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Thursday 31 July 2014
Rutland Man Agrees to Plead Guilty to Heroin ConspiracyRead the Press Release
The Office of the United States Attorney for the District of Vermont stated today that Nicholas Louras, 28, of Rutland, Vermont, has been charged in federal court with conspiring to distribute heroin in Vermont from November 2013 to March 2014. Louras appeared today before Magistrate Judge John Conroy in United States District Court for his arraignment and was released on conditions, including that he participate in a drug rehabilitation program as directed by the Probation Office.
The parties also filed today a plea agreement in which Louras agreed to waive indictment and plead guilty to the felony drug conspiracy, which carries a maximum possible term of imprisonment of twenty years. Under the terms of the plea agreement the Court will decide his sentence after a presentence investigation. A change of plea hearing will likely be scheduled in the near future.
The United States is represented by Assistant U.S. Attorney Joseph Perella and the defendant is represented by Natasha Sen, Esq. This matter was investigated jointly by the Vermont State Police Drug Task Force, the FBI, the DEA, and the New York State Police.Roseville Financial Advisor Sentenced to 46 Months in Prison for Stealing from Her ClientsRead the Press Release
SACRAMENTO, Calif. — Michelle Lee Kern, 36, of Sacramento, was sentenced today by United States District Judge Morrison C. England Jr. to 46 months in prison and ordered to pay $642,625 in restitution for financial advisor fraud, United States Attorney Benjamin B. Wagner announced.
According to court documents, Kern worked as a licensed financial advisor at Ameriprise Financial Services Inc. in Roseville between 2009 and December 2012. While working as a financial advisor, Kern stole $642,625 from approximately 20 clients by making wire transfers from client accounts to Kern’s own bank accounts and credit cards. Kern also forged client signatures on checks. According to victim statements read in court, Kern’s theft made it difficult for some victims to retire, support disabled children, and pay for college.
“Kern abused her role as a trusted, licensed financial advisor to defraud her clients for personal gain. Her actions clearly demonstrated disregard for the perilous financial situation her clients ultimately faced when they became victims of the fraud,” said Special Agent in Charge Monica M. Miller of the Sacramento division of the Federal Bureau of Investigation. “Investigation and prosecution of financial fraud is a top priority for the FBI, particularly such that is committed by those entrusted to safeguard funds.”
While awaiting sentencing in this case, Kern was charged in Placer County with embezzling from her church. That case is pending, and Kern is presumed innocent of those charges, unless and until proven guilty.
This case was the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Michael D. Anderson prosecuted the case.
Kern was ordered to turn herself in to the Bureau of Prisons on September 11, 2014, to begin serving her sentence.
Romanians Will Be Deported Following Today's Sentencing for ATM Skimming SchemeRead the Press Release
PITTSBURGH - Two Romanians residing in Allegheny County, Pennsylvania, have been sentenced in federal court to time-served on their conviction of conspiracy, United States Attorney David J. Hickton announced today.
United States District Judge Mark Hornak imposed the sentence on Florin Popescu, 31, and Ion Carligeriu, 30, both Romanian Nationals, who have been in custody since approximately Oct. 15, 2013, following their arrest. Both defendants will be immediately deported to Romania by Immigration and Customs Enforcement Operations.
According to the information presented to the court, the defendants conspired to produce ATM skimming equipment which they installed on APC kiosks at Postal Centers on McKnight Road and in Squirrel Hill, which were designed to steal customers’ bank account information.
Assistant United States Attorney Gregory C. Melucci prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the United States Postal Inspection Service, the United States Secret Service and the U.S. Department of Homeland Security Investigations for the investigation leading to the successful prosecution of these defendants.
Rio Rancho Man Arrested on Federal Child Pornography ChargesRead the Press Release
ALBUQUERQUE – Armando Camarena, 31, of Rio Rancho, N.M., was arrested yesterday by agents of Homeland Security Investigations (HSI) on federal child pornography charges. Camarena made his initial appearance in federal court earlier today, and remains in custody pending a detention hearing scheduled for tomorrow morning.
Camarena is charged in a criminal complaint with distributing and possessing visual depictions of minors engaged in sexually explicit conduct. According to the criminal complaint, HSI initiated the investigation leading to Camarena’s arrest after receiving a lead from HSI in Idaho Falls, Idaho. HSI-Idaho reported that a 14-year-old girl had received child pornography, child erotica and threatening messages on her iPod from an individual the child met through an Internet website. Investigation revealed that the child pornography and threats were sent from an IP Address allegedly being used by Camarena.
On July 30, 2014, officers from HSI and the Albuquerque Police Department (APD) executed a federal search warrant at Camarena’s residence and seized computer images allegedly consistent with child pornography. Camarena was taken into custody at that time.
If convicted of the charges in the criminal complaint, Camarena faces a federal prison term of not less than five years and not more than 20 years. Camarena also would be required to register as a sex offender. Charges in criminal complaints are merely accusations and criminal defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by SPEED, the Sexual Predator and Exploitation Enforcement Detail, which is comprised of officers from HSI-Albuquerque office, APD and the Bernalillo County Sheriff’s Office, with assistance from HSI-Idaho and the Idaho Fusion Center.
The case is being prosecuted by Assistant U.S. Attorney Jacob A. Wishard as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
The case also was brought as a part of the New Mexico Internet Crimes Against Children (ICAC) Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 74 federal, state and local law enforcement agencies associated with the New Mexico ICAC Task Force, which is funded by a grant administered by the NMAGO. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Raymond Brown Sentenced to 48 Months in Prison for Use of A Communication Facility to Facilitate A Federal Drug CrimeRead the Press Release
St. Thomas, USVI - District Court Judge Curtis V. Gomez today sentenced Raymond Brown to 48 months in prison for use of a communication facility to facilitate a federal drug crime, United States Attorney Ronald W. Sharpe announced.
Brown, 29, was arrested on July 17, 2013, as part of the investigation of Roberto Tapia, Director of the Virgin Islands Department of Planning and Natural Resources (DPNR) Division of Environmental Enforcement and charged on November 7, 2013, in a 69-count third superseding indictment, along with seven other defendants, including Angelo Hill, Hector Alcenio, Angel Negron-Betran, and Eddie Lopez-Lopez, Stephen Torres, Walter Hill, and Edwin Monsanto. On March 27, 2014, Brown was found guilty by a St. Thomas jury to one count of use of a communication facility to facilitate a federal drug crime.
Evidence introduced at trial showed that on December 2, 2012 Brown spoke to Roberto Tapia on a cellular telephone to arrange the distribution and transportation of two kilograms of cocaine. The evidence further showed that Roberto Tapia then transported the cocaine from St. Thomas to a buyer in Puerto Rico.
The case was investigated by the Public Corruption Task Force, which comprises the Federal Bureau of Investigation (FBI); U.S. Drug Enforcement Administration (DEA); Virgin Islands Police Department; U.S. Marshals Service; Internal Revenue Service Criminal Investigation Division (IRS-CI); U.S. Department of Homeland Security, Homeland Security Investigations (HSI); U.S. Customs and Border Protection (CBP); United States Coast Guard; Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Office of the Virgin Islands Inspector General. Assistant U.S. Attorney Kelly B. Lake prosecuted the case.
Polk County Methamphetamine Trafficker Sentenced to 14 Years in Federal PrisonRead the Press Release
Tampa, Florida – U.S. District Judge Virginia M. Hernandez-Covington today sentenced Maximilano Reynoso (39, Winter Haven) to 14 years in federal prison for conspiring with others to distribute 500 grams or more of methamphetamine. Reynoso pleaded guilty on March 4, 2014.
According to court documents, court-authorized wire and electronic intercepts of Reynoso’s cellular phones showed that he was in direct contact with methamphetamine sources of supply in Mexico. Reynoso ordered large quantities of high-purity methamphetamine from Mexico, and supervised couriers who distributed the drugs in Polk County. Reynoso also coordinated the transfer of drug proceeds from Polk County to Mexico. Reynoso’s co-defendant, Gerardo Millian (29, Auburndale), was sentenced to 77 months in federal prison on April 24, 2014. During the investigation, Homeland Security Investigations agents and Polk County deputies made numerous seizures, including one kilogram of methamphetamine shipped via Federal Express from Manzanillo, Mexico to a residence in Polk County, 200 grams of methamphetamine from a residence in Auburndale, 4 kilograms of methamphetamine from a vehicle on Interstate 4 in Polk County, and 40 kilograms of methamphetamine from a residence on Kristen Park Drive, in Orlando.
This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Polk County Sheriff’s Office as part of an ongoing Organized Crime Drug Enforcement Task Force (OCDETF) investigation. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply. The case was prosecuted by Assistant United States Attorney Christopher F. Murray.
Policeman Indicted for Aiding and Abetting A Conspiracy to Possess with Intent to Distribute Marijuana and for ExtortionRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Filed Office, and J.D. Patterson, Director, Miami-Dade Police Department (MDPD), announce the indictment of Roderick Silva, 45, of Miami, a police officer who formerly served as a detective assigned to the MDPD Narcotics Bureau. The indictment charges Silva with one count of aiding and abetting a conspiracy to possess with intent to distribute marijuana in violation of Title 21, United States Code, Section 846, and one of count of extortion in violation of Title 18, United States Code, Section 1951. .
The conspiracy charge against Officer Silva alleges that he aided and abetted a group of persons who were illegally growing hydroponic marijuana in numerous homes that they owned, rented, or otherwise controlled, in the south west Miami-Dade County area. The conspiracy charge further identified this group of persons as members of the Santiesteban family, and their friends and associates. The Santiesteban family members, and a number of their friends and associates, have already been convicted in a federal prosecution brought against them in 2012 for conspiracy to possess with intent to distribute over 1000 marijuana plants. They pled guilty to that charge in 2013, and are serving long prison sentences.
The conspiracy charge also alleges that Officer Silva aided and abetted the Santiesteban family members, and their friends and associates, in their marijuana growing activities by providing them with confidential MDPD information about when MDPD narcotics detectives were investigating them, and when they might have their marijuana grow houses searched, and their marijuana plants seized; and by providing advice to the Santiestebans and their friends and associates about how to avoid, deflect, frustrate, and obstruct those MDPD investigations and by providing confidential MDPD information about suspected grow houses operated by other marijuana growers, so the Santiestebans and their friends and associates could rob those grow houses of their marijuana plants.
The extortion count of the indictment charges that Officer Silva obtained money from Santiesteban family members, “under color of official right.” It specifies that Officer Silva received $1500 cash on January 5, 2011, in Miami-Dade County for “maintaining his silence and not disclosing to any law enforcement authorities all that he knew about the illegal, criminal activities of the Santiesteban family members.”
U.S. Attorney Wifredo A. Ferrer stated, “We are especially saddened when a public servant misuses his position of trust to engage in criminal conduct. Mr. Silva’s criminal conduct not only undermined the trust of this community, but also undermined the trust of the officers who served by his side. Today’s indictment sends a message to all public officials who commit crime that they are not above the law and that they will be brought to justice.”
“Mr. Silva’s actions undermines the public’s trust in law enforcement, as well as betrays the officers and agents who worked by his side” said Special Agent in Charge George L. Piro of the FBI’s Miami Division. “Silva must now face the consequences of his actions in large part due to the dedication and commitment of the Miami Dade Police Department and the FBI.”
Director J.D. Patterson stated, “The community’s trust is vital to us and make no mistake, the Miami-Dade Police Department remains committed in seeking out, identifying, and ridding itself of individuals who violate that trust. This violation of trust tarnishes the badge of every hard-working officer who risks his/her life daily to protect this community. We appreciate the partnership and support of our federal partners during this sensitive investigation.”
If convicted, Officer Silva faces a minimum mandatory sentence of 10 years in prison up to life in prison on the aiding and abetting a conspiracy count and up to 20 years in prison on the extortion count.
An indictment is only an accusation and each defendant is presumed innocent unless and until proven guilty.
Mr. Ferrer commended the investigative efforts of FBI and MDPD. This case is being prosecuted by Assistant U.S. Attorneys Michael P. Sullivan and Andy Camacho.
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.
Placerville Man Pleads Guilty to Filing False Tax ReturnsRead the Press Release
SACRAMENTO, Calif. —Thomas W. Stringfellow, 55, of Placerville, pleaded guilty today to two counts of willfully making false tax returns, United States Attorney Benjamin B. Wagner announced.
According to court documents, from 2006 through 2010, Stringfellow underreported his business income on tax returns by more than $1.1 million, and underreported his personal income on tax returns by more than $1 million. Stringfellow owned New Horizon Painting, and rather than depositing all of the business checks into the appropriate accounts, he cashed some of the checks and did not report those amounts as income. In total, Stringfellow’s underreporting of his business income and his personal income led to a tax loss of more than $687,000.
This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Jean M. Hobler is prosecuting the case.
Stringfellow is scheduled to be sentenced by Judge Morrison C. England Jr. on December 18, 2014. Stringfellow faces a maximum statutory penalty of three years in prison and a $250,000 fine on each count. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Pinedale, N.M., Man Sentenced for Federal Involuntary Manslaughter ConvictionRead the Press Release
ALBUQUERQUE – Ramsey Litzin, 20, an enrolled member of the Navajo Nation who resides in Pinedale, N.M., was sentenced this morning for his involuntary manslaughter conviction. Litzin will serve 18 months in federal prison followed by three years of supervised release.
Litzin was arrested on Nov. 15, 2013, on a criminal complaint alleging that he killed a 27-year-old Navajo man by stabbing him to death in the early hours of Nov. 12, 2013, in Pinedale, N.M., which is located within the Navajo Indian Reservation in McKinley County, N.M. Litzin was intoxicated when he killed the victim during a physical altercation between the two men.
On April 24, 2014, Litzin pleaded guilty to an involuntary manslaughter charge and admitted killing the victim by stabbing him with a knife. According to the plea agreement, Litzin armed himself with a knife prior to a physical fight with the victim and stabbed the victim approximately 23 times with the intention of causing the victim to sustain serious bodily injury and knowing his actions could result in the victim’s death. Although most of the stab wounds were superficial, at least three stab wounds contributed to the victim’s death. Litzin stated that he was angry, intoxicated and had been struck by the victim when he stabbed the victim to death.
