact to racketeering murder for his role in helping to cover up the murders.
In addition, when members of the Los Angeles Special Response Team of Homeland Security Investigations went to execute an arrest warrant for Flores on May 3, 2012, in Petaluma, Calif., Flores opened fired on the federal agents with an AK-47-style assault weapon. He fired twenty rounds of large-caliber ammunition at the agents, emptying two full magazines of ammunition, before he eventually surrendered to law enforcement. The jury convicted Flores for the attempted murder of the three federal agents whom he wounded.
“These convictions are the result of the tireless effort of law enforcement agents from multiple agencies working together to keep the community safe. For the victims and their families, there is nothing we can do to erase their pain and sorrow. We hope, however, that these convictions demonstrate that justice has been served and that the victims and their families can now begin to heal,” U.S. Attorney Haag said. “The facts of this case highlight the extraordinary bravery with which the men and women of law enforcement perform their duties.”
“These verdicts represent another important victory in the ongoing effort to rid our communities of violent street gangs along with the scourge of fear and crime they foster,” said Tatum King, acting special agent in charge for HSI San Francisco. “As we said when these defendants were arrested, ‘justice is patient and justice is resolute.’ Yesterday, it was rewarded. In that vein, HSI will continue to work closely with the South San Francisco and Daly City police departments and other local and federal law enforcement agencies to infiltrate and dismantle these dangerous criminal enterprises and hold their members accountable for their actions.”
“The conviction of Victor Flores for his attempted murder of three Department of Homeland Security agents represents a significant victory for the rule of law and for the agents and officers who put their lives on the line every day to enforce those laws,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “The FBI is proud of its role in this highly successful case and will continue to work tirelessly with our law enforcement partners to bring to justice anyone who attempts to harm law enforcement agents or officers engaged in the pursuit of justice.”
"South San Francisco is a safe place to live and work and yesterday's conviction sends a strong message to those who continue to promote the gang lifestyle, that we are not going to tolerate to be shaken by senseless and blatant acts of gang violence," South San Francisco Police Chief Jeff Azzopardi said. "We will continue our partnership with the Daly City Police Department, Homeland Security Investigations(HSI), the FBI, and the United States Attorney's Office to keep South San Francisco as one of the safest places in the Bay Area."
Flores, Campos-Gonzalez, and Acosta are currently being held in custody and are scheduled to be sentenced on Jan. 16, 2015, before Judge Illston. Flores faces a maximum penalty of six life terms plus 103 years’ imprisonment, and a mandatory minimum sentence of three life terms plus 35 years’ imprisonment. Campos-Gonzalez faces up to twenty years’ imprisonment for his conviction for racketeering conspiracy, while Acosta faces up to sixty years’ imprisonment for his conviction for racketeering conspiracy, being an accessory-after-the-fact to murder, and obstruction of justice. However, any sentence will be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The jury’s verdict concludes an investigation initiated by the South San Francisco Police Department, the Daly City Police Department, HSI, and by the FBI. In all, more than 19 defendants were charged, with more than 15 defendants pleading guilty, including Joseph Ortiz, who is presently serving a sentence of five life terms plus sixty years’ imprisonment for his involvement in the Dec. 22, 2010, shooting.
Acadia L. Senese, Stephen Meyer, and Benjamin Tolkoff are the Assistant United States Attorneys who prosecuted this case, with the assistance of Kevin Costello and Daniel Charlier-Smith.
(Ortiz et al superseding indictment )
Judge Sentenced New Jersey Man to 24 Years in Prison for Conspiring to Distribute HeroinRead the Press Release
PITTSBURGH - A New Jersey resident has been sentenced in federal court to 24 years in prison on his conviction of one count of conspiracy to distribute and possess with the intent to distribute 100 grams or more of heroin, United States Attorney David J. Hickton announced today.
United States District Judge Mark R. Hornak imposed the sentence on Rafael Cabrera, 36, of Passaic, NJ. On May 23, 2014, a federal jury had convicted Cabrera, after a four-day trial, of conspiracy to distribute and possess with the intent to distribute 100 grams or more of heroin.
According to information presented to the court, Cabrera distributed between 1,500 and 2,500 bricks of heroin into the Western District of Pennsylvania. Each brick of heroin contains 50 stamp bags, which each retail for between $6 and $10. Cabrera sold this heroin to a Pittsburgh-based dealer, who provided the heroin to lower-level drug deals. The proceeds from the heroin sales were then remitted to Cabrera after the heroin was distributed.
Prior to imposing sentence, Judge Hornak highlighted the seriousness of Cabrera’s crime and the damage heroin inflicts on society in general and the populace of the Western District of Pennsylvania in particular. The judge searched the record but could find almost no mitigating evidence in Cabrera’s favor. Accordingly, given the magnitude of Cabrera’s heroin trafficking, and the length of his criminal record, which escalated as Cabrera aged, the court sentenced Cabrera to 288 months in prison, followed by 10 years of supervised release.
Assistant United States Attorney Eric S. Rosen prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation, the City of Pittsburgh Police, and the Pennsylvania State Police for the investigation leading to the successful prosecution of Cabrera.
International Fugitive for 15 Years Caught by FBI and Sentenced for 1997 Methamphetamine OffenseRead the Press Release
EUGENE, Ore. –Joseph Floyde DeArmond, 51, previously of Medford, Oregon, was sentenced today by U.S. District Chief Judge Ann Aiken to 36 months in federal prison for an offense he committed in 1997 – possession with intent to distribute methamphetamine. Upon his release from prison, DeArmond will be on supervised release for three years.
On June 9, 1997, law enforcement seized a distributable amount of methamphetamine from defendant’s Medford, Oregon home. After being federally charged, DeArmond pled guilty and was scheduled to be sentenced on June 30, 1998. Rather than appear for sentencing, DeArmond fled the United States to Costa Rica. The FBI’s fugitive hunt lasted from 1998 until 2013, when DeArmond was located in Costa Rica living under an assumed name. After positively identifying him as Joseph DeArmond, the FBI worked with the Costa Rican government to arrange for his return to the United States.
Assistant U.S. Attorney Nathan J. Lichvarcik prosecuted this case.
