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Thursday 14 August 2014
Area Investment Advisor Indicted on Fraud ChargesRead the Press Release
St. Louis, MO – BRYAN BINKHOLDER was indicted on multiple fraud charges involving his financial planning and investment strategy businesses.
According to the indictment, Binkholder labeled himself "The Financial Coach" and provided investment and financial planning advice to the general public through his affiliated websites, YouTube channel, published books and articles and an investment related talk-radio show that aired on local radio stations. In 2008, he developed a real estate investment he termed "hard money lending." Using his platform as an investment advisor and financial talk show host, Binkholder solicited his clients and others to invest in the hard money lending program. As part of his sales pitch he represented that he had relationships with developers in the real estate community who wanted to purchase, renovate and sell residential real estate in the St. Louis area, but were not able to secure financing from traditional banks. As part of the hard money lending program, Binkholder told investors that they would invest money with him, and he would act as a bank and provide short-term loans to these developers at a high rate of interest, which would be shared with the investor. Instead of exclusively making hard money loans as promised, he commingled the vast majority of investor money across a number of different accounts. Binkholder then allegedly used the commingled funds to pay interest to subsequent investors and pay personal expenses. The indictment states that Binkholder took in millions of dollars of investor money, made only a small number of hard money loans and caused investors to lose more than $3,000,000.
Binkholder, Wentzville, MO, was indicted by a federal grand jury on four felony counts of wire fraud and one felony count of bank fraud. He is expected to appear in federal court today.
Additionally, upon a finding of guilt, the defendant will be subject to a forfeiture allegation, which will require the forfeiture to the government all monies and property derived from the illegal activity.
If convicted, each of these charges carries a maximum penalty of 30 years in prison and/or fines up to $1 million. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation and the Postal Inspection Service. Assistant United States Attorney Stephen Casey is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.Antlers Man Sentenced to 15 Months for Firearm PossessionRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that TROY LYNN HUGHES, age 54, of Antlers, Oklahoma, was sentenced to 15 months imprisonment, followed by 3 years of supervised release for being a Felon in Possession of a Firearm, in violation of Title 18, United States Code, Section 922(g)(l).
The charge is a result of an investigation by the District 17 District Attorney’s Drug Task Force, Pushmataha County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The defendant was indicted in November, 2013 and pled guilty in April 2014.
The Indictment alleged that on or about September 13, 2012, within the Eastern District of Oklahoma, the defendant, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, firearms which had been shipped and transported in interstate commerce.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending transportation to the designated federal prison at which he will serve his nonparolable sentence.
Assistant United States Attorney Kyle Waters represented the United States.
Antlers Man Pleads Guilty to Failure to Register as Sex OffenderRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that PETER GLENN BAKER, age 42, of Antlers, Oklahoma, pled guilty to Failure to Register as Sex Offender, in violation of Title 18, United States Code, Sections 2250(a)(1), 2250(a)(2)(B) and 2250(a)(3).
Charges arose from an investigation by the United States Marshal Service. The defendant was indicted in July, 2014.
The Indictment alleged that from in or about October 2013 until in or about December 2013, in the Eastern District of Oklahoma, and elsewhere, the defendant, an individual required to register as a sex offender under the Sex Offender Registration and Notification Act, after having received a felony conviction from the State of Washington on or about December 2, 2004, for the felony offense of Rape of a Child in the Third Degree, traveled in interstate commerce and knowingly failed to register and update his registration as required by the Sex Offender Registration and Notification Act.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion. The defendant will remain in the custody of the United States Marshal Service pending sentencing.
The statutory range of punishment is not more than 10 years imprisonment and/or up to a $250,000 fine.
Assistant United States Attorney Chris Wilson represented the United States.
Airline Pilot Convicted of Traveling to Have Sex with MinorRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistWHEELING, WEST VIRGINIA – A commercial airline pilot has been convicted of traveling across state lines in order to have sex with a minor female.
United States Attorney William J. Ihlenfeld, II announced today that MUSTAFA MOMOUN BAZBAZ, 28 years of age, of Oakdale, Pennsylvania entered a guilty plea to the felony offense of “Travel with Intent to Engage in Illicit Sexual Conduct.” BAZBAZ communicated with a 15-year old female from Jefferson County, Ohio, in December of 2013 via the website known as MeetMe.com. He misrepresented his age and name to the victim, claiming to be 17 years old and to be named “Mike B.” BAZBAZ also sent sexually explicit images of himself to the victim before arranging to pick up the victim near her home in Jefferson County in December of 2013. BAZBAZ then took the victim to a hotel room in Hancock County where they engaged in sexual intercourse.
At the time of the incident BAZBAZ was employed as a pilot with Republic Airways and was stationed in Pittsburgh.
The matter was investigated by the Federal Bureau of Investigation and the Hancock County (WV) Sheriff’s Department. This prosecution of the case is being handled by Assistant United States Attorney Robert H. McWilliams, Jr.
BAZBAZ faces up to thirty years in prison, a fine of up to $250,000, and supervision for life. Under the Federal Sentencing Guidelines the actual sentence imposed will be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Wednesday 13 August 2014
West Michigan Businessman Sentenced to More Than 7 Years in Prison for Defrauding His Friends and Business AssociatesRead the Press Release
Roger Andrews Defrauded Victims of $1.4 Million Pitching a Bogus Land Deal in Indiana and Committed Perjury at Trial in an Attempt to Evade Justice
GRAND RAPIDS, MICHIGAN – Roger Lee Andrews, 54, of Coopersville, was sentenced to 87 months in federal prison for committing a fraud scheme involving real estate he claimed to own in Indiana. Additionally, Andrews was ordered to pay $1,493,870.77 in restitution to the victims of the scheme and was ordered to forfeit an additional $1,408,061.33 to the United States in the form of a money judgment. The Honorable Robert J. Jonker, U.S. District Judge, imposed the sentence.
U.S. Attorney Patrick Miles, Jr. said, “The fraud perpetrated by Roger Andrews represents a deplorable abuse of trust. Sadly, Andrews exploited his decades-long relationships with his victims to swindle them out of substantial amounts of money for his own benefit and enjoyment. This sentence holds Andrews accountable for his reprehensible conduct.”
Andrews was convicted of wire fraud following a jury trial in April 2014. At trial, the jury heard evidence that Andrews solicited money from friends, business acquaintances, and a bank for use in connection with investment property in Indiana. Andrews told his victims he had non-public “inside information” concerning the value of certain real estate in Indiana and needed funds to make capital improvements to the land to sell it at a substantial profit to the State of Indiana. In reality, Andrews never owned any property in Indiana, was never involved in any land deals in Indiana, and admitted forging documents that made it appear as though he had a contract to sell the property for more than $900,000.
“Mr. Andrews engaged in a longstanding financial fraud scheme, stealing money from friends and business acquaintances,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “When confronted at trial by his victims and evidence of his crimes, Mr. Andrews showed no remorse. The prison sentence and restitution ordered in this case holds Mr. Andrews accountable for his actions and brings justice to his victims. The FBI remains dedicated to aggressively pursuing perpetrators who commit these crimes.”
In sentencing Andrews to prison, the Court remarked that Andrews engaged in a “brazen” fraud scheme to take money from his friends over several years to gamble it away in the stock market. The Court rejected Andrews’ request for leniency and found that Andrews committed perjury while testifying at trial under oath. The Court noted that Andrews has shown “no remorse whatsoever” for perpetrating the fraud and found it “mind boggling” that Andrews has failed to apologize or explain to the victims how he actually spent their money.
The case was investigated by the FBI and prosecuted by Assistant U.S. Attorneys Christopher O’Connor and Clay Stiffler.
END
United States Attorney’s Office Announces Sentence in Gun Possession CaseRead the Press Release
Armed career criminal receives enhanced sentence for lengthy criminal history
INDIANAPOLIS– Acting United States Attorney Josh J. Minkler, today announced the sentencing of an Indianapolis man for illegally possessing a firearm. O. C. Todd, 54, Indianapolis, was sentenced to 215 months (nearly 18 years) in federal prison by U.S. District Judge Tanya Walton Pratt. He was found guilty in July of this year.
“Prosecuting violent felons who possess firearms will remain a top priority for our office,” said Acting United States Attorney Josh J. Minkler. “Those who think we are not serious will have time to think about it in federal prison. The evidence demonstrates that Mr. Todd was stalking two women with a bag containing a loaded gun, a roll of duct tape, zip ties, and baby oil. The combined efforts of law enforcement to get Mr. Todd off the streets of Indianapolis should make citizens feel safer.”
Court documents state on April 18, 2013, Indianapolis Metropolitan Police Officers (IMPD) received a call to the 1600 block of East Orange Street on a man stalking two women with binoculars. When officers arrived, they saw Todd standing near a pickup truck and watched him drop a blue nylon bag. Todd got into the truck and sped away.
Officers pursued Todd and stopped him a short while later. When officers returned to the original scene, they located the blue bag and inside found a loaded .38 caliber pistol, a roll of duct tape, two large nylon zip ties and a container of baby oil. Todd told officers he was on the Southside of Indianapolis looking for work and because gasoline was cheaper there.
Todd has a lengthy criminal history that made him eligible for enhanced sentencing as an armed career criminal. His history includes:
Five counts of Criminal Confinement, Marion County, 1980
Resisting Law Enforcement, Marion County, January 2000
Resisting Law Enforcement, Marion County, May 2000This investigation was conducted by agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Indianapolis Metropolitan Police Department.
“ATF is committed to combating gun violence in our communities,” said Michael Boxler, ATF Special Agent in Charge for the Columbus Field Division. “We will continue to work with our law enforcement partners to make our communities safer and remove violent offenders from our streets.”
“Persons who prey upon our community, in particular women and children, should receive the maximum sentence allotted by law. It’s obvious that this case warrants attention due to the continuous violent history this individual has shown”, said Chief Rick Hite, “I want to thank our officers and our federal partners for bringing this suspect to justice.”
According to Gayle Helart who prosecuted the case for the government, Todd must pay a $5000 fine and faces five years of supervised release after serving his sentence.
Undocumented Aliens Sentenced for Tax Refund Fraud Conspiracy and Identity TheftRead the Press Release
United States Attorney Kenneth Allen Polite, Jr. and Deputy Assistant Attorney General Ronald A. Cimino of the Justice Department's Tax Division announced that four undocumented aliens were sentenced today to jail terms ranging from 24 to 42 months for their roles in a large conspiracy to defraud the United States by filing false income tax returns that fraudulently claimed large tax refunds. Three defendants were also sentenced for aggravated identity theft. All defendants have been detained since their arrest in June 2013. To date, sixteen defendants have entered guilty pleas to various charges in the case, including JACQUELINE J. ARIAS, a tax return preparer in Spruce Pine, Alabama, who has yet to be sentenced.
ELSIDES EDGARDO ALVARADO-CANALES, 36, was sentenced to serve 36 months in prison, after pleading guilty to conspiracy to defraud the United States and aggravated identity theft. CESAR ALEJANDRO SORIANO, 30, was sentenced to serve 42 months in prison on his guilty pleas to conspiracy and aggravated identity theft charges. OCTAVIO JOSUE PERDOMO, 25, was sentenced to serve 34 months in prison for his role in the conspiracy and for aggravated identity theft. AURELIO MONTIEL-MARTINEZ, 35, was sentenced to 24 months incarceration, after pleading guilty to conspiracy. ALVARADO-CANALES, PERDOMO, and SORIANO are natives of Honduras, while MONTIEL-MARTINEZ is a Mexican citizen. All of the defendants were present in the United States illegally and face possible deportation following the completion of their sentences. The defendants were further ordered to pay restitution and to terms of supervised release.
According to the indictments in this case, the conspirators filed false returns listing Individual Taxpayer Identification Numbers (ITINs). An ITIN is a tax processing number issued by the Internal Revenue Service (IRS) to individuals who do not have, and are not eligible to obtain, a social security number. As alleged in the indictments, JACQUELINE J. ARIAS was a Certified Acceptance Agent, meaning that she was entrusted by the IRS with the responsibility of reviewing the documentation of an ITIN applicant’s identity and alien status for authenticity, completeness and accuracy before submitting their application to the IRS. The indictments charged that ARIAS and her coconspirators filed false applications for ITINs, in addition to false income tax returns, and that ARIAS collected preparation fees from the fraudulently-obtained tax refunds. According to the second superseding indictment, the conspirators purchased identification documents from overseas and Forms W-2 from other aliens illegally present in the United States for use in filing false income tax returns with ARIAS.