The case was investigated by the Gallup office of the FBI and the Crownpoint office of the Navajo Nation Division of Public Safety and was prosecuted by Assistant U.S. Attorney Niki Tapia-Brito.
Pennsylvania Woman Sentenced to 42 Months for Role in $1.8 Million Tax Fraud ConspiracyRead the Press Release
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Stephanie Patterson, age 41, of Royersford, Pennsylvania, was sentenced yesterday by the Honorable Leonard P. Stark, Chief Judge for the United States District Court for the District of Delaware, to 42 months imprisonment and full restitution. Earlier this year, Patterson pled guilty to violations of 18 USC § 286 (False Claims Conspiracy), 18 USC § 1341 (Mail Fraud), and 42 U.S.C. § 408(a)(7)(B) & 18 U.S.C. § 2 (Aiding and Abetting Social Security Fraud) in connection with her use of stolen identities in a tax fraud conspiracy.
The defendant participated in a tax fraud conspiracy involving the filing of more than 180 false individual federal income tax returns with the Internal Revenue Service, using stolen identities. The returns sought refunds of more than $1.8 million. The defendant and her co-conspirators received more than $800,000 in refunds to which they were not entitled,on account of the fraudulently filed returns. Among other things, the scheme jeopardized the Social Security Disability benefits of at least some of the identity theft victims. The defendant’s role in the conspiracy involved providing names and social security numbers to another co-conspirator, who used the information to file the fraudulent returns. The defendant also acted as a conduit of information between other members of the scheme.
U.S. Attorney Oberly gave the following comments: “Individuals who conspire with others to file false claims against the United States Treasury will face significant penalties, as this case demonstrates. My office is committed to prosecuting these cases, and I will seek incarceration wherever possible and appropriate.”
IRS Criminal Investigation Special Agent in Charge Akeia Conner said, “Individuals who commit refund fraud and identity theft deserve to be punished to the fullest extent of the law. IRS Criminal Investigation, along with our law enforcement partners and the United States Attorney's Office, remain vigilant in identifying, investigating and prosecuting those individuals who seek to willfully defraud the United States Treasury and blatantly disregard the victims of their schemes.”
This case is the result of an investigation conducted by the Internal Revenue Service Criminal Investigation, the United States Postal Inspection Service, the Social Security Administration Office of the Inspector General, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Lauren Paxton.
North Carolina Woman Sentenced for Role in Widespread Tax Return and Identity Fraud ConspiracyRead the Press Release
The Justice Department and the Internal Revenue Service (IRS) announced that a Durham, North Carolina, woman was sentenced today to serve 30 months in federal prison for conspiring to defraud the IRS.
Tasha Renee Smith was sentenced in Greensboro, North Carolina, by U.S. District Judge Catherine Eagles, who ordered her to serve three years of supervised release and to pay restitution to the IRS in the amount of $375,578. Smith pleaded guilty on April 8 to the conspiracy charge.
According to court documents, Smith was employed by Nothing But Taxes (NBT), a tax return preparation business with branches throughout North Carolina, for parts of the filing seasons for tax years 2005, 2006 and 2007. While working at NBT’s Durham location, Smith intentionally falsified tax returns for many clients. Common techniques she employed include the addition of false dependents to tax returns and inflating the Earned Income Tax Credit for low-income clients by adding additional, fictitious income.
According to court documents, during her second and third seasons preparing returns at NBT, Smith made extensive efforts to solicit and purchase the names, dates of birth and social security numbers of individuals in the community. Smith used the identities she purchased as false dependents on returns she prepared at NBT later that tax year. Smith charged clients a side cash payment in exchange for a false dependent, in addition to the flat return preparation fee charged by NBT.
According to court documents, during the 2008 tax filing season, Smith and two business partners opened their own tax return preparation business, Tax Wizards, with branches in Durham and Roxboro, North Carolina. Smith owned and operated the business, and hired her own return preparers. Like NBT, Tax Wizards became a center of tax fraud. Smith encouraged return preparers she hired at Tax Wizards to keep any falsifications on tax returns they prepared modest, in the $1,200 to $1,500 range, to avoid IRS scrutiny. Smith knew that return preparers she employed at Tax Wizards were falsifying returns for clients because she had cautioned the return preparers to keep any falsifications modest and because she witnessed some falsifications occur on the premises. Smith intentionally tried to avoid being physically present at Tax Wizards, in part to avoid the hassle of day-to-day management, but also because she did not want to be present while she knew fraud was occurring.
Court documents state that Smith and another person opened a tax return preparation business during the 2009 tax filing season called Keystone Tax Services, also in Durham. Keystone also became a hotbed of tax fraud. Smith also intentionally tried to avoid being physically present at Keystone for the same reasons as with Tax Wizards. Around April 2011, Smith closed down Tax Wizards and Keystone. Smith became aware that return preparers at her businesses were falsifying returns by creating fictitious Form W-2’s ostensibly issued by non-existent businesses. The falsification was so rampant and involved so much money that Smith feared IRS detection, so she shuttered Tax Wizards and Keystone.
According to court documents, during filing season for tax year 2011, in January to April 2012, Smith and other investors opened a business called Tax Solutions. Tax Solutions had four branches throughout North Carolina, specifically, in Roxboro, Durham, Burlington and Kinston. Smith was hired in exchange for a share of the business’s profits and was charged with hiring managers for the various Tax Solutions branches. She hired at least one manager whom she knew to be complicit in the fraudulent practices at Tax Wizards and Keystone. Return preparers at Tax Solutions also falsified numerous tax returns for their clients.
The case against Smith was investigated by Special Agents of IRS-Criminal Investigation. It was prosecuted by Assistant U.S. Attorney Frank Chut for the Middle District of North Carolina and Trial Attorney Jonathan Marx of the Justice Department’s Tax Division.
North Carolina Woman Sentenced for Role in Widespread Tax Return and Identity Fraud ConspiracyRead the Press Release
WASHINGTON, DC – The Justice Department and the Internal Revenue Service (IRS) announced that a Durham, North Carolina, woman was sentenced today to serve 30 months in federal prison for conspiring to defraud the IRS.
Tasha Renee Smith was sentenced in Greensboro, North Carolina, by U.S. District Judge Catherine Eagles, who ordered her to serve three years of supervised release and to pay restitution to the IRS in the amount of $375,578. Smith pleaded guilty on April 8 to the conspiracy charge.
According to court documents, Smith was employed by Nothing But Taxes (NBT), a tax return preparation business with branches throughout North Carolina, for parts of the filing seasons for tax years 2005, 2006 and 2007. While working at NBT’s Durham location, Smith intentionally falsified tax returns for many clients. Common techniques she employed include the addition of false dependents to tax returns and inflating the Earned Income Tax Credit for low-income clients by adding additional, fictitious income.
According to court documents, during her second and third seasons preparing returns at NBT, Smith made extensive efforts to solicit and purchase the names, dates of birth and social security numbers of individuals in the community. Smith used the identities she purchased as false dependents on returns she prepared at NBT later that tax year. Smith charged clients a side cash payment in exchange for a false dependent, in addition to the flat return preparation fee charged by NBT.
According to court documents, during the 2008 tax filing season, Smith and two business partners opened their own tax return preparation business, Tax Wizards, with branches in Durham and Roxboro, North Carolina. Smith owned and operated the business, and hired her own return preparers. Like NBT, Tax Wizards became a center of tax fraud. Smith encouraged return preparers she hired at Tax Wizards to keep any falsifications on tax returns they prepared modest, in the $1,200 to $1,500 range, to avoid IRS scrutiny. Smith knew that return preparers she employed at Tax Wizards were falsifying returns for clients because she had cautioned the return preparers to keep any falsifications modest and because she witnessed some falsifications occur on the premises. Smith intentionally tried to avoid being physically present at Tax Wizards, in part to avoid the hassle of day-to-day management, but also because she did not want to be present while she knew fraud was occurring.
Court documents state that Smith and another person opened a tax return preparation business during the 2009 tax filing season called Keystone Tax Services, also in Durham. Keystone also became a hotbed of tax fraud. Smith also intentionally tried to avoid being physically present at Keystone for the same reasons as with Tax Wizards. Around April 2011, Smith closed down Tax Wizards and Keystone. Smith became aware that return preparers at her businesses were falsifying returns by creating fictitious Form W-2’s ostensibly issued by non-existent businesses. The falsification was so rampant and involved so much money that Smith feared IRS detection, so she shuttered Tax Wizards and Keystone.
According to court documents, during filing season for tax year 2011, in January to April 2012, Smith and other investors opened a business called Tax Solutions. Tax Solutions had four branches throughout North Carolina, specifically, in Roxboro, Durham, Burlington and Kinston. Smith was hired in exchange for a share of the business’s profits and was charged with hiring managers for the various Tax Solutions branches. She hired at least one manager whom she knew to be complicit in the fraudulent practices at Tax Wizards and Keystone. Return preparers at Tax Solutions also falsified numerous tax returns for their clients.
The case against Smith was investigated by Special Agents of IRS-Criminal Investigation. It was prosecuted by Assistant U.S. Attorney Frank Chut for the Middle District of North Carolina and Trial Attorney Jonathan Marx of the Justice Department’s Tax Division.
North Carolina Man Pleads Guilty to Travel in Furtherance of Underage ProstitutionRead the Press Release
NORFOLK, Va. – Jeffrey Chadwick Wright, 25, of Warrenton, NC, pleaded guilty today to travel in furtherance of a criminal activity, namely underage prostitution.
Dana J. Boente, United States Attorney for the Eastern District of Virginia, and Charles May, Acting Executive Assistant Director for the Atlantic Operations, Naval Criminal Investigative Service, made the announcement after the plea was heard by United States Magistrate Judge Douglas Miller.
Wright was indicted on May 8, 2014 by a federal grand jury on charges of sex trafficking of children; travel in furtherance of criminal activity; and concealment of evidence. Wright faces a maximum penalty of five years in prison when he is sentenced on November 14, 2014 before United States Chief District Judge Rebecca Beach Smith.
Wright, then on active duty in the U.S. Navy, assisted a 17 year old HIV positive female in running away from her foster home in Hampton Roads. Wright then paid for backpage.com advertisements for escort services for the 17 year old in Virginia, Maryland and North Carolina. Wright was arrested on state charges on March 3, 2014, when he and the victim were discovered by the Naval Criminal Investigative Service in base housing on Naval Station Norfolk.
This case was investigated by the Naval Criminal Investigative Service (NCIS) and the Virginia Beach Police Department. Assistant United States Attorney Elizabeth M. Yusi and Special Assistant United States Attorney Christopher A. George are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Tweet
Newport News Man Convicted of Decade-Long Drug ConspiracyRead the Press Release
NEWPORT NEWS, Va. – Kelvin L. Brown (a.k.a. “Doom”), 34, of Newport News, was convicted yesterday by a federal jury of participating in a decade-long conspiracy to distribute cocaine and crack cocaine. Brown also was convicted of two counts of possessing firearms in furtherance of a drug trafficking crime, and being a felon in possession of a firearm.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Royce E. Curtin, Special Agent in Charge of the FBI’s Norfolk Field Office; and Richard W. Myers, Chief of Newport News Police, made the announcement after the verdict was accepted by U.S. District Judge Robert G. Doumar.
According to court records and evidence at trial, Brown was arrested by Newport News police on Sept. 13, 2013 in a barricaded apartment with a firearm, a scale and cocaine. The evidence showed that Brown and his co-conspirators distributed crack and powder cocaine in the Newport News area beginning in the early 2000s, and they possessed firearms in order to protect the drug conspiracy and its proceeds. Brown also made threats against a cooperating witness during the course of the case.
Brown will be sentenced on Dec. 8, 2014. On the drug conspiracy conviction, Brown faces a mandatory term of five years and a maximum penalty of 40 years in prison. On the two counts of possessing a firearm in furtherance of a drug trafficking crime, Brown faces a combined mandatory minimum term of 30 years in prison. On the felon-in-possession conviction, Brown faces a maximum of ten years in prison.
This investigation was led by FBI and the Safe Streets Task Force, with assistance from the Newport News Police, Virginia State Police, and Newport News Commonwealth Attorney’s Office. Managing Assistant U.S. Attorney Howard J. Zlotnick and Trial Attorney Joseph K. Wheatley from the Organized Crime and Gang Section of the Justice Department’s Criminal Division are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:13-cr-110.New Hampshire Man Indicted for Tax EvasionRead the Press Release
A former Northfield, New Hampshire, man was indicted on three counts of tax evasion for tax years 2008, 2009 and 2010, the Justice Department and Internal Revenue Service (IRS) announced today.
Ronald W. Martin was indicted July 23 by a federal grand jury in the District of New Hampshire. The indictment was unsealed today.
The indictment alleges that Martin evaded federal income taxes from 2008 through 2010 on approximately $400,000 of income by directing earned income to be paid to a third party and depositing only a fraction of his income into his business bank account in an effort to conceal the source of this income. According to the indictment, Martin operates the company Martin Construction.
This case was investigated by special agents of IRS – Criminal Investigation and prosecuted by Assistant U.S. Attorney Mark Zuckerman and Senior Litigation Counsel Corey J. Smith of the department’s Tax Division.
Mexican National Sentenced to Fourteen Years in Prison for Methamphetamine TraffickingRead the Press Release
SAN JOSE – Jose Corona-Mata was sentenced yesterday to 14 years in prison for conspiracy to possess with intent to distribute and to distribute methamphetamine, announced United States Attorney Melinda Haag and Drug Enforcement Administration Special Agent in Charge Jay Fitzpatrick.
Corona-Mata previously pleaded guilty pursuant to a plea agreement on April 9, 2014, to one count of conspiracy to possess with intent to distribute and to distribute methamphetamine, in violation of 21 U.S.C. § 841(a)(1), and one count of illegal entry into the United States following deportation, in violation of 8 U.S.C. § 1326. According to the plea agreement, Corona-Mata admitted that, between May and November of 2012, he conspired with others to distribute methamphetamine in Northern California. When law enforcement officers executed a search warrant at his residence in San Jose, Calif., on Nov. 30, 2012, they found $92,574 and pay/owe sheets indicative of drug trafficking. Methamphetamine seized elsewhere as evidence of the conspiracy in this case was 97-99% pure.
