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25 September 2014
Las Vegas Urologist Convicted of Unlawful Re-Use of Needle Guides During Prostate ProceduresRead the Press Release
LAS VEGAS, Nev. – Las Vegas urologist, Michael Stanley Kaplan, 59, was convicted by a federal jury today of conspiracy to commit adulteration for re-using single use needle guides during prostate procedures, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.
“Dr. Kaplan made a decision to re-use needle guides in a manner that caused them to be adulterated for the purpose of enriching himself,” said U.S. Attorney Bogden. “He also concealed from his patients that they were undergoing procedures with re-used needle guides. Such conduct is a felony when performed with the intent to defraud or mislead. This case underscores our commitment to holding accountable those medical professionals who would endanger patients for their own personal profit.”
At the time of the offense, Dr. Kaplan operated Green Valley Urology. According to the evidence presented at trial, Kaplan re-used single-use plastic needle guides during prostate procedures, causing a significant health risk to his patients. The packaging on each needle guide clearly warned that they should not be used more than once, but Dr. Kaplan instructed his staff and permitted his staff to re-use them three to five times prior to disposal. Between about Dec. 15, 2010, and March 11, 2011, Dr. Kaplan performed approximately 120 procedures requiring a needle guide but used less than 10 guides during that period.
Dr. Kaplan was acquitted of making false representations to Food and Drug Administration (FDA) investigators regarding the duration of his re-use of the needle guides.
Dr. Kaplan is released on a personal recognizance bond and is scheduled to be sentenced on Jan. 30, 2015. He faces up to five years in prison and a fine of up to $250,000.
The case was investigated by the FDA Office of Criminal Investigations and prosecuted by Assistant U.S. Attorney Crane M. Pomerantz and Special Assistant U.S. Attorney Peter J. Leininger.Kingsville Couple Plead Guilty to $567,000 Bank Fraud for Lee's Summit Construction ProjectRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kingsville, Mo., husband and wife pleaded guilty in federal court today to a $567,000 bank fraud scheme related to his work on a Lee’s Summit, Mo., subdivision.
Dennis R. Key, 51, and his wife, Michal Ann Key, 49, both of Kingsville, pleaded guilty in separate appearances before U.S. Chief District Judge Greg Kays to bank fraud.
By pleading guilty today, the Keys admitted that they engaged in a bank fraud scheme from August 2006 to November 2009 in which they stole as much as $567,767. Dennis Key is the owner of DM & Associates, LLC, a land surveying and engineering consulting business in the Kansas City area. Michael Key did administrative and clerical work for the business, including bookkeeping, paying bills and writing checks.
On Jan. 17, 2005, Dennis Key entered into an employment agreement with Burkart Enterprises, Inc., to provide construction management services for a subdivision in Lee’s Summit for which he would be paid $35,000. On Feb. 2, 2005, Dennis Key entered into another employment agreement with Burkart to be a builder’s representative for the construction of a house in Lee’s Summit, for which he would be paid $100,000.
In August 2006, Dennis Key arranged for JM Contractors to act as general contractor for the construction work and to subcontract work to be performed. He instructed JM Contractors to add an extra five percent to its fee, which would be paid to Dennis Key. Dennis Key also instructed JM Contractors that its fee and the additional fees were not to be identified on the bills submitted by the company, but rather were to be added into each line item on the bills.
The Keys also prepared false, inflated bills and invoices in the names of Contracting Services and Mid America Construction, which were actually shell companies they created. They presented the inflated bills and invoices to Burkart, representing that the bills and invoices were for services rendered. Burkart reviewed the false, inflated bills and invoices, and, believing the payments were to entities that had performed the work stated, wrote checks for the amounts presented then gave the checks to the Keys.
Dennis Key arranged with BKB Concrete and Construction to perform work on the project, instructing the owner of BKB Concrete and Construction to submit all bills to him. On Aug. 18, 2008, Michal Key opened a business checking account in his name DBA BKB Concrete. This name was intentionally similar to and sounded like the name “BKB Concrete and Construction.” When they received BKB Concrete and Construction bills, the Keys prepared false, inflated bills for the services in the name BKB Concrete and submitted the inflated bills to Burkart rather than the true bills for the services rendered. Burkart reviewed the inflated bills and, believing the payments were to the entity that had performed the work, wrote checks for the amounts presented to him and gave the checks to the Keys. They deposited the checks into their BKB Concrete account then transferred some of the funds to their DM & Associates bank account in order to pay the bills from BKB Concrete and Construction.
Dennis Key obtained other subcontractors and entities to perform work on the property and instructed the subcontractors to submit their bills to him. When the Keys received bills from other subcontractors and entities they prepared false and inflated bills and submitted false, inflated invoices to Burkart, representing that the bills were for the services rendered. Burkart reviewed the inflated bills and, believing the payments were to the entity that had performed the work, wrote checks for the amounts presented then gave the checks to the Keys.
Under federal statutes, the Keys are each subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $1 million and an order of restitution. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Linda Parker Marshall. It was investigated by the U.S. Secret Service and the Lee’s Summit, Mo., Police Department.Justice Department Settles Lawsuit Against the City of North Las Vegas, Nevada, over Disability DiscriminationRead the Press Release
The Justice Department today announced that it has reached an agreement with the city of North Las Vegas under the Americans with Disabilities Act (ADA). The agreement, filed as a consent decree along with a complaint in the U.S. District Court for the District of Nevada, resolves allegations that the city violated the ADA by failing to accommodate, and forcing out, a Parks Department maintenance crew leader with monocular vision. The Justice Department alleged that the city revoked the employee’s long standing reasonable accommodation, which exempted him from obtaining a commercial driver’s license, even though the employee was able to perform the essential functions of the job with the reasonable accommodation and the accommodation did not impose an undue hardship on the city.
“Revoking a reasonable accommodation is a clear violation of the ADA, absent undue hardship on the employer,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “The Justice Department is committed to knocking down barriers to equal employment opportunities for people with disabilities. We applaud the city for working cooperatively with the department to promptly resolve this matter.”
The consent decree, which must be approved by the court, requires the city to pay the employee $38,229 for monetary and compensatory damages, provide training to city staff on Title I of the ADA, and file periodic reports with the department.
Title I of the ADA prohibits employers from discriminating against individuals on the basis of disability in various aspects of employment. These prohibitions include using qualification standards that screen out individuals with disabilities and that are not job-related and consistent with business necessity. The ADA requires employers to provide reasonable accommodations to qualified individuals with disabilities, where such an accommodation does not pose an undue hardship.
Those interested in finding out more about the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov.
Jackson Man Sentenced for Stolen Identity Tax Refund FraudRead the Press Release
Jackson, Miss – Tony Jones, 31, of Jackson, was sentenced to 105 months in prison followed by three years of supervised release for stolen identity tax refund fraud, U.S. Attorney Gregory K. Davis announced today. He was also ordered to pay restitution to the government in the amount of $222,137.13.
Jones previously pled guilty to conspiracy to defraud the United States. The conspiracy involved stealing the names and social security numbers of individuals and filing fraudulent federal tax returns for the purpose of obtaining fraudulent refunds. The refunds were electronically deposited into various bank accounts in Mississippi belonging to Jones and his co-conspirators.
This case was investigated by the U.S. Secret Service and Internal Revenue Service Criminal Investigation with assistance from the Mississippi Attorney General’s Office, the Mississippi Department of Corrections and the Mississippi Department of Revenue. It was prosecuted by Assistant U.S. Attorney Patrick Lemon.If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
Help us combat the proliferation of sexual exploitation crimes against children.
Heroin Courier and Dealer Plead Guilty to Maryland Heroin Distribution ConspiracyRead the Press Release
Baltimore, Maryland – Rahdel Sharbaan, age 31, of Bronx, New York, pleaded guilty on September 24, 2014, to conspiracy to distribute and possess with intent to distribute heroin. Co-defendant Gary Barham, age 52, of Easton, Maryland, pleaded guilty on September 15, 2014, to the same charge.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Frederick County Sheriff Charles A. “Chuck” Jenkins; Colonel Marcus L. Brown, Superintendent of the Maryland State Police; Washington County Sheriff Douglas W. Mullendore; and Hagerstown Police Chief Mark Holtzman.
According to their plea agreements, since early 2014, Rahdel Sharbaan and Gary Barham conspired with others to distribute and possess with the intent to distribute heroin. During the course of the conspiracy, Sharbaan was working with co-conspirators to obtain bulk quantities of heroin from sources in New York and transport that heroin to Maryland for further distribution. Specifically, Sharbaan would meet with sources in New York and obtain the heroin, then he would travel (generally via bus) to Baltimore, Maryland, where he would provide the heroin to a co-conspirator. Barham obtained bulk quantities of heroin from that same co-conspirator, which he then re-distributed in and around the Eastern Shore of Maryland. Sharbaan would take the proceeds of prior heroin transactions from the co-conspirator in order to pay the source in New York.During the investigation, law enforcement obtained a wiretap on phone lines used by a member of the conspiracy. Through those wiretaps, they intercepted numerous calls between Sharbaan and the co-conspirator discussing travel to and from Baltimore and the heroin business. Investigators also saw Sharbaan and the co-conspirator meeting at the Baltimore Travel Plaza to deliver new supplies of heroin.
Barham was also overheard by law enforcement on numerous calls discussing heroin sales with the co-conspirator. For example, on April 2, 2014, law enforcement overheard Barham and the co-conspirator discuss meeting at a restaurant in Bowie, Maryland, so that Barham could obtain a supply of heroin. Law enforcement then saw Barham and the co-conspirator meet at the restaurant to conduct the drug transaction.
Over the course of the conspiracy, it was reasonably foreseeable to Sharbaan and Barham that the conspiracy distributed at least 100 grams of heroin.
Sharbaan faces a maximum sentence of 40 years in prison for the conspiracy. Barham and the Government have agreed that if the Court accepts his plea agreement, Barham will be sentenced to 132 months in prison. U.S. District Judge Richard D. Bennett has scheduled sentencing for Barham on November 17, 2014 at 3:00 p.m., and for Sharbaan on January 8, 2015, at 3:00 p.m.Co-defendant Jeffrey Michael Anderson, age 35, of Upper Marlboro, Maryland, is scheduled to go to trial on October 27, 2014. Charges are pending against co-defendants Reginald Jones, age 26, of Bronx, New York; Shawn Christopher Malley, age 25, of Crofton, Maryland; Amanda Jo Palmer, age 32, of Hagerstown, Maryland; and William Ulysses Robinson, age 38, of Grasonville, Maryland.
United States Attorney Rod J. Rosenstein praised HSI-Baltimore, DEA, Frederick County Sheriff’s Office, Maryland State Police, Washington County Sheriff’s Office and Hagerstown Police Department for their work in the investigation and recognized the Maryland Natural Resources Police, St. Michael’s Police Department, Easton Police Department, Ocean City Police Department and Talbot County Sheriff’s Office for their assistance. Mr. Rosenstein thanked Assistant U.S. Attorney Kenneth S. Clark, who is prosecuting the case.Harrisburg Man Charged with Social Security FraudRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that Brian J. Hymon, age 35, of Harrisburg, Pennsylvania was indicted yesterday and charged with social security fraud.
According to U.S. Attorney Peter Smith, Hymon, as Representative Payee, repeatedly lied on Social Security Supplemental Security Income applications by failing to disclose household income and, which if considered would have made the recipient ineligible for such benefits. The benefits were paid for over nine years, between December 2004 and December 2014, totaling $58,299.35. If convicted, Hymon faces a term of imprisonment of up to five years and a fine of $250,000.
This case is being investigated by the Social Security Administration Office of the Inspector General and is being prosecuted by Assistant United States Attorney Daryl F. Bloom.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Gulfport Doctor Found Guilty of Felony Tax EvasionRead the Press Release
Gulfport, Miss. – On Wednesday, September 24, 2014, following a week-long trial, Timothy Dale Jackson, 50, an orthopedic physician from Pass Christian, Mississippi, was found guilty on four counts of felony tax evasion and one count of obstruction of the due administration of the internal revenue laws, announced U.S. Attorney Gregory K. Davis and Special Agent in Charge Gabriel L. Grchan with IRS Criminal Investigation.
The evidence at trial showed that Dr. Jackson claimed he had taken a vow of poverty in 2003 with the “Church of Compassionate Service,” an entity located in Utah, claiming that he was therefore exempt from paying any income tax. The evidence proved that he made substantial income practicing medicine but had not filed a tax return or paid any income tax since 2003. It also showed that he used nominee accounts and other devices to conceal his income from the IRS through the “church,” but that in fact 90% of the income was returned to him.