"Today's announcement exemplifies IRS Special Agents' intense focus on the rigorous pursuit of identity theft and refund fraud," said Gabriel L. Grchan, Chief IRS Criminal Investigation. “These individuals demonstrated a blatant disregard of the integrity of the United States tax system and caused immeasurable hardship to innocent victims. IRS Criminal Investigation remains committed to the pursuit of identity theft and, together with our partners at the U.S. Attorney’s Office, we will hold those who engage in similar conduct accountable.”
“Defrauding the government in the fashion these defendants pleaded guilty to has a direct, negative impact on law-abiding taxpayers,” said Special Agent in Charge Raymond R. Parmer Jr., ICE Homeland Security Investigations (HSI) in New Orleans. “The money stolen from the government in this case might have been used to feed hungry children, pay our soldiers or make needed repairs on a local highway. HSI stands ready with our partners at the IRS and other agencies to hold those who seek to enrich themselves at the expense of others through tax fraud and other criminal schemes accountable for their actions.”
The case was investigated by U.S. Immigration and Customs Enforcement, which oversees Homeland Security Investigations; IRS-Criminal Investigation; the U.S. Secret Service; the U.S. Postal Inspection Service; and the Social Security Administration, Office of the Inspector General, in partnership with the St. Tammany Parish and Jefferson Parish Sheriffs’ Departments. The case was prosecuted by Department of Justice, Tax Division Trial Attorneys Hayden Brockett and Kevin Lombardi and Assistant United States Attorney David Haller.
(Download Superseding Indictment )
U.S. Department of Justice Awards City of Stockton A $414,923 Grant to Continue Funding A County-Wide Firearms Reduction ConsortiumRead the Press Release
SACRAMENTO, Calif. — The Bureau of Justice Assistance, an agency of the United States Department of Justice, awarded an Edward Byrne Memorial Justice Assistance Grant (JAG) to the City of Stockton to prevent and control crime, United States Attorney Benjamin B. Wagner announced today.
The 2014 JAG grant award of $414,923 will fund the fourth year of the Firearms Reduction Consortium. The Consortium is a collaborative effort between San Joaquin County and the City of Stockton to reduce firearm violence.
The prevalence of illegal firearms within the City of Stockton, as well as throughout San Joaquin County, is a significant contributor to the increase in violent crime in the region. Efforts to combat violent crime will be coordinated between the Stockton Police Department, the San Joaquin County Sheriff's Office and the San Joaquin County Probation Department, and will include:
• Special enforcement missions to be conducted four times each year;
• Retention of an expert in firearms to provide ballistics identification services for guns and bullet casings recovered from crime scenes and during the enforcement missions;
• The assignment by the District Attorney's Office of a prosecutor knowledgeable of the laws related to gun crimes; and
• Funding of additional computer software enhancements and staff training.
For more information about this grant, contact the Office of Justice Program's Office of Communications at (202) 307-0703.
The assistance provided by this grant complements an ongoing effort by the U.S. Department of Justice, including the U.S. Attorney's Office, FBI, ATF, DEA, and the U.S. Marshals Service, to work closely with the Stockton Police Department, San Joaquin County Sheriff, the District Attorney, and other agencies to reduce violent crime in the Stockton area.U.S. Attorney Loretta Lynch for the Eastern District of New York Delivers Remarks at the Convention on the Elimination of Racial Discrimination ~ Geneva, Switzerland ~ Wednesday, August 13, 2014Read the Press Release
Mr. Chairperson, distinguished members of the committee, and representatives of civil society, it is an honor to be a part of the U.S. delegation and share some of the highlights of the Department of Justice’s efforts to eliminate racial discrimination and uphold human rights in the area of criminal justice.
Attorney General Eric Holder – and all of us at the Department of Justice who work on criminal justice issues – take seriously our obligation to protect the safety of all Americans and the security of our nation; to safeguard civil and human rights; to prevent and combat violent crime, financial fraud, and threats to the most vulnerable members of society; and to strengthen collaboration among government, law enforcement and our community partners.
As part of this mission, the department has made great progress in reforming America’s criminal justice system. Our focus is not just on the prosecution of crime, but on eradicating its root causes as well as providing support for those re-entering society after having paid their debt to it.
There is, of course, much work still to be done. Currently our country imprisons approximately 2.2 million people, disproportionately people of color. This situation is a drain on both precious resources and human capital. The Attorney General is committed to reform of this aspect of our criminal justice system.
Last August the Attorney General announced the “Smart on Crime” initiative. Under this initiative, we’re ensuring that stringent mandatory minimum sentences for certain federal drug crimes will now be reserved for the most serious criminals. This is not an abandonment of prison as a means to reduce crime, but rather a recognition that, quite often, less prison can also work to reduce crime. We’re advancing alternative programs in place of incarceration in appropriate cases. And we’re committed to providing formerly incarcerated people with fair opportunities to rejoin their communities and become productive, law-abiding citizens.
As part of this effort, the Attorney General has directed every component of the Justice Department to review proposed rules, regulations or guidance with an eye to whether they may impose collateral consequences that may prevent reintegration into society. He has called upon state leaders to do the same, with a particular focus on enacting reforms to restore voting rights to those who have served their debt to society, thus ending the chain of permanent disenfranchisement that visits many of them.
To further ensure that the elimination of discrimination is an ongoing priority, the Attorney General has created a Racial Disparities Working Group, led by the U.S. Attorney community, to identify policies that result in unwarranted disparities within criminal justice and to eliminate those disparities as quickly as possible
From the reduction of the use of solitary confinement, to the expansion of the federal clemency program, to our support for the retroactive reduction of penalties for non-violent drug offenders to the reduction in the sentencing disparity between crack and powder cocaine, we have worked to improve our criminal justice system in furtherance of our human rights treaty obligations. We look forward to the future and the opportunity to do even more.
Thank you for the opportunity to discuss these issues with you. Our next speaker is my friend and colleague, Mark Kappelhoff, of the department’s Civil Rights Division.
See more photos here: https://www.flickr.com/photos/us-mission/
USA Lynch- Senior U.S. Gov't Delegation
USA Lynch speaking w/ civil society reps at UN Office at Geneva
USA Lynch Consultation with US Civil Society
Two Foreign Nationals Indicted for Growing 5,287 Marijuana Plants in the Lassen National ForestRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a two-count indictment today against Eric Gilberto Perez, 23, of Guatemala, and Daniel Gomez-Gonzalez, 32, of Mexico, charging them with conspiracy to manufacture marijuana and manufacture of marijuana, United States Attorney Benjamin B. Wagner announced.
According to court documents, on July 11, 2014, United States Forest Service agents and Tehama County Sheriff’s deputies raided a marijuana cultivation site near the North Fork Antelope Creek in Tehama County in the Lassen National Forest. Both defendants were arrested after attempting to flee from the cultivation site. Law enforcement counted and eradicated a total of 5,287 marijuana plants from the cultivation site. The defendants are in custody.
This case was the product of an investigation by the United States Forest Service and the Tehama County Sheriff’s Office. Assistant United States Attorney Christiaan Highsmith is prosecuting the case.
If convicted, both Perez and Gomez-Gonzalez face a maximum statutory penalty of 20 years in prison and a $1 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Three Individuals Indicted in August Federal Grand JuryRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office announced today the results of the August 2014 Federal Grand Jury.
“The following named individuals have been charged with a federal crime or crimes by the return of an indictment by the Grand Jury. A grand jury Indictment does not constitute evidence of guilt. A grand jury Indictment is a method of bringing formal charges against the defendant. A defendant is presumed innocent of the charges and may not be found guilty unless evidence establishes guilt beyond a reasonable doubt. Statutory maximum punishments are in parentheses. United States Sentencing Guidelines may be considered, upon conviction, by the sentencing court. Federal prison sentences are non-parolable.”
SEAN DEVAL WARRIOR, age 33, of Eufaula, OK
a/k/a SEAN G.Distribution of Methamphetamine
Drug ForfeitureThe Indictment alleges that on or about January 16, 2014, January 24, 2014 and May 23, 2014, in the Eastern District of Oklahoma, the defendant did knowingly and intentionally distribute a mixture or substance containing a detectable amount of methamphetamine, a Schedule II Controlled Substance.
The charges arose from an investigation by the District 18, District Attorney’s Drug Task Force and the Drug Enforcement Administration. The charges are in violation of Title 21, United States Code, Sections 841(a)(1) and (b)(1)(C), punishable by not more than 20 years imprisonment and/or up to a $1,000,000.00 fine.
Assistant United States Attorney Rob Wallace
JAMES DEWAYNE MARSHALL, age 23, of Ardmore, OK
Possession with Intent to Distribute Marijuana
Possession of a Firearm in Furtherance of Drug Trafficking OffenseThe Indictment alleges that In or about February 5, 2014, June 6, 2014 and August 8, 2014, in the Eastern District of Oklahoma, the defendant, did knowingly and intentionally possess with the intent to distribute less than 50 kilograms of Marijuana, a Schedule I Controlled Substance and did knowingly possess a firearm in furtherance of a drug trafficking crime for which he may be prosecuted in a court of the United States, that is, Possession of a Controlled Substance with Intent to Distribute.
The charges arose from an investigation by the Carter County Sheriff’s Department, the Ardmore Police Department and the Bureau of Alcohol, Tobacco, Firearm and Explosives. The charges are in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(D), punishable by not more than 5 years imprisonment and/or up to a $250,000 fine and Title 18, United States Code, Section 924(c)(1)(A), punishable by not less than 5 years imprisonment and/or up to a $250,000.00 fine.
Assistant United States Attorney Kyle Waters
RICHARD PAUL GEURIN, age 66, of Ardmore, OK
Bank Theft
Embezzlement and Misapplication
False Entry in the Books of a Federally Insured Bank
Bank Fraud
ForfeitureThe Indictment alleges that from on or about February 3, 2011, until on or about February 24, 2014, in the Eastern District of Oklahoma, the defendant, being an officer, director, agent, or employee of, or connected in a capacity with, First Bank & Trust of Duncan, Oklahoma, a bank whose deposits are insured by the Federal Deposit Insurance Corporation, with intent to injure and defraud the said First Bank & Trust of Duncan, Oklahoma, willfully misapplied, embezzled, abstracted, and purloined more than $1,000.00 of the moneys, funds, assets or securities entrusted to the custody or care of First Bank & Trust of Duncan, Oklahoma, in that the defendant withdrew cash from the accounts of certain bank customers and misapplied, embezzled, abstracted and purloined the funds for his own use or benefit with the intent to deceive an officer of First Bank & Trust of Duncan, Oklahoma. The Indictment further alleges that the defendant knowingly made false entries in the books, reports, or statements of First Bank & Trust of Duncan, Oklahoma in that defendant created false transaction documents showing customers withdrawing cash from customer accounts, when in truth and in fact, as the defendant well knew, the withdrawals from customer accounts were by, and for the benefit of the defendant.
The charges arose from an investigation by the Federal Bureau of Investigation. The charges are in violation of Title 18, United States Code, Section 656; Title 18, United States Code, Section 1005 and Title 18, United States Code, Section 1344, all punishable by not more than 30 years imprisonment and/or up to $1,000,000 fine.
Assistant United States Attorney Rob Wallace
Tax Preparer Sentenced for Filing False ReturnsRead the Press Release
A Detroit tax preparer was sentenced yesterday to 30 days in prison for filing a false federal income tax return, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Acting Special Agent in Charge Jarod Koopman, Internal Revenue Service Criminal Investigation.
U.S. District Judge Paul D. Borman also ordered that Monique Gray pay restitution of $102,899.
According to court records, Gray owned and operated MO Tax Services, a tax return preparation business and U&M X Spress Inc. a trucking company. In 2008 Gray’s businesses earned combined gross receipts of approximately $167,232 which Gray knew she had a duty to report. Instead, Gray chose to underreport her gross business income by more than $155,774, in a deliberate attempt to reduce her tax liability. Grays actions caused a tax loss to the government of approximately $14,833 for the 2008 tax year. Overall, Gray caused a tax loss of $102,899 for the years 2006 through 2009.“Gray’s deliberate attempt to file a false tax return undermines the tax system and is an affront to other business owners and taxpayers that remain honest. We will continue to pursue and investigate those individuals that believe they can get away with committing these types of crimes,” said Acting Special Agent in Charge Koopman.
