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Thursday 31 July 2014
Drug Trafficker Convicted for Narcotics and Firearms OffensesRead the Press Release
Kelvin L. Brown, aka “Doom,” 34, of Newport News, Virginia, was convicted yesterday by a federal jury of participating in a drug conspiracy in the Newport News area, from the early 2000’s through September 2013. Brown was also convicted of distribution of cocaine, possession with intent to distribute cocaine, two counts of possession of firearms in furtherance of a drug trafficking crime and felon in possession of a firearm.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, Special Agent in Charge Royce E. Curtin of the FBI’s Norfolk Field Office and Chief Richard W. Myers of the Newport News Police made the announcement after the verdict was accepted by U.S. District Judge Robert G. Doumar of the Eastern District of Virginia.
During trial, evidence was presented of various drug transactions and firearms possession by Brown and co-conspirators to protect the drug conspiracy and its proceeds, and threats made by Brown against a cooperating witness during the course of the case. On Sept. 13, 2013, officers of the Newport News Police Department seized a firearm, a scale and cocaine in a barricaded apartment occupied by Brown.
This investigation was led by FBI and the Safe Streets Task Force, with assistance from the Newport News Police, the Virginia State Police and the Newport News Commonwealth Attorney’s Office. This case was prosecuted by Trial Attorney Joseph K. Wheatley of the Criminal Division’s Organized Crime and Gang Section and Managing Assistant U.S. Attorney Howard J. Zlotnick of the Eastern District of Virginia.Department of Justice and the International Association of Chiefs of Police Release Groundbreaking Model PolicyRead the Press Release
The Department of Justice’s Office of Justice Programs (OJP), in partnership with the International Association of Chiefs of Police (IACP), today released a seminal model policy regarding police interaction with children who are impacted when a parent is arrested and law enforcement carries out its investigative and arrest responsibilities. Reflecting the collective input of a wide range of subject-matter experts and stakeholders, and understanding that interactions between children and law enforcement create lasting impressions, the resulting model policy, Safeguarding Children of Arrested Parents , provides strategies for law enforcement to improve their procedures and positively impact the communities they serve.
“Limiting a child’s exposure to potentially traumatic events is an operationally sound and necessary law enforcement strategy,” said Deputy Attorney General James Cole. “It is also consistent with law enforcement’s duty to serve the community as a whole. It is an important part of the principles of community policing, problem solving, and conflict resolution.”
Funded through OJP’s Bureau of Justice Assistance (BJA), Safeguarding Children of Arrested Parents is an important resource for law enforcement. Law enforcement agencies will find the information contained in this document highly instructive as they seek to enhance their policies and procedures and gain understanding about the trauma children experience when law enforcement carries out its investigative and arrest responsibilities.
“Trauma associated with the arrest of a parent can have devastating and long term effects on the life of a child,” said Cecilia Muñoz, director of the White House Domestic Policy Council. “This administration is committed to advancing policies and programs that support the children of incarcerated parents and ensure that their futures remain bright with possibility. Implementation of this new protocol, first announced in 2013 during a White House Champions of Change event, will help limit these children's exposure to trauma and encourage positive interactions between members of law enforcement and the communities that they serve.”
In addition to the development of the model policy, IACP is developing a training curriculum that will be delivered through webinars and a number of training sessions at conferences around the country.
“Police officers are confronted with significant challenges and responsibilities when children are present or in need of care and supervision following the arrest of a parent,” said BJA Director Denise E. O’Donnell. “We are pleased to partner with IACP on a new model policy that provides sound, practical, and child-focused guidance on how police can join with their community partners to best meet the needs of children in these difficult circumstances.”
A copy of the report can be found by visiting the BJA website at www.bja.gov/Publications/IACP-SafeguardingChildren.pdf
Delaware Woman Sentenced to 12 Months for $350,000 Embezzlement Against Discover BankRead the Press Release
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Kimberly Y. Drummond, age 47, of Middletown, Delaware, was sentenced yesterday to 12 months and full restitution for her years-long embezzlement from Discover Financial Services, a federally insured financial institution, in New Castle, Delaware.
Ms. Drummond had worked for Discover for nearly 20 years in a check processing role. In or around November 2008, Drummond began falsifying entries in Discover’s books and records, resulting in the issuance of duplicate checks from Discover Bank. Drummond deposited these duplicate checks into her personal bank accounts, and she used the checks to pay her mortgage lender and purchase luxury consumer items for herself and her family. She continued until her fraud until it was discovered, in August 2012. During the course of her almost four year scheme, Drummond embezzled more than $350,000 from Discover.
U.S. Attorney Oberly commented, “While defense counsel argued for a probationary sentence and the government requested a guideline sentence of 27 months, the Court’s sentence sends a clear message that incarceration is appropriate in situations where individuals abuse their positions of trust within the local banking community.”
This case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Lauren Paxton.Defendants Sentenced on Theft of Firearms ChargeRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announces today that Tyree Arvell Monroe, Trayon Alphonse Caulton and Walter J. Porter of Mobile were sentenced following April 2014, guilty pleas to a charge of theft of firearms from a federally licensed firearm dealer.
On September 20, 2013, Monroe, Caulton and Porter, along with a juvenile, entered the Quik Pawn on Cottage Hill Road and committed an armed robbery in which they stole elven (11) firearms from the store’s inventory.
Theft from a federal firearms licensee is a violation of Title 18, United States Code Section 922(u). Chief United States District Court Judge William H. Steele imposed the following sentences of imprisonment: Monroe received a sentence of 70 months; Caulton received a sentence of 57 months; and, Porter received a sentence of 63 months. The sentences of imprisonment will be followed by a 3 year term of supervised release.
This case was investigated by Special Agent Wade Vittitow of the Bureau of Alcohol, Tobacco, Firearms & Explosives, following a referral of the case for federal prosecution by the Mobile Police Department.
Defendant Who Sold Homes He Did Not Own Gets 70 Month Prison TermRead the Press Release
PHILADELPHIA – Eric Tubbs, 54, of Philadelphia, was sentenced yesterday to 70 months in prison for fraudulently selling properties he did not own. Tubbs found vacant properties, created phony deeds which falsely transferred the properties from the legitimate owners to individuals recruited by him, and sold properties owned by estates by having others pose as the executors. Tubbs then sold the properties to unsuspecting buyers. He pleaded guilty on April 22, 2014 to seven counts that included wire and mail fraud, bank fraud, aggravated identity theft, and transactional money laundering.
In the case of the property at 1122 Carpenter Street, Tubbs recruited another person, codefendant Douglas Fields, to sign a forged deed which transferred the property to Fields for $1 as the “son” of the owners. Tubbs subsequently sold the property on March 18, 2010, for $140,000, and obtained approximately $120,000 of the proceeds from the settlement.
In the case of 2047 St. Albans Street and 2022 Titan Street, two other vacant properties, Tubbs had other individuals pose as the executors for the estates that owned the properties. He sold the St. Albans Street property on June 16, 2009 for $130,000, and received $100,000 of the proceeds. On October 28, 2011, he sold the Titan Street property for $22,000. Because there were several mortgages and liens on the property, he received only $877 as a result of the transaction. Tubbs altered the check, however, to change the amount payable from $877 to $8,077 and deposited it into an account he opened using someone else’s identity.
In addition to the prison term, U.S. District Court Judge Quinones ordered restitution in the amount of $271,146, a forfeiture money judgment of $227,857, and three years of supervised release.
The case was investigated by the Federal Bureau of Investigation with assistance from the Philadelphia Office of the Inspector General. It was prosecuted by Assistant United States Attorney Frank Costello.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Defendant Sentenced for Prohibited Possession of FirearmRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announces today that Shawn Ephisian Taylor of Mobile was recently sentenced following an April 2014 guilty plea to a charge of being an illegal drug user in possession of a firearm.
Possession of a firearm by an illegal drug user is a violation of Title 18, United States Code Section 922(g)(3). Taking into account the Defendant’s criminal history and the circumstances of the offense, Chief United States District Court Judge William H. Steele imposed a sentence of 70 months. The sentence of imprisonment will be followed by a three year term of supervised release.
This case was investigated by Sgt. Louis Screws of the Mobile Police Department and is assigned as a Task Force Officer with the Bureau of Alcohol, Tobacco, Firearms & Explosives.
Defendant Extradited to Face Charges in Border Patrol Agent Brian Terry Murder CaseRead the Press Release
Ivan Soto-Barraza, who is charged with the first degree murder of United States Border Patrol Agent Brian Terry, was extradited to the United States from Mexico today, announced Attorney General Eric Holder and U.S. Attorney Laura E. Duffy of the Southern District of California.
Agent Terry was fatally shot on Dec. 14, 2010, when he and other Border Patrol agents encountered Soto-Barraza and others in a rural area north of Nogales, Arizona. Of six defendants charged so far, two have pleaded guilty and two are awaiting trial.
“This marks another step forward in our aggressive pursuit of those responsible for the murder of Agent Brian Terry, who made the ultimate sacrifice while serving his country,” said Attorney General Holder. "We will never stop seeking justice against those who do harm to our best and bravest."
“This extradition is another major development in the pursuit of justice for Agent Terry and his family,” said U.S. Attorney Laura Duffy. “As we continue to make significant progress in this case, we are constantly motivated by the memory of Agent Terry and his sacrifice for our country.”
Soto-Barraza is scheduled to be arraigned in federal district court in Tucson, Arizona, on August 1, 2014. The indictment charges Soto-Barraza and others with first degree murder, second degree murder, conspiracy to interfere with commerce by robbery, attempted interference with commerce by robbery, use and carrying a firearm during a crime of violence and assault on a federal officer. In addition to the murder of Agent Terry, the indictment alleges that the defendants assaulted Border Patrol Agents William Castano, Gabriel Fragoza and Timothy Keller, who were with Agent Terry during the firefight.
On July 20, 2012, in order to seek the public’s assistance, Department of Justice officials announced a reward of up to $1 million for information leading to the arrest of four fugitives: Jesus Rosario Favela-Astorga, Heraclio Osorio-Arellanes, Lionel Portillo-Meza and Soto-Barraza. Portillo-Meza was captured in Mexico in September 2012 and extradited to the U.S. from Mexico on June 17, 2014. Soto-Barraza was captured in Mexico in September 2013. Favela-Astorga and Osorio-Arellanes are fugitives.
A fifth defendant, Manuel Osorio-Arellanes, pleaded guilty to first degree murder and was sentenced to 30 years in prison in February 2014. A sixth defendant, Rito Osorio-Arellanes, who was in custody at the time of Agent Terry’s murder, pleaded guilty to conspiracy to interfere with commerce by robbery and was sentenced to eight years in prison in January 2013.
This case is being prosecuted in federal court in Tucson by attorneys from the Southern District of California, Special Attorneys Todd W. Robinson, David D. Leshner, and Fred Sheppard. The U.S. Attorney’s Office for the District of Arizona is recused. This case is being investigated by the FBI. The Justice Department’s Office of International Affairs provided assistance with the extradition.
The public is reminded that an indictment is a formal charging document and defendants are presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.
Defendant Extradited to Face Charges in Border Patrol Agent Brian Terry Murder CaseRead the Press Release
SAN DIEGO, CA – Ivan Soto-Barraza, who is charged with the first degree murder of United States Border Patrol Agent Brian Terry, was extradited to the United States from Mexico today, announced Attorney General Eric Holder and U.S. Attorney Laura E. Duffy of the Southern District of California.
Agent Terry was fatally shot on Dec. 14, 2010, when he and other Border Patrol agents encountered Soto-Barraza and others in a rural area north of Nogales, Arizona. Of six defendants charged so far, two have pleaded guilty and two are awaiting trial.
“This marks another step forward in our aggressive pursuit of those responsible for the murder of Agent Brian Terry, who made the ultimate sacrifice while serving his country,” said Attorney General Holder. “We will never stop seeking justice against those who do harm to our best and bravest.”
“This extradition is another major development in the pursuit of justice for Agent Terry and his family,” said U.S. Attorney Laura Duffy. “As we continue to make significant progress in this case, we are constantly motivated by the memory of Agent Terry and his sacrifice for our country.”
Soto-Barraza is scheduled to be arraigned in federal district court in Tucson, Arizona, on August 1, 2014. The indictment charges Soto-Barraza and others with first degree murder, second degree murder, conspiracy to interfere with commerce by robbery, attempted interference with commerce by robbery, use and carrying a firearm during a crime of violence and assault on a federal officer. In addition to the murder of Agent Terry, the indictment alleges that the defendants assaulted Border Patrol Agents William Castano, Gabriel Fragoza, and Timothy Keller, who were with Agent Terry during the firefight.
On July 20, 2012, in order to seek the public’s assistance, Department of Justice officials announced a reward of up to $1 million for information leading to the arrest of four fugitives: Jesus Rosario Favela-Astorga, Heraclio Osorio-Arellanes, Lionel Portillo-Meza and Soto-Barraza. Portillo-Meza was captured in Mexico in September 2012 and extradited to the U.S. on June 17, 2014. Soto-Barraza was captured in Mexico in September 2013. Favela-Astorga and Osorio-Arellanes are fugitives.