Jackson will be sentenced by U.S. District Judge Sul Ozerden on December 18, 2014. The maximum penalty for tax evasion is five years in prison and a $250,000 fine per count. The maximum penalty for obstructing and impeding the due administration of the internal revenue laws is three years in prison and a $250,000 fine.
“Most individuals file truthful tax returns and pay their fair share of taxes,” said U.S. Attorney Gregory K. Davis. “The verdict in this case demonstrates that, regardless of one’s occupation or status in life, if you evade paying taxes, you face real consequences including criminal prosecution and a possible prison sentence.”
IRS-CI Special Agent in Charge Gabriel L. Grchan stated: “Dr. Jackson's actions and intent to evade his income taxes was made clear through the government's presentation of the evidence, and the jury saw that. Anyone who thinks they can continually evade the assessment or payment of their income taxes, and get away with it, should be aware of this case.”
This case was investigated by Special Agents of the IRS Criminal Investigation, and the prosecution was handled by Assistant U.S. Attorneys Ruth Morgan and Jay Golden.If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
Help us combat the proliferation of sexual exploitation crimes against children.
Goodwin Encourages West Virginians to Participate in Upcoming Prescription Drug Take-back EventRead the Press Release
National Rx Take Back Day Scheduled for September 27, 10a.m. to 2p.m.
Charleston, W.Va. – U. S. Attorney Booth Goodwin and U.S. Drug Enforcement Administration (DEA) Resident Agent in Charge Suzan Williamson today encouraged West Virginians to continue their support for the National Prescription Drug Take-Back Initiative which has removed over 14 tons of prescription drugs from homes throughout West Virginia and more than 2,100 tons of pills nationwide as a result of eight such events to date. The ninth National Prescription Drug Take-Back event is scheduled for this Saturday, September 27th from 10:00a.m. to 2:00p.m. at various locations throughout the state.
Medicines that languish in home medicine cabinets are highly susceptible to diversion, misuse, and abuse. “Great strides have been made in reducing the supply of illegal prescription drugs on streets throughout West Virginia. One of the big reasons why supplies have dropped is because West Virginians have come together for each of the previous eight take-back events to properly dispose of their unneeded medications, ultimately keeping them out of the wrong hands.”
Resident Agent in Charge Williamson commended all of the federal, state and local partners in West Virginia for their assistance. Noting that there are over 120 collection sites participating in Saturday’s event, Williamson stated, “It is the assistance of all of our law enforcement partners that continues to make Prescription Drug Take-Back events so successful in West Virginia.”
The Prescription Drug Take-Back initiative is coordinated by the United States Drug Enforcement Administration. For a full list of take back locations offered on Saturday, September 27th,, go to www.dea.gov. Drop-offs are accepted with no questions asked.
Glen Burnie Man Sentenced to 46 Months in Prison for Illegal Possession of Guns and Improvised Explosive DevicesRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles sentenced Todd Wheeler, age 28, of Glen Burnie, Maryland, today to 46 months in prison, followed by three years of supervised release, for being a prohibited person, specifically an unlawful user and a person addicted to drugs, in possession of firearms, including improvised explosive devices.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Anne Arundel County Police Chief Kevin Davis; Fire Chief Michael E. Cox, Jr. of the Anne Arundel County Fire Department; and Anne Arundel County State’s Attorney Anne Colt Leitess.
According to Wheeler’s plea agreement, on January 1, 2014, Wheeler was treated at the hospital for injuries the he told hospital officials he sustained from an explosion when he was attempting to make fireworks. Wheeler attempted to flee the Emergency Room but was apprehended by police who were called to the scene. Police were directed to the home of Wheeler’s grandmother in Millersville, Maryland. She confirmed that Wheeler often stayed there and gave police permission to search the home and an outbuilding located on her property. Officers recovered chemicals used to manufacture high explosives, as well as other explosive materials. Investigators learned that Wheeler received packages at that address and stored the materials in the outbuilding.
The next day, ATF agents interviewed Wheeler, who remained in custody at the hospital. Wheeler advised agents that he was injured when he mixed chemicals and they exploded. He also told the agents that he had previously made explosive devices and detonated them in his yard. A search warrant was executed at Wheeler’s residence in Glen Burnie by Anne Arundel County Police. Over the next two days law enforcement recovered, among other things: several improvised explosive devices, as well as the chemicals and explosive materials used to make them; drugs and drug paraphernalia; a Walther pistol, flare gun and signal flare launcher, along with a conversion kit to allow the launcher to shoot 12 gauge shot gun shells; and 12 gauge shot gun shells.
Further investigation revealed that Wheeler had history of drug addiction dating back to at least 2006. At the time of this incident Wheeler was on probation for driving under the influence of a controlled substance and in a drug test conducted by his state probation officer shortly before the incident Wheeler tested positive for seven different controlled substances.
United States Attorney Rod J. Rosenstein commended the ATF, FBI, Anne Arundel County Police Department, Anne Arundel County Fire Department, and the Anne Arundel County State’s Attorney’s Office for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant United States Attorneys A. David Copperthite and Harvey E. Eisenberg, who prosecuted the case.
Four Arrested on Federal Drug ChargesRead the Press Release
ROANOKE, VIRGINIA – On Wednesday, September 24, 2014, the Roanoke High Intensity Drug Trafficking Area (HIDTA) group, which consists of officers from the City of Roanoke, Roanoke County, City of Salem, Town of Vinton, Virginia State Police and the Drug Enforcement Administration Roanoke Resident Office, served a series of search and arrest warrants in relation to a long-term heroin trafficking investigation. These warrants were executed throughout the area and resulted in multiple arrests.
As a result of yesterday’s HIDTA operation, four people have been arrested and charged via federal criminal complaints. Those charged include:
Vaughn Dixon Baylor, Jr., 46, of Roanoke, has been charged with one count of distributing heroin.
Stephon Clifford Bryant, 35, of Roanoke, has been charged with two counts of distributing heroin.
Anthony Curtis Barnes, 42, of Salem, has been charged with one count of distributing cocaine and one count of possessing with the intent to distribute heroin.
Jamaal Eugene Barber, 33, of Roanoke, has been charged with one count of distributing heroin.
The investigation is part of the Roanoke HIDTA Group’s continued focus on combating the rising presence of heroin in and around the Roanoke Valley. The investigation of the case was conducted by the members of the Roanoke High Intensity Drug Trafficking Area (HIDTA) group, which consists of officers from the City of Roanoke, Roanoke County, City of Salem, Town of Vinton, Virginia State Police and the Drug Enforcement Administration Roanoke Resident Office. Assistant United States Attorney Ashley B. Neese will prosecute the case for the United States.
A criminal complaint is only a charge and not evidence of guilt. The defendants are entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.
Former Top GSA Official Indicted for FraudRead the Press Release
SAN FRANCISCO – A federal grand jury in San Francisco indicted Jeffrey Neely, a former high-ranking official with the U.S. General Services Administration (GSA), today on charges that he submitted fraudulent reimbursement claims and made false statements, announced United States Attorney Melinda Haag and GSA Office of Inspector General, Special Agent in Charge David House.
According to the indictment, Neely, 59, of Gardnerville, Nev., is alleged to have fraudulently sought reimbursement for personal travel and expenses – incurred in Las Vegas, Nev.; Long Beach, Calif.; Guam; and Saipan – by submitting false and fraudulent claims to the United States. The indictment further alleges that, when GSA employees questioned him about these expenses, Neely falsely represented that the costs were incurred for official government business. At the time of this conduct, Neely was the Regional Commissioner and Acting Regional Administrator for GSA’s Public Buildings Service, Pacific Rim Region, which encompasses California, Arizona, Nevada, Hawaii, and outlying territories.
Neely came under scrutiny as the top official overseeing an annual GSA conference in 2010. Allegations of waste, fraud, and abuse relating to this conference triggered a congressional inquiry and an investigation by GSA’s Office of Inspector General regarding conference spending as well as Neely’s own travel and expenditures.
The indictment includes three false claims counts, under 18 U.S.C. § 287, and two counts of making false statements and using false documents, under 18 U.S.C. § 1001. Neely is scheduled to make his initial appearance in federal court in San Francisco on October 20, 2014, before the Honorable Elizabeth D. Laporte, United States Magistrate Court Judge.
If convicted, the defendants face a maximum sentence of five years imprisonment, and a fine of $250,000 for each violation. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Hartley M. K. West is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Rosario Calderon. The prosecution is the result of an investigation by the GSA’s OIG.
(Neely indictment )
Former McLennan County Justice of the Peace Pleads Guilty to Federal Theft ChargeRead the Press Release
In Waco today, former McLennan County Justice of the Peace Erma Jean Laster Boone pleaded guilty to theft of Government property in connection with a scheme to steal Social Security Income benefits announced United States Attorney Robert Pitman.
According to court records, Robert Martin Davis died on May 27, 2010, and the defendant was the reporting party on Davis’ death certificate. From Davis’ death until October 2013, the Social Security Administration continued to deposit Social Security benefits, which totaled approximately $63,000, into Davis’ bank account. The defendant had access to Davis’ bank account. Boone admitted to authorities that she spent over $16,000 from Davis’ account on “fixing stuff up around the house.” In March 2014, Boone paid back to the Social Security Administration the money she had fraudulently embezzled and used.
Boone remains on bond pending sentencing which is scheduled for 1:00pm on November 19, 2014. She faces up to ten years in federal prison and a maximum $250,000 fine.
This investigation was conducted by the United States Social Security Administration, Office of Inspector General. Assistant United States Attorney Greg Gloff is prosecuting this case on behalf of the Government.
Former Harmar Twp. Police Captain Sentenced to Probation After Pleading Guilty to Conspiracy ChargeRead the Press Release
PITTSBURGH - A resident of Cheswick, Pa., pleaded guilty in federal court to a charge of conspiracy to commit an offense against the United States, the United States Attorney’s Office announced today.
Richard Allan Toney, 58, pleaded guilty to one count before United States Senior District Judge Donetta Ambrose. At the conclusion of the proceeding Judge Ambrose sentenced Mr. Toney to three years of probation.
In connection with the guilty plea, the court was advised that from in and around April 2009, and continuing thereafter to in and around September 2012, Richard Allan Toney conspired with others to hinder the prosecution or punishment of others relating to conduct surrounding a 2009 primary election for public office. Also, the court was advised that during the charged conspiracy, on or about Sept. 19, 2012, and Sept. 21, 2012, in the Western District of Pennsylvania, Richard Allan Toney attempted to influence and prevent the truthful testimony of a witness before a federal grand jury. According to the government, the Federal Bureau of Investigation and a federal grand jury had been investigating the 2009 election campaign for the position of Supervisor of Harmar Township, Pennsylvania. During the FBI’s investigation, individuals were interviewed and subpoenaed to testify before the grand jury in September of 2012. Toney, who at the time was employed as a Police Captain with the Harmar Township Police Department, twice attempted to prevent the truthful testimony of a grand jury witness.
The law provided for a maximum total sentence of not more than five years in prison, a fine of $250,000.00 or both.
Assistant United States Attorney Jonathan B. Ortiz prosecuted this case on behalf of the government. The Federal Bureau of Investigation conducted the investigation leading to the information in this case.
Former City of Miami Firefighter Sentenced to 327 Months in Prison on Child Pornography ChargesRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Alexander Rousseau, 31, of Miami, was sentenced by U.S. District Judge K. Michael Moore to 327 months in prison. Rousseau was convicted by a jury of five counts of receipt of child pornography, in violation of Title 18, United States Code, Section 2252(a)(2), and one count of possession of child pornography, in violation of Title 18, United States Code, Section 2252(a)(4)(B).
Beginning at least as early as 2010, Rousseau, a City of Miami Firefighter, downloaded, viewed, and shared videos of child pornography over peer-to-peer file sharing networks. Rousseau would download the videos on his personal computer while he was on duty at various City of Miami Fire Stations. When he was arrested in April of 2014, Rousseau had approximately 120 child pornography videos on his computer, many of which were more than five minutes in length.
After his release from incarceration, Rousseau will remain on supervised release for the rest of his life. He will also be required to attend counseling and will be included on sexual offender registries in Florida and nationwide.
Mr. Ferrer commended the investigative efforts of the FBI, the City of Miami Police Department and the City of Miami Fire Department. The case was prosecuted by Assistant U.S. Attorneys Ben Widlanski and Vanessa Johannes.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Burlington Area Man Sentenced to 60 Months in Prison for Conspiracy to Distribute CocaineRead the Press Release
DAVENPORT, IA – On September 25, 2014, Christopher Ryan Walz, age 34, was sentenced by United States District Judge Stephanie M. Rose to 60 months imprisonment for conspiracy to distribute 5 kilograms or more of cocaine, announced United States Attorney Nicholas A. Klinefeldt. Walz was also ordered to serve five years of supervised release following the imprisonment and to pay $100 towards the Crime Victims Fund.