Indictment Charges Six New Jersey Residents in Multimillion-Dollar Mortgage Fraud SchemeRead the Press Release
PHILADELPHIA - An indictment was filed yesterday charging six people, including a couple and their daughter, in a wide-reaching mortgage fraud conspiracy in which the defendants allegedly stripped the equity from the homes of desperate homeowners facing foreclosure, announced United States Attorney Zane David Memeger. The scheme caused losses to mortgage lenders of approximately $3.8 million. Silver Buckman, 36, of Cherry Hill, NJ, her parents, Vincent Foxworth, 69, and Cynthia Foxworth, 63, of Turnersville, NJ, Danette Thomas, 52, of Pennsauken, NJ, Byron White, 44, of Pennsauken, NJ and Franklin Busi, 46 of Sicklerville, NJ, are charged with conspiracy to commit bank fraud and wire fraud. Some of the defendants are also charged with bank fraud and wire fraud.
According to the indictment, the defendants engaged in a scheme in which they offered to help financially-vulnerable individuals save their homes from foreclosure or obtain money from the equity in their homes and, instead, defrauded the homeowners and mortgage lenders. Buckman owned and operated Fresh Start Financial Services (“FSFS”), in Mount Laurel, NJ and was an employee of American Home Lending as well as a mortgage broker for American One Mortgage (“AOM”). Her father is an experienced Realtor.
Between October 2006 and November 2009, Buckman and her co-defendants allegedly targeted financially vulnerable homeowners and represented to them that they could improve their credit, save their homes from foreclosure, or provide them with money through Buckman’s lease buyback program. The homeowners were told that “investors” would be used to temporarily refinance their homes and that they could repurchase the homes in one year, or once they regained their financial footing. The defendants also allegedly induced the homeowners into signing documents related to the sale and lease of their homes by their representations that the homeowners would remain on the title to their homes, that the equity from their homes would be placed into an individual escrow account in their names, and that new mortgages would be paid from the escrow accounts to establish their timely payment histories.
According to the indictment, in order to carry out the scheme, Buckman recruited Vincent Foxworth and Cynthia Foxworth and others to be straw borrowers. White also recruited a straw borrower. Ultimately, Buckman and Busi submitted false financial and employment information about the straw borrowers to mortgage lenders. Once lenders agreed to fund the mortgage loans, Buckman and some of the other defendants allegedly prevented the homeowners from receiving the settlement proceeds and did not put money into escrow accounts for the homeowners. Instead, the defendants distributed the proceeds amongst themselves. Buckman used the majority of the proceeds due the homeowners to pay the fees due the straw borrowers, the down payments on behalf of the straw borrowers in subsequent transactions to further the scheme, and her personal expenses. She used only a fraction of the homeowners’ monies toward the payment of the mortgages obtained by the straw borrowers for the homeowners’ homes and thereby caused the loans to go into default.
If convicted, the defendants face an advisory sentencing guideline range of at least 87 to 108 months in prison plus restitution.
The case was investigated by the Federal Bureau of Investigation and the United States Postal Inspection Service and is being prosecuted by Assistant United States Attorney Anita Eve.
Click here to view the indictment.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Four Defendants Plead Guilty in Connection with HMA Direct Insurance Fraud SchemeRead the Press Release
BOSTON – Four men pleaded guilty yesterday in connection with their participation in a fraudulent scheme perpetrated through a Massachusetts health insurance company known as HMA Direct.
William O’Brien, of West Barnstable, Mark Celentano, of Ipswich, Francis Gaetani, of Sutton, and Ronald Anger, of Sutton, pleaded guilty before U.S. Senior District Judge Mark L. Wolf. Sentencing is scheduled for Jan. 14, 2015.
O’Brien pleaded guilty to conspiracy, wire fraud, health care fraud, and obtaining customer information from a financial institution by false representation. Celentano pleaded guilty to conspiracy, health care fraud, and obstruction of justice. Gaetani and Anger each pleaded guilty to wire fraud.
HMA Direct offered self-funded insurance plans to small businesses in New England. At the heart of HMA Direct’s business was “carving out” from its clients’ self-funded plans those employees who had significant health risks, and then, through false statements, arranging for those employees to be insured through traditional health insurance providers.
O’Brien and Celentano participated in the carve-out scheme and subsequent lies to the health insurance providers. O’Brien also arranged for Gaetani and Anger, who were investors in HMA Direct, to pretend that they were satisfied customers of the company and to provide fake references to prospective clients. In addition, when contacted by federal investigators, Celentano obstructed justice by lying about the role he had played in the HMA Direct carve-out scheme.
For O’Brien, Gaetani, and Anger, the maximum sentence under the relevant statutes is 20 years in prison, three years of supervised release, and a $250,000 fine. For Celentano, the maximum sentence under the statute is 10 years in prison, three years of supervised release and a $250,000 fine.
Two other defendants in this scheme, Michael Cassandro, of Middleton, RI, and Shelley Lenkutis, of Waltham, previously pleaded guilty to related charges. They are scheduled to be sentenced on Dec. 10, 2014.
United States Attorney Carmen M. Ortiz; Susan Hensley, Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office; Cheryl Garcia, Special Agent in Charge for the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, New York Regional Office; ¬¬Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement. The case is being prosecuted by Assistant United States Attorneys Kristina Barclay, Gregg Shapiro, and Alexander Berlin.
Former Windham Couple Pleads Guilty to Firearms ChargesRead the Press Release
Contact: Darcie N. McElwee
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that
Theodore “Ted” Thomes, 55, and his wife, Renee Thomes, 51, both formerly of Windham, Maine, now of St. Croix, U.S. Virgin Islands, pleaded guilty this week, in U.S. District Court, to firearms charges. Ted Thomes was convicted of being a felon in possession of firearms. Renee
Thomes was convicted of knowingly transferring firearms to a non-Maine resident.According to evidence presented at the plea hearing, prior to July 2011, Renee Thomes acquired several handguns belonging to a Windham neighbor for whom the couple served as caretakers. In December 2011, Ted Thomes, a convicted felon who had previously been convicted in Maine for being a felon in possession of firearms, took the handguns to the home of another neighbor. In June 2012, Renee Thomes retrieved the handguns and illegally gave them to a New Hampshire auctioneer.
Ted Thomes faces up to 10 years in prison. Renee Thomes faces up to five years in prison. Both face a $250,000 fine. They will be sentenced after completion of presentence investigation reports by the U.S. Probation Office.