A fifth defendant, Manuel Osorio-Arellanes, pleaded guilty to first degree murder and was sentenced to 30 years in prison in February 2014. A sixth defendant, Rito Osorio-Arellanes, who was in custody at the time of Agent Terry’s murder, pleaded guilty to conspiracy to interfere with commerce by robbery and was sentenced to eight years in prison in January 2013.
This case is being prosecuted in federal court in Tucson by attorneys from the Southern District of California, Special Attorneys Todd W. Robinson, David D. Leshner, and Fred Sheppard. The U.S. Attorney’s Office for the District of Arizona is recused. This case is being investigated by the FBI. The Justice Department’s Office of International Affairs provided assistance with the extradition.
The public is reminded that an indictment is a formal charging document and defendants are presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.
###Coos Bay Man Pleads Guilty in Federal Court to Being an Armed Career CriminalRead the Press Release
EUGENE, Ore. – Christopher Michael Morgan, 41, a resident of Coos County, Oregon, appeared before United States District Court Chief Judge Ann Aiken on July 29, 2014 and pled guilty to being an armed career criminal. Morgan, a felon, admitted possessing a loaded .45 caliber pistol in a woman’s restroom at Mingus Park in Coos Bay, Oregon, at 1:30 am on June 18, 2013.
After accepting the guilty plea, Chief Judge Aiken scheduled Morgan’s sentencing hearing for November 12, 2014. Morgan faces a 15-year mandatory minimum prison term and five years of post-prison supervision. Morgan qualifies to be sentenced as an armed career criminal because he possessed the pistol after being previously convicted of four residential burglaries and a felony assault. Morgan has been convicted six times for possessing methamphetamine and once for being a felon in possession of a firearm.
According to court documents and statements made in court, Morgan and a woman were inside the women’s restroom at the park. A Coos Bay police officer confronted Morgan outside the bathroom and attempted to arrest him for violating his parole. Morgan fought the officer and during the struggle held the pistol, then tossed it away. Morgan was subdued and methamphetamine was located in his pocket. He was charged in state court with firearm and drug offenses, and resisting arrest. Coos County’s District Attorney Paul Frasier requested the assistance of the United States Attorney’s office in prosecuting Morgan. Morgan’s guilty plea and admissions were part of a global resolution of his federal and state charges.
This case was investigated by the U.S. Bureau of Alcohol, Tobacco and Firearms, and the Coos Bay Police Department. Assistant U.S. Attorney Frank R. Papagni, Jr., with the assistance of Coos County Deputy District Attorney Steven Petty, prosecuted the case.
Collin County Man Convicted for Failing to Register as A Sex OffenderRead the Press Release
Department of Justice
Office of Public AffairsPLANO, Texas – A 77-year-old McKinney, Texas man was found guilty for failing to register as a sex offender in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
A jury found Larry Wayne Thompson guilty on July 30, 2014, for failure to register as a sex offender before U.S. District Judge Richard Schell. Thompson faces up to two years in federal prison at sentencing. A sentencing date has not been scheduled.According to information presented in court, Thompson was convicted of possession of child pornography in U.S. District Court for the Northern District of Oklahoma in 2000. As a result of this conviction, Thompson is required to register under the Sex Offender Registration and Notification Act. In 2011, Thompson moved to Corpus Christi, Texas, and then in 2013, he moved from Corpus Christi to McKinney, Texas. Thompson failed to register and update his registration to reflect his move to McKinney, Texas. Thompson was previously convicted for failing to register as a sex offender in the U.S. District Court for the Southern District of Texas in Corpus Christi in 2011.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the United States Marshals Service and prosecuted by Assistant U.S. Attorneys William R. Tatum and Stevan A. Buys.Cartersville Man Sentenced in Sextortion CaseRead the Press Release
ROME, Ga., - Joshua James Geer has been sentenced to 30 years in federal prison for child pornography production, coercion of minors to engage in unlawful sex acts, and possession of child pornography.
“This defendant coerced children into engaging in sexual activity and forced them to send him photos of that activity,” said United States Attorney Sally Quillian Yates. “He is the type of predatory monster parents fear when their children are on the internet. He deserves every day of the sentence the court imposed.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “Having this disturbing child predator off of our streets is not only a tremendous victory for those investigators and prosecutors working this matter, but for the victims involved and for those who would have become victims had Mr. Geer been allowed to continue with his cyber based criminal exploitation of minors. The FBI will continue to provide significant investigative resources toward the investigation and apprehension of individuals such as Mr. Geer who choose to exploit and prey on children.”
According to United States Attorney Yates, the charges, and other information presented in court: on or about February 18, 2013, Geer contacted N.B., a 17-year-old boy living in Illinois, through an on-line communication service. Initially, Geer befriended the boy during their online chats. But then Geer coerced N.B. to use a cellular telephone to take photographs of N.B. and his 11-year-old sister engaged in graphic sex acts. Geer threatened to expose N.B. to others if the boy refused to send the images to Geer; so N.B. transmitted the images to Geer using an iPod computer device. Investigators identified Geer through his chats with N.B., which revealed Geer’s telephone number.
Several months later, on June 20, 2013, Pinellas County, Fla., Sheriff’s Office Detective Jennifer Zinge (“Det. Zinge”) received a complaint made by V.O., a 16 year old girl. V.O. told Det. Zinge that on June 19, 2013, she began chatting on line with a person who initially identified himself as a girl using the online profile “TNT.” Federal agents subsequently identified “TNT” as Geer.
During their online exchanges, Geer sent a photograph of a child who appeared to be a girl of about 4 years old to V.O. The photograph depicted the child nude above her waist. V.O. then attempted to end her online chats with Geer. But when V.O. tried to terminate her contact with Geer, he sent a text message to V.O. in which he claimed that V.O. was in possession of child pornography. In his message, Geer stated that if V.O. did not comply with his demands that he would report her to the police. Geer forced V.O. to send him nude photographs of her using her cellular telephone. V.O. did so. The photographs depict V.O.’s pubic area and V.O. posed in various lascivious positions under Geer’s written instructions.
Investigators were able to identify Geer as the person corresponding with V.O. using an internet account, as well as his cellular telephone number. FBI agents in Atlanta, Ga., learned that Geer had used the same telephone number to contact and demand pornographic images from N.B., the boy in Illinois.
On June 20, 2013, FBI agents obtained an arrest warrant for Geer, as well as a warrant to search his home in Cartersville, Ga. Federal agents seized an iPhone from Geer at the time of his arrest. An examination of the device revealed that it contained more than 300 images of child pornography, including graphic images depicting infants. Additionally, federal agents discovered more instances of Geer coercing minors to produce child pornography that he forced the victims to send him via the Internet, and that he distributed to others online. During a search of Geer’s closet, federal agents also found a handwritten note detailing how to commit a rape, along with various items bearing the description, “kidnapping kit.”
Geer, 22, of Cartersville, Ga., was sentenced to 30 years in federal prison, to be followed by supervised release for life. He must also register as a sex offender as a condition of his supervised release. Geer pleaded guilty on May 22, 2014.
This case was investigated by the Federal Bureau of Investigations.
Assistant United States Attorney Richard S. Moultrie, Jr. prosecuted the case.
This case is a part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Cannonball Man Pleads Guilty to Assault with a Dangerous WeaponRead the Press Release
BISMARCK - U. S. Attorney Timothy Q. Purdon announced that on July 31, 2014, Dustin Lester, 40, Cannonball, N.D., pleaded guilty before U. S. District Judge Daniel L. Hovland to a charge of assault with a dangerous weapon.
On Dec. 27, 2013, Lester assaulted a female victim by kicking her with the shoes he was wearing, causing bodily injury.
Sentencing for Lester has been scheduled for Oct. 31, 2014, in U.S. District Court in Bismarck, N.D., at 9:00 a.m.
The charge of assault with a dangerous weapon carries a statutory maximum of 10 years in federal prison and a $250,000 fine.
The case was investigated by Bureau of Indian Affairs – Standing Rock Agency.
Assistant U. S. Attorney Gary Delorme is prosecuting the case.
CEO of Steel Contractor on World Trade Center Site Charged in Manhattan Federal Court Wth Fraud in Connection with Program Designed to Encourage Participation of Minority and Women-Owned BusinessesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Michael Nestor, Acting Inspector General of the Port Authority of New York and New Jersey (the “Port Authority”), Shantelle P. Kitchen, the Acting Special Agent-in-Charge of the New York Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), Douglas Shoemaker, Regional Special Agent-in-Charge of the U.S. Department of Transportation’s Office of the Inspector General (“DOT-OIG”), and Cheryl Garcia, the Special Agent-in-Charge for the New York Regional Office of the U.S. Department of Labor’s Office of the Inspector General (“DOL-OIG”), Office of Labor Racketeering and Fraud Investigations announced that LARRY DAVIS, President and Chief Executive Officer of DCM Erectors, Inc. (“DCM”) was charged today with engaging in a fraudulent scheme to violate the Port Authority’s Minority and Women-Owned Business Enterprise Program (“M/WBE Program”), which is designed to increase the role of minority and women-owned businesses working on its projects. In addition, the principals of the MBE and WBE previously pled guilty before U.S. District Judge Robert P. Patterson for their roles in the fraudulent scheme and agreed to forfeit their crime proceeds. DAVIS surrendered today to a Complaint and was presented this afternoon in Manhattan federal court before U.S. Magistrate Judge Freeman.
Manhattan U.S. Attorney Preet Bharara said: “Larry Davis and his company had the special privilege of working on the World Trade Center Project, which is not only a major project, but is also one that holds a special place in New Yorkers’ hearts. Davis gained contracts for his company worth almost $1 billion for construction work at the World Trade Center. These contracts came with the responsibility to increase the role of minority and women-owned businesses in the project, which are important to both the community and the economy. Instead, as alleged in the Complaint, Davis committed fraud by claiming that work was going to minority and women-owned businesses when it was not. Davis allegedly tried to cheat the system and deserving businesses out of work.”
Port Authority Acting Inspector General Michael Nestor said: “The Port Authority made a commitment to prevent fraud from occurring in the rebuilding of the WTC site and implemented a robust Fraud Prevention Program, including the use of integrity monitors. Unfortunately, the defendant, despite holding nearly $1 Billion in WTC contracts, seized upon the opportunity to engage in fraudulent activity undermining the role of minority and women-owned businesses at the WTC site. His activity was detected by the Inspector General’s integrity monitor on the 1 WTC project, and then working with the US Attorney’s Office and our law enforcement partners, was thoroughly investigated making today’s announcement possible. I want to thank the Port Authority’s World Trade Center Construction Department for their assistance. The Port Authority OIG will continue to work diligently to prevent and detect fraud at the WTC site and on other Port Authority projects.”
IRS-CI Acting Special Agent-in-Charge Shantelle P. Kitchen said: “This investigation uncovered schemes that, for years, exploited a program designed to encourage minority and women-owned business to participate in Port Authority projects. IRS-Criminal Investigation is committed to using its financial investigative expertise to unravel complex frauds. We are proud to be part of the collective law enforcement effort on this investigation; it demonstrates the government’s resolve to protect public funds and its commitment to ensure the public’s trust.”
DOT-OIG Regional Special Agent-in-Charge Douglas Shoemaker said: “Fraud harms the integrity of Port Authority’s M/WBE program and hurts law-abiding, small business contractors trying to compete on a level playing field. Working with our Federal, State, and local law enforcement and prosecutorial partners, we will continue our vigorous efforts to pursue those who violate the law, and expose and shut down fraud schemes that illegally take advantage of minority and women-owned business enterprises.”
According to the Complaint, Informations, other documents filed in the case, and statements made today in Manhattan federal court:
DCM specializes in steel erection for large construction projects. Since at least March 1999, DAVIS has owned DCM and served as its President and Chief Executive Officer. In 2007, DCM was awarded an approximately $256 million trade contract for work to be performed on One World Trade Center and in 2009, DCM was awarded an approximately $330 million trade contract for work to be performed on the World Trade Center Port Authority Trans-Hudson (PATH) Transportation Hub (collectively, the “World Trade Center Project”).
The work to be performed by DCM for the World Trade Center Project included, but was not limited to, drafting and engineering, surveying, structural steel supply and erection, and supply and installation of metal decking. As a result of change orders and changes in the scope of work, among other things, DCM’s contracts for the World Trade Center Project increased during the course of the Project to almost $1 billion.
The Port Authority’s M/WBE Program is designed to ensure that M/WBEs receive work on its projects and applies to the World Trade Center Project. Pursuant to the M/WBE Program, all contractors, including trade contractors such as DCM, are obligated to make good faith efforts to enter into subcontracts with M/WBEs, the total value of which must equal at least 17 percent of the overall contract amount (12 percent for MBEs and five percent for WBEs).
In order to satisfy the M/WBE Program, DAVIS engaged in a fraudulent scheme in which he caused DCM to claim that certain work was performed by a minority-owned business, Solera/DCM Joint Venture LLC (ASolera/DCM@), and a woman-owned business, GLS Enterprises, Inc. (“GLS”), when, in truth and in fact, DCM itself performed such work or arranged for such work to be performed by other non-M/WBE subcontractors and GLS was not an independent WBE.