Corona-Mata also admitted that he had previously been deported from the United States to Mexico five times between 2003 and 2011, and that he had previously been convicted of a felony drug trafficking offense in 2010.
Corona-Mata, 32, of Michoacàn, Mexico, was indicted by a federal grand jury on Feb. 28, 2013, for conspiring to distribute methamphetamine, and for illegal entry into the United States following deportation.
The sentence was handed down by the Honorable Lucy H. Koh, U.S. District Court Judge. In addition to the 14-year sentence for the drug conspiracy, Judge Koh also sentenced Corona-Mata to a concurrent 46-month prison sentence for the violation of 8 U.S.C. § 1326, and a 5 year period of supervised release. The defendant has been in federal custody since Nov. 30, 2012.
Richard Cheng and Chinhayi Cadet are the Assistant U.S. Attorneys who are prosecuting the case. This case is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.
(Corona-Mata second superseding indictment )
Man who Set Fire to Neighbours Nightclub on New Year’s Eve Sentenced to Ten Years in PrisonRead the Press Release
A former Bellevue resident who set fire to a Seattle nightclub just after midnight on New Year’s Eve 2014 was sentenced today in U.S. District Court in Seattle to ten years in prison for arson, announced U.S. Attorney Jenny A. Durkan. MUSAB MOHAMMED MASMARI, 30, pleaded guilty in May 2014, admitting that he smuggled a one gallon tank of gasoline into the nightclub and attempted to set the club on fire. At the sentencing hearing U.S. District Judge Ricardo S. Martinez said, “but for the actions of some very quick thinking folks, we could have a very serious tragedy.” Judge Martinez said MASMARI deserved an exceptional sentence of ten years based on the number of people in the nightclub, that it was New Year’s Eve, the busiest night of the year, and that “it was a few seconds from causing significant injury or death.”
“The Court sent a clear message: this conduct cannot be tolerated. Motivated by ignorance and intolerance, this defendant put more than 700 lives at risk when he purposely started a fire at a crowded nightclub on New Year’s Eve,” said U.S. Attorney Durkan. “We are fortunate that the workers acted so quickly – or we may have had a horrific tragedy. I thank them for their actions and appreciate the dedicated work of the Seattle Police Department and FBI in holding this defendant accountable.”
“This important case shows the utility of a close federal-local law enforcement partnership,” said King County Prosecuting Attorney Dan Satterberg. “It was an exhaustive effort by federal agents and SPD, with invaluable assistance from prosecutors in each system.”
According to the facts admitted in the plea agreement, MASMARI carried a one gallon tank of gas into the club in Seattle’s Capitol Hill neighborhood around 11:30 PM on December 31, 2013. He concealed the gas tank in a shopping bag. Just after midnight, MASMARI poured some of the gasoline on a staircase in Neighbours and hid the gas container behind a planter at the top of the stairs. The container was still more than half full of gasoline. At 12:06 AM, MASMARI lit the gas he had poured on the stairs and hastily left the club. MASMARI was identified as a suspect following a review of surveillance videos. He was arrested by the Seattle Police Department and FBI on February 1, 2014 as he was preparing to travel to Sea-Tac Airport for international travel.
Because of the differences between state and federal law, federal prosecution ensured a longer sentence than was available in state court.
The case was investigated by the Seattle Police Department and the FBI.
The case is being prosecuted by Assistant United States Attorney Todd Greenberg and Senior Deputy King County Prosecuting Attorney Susan Storey.Man Pleads Guilty to Traveling to Maryland to Engage in Sexual Activity with a MinorRead the Press Release
Gregory King, 28, of Washington, D.C., pleaded guilty today in connection with contacting a 13-year-old girl over the Internet and traveling across state lines to engage in sexual activity with her.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, United States Attorney Rod J. Rosenstein of the District of Maryland and Special Agent in Charge Stephen E. Vogt of the FBI’s Baltimore Division made the announcement.
King pleaded guilty to one count of coercion of a minor to engage in sexual activity and one count of traveling with intent to engage in illicit sexual contact with a minor. He was initially charged by indictment on Feb. 14, 2014.
According to King’s plea agreement, on Oct. 9, 2013, he initiated a chat with a girl on a social networking site whose profile indicated that she was 13 years old. Throughout October and November 2013, King and the victim exchanged sexually explicit photographs and engaged in sexually explicit conversations. On Oct. 30, 2013, King chatted with the victim about coming to her house in Maryland, telling her that he would take a bus from Washington, D.C. The victim provided King with her address, but King was not able to get to the victim’s house that night. King continued to chat with the victim and on Nov. 21, 2013, shortly after the victim’s 14 th birthday, again discussed coming to her home. King took a bus from Washington, D.C. on the same date and met the victim at her home, where he spent the night. King was arrested on Jan. 19, 2014.
As part of his plea agreement, King must register as a sex offender under the Sex Offender Registration and Notification Act (SORNA). Sentencing is scheduled for Oct. 15, 2014, before U.S. District Judge Peter J. Messitte.
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 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.justice.gov/psc . For more information about Internet safety education, please visit www.justice.gov/psc and click on the “resources” tab on the left of the page.
This case was investigated by the FBI and the Laurel Police Department. This case is being prosecuted by Trial Attorney LisaMarie Freitas of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Kristi O’Malley of the District of Maryland.Man Charged with Inserting Needles into Packaged MeatsRead the Press Release
Follow @SDILNewsRonald G. Avers, 68, of Belleville, Illinois, was charged by criminal complaint on July 30, 2014, with seven violations of the Product Packaging Protection Act of 2002, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Avers appeared in federal court in East St. Louis earlier today for an initial appearance. A detention hearing will be held on August 4, 2014. Each violation of the Act carries a term of imprisonment of up to ten years, a fine of up to $250,000, and a term of supervised release of up to three years.
The complaint alleges that the Federal Bureau of Investigation learned on July 9, 2014, from Shop ‘n Save that needles had been found in packaged meat products offered for sale. Shop ‘n Save reported seven incidents, all of which were associated with its location on North Belt West Road in Belleville. The recoveries were made during the time period of May, 2013, to July, 2014. The complaint alleges that one customer found a needle in her mouth while eating; another reported being stuck in the hand. In other instances, customers said that they found the needles in purchased meat products but were not injured. On one occasion, an employee detected the presence of a needle in a meat product.
“Shop ‘n Save conducted an internal investigation and provided information to the Federal Bureau of Investigation which directly led to the identification of Ronald G. Avers as a suspect.” said United States Attorney Wigginton. “I want to assure the public that, while our investigation is ongoing, we do not, at this time, believe that the suspect acted at any other markets or stores, or that he was working with any other persons. I commend the time, money and effort that Shop ‘n Save expended in assisting investigators in this case. As a corporate citizen, their assistance to law enforcement was invaluable.”
A criminal complaint is a preliminary charging document. Under the law, a defendant is presumed to be innocent of a charge until proven guilty beyond a reasonable doubt to the satisfaction of a jury.
The case is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Suzanne M. Garrison.
Louisiana State Bond Commission Agrees to Settlement to Resolve Housing Discrimination LawsuitRead the Press Release
The Justice Department announced today that the United States District Court for the Eastern District of Louisiana has approved its settlement with the Louisiana State Bond Commission resolving the department’s housing discrimination lawsuit. The lawsuit alleged that the commission violated the Fair Housing Act and the Americans with Disabilities Act by adopting a moratorium on affordable housing financing in 2009. The moratorium blocked financing for a proposed 40-unit affordable housing project known as the “Esplanade.” Twenty of these units would provide permanent supportive housing to persons with disabilities.
Prior to the entry of the settlement by the court, the commission voted to approve financing for the Esplanade project and lifted the moratorium on affordable housing projects. Under the settlement, the commission agrees to refrain from further obstructing or delaying financing for the Esplanade and from adopting any future policy that would prevent consideration of affordable housing in New Orleans, including affordable housing for persons with disabilities. The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Title II of the Americans with Disabilities Act prohibits governments from discriminating on the basis of disability in administering their zoning laws.
“We are very pleased to have worked with the Louisiana State Bond Commission to reach an agreement that will not only enable the Esplanade to be built, but that will also ensure that other affordable housing projects that include housing for persons with disabilities in New Orleans will not be subject to any moratorium,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.
“Nondiscriminatory housing is a fundamental right of the citizens of New Orleans, and this settlement agreement continues the efforts to rebuild and improve a housing inventory ravaged by Hurricane Katrina,” said U.S. Attorney Kenneth Allen Polite Jr. for the Eastern District of Louisiana.
The City of New Orleans was previously named as a defendant. In April 2014, the department and the city reached a settlement resolving the department’s claims. Approved by the court, the settlement determines that the city must permit the Esplanade project to proceed and must provide all appropriate permits for the project. The settlement also required that the city develop 350 additional permanent supportive housing units, amend its Comprehensive Zoning Ordinance to allow permanent supportive housing, continue its work to prepare and implement a reasonable accommodation policy approved by the United States, conduct fair housing training for key city officials and be subject to reporting requirements.
More information about the Civil Rights Division and the laws it enforces is available at this website .
KC Man Sentenced to 60 Years in Prison for Drug-trafficking, Illegal FirearmsRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was sentenced in federal court today for drug-trafficking and illegally possessing firearms after shooting at pursuing police officers during a foot chase that ended in his arrest.
Antonio M. Taylor, 30, of Kansas City, was sentenced by U.S. District Judge Beth Phillips to 60 years in federal prison without parole.
On Feb. 26, 2014, Taylor was found guilty at trial of two counts of possessing crack cocaine with the intent to distribute and one count of possessing crack cocaine, marijuana and PCP with the intent to distribute. He was found guilty of three counts of possessing firearms in furtherance of drug-trafficking crimes and three counts of being a felon in possession of a firearm.
According to evidence presented during the trial, law enforcement officers were conducting surveillance on Taylor’s residence on July 2, 2012. Taylor, who had an active Jackson County warrant for a violation of felony probation, left the apartment and walked toward a vehicle in the parking lot. When police officers approached him, Taylor ran away and the officers pursued him on foot.
During the pursuit, Taylor changed directions and began running toward a pursuing officer. Taylor was holding an FNH 9mm semi-automatic handgun and he fired at least one round at the officer, who returned fire. The officer saw Taylor drop a large bag of crack cocaine (later determined to be 32.9 grams) as he ran. The officer took cover near a residence but continued to engage in the foot pursuit. When the officer rounded the edge of the residence, he saw Taylor attempting to climb a fence near the rear of the residence. Taylor fired his handgun again at the officer, who again returned fire. Taylor jumped the fence and stumbled and fell as he attempted to get to his feet. Taylor again turned toward the officer with the firearm still in his hand. The officer fired his firearm two more times at Taylor, at which time Taylor dropped his firearm. Taylor, who suffered several gun-shot wounds, was taken into custody and transported to the emergency room. The officer was not injured.
Prior to this incident, police officers saw Taylor conducting a drug transaction on March 7, 2012. Officers approached Taylor’s car and Taylor drove off. A high speed chase ensued and Taylor committed numerous traffic violations during the chase. Taylor jumped out of the Jeep in the area of 81st and Brooklyn and ran. Officers searched for Taylor and found him hiding in a storm drainage area. Officers found a loaded Glock .40-caliber pistol on the ground nearby. When they searched Taylor’s vehicle, officers found a plastic baggie that contained 20.62 grams of crack cocaine.
On June 5, 2012, police officers were called to a vacant house in response to a report of a suspicious vehicle. They contacted Taylor, the driver and sole occupant of the vehicle. When officers asked Taylor to step out of the vehicle, he put the vehicle in drive and drove into the back yard of a residence. Taylor crashed the vehicle head-on into a cinder block wall and ran from the scene. Officers found 80 grams of marijuana, a brown bottle containing PCP, .8 gram of crack cocaine, 12 unknown pills, and a Glock .40-caliber pistol in the vehicle.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Taylor has a prior felony conviction for shooting from a vehicle, four prior convictions for assault and five prior convictions for armed criminal action.
This case was prosecuted by Assistant U.S. Attorneys Brent Venneman and Patrick C. Edwards. It was investigated by the Kansas City, Mo., Police Department, the U.S. Postal Inspection Service and U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
Justice Department Announces $1.5 Million Paid to Victims of Discrimination by Quiktrip CorporationRead the Press Release
The Justice Department today announced the payment of more than $1.5 million in damages under a consent decree previously reached with QuikTrip Corporation. The payments were made by QuikTrip to compensate 47 individuals with disabilities who experienced discrimination at QuikTrip gas stations and convenience stores across the country, in violation of Title III of the Americans with Disabilities Act (ADA).
QuikTrip owns and operates nearly 700 gas stations, convenience stores, travel centers and truck stops throughout the Southern, Midwestern and Southwestern United States. The consent decree, which was entered by the U.S. District Court for the District of Nebraska in July, 2010, required QuikTrip to make all of its facilities accessible, adopt accessibility policies and pay a $55,000 civil penalty to the United States. QuikTrip has made all changes required in the consent decree to make their properties ADA accessible. “Today is an important milestone in making whole individuals with disabilities who experienced repeated and extensive accessibility barriers at QuikTrip facilities across the United States,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “QuikTrip should be commended for working diligently with the department to overhaul its gas stations, stores and policies to comply with the ADA.”
“Ensuring access to QuikTrip facilities by individuals with disabilities is a significant step by QuikTrip and a win-win resolution,” said United States Deborah R. Gilg for the District of Nebraska. “Individuals with disabilities will no longer encounter barriers to access at these facilities and QuikTrip can profit by providing services to this segment of our population.”
The consent decree was reached under Title III of the ADA, which prohibits discrimination against individuals with disabilities by certain businesses that are open to the public, including gas stations, convenience stores and other retailers, both large and small. More information about the Civil Rights Division and the laws it enforces is available at the website www.justice.gov/crt. More information about this Consent Decree with QuikTrip may be found at www.ada.gov or by calling the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TTY).