The investigation was conducted by the Windham Police Department, the Maine
Attorney General’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives.Former New York City Comptroller Candidate Sentenced in Manhattan Federal Court to Two Years in Prison for Illegally Distributing Prescription PillsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that KRISTIN DAVIS, a former candidate for New York City Comptroller, was sentenced today in Manhattan federal court to two years in prison for illegally distributing hundreds of various types of prescription pills. DAVIS, who was arrested in August 2013, and pled guilty in March 2014 to distributing and possessing with intent to distribute controlled substances, was sentenced by U.S. District Judge Edgardo Ramos.
Manhattan U.S. Attorney Preet Bharara said: “The convictions of Kristin Davis and the other defendants in this wide-ranging diversion investigation demonstrate once again this Office’s and our law enforcement partners’ resolve to fight the prescription drug abuse epidemic in every affected corner of New York City and beyond.”
According to the Complaint, Superseding Information, other information in the public record, and Davis’s guilty plea:
On multiple occasions for a period of years through March 2013, DAVIS sold hundreds of prescription pills, containing amphetamine, alprazolam, zolpidem, and carisoprodol, to a person she knew from her own prior purchases and sales to be a drug dealer. Unbeknownst to DAVIS, the person had become a cooperating witness (the “CW”) with the Federal Bureau of Investigation (“FBI”) and was equipped with a recording device. During these sales, DAVIS was recorded saying that the pills she was selling were “Ambien,” “Soma,” and “Xanax.” On a fourth occasion, in April 2013, DAVIS arranged for another individual to sell approximately 180 oxycodone pills to the CW.
There is an illegal market for all of the drugs DAVIS sold and assisted another in selling. Oxycodone is a powerful painkiller with a high potential for addiction and abuse, and it is often used as a substitute for, or adjunct to, other illegal drugs, such as heroin. Amphetamine is a psycho-stimulant, often referred to as “speed,” and it is often used as a substitute for, or adjunct to, other illegal drugs, including methamphetamine and cocaine. Alprazolam is a psychoactive drug often used as a substitute for, or adjunct to, other illegal drugs, such as LSD, heroin or opiates. Zolpidem is a sedative/hypnotic drug often used as a substitute for, or adjunct to, other illegal drugs, including amphetamine, methamphetamine, cocaine, and MDMA (commonly known as ecstasy). Carisoprodol is a skeletal muscle relaxant often used in conjunction with painkillers and so-called “date rape” drugs.
DAVIS was one of several people charged as part of an investigation conducted by the FBI, the United States Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), the New York City Police Department (“NYPD”), and the U.S. Attorney’s Office into the unlawful distribution of prescription drugs containing controlled substances in and around New York City:
- Thomas Rock was arrested on July 10, 2013, for distributing and conspiring to distribute oxycodone and alprazolam. He pled guilty on February 24, 2014, to distributing oxycodone and alprazolam, and was sentenced by U.S. District Judge Paul A. Engelmayer on July 21, 2014, to 15 months in prison.
- Eugene Kurochkin was arrested on July 11, 2013, for distributing oxycodone, alprazolam, amphetamine, and zolpidem. He pled guilty on November 1, 2013, to distributing oxycodone, alprazolam, amphetamine, and zolpidem, and was sentenced by U.S. District Judge Robert W. Sweet on February 10, 2014, to one year in prison.
- Raoul Goldberger and Rebecca Teman were arrested on July 29, 2013, for distributing and conspiring to distribute amphetamine, oxycodone, and vicodin. Goldberger pled guilty on August 21, 2013, to distributing amphetamine and oxycodone, and was sentenced by U.S. District Judge Colleen McMahon on March 12, 2014, to five years in prison. Teman pled guilty on November 12, 2013, to misbranding a prescription drug, and was sentenced by U.S. Magistrate Judge Henry B. Pitman on March 11, 2014, to 18 months’ probation with a special condition of 100 hours of community service.
- Erik Pichardo, who was referred to as “Individual-1” in the Complaint against DAVIS, was arrested in August 2013 for distributing oxycodone. He pled guilty on December 12, 2013, to conspiracy to distribute oxycodone, and is scheduled to be sentenced by Chief U.S. District Judge Loretta A. Preska on October 23, 2014.
- David J. Wright was arrested on October 3, 2013, for distributing oxycodone, amphetamine, and carisoprodol. He pled guilty on July 14, 2014, to distributing oxycodone, amphetamine, and carisoprodol, and is scheduled to be sentenced by Chief U.S. District Judge Loretta A. Preska on November 18, 2014.
In addition to her prison term, DAVIS, 39, of New York City, was sentenced to two years of supervised release. DAVIS was also ordered to pay $1,765 in forfeiture and a $100 special assessment fee.
Mr. Bharara praised the investigative work of the FBI. He also thanked HHS-OIG and the NYPD for their assistance in the investigation.
These cases are being handled by the Office’s Narcotics Unit. Assistant United States Attorneys Daniel C. Richenthal, Kristy J. Greenberg, and Edward A. Imperatore are in charge of the prosecutions.
Former NFL and University of Florida Football Player Pleads Guilty to Conspiracy to Distribute “Molly”Read the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Donald Reche Caldwell (35, Tampa) pleaded guilty today to conspiracy to possess with intent to distribute a positional isomer of Butylone, also known as Ethylone, and commonly marketed as the street drug “Molly.” He faces a maximum penalty of 20 years in federal prison. A sentencing date has not yet been set.
According to the plea agreement, on May 13, 2014, Caldwell signed for and accepted a parcel containing 1.5 kilograms of Ethylone. The parcel had been mailed to the United States from China. On May 19, 2014, investigators intercepted a second parcel in Atlanta, containing one kilogram of Ethylone. Further investigation revealed that, just days earlier, Caldwell had mailed the parcel from Tampa.
As a positional isomer of Butylone, Ethylone is considered a Schedule I Controlled Substance.
This case was investigated by the Drug Enforcement Administration, U.S. Postal Inspection Service, and U.S. Customs and Border Protection. It is being prosecuted by Assistant United States Attorney Carlton C. Gammons.
Former FBI Special Agent and Co-Defendant Plead Guilty to Conspiracy, Bribery, and Obstruction of Justice SchemeRead the Press Release
A former FBI special agent and a conspirator pleaded guilty in the District of Utah yesterday and today to participating in a bribery scheme to obstruct a grand jury investigation in exchange for the promise of cash and multimillion dollar business contracts offered by a businessman under investigation.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Carlie Christensen of the District of Utah and Justice Department Inspector General Michael E. Horowitz made the announcement after the guilty pleas were accepted by U.S. District Judge Tena Campbell.