Solera/DCM is a joint venture between DCM and a minority owned business, Solera Construction, Inc. (“Solera”), which is owned by JOHNNY GARCIA (“GARCIA”), a qualified minority business owner who previously pled guilty for his role in the fraudulent scheme. Solera/DCM is owned 60 percent by Solera and 40 percent by DCM. DCM and DAVIS established Solera/DCM as a joint venture majority owned by Solera with the express purpose of using it to satisfy MBE requirements on public construction projects.
From 2009 through in or about August 2012, DAVIS caused DCM to misrepresent to the Port Authority that Solera/DCM performed certain work on the World Trade Center Project when, in truth and in fact, the work, including metal decking and steel procurement, was performed by a non-minority contractor or by DCM itself, respectively. To facilitate the fraud, DAVIS directed Solera/DCM to place laborers who worked for a non-minority contractor performing metal decking on Solera/DCM’s payroll and then invoice DCM for such laborers= time and also created certain invoices and directed GARCIA to sign them to make it appear as if Solera/DCM procured steel, when, in truth and in fact, DCM did so. DCM claimed MBE credit for work purportedly performed by Solera/DCM on the World Trade Center Project in the total amount of approximately $70 million. As part of the fraudulent scheme, DCM paid GARCIA a total of at least $2 million ($150,000 in annual salary and additional monthly payments).
The owner of GLS is GALE D’ALOIA (“D’ALOIA”), who served as GLS’s Chairwoman and Chief Executive Officer and previously pled guilty for her role in the fraudulent scheme. Even though GLS was nominally independent from DCM and DAVIS, GLS=s only client and source of revenue was DCM (and its affiliates) and D’ALOIA performed the same payroll management duties under the name GLS that she previously had performed in her role as an employee of DCM. D’ALOIA also reported to DAVIS whose approval was required for any major expenditures and which were paid for by DCM. Accordingly, under the WBE program, GLS was not a bona fide independent business because its viability depends on its relationship with another firm or firms, namely DCM.
From 2009 through in or about September 2012, DAVIS caused DCM to fraudulently claim WBE credit for GLS’s payroll management work and also misrepresented to the Port Authority that GLS performed surveying work on the World Trade Center Project when, in truth and in fact, the surveying work was performed by DCM itself. To facilitate the fraud, DAVIS directed GLS to place unionized surveyors who had been on DCM=s payroll on its payroll and then to certify such payroll and invoiced DCM for the workers even though DCM continued to actually supervise them. As compensation for engaging in the fraudulent scheme, DAVIS paid GLS 10 percent of each week’s total payroll for the surveyors, which totaled approximately $575,000.
DAVIS, 63, of Mississauga, Ontario, Canada, is charged in two counts with wire fraud and a conspiracy to commit wire fraud. He faces a maximum sentencing on each charge of 20 years in prison, three years of supervised release, and a $100 special assessment.
GARCIA, 48, of Ossining, New York, is charged in two counts with wire fraud and a conspiracy to commit wire fraud. He faces a maximum sentence on each charge of 20 years in prison, three years of supervised release, and a $100 special assessment. As part of GARCIA’s plea agreement, he has agreed to forfeit $669,000. A sentencing hearing date for GARCIA has not yet been scheduled.
D’ALOIA, 66, of Charleston, South Carolina, is charged in two counts with wire fraud and a conspiracy to commit wire fraud. She faces a maximum sentence on each charge of 20 years in prison, three years of supervised release, and a $100 special assessment. As part of D’ALOIA’s plea agreement, she has agreed to forfeit $575,000. A sentencing hearing date for D’ALOIA has not yet been scheduled.
The charges contained in the Complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the investigative work of the Port Authority’s Office of Inspector General, IRS-CI, DOT-OIG, and DOL-OIG.
This case is being prosecuted by the Office’s Public Corruption Unit. Assistant United States Attorney Carrie H. Cohen is in charge of the prosecutions.
U.S. v. Larry Davis Complaint
Berkeley Psychologist Sentenced to More Than Two Years in Prison for Tax Evasion and Theft of Government PropertyRead the Press Release
OAKLAND – Hugh Leslie Baras, was sentenced today to thirty months in prison and ordered to pay restitution of $593,513 to the Internal Revenue Service and the Social Security Administration for tax evasion and theft of government property, United States Attorney Melinda Haag, and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez announced.
On Feb. 3, 2014, Baras, 70, a Berkeley psychologist, was convicted by a jury of five counts of tax evasion, in violation of Title 26, U.S.C. § 7201, and one count of theft of government property, in violation of Title 18, U.S.C. § 641. The evidence presented during the seven-day trial, showed that Baras, who formerly worked as a psychologist at Kaiser Permanente, and as an Adjunct Clinical Assistant Professor in the Department of Psychiatry and Behavioral Sciences at Stanford University School of Medicine, started a solo, private practice in Palo Alto, Calif., in late 2002. At his private practice, Baras provided clinical psychotherapy services to clients. During the years 2005 through 2009, Baras’s private practice generated over $1,000,000 of income. Although he filed timely federal income tax returns for each of these years, Baras omitted all of the income produced by his private practice from those returns. In addition, although he was self-employed and earning substantial income, Baras continued to collect Disability Insurance Benefits from the Social Security Administration. Between 2006 and 2009, Baras received Disability Insurance Benefits payments to which he was not entitled totaling $80,615. Also during this period, Baras sold nearly $600,000 worth of gold and silver coins to a coin-broker in Oakland. These sales created capital gains which Baras also failed to report on his tax returns.
The sentence was handed down by the Honorable Yvonne Gonzalez Rogers, United States District Court Judge, in Oakland. Judge Gonzalez Rogers also sentenced Baras to a three-year period of supervised release, ordered him to forfeit $80,615, and to pay a fine of $7,500. Baras was ordered to self-surrender for service of his sentence on Sept. 29, 2014.
Michael G. Pitman is the Assistant United States Attorney prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation, and the United States Social Security Administration, Office of Inspector General.
(Baras superseding indictment )
Bedford County Man Gets Prison Time for Helping Transport Stolen Guns from PA to MarylandRead the Press Release
JOHNSTOWN, Pa. - A resident of Saxton, Pa., has been sentenced in federal court to 35 months in prison, three years supervised release and ordered to pay $6,399 in restitution on his conviction of interstate transportation of stolen firearms, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Joshua M. Faircloth, 27.
According to information presented to the court, on Jan. 28, 2013, Faircloth aided in transporting 31 firearms stolen from Saxton Outdoor Supply, Inc., from Pennsylvania to Maryland.
Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Pennsylvania State Police-Bedford Barracks for the investigation leading to the successful prosecution of Faircloth.
According to Mr. Hickton, Faircloth was prosecuted as part of Project Safe Neighborhoods, a collaborative effort by federal, state, and local law enforcement agencies, prosecutors, and communities to prevent, deter, and prosecute gun crime.
Bankrupt Developer of Algonquin Project Sentenced to 15 Months in Federal Prison for $1 Million Bank FraudRead the Press Release
CHICAGO — The former owner of an area home building company that went bankrupt in 2008, leaving unfinished a commercial and residential property development in northwest suburban Algonquin, was sentenced today to 15 months in federal prison for bank fraud related to the collapse of the project, known as Riverside Square.
The defendant, BRUCE HAWKINS, 64, of Denver and formerly of Algonquin, who owned Aspen Homebuilders, Inc., was also ordered to pay $1,017,183 in restitution by U.S. District Judge Robert M. Dow, Jr. Hawkins, who pleaded guilty in January, was ordered to surrender to begin serving his sentence on Oct. 14.
“It is important that developers and general contractors know that if they commit fraud in the financing of their projects, their conduct will be met with serious consequences,” Assistant U.S. Attorney Sunil Harjani argued in a government sentencing memo. “It is important that developers know they will go to jail if they lie in bank documents in order to steal funds from financial institutions.”
Hawkins admitted defrauding Amcore Bank of more than $1 million from the proceeds of $13.5 million line of credit to finance the project. In September 2006, acting through Riverside Square, LLC, Hawkins obtained the bank loan to finance the construction of Riverside Square, located at 1100 West Algonquin Rd. Between January 2007 and June 2008, Hawkins fraudulently obtained slightly more than $1 million in loan proceeds from the bank by submitting false contractor statements, waiver of liens, and contract invoices that requested funds purportedly for village permits, construction work, and consulting work for the development.
To obtain funds from the bank loan, Hawkins submitted false contractor statements to the bank in which he verified that subcontractors and his company were owed funds for work performed on Riverside Square. Hawkins submitted, and caused the submission of, false lien waivers and invoices for work performed to the title company, which was designated by Amcore Bank to keep and disburse funds for the project. After these documents were submitted, the bank authorized the title company to disburse funds to Hawkins and the subcontractors.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and John Lucas, Special Agent-in-Charge of the Federal Deposit Insurance Corporation Office of Inspector General in Chicago.
Auburn Man Indicted for Sex Trafficking Women in Western Washington and OregonRead the Press Release
A 33-year-old Auburn, Washington man was indicted today by a federal grand jury in Seattle on four federal counts involving the sex trafficking of two female victims, announced U.S. Attorney Jenny A. Durkan. JOHN HENRY CYPRIAN, JR., aka “Lucky,” was arrested and booked into state custody in June 2014. The arrest followed a Bellevue Police Department investigation into CYPRIAN’s sex trafficking of two different women, both in Western Washington and in Portland, Oregon. CYPRIAN was indicted on two counts of sex trafficking through force, fraud, and coercion and two counts of Transportation for the Purpose of Prostitution Through Coercion and Enticement. CYPRIAN will be transferred to federal custody with arraignment on the indictment scheduled in about two weeks.
CYPRIAN was arrested at a condominium he had rented in Auburn, but the investigation revealed that between April 2013 and his arrest in June 2014, he had rented hotel rooms throughout the greater Seattle area as part of his prostitution scheme. According to records filed in the case, CYPRIAN forced the women to work as prostitutes at hotels in SeaTac, Bellevue, Mountlake Terrace, and Portland. CYPRIAN posted ads on Backpage.com and other adult sexual services websites advertising the women. CYPRIAN allegedly controlled the women with beatings and threats, and forced them to give him all the money they earned as prostitutes.
“Traffickers prey upon vulnerable women – convincing them that they have nowhere to go and even less value. It takes courage to break the bonds an abusive pimp uses to keep his victims under control,” said U.S. Attorney Jenny A. Durkan. “We will continue to work closely with state prosecutors to ensure that violent sex traffickers cannot prey on the most vulnerable in our communities – whether they are juveniles or adults.”
“This case is yet another example of the Bellevue Police Department working with Federal prosecutors to address the issue of human sex trafficking,” said Bellevue Police Chief Jim Montgomery. “We will continue to work hand in hand with our partners, both at the federal level as well as locally, to address this important issue.”
Sex trafficking through force, fraud, or coercion is punishable by a mandatory minimum term of 15 years and up to life in prison and at least five years and up to life of supervised release. Transportation for the Purpose of Prostitution through Coercion and Enticement is punishable by up to twenty years in prison and up to three years of supervised release.
The charges contained in the Indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the Bellevue Police Department with assistance from the King County Prosecuting Attorney's Office, the Mountlake Terrace Police Department and the FBI. The case is being prosecuted by Assistant United States Attorney Kate Crisham.
Attorney General Holder Announces Plans for Federal Law Enforcement Personnel to Begin Carrying NaloxoneRead the Press Release
In a new memorandum released Friday, Attorney General Eric Holder urged federal law enforcement agencies to identify, train and equip personnel who may interact with a victim of a heroin overdose with the drug naloxone. This latest step by the Attorney General will pave the way for certain federal agents -- such as emergency medical personnel -- to begin carrying the potentially life-saving drug known for effectively restoring breathing to a victim in the midst of a heroin or opioid overdose.
According to the most recent study, 110 Americans on average die from drug overdoses every day, outnumbering even deaths from gunshot wounds or motor vehicle crashes. More than half of these drug overdose deaths involve opioids such as heroin and prescription pain relievers. Between 2006 and 2010, heroin overdose deaths dramatically increased by 45 percent.
“The shocking increase in overdose deaths illustrates that addiction to heroin and other opioids, including some prescription painkillers, represents nothing less than a public health crisis,” said Attorney General Holder. “I am confident that expanding the availability of naloxone has the potential to save the lives, families and futures of countless people across the nation.”
The Justice Department wants federal law enforcement agencies, as well as their state and local partners, to review their policies and procedures to determine whether personnel in those agencies should be equipped and trained to recognize and respond to opioid overdose by various methods, including the use of naloxone. Seventeen states and the District of Columbia have amended their laws to increase access to naloxone, resulting in over 10,000 overdose reversals since 2001.