The investigation of this case was conducted by Special Agents of the Internal Revenue Service Criminal Investigation and prosecuted by Assistant U.S. Attorney Ross MacKenzie.Stotts City Man Pleads Guilty to Attempting to Produce Child Porn, Faces at Least 15 Years in PrisonRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Stotts City, Mo., man pleaded guilty in federal court today to attempting to manufacture child pornography by secretly videotaping a child victim in the shower.
Christopher L. Modglin, 45, of Stotts City, pleaded guilty before U.S. District Judge M. Douglas Harpool to one count of attempting to manufacture child pornography.
By pleading guilty today, Modglin admitted that he secretly recorded video of a child victim between the ages of 11 and 13 years old taking a shower. Modglin also admitted that he owned several computers that contained images and movies of child pornography.
According to today’s plea agreement, the victim’s father notified the Lawrence County, Mo., Sheriff’s Department that his daughter told him about Modglin trying to put a camera in her bedroom on multiple occasions. Based on this information, the child victim was interviewed at the Child Advocacy Center. During the interview, the child victim stated that she had seen a video on Modglin’s cell phone of herself taking off a swim suit and getting into a shower.
Sheriff’s deputies executed a search warrant at Modglin’s residence and seized three desktop computers and a laptop computer, all of which contained images and movie files of child pornography involving victims between the ages of 8 to 13 years old. One of the desktop computers contained seven video files that Modglin had made of the child victim in various stages of undress. Officers also seized a thumb drive that contained one of the videos of the child victim, which had been erased. The same thumb drive also contained an erased child pornography movie file. Three additional computers did not contain any child pornography.
In total, the officers seized material that contained seven video files of child pornography manufactured by Modglin, 51 movie files that contained child pornography and 17 images of child pornography.
When Modglin was arrested, officers also discovered a USB flash drive in his wallet that contained the seven video files he manufactured of the child victim.
Under Department of Justice guidelines, the attempted production of child pornography is ordinarily charged in cases that involve surreptitious recordings. The statutory penalties for producing child pornography are the same as the penalties for attempting to produce child pornography.
Under federal statutes, Modglin is subject to a mandatory minimum sentence of 15 years in federal prison without parole, up to a sentence of 30 years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Randall D. Eggert. It was investigated by U.S. Immigration and Customs Enforcement, the Southwest Missouri Cyber Crimes Task Force and the Lawrence County, Mo., Sheriff’s Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Spring Hill Man Pleads Guilty to Cross-State Robbery SpreeRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Christopher Michael Nelson (43, Spring Hill) yesterday pleaded guilty to six counts of bank robbery. Nelson faces a maximum penalty of 20 years in federal prison on each count. A sentencing date has not yet been set.
According to the plea agreements, in the five-day span between February 14 and February 18, 2014, Nelson robbed banks in Brandon, Wesley Chapel, Zephyrhills, Jacksonville and Tallahassee, Florida. On February 20, 2014, Nelson was arrested at the Hard Rock Casino Hotel in Biloxi, Mississippi.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Carlton C. Gammons.
Shreveport Man Sentenced to 87 Months in Prison for Receiving Child PornographyRead the Press Release
SHREVEPORT, La. – A Shreveport man was sentenced to 87 months in prison and a lifetime of supervised release for receiving child pornography on his home computer, U.S. Attorney Stephanie A. Finley announced today.
Kelvin McCallister, 45, of Shreveport, was sentenced by U.S. District Judge S. Maurice Hicks Jr. for one count of receiving child pornography. According to evidence presented at the April 14, 2014 guilty plea, law enforcement detected a computer accessing child pornography online. The signal was traced to a computer in Shreveport. McCallister’s home was searched on May 23, 2013 and various types of child pornography were found on a computer.
Homeland Security Investigations-ICE and the Louisiana Attorney General’s Office conducted the investigation. Assistant U.S. Attorney Brandon B. Brown prosecuted the case. This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.The U.S. Attorney’s Office and the U.S. Department of Homeland Security/Homeland Security Investigations/Immigration & Customs Enforcement (ICE) encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) DHS-2ICE. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online at www.ice.gov/exec/forms/hsi-tips/tips.asp. Tips may be submitted anonymously.
Santa Fe Man Sentenced to Ten Years in Federal Prison for Participating in Crack Cocaine Trafficking ConspiracyRead the Press Release
ALBUQUERQUE – Robert Romero, 24, of Santa Fe, N.M., was sentenced today to 120 months in federal prison followed by four years of supervised release for his role in a cocaine base trafficking conspiracy. Romero previously had entered a guilty plea on May 13, 2014, to two drug trafficking charges and a firearms charge.
Romero was one of five men who were indicted in April 2013, on federal narcotics and firearms charges as the result of “Operation Rio Grande Stucco,” a DEA led investigation into an organization that allegedly manufactured and distributed cocaine base, more commonly known as “crack” or “crack cocaine,” in Bernalillo and Santa Fe Counties, N.M.
The five-count indictment charged Romero and Michael Jaramillo, 24, also of Santa Fe, and Albuquerque residents, Gabriel Mirabal, 33, Sam Eylicio, Jr., 37, and Dominic Anaya, 33, with conspiracy to distribute crack cocaine in Bernalillo and Santa Fe Counties between May 2012 and April 2013. Romero was charged with possession of crack cocaine with intent to distribute in Santa Fe in July 2012, and with using and carrying a firearm in furtherance of a drug trafficking crime. Jaramillo also was charged with distributing crack cocaine in Santa Fe in March 2012. Mirabal was charged with possessing cocaine with intent to distribute in Albuquerque in Feb. 2013.
Jaramillo entered a guilty plea on March 21, 2014, to the conspiracy count and admitted purchasing crack cocaine from two of his co-defendants and then reselling it to others. On July 30, 2014, Jaramillo was sentenced today to 78 months in federal prison followed by four years of supervised release.
Eylicio pled guilty on June 23, 2014, to participating in a cocaine base trafficking conspiracy. Under the terms of his plea agreement, Eylicio will be sentenced to 125 months in federal prison followed by four years of supervised release. Eylicio remains in federal custody pending his sentencing hearing which is scheduled for Sept. 22, 2014.
Anaya entered a guilty plea to conspiracy to distribute crack cocaine on Aug. 5, 2014, and faces a prison term of not less than five years and not more than 40 years when he is sentenced. Anaya remains in custody pending his sentencing hearing which is scheduled for Nov. 3, 2014.
Mirabal has entered a not guilty plea to the indictment. If convicted, Mirabal faces a maximum penalty of not less than five years or more than 40 years in prison. He remains in custody pending trial. An indictment is merely an accusation, and criminal defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Albuquerque office of the DEA and the HIDTA Region III Drug Task Force, with assistance from the 1st Judicial District Attorney’s Office, and is being prosecuted by Assistant U.S. Attorney Nicholas J. Ganjei.
The Region III Drug Task Force is comprised of officers from the New Mexico State Police, Santa Fe Police Department and the Santa Fe County Sheriff’s Office and receives support from the HIDTA – High Intensity Drug Trafficking Area – program. HIDTA is a program of the White House Office of National Drug Control Policy that provides assistance to federal, state, local, and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States.
The investigation leading to the indictment, has been designated as part of the Organized Crime Drug Enforcement Task Force (“OCDETF”) program, a nationwide Department of Justice initiative that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.
San Miguel County Man Charged with Unlawful Possession of a Firearm and AmmunitionRead the Press Release
ALBUQUERQUE – Earl Thomas Romo, 27, of Las Vegas, N.M., made his initial appearance in federal court this morning on an indictment charging him with being a felon in possession. The federal prosecution against Romo was announced by U.S. Attorney Damon P. Martinez, 4th Judicial District Attorney Richard Flores, and 8th Judicial District Attorney Donald Gallegos announced
The federal indictment, which was filed on July 10, 2014, alleges that Romo violated the federal firearms laws by unlawfully possessing a firearm and ammunition in San Miguel County, N.M., on Aug. 19, 2013. At the time, Romo was prohibited from possessing firearms or ammunition because he previously had been convicted of first degree murder in the 8th Judicial District Court for the State of New Mexico (Taos County).
According to court filings, Romo was arrested on state charges by officers of the Las Vegas Police Department on Aug. 19, 2013. At the time, Romo was under the supervision of probation officers of the Probation and Parole Division of the New Mexico Corrections Department following his release from custody on his prior conviction. As a condition of his probation, Romo was required to permit the probation officers to search him, his vehicle, his residence and his property if the officers believed that such searches would reveal evidence that Romo was in violation of the conditions of his probation.
Court filings allege that on Aug. 19, 2013, state probation officers conducted searches of Romo’s vehicle and residence after obtaining information that Romo had violated the conditions of his probation. The probation officers allegedly found ammunition in Romo’s vehicle and a firearm and 8.65 grams of cocaine in a safe they allegedly seized from Romo’s residence. Romo subsequently was charged with state firearms and drug charges by the 4th Judicial District Attorney’s Office. The state charges were subsequently dismissed in favor of federal prosecution, and Romo remained in state custody based on a probation violation until he was transferred to federal custody based on the federal indictment.
If convicted, Romo faces a statutory maximum penalty of ten years in prison. Charges in indictments are merely accusations and criminal defendants are presumed innocent unless convicted in a court of law.
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Las Vegas Police Department and the Las Vegas Office of the Probation and Patrol Division of the New Mexico Corrections Department, with assistance from the 4th and 8th Judicial District Attorneys’ Offices. Assistant U.S. Attorney Louis E. Valencia is prosecuting the case.
This case is being prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
Registered Convicted Sex Offender Found Guilty of Attempted Production of Child Pornography and Traveling to Engage in Sex with a MinorRead the Press Release
A 65-year-old registered sex offender, with two prior convictions relating to possession of child pornography and attempted sexual conduct with minors, was found guilty today of attempting to produce child pornography, travel with intent to engage in illicit sexual conduct, transporting child pornography, possessing child pornography and offense by a registered sex offender.
Assistant Attorney General Leslie Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney Josh Minkler for the Southern District of Indiana made the announcement. The verdict was rendered by U.S. District Judge Jane Magnus-Stinson.
According to the evidence introduced at trial, the defendant, John Alan Lewis, met an individual he believed to be a 14-year-old online in November 2011. From November 2011 until May of 2012, Lewis sent and received numerous images depicting a minor under the age of twelve engaging in sexually explicit conduct via emails with this individual, who actually was an adult male registered sex offender living in Queens, New York. Following the arrest of the individual in the Eastern District of New York, in August of 2012, law enforcement assumed this individual’s online identity and engaged in a series of online chats where the defendant expressed his desire to travel from Ohio to Indiana, pick the 14-year-old up, and take her to a motel to engage in sexual acts with her.
On Sept. 19, 2012, the defendant rented a car in Lima, Ohio, and drove to Plainfield, Indiana. He was arrested when he arrived at the agreed-upon meeting location. The defendant had in his possession three electronic devices, each of which contained images depicting a minor, between the ages of 10 and 12, fully nude and engaging in sexually explicit conduct.
Lewis has been in federal custody since he was arrested in September of 2012. Sentencing will be scheduled at a later date.
The investigation was conducted by the Indianapolis Metropolitan Police Department Cyber Crime Unit, the Indiana State Police Cyber Crime Unit, the FBI’s Violent Crimes Against Children Section and the Indiana Internet Crimes Against Children Task Force, which is made up of federal and state law enforcement agencies. The case is being prosecuted by Criminal Division Trial Attorney Amy E. Larson of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Senior Litigation Counsel Steven D. DeBrota of the Southern District of Indiana.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.Registered Convicted Sex Offender Found Guilty of Attempted Production of Child Pornography and Traveling to Engage in Sex with A MinorRead the Press Release
Defendants believed he was driving to Plainfield to meet a 14 year old for sex
INDIANAPOLIS– A sixty-five-year-old registered sex offender, with two prior convictions relating to possession of child pornography and attempted sexual conduct with minors, was found guilty today by U.S. District Judge Jane Magnus-Stinson of attempting to produce child pornography, travel with intent to engage in illicit sexual conduct, transporting child pornography, possessing child pornography, and offense by a registered sex offender, announced Assistant Attorney General Leslie Caldwell and Josh Minkler, Acting United States Attorney for the Southern District of Indiana.
According to the evidence introduced at trial, the defendant, John Alan Lewis, met an individual he believed to be a 14-year-old online in November 2011. From November 2011 until May of 2012, Lewis sent and received numerous images depicting a minor under the age of twelve engaging in sexually explicit conduct via emails with this individual, who actually was an adult male registered sex offender living in Queens, New York. Following the arrest of the individual in the Eastern District of New York, in August of 2012, law enforcement assumed this individual’s online identity and engaged in a series of online chats where the defendant expressed his desire to travel from Ohio to Indiana, pick the 14-year-old up, and take her to a motel to engage in sexual acts with her.