From during or about 2009 and continuing until on or about April 24, 2013, Walz conspired with others to distribute at least 5 kilograms of cocaine. During the course of the conspiracy, Walz purchased and redistributed cocaine to various customers in the Burlington, Iowa, area. As part of the investigation, law enforcement officers conducted a search of Walz’ Burlington residence and seized cocaine, marijuana, digital scales, packaging material, and drug paraphernalia.
This case was investigated by the Iowa Department of Narcotics Enforcement, the United States Drug Enforcement Administration, the Burlington, Iowa, Police Department, and the Southeast Iowa Narcotics Task Force. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
(Download Press Release )
Five Gautier, Mississippi Residents Plead Guilty in Stolen Firearms CaseRead the Press Release
Gulfport, Miss – Theodore Dempsey Towne, 20, Kenneth O’Neal Knox, 46, Catina Towne Henderson, 36, Princeton Scott Knox, 34, and Aubrey Knox, 35, all of Gautier, Mississippi, pled guilty before Chief District Judge Louis Guirola, Jr. to charges related to the theft of 46 firearms, including machine guns, from a federal firearms licensee, U. S. Attorney Gregory K. Davis announced today.
Theodore Dempsey Towne pled guilty to theft of firearms from a federal firearms licensee, which carries a maximum penalty of 10 years in prison, a fine of $250,000 and three years of supervised release. He will be sentenced on December 18, 2014.
Catina Towne Henderson, Kenneth O’Neal Knox and Princeton Scott Knox pled guilty to misprision of a felony by not reporting the theft and committing acts to conceal the discovery of the crime. Misprision of a felony carries a maximum penalty of three years in prison, a $250,000 fine and one year of supervised release. They will be sentenced on December 18, 2014.
Aubrey Knox pled guilty to conspiracy to commit crimes against the United States, which carries a maximum penalty of five years in prison, a $250,000 fine and three years of supervised release. He will be sentenced on December 16, 2014.
This case was investigated by the Moss Point Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant United States Attorney Annette Williams.If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
Help us combat the proliferation of sexual exploitation crimes against children.
Federal Jury in New Mexico Convicts Arizona Man on Methamphetamine Trafficking and Firearms ChargesRead the Press Release
ALBUQUERQUE – This afternoon a federal jury sitting in Las Cruces, N.M., found Matthew Maley, 46, of Tucson, Ariz., guilty on methamphetamine trafficking and firearms charges after a four-day trial. The guilty verdict was announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Carol K.O. Lee of the FBI’s Albuquerque Division, and Lt. Bobby Holden of the Las Cruces/ Doña Ana County Metro Narcotics Agency.
Maley and his four co-defendants Jennifer Sanders, 42, Jose Luis Niño, 40, and Aubrey Savage, 34, all of Las Cruces, and Candice Marie Carpenter, 35, of Tucson, were charged in an 14-count superseding indictment filed on March 19, 2014. Count 1 charged Sanders, Savage and Maley with conspiracy to distribute methamphetamine in Doña Ana County, N.M., from June 2013 through Aug. 2013. Count 11 charged Maley, Nino and Carpenter with conspiracy to distribute methamphetamine in Doña Ana County in Dec. 2013. The indictment also charged the defendants with various substantive methamphetamine distribution offenses, and Maley and Niño with being felons in possession of firearms and ammunition.
Maley’s four co-defendants entered guilty pleas to various counts of the superseding indictment while Maley elected to exercise his right to a jury trial. Maley proceeded to trial on two counts of conspiracy to distribute methamphetamine, two counts of methamphetamine distribution, one count of possession of methamphetamine with intent to distribute, and one count of being a felon in possession of a firearm and ammunition.
Maley’s trial began on Sept. 22, 2014. Before the case was submitted to the jury, the court entered a directed verdict of acquittal on one of the two methamphetamine distribution counts. The trial concluded today when the jury returned a verdict of guilty against Maley on the five counts it considered.
The evidence established that Maley was the head of a drug trafficking organization that distributed significant quantities of methamphetamine in New Mexico and Arizona. According to the testimony at trial, during July and Aug. 2013, undercover officers made several controlled purchases of methamphetamine from Maley, Sanders and Savage, including the purchase of a pound of methamphetamine on Aug. 21, 2013. From Oct. through Dec. 2013, an informant purchased methamphetamine from Niño, who obtained the methamphetamine from Maley, and on Dec. 4, 2013, officers seized approximately 274 grams of methamphetamine when they executed a search warrant at Niño’s residence in Las Cruces.
Maley has been in federal custody since his arrest on Dec. 4, 2013, and remains detained pending his sentencing hearing, which has yet to be scheduled. At sentencing, Maley faces a mandatory minimum of 20 years in prison and a maximum of life in prison on the methamphetamine trafficking charges, and a statutory maximum penalty of ten years in prison on the firearms charge. Maley faces the enhanced penalty of a mandatory minimum 20 years in prison on the drug charges because he has a prior drug trafficking felony conviction.
On June 11, 2014, co-defendant Savage pled guilty to a conspiracy count on June 11, 2014, and admitted distributing methamphetamine on seven separate occasions between June 7, 2013 and July 11, 2013. The quantities involved in those transactions ranged from .97 grams to 97.3 grams. Savage faces a mandatory minimum of five years in prison and a maximum of 40 years in prison when she is sentenced.
On July 16, 2014, co-defendant Niño pled guilty to one count of conspiracy, one count of possession of methamphetamine with intent to distribute, and one count of being a felon in possession of ammunition. Niño admitted possessing 274 grams of methamphetamine with intent to distribute in his home on Dec. 4, 2013. He also admitted unlawfully possessing 30 rounds of ammunition on that day. Niño was prohibited from possessing firearms or ammunition because he previously had been convicted of a felony drug trafficking offense. Niño faces a mandatory minimum of ten years in prison and a maximum of life in prison.
On July 18, 2014, co-defendant Sanders pled guilty to one count of conspiracy and seven counts of distribution of methamphetamine, and admitted selling methamphetamine to a person who turned out to be an undercover officer on seven separate occasions between June 12, 2013 and Aug. 21, 2013. Sanders acknowledged that the quantities of methamphetamine involved in the sales ranged from 5.4 grams in the first transaction to more than 250 grams in the last two transactions. At sentencing, Sanders faces a mandatory minimum of ten years in prison and a maximum of life in prison.
Co-defendant Carpenter entered a guilty plea on Sept. 18, 2014, to conspiracy to distribute methamphetamine and distribution of methamphetamine, and admitted transporting 270 grams of methamphetamine from Arizona to New Mexico at Maley’s direction. At sentencing, Carpenter faces a statutory maximum penalty of 20 years in prison.
The four co-defendants remain in custody pending sentencing hearing, which have yet to be scheduled.
This case was investigated by the Las Cruces office of the FBI and Las Cruces/ Doña Ana County Metro Narcotics Agency, and is being prosecuted by Assistant U.S. Attorneys Maria Y. Armijo and E. Garreth Winstead, III, of the U.S. Attorney’s Las Cruces Branch Office.
Federal Jury Convicts Two Kansas Men for Trafficking in Synthetic MarijuanaRead the Press Release
TOPEKA, KAN. A father and son from Kansas who helped launch a global sales and supply network for a synthetic version of marijuana were convicted today on charges of violating the federal Food, Drug and Cosmetic Act, U.S. Attorney Barry Grissom said.
A federal jury convicted the men on charges of conspiring to manufacture and sell a marijuana substitute called K2 – named after the second-highest mountain in the world. The business, which began in a shop in Lawrence, Kan., grew to encompass a chain of suppliers, retailers, wholesalers and business associates with locations in Kansas, California, Massachusetts, New Jersey, Oregon, Nevada and Indiana, as well as in other nations including Argentina, Latvia, Germany, Lithuania, the United Kingdom, Ukraine, the Netherlands, Canada, Sweden, Singapore, Thailand and Uruguay. The defendants made at least $3.3 million from the sale of the drugs.
A federal jury convicted Clark Sloan, 55, Tonganoxie, Kan., and his son, Jonathan Sloan, 33, Lawrence, Kan., on 20 counts including one count of conspiracy, two counts of misbranding, 15 counts of mail fraud, one count of smuggling and one count of money laundering.
The defendants were acquitted on five other counts.
During trial, prosecutors presented evidence that Jonathan Sloan was co-owner of two businesses, Persephone's Journey, a retail store in Lawrence, Kan., and Bouncing Bear Botanicals, ostensibly a wholesaler of herbs and botanical products, with co-defendant Bradley Miller of Wichita, Kan. Bouncing Bear Botanicals was located in the basement of Persephone's Journey and then moved to a warehouse in Oskaloosa, Kan. Clark Sloan, who was Miller’s brother, developed and monitored the Web site for Bouncing Bear Botanicals and worked in marketing and Internet technologies.
Miller developed recipes for K2 and manufactured it. During trial, prosecutors presented evidence that:
- The defendants manufactured and distributed K2 as an Aall natural product@ but it contained synthetic chemicals called JWH Compounds that mimic the effects of the THC in marijuana. Their products also contained solvents, either the alcohol Everclear or acetone, as well as other additives.
- They manufactured and sold at least four types of K2 products: Standard, Citron, Blonde and Summit, with Standard being the least potent and Summit being the most potent, depending on the amount of JWH Compounds that were mixed with herbs.
- The defendants manufactured the K2 without quality controls, resulting in inconsistent potencies. They intended K2 products to be smoked like marijuana by recreational drug users, but they falsely referred to K2 products as aromatic incense and falsely labeled them as Anot for consumption.@
“The public is put at risk by those who distribute drugs that are misbranded because of deceptive labeling or inadequate directions for use,” said Catherine Hermsen, Special Agent in Charge of the FDA’s Office of Criminal Investigations. “We will continue to work to prevent such drugs from reaching the U.S. market and to bring to justice those who attempt to circumvent FDA’s regulations, which protect the public health.”
Sentencing is set for Jan. 26, 2015. The crimes carry the following penalties: Conspiracy: A maximum penalty of five years in federal prison and a fine up to $250,000.
Distributing misbranded K2: A maximum penalty of three years and a fine up to $250,000.
Mail fraud: A maximum penalty of 20 years and a fine up to $250,000 on each count.
Smuggling: A maximum penalty of 10 years and a fine up to $250,000.
Conspiracy to commit money laundering: A maximum penalty of 20 years and a fine up to $500,000.Co-defendant Bradley Miller is awaiting trial.
Grissom commended the Food and Drug Administration, Assistant U.S. Attorney Tanya Treadway and Assistant U.S. Attorney Tony Mattivi for their Work on the case.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Eufaula Man Pleads Guilty to Methamphetamine DistributionRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that SEAN DEVAL WARRIOR a/k/a Sean G, age 33, of Eufaula, Oklahoma, pled guilty to Distribution of Methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1) and (b)(1)(C).
Charges arose from an investigation by the District 18 and District 25 Drug and Violent Crime Task Forces, Eufaula Police Department and the Drug Enforcement Administration. The defendant was indicted in August, 2014.
The Indictment alleged that on or about January 24, 2014, in the Eastern District of Oklahoma, SEAN DEVAL WARRIOR a/k/a Sean G, defendant herein, did knowingly and intentionally distribute a mixture or substance containing a detectable amount of methamphetamine, a Schedule II Controlled Substance.
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 20 years imprisonment and/or up to a $1,000,000.00 fine.
Assistant United States Attorney Rob Wallace represented the United States.
Eufaula Man Pleads Guilty to Firearm Possession in Furtherance of a Drug Trafficking OffenseRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that JAMES DEWAYNE MARSHALL, age 33, of Eufaula, Oklahoma, pled guilty to Possession of a Firearm in Furtherance of Drug Trafficking Offense, in violation of Title 18, United States Code, Section 924(c)(1)(A).
Charges arose from an investigation by the Carter County Sheriff’s Department, the Ardmore Police Department, the United States Marshal Service and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The defendant was indicted in August, 2014.
The Indictment alleged that on or about February 5, 2014, within the Eastern District of Oklahoma, JAMES DEWAYNE MARSHALL, did knowingly possess a Ruger, model P95, 9mm caliber pistol, 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 Honorable Stephen P. Shreder, District 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 less than 5 years imprisonment and/or up to a $250,000.00 fine.
Assistant United States Attorney Edward Snow represented the United States.
Eufaula Man Pleads Guilty to CounterfeitingRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that RICKY ELLIS LAMB, age 33, of Eufaula, Oklahoma, pled guilty to Possession and Uttering a Counterfeit Security, in violation of Title 18, United States Code, Section 513(a).