“ The heroin and prescription painkiller epidemic knows no boundaries--anyone can be affected, and we have already lost far too many lives,” said Acting Director of the Office of National Drug Control Policy Michael Botticelli. “We have moved aggressively against this epidemic and we know that the actions of law enforcement officers at the scene of an overdose can mean the difference between life and death. Attorney General Holder's leadership in this arena will help prevent future overdose deaths and we look forward to working closely with his office and other partners to get naloxone to law enforcement professionals across the nation. ”
As the department continues to address escalating and rapidly-evolving challenges that lead to opioid abuse and drug trafficking, the Attorney General cautioned members of Congress to protect critical enforcement tools like Immediate Suspension Orders (ISOs). A recently passed House bill would “severely undermine” a critical component of our efforts to prevent communities and families from falling prey to dangerous drugs.
The Attorney General announced the new memorandum at a day-long conference on law enforcement and naloxone convened by the Justice Department’s Bureau of Justice Assistance in partnership with the Drug Enforcement Administration, the Office of Community Oriented Policing Services and the Office of National Drug Control Policy. Today’s announcement follows up on the Attorney General’s call to action in March, when he urged local law enforcement authorities, who are often the first to respond to possible overdoses, to routinely carry naloxone.
The Attorney General’s full remarks to the law enforcement conference, as prepared for delivery appear below:
“Thank you, Mary Lou Leary, for those kind words – and thank you all for being here today. I’d particularly like to thank Director Denise O’Donnell, Deputy Director Kristen Mahoney, and their colleagues from the Bureau of Justice Assistance – as well as Acting Director of the Office of National Drug Control Policy Michael Botticelli, Administrator Michele Leonhart, Deputy Assistant Administrator Joe Rannazzisi, and the dedicated men and women of the Drug Enforcement Administration – for bringing us together this morning. And I want to recognize all of the distinguished panelists – representing fields ranging from law enforcement, to public policy, to public health and drug treatment – who have taken the time to lend their voices to this important discussion. Every day, you stand on the front lines of our fight to confront an urgent – and growing – threat to our nation and its citizens. And we’re proud to count you as colleagues and partners.
“As the leaders in this room know all too well, in the five years between 2006 and 2010, this country witnessed a dramatic, 45-percent increase in heroin-related deaths. And 110 people die every day from overdoses, primarily driven by prescription drugs. The shocking increase in overdose deaths illustrates that addiction to heroin and other opioids, including some prescription painkillers, represents nothing less than a public health crisis. It’s also a public safety crisis. And every day, this crisis touches – and devastates – the lives of Americans from every state, in every region, and from every background and walk of life.
“That’s why this Administration, and this Department of Justice in particular, have taken aggressive steps to fight back at every point of intervention – and with every tool at our disposal. In recent years, we have worked to prevent opioid diversion and abuse by targeting the illegal supply chain, by disrupting pill mills, and by thwarting doctor-shopping attempts by drug users and distributors. We have developed innovative public health programs to educate the public, to monitor the problem, and to rigorously enforce applicable federal laws. And we have stepped up our investigatory efforts – opening more than 4,500 heroin-related investigations since 2011 and increasing the amount of heroin seized along America’s southwest border by 320 percent between 2008 and 2013.
“From our rigorous scrutiny of new pharmacy applications to prevent illicit storefront drug trafficking – to our sponsorship of “Drug Take Back” events that provide opportunities for safe and responsible prescription drug disposal – with your help and expert guidance, the department has pursued a comprehensive strategy to keep pharmaceutical controlled substances from falling into the hands of non-medical users. We can all be proud of the steps forward we’ve taken, and the considerable results we’ve achieved, over the last few years alone. But we continue to face escalating and rapidly-evolving challenges in our efforts to prevent opioid abuse and intercept illicit drugs.
“These challenges illustrate the need to preserve important law enforcement tools like Immediate Suspension Orders, which allow DEA to immediately shut down irresponsible distributors, pharmacies, and rogue pain clinics that flood the market with pills prescribed by unethical or irresponsible doctors. These Immediate Suspension Orders, or ISOs, are used to take action in instances where irresponsible behavior places the public at risk - and do so without interrupting the legitimate flow of prescription drugs or preventing patients from receiving necessary medications.
“Particularly now – at a time when our nation is facing a heroin and prescription drug abuse crisis – law enforcement tools like ISOs could not be more important. And if Congress were to take them away, or weaken our ability to use them successfully, it would severely undermine a critical component of our efforts to prevent communities and families from falling prey to dangerous drugs.
“Of course, I recognize – as you do – that we cannot prevent every individual instance of heroin or prescription painkiller abuse. And that is why, beyond these efforts, we must also take additional steps to ensure that we can respond quickly and effectively in the event of acute heroin- or prescription drug-related emergencies that are encountered in the field.
“In March, I urged local law enforcement authorities, who are often the first to respond to possible overdoses, to routinely carry naloxone – a drug that’s extremely effective at restoring breathing to a victim in the midst of a heroin or other opioid overdose. At that time, seventeen states and the District of Columbia had amended their laws to increase access to naloxone, resulting in over 10,000 overdose reversals since 2001. During one of my regular meetings with the leaders of national law enforcement organizations – many of whom I see here today – they identified the need for technical assistance so that jurisdictions with an interest in equipping officers and first responders may do so effectively. Today’s meeting fulfills that request. The result of this convening will be a set of guidelines to assist law enforcement and public health providers who wish to be equipped and trained in the use of this potentially life-saving remedy.
“In addition, this morning, I can announce that, for the first time ever, I have issued a memorandum urging federal law enforcement agencies – including the DEA, the ATF, the FBI and the U.S. Marshals Service – to review their policies and procedures to determine whether personnel within their agencies should be equipped and trained to recognize and respond to opioid overdose, including with the use of naloxone. In the coming days, I expect each of these critical agencies to determine whether and which members of their teams should be trained to use and carry naloxone in the performance of their duties.
“Although, like you, I recognize that there are numerous challenges involved in naloxone implementation – from acquisition and replenishment, to training, medical oversight and liability issues – I am confident that expanding the availability of this tool has the potential to save the lives, families, and futures of countless people across the nation. I am certain that the leaders in this room – together with our colleagues and counterparts far beyond it – possess the knowledge, the skill, and the determination to forge workable solutions to these pressing concerns. The ultimate goal of today’s conference is to harness your insights, to channel your expertise, and to mine your collective experience in order to make real and lasting progress on behalf of those who are in desperate need of our assistance. Through extensive collaboration and shared wisdom, we can overcome persistent challenges and set a new course for the future.
“So long as I have the privilege of serving as Attorney General, I am determined to keep working with you – and with leaders and stakeholders from around the country – to help break new ground, to develop new solutions, and to forge new paths to the safer, brighter, and more just futures that all Americans deserve. I want to thank each of you, once again, for your commitment to this initiative; for your devotion to this cause; and for your partnership in the considerable work that lies before us. I look forward to all that we must, and surely will, accomplish together in the months and years to come. And I wish you all a most productive conference.”
Attorney General Holder Announces Plans for Federal Law Enforcement Personnel to Begin Carrying NaloxoneRead the Press Release
WASHINGTON — In a new memorandum released Friday, Attorney General Eric Holder urged federal law enforcement agencies to identify, train and equip personnel who may interact with a victim of a heroin overdose with the drug naloxone. This latest step by the Attorney General will pave the way for certain federal agents -- such as emergency medical personnel -- to begin carrying the potentially life-saving drug known for effectively restoring breathing to a victim in the midst of a heroin or opioid overdose.
According to the most recent study, 110 Americans on average die from drug overdoses every day, outnumbering even deaths from gunshot wounds or motor vehicle crashes. More than half of these drug overdose deaths involve opioids such as heroin and prescription pain relievers. Between 2006 and 2010, heroin overdose deaths dramatically increased by 45 percent.
“The shocking increase in overdose deaths illustrates that addiction to heroin and other opioids, including some prescription painkillers, represents nothing less than a public health crisis,” said Attorney General Holder. “I am confident that expanding the availability of naloxone has the potential to save the lives, families and futures of countless people across the nation.”
The Justice Department wants federal law enforcement agencies, as well as their state and local partners, to review their policies and procedures to determine whether personnel in those agencies should be equipped and trained to recognize and respond to opioid overdose by various methods, including the use of naloxone. Seventeen states and the District of Columbia have amended their laws to increase access to naloxone, resulting in over 10,000 overdose reversals since 2001.
"The heroin and prescription painkiller epidemic knows no boundaries--anyone can be affected, and we have already lost far too many lives,” said Acting Director of the Office of National Drug Control Policy Michael Botticelli. “We have moved aggressively against this epidemic and we know that the actions of law enforcement officers at the scene of an overdose can mean the difference between life and death. Attorney General Holder's leadership in this arena will help prevent future overdose deaths and we look forward to working closely with his office and other partners to get naloxone to law enforcement professionals across the nation."
As the department continues to address escalating and rapidly-evolving challenges that lead to opioid abuse and drug trafficking, the Attorney General cautioned members of Congress to protect critical enforcement tools like Immediate Suspension Orders (ISOs). A recently passed House bill would “severely undermine” a critical component of our efforts to prevent communities and families from falling prey to dangerous drugs.
The Attorney General announced the new memorandum at a day-long conference on law enforcement and naloxone convened by the Justice Department’s Bureau of Justice Assistance in partnership with the Drug Enforcement Administration, the Office of Community Oriented Policing Services and the Office of National Drug Control Policy. Today’s announcement follows up on the Attorney General’s call to action in March, when he urged local law enforcement authorities, who are often the first to respond to possible overdoses, to routinely carry naloxone.
The Attorney General’s full remarks to the law enforcement conference, as prepared for delivery appear below:
“Thank you, Mary Lou Leary, for those kind words – and thank you all for being here today. I’d particularly like to thank Director Denise O’Donnell, Deputy Director Kristen Mahoney, and their colleagues from the Bureau of Justice Assistance – as well as Acting Director of the Office of National Drug Control Policy Michael Botticelli, Administrator Michele Leonhart, Deputy Assistant Administrator Joe Rannazzisi, and the dedicated men and women of the Drug Enforcement Administration – for bringing us together this morning. And I want to recognize all of the distinguished panelists – representing fields ranging from law enforcement, to public policy, to public health and drug treatment – who have taken the time to lend their voices to this important discussion. Every day, you stand on the front lines of our fight to confront an urgent – and growing – threat to our nation and its citizens. And we’re proud to count you as colleagues and partners.
“As the leaders in this room know all too well, in the five years between 2006 and 2010, this country witnessed a dramatic, 45-percent increase in heroin-related deaths. And 110 people die every day from overdoses, primarily driven by prescription drugs. The shocking increase in overdose deaths illustrates that addiction to heroin and other opioids, including some prescription painkillers, represents nothing less than a public health crisis. It’s also a public safety crisis. And every day, this crisis touches – and devastates – the lives of Americans from every state, in every region, and from every background and walk of life.
“That’s why this Administration, and this Department of Justice in particular, have taken aggressive steps to fight back at every point of intervention – and with every tool at our disposal. In recent years, we have worked to prevent opioid diversion and abuse by targeting the illegal supply chain, by disrupting pill mills, and by thwarting doctor-shopping attempts by drug users and distributors. We have developed innovative public health programs to educate the public, to monitor the problem, and to rigorously enforce applicable federal laws. And we have stepped up our investigatory efforts – opening more than 4,500 heroin-related investigations since 2011 and increasing the amount of heroin seized along America’s southwest border by 320 percent between 2008 and 2013.
“From our rigorous scrutiny of new pharmacy applications to prevent illicit storefront drug trafficking – to our sponsorship of “Drug Take Back” events that provide opportunities for safe and responsible prescription drug disposal – with your help and expert guidance, the department has pursued a comprehensive strategy to keep pharmaceutical controlled substances from falling into the hands of non-medical users. We can all be proud of the steps forward we’ve taken, and the considerable results we’ve achieved, over the last few years alone. But we continue to face escalating and rapidly-evolving challenges in our efforts to prevent opioid abuse and intercept illicit drugs.
“These challenges illustrate the need to preserve important law enforcement tools like Immediate Suspension Orders, which allow DEA to immediately shut down irresponsible distributors, pharmacies, and rogue pain clinics that flood the market with pills prescribed by unethical or irresponsible doctors. These Immediate Suspension Orders, or ISOs, are used to take action in instances where irresponsible behavior places the public at risk - and do so without interrupting the legitimate flow of prescription drugs or preventing patients from receiving necessary medications.
“Particularly now – at a time when our nation is facing a heroin and prescription drug abuse crisis – law enforcement tools like ISOs could not be more important. And if Congress were to take them away, or weaken our ability to use them successfully, it would severely undermine a critical component of our efforts to prevent communities and families from falling prey to dangerous drugs.
“Of course, I recognize – as you do – that we cannot prevent every individual instance of heroin or prescription painkiller abuse. And that is why, beyond these efforts, we must also take additional steps to ensure that we can respond quickly and effectively in the event of acute heroin- or prescription drug-related emergencies that are encountered in the field.
“In March, I urged local law enforcement authorities, who are often the first to respond to possible overdoses, to routinely carry naloxone – a drug that’s extremely effective at restoring breathing to a victim in the midst of a heroin or other opioid overdose. At that time, seventeen states and the District of Columbia had amended their laws to increase access to naloxone, resulting in over 10,000 overdose reversals since 2001. During one of my regular meetings with the leaders of national law enforcement organizations – many of whom I see here today – they identified the need for technical assistance so that jurisdictions with an interest in equipping officers and first responders may do so effectively. Today’s meeting fulfills that request. The result of this convening will be a set of guidelines to assist law enforcement and public health providers who wish to be equipped and trained in the use of this potentially life-saving remedy.