On September 19, 2012, the defendant rented a car in Lima, Ohio and drove to Plainfield, Indiana. He was arrested when he arrived at the agreed upon meeting location. The defendant had in his possession three electronic devices, each of which contained images depicting a minor, between the ages of 10 and 12, fully nude and engaging in sexually explicit conduct
Lewis has been in federal custody since he was arrested in September of 2012. Given the defendant’s criminal history, Attempted Sexual Exploitation of Children carries a mandatory minimum of 35 years in prison and a $250,000 fine. A sentencing date for Lewis has not been set.
“The most vulnerable citizens in our communities deserve the best protection we can provide,” said Acting United States Attorney Josh J. Minkler. “Fighting against sexual predators remains a top priority in our office.”
The case is being prosecuted by Criminal Division Trial Attorney Amy E. Larson of the Child Exploitation and Obscenity Section (CEOS) and Senior Litigation Counsel Steven D. DeBrota of the Southern District of Indiana. The investigation was conducted by the Indianapolis Metropolitan Police Department Cyber Crime Unit, the Indiana State Police Cyber Crime Unit, the Federal Bureau of Investigation Violent Crimes Against Children Section and the Indiana Internet Crimes Against Children Task Force, which is made up of federal and state law enforcement agencies.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Raytheon to Resolve Allegation That It Improperly Charged Department of Defense for ReimbursementRead the Press Release
BOSTON – Raytheon Company, a Waltham-based defense contractor, has agreed to pay $350,000 to resolve allegations that it charged the Department of Defense for meal expenses that were ineligible for reimbursement. Specifically, the government alleged that, from 2007 to 2009, Raytheon submitted overhead expenses for group meals, business group meals, and group meals at conference events that were ineligible for reimbursement under the Federal Acquisition Regulation.
This matter was investigated by Leo Lamont, Special Agent in Charge of the Naval Criminal Investigative Service, Northeast Field Office, and Michael Conner, Resident Agent in Charge of the U.S. Army Criminal Investigation Division, Hartford Fraud Resident Agency, with the assistance of the Defense Contract Audit Agency’s Investigative Support Division and the Defense Contract Management Agency. The matter was handled by Assistant United States Attorney Jennifer Cardello or Ortiz’s Civil Division.
Quebec Resident Indicted in Multi-Million Dollar Telemarketing SchemeRead the Press Release
SAN FRANCISCO - A federal Indictment charging Nicolaos Menis with mail fraud, conspiracy to commit mail fraud, and conspiracy to commit money laundering was unsealed yesterday in federal court, announced United States Attorney Melinda Haag, U.S. Postal Inspection Service Inspector in Charge Rafael E. Nunez, and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez.
Menis, 42, of Dollard-des-Ormeaux, Quebec, Canada, was indicted by a federal grand jury in San Francisco on August 7, 2014. According to the Indictment, Menis executed a scheme to defraud in which he sent, or caused others to send, invoices to small businesses, churches, cities, and others indicating that they owed payment for a service variously described as “business listing optimization,” “business profile optimization,” and “online business listing optimization,” when such services were never ordered. The invoices instructed the small businesses to send payment – usually around $500 – to a street address that, according to the Indictment, was a UPS or similar mailbox rented by one of the companies involved in the scheme. The Indictment alleges that Menis caused others to call, or receive calls from, small businesses regarding the fraudulent invoices and falsely state that the small businesses had ordered “business listing optimization” or similar services and owed the amount on the invoice. According to the Indictment, between in or about May 2009 and in or about June 2014, Menis and others collected approximately $3.6 million from more than 4,000 victims and transferred the money from bank accounts in the United States held by entities involved in the scheme to bank accounts in Canada.
Menis was arrested after entering the United States on August 11, 2014. He made his initial appearance in federal court in Orlando, Florida, on August 12, 2014, and was ordered detained and removed to the Northern District of California. He is scheduled to appear in federal court in San Francisco, Calif., at a date and time to be determined.
The Indictment alleges four counts of mail fraud, one count of conspiracy to commit mail fraud, and one count of conspiracy to commit money laundering. The maximum statutory penalty for each count of mail fraud and conspiracy to commit mail fraud, in violation of 18 U.S.C. §§ 1341 and 1349, is 20 years’ imprisonment and a fine of $250,000 or twice the gross gain or loss from the offense, plus restitution. The maximum statutory penalty for conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h), is 20 years’ imprisonment and a fine of $500,000 or twice the value of the funds involved in the transaction. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553
An indictment merely alleges that crimes have been committed. All defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Robert S. Leach is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Bridget Kilkenny and Mary Mallory. The prosecution is the result of an investigation by the United States Postal Inspection Service in San Francisco and Albany, New York; IRS – Criminal Investigation; and the U.S. Department of Homeland Security, Homeland Security Investigations in Rouses Point, New York.
(Menis indictment)
Pittsburgh Woman Pleads Guilty to Criminal Contempt of Court ChargeRead the Press Release
PITTSBURGH - A Pittsburgh resident pleaded guilty in federal court to a charge of criminal contempt of court, United States Attorney David J. Hickton announced today.
Marquetta Lavelle Mitchell, 41, pleaded guilty to one count before Senior United States District Judge Alan N. Bloch.
In connection with the guilty plea, the court was advised that Mitchell disobeyed and resisted the lawful process, order and command of a Court of the United States, that is, she refused to testify at the October 16-22, 2012, trial of her boyfriend, Andre Williams, for charges that included conspiracy to possess with intent to distribute 5 kilograms or more of cocaine, at Case Number 11-116, despite: the subpoena that required her to do so; an instruction from Senior United States District Court Judge Alan N. Bloch that her Fifth Amendment rights had been extinguished; and a written order compelling her to testify pursuant to a grant of immunity from Senior United States District Court Judge Alan N. Bloch.
Judge Bloch scheduled sentencing for Jan. 8, 2015 at 11:30 a.m. The law provides for an unlimited period of incarceration and/or a fine, at the discretion of the Court. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Ross E. Lenhardt is prosecuting this case on behalf of the government.
The Drug Enforcement Administration, Homeland Security Investigations and the 21st Judicial District Drug Task Force in Tennessee conducted the investigation that led to the prosecution of Marquetta Lavelle Mitchell.
Pasco Woman Sentenced to 8 Years in Prison for Stolen Identity Refund FraudRead the Press Release
Tampa, Florida – U.S. District Judge Susan C. Bucklew today sentenced Selathiel Frazier (29, Pasco County) to 8 years in federal prison for wire fraud. As part of her sentence, the Court also entered a money judgment in the amount of $4,039,238.00, the proceeds of the charged criminal conduct. Frazier pleaded guilty on March 26, 2014.
According to court documents, Frazier engaged in a scheme to defraud the United States government by participating in the filing of fraudulent tax returns and spending fraudulently-obtained tax refunds. During the course of the investigation, law enforcement officers searched Frazier’s residence, where they recovered thousands of names and social security numbers in ledgers and on various other records. They also recovered more than $60,000 in cash, multiple cars, and other proceeds of the scheme.
This case was investigated by the Tampa Police Department, the U.S. Postal Inspection Service, and the Internal Revenue Service - Criminal Investigation. It was prosecuted by Assistant United States Attorneys Amanda L. Riedel and Sara C. Sweeney.
Pair Indicted for Sex Trafficking of Five MinorsRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that WELLINGTON BROWN, also known as “Jamal,” 25, a Jamaican citizen formerly residing in Hartford, and SHEENA DUME, 21, formerly of Stratford and Greenwich, were charged by indictment with Sex Trafficking of a Minor and Conspiracy to Commit Sex Trafficking of a Minor. The Indictment was returned on July 22, 2014. BROWN was arraigned on the indictment yesterday, and DUME was arraigned on August 7, 2014.
According to the criminal indictment, between June 2013 and February 2014, BROWN and DUME conspired with each other and with other individuals to recruit, entice, harbor, transport, provide, obtain, and maintain five different minor victims, knowing that the minors would be caused to engage in a commercial sex act.
BROWN and DUME were both arrested in Glen Burnie, Maryland, on July 30, 2014. They were presented before a United States Magistrate Judge in Baltimore and ordered removed to Connecticut. DUME was arraigned on August 7, 2014 and was ordered detained. BROWN was arraigned yesterday, and was also ordered detained pending trial.
If convicted, each defendantfaces a maximum term of imprisonment of life imprisonment and a mandatory minimum sentence of ten years imprisonment.
The case is assigned to U.S. District Judge Janet Bond Arterton in New Haven.
This matter is being investigated by the Federal Bureau of Investigation, aided by the Milford Police Department and the Stratford Police Department. US Attorney Daly recognized the significant assistance provided by the Connecticut Department of Children and Families, particularly its Human Anti-Trafficking Response Team (“HART”). The case is being prosecuted by AUSA’s David Novick and Marc SilvermanPUBLIC AFFAIRS CONTACT:
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[email protected]Owner of Security Training Companies Sentenced to More Than 7 Years in Prison for FraudRead the Press Release
NASHVILLE, Tenn. - August 13, 2014- Ricky Lee Coleman, Jr., 41, of Antioch, Tennessee was sentenced on August 11, 2014, to 92 months in prison in connection with a scheme that defrauded more than 2,500 individuals, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Coleman’s sentence also includes 3 years of supervised release following his prison sentence and he was ordered to pay more than $900,000 in restitution to his victims.
On May 7, 2014, Coleman pleaded guilty to charges of mail fraud, wire fraud, and credit card fraud in connection with his ownership and operation of International Executive Services LLC, Advancement Solutions LLC, and RLC Enterprises, companies based in Hermitage and Antioch, Tennessee, that defrauded thousands of military veterans and others seeking job training and job placement services.
Coleman previously admitted directing his employees to make false representations to customers and potential customers, including that they would be placed into a training class, that they would be paid during training, and that they would be guaranteed employment after training. Coleman also admitted instructing his employees to make misrepresentations to customers who had paid for training in order to delay their attempts to seek refunds and to postpone their complaints, including by sending letters falsely informing customers that they were enrolled in certain training academies. Coleman spent the majority of funds paid by customers on personal expenses or on efforts to recruit new customers.The case was investigated by the United States Secret Service, the Tennessee Bureau of Investigation, the United States Postal Inspection Service and the Metro Nashville Police Department. The case was prosecuted by Assistant U.S. Attorney William F. Abely.
Orofino Man Sentenced in Theft ConspiracyRead the Press Release
Coeur d’Alene – Joseph G. Walker, 21, of Orofino, Idaho, was sentenced yesterday in United States District Court to nine months incarceration, three years supervised release and $100 special assessment, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Larry Alan Burns also ordered Walker to pay $9,904.25 in restitution. Walker pleaded guilty to the charge on January 21, 2014.
According to the plea agreement, Walker admitted that between October 2011 and January 15, 2012, in and near Orofino, Idaho, and within the exterior boundaries of the Nez Perce Indian Reservation, that he and others agreed to steal items of value from various businesses and individuals in the area. The total value for the items taken by members of the conspiracy was approximately $9,900.
The case was investigated by Orofino Police Department and the Federal Bureau of Investigation.
Orlando Man Pleads Guilty to Threatening to Kill the President of the United StatesRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that Jason Lynn Gay (40, Orlando) pleaded guilty today to making threats against the President of the United States. He faces a maximum penalty of five years in federal prison. A sentencing date has not yet been set. Gay was indicted on February 12, 2014.
According to court documents, on May 29, 2013, Gay mailed a letter to the United States Courthouse in Orlando. In this letter, he threatened to assault and murder an FBI agent. He also threatened to take the life of and inflict bodily harm upon the President of the United States of America. Gay further threatened to “blow up” the federal courthouse. On May 31, 2013, a clerk at the courthouse in Orlando received, opened, and read the letter. On June 3, 2013, and again on January 16, 2014, federal agents interviewed Gay regarding the threats he made in the letter. In these interviews, Gay acknowledged writing the letter and reaffirmed his desire to kill the President.
This case was investigated by the United States Secret Service. It is being prosecuted by Assistant United States Attorney Andrew C. Searle.
Ohio Man Sentenced for Defrauding InvestorsRead the Press Release
PITTSBURGH – An Ohio man has been sentenced in federal court to five years probation, including four months in a community confinement center followed by four months home confinement, on his conviction of wire fraud, United States Attorney David J. Hickton announced today.