Charges arose from an investigation by the United States Secret Service. The defendant was indicted in June, 2014.
The Indictment alleged that on or about July 18, 2012 in the Eastern District of Oklahoma, RICKY ELLIS LAMB, defendant herein, knowingly possessed, uttered and caused to be uttered counterfeit securities, a counterfeit check on the account of Compass Assembly of God, Inc., made payable to Staples in the amount of $844.16, and drawn on Citizens Security Bank, an organization which operates in interstate commerce, with intent to deceive another.
The Honorable Stephen P. Shreder, District 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 up to 10 years imprisonment and/or up to a $250,000.00 fine.
Assistant United States Attorney Edward Snow represented the United States.
Erik R. Szczesh Sentenced to 51 Months in Federal Prison for Distribution of Child PornographyRead the Press Release
CHATTANOOGA, Tenn. – On Sept. 25, 2014, Erik Szczesh, 28, of Cleveland, Tenn., was sentenced to serve 51 months in prison by the Honorable Curtis L. Collier, U.S. District Judge.
Upon his release from prison, Szczesh will be under the supervision of the U.S. Probation Office for 10 years. He will also be subject to numerous special conditions of release which restrict his access to children and the internet.
Nashville police seized the phone of an individual who was taking pictures of children as they walked to and from school. Upon examination of the individual’s phone, they found the he had been trading child pornography with Szczesh. They also recovered a text conversation between Szczesh and this individual discussing abusing children.
Police subsequently searched Szczesh’s phone and found a total of 403 pornographic images of children and seven videos of the same, which, under the law, amounts to 928 images. When questioned by police Szczesh immediately confessed. He has agreed to pay restitution in an amount of $500.00 per victim, for a total of $3,000.
The indictment and subsequent conviction of Szczesh was the result of an investigation conducted by the Federal Bureau of Investigation. Assistant United States Attorney James T. Brooks represented the United States in the prosecution.
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.”
Department of Justice Files Statement of Interest in New York State Right to Counsel CaseRead the Press Release
The Department of Justice today filed a statement of interest with the Supreme Court of the State of New York, Albany County in Hurrell-Harring v. State of New York. In this class action litigation, the plaintiffs allege that, due to systemic failures in four New York counties, indigent criminal defendants have been constructively denied the right to counsel.
In Hurrell-Harring the plaintiffs allege that a lack of funding for indigent defense deprives public defenders of the time or resources to prepare cases or meaningfully represent their clients and amounts to the denial of counsel in violation of Gideon v. Wainwright and the Sixth Amendment. In its statement of interest, the department advised the court that under resourcing public defense may force even otherwise competent and well-intentioned public defenders into a position where they are, in effect, a lawyer in name only. The statement of interest added that if the court finds that the plaintiffs have been constructively denied the right to counsel on a systemic basis, the court has broad injunctive authority to remedy those constitutional violations.
“To truly guarantee adequate representation for low-income defendants, we must ensure that public defenders’ caseloads allow them to do an effective job,” said Attorney General Eric Holder. “The Department of Justice is committed to addressing the inequalities that unfold every day in America’s courtrooms, and to fulfilling the Supreme Court’s historic decision in Gideon v. Wainwright. America’s indigent defense systems exist in a state of crisis, and over 50 years after it was made, the promise of Gideon is not being met.”
“This case is emblematic of a national crisis in indigent criminal defense,” said Acting Assistant Attorney General Molly Moran of the Civil Rights Division. “The right to counsel is one of the core guarantees of the Bill of Rights, and yet, as countless cases and studies show, indigent defense systems across the country are facing significant challenges in meeting their Sixth Amendment obligations.”
The purpose of the statement of interest is to provide the court with a framework to assess the plaintiffs’ claim of constructive denial of counsel. As the department explained in the statement of interest, “An analysis of Gideon cases informs the United States’ position that constructive denial of counsel may occur when: (1) on a systemic basis, counsel for indigent defendants face severe structural limitations, such as a lack of resources, high workloads, and understaffing of public defender offices; and/or (2) indigent defenders are unable or are significantly compromised in their ability to provide the traditional markers of representation for their clients, such as timely and confidential consultation, appropriate investigation, and meaningful adversarial testing of the prosecution’s case.”
The Hurrell-Harring case was filed in 2007 and brought by former indigent defendants who faced criminal charges in five New York counties. The plaintiffs seek systemic reform to prevent future violations of the right to counsel. The state court trial is scheduled to begin on Oct. 7, 2014.
Deltona Felon Sentenced to 7 Years in Federal Prison for Possessing A FirearmRead the Press Release
Orlando, Florida – U.S. District Judge Paul G. Byron sentenced Olajuwon Perry (28, Deltona) today to seven years in federal prison for being a felon in possession of a firearm. Perry pleaded guilty on June 24, 2014.
According to court documents, on December 23, 2012, in Sanford, Perry drove a Chevrolet Lumina in a reckless manner and failed to stop at a stop sign. When deputies from the Seminole County Sheriff’s Office attempted to stop him, Perry drove the car into the front yard of a residence. Perry, the sole occupant of the vehicle, exited and ran inside the residence. Deputies recovered a loaded AK-47 firearm from the front passenger seat of the vehicle. Perry claimed that he had not been driving the vehicle; however, authorities found his fingerprints in the car.
Perry had previously been convicted of multiple felony offenses prior to this incident, including convictions for robbery and battery upon a person 65 years or older. As such, he was prohibited from possessing a firearm or ammunition under federal law.
This case was investigated by the Seminole County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). It was prosecuted by Assistant United States Attorney Andrew C. Searle.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Trevor Velinor, Acting Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials. It is another example of ATF’s Frontline Strategy to impact violent crime within our communities.
Dallas Methamphetamine Distributor Is Sentenced to 235 Months in Federal PrisonRead the Press Release
DALLAS — Angel Escobedo, 29, a methamphetamine distributor who was selling drugs in the Dallas area was sentenced yesterday in federal court. Escobedo was sentenced by U.S. District Judge Jane J. Boyle to 235 months in federal prison, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Escobedo will also be required to forfeit firearms seized during his arrest.
Escobedo was charged in a drug conspiracy that was outlined in a federal indictment returned by a grand jury in Dallas in November 2013. Escobedo pleaded guilty in March 2014 to one count of conspiracy to distribute a controlled substance.
According to documents filed in the case, on November 6, 2013 Escobedo was approached in the lobby of the Super 8 Motel located at 8901 E. RL Thornton Freeway, Dallas by law enforcement officers who were looking for an individual on an outstanding warrant. Officers located a .40 caliber handgun during a pat down of Escobedo and a .380 caliber handgun during a search of his vehicle.
Escobedo admitted to staying at a room at the Super 8 Motel. A search of the motel room revealed various drug paraphernalia items, and over 700 grams of methamphetamine.
The Texas Department of Public Safety Criminal Investigations Division (DPS-CID) was in charge of the investigation. DPS-CID were assisted by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the U.S. Marshal Service and the Dallas Police Department.
Assistant U.S. Attorney Phelesa Guy was in charge of the prosecution and Assistant U.S. Attorney John de la Garza handled the forfeiture.
Dallas Man Sentenced to 324 Months in Federal Prison for Committing Armed Robberies of Dallas-Area BusinessesRead the Press Release
DALLAS — Darren Lewis, 45, who admitted committing the armed robberies of several businesses in the Dallas area in 2012-2013, was sentenced today by U.S. District Judge Jane J. Boyle to 324 months (27 years) in federal prison, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
In May, Lewis pleaded guilty to three counts of interference with commerce by robbery and one count of brandishing a firearm during and in relation to a crime of violence. In July, co-defendant Christopher Washington pleaded guilty to two counts of interference with commerce by robbery and one count of brandishing a firearm during and in relation to a crime of violence. Washington is scheduled for sentencing November 2014.
According to documents filed in the case, on October 30, 2012, Lewis entered a Hampton Inn and Suites in Desoto, Texas, inquired about room rates, looked around the lobby, and then left the hotel. Immediately afterwards, Washington entered the lobby and requested a room. He then pulled out a firearm, pointed it at the desk clerk, and demanded cash. Fearing for her life, the clerk complied. Washington then left the hotel and got into a waiting Ford expedition, driven by Lewis.
On November 6, 2012, Washington entered a La Quinta Inn in Cedar Hill, Texas, approached a desk clerk, displayed a shotgun, and while pointing it at the clerk, demanded money. The clerk complied and Washington left and got into a dark colored car, parked outside of the hotel lobby, driven by Lewis.
On January 28, 2013, Lewis entered a 7-Eleven store in Dallas, grabbed a candy bar from a shelf and then pulled out a silver handgun, pointed it at the clerk, and demanded money from the cash register. In fear for his life, the clerk complied. Lewis then fled the store and drove away in a maroon Ford Expedition.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Dallas, Duncanville, Desoto and Cedar Hill Police Departments investigated the case. Assistant U.S. Attorney Taly Haffar prosecuted.
Cuban National Sentenced to Eighty-Six Months in Federal Prison for Violating Firearms LawsRead the Press Release
ALBUQUERQUE – Alberto Sanchez, 51, a Cuban national residing in Albuquerque, N.M., was sentenced this afternoon to 86 months in federal prison followed by three years of supervised release for being a felon in possession of a firearm and ammunition. Sanchez was convicted of this offense based on a guilty plea entered on Feb. 26, 2014.
Sanchez was arrested in July 2013, on an indictment charging him with possession of a handgun and ammunition in Bernalillo County, N.M., on July 19, 2012. At the time, Sanchez was prohibited from possessing firearms or ammunition because previously he had been convicted of three drug trafficking offenses in 1998; a drug trafficking offense in 2003; and two aggravated battery offenses in 2007 in the 2nd Judicial District Court for the State of New Mexico
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Bernalillo County Sheriff’s Office, with assistance from the 2nd Judicial District Attorney’s Office, and was prosecuted by Assistant U.S. Attorney Louis E. Valencia.Sanchez was prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
Convicted Bank Robber on Federal Supervised Release Ordered Detained in Westerly Bank RobberyRead the Press Release
PROVIDENCE, R.I. –Lawrence M. Sullivan, 38, was ordered detained today by U.S. District Court Magistrate Judge Lincoln D. Almond, charged with allegedly robbing a branch office of the Washington Trust Company in Westerly on September 15, 2014, announced United States Attorney Peter F. Neronha and Westerly Police Chief Edward W. St. Clair.
Sullivan is charged with one count of bank robbery.
According to court records, Sullivan allegedly approached a teller at the Washington Trust Company branch office, located inside a supermarket, and demanded cash. According to a teller, Sullivan threatened to “start shooting” if his demands were not met. No weapon was shown.
On September 16, 2014, Sullivan was arrested by Groton, Ct., police after he was discovered hiding inside a storage closet inside a local motel. Sullivan was returned to Rhode Island where he has been held in state custody.
According to court records, at the time of his arrest, Sullivan was serving a term of 3 years federal supervised release, having recently completed serving a 63-month federal prison sentence imposed in February 2010 for robbing two banks in Connecticut and one in Maine in 2008 and 2009. He pleaded guilty in U.S. District Court in New Haven in December 2009 to two counts of bank robbery.
A criminal complaint is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case is being prosecuted by Assistant U.S. Attorney Sandra R. Hebert.
The FBI and the Groton, Ct., Police Department assisted the Westerly Police Department in the investigation of this matter.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Columbus Woman Convicted of Cashing Stolen Treasury ChecksRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that on September 25, 2014, Wytrenia Reynolds, aged 44, of Columbus, Georgia, was convicted in United States District Court for four counts of theft of government property, two counts of aggravated identity theft, and three counts of possession of stolen United States Treasury checks. The guilty verdict is the result of a four-day trial held in Columbus, Georgia.Evidence presented at trial showed that in September 2010, Ms. Reynolds cashed or attempted to cash three stolen treasury checks at Navy Federal Credit Union in Columbus, Georgia. All three of these checks were payable to individuals living in the metro Atlanta, Georgia area. All three checks bore forged endorsements and were presented by Ms. Reynolds without the permission or authority of the intended recipient.
In October and November of 2010, Ms. Reynolds cashed thirteen stolen Treasury checks at a package store in Columbus, Georgia. The payees for these checks primarily were residents of the Atlanta, Georgia area, although two lived Alabama.
In January 2011, agents recovered three stolen Social Security checks in a vehicle leased by Ms. Reynolds. These checks were payable to elderly victims living in Thomaston, Georgia, and Ellenwood, Georgia.