“No one is above the law, no matter what rank or badge a person might hold,” said Assistant Attorney General Caldwell. “Corruption by those entrusted to enforce the law strikes at the heart of our criminal justice system, and it will not be tolerated. This case lays bare a disgraceful attempt by a veteran FBI agent to get rich by thwarting an ongoing investigation. The Justice Department will fight corruption wherever we find it, even within the ranks of federal law enforcement.”
“These plea agreements demonstrate that Federal law enforcement officers who sell their badges for cash and frustrate the administration of justice will be held accountable for their actions,” said Inspector General Horowitz. “Department employees are held to the highest standards, and we cannot permit our criminal justice system to be stained by such bribery and corruption.”
“When a law enforcement officer violates his oath and the public’s trust by breaking the law, he must be held accountable,” said Acting U.S. Attorney Christensen. “In this case, former Agent Lustyik’s decision to enter into a conspiracy to obstruct a significant fraud investigation in Utah is a troubling reminder that corruption may exist even among those we entrust with protecting our citizens and upholding our laws.”
A 24-year veteran of the FBI, Robert Lustyik Jr., 51, of Sleepy Hollow, New York, pleaded guilty on Sept. 30, 2014, to an 11-count indictment charging him with conspiracy, eight counts of honest services wire fraud, obstruction of a grand jury proceeding, and obstruction of an agency proceeding. A childhood friend of Lustyik, Johannes Thaler, 50, of New Fairfield, Connecticut, pleaded guilty today to conspiracy to commit bribery, obstruction of a grand jury proceeding and obstruction of an agency proceeding. Sentencing is scheduled for Jan. 5, 2015.
In court documents and at the plea hearings, Lustyik and Thaler admitted that from October 2011 to September 2012, Lustyik, while employed as an FBI counterintelligence special agent, and Thaler conspired to use Lustyik’s official position to obstruct a criminal investigation into Michael Taylor, a businessman who owned and operated American International Security Corporation and was under investigation for paying kickbacks to obtain a series of contracts from the Department of Defense worth approximately $54 million. Taylor promised Lustyik and Thaler that in exchange for their help, he would provide them cash and multimillion dollar business contracts. Taylor told the two men: “I’ll make you guys more money than you can believe, provided they don’t think I’m a bad guy and put me in jail.”
Court documents state that Lustyik attempted to obstruct the investigation into Taylor by opening Taylor as an official FBI source in an effort to persuade the FBI, the Justice Department and the prosecutors and law enforcement agents investigating Taylor that Taylor’s usefulness as a source outweighed the government’s interest in prosecuting him. Lustyik also advocated on Taylor’s behalf directly to the prosecutors and law enforcement agents, urging them to use Taylor as a cooperating witness and emphasizing that indicting Taylor would threaten the nation’s security.
According to court documents, while Lustyik was obstructing the investigation into Taylor, Lustyik suggested that Thaler “blatantly” ask Taylor for money, emphasizing “he knows we are keeping him outta jail.” Lustyik explained to Thaler that on his upcoming trip to meet Taylor in Lebanon, “Taylor is gonna hand you cash in Lebanon,” “[l]ike 150 gs.” When Thaler asked Lustyik how he was supposed to bring that much cash back to the United States, Lustyik instructed him “[i]n your pants. Or wire it? They won’t stop 2 white guys at customs without a reason, [o]r I meet you at customs at JFK and cred you in.”
Court records state that during the conspiracy, Lustyik and Thaler acknowledged that Taylor was probably guilty, but they boasted about their success in using Lustyik’s official position to obstruct the investigation into Taylor, with Lustyik texting Thaler, “at this point IF he is indicted there is NO WAY he gets convicted even though he Prob did it.” During the conspiracy, Lustyik texted Thaler, “I think we are rich by Christmas!!” When Thaler asked why, Lustyik responded, “he [Taylor] is gonna be free!!!!!!!!”
Taylor pleaded guilty in the District of Utah to honest services wire fraud for his role in the scheme on Nov. 27, 2013. He is scheduled for sentencing on Jan. 5, 2015.
The investigation was conducted by Assistant Special Agent in Charge Tom Hopkins of the U.S. Department of Justice Office of Inspector General. The case is being prosecuted by Deputy Chief Peter Koski and Trial Attorney Maria Lerner of the Criminal Division’s Public Integrity Section, and Trial Attorney Ann Marie Blaylock of the Criminal Division’s Asset Forfeiture and Money Laundering Section. Scott Ferber of the Counterespionage Section of the National Security Division also assisted in the prosecution.
# # #
Former FBI Special Agent and Co-Defendant Plead Guilty to Conspiracy, Bribery, and Obstruction of Justice SchemeRead the Press Release
SALT LAKE CITY - A former FBI special agent and a conspirator pleaded guilty in Salt Lake City yesterday and today to participating in a bribery scheme to obstruct a grand jury investigation in exchange for the promise of cash and multimillion dollar business contracts offered by a businessman under investigation.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Carlie Christensen of the District of Utah and Justice Department Inspector General Michael E. Horowitz made the announcement after the guilty pleas were accepted by U.S. District Judge Tena Campbell.
“No one is above the law, no matter what rank or badge a person might hold,” said Assistant Attorney General Caldwell. “Corruption by those entrusted to enforce the law strikes at the heart of our criminal justice system, and it will not be tolerated. This case lays bare a disgraceful attempt by a veteran FBI agent to get rich by thwarting an ongoing investigation. The Justice Department will fight corruption wherever we find it, even within the ranks of federal law enforcement.”
“These plea agreements demonstrate that Federal law enforcement officers who sell their badges for cash and frustrate the administration of justice will be held accountable for their actions,” said Inspector General Horowitz. “Department employees are held to the highest standards, and we cannot permit our criminal justice system to be stained by such bribery and corruption.”
“When a law enforcement officer violates his oath and the public’s trust by breaking the law, he must be held accountable,” said Acting U.S. Attorney Christensen. “In this case, former Agent Lustyik’s decision to enter into a conspiracy to obstruct a significant fraud investigation in Utah is a troubling reminder that corruption may exist even among those we entrust with protecting our citizens and upholding our laws.”