On Aug. 12, 2014, Chief United States District Judge Joy Flowers Conti imposed the sentence on Daniel P. Lucas, 50, of East Liverpool, Ohio.
According to information presented to the court, Lucas defrauded three investors by representing that he was a successful currency trader and obtaining $78,000 from them for this purpose, and thereafter retaining and spending more than $49,000 for his own purposes, while earning no profits for investors and incurring more than $28,000 in currency trading loses.
Prior to imposing sentence, Judge Conti stated that Lucas’ stated plan - to repay the victims by turning his $1,500 into hundreds of thousands of dollars via currency trading - would be “just short of a miracle.”
Assistant United States Attorney Leo M. Dillon prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation for the investigation leading to the successful prosecution of Lucas.
Non-Indian Man Sentenced to Fifteen Years in Federal Prison for Sexually Abusing an Indian Child on Laguna Pueblo LandRead the Press Release
ALBUQUERQUE – Michael Ray Looney, 39, a non-Indian man who resides in the Pueblo of Laguna, N.M., was sentenced this morning to 15 years in federal prison for his child sexual abuse conviction. Looney will be on supervised release for 20 years after completing his prison sentence. He also will be required to register as a sex offender.
The sentence was announced by U.S. Attorney Damon P. Martinez, DuWayne W. Honahni, Sr., Special Agent in Charge of District IV of BIA’s Office of Justice Services, and Acting Chief Brian Carr of the Pueblo of Laguna Tribal Police Department.
Looney, who is originally from Portales, N.M., was arrested on June 28, 2013, on a criminal complaint alleging that he forced an Indian child between the age of 12 and 16 years to engage in sexual acts. According to the complaint, Looney committed these criminal acts within the Pueblo of Laguna in Cibola County, N.M.
On March 26, 2014, Looney entered a guilty plea to a felony information charging him with sexual abuse of a minor. In his plea agreement, Looney admitted to engaging in sexual acts with the child victim from March 2013 to June 2013. Looney also admitted knowing that the child victim was under 16 years of age when he violated the child.
Looney has been in federal custody since his arrest. He remains detained pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Laguna Agency of the BIA’s Office of Justice Services and the Pueblo of Laguna Tribal Police Department, and was prosecuted by Special Assistant U.S. Attorney David Adams.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, 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 http://www.justice.gov/psc/.
New Braunfels Ammo Smuggler Sentenced to Federal PrisonRead the Press Release
In Del Rio today, 23-year-old Jesus Cardenas of New Braunfels, TX, was sentenced to six years in federal prison followed by three years of supervised release and ordered to pay a $4,000 fine for smuggling ammunition from the United States announced U.S. Attorney Robert Pitman and Homeland Security Investigations Special Agent in Charge Janice Ayala.
In February, a federal jury convicted the defendant and his 34-year-old brother, Luis Cardenas, of two counts of smuggling ammunition from the United States. The jury also convicted Jesus Cardenas of two counts of smuggling ammunition and magazines from the United States.
Evidence presented during the three-day-trial showed that on two separate occasions between November 2011 and January 2012, Jesus Cardenas purchased, on behalf of an individual in Piedras Negras, Mexico, a total of more than 15,000 rounds of ammunition and 400 assault rifle magazines intended for export to Mexico. Furthermore, Luis Cardenas was paid to transfer the ammunition to 31-year-old San Antonio Jason Vega who then transported it to Del Rio.
On December 1, 2011, United States Border Patrol agents seized part of the ammunition along with 23 assault rifles within yards of the Rio Grande River outside Del Rio. Special Agents with Homeland Security Investigations seized additional ammunition and magazines in January 2012.
Luis Cardenas is scheduled to be sentenced on February 9, 2015, before U.S. District Judge Alia Moses in Del Rio. On May 27, 2014, Judge Moses sentenced Vega to 54 months in federal prison and ordered him to pay a $1,500 fine. Prior to trial, Vega pleaded guilty to being a convicted felon in possession of approximately 4,300 rounds ammunition on November 17, 2011.
“HSI is committed to preventing weapons and ammunition from reaching the hands of transnational criminal enterprises that pose a threat to public safety in the United States and abroad,” said Special Agent in Charge Janice Ayala, HSI San Antonio. “HSI special agents will continue working jointly with our law enforcement partners and utilize our expertise in export enforcement to keep our citizens safe and secure.”
This case resulted from an investigation by Homeland Security Investigations (HSI) together with United States Customs and Border Protection, United States Border Patrol and the Federal Bureau of Investigation. Assistant United States Attorneys Lewis Thomas and Patrick Burke prosecuted this case for the Government.Middle Georgia Tax Preparer SentencedRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that Jackie Elvine, a/k/a Jackie Young, 39, of Jeffersonville, Georgia, was sentenced on August 13, 2014 to serve 5 years (63 months) in prison for health care fraud, aiding in the preparation of a false tax return and false claims against the Government. The sentence was handed down by the Honorable Marc T. Treadwell, United States District Court Judge, in Macon, Georgia. The Court also ordered Ms. Elvine to pay restitution in the amount of $372,008.88.Ms. Elvine entered her plea of guilty to the charges on January 17, 2014. As a part of her plea, Ms. Elvine admitted that she established Young’s Financial Billing Service in Jeffersonville, Georgia in 2008 as a tax return preparation service. From 2008 to 2010, Ms. Elvine prepared and submitted hundreds of false tax returns. At least 61 of the returns included fraudulent tax credits for first time home buyers. The total amount of those claims was $283,683.00. Also claimed were numerous tax credits for higher education costs that Ms. Elvine knew were not legitimate.
Ms. Elvine also defrauded AFLAC by filing false health care claims. The amount of loss sustained by AFLAC was $147,483.56. In addition, Ms. Elvine diverted healthcare refunds from her employer, National Reimbursement Group, into her own personal account. The loss to National Reimbursement Group was $118,446.84.
“For years, Ms. Elvine made up and filed phony figures to steal from the Government and these insurance companies. At least for the next five years, the only numbers she will be dealing with will be the ones in her federal inmate identification number. The message in the prison sentence today is simple. These schemes will not keep you out of the poorhouse; they’ll put you in the jailhouse,” stated U.S. Attorney Michael Moore.
"The prison time received by Ms. Elvine should serve as a strong warning that tough punishment awaits those who embark on a similar criminal path," stated Veronica F. Hyman-Pillot, Special Agent in Charge, IRS-Criminal Investigation. "As the defendant in this case has learned, stealing from the American people will not be tolerated and you will be held accountable."
“Elvine, not content with cheating on hundreds of tax returns, started stealing critically needed healthcare dollars,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “OIG along with our law enforcement partners will vigorously pursue thieves who believe government programs exist to fatten their pockets.”
Staci Guest, Director of the Georgia Department of Revenue - Office of Special Investigations, stated: “Jackie Elvine’s sentence shows how serious the State of Georgia is at finding individuals who erode public trust and confidence. The Georgia Department of Revenue will continue to work with our federal and local law enforcement officials to combat individuals who commit fraud. “
The case originated from an investigation initiated by the Twiggs County Sheriff's Office.
Other agencies responsible for the investigation were the Internal Revenue Service Criminal Investigations, Department of Health and Human Services – Office of Inspector General, Georgia Department of Revenue – Office of Special Investigations Assistant United States Attorney Graham Thorpe is handling the prosecution for the Government.Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.
McAlester Man Sentenced to 10 Months, $30,000 for Video VoyeurismRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that KENNETH WAYDE ELKINS, age 56, of McAlester, Oklahoma, was sentenced to 10 months imprisonment, followed by 1 year of supervised release, a fine of $10,000.00 per count, $393.23 in restitution and is required to register as a sex offender for three counts of Video Voyeurism, in violation of Title 18, United States Code, Section 1801.
The charges arose from an investigation by the McAlester Army Ammunition Plant Security and the Federal Bureau of Investigation. The defendant pled guilty in February 2014.
The Information alleged that between July 1, 2013 and August 14, 2013, in the Eastern District of Oklahoma, in the special maritime and territorial jurisdiction of the United States, at the McAlester Army Ammunition Plant, the defendant, knowingly and intentionally captured images of the private areas of females without their consent while they were in an area in which they had a reasonable expectation of privacy, a restroom.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearing. The defendant was remanded into the custody of the United States Marshal Service pending transportation to the designated federal prison at which he will serve his nonparolable sentence.
Assistant United States Attorney Dean Burris represented the United States.
Man Sentenced to Maximum 20 Years for Role in Conspiracy to Commit Murder-For-Hire in Shooting of Correctional OfficerRead the Press Release
Contact Person: Stacey Haynes or William Witherspoon (803) 929-3000
Columbia, South Carolina -----United States Attorney Bill Nettles announced today that a federal grand jury returned a nine-count Indictment charging Florence resident Willard Lester “Les” Willard, age 51, with conspiracy, smuggling and violations of the Food, Drug and Cosmetic Act. The Indictment alleges that beginning in 2010, Willard ran a fulfillment center for foreign drug companies that illegally sold unapproved pharmaceutical drugs to US residents. He is also accused of selling unapproved prescription drugs to US customers through a website, www.click1market.com, that he maintained and controlled. The Indictment alleges that Willard shipped more than 10,000 packages containing the smuggled drugs.
The case was investigated by Special Agents with the Food and Drug Administration’s Office of Criminal Investigation, working with Homeland Security Investigations and Inspectors with the United States Postal Inspection Service. Assistant United States Attorney Eric Klumb is prosecuting the case.
The United States Attorney stated that the charges alleged in the Indictment are merely accusations and that all defendants are presumed innocent until and unless proven guilty.Man Sentenced in Federal Court for Failure to Register as a Sex Offender as Required by LawRead the Press Release
PORTLAND, Ore. – Anthony Lee McThrow, 28, formerly residing on the Umatilla Indian Reservation, was sentenced on August 11, 2014, to 30 months in federal prison by U.S. District Judge Michael W. Mosman. In November 2013, McThrow pled guilty to a single count indictment charging failure to register as a sex offender as required by law. McThrow has remained in custody of the U.S. Marshal since his arrest in July of 2013. His sentence was ordered to run concurrently to a state prison sentence for conviction of first degree forgery, he is currently serving.
After McThrow has completed his 30 months in prison, he was ordered to serve three years of federal supervised release. While on supervised release, McThrow will be required to register as a sex offender with the state sex offender registration agency in any state where the defendant resides. He is also required to participate in a sex offender assessment and treatment program.
“The Sex Offender Registration and Notification Act (SORNA) is an important tool to track the location of sex offenders in order to protect children in the community” stated U.S. Attorney Amanda Marshall. “Those who try to elude registration so they can't be tracked are exactly the people who pose the greatest risk to reoffend. My office, along with our law enforcement partners, are committed to finding those who violate federal law by failing to register and holding them accountable."
According to the public filings in the case, McThrow was living on the Umatilla Indian Reservation and required to register as a sex offender every 90 days based on prior convictions for Sex Abuse II and Sex Abuse III in Umatilla County, Oregon. McThrow admitted he knew he was required to register but did not do so in violation of federal law.
The case was investigated by the U.S. Marshal Service. Assistant U.S. Attorney Pamala R. Holsinger prosecuted the case.
Local Pastor Charged for Embezzling over $900,000 from Community CenterRead the Press Release
TULSA, Okla. — Willard Lenord Jones, 63, of Tulsa, Church pastor and former Executive Director of the Greater Cornerstone Community Development Project, was charged today with three counts of wire fraud and one count of subscribing to a false tax return by criminal information.
Danny C. Williams Sr., the United States Attorney for the Northern District of Oklahoma; James E. Finch, the Special Agent in Charge of the Oklahoma City Division of the Federal Bureau of Investigation; and R. Damon Rowe, the Special Agent in Charge of the Dallas Office of Internal Revenue Service Criminal Investigation made the announcement.
According to the Information, from September 2007 to June 2013, Jones defrauded approximately $933,000 from the Church and the Greater Cornerstone Community Development Project. The Greater Cornerstone Community Development Project is a non-profit organization formed to raise money for the building and operation of a community center in South Haven, a neighborhood in West Tulsa.
As the Executive Director, Jones oversaw the design, construction and fundraising for building the Community Center. Jones solicited monetary contributions from donors, including, foundations, corporations, churches and individuals, to fund the development project.
The scheme to defraud charged in the Information accuses Jones of fraudulently transferring funds from Community Center bank accounts to Church bank accounts and then transferring those funds into personal bank accounts; and, that Jones made large cash withdrawals from the Church bank account that he then used for personal expenses.