In addition to the checks listed above, other government checks were found in Ms. Reynolds’ possession which were determined to be stolen by a worker or workers at the United States Post Office in Atlanta, Georgia. The total face value of the checks possessed, cashed, or attempted to be cashed by Ms. Reynolds was approximately $515,000.
Following her conviction, United States District Court Judge Clay D. Land ordered that Ms. Reynolds immediately be taken into custody pending sentencing, which is scheduled for January 27, 2015.
Both theft of government property and possession of stolen Treasury checks are punishable by up to ten years imprisonment and a $250,000 fine for each count of conviction. Aggravated identity theft is punishable by a mandatory two years in prison, which must be served consecutively to any other sentence imposed.
U.S. Attorney Michael Moore said, “Identity theft is an ever-increasing problem across the country. Victims have their lives invaded in a way that often causes long lasting financial consequences; businesses are forced to implement costly security procedures; and consumers are left looking over their shoulders for fear that someone has stolen their personal information. With every check that is issued or every credit card that is swiped, we are vulnerable to criminals who are willing to steal our personal information for their own gain. As we put our resources into these cases, we are sending the message that if prosecuting identity thieves is a way to protect other victims, then that is exactly what my office will do.”
Special Agent in Charge Thomas Caul, Office of the Inspector General, Social Security Administration stated, “Social Security payments are a lifeline for many Americans who are unable to work due to a temporary or permanent disability. Our office is gratified by the U.S. Attorney’s shared commitment to investigate and prosecute those who defraud Social Security trust funds. One of our highest priorities is ensuring that those who steal SSA payments are swiftly detected and prosecuted. Social Security fraud affects all Americans. The individual convicted today is a testament to our serious commitment to pursuing those who would victimize Social Security beneficiaries."
“The Secret Service remains committed to protecting our nation’s financial security, to include aggressively investigating those responsible for stealing and cashing United States Treasury checks. Along with our law enforcement partners we will continue to pursue those committing these crimes,” said Clint A. Bush, Resident Agent in Charge, Albany, Georgia Resident Office, United States Secret Service.
The case was investigated by Special Agent Teresa Hudson of the United States Secret Service and Special Agent Pablo Griffiths of the Social Security Administration, Office of the Inspector General. Assistant United States Attorney Mel Hyde prosecuted the case 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.Chinese National Sentenced for Skimming Customers’ Credit Card Numbers at Loudoun County RestaurantvRead the Press Release
ALEXANDRIA, Va. – Yaoliang Gao, 23, of Flushing, New York, was sentenced today to 30 months in prison, followed by three years of supervised release for one count of possessing 15 or more unauthorized access devices.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Kathy Michalko, Special Agent in Charge of the U.S. Secret Service’s Washington Field Office; and Terry Sheffer, Detective for Loudoun County Sheriff’s Office, made the announcement after sentencing by U.S. District Judge James C. Cacheris.
Gao pled guilty on July 3, 2014. According to court documents, from March 11, 2014 to April 8, 2014, Gao was employed as a waiter at Moca Asian Bistro in Chantilly, Virginia. When customers gave Gao their credit cards to pay for their meals, the defendant swiped the customer’s card through a credit card skimming device, which captured the customer’s card information from the magnetic strip. Prior to beginning his employment, Gao met an individual who gave him the skimmer and agreed to pay him $50 for every credit and debit card number he captured.
On April 8, 2014, Gao was caught in the act by a customer who observed him using the skimming device to illegally obtain his credit card information. Loudoun County Sheriff’s Deputies were dispatched to the location and took possession of the device, which was discovered to contain 598 unique credit card numbers. As a result of Gao’s actions, financial institutions lost $8,429. In addition, Gao, who is a Chinese citizen, overstayed his F-1 Student Visa.
The investigation was conducted by the U.S. Secret Service’s Washington Field Office, with assistance from the Loudoun County Sheriff’s Office. Special Assistant U.S. Attorney Jennifer Ballantyne prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-218.
Chemical Company in Kansas City, Kan. Ordered to Pay $1.5 Million Fine for Mishandling Hazardous WasteRead the Press Release
KANSAS CITY, KAN. – A chemical company with a plant in Kansas City, Kan., pleaded guilty and was sentenced Thursday to pay a $1.5 million fine for violating a federal law regulating the storage of hazardous waste, U.S. Attorney Barry Grissom said. The company will serve two years on federal probation.
Harcros Chemicals Inc., 5200 Speaker Road in Kansas City, Kan., pleaded guilty to one count of storing hazardous waste without a permit.
Harcros manufactures industrial chemicals including surfactants, emulsifiers, antifoaming agents and custom organics. In addition to its manufacturing, the company operated eight laboratories for the development and testing of new chemical products.
In its plea, the company admitted that from at least May 5, 2006, through Jan. 30, 2009, the company stored waste chemicals including phosgene solution, ethylenediamine, 1,4-dioxane, butyl acrylate, acrylic acid and methacrylate at the facility. The company did not have a permit to store hazardous waste for more than 90 days as required by the Resource Conservation and Recovery Act.
“EPA’s commitment to protect the environment includes bringing to justice those who, in the course of breaking the law, disregard the harm they pose to public health,” said Michael Burnett, Special Agent in Charge of EPA’s criminal enforcement program in Kansas. “The defendant’s illegal storage practices threatened groundwater supplies and put employees and the public at serious risk. Today’s plea demonstrates that those who knowingly engage in criminal activity must be willing to face the consequences in court.”
Grissom commended the Environmental Protection Agency – Criminal Investigation Division, the Kansas Department of Health and Environment, Jennifer A. Whitfield, Senior Trial Attorney, Department of Justice Environment and Natural Resource Division, Environmental Crimes Section, and Assistant U.S. Attorney Tris Hunt for their work on the caseChattanooga Man Sentenced to 108 Months for Attempted Armed Robbery of Jewelry StoreRead the Press Release
CHATTANOOGA, Tenn. – On Sept. 25, 2014, Diontre Danforth, 19, of Chattanooga, Tenn., was sentenced to serve 108 months in federal prison by the Honorable Curtis L. Collier, U.S. District Judge. Upon his release from prison Danforth will be subject to the supervision of the U.S. Probation Office for three years. There is no parole in the federal system.
Danforth pleaded guilty in June 2014 to aiding and abetting the brandishing of a firearm during and in relation to a crime of violence and an attempted Hobbs Act robbery. In his plea agreement on file with the U.S. District Court, Danforth admitted that he and co-defendant Gerald Jackson attempted to rob the Kennedy Jewelry store in August 2013. Jackson entered the store wearing a “Scream” mask. He was armed with an assault rifle, which he immediately used to fire a round towards the back of the store, where multiple employees and a customer were standing. Danforth had followed Jackson into the store with a laundry basket and pillowcase outstretched in his hands, which the two had planned to use to collect the merchandise that they intended to steal. However, before they were able to get any jewelry, one of the store’s managers began firing back at Jackson. Jackson and Danforth then sprinted for their own safety, with Jackson continuing to fire back at the store even after the two were outside. Jackson has also been charged and is in custody pending trial in U.S District Court, Chattanooga.
Law enforcement agencies participating in the investigation included the Chattanooga Police Department and Federal Bureau of Investigation. Special Assistant U.S. Attorney Meredith J. Edwards represented the United States.
This case was brought as part of Project Safe Neighborhoods (PSN), a comprehensive national strategy that creates local partnerships with law enforcement agencies to effectively enforce existing gun laws. It provides more options to prosecutors, allowing them to utilize local, state, and federal laws to ensure that criminals who commit gun crime face tough sentences. PSN gives each federal district the flexibility it needs to focus on individual challenges that a specific community faces.
Brooklyn Man Charged with Facilitating $6 Million Food Stamp Fraud in New YorkRead the Press Release
A criminal complaint was unsealed earlier this week in federal court in the Eastern District of New York charging Fowzi Naji Tareb with misappropriating government permits from the United States Department of Agriculture, Food and Nutrition Service and facilitating more than $6 million in unauthorized food stamp transactions. Tareb was arrested on Tuesday and his initial appearance was held before United States Magistrate Judge Vera Scanlon at the federal courthouse in Brooklyn.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and William Squires, Special Agent-in-Charge, Northeastern Region, United States Department of Agriculture, Office of Inspector General.
The federal government, through the United States Department of Agriculture, Food and Nutrition Service (FNS), administers the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program. SNAP utilizes federal tax dollars to subsidize low-income households, affording such households the opportunity to achieve a more nutritious diet by increasing their food-purchasing power.
In New York, individuals who receive SNAP benefits (recipients) no longer redeem their benefits by using paper food stamp coupons, but rather redeem them electronically through the use of an Electronic Benefits Transfer (EBT) card, which operates much like ATM cards used by banks. The EBT cards may be used by recipients to purchase eligible food items at retail food stores that are authorized by FNS to participate in SNAP and have EBT terminals located in the stores. As a purchase is made, the retailer runs the EBT card through the terminal, and the amount of the purchase is deducted from the recipient’s EBT card. The purchase amount is then electronically credited to the retail food store owner’s bank account.
SNAP benefits may be accepted by authorized retailers only in exchange for eligible food items. Items such as beer, cigarettes, paper goods, and soaps are not eligible for purchase. SNAP benefits may not lawfully be exchanged for cash under any circumstances and may not lawfully be used to pay off credit accounts. SNAP benefits may be accepted only by retailers authorized to participate in SNAP by FNS.
The defendant Tareb allegedly used his position as an agent at Century Payments, a third-party vendor and distributor of EBT terminals, to provide EBT terminals capable of processing SNAP benefits and authorization codes to more than 25 retailers that were not authorized by FNS to accept SNAP benefits. In doing so, the defendant facilitated more than $6 million in unauthorized SNAP transactions. A number of the retail locations, which were searched by law enforcement over the past two days, are also alleged to have been involved in the unlawful exchange of SNAP benefits for cash.
“The government’s food stamp program enables law-abiding retailers to provide food and other essentials to low-income households and receive compensation from the government,” stated United States Attorney Lynch. “The defendant manipulated that program by misappropriating EBT terminals and codes of authorized retailers and giving them to unauthorized retailers -- allowing them to profit by engaging in millions of dollars in under-thetable transactions.” Ms. Lynch also thanked the New York City Police Department for assisting in the investigation.
If convicted, the defendant faces a maximum sentence of 10 years of imprisonment. The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by Assistant United States Attorney Saritha Komatireddy.
The Defendant:
FOWZI NAJI TAREB
Age: 43
Brooklyn, New York
E.D.N.Y. Docket No. 14-M-806
Batesburg Woman Sentenced for Wire Fraud and Tax EvasionRead the Press Release
Contact Person: Beth Drake (803) 929-3000
Columbia, South Carolina ---- William N. Nettles, United States Attorney for the District of South Carolina announced today that Chandra Padgett, 46 of Batesburg, South Carolina, was sentenced to 87 months incarceration for her conviction on charges of wire fraud and tax evasion. Padgett was an office manager and bookkeeper for Advanced Pain Therapies (APT), a clinic in Irmo, SC. Facts presented during Ms. Padgett’s guilty plea explained that she set up a shell company named PSS (Padgett Specialty Scrapbooking Services). The name PSS was shared with APT’s primary vendor and allowed Padgett to send APT bogus invoices for payment. Between June 2008 and December 2010, Padgett created checks made payable to her company PSS and deposited them in to an account to which she had primary control. During this time, Padgett also made payments to her personal credit cards using APT funds and wrote unauthorized checks to family members for personal expenses. Padgett also used her position as bookkeeper and office manager to increase her own salary without her employer’s authorization or knowledge. According to a forensic accounting performed by APT, Padgett stole approximately $1,941,455.96 from APT. Facts presented during the sentencing hearing indicated that Padgett used the stolen money to finance an extravagant wedding and a lifestyle filled with expensive vacations, gifts and even an expensive New York apartment. Padgett was ordered to pay restitution to her employer and the Internal Revenue Service. Padgett is subject to forfeiture of her assets to satisfy the judgment against her.
The investigation and convictions were pursued by the Internal Revenue Serviceand was prosecuted by Assistant United States Attorney T. DeWayne Pearson of the Columbia office.Attorney Convicted of Laundering Drug MoneyRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that a federal jury in New Haven has found RALPH CROZIER, 62, an attorney based in Seymour, guilty of money laundering offenses. The trial before Chief U.S. District Judge Janet C. Hall began on September 16 and the jury returned its verdict this afternoon.
According to the evidence introduced during the trial, law enforcement began investigating CROZIER after receiving information from a convicted narcotics trafficker who was in federal custody. The narcotics trafficker stated that he was a former client of CROZIER and that CROZIER had convinced him to invest $30,000 in cash into CROZIER’s law partner’s solar energy company. CROZIER knew that the cash was derived from his client’s narcotics trafficking activities.