A 24-year veteran of the FBI, Robert Lustyik Jr., 51, of Sleepy Hollow, New York, pleaded guilty on Sept. 30, 2014, to an 11-count indictment charging him with conspiracy, eight counts of honest services wire fraud, obstruction of a grand jury proceeding, and obstruction of an agency proceeding. A childhood friend of Lustyik, Johannes Thaler, 50, of New Fairfield, Connecticut, pleaded guilty today to conspiracy to commit bribery, obstruction of a grand jury proceeding and obstruction of an agency proceeding. Sentencing is scheduled for Jan. 5, 2015.
In court documents and at the plea hearings, Lustyik and Thaler admitted that from October 2011 to September 2012, Lustyik, while employed as an FBI counterintelligence special agent, and Thaler conspired to use Lustyik’s official position to obstruct a criminal investigation into Michael Taylor, a businessman who owned and operated American International Security Corporation and was under investigation for paying kickbacks to obtain a series of contracts from the Department of Defense worth approximately $54 million. Taylor promised Lustyik and Thaler that in exchange for their help, he would provide them cash and multimillion dollar business contracts. Taylor told the two men: “I’ll make you guys more money than you can believe, provided they don’t think I’m a bad guy and put me in jail.”
Court documents state that Lustyik attempted to obstruct the investigation into Taylor by opening Taylor as an official FBI source in an effort to persuade the FBI, the Justice Department and the prosecutors and law enforcement agents investigating Taylor that Taylor’s usefulness as a source outweighed the government’s interest in prosecuting him. Lustyik also advocated on Taylor’s behalf directly to the prosecutors and law enforcement agents, urging them to use Taylor as a cooperating witness and emphasizing that indicting Taylor would threaten the nation’s security.
According to court documents, while Lustyik was obstructing the investigation into Taylor, Lustyik suggested that Thaler “blatantly” ask Taylor for money, emphasizing “he knows we are keeping him outta jail.” Lustyik explained to Thaler that on his upcoming trip to meet Taylor in Lebanon, “Taylor is gonna hand you cash in Lebanon,” “[l]ike 150 gs.” When Thaler asked Lustyik how he was supposed to bring that much cash back to the United States, Lustyik instructed him “[i]n your pants. Or wire it? They won’t stop 2 white guys at customs without a reason, [o]r I meet you at customs at JFK and cred you in.”
Court records state that during the conspiracy, Lustyik and Thaler acknowledged that Taylor was probably guilty, but they boasted about their success in using Lustyik’s official position to obstruct the investigation into Taylor, with Lustyik texting Thaler, “at this point IF he is indicted there is NO WAY he gets convicted even though he Prob did it.” During the conspiracy, Lustyik texted Thaler, “I think we are rich by Christmas!!” When Thaler asked why, Lustyik responded, “he [Taylor] is gonna be free!!!!!!!!”
Taylor pleaded guilty in the District of Utah to honest services wire fraud for his role in the scheme on Nov. 27, 2013. He is scheduled for sentencing on Jan. 5, 2015.
The investigation was conducted by Assistant Special Agent in Charge Tom Hopkins of the U.S. Department of Justice Office of Inspector General. The case is being prosecuted by Deputy Chief Peter Koski and Trial Attorney Maria Lerner of the Criminal Division’s Public Integrity Section, and Trial Attorney Ann Marie Blaylock of the Criminal Division’s Asset Forfeiture and Money Laundering Section. Scott Ferber of the Counterespionage Section of the National Security Division also assisted in the prosecution.
Former Ebay Exec Sentenced for Insider TradingRead the Press Release
PHILADELPHIA - Christopher Saridakis, 45, of Wilmington DE, was sentenced today to 15 months in prison for giving another person confidential information about eBay stock. Saridakis pleaded guilty on May 9, 2014 to securities fraud. He was a senior executive at GSI Commerce, Inc. (“GSIC”), when he provided material, non-public information regarding eBay’s pending acquisition of GSIC. In addition to the prison term, U.S. District Court Judge Stewart Dalzell ordered one year of supervised release, a $10,000 fine, and a $100 special assessment.
On March 20, 2011, Saridakis, who was privy to discussions of a merger, sent a series of text messages to a Confidential Witness (“CW1”) that began with the defendant asking if CW1 “...own[ed] our [GSIC] shares?” CW1 replied, “no, but it’s cheap.” This response led Saridakis to tell CW1 “you should.” CW1 responded with “ok,” to which Saridakis replied, “soon.” On March 22, 2011, following the receipt of the text messages, while in possession of the inside information, and knowing defendant Saridakis’ position as a senior executive at GSIC, CW1 purchased and caused to be purchased 25,000 shares of GSIC stock on margin for approximately $470,000. On June 20, 2011, CW1 received $737,500 in exchange for the 25,000 shares of GSIC, equating to an illicit profit of $260,304, as a result of the text messages. Saridakis also shared the same material non-public information with other individuals.
The case was investigated by the FBI. It was prosecuted by Assistant United States Attorney Joel D. Goldstein. Saridakis and others have been charged in a parallel civil matter by the Securities and Exchange Commission.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525- Former Deputy Sentenced for Laundering $40 Million in Drug Proceeds
Florida Man Sentenced to 27 Months in Prison for Attempting to Purchase 100 Stolen IdentitiesRead the Press Release
A Florida man was sentenced today to serve 27 months in prison for attempting to purchase sensitive, detailed personal identifying information, known as PII – including Social Security numbers and bank account numbers – to open credit card accounts and file fraudulent tax returns.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney John P. Kacavas of the District of New Hampshire made the announcement. U.S. District Judge Steven J. McAuliffe of the District of New Hampshire imposed the sentence.
Derric Theoc, 36, was indicted by a federal grand jury in July 2013 and pleaded guilty in June 2014 to one count of attempted access device fraud. In addition to his prison sentence, he was ordered to serve two years of supervised release.
In his guilty plea, Theoc admitted that, in April 2013, he attempted to purchase packages of personal identifying information for 100 people from an undercover United States Secret Service agent who was posing as a known, prolific vendor of personally identifiable information, Hieu Minh Ngo. Theoc had previously made multiple similar purchases from Ngo.