“In addition, this morning, I can announce that, for the first time ever, I have issued a memorandum urging federal law enforcement agencies – including the DEA, the ATF, the FBI and the U.S. Marshals Service – to review their policies and procedures to determine whether personnel within their agencies should be equipped and trained to recognize and respond to opioid overdose, including with the use of naloxone. In the coming days, I expect each of these critical agencies to determine whether and which members of their teams should be trained to use and carry naloxone in the performance of their duties.
“Although, like you, I recognize that there are numerous challenges involved in naloxone implementation – from acquisition and replenishment, to training, medical oversight and liability issues – I am confident that expanding the availability of this tool has the potential to save the lives, families, and futures of countless people across the nation. I am certain that the leaders in this room – together with our colleagues and counterparts far beyond it – possess the knowledge, the skill, and the determination to forge workable solutions to these pressing concerns. The ultimate goal of today’s conference is to harness your insights, to channel your expertise, and to mine your collective experience in order to make real and lasting progress on behalf of those who are in desperate need of our assistance. Through extensive collaboration and shared wisdom, we can overcome persistent challenges and set a new course for the future.
“So long as I have the privilege of serving as Attorney General, I am determined to keep working with you – and with leaders and stakeholders from around the country – to help break new ground, to develop new solutions, and to forge new paths to the safer, brighter, and more just futures that all Americans deserve. I want to thank each of you, once again, for your commitment to this initiative; for your devotion to this cause; and for your partnership in the considerable work that lies before us. I look forward to all that we must, and surely will, accomplish together in the months and years to come. And I wish you all a most productive conference.”
Bay Area Prescription Drug Abuse Summit
VIDEO: Beyond the Headlines: Prescription Drug Abuse - ABC7 News
Atlanta-Area Woman Charged for Operating $4.8 Million Fraud That Involved Nearly 1,000 People from Northeast OhioRead the Press Release
An Atlanta-area woman was charged in a two-count criminal information for operating a $4.8 million fraud conspiracy involving nearly 1,000 people who resided in Northeast Ohio, said Steven M. Dettelbach and Kathy Enstrom, IRS-Criminal Investigation Special Agent in Charge.
Zinara M. Highsmith, 35, of Fayetteville, Georgia, was charged with one count of conspiracy to commit wire fraud and one count of wire fraud. She is accused of filing approximately 2,750 false tax returns containing false refund claims of more than $4.8 million.
Approximately 964 false claims were made on behalf of people living in Northeast Ohio, resulting in false claims of nearly $1.7 million, according to the information.
“This defendant took advantage of programs designed to give people a hand up and instead used them to make herself rich,” Dettelbach said.
“The American tax system is designed to provide vital government services to our people. It is not a slush fund for thieves and fraudsters,” Enstrom said. “IRS will vigorously pursue those who illegally target our nation’s tax dollars for personal financial gain.”
Highsmith formed the Atlanta-based tax-preparation business WE XL LLC in 2010. From March 2011 through July 2011, Highsmith partnered with a minister in Arkansas – identified in the charges only as Minister ADM – in a scheme to file false tax returns.
Minister ADM’s role in the scheme was to recruit and obtain personal identification information from claimants and to provide that information to Highsmith, who was responsible for the preparation of the false returns. Minister ADM did this in large part by inducing other ministers and church leaders in various states, including Ohio, to solicit members of their congregations to apply for benefits under the so-called government stimulus program, according to the information.
Some of the claimants were residents of Northeast Ohio who provided their personal identification information to a pastor in Canton, Ohio, and to a relative of the Canton pastor. They, in turn, forwarded the information to Minister ADM, according to the information.
As instructed by Minister ADM, the claimants were told they could receive their “stimulus” payment by direct deposit or on a debit card. ADM told pastors to request a $50 “donation” from each claimant, according to the information.
ADM, in turn, forwarded the claimants’ personal identification information to Highsmith to use in preparing false tax returns. Highsmith never had any contact with a claimant or any of the other pastors used by ADM to recruit or enlist claimants, according to the information.
Highsmith instructed associates how to prepare false income tax returns using Turbo Tax software, which they did by reporting false occupations and wage income, and by falsely claiming a variety of tax credits, including the AOC Education Credit, the Making Work Pay Credit and the Earned Income Credit, according to the information.
All of the returns requested that $125 be deposited into a bank account controlled by ADM and $275 be deposited into a bank account controlled by Highsmith, according to the information.
Based on the false claims, the IRS issued refunds totaling more than $3.9 million, with more than $500,000 from those refunds going to bank accounts controlled by Highsmith, according to the information.
This case is being prosecuted by Assistant U.S. Attorney Justin J. Roberts following an investigation by the Internal Revenue Service.
If convicted, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Activity for July 31, 2014Read the Press Release
Burlington, Wyoming Man Convicted for Bank Fraud
U.S. Attorney Christopher A. Crofts announced today that Burlington, Wyoming resident Marvin Iverson has been convicted in federal court. Iverson was charged in a Superseding Indictment on March 21, 2013, for violating 18 U.S.C. § 1344, bank fraud. A jury found Iverson guilty after a three-day jury trial in the U.S. District Court in Cheyenne. Iverson executed a scheme to defraud federally insured financial institutions (including Big Horn County Savings Bank) by passing checks on a closed account to pay off large debts. Iverson is scheduled to be sentenced by Federal District Court Judge Alan B. Johnson on October 8, 2014.
The investigation in this case was conducted by the Federal Bureau of Investigation, assisted by the Big Horn County Sheriff and Cody Police Department.
Wednesday 30 July 2014
two Men Sentenced to 15 1/2 Years and 8 Years in Prison for Armed Robbery of Milwaukee Grocery StoreRead the Press Release
United States Attorney James L. Santelle announced today that Joshua Mueller, age 23, was sentenced on July 30, 2014, to 186 months (15 ½ years) of imprisonment, followed by 5 years of supervised release for his involvement in the January 28, 2014 armed robbery of Mother’s Foods (formerly Magic Foods) in Milwaukee. The sentence was the result of Mueller’s guilty plea to one count of interference with commerce by robbery pursuant to the Hobbs Act and one count of discharging a firearm in furtherance of a crime of violence. Co-defendant Sedrick Brown, age 27, was sentenced on July 29, 2014, to 96 months (8 years) of imprisonment after his guilty plea to one count of aiding and abetting the discharge of a firearm in furtherance of a crime of violence. Co-defendant Steven Bugni remains a fugitive.
The investigation revealed that on January 28, 2014, defendants Mueller and Bugni, both armed with firearms, stole U.S. currency from the Mother’s Foods store at 2879 N. 16th Street in Milwaukee, Wisconsin. Brown served as a lookout. During the robbery, Mueller shot a store employee in the leg, causing life-threatening bodily injury.
At the sentencing hearing, one victim spoke regarding the effect of the robbery on himself, the other store employees, and the business. He mentioned that several customers were in the store at the time of the robbery, including two young children.
The Hobbs Act, passed by Congress in 1946, provides federal jurisdiction for cases involving violent, habitual criminals who commit armed robbery of businesses involved in interstate commerce. Federal prosecution of these offenders is sometimes beneficial since the penalties may be tougher than under state law. To that end, the U.S. Attorney’s Office and its County Attorney partners are working together to ensure that violent offenders are effectively prosecuted, making our communities safer for all.
This matter was investigated by the Federal Bureau of Investigation and the Milwaukee Police Department. It was prosecuted by Assistant United States Attorney Margaret B. Honrath.
Two Sons of Woman Linked to Mexican Drug Cartel Plead Guilty to Federal Drug ConspiracyRead the Press Release
Little Rock – Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, along with David T. Resch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI) announced that two men with ties to the Gulf Cartel have pleaded guilty for their roles in a conspiracy to transport cocaine from Mexico to Little Rock for distribution in the Central Arkansas area. Mohammed Kazam Martinez, a/k/a “Mo,” pleaded guilty earlier today before the Honorable Susan Webber Wright to conspiring to possess with intent to distribute 5 kilograms or more of cocaine hydrochloride. Martinez’s brother, Homar Martinez, was indicted in the same case - along with sixteen (16) other defendants - and pleaded guilty to the same charge on Monday, July 28, 2014, in the Southern District of Texas (SDTX), where he is being held by the United States Marshal Service in Brownsville, Texas, on a separate federal drug case. As a result of their pleas, both men face a sentence of not less than 10 years to life imprisonment.
Mohammed and Homar Martinez are the sons of Idalia Ramos Rangel, a/k/a La Tia or Big Momma, a known close associate of high-ranking members of the Gulf Cartel, who directs a drug trafficking organization based in Matamoros, Mexico. That organization is responsible for the distribution of multiple hundreds of kilograms of cocaine in the United States. According to the indictment, Mohammed Martinez was a federal inmate in the Bureau of Prisons when he recruited inmates in the Federal Correctional Complex at Forrest City, Arkansas, to distribute Rangel’s Gulf Cartel cocaine upon their release from prison. Mohammed Martinez communicated with members of the drug trafficking organization using the prison telephone and e-mail systems to coordinate the distribution of cocaine to, and the collection of drug proceeds from, former federal inmates and others, including Homar Martinez and other members of Rangel’s family.
The investigation was conducted by the FBI, with substantial assistance from the Federal Bureau of Prisons and the Little Rock Police Department. The case is being prosecuted by Assistant United States Attorneys Michael Gordon and Chris Givens.
Two More Defendants Plead Guilty in Identity Theft Fraud Scheme Involving Personal Identifying Information from AT&T Customer FilesRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Donnell Young, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Jacqueline Nicole Lee Warrick, 26, of Miami, and Tracy Delva, 27, of Deerfield Beach, pled guilty today for their participation in a conspiracy to unjustly enrich themselves by stealing personal identifying information and using the information to make unauthorized wire transfers from the victims’ bank accounts and obtain unauthorized credit or debit cards.
Specifically, Warrick and Delva each pled guilty today to one count of using an authorized access device and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1029(a)(2) and 1028A. Sentencing for both defendants is scheduled for October 15, 2014, before U.S. District Court Judge Marcia G. Cooke.
Co-defendant Chouman Emily Syrilien, 25, of Lauderdale Lakes, pled guilty on May 19, 2014, to one count of possession of 15 or more unauthorized access devices and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1029(a)(3) and 1028A. Syrilien’s sentencing is scheduled for August 6, 2014, at 1:30 p.m.
Co-defendant Carlos Antonio Alexander, 24, of Orlando, pled guilty on July 16, 2014 to one count of using an unauthorized access device and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1029(a)(2) and 1028A. Alexander’s sentencing is scheduled for October 1, 2014, at 10:00 a.m.
Co-defendant Angel Arcos, 23, of Pompano Beach, pled guilty on May 15, 2014 to one count conspiracy to commit bank fraud, in violation of Title 18, United States Code, Section 1349. Arcos’ sentencing is scheduled for September 3, 2014, at 2:00 p.m.
Change of plea hearings are scheduled on September 3, 2014 for Monique Smith, 31, of Pompano Beach, and Shantegra La’Shae Godfrey, 23, of Deerfield Beach.
Trial is scheduled on September 22, 2014 for Arrington Basil Segu, 28, of Miami.
According to court documents, defendant Syrilien was employed by Interactive Response Technologies, Inc. (IRT) located in Margate. IRT provides staffing for call centers to handle direct sales and customer inquiries for AT&T. Syrilien unlawfully provided a co-conspirator with the personal identifying information from multiple AT&T customer files. Defendant Segu also unlawfully provided personal identifying information of numerous individuals to the co-conspirator.
Defendants Alexander, Delva, Godfrey, Smith and Warrick were added as “authorized users” on victims’ credit or debit card accounts or bank accounts to access the accounts of persons whose personal identifying information had been stolen. Once a co-conspirator’s name was added as an “authorized user,” the bank and/or credit card company was directed to mail additional debit or credit cards bearing the names of these newly added “authorized users” to their addresses or addresses under their control, all without the true account holder's knowledge or consent. The defendants used these credit and debit cards to make purchases or obtain money.
Defendants Delva and Warrick both utilized fraudulently obtained debit and credit cards that bore their names as additional “authorized users” on victims’ accounts to make both retail purchases as well as cash advances in excess of $28,000. Defendants Alexander, Smith and Godfrey each made both retail purchases as well as cash advances in excess of $24,000, $12,000 and $8,200, respectively.
Defendant Arcos allowed his personal information to be used to open a bank account to further the fraudulent activity. From September 16 to 18, 2013, five withdrawals totaling $13,000, were made from the fraudulent account and deposited into Arcos’ checking account.
The defendants face a maximum of thirty years in prison for the conspiracy charge, a maximum of ten years in prison for the access device fraud charge, and a mandatory term of two years in prison for the aggravated identity theft charge.