In 2013, the narcotics trafficker’s mother agreed to wear a recording device while meeting with CROZIER to discuss her son’s prior investment. On April 11, 2013, the woman brought $11,000 in DEA funds to a meeting with CROZIER, representing that her son had hidden the cash and wanted her to bring it to CROZIER. The conversation during the meeting made it clear that the money had been illegally derived from drug dealing. CROZIER accepted the cash and told the woman that he was going to make out the receipt in her son’s name, stating “I don’t want to put your name on anything because I don’t want you involved with hiding things from the Feds.” CROZIER was arrested shortly after the woman left his office.
CROZIER was convicted of one count of conspiracy to launder monetary instruments and one count of attempt to launder monetary instruments. Each charge carries a maximum term of imprisonment of 20 years and a fine of up to $1 million.
Chief Judge Hall scheduled sentencing for December 18, 2014.
CROZIER is currently released on a $200,000 bond.
This case was investigated by the Drug Enforcement Administration’s Bridgeport High Intensity Drug Trafficking Area Task Force and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys Rahul Kale and Robert Spector, and Special Assistant U.S. Attorney Charles Rombeau.PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Armed Robber Sentenced to Nine Years in Prison for Robbing Seven Convenience Stores During an Eight Day SpreeRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles, Jr. sentenced Monte Glascoe , age 24, of Baltimore, today to nine years in prison, followed by five years of supervised release, for robbery and brandishing a gun in furtherance of robbery. Judge Quarles also ordered Glascoe to pay restitution to the victims totaling $2,625.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Baltimore City State’s Attorney Gregg L. Bernstein; and Baltimore Police Commissioner Anthony W. Batts.
According to his plea agreement, from July 18 to 26, 2013, Glascoe and co-defendants Gary Howard and Michael Emmanuel Smith robbed at least seven Baltimore 7-Eleven stores, located at: 6314 Eastern Avenue; 3436 Wilkens Avenue; 5512 Park Heights Avenue; 2500 Liberty Heights Avenue; 6700 Brentwood Avenue; 211 West 28th Street; and 3204 Hollins Ferry Road. Glascoe, Howard and Smith would choose a store to rob, steal a vehicle to use during the robbery; brandish a firearm during the robbery; and steal money and cigarettes during the robbery. In each robbery, Glascoe pointed a gun at victim employees. The conspirators stole money from the cash registers, cigarettes and other merchandise, and stole cash, a cell phone and folding knife from employees at the stores.
Gary Howard, age 34, and Michael Emmanuel Smith, age 28, both of Baltimore, previously pleaded guilty to their participation in the robberies. Howard was sentenced to 235 months in prison on September 2, 2014 and Smith is scheduled to be sentenced on October 1, 2014, at 1:00 p.m.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Special Assistant United States Attorney Matthew K. Hoff, a cross-designated Baltimore City Assistant State’s Attorney assigned as part of the Baltimore initiative to combat violent crime, who prosecuted the case.
24 September 2014
Wellsville Man Sentenced on Drug ChargesRead the Press Release
BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Jason W. Patterson, 38, of Wellsville, N.Y., who was convicted of conspiracy to manufacture, possess with intent to distribute and distribute, 50 grams or more of methamphetamine, was sentenced to 151 months in prison and ordered to pay $3,143 in restitution to the New York State Department of Environmental Conservation by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Thomas S. Duszkiewicz, who handled the case, stated that on January 26, 2012 law enforcement officers executed a search warrant at a residence on South Main St. in Wellsville. Officers discovered items used to manufacture methamphetamine as well as a quantity of methamphetamine. A subsequent search warrant executed at a residence on Madison Ave. in Wellsville led to the discovery of active methamphetamine laboratory. The court’s restitution amount was to repay the government for costs associated with the environmental clean-up of this laboratory.
The defendant was arrested along with his wife April Patterson, Anthony Kidd, John Faber and Justin McPherson. April Patterson was sentenced to 30 months in prison; John Faber 40 months; and Justin McPherson 24 months. Anthony Kidd will be sentenced on November 5, 2014.
Today’s sentencing is the result of an investigation on the part of the New York State Police, under the direction of Major Michael Cerretto, the Wellsville Police Department, under the direction of Chief Timothy O’Grady, and the Drug Enforcement Administration, under the direction of James J. Hunt, Acting Special Agent in Charge, New York Field Division.Wellpinit Man Sentenced to Federal Prison for Violent AssaultRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Richard James Peone, age 21, of Wellpinit, Washington, was sentenced after having previously pleaded guilty in May, 2014 to one count of Assault With a Dangerous Weapon. Senior United States District Court Judge Justin L. Quackenbush sentenced Peone to a thirty-nine month term of imprisonment, to be followed by three years of court supervision after he is released from Federal prison.
According to information disclosed during the court proceedings, on August 13, 2012, Peone and others picked up the victim and drove him to a remote location on the Spokane Indian Reservation, where the victim was assaulted. The assault was in retaliation for a previous drug transaction that involved the victim.
Michael C. Ormsby stated, “Violence committed in relation to drug trafficking will not be tolerated in the Eastern District of Washington, particularly such violent acts that are committed on an Indian reservation. I commend the Spokane Tribal Police and the FBI for their cooperative and diligent efforts in investigating this case.”
This investigation was conducted by FBI and the Spokane Tribal Police Department. The case was prosecuted by Rudy J. Verschoor, an Assistant United States Attorney for the Eastern District of Washington.
CR-14-CR000070-JLQ
Waterbury Felon Admits Illegal Gun PossessionRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that CHRISTOPHER BRYAN COLEMAN, 25, of Waterbury, pleaded guilty yesterday in New Haven federal court to one count of possession of a firearm by a previously convicted felon.
According to court documents and statements made in court, on April 22, 2014, officers from the Waterbury Police Department responded to a complaint of a disturbance at 1298 N. Main Street in Waterbury. There, the complainant told police that her car had broken down and, while she was awaiting assistance, a male had attempted to gain entry to her vehicle. As one of the officers drove up to the male, who was later identified as COLEMAN, the officer observed COLEMAN remove a firearm from his waist area and throw it over a chain link fence. Officers then recovered an RG14 .22 caliber revolver with an obliterated serial number, loaded with six rounds, three of which were live and three of which were expended.
Prior to that date, COLEMAN had sustained felony convictions, including sale of a controlled substance, escape in the first degree, and possession of a controlled substance with intent to distribute.
It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
COLEMAN is scheduled to be sentenced by U.S. District Judge Janet Bond Arterton on December 22, 2014, at with time he faces a maximum term of imprisonment of 10 years and a fine of up to $250,000 in fines. He has been detained since his arrest on April 22.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Waterbury Police Department. This case is being prosecuted by Assistant U.S. Attorney Anthony E. Kaplan.PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Virginia Beach Concert Promoter Sentenced to 41 Months for Fraud SchemeRead the Press Release
RICHMOND, Va. – Kensey Lamonte Wright, 43, of Virginia Beach, Virginia, was sentenced today to 41 months in prison, followed by 3 years of supervised release, for wire fraud. Wright was also ordered to pay $940,600 in restitution to his victims.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; and Joseph Morrison, Assistant Special Agent in Charge of the United States Secret Service’s Richmond Field Office, made the announcement after sentencing by Senior United States District Judge James R. Spencer.
Wright pled guilty on June 10, 2014. According to court documents, between January 2007 and December 2013, he acted as a representative of Fifth Degree Tours #1, Inc., Fifth Degree Records, Inc., and Turnwright Enterprises, Inc. In that capacity, Wright solicited individuals in Virginia and elsewhere to invest in concerts, tours, and similar entertainment events to be held throughout the United States.Wright promised returns as high as 100% within just two weeks to two months, and represented to investors that their funds would be used to produce and promote entertainment events, including ones featuring Prince, Beyoncé, Jay Z, R Kelly, and TLC, among others. Rather than use the investment funds as he had promised, Wright used the vast majority of the funds for his personal benefit, including for gambling and other expenses at various casinos.
As a result of Wright’s ongoing scheme to defraud, investors lost $940,600.
This case was investigated by the United States Secret Service. Assistant United States Attorneys Dominick S. Gerace and Michael Gill are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:13CR143.
Two Honduran Nationals, Sentenced for Conspiracy, Aggravated Identity TheftRead the Press Release
United States Attorney Kenneth Polite and Deputy Assistant Attorney General Ronald A. Cimino of the Justice Department’s Tax Division announced today that YONI PERDOMO, 35, was sentenced to 38 months in prison for conspiracy to defraud the United States by filing false income tax returns and for aggravated identity theft. In addition, SANTOS MARTIN HERNANDEZ, 41, was sentenced to 24 months in prison for his role in the conspiracy to defraud the United States. The defendants were further ordered to pay restitution and to serve terms of supervised release.
Both defendants have been detained since their arrest, and as Honduran nationals they face possible deportation following the completion of their sentences. They were charged with being part of a multi-jurisdictional conspiracy to file false income tax returns. To date, 16 defendants have entered guilty pleas to various charges in the case, including JACQUELINE J. ARIAS, a tax return preparer in Spruce Pine, Alabama, who is pending sentencing.
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, ARIAS was a certified acceptance agent, 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.
The case was investigated by U.S. Immigration and Customs Enforcement’s 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 Trial Attorneys Hayden Brockett and Kevin Lombardi of the Justice Department’s Tax Division and Assistant U.S. Attorney David Haller.
Tulsa Man Sentenced to More Than 7 Years in Prison for Child Sex TraffickingRead the Press Release
TULSA, Okla. — Damian Deshane Wardell, a/k/a “Fray Fray,” 40, of Tulsa, was sentenced today by U.S. District Judge Claire V. Eagan to serve 92 months in federal prison on charges related to child sex trafficking, announced Danny C. Williams Sr., United States Attorney for the Northern District of Oklahoma.
In February, a Federal Grand Jury charged Wardell by Indictment with crimes related to Sex Trafficking of a Child. He pleaded guilty on May 6, 2014.
According to court documents, Wardell admitted, from November 19 to 22, 2013, he prostituted a 16-year-old female at a Tulsa area motel. The victim’s mother alerted the Tulsa Police Department to her daughter’s whereabouts. Tulsa Police Department officers arrested Wardell and found the victim and two other juvenile females in the motel room.
The case was investigated by the Tulsa Police Department’s Vice Unit and prosecuted by Assistant U.S. Attorneys Trent Shores and Clinton Johnson on behalf of the United States.
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. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.
Third Colombian National Pleads Guilty to Kidnapping and Murder of DEA Agent Terry WatsonRead the Press Release
A third Colombian man extradited to the Eastern District of Virginia pleaded guilty today for his involvement in the kidnapping and murder of Drug Enforcement Administration (DEA) Special Agent James Terry Watson in Bogotá, Colombia, on June 20, 2013.
Attorney General Eric H. Holder, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, DEA Administrator Michele M. Leonhart and Director Bill A. Miller of the U.S. Department of State’s Diplomatic Security Service (DSS) made the announcement.
“This development marks yet another significant step forward in our effort to achieve justice for Special Agent Terry Watson, who gave his life in the service of his country,” said Attorney General Eric Holder. “This nation owes Special Agent Watson, and all of our fallen law enforcement personnel, a debt of gratitude we can never hope to repay. But we will never rest in our commitment to hold accountable all those responsible for his murder. That effort will continue. And his example will continue to guide and inspire us.”
Héctor Leonardo López, 34, pleaded guilty before U.S. District Judge Gerald Bruce Lee of the Eastern District of Virginia to aiding and abetting the murder of an internationally protected person and conspiracy to kidnap an internationally protected person. Sentencing is scheduled for Dec. 12, 2014.
In a statement of facts filed with the plea agreement, López admitted that he and his conspirators agreed to conduct a “paseo milionario” or “millionaire’s ride” in which victims who were perceived as wealthy were lured into taxi cabs, kidnapped and then robbed. López admitted that he was part of the group of individuals that targeted and picked up Special Agent Watson, outside of a restaurant in Bogotá. Soon after, two conspirators entered the taxi carrying Special Agent Watson, and one used a stun gun to shock Special Agent Watson and the other stabbed him. Special Agent Watson was able to escape from the taxi, but he later collapsed and died from his injuries. López admitted that he drove the second taxi, which carried the two individuals who attacked Special Agent Watson. López also admitted that part of his role in the robbery crew was to receive stolen bank cards and use them at various banks to take out money.
Six other defendants were charged in this case for their alleged involvement in the murder of Special Agent Watson. Gerardo Figueroa Sepúlveda, 39; Omar Fabián Valdes Gualtero, 27; and Édgar Javier Bello Murillo, 27, are each charged by indictment with second degree murder, kidnapping and conspiracy to kidnap. Wilson Daniel Peralta Bocachica, 31, was charged for his alleged efforts to destroy evidence associated with the murder of Special Agent Watson.