Jury Convicts St. Anne Man for Heroin Trafficking and Felon in Possession of A FirearmRead the Press Release
Urbana, Ill. – A jury deliberated for approximately four hours this afternoon before convicting JB Brown, Jr., aka Cocoa, 37, of the 400 block of Circle Drive, St. Anne, Ill., of federal drug trafficking and possession of a firearm by a felon, as announced by Jim Lewis, U.S. Attorney for the Central District of Illinois.
During the trial, which began on Tuesday, Jul. 29, the government presented evidence to establish that in June 2013, Brown possessed more than 100 grams of heroin, which he intended to distribute, and a loaded Glock .45 caliber semi-automatic pistol at a residence in the 7400 block of East First Street in St. Anne.
Following the jury’s return of the guilty verdicts, Brown, who had been released on bond, was remanded to the custody of the U.S. Marshals Service. Sentencing for Brown is scheduled for Dec.1, 2014.
The statutory penalty for possession of 100 grams or more of heroin with the intent to distribute is a minimum 10 years in prison and up to life in prison, and a fine of up to $8 million. The maximum statutory penalty for unlawful possession of a firearm by a felon is 10 years in prison, and a fine of up to $250,000.
The case is being prosecuted by Assistant U.S. Attorney Eugene L. Miller. The charges are the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Kankakee Area Project Safe Neighborhoods Task Force, and the Kankakee County Major Crimes Task Force.Jury Convicts Former Owner of Valley Dairy, Inc. of False Statements to the USDA, Rural DevelopmentRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that on July 30, 2014, an Anchorage jury convicted a Wasilla woman, Karen Olson, 68, of one count of false statements to influence the United States Department of Agriculture, Rural Development Program, and one count of misprision of a felony. The convictions essentially involve Ms. Olson taking steps to cover up fraud perpetuated by Kyle Beus, the former President of Valley Dairy, Inc., in part by submitting false and fraudulent documents to the USDA. In May 2014, Beus was convicted of wire fraud and false statements to influence USDA, Rural Development (RD).
According to Assistant U.S. Attorney Retta Randall who prosecuted the case, trial evidence demonstrated that in 2007, through an appropriation, a one-time grant offering of $650,000 was made available by USDA, RD, to fund one or more small dairy projects in an effort to support and expand the dairy industry in Alaska.
Through that appropriation, Kyle Beus received a grant in the amount of $168,000 to support an ice cream and cheese making facility, and Rob Wells & Co., LLC, received $475,000 to support a milk manufacturing facility. Karen Olson wrote the grant application for Rob Wells, and unbeknownst to the USDA, she was a 50/50 partner in the Wells grant. Karen Olson was the former Alaska State Executive Director of the USDA, Farm Service Agency, from April 1993 through February 2001.
In November 2007, Olson, Wells, and Beus decided to join their projects and locate them in one dairy processing facility which became known as Valley Dairy, Inc., located at 7805 Palmer Wasilla Highway in Palmer, Alaska. They agreed that Beus would be the manager in charge of the day-to-day operations of the Valley Dairy, and he would manage the disbursement of USDA, RD, grant funds.
In September 2008, Olson discovered that Beus had inflated invoices which had been submitted by Olson and Wells to USDA, RD, and Beus had received kickbacks of grant monies. Some of those monies were diverted to assist his financially troubled restaurant, Klondike Creamery/Teeland’s. Olson became aware that because Beus had diverted grant funds to his personal use, funds were not available to pay the milk producers who were owed over $200,000, or to pay over $450,000 owed to construction vendors who had built the Valley Dairy.
Hence, within months after the Valley Dairy became operational, and due in part to fraud by Beus, the Valley Dairy was in jeopardy of being shut down. Subsequently, Karen Olson was named CFO for the Valley Dairy and Beus’ signature authority was removed from the bank accounts; however, he remained President of Valley Dairy, Inc.
Instead of informing USDA, RD, or law enforcement of Beus’s fraud, Olson sought USDA, RD’s assistance in securing a loan from the State of Alaska to replace the loss of funds. Olson submitted financial documents to USDA, RD, which were inaccurate and covered up the losses caused by Beus. The documents influenced USDA, RD, to allow the State to hold a first lien position on equipment in the Valley Dairy which had been purchased or obtained with federal grant funds. The State of Alaska then authorized loans to the Valley Dairy, some of which were used to pay vendors who should have been paid with the federal grant funds diverted by Beus. Within three months the Valley Dairy was once again in a poor financial state, and the dairy closed in 2012.
The jury acquitted Olson on a third count in the indictment charging her with mail fraud. Olson remains out on bail and her sentencing is scheduled for October 24, 2014.
As a result of her conviction for submitting false documents to the USDA to influence it to give up its first lien position, Olson faces a maximum sentence of 30 years of imprisonment, to be followed by five years of supervised release. She also may be fined up to $1 million. For taking actions to cover up Beus’ fraud – the misprision of felony count – Olson faces a maximum sentence of three years of imprisonment, to be followed by one year of supervised release and a potential maximum fine of $250,000.
Ms. Loeffler commends the U.S. Department of Agriculture, Rural Development, and the Federal Bureau of Investigation for the investigation of this case.
Judge Sentences Heroin Dealer to 33 Months in PrisonRead the Press Release
JOHNSTOWN, Pa. - A resident of Johnstown, Pa., has been sentenced in federal court to 33 months in prison and three years supervised release on her conviction of distribution of heroin, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Desalynn L. Coleman, 33.
According to information presented to the court, on Oct. 30, 2012, Coleman distributed less than 100 grams of heroin.
Assistant United States Attorney Stephanie L. Haines prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force for the investigation leading to the successful prosecution of Coleman.
Jerseyville Woman Sentenced for Defrauding Former Employer of over $440,000.00Read the Press Release
Follow @SDILNewsStephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on July 31, 2014, Stacy Jo Kanallakan, 35, of Jerseyville, Illinois, was sentenced in United States District Court in East St. Louis, Illinois on a one-count information charging that she engaged in a scheme to commit wire fraud. The district court sentenced Kanallakan to serve 33 months in federal prison, to be followed by 3 years mandatory supervised release. The district court ordered Kanallakan to pay $442,211.91 in restitution to her former employer. The court also ordered Kanallakan to pay a special assessment of $100.00.
At her plea on May 2, 2014, Kanallakan admitted that while working as the bookkeeper and accountant for Telsar Laboratories, Inc. (TLI), she fraudulently caused electronic deposits to be made to her own accounts and also caused fraudulent payments to be made to her by check out of TLI accounts. TLI was at the time a business located in Madison County, Illinois and the wire communications in furtherance of her scheme to defraud TLI utilized a bank in Brookfield, Wisconsin. Kanallakan admitted that between September of 2005 and October of 2011, she defrauded the business and its owner of $442,211.91.
The investigation was conducted by the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Ranley R. Killian.
Jefferson City Man Indicted for MethRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Jefferson City, Mo., man was indicted by a federal grand jury today for possessing methamphetamine with the intent to distribute.
Christopher Eugene Ronimous, also known as “Rodney,” 38, of Jefferson City, was charged in an indictment returned by a federal grand jury in Jefferson City. Today’s indictment replaces a federal criminal complaint that was filed against Ronimous on July 8, 2014.
The federal indictment alleges that Ronimous was in possession of 50 grams or more of methamphetamine with the intent to distribute on July 7, 2014.
According to an affidavit filed in support of the original criminal complaint, Jefferson City police officers stopped a vehicle for improper registration. Ronimous, a passenger in the vehicle, got out of the car while officers conducted a search. While standing outside the vehicle, the affidavit says, an Altoids can fell from Ronimous’s shorts. Inside the can was approximately five grams of methamphetamine and three “hits” of LSD.
Ronimous was arrested and transported to the police station, according to the affidavit, where he was observed reaching into his crotch area while inside an interview room. An officer conducted a more thorough search of Ronimous and discovered two bags containing approximately 50 additional grams of methamphetamine.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Special Assistant U.S. Attorney Stuart J. Zander. It was investigated by the Drug Enforcement Administration and the Jefferson City, Mo., Police Department.Indictment for Marijuana Cultivation in Sierra National ForestRead the Press Release
FRESNO, Calif. — A federal grand jury returned a five-count indictment today against Jose Antonio Reyna-Chavez (Reyna), 18, of Michoacàn, Mexico, charging him with conspiring to manufacture, distribute, and possess with intent to distribute marijuana, manufacturing marijuana, possessing marijuana with intent to distribute, damaging public land and natural resources, and avoiding immigration officers, United States Attorney Benjamin B. Wagner announced.
According to court documents, Reyna was involved in the cultivation of 1,539 marijuana plants in the Blue Canyon area of the Sierra National Forest in Fresno County when he attempted to flee from law enforcement officers. The cultivation operation was within three miles of a public campground and about seven miles from Shaver Lake. The marijuana cultivation caused significant damage to the land and natural resources of the forest. Six large helicopter net loads of material and debris, including fertilizer, propane tanks, and poisons, were removed from the grow site.
This case is the product of an investigation by the U.S. Forest Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Fresno County Sheriff’s Office. Assistant United States Attorney Karen A. Escobar is prosecuting the case.
Reyna has been ordered detained pending trial and is scheduled for arraignment and plea on the indictment on August 6, 2014.
If convicted of the more serious drug offenses, Reyna faces a minimum statutory penalty of 10 years in prison, a maximum statutory penalty of life in prison and a $10 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Illegal Alien and Convicted Felon Sentenced to 51 Months in Prison for Illegally Entering the United StatesRead the Press Release
St. Thomas, USVI- District Court Judge Curtis V. Gomez sentenced Ray Anthony Wayne, 43, to 51 months in prison and three years of supervised release for illegally reentering the United States after having been deported for a prior felony conviction, United States Attorney Ronald W. Sharpe announced.
Court records show that on December 31, 2013, Wayne was arrested by U.S. Customs and Border Protection (CPB), after he presented a fraudulent Virgin Islands birth certificate and driver’s license while attempting to board a flight to Miami at Cyril E. King Airport located on St. Thomas. Court records also show that Wayne was deported from the United States on June 3, 2013, after being convicted of possession with the intent to distribute cocaine, a felony offense. Under federal law, deported felons, such as Wayne, are prohibited from re-entering the United States. On March 27, 2014, Wayne pled guilty to illegally entering the United States after having been deported. Wayne, who has been detained since his arrest, was remanded to the custody of the U.S. Marshals Service at the conclusions of today’s sentencing hearing.
The case was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI). The case was prosecuted by Assistant U.S. Attorney Ishmael A. Meyers, Jr.
Hudson County, N.J., Man Indicted for Robbery Spree in Bergen and Hudson CountiesRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man was indicted today in connection with his alleged role in an armed robbery spree of banks and commercial establishments in Bergen and Hudson counties in July 2013, U.S. Attorney Paul J. Fishman announced.
Gary Bohanan, 44, of North Bergen, New Jersey, is charged by superseding indictment with conspiracy to commit armed bank robberies and Hobbs Act robberies, two counts of armed bank robbery, and two counts of armed Hobbs Act robbery.
Bohanan and Angel Feliu, 20, of North Bergen, were charged by indictment on April 1, 2014, with committing two bank robberies in Secaucus and Fairview, New Jersey. In a separate proceeding today, Feliu pleaded guilty to an information charging him with two counts of armed bank robbery for his role in those robberies. Bohanan will be arraigned in Newark federal court on the superseding indictment before U.S. Judge Claire C. Cecchi at a date and time to be determined.
According to documents filed in this case and statements made in court:
On July 10, 2013, Bohanan and one other individual, both wearing masks, entered a McDonald’s restaurant in North Bergen. Bohanan brandished a handgun and demanded money from the employees of McDonald’s. Bohanan and the other individual then took $1,600 from the cash registers and fled in a car driven by a third individual.
On July 18, 2013, Bohanan and other individuals cased Le Chateau restaurant in West New York, New Jersey, for the purpose of robbing it. Bohanan and the other individuals waited for an agent of the restaurant to close the restaurant, followed her home, and robbed her at gunpoint of $6,000 of proceeds from the restaurant outside her home.
On July 22, 2013, Bohanan, Feliu, and Josephine Chenet, 45, of North Bergen, allegedly robbed the Sovereign Bank (now Santander Bank) in Secaucus. (Charges from the April 1, 2014 indictment that had been pending against Chenet for her role in the bank robberies have been dismissed due to her death on June 22, 2014.)
On July 22, 2013, Bohanan and Feliu entered the bank at 10:11 a.m. Both men wore latex gloves and masks. Once inside the Sovereign Bank, Bohanan brandished a black handgun, jumped over the counter and proceeded to empty two drawers of money into a black bag, while pointing the handgun at bank tellers. As Bohanan emptied the drawers, Feliu stood guard. Bohanan and Feliu then fled the bank with $21,961.
On July 26, 2013, Bohanan, Feliu, and Chenet robbed the TD Bank, located in Fairview, New Jersey. Bohanan and Feliu entered the Bank at 9:48 a.m. Bohanan and Feliu both wore latex gloves and masks. Feliu, however, was captured by the Bank’s video surveillance system before he pulled the mask on. Feliu brandished a knife at employees and customers. Bohanan brandished what appeared to be a black handgun, but was later identified as an air pistol. Bohanan then jumped over the counter and emptied two drawers of money into a black bag, while pointing the air pistol at bank tellers. As Bohanan emptied the drawers, Feliu stood guard and held bystanders back by brandishing the knife.
Bohanan and Feliu fled on foot and were followed by concerned citizens and victims of the bank robbery. Bohanan encountered a white GMC Savana van, pointed the air pistol at the driver and ordered the driver out. Bohanan then attempted to flee the area by driving away in the van, but crashed it into a nearby structure after a short distance, at which point he attempted to flee the area on foot.
Law enforcement and concerned citizens located Bohanan hiding under a truck, which was parked a short distance away. He had with him a black bag containing a black air pistol and money covered with red dye. Feliu separated from Bohanan after the bank robbery and was also arrested shortly after the bank robbery.