Mr. Ferrer commended the investigative efforts of IRS-CI and FBI. The case is being prosecuted by Assistant U.S. Attorney Cynthia R. Wood.
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.
Two Mexican Nationals Indicted for Illegally Re-entering U.S.Read the Press Release
BIRMINGHAM -- A federal grand jury today indicted two Mexican nationals for illegally re-entering the United States after previously having been deported, announced U.S. Attorney Joyce White Vance and U.S. Immigration and Customs Enforcement's Enforcement and Removal Operations Field Office Director David Rivera.
Separate indictments filed in U.S. District Court charge JOSE ANIVAL-RIVERA, 29, and JOSE ADAN PAVON-RODRIGUEZ, 33, with being in the United States illegally, having previously been removed following a felony conviction. Anival-Rivera was living in Decatur, and Pavon-Rodriguez was living in Oxford.
Anival-Rivera, also known as Jose Anibal-Rivera, Paulino Balderas, and Wan Camacho, was deported in March 2011, and again in January 2013, February 2013, and July 2013, after a felony conviction, according to his indictment. Pavon-Rodriguez was deported in December 2011, and again in August 2013, following an aggravated felony conviction, according to his indictment. Neither indictment states the nature of the prior convictions.
The maximum prison sentence for illegal re-entry following a felony conviction is 10 years. The maximum for illegal re-entry following an aggravated felony conviction is 20 years.
ICE ERO investigated both cases. Assistant U.S. Attorney Erica Williamson Barnes is prosecuting Anival-Rivera. Assistant U.S. Attorney Daniel M. Murdock is prosecuting Pavon-Rodriguez.
The public is reminded that an indictment is only a charge. A defendant is presumed innocent unless and until proven guilty.
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Two Convicted of Distributing MethamphetamineRead the Press Release
McALLEN, Texas – Francisco Calderon, 27, and Jorge Alejandro Galvan-Ibarra, 30, have entered a guilty plea to possession with intent to distribute more than one kilogram of methamphetamine, announced United States Attorney Kenneth Magidson. Calderon entered his plea just a short time ago, while Galvan-Ibarra pleaded yesterday.
Calderon, a naturalized citizen originally from Mexico residing in McAllen, and Galvan-Ibarra, an illegal alien residing in the Dallas area, were arrested June 3, 2014, as they attempted to distribute the methamphetamine.
Calderon brokered the transaction out of McAllen, while Galvan-Ibarra was to deliver the drugs in Dallas.
Prior to the June 2014 arrest, Calderon admitted to negotiating two additional transactions totaling more than 500 grams of methamphetamine. Galvan-Ibarra handled the delivery of the methamphetamine in one of the transactions.
U.S. District Judge Micaela Alvarez, who accepted the pleas, has set sentencing for Oct. 22, 2014. At that time, they face a minimum o f10 years and up to life in federal prison as well as a possible $10 million fine. Both were ordered to remain in custody pending that hearing.
The charges are the result of an Organized Crime Drug Enforcement Task Force investigation dubbed Operation Sword Fight conducted by the Drug Enforcement Administration, Homeland Security Investigations and FBI. Assistant United States Attorney Juan F. Alanis is prosecuting.Three Sent to Prison in Massive Stash House CaseRead the Press Release
HOUSTON – Three of the five men arrested in connection with the March discovery of more than 100 illegal aliens in an area stash house have been ordered to federal prison, announced United States Attorney Kenneth Magidson along with Brian Moskowitz, special agent in charge of Homeland Security Investigations (HSI). Jonathan Solorzano-Tavila, 30, Jose Cesmas-Borja, 26, and Eugenio Sesmas-Borja, 20, pleaded guilty just one month after their arrest as did Jose Aviles-Villa, 32, and Antonio Barruquet-Hildeberta, 46. All are from Michoacan, Mexico.
They were all convicted of conspiracy to harbor and transport ilegal aliens and use of a firearm during and in relation to a crime of violence.
Today, U.S. District Judge Lee Rosenthal, handed Solorzano-Tavila, Sesmas-Borja and Cesmas-Borja respective sentences of 60, 54 and 51 months in federal prison for the conspiracy charge. Each were also ordered to serve consecutive 60-month sentences for the use of a firearm, resulting in total sentences ranging from 120 to 111 months in prison. As illegal aliens, they are all expected to face deportation proceedings following release from prison. Aviles-Villa and Barruquet-Hildeberta will be sentenced Sept. 4, 2014.
The five men were arrested March 19, 2014. On that date, 115 illegal aliens were discovered in a stash house on Almeda School Road in Houston.
The convicted smugglers admitted they obtained substantial profits as a result of the conspiracy. They had established networks who brought the aliens into the U.S. illegally across the Southwest border. The illegal aliens were then held in stash houses while the smugglers arranged payment of remaining smuggling fees from their families.
While in the stash house, the conspirators seized the victim aliens’ clothes, shoes, phones and other possessions. The conspirators used guns, paddles, tasers and other equipment to control and prevent the illegal aliens from escaping from the stash house. They guarded the aliens with guns displayed in plain view and threatened to kill them by shooting them in the back of the head if they tried to escape.
In one specific instance, the conspirators contacted the mother of one of the stashed aliens and told her to pay an additional $13,000 for the victim and her two children. She was advised that if she did not pay, they would “make her family disappear and make her family pay.”
They will all remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The case was investigated by HSI with the assistance of the Houston Police Department. Assistant United States Attorney (AUSA) Julie Searle and Special AUSA Rick Bennett are prosecuting.
Three Insurance Agents Sentenced in Manhattan Federal Court for Elaborate Multimillion-Dollar Life Insurance SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MICHAEL BINDAY, the president and owner of a Scarsdale-based insurance agency, JAMES KEVIN KERGIL, an insurance agent based in Peekskill, New York, and MARK RESNICK, an insurance agent based in Orlando, Florida, were sentenced today to prison terms of 12 years, nine years, and six years, respectively, for their involvement in a massive scheme to defraud life insurance companies in connection with the issuance of stranger-originated life insurance (“STOLI”) policies. BINDAY, KERGIL, and RESNICK were found guilty of mail fraud, wire fraud, and conspiracy to commit mail and wire fraud in October 2013, following a 12-day jury trial before U.S. District Judge Colleen McMahon, who also imposed today’s sentences. KERGIL and RESNICK were also found guilty of conspiring to obstruct justice.
Manhattan U.S. Attorney Preet Bharara said: “For several years, the defendants carried out an elaborate scheme to deceive life insurance providers and trick them into issuing policies for unintended beneficiaries. Based on the defendants’ web of lies, the insurance companies were misled to believe they were issuing policies for wealthy senior citizens when in reality, those seniors were straw applicants who had no ability to pay the premiums and had been recruited by the defendants who were seeking big commissions for themselves. The defendants now will have to forfeit the proceeds of their scheme and, more importantly, their liberty.”
According to the evidence at trial, documents filed in Manhattan federal court, and statements made at today’s sentencing and other court proceedings:
BINDAY ran a business in Scarsdale, New York called R. Binday Plans and Concepts, Ltd. (“R. Binday”). R. Binday purported to be a general agency that secured high face-value life insurance policies for wealthy “clients.” In truth, from 2006 through early 2009, BINDAY and his company were engaged almost exclusively in procuring STOLI policies – policies on the lives of seniors for the benefit of investors who were strangers to them – by means of false and fraudulent applications.
The various life insurance companies on whose behalf R. Binday claimed to act as agent (the “Insurers”) expressly prohibited their agents from soliciting and submitting STOLI business. In pricing and underwriting universal life insurance, the Insurers relied on the basic premise that the people applying for the policies – rather than professional investors – were the ones seeking and planning to pay for these high-face-value policies. These assumptions permitted the Insurers to offer lower prices than they could have without the assumptions. Accordingly, the Insurers asked questions on their universal life applications specifically designed to identify STOLI policies and to prevent such policies from being issued. The Insurers also required their agents to certify that all information in the life insurance applications – including the answers to these questions and the applicants’ financial information – was accurate.
BINDAY, with the help of R. Binday office workers and independent insurance agents, including KERGIL and RESNICK, prepared and submitted applications for life insurance that were riddled with lies to conceal from the Insurers that the applications were for STOLI policies and to trick the Insurers into issuing those policies. The insurance applications were designed to falsely make it appear to the Insurers that the senior citizens purportedly applying for life insurance were wealthy individuals who wanted insurance for their “estate planning” needs. In fact, unbeknownst to the Insurers, most of the seniors could not possibly afford these policies, and the financial information included in the applications was completely fabricated. In reality, the seniors were people of modest means who had been recruited by the defendants to serve as straw insureds so that investors could insure the seniors’ lives, pay the premiums until death, and then reap what BINDAY and his associates had projected would be massive profits – at the expense of the Insurers. Yet BINDAY, KERGIL, RESNICK, and others certified to the Insurers, over and over, that these were not applications for STOLI policies, and that the information on the applications was accurate to the best of their knowledge.
In addition to preparing and submitting blatantly false insurance applications, BINDAY, KERGIL, and RESNICK supported their fraud with bogus back-up documentation and supposedly “independent” verification papers, all predicated on false financial figures and other lies. And once a policy had been issued based on these falsehoods, the defendants arranged elaborate bank transactions to create the false impression that the seniors – rather than investors – were the ones paying the premiums on the policies. The defendants also instructed insureds to refuse to speak to Insurer representatives and, if conversation could not be avoided, to lie.
For every stealth STOLI policy issued, the Insurers paid out a substantial commission, usually in the six figures. The defendants split these commissions with the investors on whose behalf they were secretly operating, generally pocketing about half for themselves. Collectively, the defendants made millions in commissions over just a few years from their fraudulent STOLI applications.
To cover up and perpetuate their fraud, the defendants lied to governmental authorities and conspired to destroy evidence. First, in 2009, during sworn testimony before the New York State Insurance Department, BINDAY falsely claimed he was not involved in procuring STOLI policies and that he would never submit a life insurance application knowing it to be for a STOLI policy. Later, in 2010, after FBI agents approached RESNICK with questions about stealth STOLI policies he had submitted, all three defendants and another insurance agent conspired to destroy documents and electronic records related to their fraud.
In addition to their prison sentences, BINDAY, 50, of New York, New York, KERGIL, 59, of Peekskill, New York, and RESNICK, 58, of Orlando, Florida, were ordered to pay $39,308,305.63 in restitution, an amount for which they are jointly and severally liable. Additionally, BINDAY was ordered to forfeit $13,522,424.64; KERGIL was ordered to forfeit $15,623,737.64; and RESNICK was ordered to forfeit $14,315.868. Portions of the forfeiture judgments carry joint and several liability.
Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Sarah E. McCallum and Eun Young Choi are in charge of the prosecution. Assistant U.S. Attorney Paul Monteleoni is handling the forfeiture aspects of the prosecution.
Three Hudson County, New Jersey, Men Admit Racketeering Conspiracy Related to Illegal Online Gambling EnterpriseRead the Press Release
NEWARK, N.J. – Three men from Hudson County, New Jersey, today admitted conspiring with a criminal enterprise that engaged in illegal online sports betting in New Jersey and elsewhere, U.S. Attorney Paul J. Fishman announced.
Mark A. Sanzo, 56, Robert J. Scerbo, 56, and William A. Bruder, 44, all of Bayonne, New Jersey, each pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to separate informations charging them with one count of racketeering conspiracy.
According to documents filed in this case and statements made in court:
Joseph Lascala, 80, of Monroe, New Jersey, was the alleged “capo” and a made member of the Genovese family operating in northern New Jersey. He directed the criminal activities of a smaller group of associates, referred to as a crew, whose activities included illegal gambling and the collection of unlawful debt.
Joseph Graziano, 77, of Springfield, New Jersey, was the principal owner of Beteagle.com, a website located in Costa Rica and used to facilitate illegal online sports betting. Dominick J. Barone, 44, also of Springfield, New Jersey, worked with Graziano in carrying out the daily activities of the website. Both men conspired with the Genovese Crime Family of La Cosa Nostra in the operation of Beteagle. Graziano and Barone pleaded guilty on July 29, 2014, to their roles in the racketeering conspiracy, each admitting that they were associates of the Genovese Crime Family. Beteagle, through the individuals that owned, operated, and controlled it, was a “criminal enterprise” that operated in interstate and foreign commerce.Lascala’s organized crime crew and the criminal enterprise joined forces to allow traditional organized crime members and associates to use the Internet and current technology to conduct traditional organized crime by engaging in and profiting from illegal sports betting through the website. Associates of the crew were given access to Beteagle and were considered “agents.” Before the advent of computerized betting, these agents would have been referred to as “bookmakers” or “bookies.” The agents had the ability to track the “sub-agents,” or bookies, under them and the wagers placed by their bettors. The agent or sub-agent maintained a group of bettors (the “package”) and were responsible for those bettors.
To place bets online, the agent or sub-agent issued the bettor a username and password to access Beteagle. This access was not given online and no money or credits were made or transferred through the website. Associates of the crew paid out winnings or collected losses in person. If a bettor failed to pay his gambling losses, the crew used their LCN status and threats of violence to collect on these debts.The agent or sub-agent paid a fee to the website for each bettor added to a package. Barone and others made weekly collections of cash in furtherance of the scheme.