Ngo, a Vietnamese national, pleaded guilty on March 3, 2013, to wire fraud, identification fraud and fraud in connection with access devices and on Aug. 21, 2014, to a separate indictment to four counts of computer fraud. Sentencing is scheduled for Dec. 1, 2014. According to court documents, Ngo administered websites from 2007 through February 2013 that allowed more than 1,000 individuals from throughout the world to access databases containing personal identifying information and conduct more than 3 million queries to obtain a person’s date of birth, Social Security number and other information. He also sold or transferred more than 150,000 packages of personally identifiable information that would allow criminals to take over the identity of another person.
The packages of personal identifying information that Theoc attempted to purchase typically included a person’s name, address, date of birth, Social Security number, mother’s maiden name, driver’s license number, bank account number, bank routing number, email account, account password and place of work. Theoc further admitted that he attempted to purchase the information with the intent to obtain credit cards to make purchases or withdraw money and to file fraudulent tax returns in an effort to receive refunds to which he was not entitled.
The case is being investigated by the United States Secret Service. The case is being prosecuted by Senior Counsel Mysti Degani of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire.
Flakeboard Abandons Its Proposed Acquisition of SierraPineRead the Press Release
Flakeboard America Ltd. abandoned its plan to acquire one medium-density fiberboard (MDF) and two particleboard mills from SierraPine after the Department of Justice expressed concerns about the transaction’s likely anticompetitive effects in MDF. The department said that the transaction likely would have substantially lessened competition in the market for the production of MDF sold to customers in the west coast states of California, Oregon and Washington.
MDF is a manufactured wood product widely used in furniture, kitchen cabinets, and decorative mouldings. An increase in the price of MDF would likely result in significant harm to MDF consumers on the West Coast, the department said.
“This deal threatened to weaken competition and raise MDF prices for customers on the West Coast,” said Bill Baer, Assistant Attorney General of the Department of Justice’s Antitrust Division. “The companies’ decision to abandon the deal is a victory for consumers, who will continue to enjoy the benefits of MDF competition between Flakeboard and SierraPine.”
Flakeboard and SierraPine are two of only four significant suppliers of MDF to the West Coast. Both companies operate MDF mills in Oregon—Flakeboard in Eugene; SierraPine in Medford—and the nearest competing mill is several hundred miles away. For many customers, Flakeboard and SierraPine are the two closest sellers of MDF. The proposed merger would have given the combined firm a 58 percent market share for the thicker and denser grades of MDF that Flakeboard and SierraPine sell on the West Coast.
According to the department, the acquisition would have eliminated significant head-to-head competition between Flakeboard and SierraPine. In addition, by gaining control over SierraPine’s MDF mill, the department said that Flakeboard would have been in a better position to raise prices by restricting the amount of MDF available to the West Coast. The acquisition also would have enhanced the risk of coordination between Flakeboard and its few remaining rivals on output and prices, the department said.
Flakeboard is a Delaware corporation headquartered in Ontario, Canada. Flakeboard’s parent company is Celulosa Arauco y Constitución (Arauco), which is held by Inversiones Angelini y Compañia Limitada, a Chilean corporation headquartered in Santiago, Chile. In 2013, Flakeboard’s annual revenues from its MDF business were approximately $380 million. SierraPine is a California limited partnership headquartered in Roseville, California. In 2013, SierraPine’s annual revenues from its MDF business were approximately $70 million.
Five Army National Guard Officials and One Civilian Charged with BriberyRead the Press Release
Four retired and one active-duty Army National Guard officials and one civilian have been charged for their alleged participation in bribery schemes related to the awarding of millions of dollars of Army National Guard marketing, retention and recruitment contracts. Two of the retired Army National Guard officials and the civilian pleaded guilty for their roles in the schemes.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Director in Charge Andrew McCabe of the FBI’s Washington Field Office, Special Agent in Charge Robert E. Craig Jr. of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office and Director Frank Robey of the U.S. Army Criminal Investigative Command’s Major Procurement Fraud Unit (Army-CID) made the announcement.
“As captured by its motto, the Army National Guard is ‘always ready, always there’ for the American people,” said Assistant Attorney General Caldwell. “Unfortunately, today’s charges expose National Guard officials who were ‘always ready’ to pocket bribes and ‘always there’ to take kickbacks. In return, the charged officials allegedly subverted the open bidding process and illegally steered millions of taxpayer dollars to the bribe-payers through marketing and advertising contracts. Corruption should know no place in American government, but least of all in the military that so honorably serves our country. The Criminal Division is committed to rooting out corruption wherever we find it, including in the military, so that we can ensure that no one is putting the public’s trust up for sale.”
“These criminal charges and guilty pleas reflect our continued commitment to rooting out public corruption wherever it occurs,” said U.S. Attorney Boente. “The public contracting process should be one of integrity and fairness, and these cases should send a strong message that public corruption will be vigorously prosecuted in the military as well as other areas of government.”
“This investigation has sadly reminded us that even some members of our military are willing to trade on the trust their country placed in them to line their pockets with the profits of corrupt activities,” said U.S. Attorney Lynch. “We and our law enforcement partners will constantly guard against and root out such corruption wherever we find it.”
Charles Sines, 56, of Stafford, Virginia, a retired colonel from the United States Army National Guard; Wesley Russell, 48, of Albany, Indiana, a retired lieutenant colonel from the Indiana Army National Guard; and Jason Rappoccio, 39, of Hampton, South Carolina, an active-duty sergeant first class from the Army National Guard are charged with conspiracy to solicit bribes and the solicitation of bribes. Russell and Rappoccio allegedly asked for and received bribes, and Sines allegedly provided bribes.
Robert Porter, 50 of Columbia, Maryland, a retired colonel from the Army National Guard, and Timothy Bebus, 44, of Forest Lake, Minnesota, a retired sergeant major of the Minnesota Army National Guard and owner of Mil-Team Consulting and Solutions LLC, each pleaded guilty in the Eastern District of Virginia in September 2014 to conspiracy to commit bribery and bribery of a public official. Julianne Hubbell, 45, of Brooklyn Park, Minnesota, a civilian who partnered with her brother, Bebus, as the vice president of operations of Mil-Team, also pleaded guilty in September 2014 to conspiracy to commit bribery. Sentencing hearings for Bebus and Hubbell are scheduled for Jan. 23, 2015, and for Porter on Jan. 30, 2015.