The two counts of armed bank robbery with which Bohanan is charged each carry a maximum penalty of 25 years in prison and a fine of $250,000. The counts of Hobbs Act robbery with which Bohanan is charged each carry a maximum penalty of 20 years in prison. The count of conspiracy with which Bohanan is charged carries a maximum penalty of five years in prison.
Feliu also pleaded guilty to one count of conspiracy to commit armed bank robberies and Hobbs Act robberies. The counts of armed bank robbery that Feliu pleaded guilty to each carry a maximum penalty of 25 years in prison and a fine of $250,000. The count of conspiracy that Feliu plead guilty to carries a maximum penalty of five years in prison. Feliu is detained pending sentencing, which is scheduled for Nov. 20, 2014.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation. He also thanked the Fairview, North Bergen, and Secaucus police departments for their contributions to the case.
The government is represented by Assistant U.S. Attorney Francisco J. Navarro of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charges and allegations contained in the indictment are merely accusations and the defendants are considered innocent unless and until proven guilty.
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Defense counsel:
Feliu: Kevin F. Carlucci Esq., Assistant Federal Public Defender
Bohanan: Carl Herman Esq., West Orange, N.J.
Chenet: Michael Gilberti Esq., Little Silver, N.J.Bohanan, Gary Superseding Indictment
Feliu, Angel Superseding InformationHouston Man Gets 25 Years for Producing Child PornographyRead the Press Release
HOUSTON – Daniel M. Layne, 34, of Houston, has been ordered to federal prison following his conviction of production of child pornography, announced United States Attorney Kenneth Magidson. Layne pleaded guilty Friday, Feb. 14, 2014.
Today, U.S. District Judge David Hittner handed Layne a total sentence of 300 months in prison. At the hearing, additional information was presented including evidence that Layne had been communicating over the Internet with other underage girls and discussing engaging in sexual activity with them. Judge Hittner further ordered Layne to be placed on supervised release for life following completion of his prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet. He will also be ordered to register as a sex offender.
The investigation began in Maine when the mother of a 14-year-old girl discovered a motel key card in her daughter’s pants pocket and sexually graphic text messages on her cell phone. She contacted local authorities who then determined that Layne had traveled to Maine after meeting the girl over the Internet. The investigation revealed Layne had taken sexually explicit photos of the young girl.
As a result of the information gathered in Maine, authorities in the Houston area conducted a search at Layne’s residence on Sept. 24, 2013, at which time they seized computers, a tablet and cell phones from the house. A forensic analysis revealed images of the 14-year-old on the tablet and a cell phone.
Layne was arrested on the federal charges in October 2013 and has been in custody since that time where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Homeland Security Investigations and the Harris County Sheriff’s Office investigated the case in conjunction with the Houston Metro Internet Crimes Against Children Task Force and the Westbrook, Maine, Police Department.
This case, prosecuted by Assistant United States Attorney Robert Stabe, 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."
Hogsett Announces Sentencing for Heroin Distribution and Illegal Gun ChargesRead the Press Release
Hogsett continues crackdown on illegal drugs and illegal gun possession
INDIANAPOLIS – Joseph H. Hogsett, the United States Attorney, announced the sentence of Anthony Lomax, 39, Indianapolis, today. Lomax was sentenced to 400 months (over 33 years) in federal prison by District Court Judge Sarah Evans Barker.
Lomax was tried by Hogsett’s office in February for twenty criminal counts including conspiring to possess heroin, possession with intent to distribute heroin, distribution of heroin and illegal possession of firearms. Lomax, his brother Brandon Lomax and Demond Glover were all found guilty of their involvement in the conspiracy.
“Heroin is a dangerous drug that has ravaged our communities,” said Hogsett. “Putting those who infect our streets with this terrible drug behind bars has been and will continue to be is a top priority of this office.”
“Those who call for longer sentences for the “worst of the worst” have not been paying attention to what the United States Attorney’s Office has been doing for three years as part of our Violent Crime Initiative. Thirty-three years is a long time.”
Lomax’s sentence came after a jury verdict found that he and the other defendants conspired between 2009 and 2012 to distribute kilogram-quantities of heroin in and around the Haughville area of Indianapolis. The trio covered their operations through a shell business, which was discovered by law enforcement investigators.
Heroin use has been on the rise in Indianapolis and other major cities in recent years. As prescription drug addiction and abuse spread across the state and country, users switched to heroin as opioid pills became more expensive and the cost of heroin has dropped.
“The heroin epidemic knows no geographic boundaries and is blind to what tax bracket you happen to be in,” Hogsett said.
According to Assistant United States Attorneys Michelle Brady and Melanie Conour, who prosecuted the case for the government, Lomax will serve 10 years supervised release after his term of imprisonment.
Greenleaf Co-owner Sentenced for Multi-million-dollar Mortgage Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Nixa, Mo., man who was a co-owner of Greenleaf Companies has been sentenced in federal court for aiding and abetting a bank fraud conspiracy that was part of a multi-million-dollar mortgage investment scheme.
Eric Gagnepain, 41, of Nixa, was sentenced by U.S. District Judge Greg Kays on Wednesday, July 30, 2014, to four years in federal prison without parole. The court also ordered Gagnepain to pay $2,911,214 restitution.
On Jan. 9, 2014, Gagnepain pleaded guilty to conspiracy to commit bank fraud. Gagnepain co-owned and operated Greenleaf Companies and all of its subsidiaries, along with Scott Dasal, 47, of Republic, Mo., from 2006 through May 2008. During this time, Greenleaf sponsored real estate investment seminars that were designed to recruit potential investors to apply for mortgage loans for the construction and sale of residential homes in southwest Missouri and northwest Arkansas.
Gagnepain admitted that he aided and abetted others in the creation and submission of fraudulent mortgage loan documents. These mortgage loan documents contained false statements regarding the true source of monies provided at the time of closing, as well as fraudulently omitting the payment of monies obtained from the sale of the real estate properties.
Dasal was sentenced on Nov. 21, 2013, to three years in federal prison without parole and ordered to pay $2,911,209 in restitution. Dasal pleaded guilty to aiding and abetting a bank fraud.
Gagnepain derived more than $1 million in gross receipts from his criminal conduct. The total loss amount resulting from the bank fraud conspiracy is between $2.5 million and $7 million.
Gagnepain’s plea agreement cites a specific instance of such fraud that occurred on March 12, 2008. Gagnepain and others created false mortgage loan documents that were submitted to Flagstar Bank. The loan documents fraudulently stated that the borrower had provided their own monies at the time of the closing; in reality, however, Greenleaf provided monies that were falsely identified as “cash from borrower.” Additionally, the loan documents omitted the fact that Greenleaf would receive monies from the sale of the real estate property from the seller. If Flagstar Bank had known the true source of the monies provided on behalf of the borrower, or that Greenleaf was receiving monies from the sale of this real estate property, the bank would have denied the mortgage loan application.
Under the terms of his plea agreement, Gagnepain was required to also plead guilty to state charges (State of Missouri vs. Eric Christian Gagnepain). The sentence in the state case will be served concurrently with the federal sentence.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the FBI and IRS-Criminal Investigation.Georgia Man Sentenced on Wire Fraud ChargeRead the Press Release
ROCHESTER, N.Y. – U.S. Attorney William J. Hochul, Jr. announced today that George Eric Brumfield, 48, of Atlanta, Georgia, who was convicted of conspiring to commit wire fraud, was sentenced to six months in prison to be followed by six months of home detention by U.S. District Judge Frank P. Geraci. The defendant was also ordered to pay restitution of approximately $190,000.
Assistant U.S. Attorney John J. Field, who handled the case, stated that Brumfield worked for Kenneth Griffin in Rochester at Cambridge Personnel in 2007 and 2008. While working there, the defendant agreed to participate in a scheme to defraud factoring companies. Factoring is a transaction in which a financing company agrees to purchase the accounts receivable of another company, in this case Cambridge Personnel. The fraud involved the sale of fake accounts receivable, and Brumfield agreed to participate in the fraud by having third parties that he knew “verify” the validity of the fake accounts receivable.
Kenneth Griffin, the owner of Cambridge Personnel and leader of the fraud, was previously sentenced to 46 months for his role in the matter.
The sentencing is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Acting Special Agent in Charge Shantelle Kitchen, and the Federal Bureau of Investigation.G.S. Electech Inc. Executive Pleads Guilty to Bid Rigging and Price Fixing on Automobile Parts Installed in U.S. Cars<br />Read the Press Release
An executive of Japanese auto parts maker G.S. Electech Inc. pleaded guilty and was sentenced today to serve 13 months in a U.S. prison for his role in an international conspiracy to rig bids and fix prices on auto parts used on antilock brake systems installed in U.S. cars, the Department of Justice announced.
Shingo Okuda, the former Engineering and Sales Division Manager for G.S. Electech, pleaded guilty today in the U.S. District Court for the Eastern District of Kentucky in Covington, to a one count charge of bid rigging and price fixing.
As part of his plea agreement, Okuda also agreed to cooperate with the department’s ongoing investigation and to pay a $20,000 criminal fine.
On Sept. 11, 2013, a federal grand jury in Covington, Kentucky, returned an indictment against Okuda, charging him with conspiring to rig bids and fix prices of speed sensor wire assemblies, which are installed in automobiles with an antilock brake system (ABS), sold to Toyota Motor Corp. and Toyota Motor Engineering and Manufacturing North America Inc., in the United States and elsewhere.
According to the indictment, Okuda and his co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and discussions to coordinate bids and fix prices of automotive parts submitted to Toyota. The indictment charged Okuda with participating in the conspiracy beginning at least as early as January 2003 until at least February 2010.
“Today’s guilty plea is a victory for consumers, who deserve to know that the essential parts used in their automobiles are not subject to anticompetitive agreements,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “The Antitrust Division remains committed to holding executives accountable for behavior that undermines the competitive marketplace.”
G.S. Electech manufactures, assembles and sells a variety of automotive electrical parts, including speed sensor wire assemblies. The speed sensor wire assemblies connect a sensor on each wheel to the ABS to instruct it when to engage. On May 16, 2012, G.S. Electech pleaded guilty to the conspiracy and agreed to pay a $2.75 million criminal fine.
Okuda is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine for an individual may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Including Okuda, 36 individuals have been charged in the department’s ongoing investigation into price fixing and bid rigging in the auto parts industry. Okuda is the first individual in the investigation to plead guilty following an indictment. Additionally, 27 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of nearly $2.3 billion in fines.Today’s guilty plea arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s guilty plea was brought by the Antitrust Division’s Washington Criminal I Section, with the assistance of the FBI’s Detroit Field Office, with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323.
Fulton County Investment Advisor Sentenced to 262 Months' ImprisonmentRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Robert G. Bard, age 47, of Warfordsburg, Pennsylvania, was sentenced by Senior U.S. District Court Judge Sylvia H. Rambo to 262 months’ imprisonment, ordered to pay $4.2 million in restitution to 66 victims, and was placed on two years supervised release after release from prison.
In handing down her sentence, Judge Rambo stated “Bard’s actions had a devastating impact on his victims and the lengthy sentence was appropriate under the circumstances.” Judge Rambo ordered that Bard be immediately taken into custody to commence serving his sentence. A number of victims were present in the courtroom and applauded as Bard was taken into custody.
Bard was convicted of 21 counts of securities fraud, mail fraud, wire fraud, bank fraud, and making false statements after a seven-day jury trial in August 2013. The evidence at trial proved that Bard was a registered investment advisor and was the owner and operator of Vision Specialist Group (VSG) between December 2004 and August 2009. The jury convicted Bard of defrauding numerous investors by, among other things, misrepresenting the value and make-up of their investment portfolios.
Bard executed the scheme by creating phony account statements which significantly inflated the value of the investors’ accounts and included securities that were not owned by the investor. Bard created the phony account statements to conceal over $5.8 million in losses his clients sustained between 2006 and 2009 as a result of risky and speculative stocks he purchased on their behalf.
Bard also failed to inform his clients that he was terminated from his prior employment as a stock broker for forging customer signatures on financial documents, had received a lifetime ban from the National Association of Securities Dealers and had declared personal bankruptcy in 2005.
The case was investigated by the FBI with assistance from the U.S. Securities and Exchange Commission. Senior Litigation Counsel Bruce Brandler handled the prosecution.
Fresno Women Including A Mother and Daughter Indicted for Trafficking MethamphetamineRead the Press Release
FRESNO, Calif. — A federal grand jury returned a four-count indictment charging Marisela Rico-Tzintzun, 38, her daughter Vanessa Garcia, 23, and friend Brenda Ruiz-Tovar, 26, all of Fresno, with conspiring to distribute and possess with the intent to distribute methamphetamine, distributing methamphetamine, and possessing methamphetamine with the intent to distribute, United States Attorney Benjamin B. Wagner announced.
According to court documents, the three had been working together since April 2013 to sell methamphetamine in the Fresno area. On September 4, 2013, the three sold approximately one pound of methamphetamine, and on April 7, 2014, Rico-Tzintzun sold approximately one ounce. On July 17, 2014, a search warrant for Rico-Tzintun’s residence was issued and nearly two pounds of methamphetamine was found there.
This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Central Valley Marijuana Investigation Team that is composed of officers from the Drug Enforcement Administration, California Department of Justice, and the Fresno County Sheriff’s Office. Assistant United States Attorney Laurel J. Montoya is prosecuting the case.
If convicted, the defendants face a maximum statutory penalty of 10 years to life in prison and a $10 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Fourteen Indicted in Heroin Trafficking ConspiracyRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA – A Baltimore man is alleged to be the leader of a drug trafficking ring that led to large quantities of heroin being distributed in the Eastern Panhandle.
United States Attorney William J. Ihlenfeld, II announced that 9 arrests were made on charges contained in a 24-count Indictment returned by a Federal Grand Jury. According to Ihlenfeld, the Indictment alleges that the defendants were involved in a conspiracy to distribute heroin from 2008 to July 22, 2014, in the Berkeley, Jefferson, Grant and Hardy County areas.
Thus far, of the 14 defendants, nine were arrested this week; three are in custody on related charges; and, the agents are still looking for two defendants.