Sanzo, Scerbo, and Bruder each admitted that they conspired with the criminal enterprise to commit racketeering acts, namely, the illegal sports betting operation, and that they and their conspirators profited through this criminal venture.
In addition to Graziano and Barone, John Breheney, a/k/a “Johnny Fugazi, Fu, Johnny Fu,” 49, and Salvatore Turchio, 48, both of Little Egg Harbor, New Jersey; Patsy Pirozzi, a/k/a “Uncle Patsy,” 75, Suffern, New York; and Jose Gotay, 76, New Milford, New Jersey have pleaded guilty to their role in this racketeering conspiracy and await sentencing.
As to the remaining defendants, the charges and allegations contained in a criminal complaint sworn in May 2012 are merely accusations and they are presumed innocent unless and until proven guilty.
At sentencing, Sanzo, Scerbo and Bruder each face a maximum potential punishment of 20 years in prison and a fine of $250,000. Sentencing for Sanzo is scheduled for Sept. 19, 2014; for Scerbo, Sept. 20, 2014; and for Bruder, Nov. 13, 2014. All defendants were previously released on bail.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Bayonne Police Department, Special Investigations Unit, under the direction of Chief Drew Niekrasz; IRS-Criminal Investigation under the direction of Acting Special Agent in Charge Jonathan D. Larsen; the N.J. State Police, under the direction of Superintendent Rick Fuentes; and the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Gramiccioni, with the investigation leading to today’s guilty pleas.
The government is represented by Assistant United States Attorneys Serina M. Vash and Anthony Moscato of the New Jersey U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel:
Sanzo: Christopher L. Patella Esq., Bayonne, New Jersey
Scerbo: Thomas J. Cammarata Esq., Jersey City, New Jersey
Bruder: Daniel J. Welsh Esq., Jersey City, New JerseySanzo, Mark Information
Scerbo, Robert Information
Bruder, William InformationThirteen Rockford Area Residents Facing Federal Gun And/Or Drug ChargesRead the Press Release
ROCKFORD — Thirteen Rockford area residents are facing federal gun and/or narcotics charges, federal and local law enforcement officials announced today. The indictments stem from a year-long investigation into firearms and cocaine trafficking in the Rockford area led by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Rockford Police Department. ATF agents, together with local police and other authorities, began executing arrest warrants this morning.
Zachary T. Fardon, United States Attorney for the Northern District of Illinois, praised the teamwork of the ATF and Rockford Police Department. Mr. Fardon announced the charges with Carl J. Vasilko, Special Agent-in-Charge of ATF in Chicago, and Chet Epperson, Rockford Police Chief. Also participating in the investigation and arrests were the Belvidere Police Department, Winnebago County Sheriff’s Office and the Illinois State Police.
Ten of the thirteen defendants were arrested today; one defendant was already in custody; and one defendant was previously arraigned. Those arrested today will appear before U.S. Magistrate Judge Iain D. Johnston and will remain in federal custody pending detention hearings.
Everardo Rodriguez, 28, Oscar Pina, 38, and Gabriel Rodriguez, 38, are each charged separately with selling cocaine. Mallek Sanchez, 28, is charged alone with selling cocaine, being a felon in possession of a firearm, and possessing a firearm with an obliterated serial number. Teovonni Cunningham, 29, Darrell Reed, 26, and Michael Schaffer, 31, are all charged together with conspiring to possess and sell stolen firearms. Cunningham is also charged with possession of 21 stolen firearms and numerous rounds of stolen ammunition, with being a felon in possession of those stolen firearms and ammunition, and with selling one of the stolen firearms and the stolen ammunition. Reed is also charged with possessing and selling four of the stolen firearms.
Daniel Guajardo, 24, is charged separately with being a felon in possession of a firearm and possession of a short-barreled shotgun. Jose G. Pagan, 37, is charged alone with being a felon in possession of a firearm and possessing a firearm with an obliterated serial number. Mario A. Guerra, 33, and Rosario Pillado, 21, are each charged separately with being a felon in possession of a firearm. Sergio Cazares, 20, and Jose M. Martinez, 26, are each charged separately with possessing a firearm with an obliterated serial number.
All of the defendants are Rockford residents, except for Darrell Reed who is a resident of Byron, Ill., and Mallek Sanchez, who is a resident of Belvidere, Ill.
Each drug distribution charge carries a maximum sentence of 20 years in prison and a $1 million fine. Each charge of a felon possessing a firearm, of possessing or selling a stolen firearm, or of possessing of a short-barreled firearm carries a maximum sentence of 10 years in prison and a maximum fine of $250,000. Each charge of possessing a firearm that has an obliterated serial number carries a maximum sentence of 5 years in prison and a maximum fine of $250,000. The charge of conspiring to possess and sell stolen firearms carries a maximum sentence of 5 years in prison and a maximum fine of $250,000. Upon conviction, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant United States Attorney John G. McKenzie.
The public is reminded that an indictment contains only a charge and is not evidence of guilt. Each defendant is presumed innocent and is entitled to a fair trial at which the government will have the burden of proving guilt beyond a reasonable doubt.
Superseding Indictment Handed Down in Sex Trafficking and Transportation CaseRead the Press Release
ROCHESTER, N.Y.— U.S. Attorney William J. Hochul, Jr., announced today that a federal grand jury in Rochester, NY has returned a six-count superseding indictment charging Jodia Campbell, 32, Laree Greggs, 37, and Jennifer Miller, 26, all of Rochester, N.Y., with various felonies including conspiracy to commit sex trafficking of a minor, sex trafficking of a minor, transportation of a minor across state lines with intent that the minor engage in prostitution, and transportation of an individual across state lines with intent that the individual engage in prostitution. Conspiracy to commit sex trafficking of a minor carries a maximum penalty of life in prison and a fine of $250,000. Sex trafficking of a minor and transportation of a minor across state lines each carries a mandatory minimum penalty of 10 years in prison and a maximum of life and a fine of $250,000. Transportation of an individual across state lines carries a maximum penalty of 10 years in prison and a fine of $250,000.
Assistant U.S. Attorney Tiffany H. Lee, who is handling the case, stated that according to the complaint, in April 2013, Rochester Police began investigating the alleged prostitution of a 16 year old female from Rochester using the name “Cherry Red” on Backpage.com in Pennsylvania. The 16-year-old alleged that she was recruited by a woman named Jennifer Miller and taken to New Jersey and Pennsylvania to engage in prostitution by Jodia Campbell along with Jennifer Miller and Laree Greggs. Other individuals also alleged having been transported by Greggs, Miller and Campbell at various times, out of state, to prostitute. Investigators reviewed backpage.com ads and found contact information associated with Miller, Campbell and Greggs.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys= Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The indictment is the culmination of an investigation on the part of the FBI's Cyber Task Force, which includes the Rochester Police Department under the direction of Chief Michael Ciminelli, the Monroe County Sheriff’s Office under the direction of Chief Patrick O’Flynn and Special Agents of the Federal Bureau of Investigation.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.Statement of Manhattan U.S. Attorney Preet Bharara on the Penalties Imposed by the Court on Countrywide, Bank of America, and Rebecca Mairone for Engaging in Mortgage Fraud Totaling in Excess of One Billion DollarsRead the Press Release
“Today, Judge Rakoff imposed stiff penalties in a case brought by this Office to punish and deter the fraudulent and reckless lending activities of a financial institution leading up to the financial crisis in 2008.
On October 23, 2013, after a four-week trial, a jury sent a loud and clear message to Wall Street that this kind of conduct will not be tolerated, finding that Countrywide and its former executive, Rebecca Mairone, committed mail and wire fraud by selling thousands of toxic mortgages to Fannie Mae and Freddie Mac with lies that they were quality investments.
Today that message was reinforced through the imposition of tough civil penalties against Countrywide, Bank of America, which purchased Countrywide in 2008, and Mairone. Judge Rakoff ordered Countrywide and Bank of America to pay $1,267,491,770, based on the amount that Countrywide falsely induced the victims, Fannie Mae and Freddie Mac, to pay for fraudulently misrepresented loans and ordered Mairone to pay a civil penalty to the Government of $1,000,000. In determining the penalty amounts, the Court highlighted the egregious nature of the fraud, stating that ‘[the bank’s] HSSL [loan] process . . .was from start to finish the vehicle for a brazen fraud by the defendants, driven by a hunger for profits and oblivious to the harms thereby visited, not just on the immediate victims but also on the financial system as a whole.’
Throughout a year-long litigation and month-long trial, Bank of America claimed that the Government had no case. After the jury said otherwise, Bank of America claimed that it should pay no penalty at all, arguing that the victims were not harmed and that the bank did not profit from this massive fraud. Judge Rakoff’s opinion squarely and emphatically rejects the bank’s claims which, besides ignoring the victims’ out-of-pocket losses, also ignored that the fraudulent conduct required penalties to be paid for punitive and deterrence purposes as well.
This is the first case in which a bank or any of its executives has been found liable under FIRREA for mortgage fraud leading up to the financial crisis, and now it is the first case in which civil penalties have been imposed upon a bank or any of its executives following such a finding. The jury verdict and subsequent imposition of penalties make clear that mortgage fraud cannot be viewed as simply another cost of doing business in the financial world. This Office will continue to investigate and vigorously prosecute mortgage fraud in all of its forms using all of the civil and criminal tools at its disposal.”
U.S. v. Countrywide, et al. (Bank of America) Opinion and Order
St. Louis Man Indicted for Drug TraffickingRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a St. Louis, Mo., man was indicted by a federal grand jury today for drug trafficking after he suffered a heroin overdose in a Columbia, Mo., hotel room.
Gustavo Ruvalcaba, 43, of St. Louis, was charged in a four-count indictment returned by a federal grand jury in Jefferson City, Mo. Today’s indictment replaces a federal criminal complaint that was filed against Ruvalcaba on July 15, 2014.
Today’s indictment alleges that Ruvalcaba was in possession of heroin, crack cocaine, powder cocaine and methamphetamine, all with the intent to distribute, on July 14, 2014.
According to an affidavit filed in support of the original criminal complaint, Columbia police officers were dispatched to a room at the Super 8 Motel in response to a drug overdose. Ruvalcaba was lying on the floor and being treated by EMS and fire personnel when officers arrived.
Officers executed a search warrant for the hotel room and seized 18 grams of black tar heroin, seven grams of crack cocaine, 39 grams of powder cocaine, 13 grams of methamphetamine, drug paraphernalia and $74,525.
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 Columbia, Mo., Police Department.
Shreveport Man Pleads Guilty to Failing to Update His Sex Offender RegistrationRead the Press Release
SHREVEPORT, La. –A Shreveport man pleaded guilty on Monday for failing to register his correct address for his sex offender identification, U.S. Attorney Stephanie A. Finley announced today.
Michael Thomas Cupp, 60, of Shreveport, pleaded guilty Monday before U.S. District Judge S. Maurice Hicks, to one count of failure to update his sex offender registration. According to evidence presented at the guilty plea, starting in January 2009, Cupp listed his sex offender registration as being in Texas. However, upon investigation, it was determined that Cupp had never lived in the state. Cupp was originally convicted of forcible rape, incest, carnal knowledge of a juvenile and indecent behavior with a juvenile in State District Court in Baton Rouge in 1992. After completion of his prison sentence, he began living in Shreveport in 1998. Cupp then registered his address in Panola County (Texas) Sheriff’s Office in April of 2009, but after a compliance check of sex offenders in 2012, he was found to have been living and working continuously in Shreveport.
Cupp faces up to 10 years in prison, five years to life of supervised release and a $250,000 fine. A sentencing date of November 10, 2014 has been set.
The U.S. Marshal’s Service, Panola County Sheriff’s Office in Texas, and the Shreveport Police Department conducted the investigation. Assistant U.S. Attorney Allison D. Bushnell is prosecuting the case.
Santa Fe Man Sentenced to Seventy-Eight Months for Participating in Crack Cocaine Trafficking ConspiracyRead the Press Release
ALBUQUERQUE – Michael Jaramillo, 24, of Santa Fe, N.M., was sentenced today to 78 months in federal prison followed by four years of supervised release for his role in a cocaine base trafficking conspiracy.
Jaramillo was one of five men who were indicted in April 2013, on federal narcotics and firearms charges as the result of “Operation Rio Grande Stucco,” a DEA led investigation into an organization that allegedly manufactured and distributed cocaine base, more commonly known as “crack” or “crack cocaine,” in Bernalillo and Santa Fe Counties, N.M.
The five-count indictment charged Jaramillo and Robert Romero, 26, also of Santa Fe, and Albuquerque residents, Gabriel Mirabal, 33, Sam Eylicio, Jr., 37, and Dominic Anaya, 33, with conspiracy to distribute crack cocaine in Bernalillo and Santa Fe Counties between May 2012 and April 2013. Jaramillo also was charged with distributing crack cocaine in Santa Fe in March 2012. Romero was charged with possession of crack cocaine with intent to distribute in Santa Fe in July 2012, and with using and carrying a firearm in furtherance of a drug trafficking crime. Mirabal was charged with possessing cocaine with intent to distribute in Albuquerque in Feb. 2013.