Rather than pay for construction operating costs of the Community Center, Jones used the proceeds of his fraud scheme for luxury items, including, hotels, restaurants, casinos, liquor, automobiles, a Rolex watch and a mink coat.
In addition, Jones was charged with one count of subscribing to a false 2011 Form 1040 U.S. Individual Income Tax because he didn’t report approximately $390,061 of income on that return.
If convicted, the maximum penalty would be 20 years imprisonment for each count of wire fraud and three years for subscribing to a false tax return. Jones would also forfeit his residence and luxury items; and face entry of approximately one million dollars in criminal forfeiture money judgment.
The case is being investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation. The prosecution is being handled by Assistant U.S. Attorneys Joseph F. Wilson, Kevin C. Leitch, and Catherine Depew on behalf of the United States.
The charges contained in the Information are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Willard Lenord Jones
Lincoln Co. Man Sentenced to Prison on Federal Arson ChargesRead the Press Release
CHARLOTTE, N.C. – Zulfiqar Ali Kacho, 40, of Vale, N.C. was sentenced today to serve 33 months in prison on a federal arson charge, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Max O. Cogburn, Jr. also sentenced Kacho to serve one year under court supervision.
U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation, Charlotte Division.
According to court documents and today’s court proceedings, in or about March 2013, Kacho solicited an undercover law enforcement agent to burn down the home of a man who, according to Kacho, had purportedly wronged him. Court records show that during a meeting on March 8, 2013, Kacho showed the undercover agent images of the victim’s home, located in South Carolina. At that meeting, Kacho told the undercover agent that he wanted the victim’s home to burn “to the ground,” and provided details to the undercover agent about using gas or petroleum in the crawl space to carry out the arson, court records indicate. On March 13, 2013, Kacho and the undercover agent met again, and over the course of that meeting, Kacho told the undercover agent he would pay him $1,000 to commit the arson, of which $300 would be paid in advance. Law enforcement arrested Kacho on March 15, 2013. He pleaded guilty in July 2013, to one count of solicitation to commit a crime of violence (arson), affecting interstate commerce.
Kacho has been in custody since March 2013 arrest, and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation was handled by the FBI. Assistant U.S. Attorney Craig D. Randall of the U.S. Attorney’s Office in Charlotte prosecuted the case.
Leader of Sovereign Citizen Group Convicted of Causing the Impersonation of Diplomats and Producing False IDsRead the Press Release
ALEXANDRIA, Va. – James T. McBride, 60, of Columbus, Ohio, the self-proclaimed leader of a group known as “Divine Province,” was convicted today by a federal jury of conspiracy, causing the impersonation of a diplomat and producing false identification documents.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Clark Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, made the announcement after the verdict was accepted by U.S. District Judge Anthony J. Trenga.McBride was indicted on May 14, 2014, by a federal grand jury of one count of conspiracy, one count of causing the impersonation of a diplomat and four counts of producing false identification documents. According to the evidence at trial, McBride was the leader of a sovereign citizen group called “Divine Province,” whose members claimed the U.S. government was a “municipal corporation” that did not have authority over them. McBride produced and distributed false diplomatic identification cards to his group’s members, and he encouraged them to make claims of diplomatic immunity to avoid arrest, debts or taxes. None of the group’s members were in fact accredited diplomats.
McBride started selling the identification cards in September 2012 at a seminar he organized in Herndon, Virginia. Afterwards, he started selling the IDs from a website and shipping them around the country.McBride sold the IDs in pairs, one that identified the holder as a “Universal Post Office Diplomat” and another that purported to be an “International Diplomatic Driver Permit,” for approximately $200. The defendant also encouraged his members to send copies of the IDs to governmental agencies to notify them of a member’s “status” as a diplomat. The defendant claimed that his authority to issue the IDs came from the Vatican. The defendant also gave a televised interview on ABC News prior to the filing of charges in the case, in which he reiterated such claims. During the course of the charged conduct, the defendant’s organization earned close to $500,000.
McBride faces a maximum punishment of five years in prison for the conspiracy count, ten years for the count of causing the impersonation of a diplomat, and five years for each count of producing a false identification document.
This case was investigated by Homeland Security Investigations, with significant assistance from the South Carolina Law Enforcement Division. Special Assistant U.S. Attorney William E. Johnston and Assistant U.S. Attorney Kosta S. Stojilkovic are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-175.
Lafayette Man Indicted for Bomb Threat, Bank RobberyRead the Press Release
LAFAYETTE, La. –A federal grand jury indicted a Lafayette man for making a bomb threat and attempting to rob a bank, U.S. Attorney Stephanie A. Finley announced today.
Devin Haywood, 30, of Lafayette, was charged by a federal grand jury with one count of using a facility in interstate commerce to willfully make a threat or maliciously convey false information and one count of attempted bank robbery. According to the indictment, Haywood used a cell phone to make a bomb threat on July 16, 2014, in Lafayette and also attempted to rob a bank on Moss Street in Lafayette the same day.
If convicted, the defendant faces 10 years in prison and three years of supervised release for the bomb threat charge. He faces 20 years in prison and five years of supervised release for the attempted bank robbery charge. Both charges carry a fine of up to $250,000.The FBI, ATF, U.S. Marshals Service, Louisiana State Police, Lafayette Police Department, Lafayette Parish Sheriff’s Office, and the University of Louisiana at Lafayette Police Department investigated the case. Assistant U.S. Attorney John Luke Walker is prosecuting the case.
An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Kansas Woman Pleads Guilty, Admits to Stealing $731,000 from Two EmployersRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Bucyrus, Kan., woman pleaded guilty in federal court today to a bank fraud scheme in which she embezzled more than $543,000 from one employer, and admitted that she also stole more than $188,000 from a subsequent employer.
Susan Elise Prophet, 45, of Bucyrus, pleaded guilty before U.S. Chief District Judge Greg Kays to one count of bank fraud and one count of aggravated identity theft.
By pleading guilty today, Prophet admitted that she embezzled $543,034 from Dorfman Plumbing Supply Company in Kansas City, Mo., by forging her employer’s signature on 104 checks, 99 of which were written to herself. After her theft was discovered and she was fired by Dorfman, Prophet was hired as a bookkeeper at a Paoloa, Kan., nursing center. Prophet admitted that she also embezzled at least $188,460 from this employer.
Prophet worked as a bookkeeper for Dorfman from December 2012 until she was fired eight months later in August 2013. (The company has since been sold to Ferguson Enterprises, Inc., a national distributor of residential and commercial plumbing supplies.) Prophet was known to her employer as “Susan Morriss.” She touted that she was the wife of a federal law enforcement agent, which was true at or close to the time she was hired. In a separate and unrelated case, former ICE-Homeland Security Investigations agent Jeffrey Morriss pleaded guilty to making false statements to FBI agents in regard to a more than $800,000 mortgage fraud scheme.
Prophet used the funds for her personal enrichment, purchasing trucks, a car, a motorcycle, travel, furniture, electronics, a gym membership, tattoos and other items. Prophet spent at least $130,424 on vehicle-related purchases, including a 2013 Dodge Ram 1500 Sport; a 2013 Harley Davidson FLTRX Road Glide motorcycle; a 2008 Ford Focus; a 2005 Chevrolet Tahoe; and a 2003 Chevrolet Trailblazer. Prophet withdrew at least $86,000 from her accounts and wrote nearly $21,000 in checks to herself or to cash. She used the embezzled funds to pay her rent and pay down her debts, and spent at least $15,096 at restaurants, $12,743 on travel, $6,703 on electronics, and $9,221 at Nebraska Furniture Mart.
Prophet took steps to conceal her scheme, such as altering the company’s financial records to show that vendors had been paid when, in fact, they had not been paid. When vendors attempted to collect, Prophet answered the calls and hid the claims from her employer. As vendors began to freeze the company’s accounts, Prophet created new checks and forged her employer’s name on the checks to pay the most critical invoices.
Prophet had worked as a bookkeeper for multiple companies beginning in Tennessee at least in 2002, and she sustained a felony conviction or convictions related to those positions. Upon her release from prison, Prophet applied to transfer her supervision from Tennessee to Kansas in 2009. Her release conditions prohibited her from any employment where she would have access to cash, checks or any account information of her employer. She was required to keep her parole officer continuously informed of her residence and employment, and to notify her employer of her felony convictions.
Prophet found a job posting online and was hired by Dorfman in November 2012 for $13.50 per hour. She did not disclose her criminal history or that she was prohibited by her supervision conditions from working as a bookkeeper. She did not inform her parole officer of her new employment. Prophet began embezzling from the company the very next month.
On Aug. 7, 2013, company owner Charles Dorfman met with Scott Rayburn, a representative of Ferguson Enterprises, regarding the company’s sale to Ferguson. Prior to the meeting, Rayburn sent an e-mail to Dorfman containing a list of all the outstanding invoices that needed to be satisfied before the completion of the sale. During the negotiation process, Rayburn thanked Dorfman for paying the outstanding invoices to Ferguson via an electronic funds transfer of $10,000. Dorfman had neither ordered nor authorized the transfer. The electronic authorization form had been filled out by Prophet (who signed Dorfman’s name). At the conclusion of the meeting, Dorfman contacted bank officials regarding the known forgeries committed by Prophet and she was fired.
A few months after being fired, on or about Oct. 10, 2013, Prophet obtained another bookkeeping job at North Point Skilled Nursing in Paola, Kan. She did not disclose her criminal history or that she was prohibited by her supervision conditions from working as a bookkeeper. She did not inform her parole officer of her new employment. Following her Feb. 28, 2014, arrest on the federal indictment, North Point discovered that Prophet had been embezzling from North Point as well, also by writing numerous checks to herself and altering the ledgers to conceal where the money actually went. The loss from this embezzlement was at least $188,460.
Under federal statutes, Prophet is subject to a sentence of up to 30 years in federal prison without parole for bank fraud, plus a consecutive sentence of two years in federal prison without parole for aggravated identity theft. Prophet must pay $732,495 in restitution to her former employers. Prophet must forfeit to the government the 2013 Dodge Ram 1500 Sport, 2013 Harley Davidson FLTRX Road Glide motorcycle, 2008 Ford Focus, 2005 Chevrolet Tahoe and 2003 Chevrolet Trailblazer as well as a money judgment of $543,034, all of which represents the proceeds obtained from the fraud scheme. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by the FBI and the Kansas City, Mo., Police Department.Joint Statement of United States Attorney Richard G. Callahan, Acting Assistant Attorney General for the Civil Rights Division Molly J. Moran and FBI SAC William P. WoodsRead the Press Release
At the request of local authorities and at the direction of Attorney General Eric H. Holder, Jr., our respective offices have opened a civil rights investigation into the shooting death of Michael Brown that occurred in Ferguson, Missouri, this past Saturday. In conducting the independent federal investigation into whether there were federal civil rights violations, we will be working as much as possible with the local authorities who are determining whether there were any state law violations. While the investigation will be handled as expeditiously as possible, our pledge to the community is that it will be a thorough and complete investigation, following the facts wherever they may take us.
We urge witnesses or individuals with any information related to the incident who have not yet come forward to contact the local FBI office. The FBI office in St. Louis can be reached at (314) 589-2500.
Jefferson County Man Guilty of Wire FraudRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – A 42-year-old Nederland, Texas man has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Antonio Govea Figueroa pleaded guilty to an Information charging him with wire fraud today before U.S. Magistrate Judge Keith F. Giblin.
According to information presented in court, from June 2008 to November 2013, Figueroa, the owner and operator of Tony’s Kustom & Collision in Port Arthur, Texas, electronically submitted claims to Farmers Insurance for collision work. Farmers became suspicious of the invoices submitted by Figueroa. The inspection of 44 claims revealed Figueroa claimed repairs that were not actually done and claimed to use new parts when salvaged or inferior parts were actually used without the consent or knowledge of the insured.
Figueroa faces up to 20 years in federal prison and restitution of $118,013.34 at sentencing. A sentencing date has not been set.
This case is being investigated by Department of Homeland Security – Homeland Security Investigations, Texas Department of Public Safety, and Farmers Insurance Significant Investigations Unit and prosecuted by Assistant U.S. Attorney Christopher T. Tortorice.
Jackson, Mississippi, Man Convicted of the Attempted Online Extortion of the University of Louisville Athletic AssociationRead the Press Release
LOUISVILLE, Ky. – A Jackson, Mississippi, man was convicted in U.S. District Court today, following a day-and-a-half jury trial, on a single count of extortion, by means of a threatening interstate communication, announced David J. Hale, United States Attorney for the Western District of Kentucky.