The names of those arrested are:
1) Tavon Darrell Moore, also known as “Frank”, also known as “Lodo”, age 30, of Baltimore, Maryland
2) Aaron Daniel Rose a/k/a “Fat Boy,” age 29, of Kearneysville, West Virginia
3) Courtney Danielle McDonald, age 24, of Martinsburg
4) Crystalin Nicole Holliday, age 24, of Martinsburg
5) Susan Renee Underwood, age 31, of Martinsburg
6) Melissa Bailey, age 25, of Petersburg, West Virginia
7) Kimberly Michelle Bailey, age 32, of Petersburg
8) Pamela Jean Bailey, age 30, of Petersburg
9) Thomas Richard Greenfield, Jr., age 57, of MartinsburgThose in custody on related charges
1) Stephanie Lee Butts, also known as “Stephanie Zavala,” also known as Tater, age 37
2) Christian Nicole Pierce, age 21
3) Brandy Netz, age 29The names of those still wanted are
1) Tony Calvin Collins, age 29, of Petersburg
2) Brenda Michelle Sams, age 34, of Brandywine, MarylandThe 24-count Indictment charges the defendants with conspiracy to distribute heroin; possession with intent to distribute heroin; attempted distribution of heroin; distribution of heroin, crack cocaine, oxycodone, morphine and methamphetamine; using the telephone to distribute drugs; and, interstate transportation to aid in the distribution of heroin. Specifically:
Moore is named in the conspiracy count alleging he was responsible for the distribution of more than 1 kilogram of heroin, two counts for the illegal use of a telephone to distribute drugs and two counts of interstate transportation. Moore has prior felony convictions in the State of Maryland for possession with intent to distribution, carjacking and possession of a firearm.
Rose is named in the conspiracy count alleging he was responsible for the distribution of more than 100 grams of heroin and five additional counts of distribution of heroin.
Butts is named in the conspiracy count alleges she was responsible for the distribution of more than 100 grams of heroin, one count of distribution of heroin and one count of possession with intent to distribute heroin.Pierce is named in the conspiracy count alleging the distribution of less than 100 grams of heroin.
Collins, Sams, Holliday and Underwood are named in the conspiracy count alleging the distribution of less than 100 grams of heroin and one count of possession with intent to distribute heroin.
McDonald is named in the conspiracy count alleging the distribution of less than 100 grams of heroin, four counts of distribution of heroin, one count of distribution of oxycodone, three counts of distribution of morphine and one count of attempted distribution of heroin.Netz is named in the conspiracy count alleging the distribution of less than 100 grams of heroin, one count of distribution of crack cocaine and one count of distribution of heroin.
Melissa Bailey is named in the conspiracy count alleging the distribution of less than 100 grams of heroin, three counts of distribution of methamphetamine and two counts of distribution of heroin.Kimberly Bailey is named in the conspiracy count alleging the distribution of less than 100 grams of heroin, one count of distribution of hydrocodone, one count of distribution of methamphetamine and two counts of distribution of heroin.
Pamela Bailey is named in one count of distribution of methamphetamine
Greenfield is named in one count of distribution of oxycodone and one count of distribution of morphine.
The United States is also seeking the forfeiture of a $208,500 money judgment which constitutes the proceeds of the illegal activity.
If convicted, Moore faces a mandatory 20 years to life in prison, Rose and McDonald face up to 40 years and the other defendants face up to 20 years on the conspiracy charge, up to 10 years on the morphine distribution charge, up to 20 years on the other possession and distribution charges; up to 4 years on the illegal use of a communication facility charges and up to 5 years on the interstate transportation charges.
The case will be prosecuted by Assistant U.S. Attorney Jarod J. Douglas and was investigated by the Eastern Panhandle Drug Task Force, consisting of officers from the West Virginia State Police - Bureau of Criminal Investigation, the Martinsburg Police Department, the Berkeley County Sheriff’s Department, and the Jefferson County Sheriff’s Department; and, the Potomac Highlands Drug & Violent Crime Task Force, consisting of officers from the Federal Bureau of Investigation, and the West Virginia State Police - Bureau of Criminal Investigations.Former Postmaster Sentenced for Robbery ConspiracyRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former Eagle Rock, Mo., postmaster was sentenced in federal court today for conspiring to rob or burglarize a convenience store.
Michael Joe Stubblefield, 51, of Cassville, Mo., sentenced by U.S. District Judge Gary A. Fenner to three years and eight months in federal prison without parole.
On Dec. 18, 2013, Stubblefield pleaded guilty to participating in a conspiracy to commit robbery and to transporting stolen goods.
On multiple occasions in March 2012, Stubblefield – who was then employed as the postmaster at the U.S. Postal Service office in Eagle Rock – met with confidential informants, who were cooperating with law enforcement, to coordinate a staged robbery or burglary at Uncle Roy’s Convenience Store. Several of those conversations were recorded.
Stubblefield asked one of the informants, who was an employee of the store, to provide detailed information about the location of cameras, closing operations and employee schedules, location of storage areas for valuable liquor, and other specific details regarding the operation of the store. Both confidential informants believed the purpose of Stubblefield’s inquiries were his desire to conduct a robbery when the confidential informant was on duty at the convenience store or possibly a burglary of the facility, utilizing the employee’s access information to carry out the plan after the store was closed.
When that employee was terminated from the store, Stubblefield abandoned the plan of a staged robbery and turned his attention toward a possible take-over robbery. In addition to discussing the planned robbery, Stubblefield also described how those taking part in the robbery could place cash, masks and other items related to the robbery in Postal Service packaging that Stubblefield would provide. After the robbery, co-conspirators would drop these items at the USPS drop box in front of the USPS facility in Eagle Rock. As Stubblefield was the only individual with access to this box, he would be able to retrieve the cash and other items from the drop box.
Stubblefield planned to create a diversion for law enforcement officers by having co-conspirators make a false 911 call while other co-conspirators robbed the store.
During the continuing investigation, it was determined that Stubblefield had also intercepted and stole at least two shipments of precious metals bound for THR Associates, a company that buys gold and silver items. Stubblefield referred to these thefts during his contact with the confidential informants. The gold and silver items were sold for a total of $6,480.
This case was prosecuted by Supervisory Assistant U.S. Attorney Michael Oliver and Assistant U.S. Attorney James Kelleher. It was investigated by the FBI, the United States Postal Service – Office of Inspector General, and the Barry County, Mo., Sheriff’s Department.Former Non-Profit Executives Charged with Stealing Funds Intended to Help the HomelessRead the Press Release
An information and a separate indictment, filed today, charge Erica N. Brown, 38, of Glenolden, PA, and Nathaniel E. Robinson, 62, of Philadelphia, of using funds intended to help the homeless to pay for their own personal and living expenses. The charges were announced by United States Attorney Zane David Memeger and Philadelphia Inspector General Amy Kurland.
Brown was the Chief Operating Officer at SELF, Inc., and Robinson was the Chief Program Officer. They are each charged with theft from a program receiving federal funds. According to the charges, between approximately 2005 and 2010, Brown used her corporate American Express credit card at SELF to charge approximately $198,628 of personal expenses. She reimbursed a total of $4,867 before her employment ended. Between 2006 and 2010, Robinson allegedly used his corporate American Express credit card at SELF to charge approximately $154,309 of personal expenses. Robinson reimbursed a total of $2,594.30 before his employment was terminated.
“Every organization that receives taxpayer funding must act as responsible stewards of that money. That duty is even more important in a case like this, where funds were designated to help some of Philadelphia’s residents who are most in need,” said City of Philadelphia Inspector General Amy Kurland. “This case sends a strong message that misappropriating taxpayer money will not be tolerated. I would like to also thank our federal law enforcement partners for their close cooperation in this investigation.”
According to the information, Brown charged personal travel and lodging expenses in places such as the Caribbean, Orlando, and Cape May; personal dining expenses, from groceries and purchases at Wawa’s to meals at the Four Seasons; personal automobile repairs and insurance payments; vehicle rentals, including a Hummer rental; children’s toys; clothing, including five pair of Ugg boots; a gym membership with the services of a personal trainer; and pet medical services, among many other expenses. In total, Brown charged approximately $198,628 of personal expenses to her corporate American Express card between approximately April 2005 and November 2010.
According to the indictment, Robinson used the corporate American Express card to pay for car rental charges, in Philadelphia and elsewhere; repairs to his personal car; dining charges in Philadelphia, Disney World, Orlando, and numerous other cities; lodging charges, including charges at hotels on weekends in the Philadelphia area as well as charges for lodging in the Dominican Republic and in Mobile, Alabama, where Robinson has family; travel expenses, including airfare for himself and a family member; charges at a variety of stores including DSW Shoe Warehouse, the Boot Barn, Boot City, Nike, Foot Locker, Modell’s, Maron Chocolates, World Embroidery, Disney’s Ear Port, Circuit City, Best Buy, IKEA, Sears, and Walmart; parking tickets; legal fees; and entertainment charges at places such as Morey’s Pier, Clementon Park, and Six Flags Great Adventure.
If convicted, each defendant faces a maximum possible sentence of 10 years in prison, restitution, up to three years of supervised release, and a $250,000 fine.
The case was initiated by a tip to the Philadelphia Office of the Inspector General and was also investigated by the FBI. It is being prosecuted by Assistant United States Attorney Karen L. Grigsby.
Information.pdf | Indictment.pdf
An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Former Heber Springs Gymnastics Studio Owner Pleads Guilty to Child Pornography ChargeRead the Press Release
Little Rock – Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, along with Special Agent in Charge Raymond R. Parmer, Jr., of the New Orleans Field Office for Homeland Security Investigations, announced today that Matthew Tinkle, age 27, of Heber Springs, Arkansas, entered a plea of guilty to receipt of child pornography.
“This case illustrates the necessity of keeping lines of communication open and active with your children,” stated Thyer. “We place our children in the care of others with the intent that their lives are safe and their innocence protected. The vast majority of the time, that is the case. When it is not, it is often a parent who discovers the violation. Thankfully, law enforcement was contacted and the end result is that this child predator will be serving federal time as well as state time. We take the safety and security of our children seriously. Together, we will work to ensure that those who seek to prey on our children are not given the opportunity to abuse our sons and daughters.”
“Child predators who use a position of trust in order to groom and abuse their victims are truly the worst of the worst,” said Raymond R. Parmer Jr., Special Agent in Charge of ICE Homeland Security Investigations (HSI) in New Orleans. “The victims of heartless degenerates like this defendant are exploited through their faith, trust and innocence: values we hold dear in our children that can be damaged beyond repair by the perversions these monsters subject them to. This case serves as an unfortunate reminder to parents that child predators are often hidden in plain sight, seeking access to their victims by any means available.”
The indictment charged Tinkle with two counts of receipt of child pornography and one count of possession of child pornography. Pursuant to the plea agreement, Tinkle pled guilty to Count One of the Indictment which charged receipt of child pornography. In exchange for his guilty plea, the United States dismissed the remaining counts in the Indictment. Stipulations in the plea agreement included enhancements for use of a computer, for abuse of a position of trust, and for engaging in a pattern of activity involving the sexual abuse or exploitation of a minor. Tinkle will be required to register as a sex offender.
The charges in the Indictment were based on an investigation that began on December 20, 2012, when the Heber Springs Police Department was called to a residence in Heber Springs, concerning a 13 year old minor that had been molested. The investigation revealed that Tinkle, who was 25 at the time, had molested the minor on at least two occasions.
At all times relevant to the investigation, Tinkle was the owner of Tink’s Tumblers, a gymnastics studio in Heber Springs. The minor met Tinkle after attending "open gym" at Tinkle's gymnastics studio. The minor said that she and other kids would hang out with Tinkle at the gym and, on occasion, Tinkle would also give the minor and other kids rides to and from home.
During the investigation, the minor stated that she told Tinkle on multiple occasions that she was 13 years old. The minor also revealed that Tinkle did not charge her for using the gymnastics studio. The minor then informed Investigators that she had sent nude photographs of herself to Tinkle via text message.
An iPhone seized from Tinkle revealed images of the minor that met the federal definition of child pornography. The minor also stated that Tinkle sent her photographs of himself nude.
On February 27, 2014, Tinkle pled no contest in the Circuit Court of Cleburne County, Arkansas, to Rape. In exchange for his plea, the prosecuting attorney agreed to recommend that the court sentence Tinkle to a term of incarceration for a period of 120 months.
Tinkle faces not less than five years imprisonment to not more than 20 years imprisonment, five years to life of supervised release, and up to a $250,000 fine. The actual sentence will be decided by the Court at a later date.
The investigation was conducted by the Little Rock Office of Homeland Security Investigations Heber Springs Police Department, and the Arkansas State Police Crimes Against Children Division.
This case was prosecuted by Assistant United States Attorney Kristin Bryant.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys= Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, including resources for parents, please visit www.projectsafechildhood.gov.
Former Folsom Swim Coach Sentenced to 12 Years in Prison for Attempted Enticement of A MinorRead the Press Release
SACRAMENTO, Calif. — Eric Johnston, 23, of Folsom, was sentenced today by United States District Judge Morrison C. England Jr. to 12 years in prison, to be followed by 20 years of supervised release, for attempted enticement of a minor, United States Attorney Benjamin B. Wagner announced.
According to the plea agreements filed in the case, Johnston arranged to meet what he thought to be a 13-year-old at a hotel. Johnston was arrested when he arrived at the designated meeting. Following his arrest, Johnston allowed law enforcement to assume his identity and they then sent a message to Nicholas Perry telling him that he was at the hotel. Perry arrived approximately 45 minutes later and was arrested. Both defendants have been in federal custody since their arrest.
Subsequent investigation identified a minor with whom Johnston was engaged in a sexual relationship. Johnston was sentenced in Sacramento Superior Court based on that conduct to two years in prison to be served concurrently with his federal sentence. The Sacramento case number is 12F04917.
Perry is scheduled to be sentenced by Judge England on April 3, 2014. He faces a statutory penalty of 10 years to life in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case was investigated by the Sacramento Internet Crimes Against Children (ICAC) Task Force, a federally and state-funded task force managed by the Sacramento Sheriff’s Department with agents from federal, state, and local agencies. The Sacramento ICAC investigates online child exploitation crimes, including child pornography, enticement, and sex trafficking. Assistant United States Attorney Kyle Reardon is prosecuting the case.