“The alleged steering of large government contracts is offensive to active duty, reserve and retired members of the National Guard Bureau who took an oath to support and defend the Constitution,” said FBI Assistant Director in Charge McCabe. “It is also offensive to average American citizens who trust their government and its contractors to use taxpayer money wisely. We urge anyone who has knowledge of corruption and abuse in federal government contracting to contact the FBI.”
“The Department of Defense places special trust and confidence in its service members, particularly those in positions to influence the expenditure of taxpayer dollars,” said DCIS Special Agent in Charge Craig. “Guardsmen hold a unique position in our society, representing both their state and military service. The alleged behavior uncovered in this investigation was a disservice to both, but in no way typical of those honorable women and men that serve in our Army and Air National Guard. Identifying and investigating fraud and public corruption remains the highest of priorities for the Defense Criminal Investigative Service. Alongside our law enforcement partners, we will continue to aggressively pursue allegations of fraud impacting Department of Defense resources.”
“We have highly-trained, Army CID special agents who are extremely talented and very capable of rooting out this type of corruption within our ranks,” said Army-CID Director Robey. “People must realize, both in and out of uniform, that fraud will not be tolerated within the Army and Department of Defense, and greed cannot and will not trump duty and honor.”
As set forth in the indictments and other publicly-filed documents, the National Guard Bureau is a joint activity of the U.S. Department of Defense (DOD), state Army National Guard units and the Departments of the Army and Air Force. The National Guard Bureau, located in Arlington, Virginia, oversees the distribution of federal funding provided to the Army National Guard and its state units.
The DOD provides millions of dollars of federal funds to the Army National Guard for, among other things, advertising, marketing and sponsorships in order to recruit new members. The National Guard Bureau uses these funds to promote the Army National Guard by entering into advertising, marketing and sponsorship contracts. For example, through advertising, marketing and sponsorship contracts, the National Guard was an official sponsor of Dew Tour, Warrior Dash, and American Motorcycle Association Supercross’s events, where recruiters handed out promotional items and recruited new members. The National Guard also had a contract to sponsor Michael Jordan’s AMA Superbike team.
The National Guard Bureau can avoid a competitive bid process by awarding these federally-funded marketing contracts to Small Business Administration (SBA) certified 8(a) companies, which are minority-owned businesses. The National Guard Bureau also provides a portion of the federal funds to the state units to allocate.
The indictments allege that Sines and Rappoccio evaded the competitive bid process by using 8(a) companies to award contracts in exchange for bribes.
According to allegations in the indictment against him, Sines founded a company, Financial Solutions, after retiring from the Army National Guard as a colonel. Sines allegedly paid Porter, a then-active-duty colonel in the Army National Guard, a percentage of all contracts that Porter steered to Financial Solutions through 8(a) companies. As the director of the National Guard Bureau’s Guard Strength Directorate, Porter had substantial influence over the awarding of National Guard Bureau contracts, and allegedly steered approximately $4.5 million worth of contracts to Sines and Financial Solutions.
The indictment against Russell alleges that, while on active duty as a lieutenant colonel in the Indiana Army National Guard, Russell demanded 15 percent of all profits that a private marketing company would receive from state Army National Guard units. In return for his 15 percent cut of the profits, Russell allegedly promoted and encouraged state Army National Guard units to purchase the marketing company’s products.
The indictment against Rappoccio, an active-duty sergeant first class in the Army National Guard, alleges that Bebus and Hubbell paid Rappoccio a $30,000 bribe for steering a contract worth approximately $3.7 million to an 8(a) company chosen by Bebus. In pleading guilty, Bebus and Hubbell admitted to paying this bribe. In an effort to conceal the bribe payment, Bebus, Hubbell and others allegedly arranged for the payment of $6,000 in cash to Rappoccio, and the remaining $24,000 was allegedly routed from a business account controlled by Hubbell to an account controlled by Bebus and Hubbell’s brother-in-law, and then provided to Rappoccio in the form of a cashier’s check to Rappoccio’s wife.
An indictment is merely an allegation, and the defendants are presumed innocent unless and until proven guilty.
The case is being investigated by the FBI’s Washington Field Office, with assistance from DCIS’s Mid-Atlantic Field Office and Army-CID’s Expeditionary Fraud Resident Agency’s Major Procurement Fraud Unit. The case is being prosecuted by Trial Attorney Alison L. Anderson of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Jonathan Fahey of the Eastern District of Virginia and Assistant U.S. Attorneys Marisa Seifan and Martin Coffey of the Eastern District of New York.
Allegations of bribery or corruption within the National Guard Bureau’s retention and recruitment contracting can be reported to the FBI’s Washington Field Office at (202) 278-2000 or the FBI’s Northern Virginia Public Corruption Hotline at (703) 686-6225.
Bebus Statement of Facts
Hubbell Statement of Facts
Porter Statement of Facts
Indictment - Sines 14cr325
Indictment - Russell 14cr324
Indictment - Rappoccio 14cr323
Five Army National Guard Officials and One Civilian Charged with BriberyRead the Press Release
WASHINGTON – Four retired and one active-duty Army National Guard officials and one civilian have been charged for their alleged participation in bribery schemes related to the awarding of millions of dollars of Army National Guard marketing, retention and recruitment contracts. Two of the retired Army National Guard officials and the civilian pleaded guilty for their roles in the schemes.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Director in Charge Andrew McCabe of the FBI’s Washington Field Office, Special Agent in Charge Robert E. Craig Jr. of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office and Director Frank Robey of the U.S. Army Criminal Investigative Command’s Major Procurement Fraud Unit (Army-CID) made the announcement.
“As captured by its motto, the Army National Guard is ‘always ready, always there’ for the American people,” said Assistant Attorney General Caldwell. “Unfortunately, today’s charges expose National Guard officials who were ‘always ready’ to pocket bribes and ‘always there’ to take kickbacks. In return, the charged officials allegedly subverted the open bidding process and illegally steered millions of taxpayer dollars to the bribe-payers through marketing and advertising contracts. Corruption should know no place in American government, but least of all in the military that so honorably serves our country. The Criminal Division is committed to rooting out corruption wherever we find it, including in the military, so that we can ensure that no one is putting the public’s trust up for sale.”
“These criminal charges and guilty pleas reflect our continued commitment to rooting out public corruption wherever it occurs,” said U.S. Attorney Boente. “The public contracting process should be one of integrity and fairness, and these cases should send a strong message that public corruption will be vigorously prosecuted in the military as well as other areas of government.”