The jury deliberated less than two hours before convicting Thomas E. Ray, age 36, of Jackson, Mississippi.
Ray was indicted by a federal grand jury meeting in Louisville, Kentucky, on October 16, 2013. The indictment was unsealed on October 24, 2013, following Ray’s arrest in Mississippi, by the U.S. Marshal Service.
According to evidence presented at trial, Ray used the alias “Melinda White” when he knowingly sent an email communication from his home in Jackson, to the Commonwealth of Kentucky, on April 23, 2013. Ray’s email was sent to two University of Louisville employees with a threat to injure the reputation of the University of Louisville Athletic Association and a demand for $3.5 million.
Ray faces no more than two years in prison, a maximum fine of $250,000 and a one year period of supervised release. Ray was taken in to custody by the U.S. Marshal Service in Louisville and is scheduled for sentencing before Chief Judge Joseph H. McKinley Jr. on November 3, 2014, in Louisville.
This case was prosecuted by Assistant United States Attorney A. Spencer McKiness and was investigated by the Federal Bureau of Investigation (FBI), Louisville Metro Police Department, and Office of the Kentucky Attorney General.
Hickory Man Handed Down 30 Month Prison Sentence in Connection with Multi-Million Dollar Mortgage and Consumer Fraud SchemeRead the Press Release
STATESVILLE, N.C. B Roger Dean Bailey, Jr., 41, or Hickory, N.C. was sentenced to 30 months in prison today for his role in a mortgage and consumer fraud conspiracy involving manufactured and modular homes, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Richard L. Voorhees also ordered Bailey to serve two years under court supervision and to pay restitution, the amount of which will be determined at a later date. Bailey pleaded guilty in October 2011 to conspiracy and fraud charges related to his and his conspirators’ lies to buyers of manufactured and modular homes, to lenders who financed the home sales, and to the U.S. Department of Housing and Urban Development, which guaranteed the loans.
U.S. Attorney Tompkins is joined in making today’s announcement by Nadine Gurley, Special Agent in Charge, Office of the Inspector General, Office of Investigation of the Department of Housing and Urban Development (HUD-OIG); Karen Citizen-Wilcox, Special Agent in Charge, Office of the Inspector General, Office of Investigation of the U.S. Department of Agriculture (USDA-OIG); Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS); North Carolina Attorney General Roy Cooper; and Ray Grace, North Carolina Commissioner of Banks (NCCOB).
According to filed documents and statements made in court today, Bailey was a former sales manager with Homes America in Hudson, N.C. Homes America was a sales branch of manufactured housing retailer Phoenix Housing Group (PHG), previously headquartered in Greensboro, N.C. Court records indicate that from 2004 to 2008 Bailey was involved with the origination of up to 154 fraudulent HUD/FHA-insured mortgage loans worth over $16 million. As a sales manager, court records show that Bailey convinced customers to purchase manufactured and modular homes which they could not afford by misrepresenting the financing terms, including that Homes America had a rent-to-own program, when it did not. Court records indicate that Bailey was able to secure mortgage loans for unqualified consumers by providing lenders with documents that contained fraudulent customer information, including false income, false assets, and false credit. According to court records, in some instances Bailey also obtained inflated appraisals, misrepresented the source of down payment funds, and coerced consumers to sign closing documents. On some occasions, Bailey also collected down payment money for which borrowers received no credit.
In imposing the 30 month sentence on Bailey, Judge Voorhees emphasized that Bailey, who was the first defendant to plead guilty in the case, provided “exceptional cooperation.” However, in describing the customers defrauded during the scheme—many of whom were not familiar with the home buying process – Judge Voorhees cited that the fraud “visited losses on impecunious people.”
According to court records, of the 154 loans issued based on the false information provided by Bailey, 74 of those loans (totaling more than $9 million) were originated by a single loan officer, Marina McCuen. McCuen worked in the Asheville office of W.R. Starkey Mortgage (WRSM), a mortgage loan company approved to originate loans insured by the FHA or guaranteed by USDA. McCuen, 50, was sentenced on August 4, 2014 to 50 months in prison and to one year of supervised release for her role in the conspiracy.
In addition to Bailey and McCuen, five other conspirators in this case have pleaded guilty and are awaiting sentencing:
• Dennis Wayne Parris, 56, of Pinehurst, N.C. was a Senior Vice President at PHG. He pleaded guilty in April 2014 to conspiracy to make false statements to a federal agency, submit false statements to HUD, and destroy records in a federal investigation.
• Fabian Sparrow, 36, of Burlington, N.C. was a sales manager at PHG’s sales center in Burlington. He pleaded guilty in June 2014 to conspiracy to make false statements to a federal agency and submit false statements to HUD.
• Andrew B. McKeown, 40, of Asheboro, N.C. was a sales manager at PHG’s sales center in Asheboro. He pleaded guilty in January 2014 to concealing the conspiracy to defraud the government and consumers.
• Isaac “Ike” A. Vinson, IV, 47, of Pawley’s Island, S.C. pleaded guilty in November 2013 to conspiracy to make false statements to a federal agency, submit false statements to HUD, and destroy records in a federal investigation. Vinson was a WRSM branch manager and loan officer in Myrtle Beach, S.C. He also supervised McCuen.
• Joseph Klakulak, 37, of Charlotte, was a loan officer for WRSM’s Charlotte office. He pleaded guilty in August 2013 to conspiracy to make false statements to a federal agency and submit false statements to HUD.Court records show that Parris, Sparrow, McKeown, and Bailey sold over 1,100 homes to North Carolina consumers from PHG stores in Burlington, Asheboro, Granite Falls, and elsewhere, financed with more than $158 million in government-insured loans. The fraudulent loans resulted in hundreds of mortgage insurance claims totaling more than $24 million and net losses to the United States exceeding $16 million at the time that charges were filed. In January 2011, PHG ceased business operations as part of a settlement with the Consumer Protection Division of the North Carolina Attorney General’s office.
The prosecution for the case was handled by Assistant United States Attorneys Michael Savage and Benjamin Bain-Creed, of the U.S. Attorney’s Office in Charlotte. The investigation is being handled by HUD-OIG and USDA-OIG, investigators with North Carolina’s State Bureau of Investigation, the NCCOB, the Consumer Fraud Divisions of the North Carolina Attorney General’s Office, and USPIS. In making today’s announcement, U.S. Attorney Tompkins noted that substantial assistance in financial analysis was provided by the United States Marshals Service. Tompkins also thanked the U.S. Department of State for their assistance in the apprehension of Sparrow, who fled the United States for Doha, Qatar.
Government Files Motion to Quash State Court Subpoena in Commonwealth of Pennsylvania V. Robert J. MellowRead the Press Release
The Unites States Attorney's Office for the Middle District of Pennsylvania announced today that it filed a Motion and Brief in Support of Motion to Quash State Court Subpoena in Commonwealth of Pennsylvania v. Robert J. Mellow.
Goose Creek Man Sentenced to 30 Years in Prison for Manufacturing Methamphetamine in Apartment Where Fire Killed Three ResidentsRead the Press Release
Contact Person: Peter Phillips (843) 727-4381
Columbia, South Carolina -----United States Attorney Bill Nettles stated today thatShonni Abernathy, age 41, of Berkeley County, South Carolina, was sentenced by the Honorable Richard M. Gergel to 30 years imprisonment for (1) conspiring to manufacture methamphetamine; and (2) manufacturing methamphetamine where children reside. Abernathy had previously pled guilty on April 29, 2013.
The investigation began on May 31, 2012, after a suspicious fire occurred at the Pine Harbour Apartments in Goose Creek, South Carolina, which resulted in three deaths and the displacement of numerous residents. The investigation revealed a used, one-pot methamphetamine lab in the apartment where the fire began, as well as other chemicals and tools used for the manufacture of methamphetamine. The investigation further revealed that Shonni Abernathy and his codefendant, Jerald McCabe, manufactured methamphetamine in that apartment on numerous, previous occasions.
Mr. Nettles stated that the case was investigated by the Berkeley County Sheriff’s Office, State Law Enforcement Division (SLED), the Drug Enforcement Agency (DEA), and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). Assistant United States Attorney Peter T. Phillips of the Charleston Office handled the prosecution.Former Wayne County School System Employee Charged with Federal Program Fraud Totaling $135,000Read the Press Release
Nashville, Tenn. – August 13, 2014 – Kayla Luna, 47, of Waynesboro, Tennessee, was charged by a criminal information filed yesterday, with federal program fraud, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
According to the information, between July 2008 and continuing until January 2013, Luna, who was an agent of the Wayne County School System, embezzled, stole, and obtained by fraud, goods that belonged to the Wayne County School System. Specifically, Luna is charged with converting goods and gift cards purchased at Wal-Mart stores, totaling approximately $135,000, to the use of someone other than the school system.
U.S. Attorney David Rivera stated, “This case is yet another example of cooperation between federal and state law enforcement agencies to pursue fraud allegations and prosecute an individual responsible for helping herself to funding that was intended for Wayne County schools and students.”
“This case illustrates how state and federal law enforcement agencies can utilize their resources to bring to justice the most egregious criminal activity, including corrupt practices undertaken by those in a position of public trust” said A. Todd McCall, Special Agent in Charge of the Federal Bureau of Investigation’s Memphis Division.
"This case exemplifies the hard work exhibited by the Internal Revenue Service- Criminal Investigation and our law enforcement partners as we leveraged our cooperative resources to dismantle public corruption in Wayne County", said Christopher A. Henry, Special Agent in Charge for IRS- Criminal Investigation's Nashville Field Office. "The victims in this case are the young minds that one day will be the future leaders of this great country and their needs and educational opportunities will not be dashed by corrupt public officials. IRS Special Agents will vigorously pursue all aspects of criminal financial fraud."
If convicted, Luna faces a maximum penalty of 10 years in prison, a $250,000 fine, as well as forfeiture of $135,000.
This investigation was conducted by the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigation, the Tennessee Bureau of Investigation, and the State of Tennessee-Office of the Comptroller of the Treasury. Assistant United States Attorney Scarlett S. Nokes is representing the United States.
Charges brought by an information are merely accusations and are not evidence of guilt. The defendant is presumed innocent unless and until proven guilty.Former WVDOH Supervisor Convicted of Lying to Federal AgentRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistWHEELING, WEST VIRGINIA – A former supervisor with the state Division of Highways admitted today that he lied to a Federal agent.
United States Attorney William J. Ihlenfeld, II, announced that EDWARD MATTHEW TUTTLE, 38 years old, of Buckhannon, West Virginia, entered a guilty plea this morning to the felony offense of "Making a False Statement to a Federal Agent." TUTTLE admitted that he lied to an F.B.I. agent who questioned him as part of an ongoing Federal investigation into the Equipment Division of the West Virginia Division of Highways. TUTTLE formerly served as the Highway Administrator for the WVDOH in Upshur County, and as a supervisor with the Equipment Division. U.S. Magistrate Judge James E. Seibert accepted the plea today in Wheeling.
Testimony offered at the plea hearing revealed that complaints made by citizens to a public corruption hotline were very beneficial to investigators and led them to obtain a Federal search warrant for the WVDOH’s Equipment Division.
TUTTLE now faces up to five years in prison and a fine of up to $250,000. Under the
Federal Sentencing Guidelines the actual sentence imposed will be based upon the seriousness of the offense and the Defendant’s prior criminal history, if any.This case is being prosecuted by U.S. Attorney Ihlenfeld and Assistant United States Attorney John C. Parr and was investigated by the U.S. Attorney’s Public Corruption Unit. Agents and officers from the Federal Bureau of Investigation, the West Virginia State Police, and the State Commission on Special Investigations are leading the inquiry.
Citizens who wish to report public corruption in their community are encouraged to call the West Virginia Public Corruption Hotline at 855-WVA-FEDS or to send an email to [email protected].
Former Richmond County Deputy Sentenced in Identity Theft SchemeRead the Press Release
AUGUSTA, GA: Sean Lydell Street, 39, a former Richmond County, Georgia Deputy Sheriff, was sentenced yesterday by U. S. District Court Judge J. Randal Hall to 24 months in prison for stealing personal identification information to be used as part of a fraudulent tax refund scheme.