Former Credit Suisse Vice President Sentenced in Manhattan Federal Court in Connection with Scheme to Hide Losses in Mortgage-Backed Securities Trading BookRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that SALMAAN SIDDIQUI, a former Vice President in the Investment Banking Division of Credit Suisse Group (“Credit Suisse”), was sentenced yesterday to time served in connection with a scheme to hide more than $100 million in losses in a mortgage-backed securities trading book at Credit Suisse. On February 1, 2012, SIDDIQUI pled guilty, pursuant to a cooperation agreement, to the offense of conspiracy to falsify the books and records of the bank. The bonds at issue were composed of subprime residential mortgage-backed securities (“RMBS”) and commercial mortgage-backed securities (“CMBS”). Once discovered, the manipulation of these bond prices contributed to Credit Suisse taking a $2.65 billion write-down of its 2007 year-end financial result. Siddiqui was sentenced by U.S. District Judge Paul A. Crotty.
According to the Information to which Siddiqui pled guilty, and statements made during court proceedings:
SIDDIQUI was employed at Credit Suisse as a Vice President in the bank’s New York office. He reported to David Higgs, a Managing Director, who in turn reported to Kareem Serageldin, the Global Head of the Structured Credit Group in the Securities Department of Credit Suisse’s Investment Banking Division. The Structured Credit Group held and traded ABS (“Asset Backed Security”) cash bonds, which included RMBS and CMBS. SIDDIQUI was a trader and had, on occasion, responsibility for marking the securities in a trading book known as “ABN1.” The ABN1 book was composed primarily of several thousand individual long and short subprime-related positions, and also included other securities. The long positions consisted of, among other things, various types of cash securities, including AAA-rated and non-AAA-rated cash bonds. Until March 2008, ABN1 had a net asset value of approximately $5.35 billion, approximately $3.71 billion of which consisted of ABS cash bonds, including RMBS and CMBS positions.
Pricing of Mortgage-Backed Securities
Credit Suisse traders were required at all relevant times to price securities they held at their fair value, that is, on a “mark-to-market” basis, which was determined by reference to either the current market price of the asset or liability, or the current price for a similar asset or liability. In the absence of a liquid market, Credit Suisse traders were required to look to other indicia in order to determine the fair value of the assets on their books. During this time, the ABX Index served as a benchmark for certain securities backed by home loans. It was widely understood within Credit Suisse that traders were to consult the corresponding ABX indices when pricing RMBS bonds and related products.
The Bond Pricing Scheme
The deterioration throughout 2007 of the real estate market in the United States, including the subprime housing market, led to significant reductions in valuations of mortgage-backed securities. As mortgage delinquencies increased across the country, the value of the securities backed by these mortgages decreased and the market for them became increasingly illiquid.
By late November 2007, SIDDIQUI and his co-conspirators were aware that the market for mortgage-backed securities had declined enormously. On November 28, 2007, Serageldin told SIDDIQUI, Higgs, and another co-conspirator that “the housing market [was] going down the tubes” and that they had to “find a way to sell these bonds,” i.e., the mortgage-backed bonds in ABN1. As they recognized, “[t]hose bonds are going to start trading worse than the [ABX] Index.” SIDDIQUI and his co-conspirators did not sell the bonds because the market prices for the bonds were substantially below the inflated value at which they marked the bonds.
From August 2007 through February 2008, SIDDIQUI and his co-conspirators artificially increased the price of bonds in order to create the false appearance of profitability in the ABN1 trading book. Specifically, Serageldin directed Higgs on numerous occasions to reach specific Profit & Loss (“P&L”) targets on a daily and month-end basis. Higgs, in turn, instructed SIDDIQUI and another co-conspirator to mark the books so as to achieve the particular P&L targets specified by Serageldin, rather than to reflect the fair value of the bonds.
Credit Suisse’s ABN1 Trading Book Was Falsely Inflated as a Result of the Scheme
As a result of the scheme, there was a growing disparity between the values ascribed to the marks in the ABN1 book and the available external benchmarks, such as the ABX Index. From August 2007 through the end of that year, as ABX Index prices fell, bond prices in ABN1 that were supposed to reflect the ABX Index remained effectively stable, thereby giving the false impression to Credit Suisse senior management that the ABN1 book was profitable. On one occasion in January 2008, Serageldin expressed concern to Higgs that the overpriced bonds were at risk of being discovered: “We should mark these down because someone is going to spot this,” he said.
The February 2008 Mark-Down
On March 20, 2008, Credit Suisse issued a press release which announced completion of its internal review and stated that the fair value reduction, or write-down, of the ABS positions – which included but was not limited to the ABNl book – was approximately $2.65 billion. Approximately $540 million of this write-down was attributable to the ABN1 trading book and included ABS cash bonds for the fourth quarter 2007 that SIDDIQUI and his co-conspirators manipulated and inflated in connection with his scheme.
Judge Crotty also ordered SIDDIQUI to pay forfeiture in the amount of $150,000, and a $100 special assessment.
Mr. Bharara praised the work of the Federal Bureau of Investigation and thanked the Securities and Exchange Commission for its assistance in the investigation of this case.
Yesterday’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorney Eugene Ingoglia is in charge of the prosecution.
U.S. v. Salmaan Siddiqui Information
Former California News Helicopter Pilot Pleads Guilty to ID TheftRead the Press Release
SACRAMENTO, Calif. — John Michael Dial, 58, of Skaneateles, New York, pleaded guilty today to aggravated identity theft, United States Attorney Benjamin B. Wagner announced.
According to court documents, Dial used the names of actual persons to commit violations of federal law such as false statements to the FAA and forgery of a U.S. passport.
According to the plea agreement, from December 16, 2009, to August 4, 2010, Dial was hired as a television news helicopter pilot and operated news helicopters in the Bay Area without a pilot’s license. On one occasion, flight records from Dial’s employer show him operating a news helicopter in the Eastern District of California.
In June 2011, in order to work for an air ambulance service in Susanville, Dial provided numerous false identification documents and knowingly and willfully made material false statements about his true identity. These statements concerned matters within the jurisdiction of the FAA, and were relevant because they prevented the FAA from knowing the true identity of a pilot operating an aircraft within the United States. Had the FAA known Dial’s true identity, it would have known that Dial had previously been convicted of making false statements to the FAA regarding his medical certificate and student pilot certificate. From July 3, 2011, to November 7, 2011, Dial operated a helicopter approximately 63 times, without having a valid pilot certificate.
On March 15, 2012, Dial was hired under his real name to work as a television news helicopter pilot in Sacramento. Dial submitted a fraudulent FAA Temporary Airman Certificate under his real name, and an FAA Medical Second Class Certificate under his real name. Dial flew for the television station two times without having a valid pilot certificate.
According to the plea agreement, Dial used the identity of a former co-worker to gain employment with an air ambulance service in New York. Dial also created a fraudulent United States passport using that person’s identity.
On April 8, 2012, Dial was stopped by a Cascade, Idaho police officer and gave police a fraudulent Vermont driver’s license. He was cited for driving without a license and told to not drive his vehicle. Shortly thereafter, Dial was observed driving away from the scene. When Dial was stopped again, police learned that his true name was likely John M. Dial and that he had two outstanding felony warrants in the state of Washington.
During a Mirandized statement, Dial admitted that his name was John Michael Dial, and that he obtained the Vermont driver’s license approximately 12 years ago by providing fictitious information. He said that he did this in order to avoid apprehension for the two outstanding felony warrants. During a search of Dial’s vehicle, two wallets were located. In one wallet was information relating to John M. Dial, including a California driver’s license; in the other wallet were documents relating to the identity theft victim and second fraudulent Vermont driver’s license.
This case is the product of an investigation by the U.S. Department of Transportation, Office of Inspector General, the United States Secret Service, and the Federal Bureau of Investigation with the assistance of the Cascade, Idaho, and McCall, Idaho Police Departments. Assistant United States Attorney Kyle Reardon is prosecuting the case.
Dial is scheduled to be sentenced by United States District Judge Morrison C. England Jr. on August 14, 2014. Dial faces a mandatory statutory penalty of two years in prison and a $250,000 fine.
Former Bank Employee Pleads Guilty to Bank FraudRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that Patricia Margaret Drake (24, Jacksonville) today pleaded guilty to three counts of bank fraud. She faces a maximum penalty of 30 years in federal prison for each count. A sentencing date has not yet been set. Drake was indicted on May 7, 2014.
According to court documents, on December 5, 2013, a Wells Fargo Bank customer in Jacksonville contacted the bank in order to discuss his concerns regarding unauthorized withdrawals from his bank account. After an internal review of the matter, Wells Fargo Bank identified a series of fraudulent withdrawals from the victim’s bank account. Drake, a Wells Fargo Bank employee, was identified as the teller who had handled every fraudulent withdrawal. The investigation revealed that the victim was not present in the bank branch on the days when the withdrawals took place, including days when withdrawals were made by counter withdrawal slips.
U.S. Secret Service agents later interviewed Drake about the fraudulent bank withdrawals. Drake stated that while using the victim’s bank account number, she made multiple unauthorized withdrawals from the victim’s bank account. Drake also stated that she was not sure how many transactions were completed or the total amount of money stolen from the victim’s account. She did not think the victim would notice the withdrawals quickly because he had a larger account balance.
This case was investigated by United States Secret Service. It is being prosecuted by Assistant United States Attorney Kevin C. Frein.
Former Bank Branch Manager Sentenced for Bank Fraud, False Tax ReturnRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a former bank branch manager has been sentenced in federal court for stealing more than $316,000 from several elderly customers’ accounts and failing to report the embezzled income on her taxes.
Jennifer A. Gunter, 34, of Republic, Mo., was sentenced by U.S. District Judge Greg Kays on Wednesday, July 30, 2014, to three years and 10 months in federal prison without parole. The court also ordered Gunter to pay a total of $547,897 in restitution.
Gunter pleaded guilty on Sept. 12, 2013, to bank fraud and filing a false tax return. Gunter was the branch manager at the Guaranty Bank at 291 Highway CC in Nixa, Mo., (and earlier at the Guaranty Bank at 1341 W. Battlefield, Springfield, Mo.) from August 2005 until her termination in November 2012.
Gunter’s fraud was detected when she issued and authorized three checks on the bank account of a victim who had died the previous day. Gunter admitted that, from December 2006 until November 2012, she repeatedly accessed the bank accounts of four elderly bank customers. Gunter embezzled a total of $316,598 from those accounts.
Gunter submitted transaction tickets, withdrawal slips, and cashier’s checks on which she forged the names of the account holders in order to withdraw money from the bank accounts. She used the money for personal matters and expenses. Gunter set the customer accounts to “do not mail” status in order to keep the customers from receiving their bank statements and detecting the theft from their bank accounts.
Gunter failed to report this embezzled income on her Form 1040, U.S. Individual Income Tax Return. Gunter did not report the additional income of $45,002 for 2009, $70,481 for 2010, $107,119 for 2011, and $35,000 for 2012. Gunter’s actions resulted in an additional tax due and owing of $7,642 in 2009, $13,305 in 2010, $22,935 in 2011, and $6,258 in 2012. The total tax loss is $50,140.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the U.S. Secret Service, FDIC – Office of Inspector General, IRS-Criminal Investigation and the Christian County, Mo., Sheriff’s Department.
Former Army Contracting Official Pleads Guilty in Bribery and Kickback SchemeDefendant Admits Accepting over $490,000 in Benefits from Companies He Helped Win Favorable Treatment, Government ContractsRead the Press Release
WASHINGTON – In Seon Lim, a former contracting official for the U.S. Department of the Army, pled guilty today to federal charges stemming from a scheme in which he accepted over $490,000 worth of benefits, including cash payments and vacations, from favored contractors. In return, he helped these businesses obtain millions of dollars in federal contracts.
The guilty plea was announced by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; Thomas J. Kelly, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI); Peggy E. Gustafson, Inspector General for the Small Business Administration (SBA); Robert E. Craig, Special Agent in Charge of the Mid-Atlantic Field Office of the Defense Criminal Investigative Service (DCIS), and Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU).
Lim, 48, of Fairfax Station, Va., also known as InSeon Lim, pled guilty in the U.S. District Court for the Eastern District of Virginia to three offenses: conspiracy to commit bribery and honest services wire fraud; bribery; and attempting to interfere with and impede tax laws. The conspiracy charge carries a statutory maximum of five years in prison, the bribery charge carries up to 15 years, and the tax charge carries up to three years of incarceration. The charges also carry potential financial penalties. The plea agreement calls for Lim to pay restitution, including $250,000 to the Department of Defense and nearly $125,000 to the IRS. In addition, the plea agreement requires Lim to pay a forfeiture money judgment of $490,262. The Honorable Leonie M. Brinkema scheduled sentencing for Oct. 17, 2014.
Lim is the latest person to plead guilty in an investigation into domestic bribery, bid-rigging, and federal contracting. He has agreed to cooperate in an ongoing investigation. In addition to Lim, a total of 17 other individuals and one corporation, Nova Datacom, LLC, have pled guilty to federal charges.
“In Seon Lim, a former Army contracting officer, procured a half-million dollars in bribes in exchange for steering millions of dollars in Army contracts to corrupt businessmen,” said U.S. Attorney Machen. “Lim sold out the public trust for cash, vacations, and a Lexus. Today he joined 17 other individuals who have also pled guilty as part of this far-reaching bribery and bid-rigging scheme. The breadth of this investigation and prosecution demonstrates our unwavering commitment to holding crooked public officials and contractors accountable for crimes which threaten the very integrity of our system of government. I want to commend the outstanding work of the investigating agents and prosecutors who have worked so tirelessly on this matter.”
“Abusing one’s position for personal gain is a blatant disregard to the oath that every government employee takes, especially those whose job it is to manage the procurement needs of our government,” said Assistant Director in Charge Parlave. “Working together to protect federal funds, the FBI and our law enforcement partners will continue to ensure those who commit fraud and corruption are brought to justice.”