On Sept. 3, 2014, Julio Estiven Gracia Ramírez, 31, pleaded guilty to aiding and abetting the murder of an internationally protected person and conspiracy to kidnap an internationally protected person. Sentencing for Gracia Ramírez is scheduled for Dec. 5, 2014. On Sept. 17, 2014, Andrés Álvaro Oviedo García, 22, pleaded guilty to aiding and abetting the murder of an internationally protected person and conspiracy to kidnap an internationally protected person. Sentencing is scheduled for Dec. 12, 2014.
Trial for the remaining defendants is set for Jan. 12, 2015.
The charges in the indictment against the other defendants are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
This case was investigated by the FBI, DEA and DSS, in close cooperation with Colombian authorities and with assistance from Interpol and the Justice Department’s Office of International Affairs. The case is being prosecuted by Special Counsel Stacey Luck of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Michael P. Ben’Ary of the U.S. Attorney’s Office for the Eastern District of Virginia.
The Department of Justice gratefully acknowledges the Colombian Attorney General’s Office, Colombian National Police, Colombian Directorate of Criminal Investigation and Interpol (DIJIN), DIJIN Special Investigative Unit, Bogotá Metropolitan Police, Bogotá Police Intelligence Body (CIPOL) Unit and Colombian Technical Investigation Team for their extraordinary efforts, support and professionalism in responding to this incident.
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Texas Businessman Sentenced to 27 Months in Prison for Carrying Out Nearly $1.7 Million Fraud Scheme-Defendant Kept Proceeds of Business Loan for Personal Benefit-Read the Press Release
WASHINGTON – Arnold Rojas Rivas, 46, a businessman from San Antonio, Texas, was sentenced today to 27 months in prison for a scheme in which he defrauded a federal agency and a private company of nearly $1.7 million, announced U.S. Attorney Ronald C. Machen Jr. and Andrew G. McCabe, Assistant Director of the FBI’s Washington Field Office.
Rojas pled guilty in January 2014 in the U.S. District Court for the District of Columbia to wire fraud. He was sentenced by the Honorable Robert L. Wilkins. Upon completion of his prison term, Rojas will be placed on three years of supervised release. He also was ordered to pay $1,655,925 in restitution and an identical amount in a forfeiture money judgment.
According to the government’s evidence, Rojas was the director of Corporativo Papelero y De Suministros Basicos, S.A. DE C.V. (COPASBA), a company based in Mexico that produced toilet paper and napkins for the Mexican market by converting large rolls of raw paper into final products. The company applied for, and obtained, access to a $10 million credit facility from a finance company based in Hartford, Conn. At the time that COPASBA applied for the credit facility, it was the fifth biggest producer of toilet paper and napkins in Mexico. Funds borrowed from this credit facility were supposed to be used to build a warehouse to house COPASBA’s product and to assist with the company’s general operations.
The credit facility was guaranteed by the Overseas Private Investment Corporation (OPIC), an agency of the U.S. government which has as one of its missions providing insurance, guarantees, financing, and reinsurance for projects in less developed countries and areas. Under the terms of the guarantee agreement, OPIC guaranteed 97.5% of any losses.
In order to obtain access to the funds, Rojas had to submit requests explaining how COPASBA would use the funds, and these requests required Rojas to make a number of representations about COPASBA’s financial condition. In mid-2006, COPASBA requested and received more than $6 million from the facility. In the months after receiving the last of these funds, COPASBA’s position weakened significantly: the company’s cash-on-hand plummeted, workers went on strike, and suppliers began refusing to do business with the company. The company’s condition became so bad during this time that Rojas ordered workers to disassemble the machines the company used to make its paper goods so the machines could be sold. By June 2007, COPASBA had essentially ceased functioning as a company.
Nevertheless, Rojas requested another disbursement of over $1.8 million for COPASBA, failing, in violation of the credit agreement, to inform the finance company or OPIC of the many problems the company had encountered. Unaware of the fact that COPASBA had ceased functioning, the finance company released over $1.8 million from the credit facility to COPASBA. Within moments of COPASBA receiving the funds, Rojas transferred nearly $1.7 million to his personal account. He used these funds for his and his family’s personal benefit.
In announcing the sentence, U.S. Attorney Machen and Assistant Director in Charge McCabe commended the work of those who investigated the case from the FBI’s Washington Field Office. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Tasha Harris, Lenisse Edloe, and Shanna Hays; former Assistant U.S. Attorney Matthew C. Solomon, who investigated the matter, and Assistant U.S. Attorney Diane Lucas, who handled forfeiture issues. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Matt Graves and former Acting Deputy Chief Glenn S. Leon and former Trial Attorney Mary Ann McCarthy of the Department of Justice’s Fraud Section, who investigated and prosecuted the matter.
14-217State Audit Director Sentenced to over 3 Years in Federal PrisonRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today the sentencing of the former Director of the Bureau of Auditing and Compliance Services for the Louisiana Department of Children and Family Services (DCFS).
U.S. District Judge Shelley Dick sentenced DELRICE J. AUGUSTUS, age 35, of Baton Rouge, Louisiana, to 37 months imprisonment, 2 years of supervised release following imprisonment, restitution of $155,305.24 to DCFS, and forfeiture of $150,035 to the United States.
Augustus was sentenced following his conviction for stealing from a federally-funded entity, in violation of Title 18, United States Code, Section 666(a)(1)(A). Augustus served as the Director of the Bureau of Auditing and Compliance Services for DCFS, a state agency which receives over a billion dollars ($1,000,000,000) in federal funding annually. As Director, Augustus reported directly to the Secretary of DCFS and led the office responsible for safeguarding assets against theft and unauthorized use; ensuring that transactions were properly authorized and recorded properly; and ensuring compliance with management policies, as well as federal and state laws and regulations.
When he pled guilty, Augustus admitted to using his official position to defraud DCFS through the following means.
• Augustus admitted to fraudulently misusing government purchasing cards to obtain items for personal use for himself and others, including an installed dishwasher, televisions, movies, cameras, wireless audio systems, such as Sonos and Jawbone, gaming devices, such as Xboxes, Wii and Leapsters, mobile devices, such as I-Pads, Kindle Fires, and an I-Phone 5, Dyson vacuums, rental vehicles, hotel rooms, and fuel.
• Augustus admitted to misusing and causing others to misuse state travel and gas cards to pay for personal travel and entertainment expenses for himself and others, including gas, rental vehicles, and hotel stays. One such occasion involved purchasing hotel suites in New Orleans for Mardi Gras and the NBA All-Star Game.
• Augustus admitted to engaging in a scheme to create and use fraudulent documents to request and receive reimbursement from the State of Louisiana for official travel that did not occur. Augustus would sign and submit reimbursement claims for expenses he falsely claimed to have incurred as part of his official duties. Augustus would cause the signature of the Secretary of the Louisiana Department of Children and Family Services to appear on his fraudulent reimbursement claims as approving such claims, when, in fact, the Secretary had neither approved the claims nor authorized her signature to be used in such a manner. Augustus would also create fraudulent documents reflecting that C.P. and K.G., who were employees in the Auditor’s Office, had incurred certain expenses related to official travel. C.P. and K.G. would sign the fraudulent reimbursement requests as the requesting employees, and Augustus would sign as the approving supervisor. The State would pay the requested amount to C.P. and K.G. who would split the proceeds with Augustus.
U.S. Attorney Green stated: “It is a sad day when someone whose responsibility it is to safeguard and watch over hundreds of millions of dollars of federal funds is caught stealing from the very funds he is entrusted to protect. I commend DCFS leadership on their immediate action when the fraud became known to them. Such swift action and cooperation with law enforcement is imperative to ensuring that the occasional bad actor is addressed. I am grateful to our partners with the Louisiana State Police, the Louisiana Inspector General’s Office, and the Federal Bureau of Investigation who worked seamlessly with our prosecutors to ensure today’s just result.”
Louisiana Inspector General Stephen Street commented: “This sentence should make it clear to anyone thinking about stealing from the taxpayers that they had better be prepared to go to jail for it. Together with our law enforcement partners, we will continue doing everything we can to make that happen.”
“The public demands that we as law enforcement professionals hold those that commit such crimes responsible,” stated Colonel Mike Edmonson, Superintendent of the Louisiana State Police. “The Louisiana State Police and all of our law enforcement partners are committed to ensuring that individuals in positions of trust are held to a higher standard.”
This matter is being handled by the United States Attorney’s Office, the Louisiana State Police, the Louisiana Inspector General’s Office, and the Federal Bureau of Investigation. The matter is being prosecuted by First Assistant United States Attorney Corey R. Amundson, who serves as the Chief of the Criminal Division, and Special Assistant United States Attorney J. Brad Casey.
Shire Pharmaceuticals LLC to Pay $56.5 Million to Resolve False Claims Act Allegations Relating to Drug Marketing and Promotion PracticesRead the Press Release
Pharmaceutical company Shire Pharmaceuticals LLC will pay $56.5 million to resolve civil allegations that it violated the False Claims Act as a result of its marketing and promotion of several drugs, the Justice Department announced today. Shire, located in Wayne, Pennsylvania, manufactures and sells pharmaceuticals, including Adderall XR, Vyvanse and Daytrana, which are approved for the treatment of attention deficit hyperactivity disorder (ADHD), and Pentasa and Lialda, which are approved for the treatment of mild to moderate active ulcerative colitis.
“Patients and health care providers must receive accurate information about available prescription drugs so that they can make safe and informed treatment decisions,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “The Department of Justice will be vigilant to hold accountable pharmaceutical companies that provide misleading information regarding a drug’s safety or efficacy.”
The settlement resolves allegations that, between January 2004 and December 2007, Shire promoted Adderall XR for certain uses despite a lack of clinical data to support such claims and overstated the efficacy of Adderall XR, particularly relative to other ADHD drugs. Among the allegedly unsupported claims was that Adderall XR was clinically superior to other ADHD drugs because it would “normalize” its recipients, rendering them indistinguishable from their non-ADHD peers. Shire allegedly stated that its competitors’ products could not achieve similar results, which the government contended was not shown in the clinical data that Shire collected. Shire also allegedly marketed Adderall XR based on unsupported claims that Adderall XR would prevent poor academic performance, loss of employment, criminal behavior, traffic accidents and sexually transmitted disease. In addition, Shire allegedly promoted Adderall XR for the treatment of conduct disorder without approval from the Food and Drug Administration (FDA).
The settlement further resolves allegations that, between February 2007 and September 2010, Shire sales representatives and other agents allegedly made false and misleading statements about the efficacy and “abuseability” of Vyvanse to state Medicaid formulary committees and to individual physicians. For example, one Shire medical science liaison allegedly told a state formulary board that Vyvanse “provides less abuse liability” than “every other long-acting release mechanism” on the market. However, the government contended that no study Shire conducted had concluded that Vyvanse was not abuseable, and, as an amphetamine product, the Vyvanse label included an FDA-mandated black box warning for its potential for misuse and abuse. Shire also made allegedly unsupported claims that treatment with Vyvanse would prevent car accidents, divorce, arrests and unemployment.
Additionally, the settlement resolves allegations that from April 2006 to September 2010, Shire representatives improperly marketed Daytrana, administered through a patch, as less abuseable than traditional, pill-based medications, and, for part of this period, improperly made phone calls and drafted letters to state Medicaid authorities to assist physicians with the prior authorization process for prescriptions to induce these physicians to prescribe Daytrana and Vyvanse.
Finally, the settlement resolves allegations that between January 2006 and June 2010, Shire sales representatives promoted Lialda and Pentasa for off-label uses not approved by the FDA and not covered by federal healthcare programs. Specifically, the government alleged that Shire promoted Lialda off-label for the prevention of colorectal cancer.
"Marketing efforts that influence a doctor’s independent judgment can undermine the doctor-patient relationship and short-change the patient,” said U.S. Attorney Zane David Memeger for the Eastern District of Pennsylvania. “Where children’s medication is concerned, it can interfere with a parent’s right to clear information regarding the risks to the safety and health of their child. Shire cooperated throughout this investigation and, in advance of this settlement, began to correct its marketing activities.”
"This settlement represents another important step in our fight against fraud in federally-funded healthcare programs such as Medicare and Medicaid,” said U.S. Attorney Zachary T. Fardon for the Northern District of Illinois. “The Shire settlement returns funds not only to the U.S. government but also to the individual states whose health care programs rely in part on the efficacy of jointly-funded programs like Medicaid. We will continue doing everything in our power to combat fraud and ensure the integrity of our healthcare programs.”