“This investigation has sadly reminded us that even some members of our military are willing to trade on the trust their country placed in them to line their pockets with the profits of corrupt activities,” said U.S. Attorney Lynch. “We and our law enforcement partners will constantly guard against and root out such corruption wherever we find it.”
Charles Sines, 56, of Stafford, Virginia, a retired colonel from the United States Army National Guard; Wesley Russell, 48, of Albany, Indiana, a retired lieutenant colonel from the Indiana Army National Guard; and Jason Rappoccio, 39, of Hampton, South Carolina, an active-duty sergeant first class from the Army National Guard are charged with conspiracy to solicit bribes and the solicitation of bribes. Russell and Rappoccio allegedly asked for and received bribes, and Sines allegedly provided bribes.Robert Porter, 50 of Columbia, Maryland, a retired colonel from the Army National Guard, and Timothy Bebus, 44, of Forest Lake, Minnesota, a retired sergeant major of the Minnesota Army National Guard and owner of Mil-Team Consulting and Solutions LLC, each pleaded guilty in the Eastern District of Virginia in September 2014 to conspiracy to commit bribery and bribery of a public official. Julianne Hubbell, 45, of Brooklyn Park, Minnesota, a civilian who partnered with her brother, Bebus, as the vice president of operations of Mil-Team, also pleaded guilty in September 2014 to conspiracy to commit bribery. Sentencing hearings for Bebus and Hubbell are scheduled for Jan. 23, 2015, and for Porter on Jan. 30, 2015.
“The alleged steering of large government contracts is offensive to active duty, reserve and retired members of the National Guard Bureau who took an oath to support and defend the Constitution,” said FBI Assistant Director in Charge McCabe. “It is also offensive to average American citizens who trust their government and its contractors to use taxpayer money wisely. We urge anyone who has knowledge of corruption and abuse in federal government contracting to contact the FBI.”
“The Department of Defense places special trust and confidence in its service members, particularly those in positions to influence the expenditure of taxpayer dollars,” said DCIS Special Agent in Charge Craig. “Guardsmen hold a unique position in our society, representing both their state and military service. The alleged behavior uncovered in this investigation was a disservice to both, but in no way typical of those honorable women and men that serve in our Army and Air National Guard. Identifying and investigating fraud and public corruption remains the highest of priorities for the Defense Criminal Investigative Service. Alongside our law enforcement partners, we will continue to aggressively pursue allegations of fraud impacting Department of Defense resources.”
“We have highly-trained, Army CID special agents who are extremely talented and very capable of rooting out this type of corruption within our ranks,” said Army-CID Director Robey. “People must realize, both in and out of uniform, that fraud will not be tolerated within the Army and Department of Defense, and greed cannot and will not trump duty and honor.”
As set forth in the indictments and other publicly-filed documents, the National Guard Bureau is a joint activity of the U.S. Department of Defense (DOD), state Army National Guard units and the Departments of the Army and Air Force. The National Guard Bureau, located in Arlington, Virginia, oversees the distribution of federal funding provided to the Army National Guard and its state units.
The DOD provides millions of dollars of federal funds to the Army National Guard for, among other things, advertising, marketing and sponsorships in order to recruit new members. The National Guard Bureau uses these funds to promote the Army National Guard by entering into advertising, marketing and sponsorship contracts. For example, through advertising, marketing and sponsorship contracts, the National Guard was an official sponsor of Dew Tour, Warrior Dash, and American Motorcycle Association Supercross’s events, where recruiters handed out promotional items and recruited new members. The National Guard also had a contract to sponsor Michael Jordan’s AMA Superbike team.
The National Guard Bureau can avoid a competitive bid process by awarding these federally-funded marketing contracts to Small Business Administration (SBA) certified 8(a) companies, which are minority-owned businesses. The National Guard Bureau also provides a portion of the federal funds to the state units to allocate.
The indictments allege that Sines and Rappoccio evaded the competitive bid process by using 8(a) companies to award contracts in exchange for bribes.
According to allegations in the indictment against him, Sines founded a company, Financial Solutions, after retiring from the Army National Guard as a colonel. Sines allegedly paid Porter, a then-active-duty colonel in the Army National Guard, a percentage of all contracts that Porter steered to Financial Solutions through 8(a) companies. As the director of the National Guard Bureau’s Guard Strength Directorate, Porter had substantial influence over the awarding of National Guard Bureau contracts, and allegedly steered approximately $4.5 million worth of contracts to Sines and Financial Solutions.
The indictment against Russell alleges that, while on active duty as a lieutenant colonel in the Indiana Army National Guard, Russell demanded 15 percent of all profits that a private marketing company would receive from state Army National Guard units. In return for his 15 percent cut of the profits, Russell allegedly promoted and encouraged state Army National Guard units to purchase the marketing company’s products.
The indictment against Rappoccio, an active-duty sergeant first class in the Army National Guard, alleges that Bebus and Hubbell paid Rappoccio a $30,000 bribe for steering a contract worth approximately $3.7 million to an 8(a) company chosen by Bebus. In pleading guilty, Bebus and Hubbell admitted to paying this bribe. In an effort to conceal the bribe payment, Bebus, Hubbell and others allegedly arranged for the payment of $6,000 in cash to Rappoccio, and the remaining $24,000 was allegedly routed from a business account controlled by Hubbell to an account controlled by Bebus and Hubbell’s brother-in-law, and then provided to Rappoccio in the form of a cashier’s check to Rappoccio’s wife.
An indictment is merely an allegation, and the defendants are presumed innocent unless and until proven guilty.
The case is being investigated by the FBI’s Washington Field Office, with assistance from DCIS’s Mid-Atlantic Field Office and Army-CID’s Expeditionary Fraud Resident Agency’s Major Procurement Fraud Unit. The case is being prosecuted by Trial Attorney Alison L. Anderson of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Jonathan Fahey of the Eastern District of Virginia and Assistant U.S. Attorneys Marisa Seifan and Martin Coffey of the Eastern District of New York.
Allegations of bribery or corruption within the National Guard Bureau’s retention and recruitment contracting can be reported to the FBI’s Washington Field Office at (202) 278-2000 or the FBI’s Northern Virginia Public Corruption Hotline at (703) 686-6225.
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