“There is no place in our society for corrupt public officials, and the betrayal of the trust placed in them is an egregious act. Anyone, including government contracting officials such as Mr. Lim, who promotes fraudulent schemes against the United States, will be held accountable for their blatant disregard of the duties and responsibilities of their official government position,” said Special Agent in Charge Kelly of IRS-CI. “These individuals face severe consequences, including imprisonment and substantial fines.”
“Government employees who abuse their office to enrich themselves are not only guilty of criminal wrongdoing, but tarnish the reputation of all honest public servants and lessen citizens’ faith in our system. We will continue to aggressively investigate these crimes and seek justice for the victims, the American taxpayers,” said SBA Inspector General Gustafson. “I want to thank the U.S. Attorney's Office for its dedicated leadership and professionalism throughout this investigation.”
“We are glad to see that justice has been served and Mr. Lim has been sentenced for his selfish criminal activities,” said Director Robey of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit. “Identifying and vigorously investigating contracting fraud remains a top priority for our special agents and we will continue to work seamlessly with our fellow law enforcement agencies to see that people who defraud the American taxpayer are brought to justice.”
“Today's plea demonstrates the Defense Criminal Investigative Service's ongoing commitment to combating fraud and corruption that impacts the DoD procurement process,” said Special Agent in Charge Craig. “DCIS, with our partner agencies, will continue to work tirelessly to identify and prosecute corruption of this nature."
According to a Statement of Offense signed by Lim as well as the government, Lim was a public official until April 2012. The charges involve his activities as an assistant project manager and product director with the Program Executive Office Enterprise Information Systems, a part of the Army that provides infrastructure and informational management systems.
Until June 2010, Lim resided and worked in Seoul, South Korea. While in South Korea, his primary duties were to oversee and implement communications systems upgrades for the U.S. forces there, which included approximately 10 communications centers and various other special projects at military sites throughout the country. Among other things, Lim coordinated work on a major contract, which, in turn, had numerous sub-contracts.
From June 2010 until his resignation in April 2012, Lim worked as a product director at Fort Belvoir, Va.
In the statement of offense, Lim admits that he secretly used his official position to enrich himself by soliciting and accepting gifts, payments and other things of value from government contractors – totaling more than $490,000 -- in return for favorable official action. Among other things, the statement of offense notes, Lim received payments personally and to accounts that he controlled; payments for travel, vacation, vehicles, cellphones and cellular service for himself and family members; ownership interests in two companies, and other benefits.
In exchange, Lim now admits, he provided favorable official action on subcontracts obtained and retained by the favored government contractors as requested and as opportunities arose. He also disclosed confidential bid information to the favored government contractors.
The indictment provides details about numerous contracts and payments. For example:
-Nova Datacom: According to the statement of offense, two former employees of the Northern Virginia company - Alex N. Cho, also known as Young N. Cho, and Nick Park - paid Lim $40,000 in cash in 2007. In addition, Park paid for Lim’s travel, lodging, meals and entertainment during a trip to the Philippines in 2007, and Cho paid for lodging and a $1,000 casino chip during a trip later that year to Las Vegas. Lim, meanwhile, agreed to use his official position to recommend the company for a contract valued at nearly $330,000.
-Avenciatech: According to the statement of offense, former officials of Avenciatech, Inc., a government contractor based in Annandale, Va., provided Lim with cash payments; payments for hotel stays for Lim and family members, including a trip to the Atlantis resort in the Bahamas; payments to finance the purchase of a 2010 Lexus automobile, and payments for other things of value. One of the officials, Oh Song Kwon, also known as Thomas Kwon, also assisted Lim in obtaining financing for the purchase of a home in Fairfax Station, Va., where Lim resided following his reassignment in 2010 to a position at Fort Belvoir. Lim, meanwhile, assisted the company in obtaining more than $3 million in contracts.
-UEI:Nick Park left Nova Datacom in 2007 and co-founded another government contractor, Unisource Enterprise Inc. (UEI), based in Annandale, Va. According to the statement of offense, in exchange for favorable treatment, Lim was given a secret ownership in UEI. Among other things, Lim provided Park with sensitive procurement information. He also assisted the company in obtaining a government sub-contract worth over $1.1 million.
Cho, Park, and Kwon are among those who earlier pled guilty to charges in the case.
In addition to pleading guilty to the conspiracy and bribery charges, Lim admitted that he failed to report the bribes he received on tax returns for the years 2007 through 2011. He also failed to keep records that would allow him to file accurate records for 2012 and 2013.
This investigation is being conducted by the FBI’s Washington Field Office; the Washington Field Office of the Internal Revenue Service-Criminal Investigation, the Office of the Inspector General for the Small Business Administration; the Department of Defense’s Defense Criminal Investigative Service; the Defense Contract Audit Agency, and the Army Criminal Investigation Command. It is being prosecuted by Assistant U.S. Attorneys Michael K. Atkinson and Bryan Seeley of the Fraud and Public Corruption Section and Assistant U.S. Attorney Anthony Saler of the Asset Forfeiture and Money Laundering Section, all of the U.S. Attorney’s Office for the District of Columbia, and Assistant U.S. Attorney Jack Hanly, of the U.S. Attorney’s Office for the Eastern District of Virginia.
14-175Federal Jury Convicts El Paso Man in Laser Strike IncidentRead the Press Release
El Paso resident Don Ray Dorsett, age 28, faces up to five years in federal prison after a jury convicted him of pointing a laser at an aircraft flying overhead announced United States Attorney Robert Pitman and FBI Special Agent in Charge Douglas E. Lindquist, El Paso Division.
In February 2012, President Barrack Obama signed the “FAA Modernization and Reform Act of 2012” and added a new provision that makes it a federal crime to aim a laser pointer at an aircraft. Yesterday afternoon, jurors convicted Dorsett of violating that provision (Title 18 United States Code Section 39A—Aiming a Laser Pointer at an Aircraft). Evidence presented during trial revealed that on January 4, 2014, Dorsett knowingly aimed the beam of a laser pointer at a helicopter flying overhead. The aircraft belonged to the Texas Department of Public Safety.
Sentencing is scheduled for October 2, 2014, before United States District Judge David C. Guaderrama in El Paso.
This indictment resulted from an investigation conducted by agents with the Federal Bureau of Investigation together with the Texas Department of Public Safety and the El Paso Police Department. Assistant United States Attorney Stanley Serwatka is prosecuting this case on behalf of the Government
Reported incidents of laser strikes are on the rise. Since the FBI and the Federal Aviation Administration (FAA) began tracking laser strikes in 2005, statistics reflect a more than 1,100% increase in the deliberate targeting of aircraft by people with handheld lasers. In 2013, there were a total of 3,960 laser strikes reported – an average of almost 11 incidents per day.
Earlier this year, the FBI announced the inception of the Laser Threat Awareness Campaign, a nationwide effort led by the FBI in collaboration with the Air Line Pilots Association, Int’l (ALPA) and the FAA to raise awareness of aircraft laser illumination threats. If you have information about a lasing incident, contact the El Paso FBI at 915-832-5000. If you see someone pointing a laser at an aircraft, call the nearest local law enforcement agency immediately by dialing 911. Tips can also be submitted online at https://tips.fbi.gov.
Elgin Mining Company Pays $3,221,292 to Settle Alleged Violations of the Clean Water Act at Former Mining Sites in Western KentuckyRead the Press Release
LOUISVILLE, Ky. – Elgin Mining Company of Vancouver, British Columbia, has agreed to settle non-compliance issues, associated with the Clean Water Act, for failure to perform mitigation requirements at former mining sites in Kentucky’s Muhlenberg and Crittenden counties in Kentucky. As a result, Elgin Mining and its subsidiaries have agreed to pay a $3,221,292 settlement announced David J. Hale, United States Attorney for the Western District of Kentucky and the U.S. Army Corps of Engineers.
Between 2005 and 2009, the Army Corps of Engineers Louisville Division (USACE) issued four permits or authorizations pursuant to Section 404 of the Clean Water Act, to three companies which at the time were wholly owned subsidiaries of Phoenix Coal Corporation, which is owned by Elgin Mining. Those permits were issued to Charolais Coal No. 1,LLC; C&R Coal Company, Inc. (2 permits); and Crittenden County Coal, Inc. (the “Permits”). The Permits allowed these companies to discharge dredged or fill material into waters of the United States in conjunction with their surface mining operations located in Muhlenberg and Crittenden counties. The Permits provided that the companies had to comply with certain conditions specified in the Permits. Among the conditions were requirements that the permit holders provide mitigation by restoring or establishing additional streams and wetlands to replace the streams and wetlands lost as a result of the mining activities. The United States alleged that the current permit holders, all wholly owned subsidiaries of Elgin Mining, failed to perform the required on-site mitigation which resulted in the loss of aquatic resources. Specifically, streams, wetlands and open waters were filled in with soil and mining overburden, and mitigation to replace the lost aquatic resources was never completed.
All parties agreed that Elgin Mining would pay $3,071,292.00 to the Kentucky Department of Fish and Wildlife Resources’ (KDFWR) Wetland and Stream Mitigation In-Lieu-Fee Program, which provides mitigation credits for impacts to Kentucky’s wetlands and streams associated with discharges of dredged or fill material. Elgin Mining is also required to pay a civil penalty of $150,000 to the United States.
The KDFWR Wetland and Stream Mitigation Program administers funds to provide a consistent and successful approach to fulfill compensatory mitigation obligations required under Department of the Army permits issued pursuant to Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act. A Section 404 permit from the USACE is required for activities resulting in the discharge of dredged or fill material into waters of the United States, which include streams, wetlands and open waters. The purpose of the mitigation is to compensate for the loss of aquatic functions within a defined watershed or regional area. The Kentucky Wetland and Stream Mitigation Fund is supported by sales of mitigation credits to permittees to satisfy regulatory requirements. The monies generated are used to implement projects to restore (rehabilitate or reestablish), establish, enhance, and preserve aquatic resources in Kentucky for the benefit of its citizens.
This agreement constitutes a compete and final settlement of all civil claims for injunctive relief and civil penalties against Elgin Mining under Section 404 of the Clean Water Act concerning the mitigation requirements of the Permits.
This case was prosecuted by Assistant United States Attorney Benjamin S. Schecter, Trial Attorney Paul Cirino with the U.S. Department of Justice’s Environmental Defense Section, and was investigated by the Regulatory Branch and Office of Counsel of the Army Corps of Engineers Louisville District.
Drug Trafficker Sentenced to Prison on Money Laundering Conspiracy ChargesRead the Press Release
Six Others Have Been Sentenced For Their Roles In The Conspiracy
CHARLOTTE, N.C. – On Wednesday, July 30, 2014, U.S. District Judge Max O. Cogburn, Jr. ordered Jesus Ibarra-Quen, 30, of Calif., to serve 30 months in prison for his role in a cocaine trafficking and money laundering conspiracy, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Ibarra-Quen previously pleaded guilty to conspiracy to commit money laundering for his participation in a 2012 bulk money pick-up of $430,874 in cocaine proceeds.
Harry S. Sommers, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office joins U.S. Attorney Tompkins in making today’s announcement.
Ibarra-Quen is one of seven defendants prosecuted in connection with an Organized Crime Drug Enforcement Task Force (OCDETF) investigation code-named “Biscoe Kidd.” According to court records, the investigation began in December of 2011 and was led by DEA’s High Intensity Drug Trafficking Areas Task Force. Court records indicate that the multi-jurisdictional, multi-agency operation focused on a cocaine trafficking and money laundering organization that was selling large quantities of cocaine in the Western District and transferring the drug proceeds back to Mexico. The local group was part of international money laundering organization involved in the collection, transportation, and delivery of drug proceeds in bulk cash and wire transfers to Mexico, court records show.
To date, six other defendants have charged and sentenced:
• Ruben Perez-Ruiz a/k/a Sarco, 32, of Greensboro, N.C. was sentenced on July 2, 2014 to 200 months in prison, followed by five years of supervised release. Perez-Ruiz was the local cell leader in the organization.
• Isidoro Ochoa, 33, of Jackson Springs, N.C. was sentenced on July 2, 2014 to 150 months in prison followed by five years of supervised release.
• Nancy Sanchez, 32, of Greensboro was sentenced on July 2, 2014 to 24 months in prison followed by one year of supervised release.
• Joaquin Tostado-Barraza, 40, of Ellervee, N.C. was sentenced on June 25, 2014, to 120 months in prison, followed by five years of supervised release.
• Ysrael Ayalla-Garcia, 43, of Monroe, N.C. was sentenced on June 5, 2014 to 30 months in prison.
• Macario Leal, 47, of Monroe was sentenced on April 10, 2014 to 60 months in prison, followed by four years of supervised release.According to information contained in court documents and the defendants’ sentencing hearings, from about 2011 to February 2013, Perez-Ruiz was the local cell leader of the Mexican-based organization responsible for trafficking more than 150 kilograms of cocaine from Mexico to the United States, with a total street value of over $5,000,000. According to evidence presented at court proceedings, the cocaine was driven to the Charlotte area hidden in car parts.
Court records show that Perez-Ruiz was responsible for distributing the cocaine to mid-level distributors, including Leal and Ayalla-Garcia. According to court records, Perez-Ruiz was also responsible for collecting and arranging the bulk pick-ups of the drug proceeds to be delivered back to Mexico. For example, court records show that in 2012 Sanchez participated in a bulk money pick-up of $700,000 in cocaine trafficking proceeds. Just in the month of January 2012, the drug ring coordinated the bulk money transfer of over $1,000,000 of cocaine proceeds.
The defendants will serve their sentences without the possibility of parole. The investigation was led by the DEA, assisted by the Charlotte-Mecklenburg Police Department, the North Carolina State Bureau of Investigation, the Monroe Police Department, the Union County Sheriff’s Office, the Gastonia Police Department, the Matthews Police Department, the Montgomery County Sheriff’s Office and the North Carolina Highway Patrol.
The prosecution for the government was handled by Assistant U.S. Attorney Elizabeth F. Greene of the U.S. Attorney’s Office in Charlotte.
OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.