As a result of today’s $56.5 million settlement, the federal government will receive $35,713,965, and state Medicaid programs will receive $20,786,034. The Medicaid program is funded jointly by the federal and state governments. In addition, Shire has separately reached agreement with the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) on a corporate integrity agreement, which will address the company’s future marketing efforts.
“Our agency will continue to hold drug companies responsible for seeking to boost profits using false and misleading claims about products, such as the powerful medications prescribed to children and other drugs at issue in this settlement,” said Chief Counsel to the HHS Inspector General Gregory E. Demske. “We entered into a corporate integrity agreement with Shire that requires comprehensive compliance safeguards, oversight of Shire promotional activities, and compliance certifications from Shire’s board of directors and management.”
The allegations resolved by the settlement arose from a lawsuit filed by Dr. Gerardo Torres, a former Shire executive, and a separate lawsuit filed by Anita Hsieh, Kara Harris and Ian Clark, former Shire sales representatives. The lawsuits were filed under the False Claims Act’s whistleblower provisions, which permit private parties to sue for false claims on behalf of the government and to share in any recovery. Torres will receive $5.9 million.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of HHS. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $22.4 billion through False Claims Act cases, with more than $14.2 billion of that amount recovered in cases involving fraud against federal health care programs.
This case was a cooperative effort among the U.S. Attorneys’ Offices for the Eastern District of Pennsylvania and the Northern District of Illinois, the Justice Department’s Civil Division, Office of the Inspector General for the Office of Personnel Management, HHS-OIG and the FDA. The HHS Office of the General Counsel-CMS Division and the National Association of Medicaid Fraud Control Units also provided assistance.
The lawsuits are captioned United States ex rel. Torres v. Shire Specialty Pharmaceuticals, et al., No. 08-4795 (E.D. Pa.) and United States ex rel. Hsieh, Harris, and Clark v. Shire PLC, et al., No. 09-6994 (N.D. Ill.). The claims resolved by the settlement are allegations only; there has been no determination of liability.
Shire Pharmaceuticals LLC to Pay $56.5 Million to Resolve False Claims Act Allegations Relating to Marketing, PromotionRead the Press Release
Shire Pharmaceuticals LLC to Pay $56.5 Million to Resolve False Claims Act Allegations
Relating to Drug Marketing and Promotion PracticesPharmaceutical company Shire Pharmaceuticals LLC will pay $56.5 million to resolve allegations that it violated the False Claims Act as a result of its marketing and promotion of several drugs, the Justice Department announced today. Shire, located in Wayne, Pennsylvania, manufactures and sells pharmaceuticals, including Adderall XR, Vyvanse, and Daytrana, which are approved for the treatment of attention deficit hyperactivity disorder (ADHD), and Pentasa and Lialda, which are approved for the treatment of mild to moderate active ulcerative colitis.
“Marketing efforts that influence a doctor’s independent judgment can undermine the doctor-patient relationship and short-change the patient,” said Zane David Memeger, U.S. Attorney for the Eastern District of Pennsylvania. “Where children’s medication is concerned, it can interfere with a parent’s right to clear information regarding the risks to the safety and health of their child. Shire cooperated throughout this investigation and, in advance of this settlement, began to correct its marketing activities.”
“Patients and health care providers must receive accurate information about available prescription drugs so that they can make safe and informed treatment decisions,” said Acting Assistant Attorney General for the Justice Department’s Civil Division Joyce R. Branda. “The Department of Justice will be vigilant to hold accountable pharmaceutical companies that provide misleading information regarding a drug’s safety or efficacy.”
The settlement resolves allegations that, between January 2004 and December 2007, Shire promoted Adderall XR for certain uses despite a lack of clinical data to support such claims and overstated the efficacy of Adderall XR, particularly relative to other ADHD drugs. Among the unsupported claims allegedly made by Shire was that Adderall XR was clinically superior to other ADHD drugs because it would “normalize” its recipients, rendering them indistinguishable from their non-ADHD peers. Shire allegedly stated that its competitors’ products could not achieve similar results, which the Justice Department contended was not shown in the clinical data Shire collected. Shire also marketed Adderall XR based on claims that Adderall XR would prevent poor academic performance, loss of employment, criminal behavior, traffic accidents, and sexually transmitted disease. In addition, Shire promoted Adderall XR for the treatment of conduct disorder, an indication not approved by the Food and Drug Administration (FDA).
The settlement further resolves allegations that, between February 2007 and September 2010, Shire sales representatives and other agents also allegedly made false and misleading statements about the efficacy and abuse liability of Vyvanse to state Medicaid formulary committees and to individual physicians. For example, one Shire medical science liaison allegedly told a state formulary board that Vyvanse “provides less abuse liability” than “every other long-acting release mechanism” on the market. No study Shire conducted concluded that Vyvanse was not abusable, and, as an amphetamine product, the Vyvanse label included an FDA-mandated black box warning for its potential for misuse and abuse. Shire also made unsupported claims that treatment with Vyvanse would prevent car accidents, divorce, being arrested, and unemployment.
Additionally, the settlement resolves allegations that, from April 2006 to September 2010, Shire representatives improperly marketed Daytrana, administered through a patch, as less abusable than traditional, pill-based medications. The settlement also resolves allegations that, for part of the foregoing periods, Shire representatives improperly made phone calls and drafted letters to state Medicaid authorities to assist physicians with the prior authorization process for prescriptions to induce these physicians to prescribe Daytrana and Vyvanse.
Finally, the settlement resolves allegations that, between January 2006 and June 2010, Shire sales representatives promoted Lialda and Pentasa for off-label uses not approved by the FDA and not covered by federal healthcare programs. Specifically, the government alleged that Shire promoted Lialda off-label for the prevention of colorectal cancer.
As a result of today’s $56.5 million settlement, the federal government will receive $35,713,965, and state Medicaid programs will receive $20,786,034. The Medicaid program is funded jointly by the federal and state governments. In addition, Shire has separately reached agreement with the U.S. Department of Health and Human Services (HHS) Office of the Inspector General on a Corporate Integrity Agreement, which will address the company’s future marketing efforts.
The allegations resolved by the settlement arose from a lawsuit filed by Dr. Gerardo Torres, a former Shire executive, and a separate lawsuit filed by Anita Hsieh, Kara Harris, and Ian Clark, former Shire sales representatives. The lawsuits were filed under the False Claims Act’s whistleblower provisions, which permit private parties to sue for false claims on behalf of the government and to share in any recovery. The relator share payment will be $5.9 million.“Our agency will continue to hold drug companies responsible for seeking to boost profits using false and misleading claims about products, such as the powerful medications prescribed to children and other drugs at issue in this settlement. We entered into a Corporate Integrity Agreement with Shire that requires comprehensive compliance safeguards, oversight of Shire promotional activities, and compliance certifications from Shire’s Board of Directors and management,” said Chief Counsel to the HHS Inspector General Gregory E. Demske.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of HHS. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $20.5 billion through False Claims Act cases, with more than $14.2 billion of that amount recovered in cases involving fraud against federal health care programs.
The case in this district is being handled by Assistant United States Attorneys Paul W. Kaufman and David A. Degnan. The case was a cooperative effort among the U.S. Attorneys’ Offices for the Eastern District of Pennsylvania and the Northern District of Illinois, the Civil Division of the Department of Justice, the FDA’s Office of Criminal Investigations, and Office of the Inspector General for the Office of Personnel Management. The HHS Office of Counsel to the Inspector General, the HHS Office of the General Counsel-CMS Division, the FDA’s Office Chief Counsel, and the National Association of Medicaid Fraud Control Units also provided assistance.
The lawsuits are captioned United States ex rel. Torres v. Shire Specialty Pharmaceuticals, et al., No. 08-4795 (E.D. Pa.) and United States ex rel. Hsieh, Harris, and Clark v. Shire PLC, et al., No. 09-6994 (N.D. Ill.). The claims resolved by the settlement are allegations only; there has been no determination of liability.
Click here to read the settlement agreement.
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PATTY HARTMAN, Media Contact, 215-861-8525Shiprock Woman Sentenced for Federal Child Abuse ConvictionRead the Press Release
ALBUQUERQUE – Angela Sloan, 30, an enrolled member of the Navajo Nation who resides in Shiprock, N.M., was sentenced today to two years of probation for her child abuse conviction. Sloan has been in a half-way house for the past three and a half months and will be spend up to an additional six months in the half-way house as a condition of her probation.
Sloan was arrested in May 2014, on a criminal complaint alleging that on May 9, 2014, she endangered the lives and safety of two children, a nine-month-old infant and a nine-year-old child, by driving under the influence of alcohol while the children were unrestrained in the back seat of her vehicle. The children did not suffer seriously bodily injury when Sloan crashed the vehicle into a wooden fence and a parked vehicle. She subsequently was indicted and charged with committing child abuse by placing the children in a situation that may have endangered their lives or health.
On July 21, 2014, Sloan entered a guilty plea to the indictment and admitted driving under the influence of alcohol, with a blood alcohol content of .23, and losing control of the vehicle in which the two children were unrestrained passengers. Sloan admitted placing the children in a situation that endangered their lives by crashing into fencing and a parked vehicle.
This case was investigated by the Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety and was prosecuted by Special Assistant U.S. Attorney David Adams.
Serial Bank Fraud Offender Sentenced to 55 Months in Federal PrisonRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DONALD GLENN, 42, formerly of Hartford, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 55 months of imprisonment, followed by five years of supervised release, for operating a bank fraud scheme while in federal custody at a Hartford halfway house, and then escaping.
According to court documents and statements made in court, in December 2009, GLENN was sentenced in Hartford federal court to 78 months of imprisonment for running an extensive fraudulent check cashing scheme that involved more than 200 counterfeit business checks and 75 different bank branches in Connecticut. Through this scheme, GLENN and his associates defrauded banks of more than $155,000.
On September 28, 2012, the Bureau of Prisons transferred GLENN to a halfway house in Hartford where he was to serve the final six months of his sentence.
In November 2012, while he was in federal custody in the Hartford halfway house, GLENN began to engage in another bank fraud scheme. In December 2012, GLENN gave an individual a counterfeit check from a Connecticut business in the amount of $4,809.02, and gave a second individual a counterfeit check from the same business in the amount of $4,743.80. At GLENN’s direction, the individuals deposited the checks into bank accounts and then withdrew a portion of the funds.
On March 27, 2013, GLENN left the halfway house without permission and did not return.
On April 2, 2013, GLENN deposited a counterfeit business check in the amount of $7,321.60 into a bank account he controlled in Connecticut and then withdrew a portion of the funds.
On August 2, 2013, GLENN was arrested in Florida on state charges. He has been detained since his arrest.
On June 16, 2014, GLENN pleaded guilty to one count of bank fraud and one count of escape from the custody of the Attorney General.
Judge Bryant ordered GLENN to pay restitution to two bank victims in the total amount of $9,687.94.
In addition to his 2009 federal conviction, GLENN’s criminal history includes a 1997 federal conviction for bank fraud and 16 state convictions. GLENN still owes more than $300,000 in restitution to the victims of his two prior federal crimes.
This matter was investigated by the Connecticut Financial Crimes Task Force and the U.S. Marshals Service. The case was prosecuted by Assistant U.S. Attorneys Anastasia E. King and David T. Huang.PUBLIC AFFAIRS CONTACT:
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(203) 821-3722 [email protected]Prior Felon from Albuquerque Pleads Guilty to Violating Federal Firearms Laws – Defendant Prosecuted Under Federal "Worst of the Worst" Anti-Violence InitiativeRead the Press Release
ALBUQUERQUE – Nicholas Richard Blume, 36, of Albuquerque, N.M., pleaded guilty this morning to being a felon in possession of a firearm and ammunition.
Blume was arrested in Feb. 2014, on a criminal complaint alleging that he unlawfully possessed a firearm and ammunition on Feb. 10, 2014, in Bernalillo County, N.M. Blume subsequently was indicted on that same charge on March 11, 2014. According to court filings, Blume was prohibited from possessing firearms and ammunition in Feb. 2014, because he previously had been convicted of receiving and transferring a stolen motor vehicle, aggravated battery with a deadly weapon causing great bodily harm, extortion, possession of an imitation controlled substance, and robbery.
Today Blume admitted to the possession of a rifle and ammunition on March 11, 2014. Blume acknowledged that he was prohibited from possessing the firearm and ammunition because he was a convicted felon.
Blume has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled. Blume faces a statutory maximum penalty of ten years in federal prison.
Blume 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.
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Albuquerque Police Department with assistance from the 2nd Judicial District Attorney’s Office. Assistant U.S. Attorney Louis E. Valencia is prosecuting the case.