According to the evidence presented during the guilty plea and sentencing hearings, Street worked for the Richmond County Sheriff’s Office from 2007 through 2012. During the last part of 2011 and the first part of 2012, Street used the personal identification information of over 100 individuals, which he obtained through his work as a law enforcement officer, to create a list containing the name, birthdate, and social security number of each person. Street then passed this list to an acquaintance knowing that the information would be used to file fraudulent tax returns with the United States Internal Revenue Service. In exchange, Street hoped to gain at least $1,000.00 per stolen identity. In total, individuals used the information from Street’s list to file 76 bogus tax returns which claimed $414,826.00 in false refunds. The IRS paid a total of $76,424.00 in refunds prior to the discovery of the fraud.
United States Attorney Edward J. Tarver said, “Aggravated identity theft and stolen identity tax refund fraud are serious crimes that have serious consequences. Mr. Street is now walking a different beat on the way to federal prison.”
“Mr. Street exploited his position as a law enforcement officer for his own personal financial gain which came at the expense of the community he was entrusted to serve,” stated Special Agent in Charge, IRS Criminal Investigation Veronica F. Hyman-Pillot. “This sentence is a message to others that there are consequences to stealing and using other individual's personal identifying information.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated, “Identity theft in furtherance of fraudulent tax returns is a significant and growing crime problem that victimizes not only those individuals but also the taxpayer. The FBI will continue to do its part in combating this trend and ensuring that those individuals engaged in such criminal activities are held accountable for their actions.”
IRS-CI Special Agent Jeffrey Pippin Hale, FBI Special Agent Paul Kubala, and Deputies from the Richmond County Sheriff’s Office conducted the investigation which led to the information and plea. Assistant United States Attorney C. Troy Clark prosecuted the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Former Redflex CEO, Liaison, and Chicago Official Indicted for Alleged Corruption in City’s Red Light Camera ContractsRead the Press Release
CHICAGO — A former chief executive officer of Chicago’s first red light camera vendor, Redflex Traffic Systems, Inc., and the company’s customer liaison with the city, were indicted today on federal corruption charges together with a retired city official who managed the red light camera program for nearly a decade, after he alone was charged initially in May.
A federal grand jury returned a 23-count indictment alleging that Redflex officials, including KAREN FINLEY, its former CEO, provided the retired city official, JOHN BILLS, with approximately $570,000 cash and other personal benefits in exchange for Bills’ providing inside information and assisting Redflex in obtaining, keeping, and expanding its Chicago contracts that grew to $124 million. Finley and other officials of Phoenix-based Redflex arranged to funnel the cash and benefits to Bills through his friend, MARTIN O’MALLEY, by hiring O’Malley as an independent contractor who passed much of his $2 million compensation on to Bills, the indictment alleges.
Finley, 54, of Cave Creek, Ariz., who was Redflex’s chief executive from late 2005 through February 2013 and its vice president of operations from 2001 until she became CEO, was charged with nine counts of mail fraud, three counts of wire fraud, three counts of federal program bribery, and one count of conspiracy to commit federal program bribery. O’Malley, 73, of south suburban Worth, who was an independent contractor for Redflex between 2003 and 2012, was charged with one count of conspiracy to commit federal program bribery.
Bills, 53, of Chicago, who was arrested in May on a criminal complaint and released on his own recognizance, was indicted on nine counts of mail fraud, three counts of wire fraud, three counts of federal program bribery, three counts of filing a false federal income tax return, and one count each of extortion and conspiracy to commit federal program bribery. A city employee for 32 years, Bills served as a member of the red light camera contract evaluation committee and retired as managing deputy commissioner of the city’s transportation department on June 30, 2011.
All three will be arraigned on a date yet to be determined in U.S. District Court in Chicago.
The indictment also seeks forfeiture from all three defendants of approximately $613,400 as well as the proceeds from the sale of a condominium in Gilbert, Ariz.
Between late 2002 and late 2012, Bills and Finley allegedly schemed to defraud the city of money and Bills’ honest services by providing Bills with cash, checks, and other personal benefits directly and indirectly, including meals, hotel stays, rental cars, and golf outings. In May 2008, O’Malley purchased the condominium for Bills, which Bills visited nearly two dozen times with friends and family until the fall of 2012.
“When public officials peddle influence for profit, the consequences are severe, and when corporate executives enable that corruption, the same rule applies. We will attack alleged public corruption from every angle,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois.
“Rooting out public corruption remains one of the FBI's highest priorities,” said Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. “Today's indictment underscores our commitment to work in a collaborative effort to promote honest and ethical government at all levels and to prosecute those who allegedly violated the public’s trust,” he added.
“IRS Criminal Investigation ensures that all Americans, including public officials, are held to the same standard and that everyone pays their fair share of taxes,” said James C. Lee, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.
“The alleged confluence of corrupt local officials and corrupt corporate officers demands a counterweight of local and federal agencies working to redeem the frayed confidence of the public,” said Joseph Ferguson Inspector General for the City of Chicago. “The Office of Inspector General is therefore grateful for the continuing leadership, dedication and collaboration of our federal partners in this matter.”
The investigation is continuing, the officials said.
According to the indictment and the complaint affidavit against Bills, in October 2003, the city awarded a contract to Redflex for the installation, maintenance and operation of the city’s first Digital Automated Red Light Enforcement Program (DARLEP), which used cameras to automatically record and ticket drivers who ran red lights. Between 2004 and 2008, the city paid Redflex approximately $25 million under this contract, and Redflex installed and maintained more than 100 red light cameras in Chicago intersections, and assisted in reviewing and processing violations. Bills, then assistant transportation commissioner, was a voting member of the city’s request for proposal (RFP) evaluation committee that recommended awarding the contract to Redflex after a one-month trial run of competing systems by Redflex and another finalist. In February 2008, the city awarded a new, non-competitive contract to Redflex to operate and maintain the previously installed camera systems, and paid Redflex approximately $33 million under that contract.
Also in February 2008, following the competitive RFP process, the city awarded a new DARLEP contract to Redflex that was similar to the first. Bills was an advisory member of this RFP evaluation committee. The city paid Redflex approximately $66 million under this contract, resulting in the installation of nearly 250 additional red light cameras.
By 2010, Chicago had the largest red light camera program in the United States, representing approximately 20 percent of the total camera systems that Redflex, a subsidiary of Australian-based Redflex Holdings Ltd., operated nationwide.
According to the indictment, Individual A, Redflex’s former vice president of sales and marketing, made a presentation to Bills regarding Redflex’s red light cameras in late 2002. Shortly after a Jan. 3, 2003, pre-bid meeting that Individual A attended with other vendors, Bills asked Individual A to get him a hotel room in Los Angeles. Individual A paid for the room and sought and received reimbursement from Redflex.
In February 2003, after Redflex and a competitor were selected for a pilot phase, Finley, Individual A, and others from Redflex met Bills at the John Hancock Center and Bills provided information in an effort to give Redflex an advantage over its competitor, the charges allege. Before the pilot phase, Bills recommended that Redflex hire Company A as a subcontractor. In May 2003, before the city contract was awarded, Bills, Individual A and, at times, Individual B, who was then Redflex’s CEO, allegedly strategized to ensure a favorable result for Redflex. On May 27, 2003, the evaluation committee and city transportation commissioner recommended that Redflex be awarded the DARLEP contract, effective in October 2003.
At a celebratory dinner in June 2003 in Los Angeles, Bills allegedly told Individual A words to the effect of, “It’s time to make good,” which Individual A understood to mean that Bills wanted and expected to be paid for helping Redflex win and maintain the Chicago contract. Bills allegedly discussed how much money he wanted based on the size of the contract, and suggested to Individual A alternative ways to funnel benefits to him, including paying him through the newly created Chicago customer liaison position.
Individual A relayed Bills’ demand to Finley and Individual B. In May 2003, Finley allegedly directed placing an advertisement in a Chicago newspaper for an account manager for Redflex’s Chicago contract, and Bills allegedly told O’Malley to look for and respond to the ad. O’Malley interviewed with Finley and Individual B and was hired in the summer of 2003. Bills allegedly indicated to O’Malley that he was working with Redflex on O’Malley’s employment contract and that O’Malley would give him a portion of the commissions that O’Malley received.
The indictment alleges that from 2003 through November 2012, O’Malley and Bills used several different methods, at Bills’ direction, to transfer funds to Bills, including: from 2004 through 2012, O’Malley withdrew more than $600,000 in cash and O’Malley gave Bills approximately $570,000 in cash; from 2008 to 2010, O’Malley wrote Bills checks totaling approximately $17,900, which Bills used to pay personal debts and expenses; and from 2007 to 2011, O’Malley wrote checks totaling approximately $5,500 to a political organization.
Also at Bills’ request, the indictment alleges that Redflex agents, including Individual A and O’Malley, paid for at least $20,000 worth of personal expenses for Bills, including hotels rooms, meals, golf games, and computers, with the approval of Finley and Individual B, and expensed these purchases through Redflex from 2003 through 2011. Neither Finley nor Bills reported the flow of benefits on financial disclosure or economic interest forms they each submitted in connection with the contracts and Bill’s employment, the charges allege.
Before Bills retired, he allegedly made it known to Individual A and other Redflex employees that he wanted a job with Redflex. Instead, Finley, Individual A and others arranged for Bills to get a job with Nonprofit Corporation A, and Redflex increased its monthly funding to Nonprofit Corporation A to help pay for Bills’ salary. That job lasted through the early spring of 2012.
The tax charges against Bills allege that he failed to report the income he received from O’Malley on his federal income tax returns for 2008, 2009 and 2011.
Each count of mail and wire fraud and extortion carries a maximum sentence of 20 years in prison; federal program bribery carries a maximum of 10 years in prison; and conspiracy carries a maximum of five years in prison, and each count carries a $250,000 maximum fine, while the mail and wire fraud counts also carry an alternate maximum fine of twice the gain, or twice the loss, whichever is greater. The tax counts against Bills each carry a maximum of three years in prison and a $250,000 fine. Defendants convicted of tax offenses must pay the costs of prosecution and remain civilly liable for any back taxes, as well as a potential civil fraud penalty of up to 75 percent of the underpayment plus interest. Restitution is mandatory. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is being represented by Assistant U.S. Attorneys Carrie Hamilton and Laurie Barsella.
Indictment
Former Bahrain Banker Pleads Guilty to $1.3 Million Federal Income Tax Fraud; Begins RepaymentRead the Press Release
CHICAGO — A former executive of a bank in Bahrain pleaded guilty today to federal income tax fraud, admitting that he filed three false tax returns and failed to file a fourth return, resulting in a tax loss to the United States of more than $1.3 million over four years. The defendant, AAMIR H. KHAN, pleaded guilty to one count of filing a false individual federal income tax return at his arraignment in U.S, District Court after he was charged in a single-count information filed late last month. He also agreed to pay the United States a $724,000 civil penalty for failing to report funds he held in foreign bank accounts.
Khan, 48, of Doha, Qatar, and formerly of Naperville, was the managing director – head of private equity for Unicorn Investment Bank BSC in Manama, Bahrain. A dual citizen of the United States and Pakistan, Khan voluntarily returned to the U.S. to resolve the tax charges. He was released on a $200,000 secured bond pending sentencing on Nov. 24 before U.S. District Judge Thomas M. Durkin.
Khan faces a maximum sentence of three years in prison and a $250,000 fine, and his plea agreement contemplates an advisory United States Sentencing Guidelines range of 30 to 37 months in prison. Khan made a partial restitution payment today of $300,000, and he remains liable for the total amount of back taxes and interest, as well as mandatory costs of prosecution.
As part of his guilty plea, Khan also agreed to pay the U.S. Treasury a civil penalty of $724,574, which represents 50 percent of the highest cumulative balance of five foreign bank accounts he maintained in the Middle East. The penalty resolves Khan’s civil liability for failing to file annual reports of Foreign Bank and Financial Accounts for the years 2007 through 2012.
In pleading guilty, Khan admitted that he caused a federal tax loss of just under $1.32 million by filing false tax returns for 2006-08 and failing to file a tax return for 2009. Khan did not provide accurate information to an accountant who prepared his returns. He reported that he had earned only slightly more than $100,000 on each of the three returns he filed, when, in fact, his wages and compensation totaled approximately $518,394 in 2006; $801,390 in 2007; and $2,029,331 in 2008. Khan’s gross income was approximately $1,238,604 in 2009 when he failed to file a tax return.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and James C. Lee, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.
Federal tax law requires that U.S. taxpayers pay taxes on all income earned worldwide and to report certain foreign financial accounts.
The government is being represented by Assistant U.S. Attorney Patrick King.
Plea Agreement