Jaramillo entered a guilty plea on March 21, 2014, to the conspiracy count and admitted purchasing crack cocaine from two of his co-defendants and then reselling it to others.
Romero pled guilty to two drug trafficking charges and a firearms charge on May 13, 2014, under a plea agreement that requires him to be sentenced to ten years in federal prison followed by four years of supervised release. Romero remains in federal custody pending his sentencing hearing which is scheduled for Aug. 13, 2014.
Eylicio pled guilty on June 23, 2014, to participating in a cocaine base trafficking conspiracy. Under the terms of his plea agreement, Eylicio will be sentenced to 125 months in federal prison followed by four years of supervised release. Eylicio remains in federal custody pending his sentencing hearing which is scheduled for Sept. 22, 2014.
Mirabal and Anaya have entered not guilty pleas to the indictment. If convicted of the drug trafficking charges against them, each faces a maximum penalty of not less than five years or more than 40 years in prison. They remain in custody pending trial. An indictment is merely an accusation, and criminal defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Albuquerque office of the DEA and the HIDTA Region III Drug Task Force, with assistance from the 1st Judicial District Attorney’s Office, and is being prosecuted by Assistant U.S. Attorney Nicholas J. Ganjei.
The Region III Drug Task Force is comprised of officers from the New Mexico State Police, Santa Fe Police Department and the Santa Fe County Sheriff’s Office and receives support from the HIDTA – High Intensity Drug Trafficking Area – program. HIDTA is a program of the White House Office of National Drug Control Policy that provides assistance to federal, state, local, and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States.
The investigation leading to the indictment, has been designated as part of the Organized Crime Drug Enforcement Task Force (“OCDETF”) program, a nationwide Department of Justice initiative that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.
Rockville Physician Indicted for Illegally Distributing Prescription Drugs, Causing Death of A PatientRead the Press Release
Maryland Authorities Working to Identify Corrupt “Pill Mill” Medical Professionals
Greenbelt, Maryland - A federal grand jury has indicted Silviu Ziscovici, M.D., a/k/a “Dr. Z,” age 59, of Rockville, Maryland, on charges of conspiracy to distribute and distribution of controlled dangerous substances, distribution of a controlled dangerous substance resulting in death, and money laundering, in connection with his Rockville pain management practice. The indictment was returned on July 28, 2014, and unsealed today upon the arrest of the defendant.The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Assistant Director in Charge Valerie Parlave of the Federal Bureau of Investigation’s Washington Field Office; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Chief J. Thomas Manger of the Montgomery County Police Department.
“Sadly, many drug users become hooked on oxycodone with the assistance of medical professionals, then move on to even more dangerous drugs such as heroin,” said U.S. Attorney Rod J. Rosenstein. “Local, state and federal authorities in Maryland are working together to identify corrupt medical professionals who operate ‘pill mills,’ put them out of business and hold them accountable.”
“To those who practice medicine and abuse the privilege of caring for their patients by inappropriately prescribing controlled substances, DEA has a strong message for you: We will investigate you and prosecute you to the fullest extent of the law,” said Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division.
“Providing prescription drugs to people who do not need them is no different than distributing illegal street drugs,” said Assistant Director in Charge Parlave. “When abused and used outside of legitimate medical purposes, pain medications have dangerous effects on users. The FBI is committed to the pursuit of prescription drug abuse and will continue to work with our law enforcement partners to protect our community from the dangers of these crimes.”
“Physicians who exploit the trust given to them by facilitating the abuse of controlled dangerous substances are negatively impacting our entire community. IRS-Criminal Investigation will work with our law enforcement partners to insure that these individuals are held accountable for their actions and do not profit from their criminal activity,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office.
According to the indictment, Silviu Ziscovici was a physician who held a Maryland medical license. Ziscovici worked as a pain management specialist and practiced out of an office in Rockville, Maryland. As a medical doctor, Ziscovici was authorized to prescribe medicine, including controlled substances, to patients for legitimate medical purposes and in the usual course of professional practice.
The 29-count indictment alleges from at least July 2009 through June 22, 2010, Ziscovici conspired to distribute and distributed controlled dangerous substances. As part of the conspiracy, Ziscovici prescribed oxycodone, methadone, morphine, alprazolam and other controlled substances to patients without individually assessing their medical needs. As a result, the indictment alleges that Ziscovici’s office served as a “pill mill,” at which individuals paid a fee to obtain prescriptions for controlled substances without any demonstrated medical need.
The indictment alleges that a co-conspirator residing in Tennessee repeatedly provided transportation for himself and others from Tennessee to Ziscovici’s office in Rockville, to obtain prescriptions for controlled substances. According to the indictment, Ziscovici instructed the co-conspirator not to bring anyone under the age of 25, or anyone with visible “track marks” to Ziscovici’s office. The indictment alleges that, among other things, Ziscovici conducted cursory, incomplete, or no medical examination of patients, prescribed inappropriate combinations of medications, increased patients’ dosages without medical justification, and treated a large number of patients who had travelled long distances to his office in order to obtain prescriptions for highly addictive controlled substances.
The indictment alleges that Ziscovici repeatedly caused oxycodone, methadone, morphine, alprazolam and other drugs to be distributed, outside the course of professional practice and without a legitimate medical purpose. According to the indictment, on February 2, 2010, Ziscovici caused methadone to be distributed to a patient, outside the usual course of professional practice and without a legitimate medical purpose, and the patient died as a result of using the methadone.
Finally, the indictment charges that Ziscovici used the proceeds of the drug distribution to purchase a vehicle, specifically, using a check in the amount of $13,983.70 drawn on his business checking account. The indictment seeks the forfeiture of at least $651,500, which constitutes proceeds traceable to the drug distribution, as well as cash, coins and jewelry seized from Ziscovici’s bank accounts, safe deposit boxes, and from his home.
Ziscovici faces a mandatory minimum sentence of 20 years in prison, and up to life in prison, for distribution of controlled substances resulting in death; 20 years in prison for each of the 26 counts of distribution of controlled substances and for the conspiracy; and 10 years in prison for money laundering. Ziscovici had an initial appearance this afternoon in U.S. District Court in Greenbelt, and remains in custody pending a detention hearing scheduled for Friday, August 1, 2014, at 3:30 p.m.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised the DEA, FBI, IRS-CI, and Montgomery County Police Department for their work in the investigation and recognized the Virginia State Police, Knox County, Tennessee, Sheriff’s Office, and the Blount County, Tennessee Sheriff’s Office for their assistance. Mr. Rosenstein thanked Assistant United States Attorneys Arun G. Rao and Daniel C. Gardner, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
Rochester Men Indicted for Wire Fraud and Theft of United States MailRead the Press Release
ROCHESTER, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned an Indictment charging Igor Kasap, 34, and Arkadiy Kasap, 29, both of Rochester, N.Y., with conspiracy to commit wire fraud and wire fraud. The charges carry and maximum penalty of 20 years in prison and a $250,000 fine. Igor Kasap is also charged with obstruction of correspondence and theft of United States mail, both of which are punishable by five years in prison and a $250,000 fine.
Assistant U.S. Attorney Craig R. Gestring, who is handling the case, stated that according to the indictment, the defendants placed online advertisements for stolen items on eBay. In one particular case, they tried to sell a stolen pallet of Exxon-Mobil jet engine oil. During the investigation of that incident, law enforcement found over 52,000 pieces of undelivered mail in the defendant’s Gates Warehouse, several thousand of which had been opened.
The defendants will be arraigned before U.S. Magistrate Judge Jonathan W. Feldman on July 31, 2014 at 9:00 a.m. in Rochester.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The Indictment is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, Inspectors with the United States Postal Inspection Service, under the direction of Special Agent in Charge Shelly Binkowski, and Officers and Investigators of the Gates Police Department, under the direction of Chief James VanBrederodeRemarks by Assistant Attorney General John P. Carlin on Cyber-Crime at Carnegie Mellon UniversityRead the Press Release
PITTSBURGH - Thanks for that kind introduction. I’m grateful to be with you today to discuss emerging national security threats.
In particular, I’ll discuss cyber threats linked to a diverse range of dangerous cyber actors. And I’ll tell you what we in the National Security Division, at the Department of Justice, are doing to counter those threats.
I should note at the outset that this week marks a busy time for national security law. There is a lot going on in the world, all of which we are tracking closely. But I’m going to focus today on the threats associated with national security cyber issues.
Just last week, the 9/11 Commission published its reflections on the tenth anniversary of the Commission’s original report. And it specifically pointed to the growing significance of cyber threats to our Government and private sector.
In its report, the Commission noted that: “We are at September 10th levels in terms of cyber preparedness.” They added that “American companies’ most-sensitive patented technologies and intellectual property, U.S. universities’ research and development, and the nation’s defense capabilities and critical infrastructure, are all under cyber attack.”
I could not agree more.
As the Commission concluded, “One lesson of the 9/11 story is that, as a nation, Americans did not awaken to the gravity of the terrorist threat until it was too late. History may be repeating itself in the cyber realm.”
I’m particularly glad to talk about these important issues here in Pittsburgh. In a way, this brings me back to earlier days of my cybersecurity work.
I began my career as a prosecutor handling a wide range of crimes, but I have spent nearly a decade focusing on cyber issues – including as the National Coordinator of the Justice Department’s Computer Hacking and Intellectual Property, or “CHIP,” program.
Then, I had the honor of joining FBI Director Mueller as he led a critical shift. Even back then, he understood just how significant cyber threats would soon become.
Soon after arriving I was asked to prepare a speech on the FBI’s role in tackling national security cyber threats. We saw this as an important opportunity to underscore how serious the national security cyber threat was—at a time when not many people were talking about it.
It was his first major FBI speech on the national security cyber threat. Much of what the Director said that day remains true today. We warned of the particular dangers lurking in the intersection between cyber and terrorism.
But we also emphasized that terrorists are not the only ones seeking to harm us online—there are other dangerous actors out there, including nation-states. We pointed to the growing use of botnets as a way to attack networks, infect computers, and inject spyware.
We talked about the dangers of cyber espionage, including economic espionage. And we explained that the FBI was mobilizing to address these threats by collaborating with partners across the Federal Government and in the private sector.
That speech, a significant moment in the FBI’s cyber history, was delivered just a few hours east of here, at Penn State. Not just because of the balmy November weather it’s known for. But rather, as explained then, because “[m]uch of our collaboration begins in Pittsburgh—at the FBI’s Cyber Fusion Center.”
The Director said to think of that fusion center as a hub, with spokes emanating out to federal agencies, software companies, Internet service providers, merchants, and members of the financial sector.
That model was right then and it is right now.
The fusion center, and Pittsburgh generally, is the center of so much of our cybersecurity collaboration, which is critical to our efforts to disrupt cyber threats.
That is why a key theme from our time near Pittsburgh nearly seven years ago was collaboration. Back then we talked about the cooperation underway as part of Operation Bot Roast.
Through that project, the Justice Department, the FBI, the CERT Coordination Center at Carnegie Mellon, and private companies were working to identify infected computers and shut down bot-herders.
Also on that trip, we visited the National Cyber-Forensics and Training Alliance, right here in Pittsburgh. Today I came full circle. Now I am delivering a speech about cyber in Pittsburgh. And I spent this morning with the current FBI Director, Jim Comey, visiting NCFTA again.
I could scarcely have guessed back in 2007 that by today the NCFTA would have aided in successful prosecutions of more than 300 cyber criminals worldwide. Or that it would be specifically called out by the recent 9/11 Commission Report, as “a promising example of the type of cross-sector collaboration that will be needed to combat this threat.”
Returning to Pittsburgh, I am struck by just how much progress we have made in seven short years. But there is more that must be done. Our recognition of the magnitude of the cyber threat has grown over that same time.
Director Comey recently said, as the torch was passed, that Director Mueller told him he believed cyber issues would come to dominate Director Comey’s tenure just as counterterrorism had dominated his. Director Comey has continued to express FBI’s steadfast commitment to tackling cyber threats.
Just this morning as the FBI Director and I toured the NCFTA, he reiterated what he has said before, “John Dillinger couldn’t do a thousand robberies in the same day in all 50 states in his pajamas halfway around the world. That’s the challenge we now face with the Internet.”
So the threat is real, it is here, and it is not going away. But today, seven years later, our ability to detect, disrupt and deter has also improved.
Our most recent successes can be traced to the visionaries who predicted the threat years ago and laid the foundation to meet the challenge.
Take as just one example, another Pittsburgh story. A historic indictment that came right out of the Western District of Pennsylvania.
Earlier this summer, we announced unprecedented charges against five members of the Chinese military for computer hacking, economic espionage, and other offenses directed at six American victims in the U.S. nuclear power, metals and solar products industries.
What these charges allege is stealing from America’s heartland, literally and figuratively.
The charges allege that cyber thieves grabbed the hard work of companies right here in Pennsylvania. And they allege that the thieves targeted key American economic sectors, like metals and energy.
This is the true face of cyber economic espionage and of those it targets. This type of theft hurts American competitiveness by stealing what we work so hard for.
These charges against uniformed members of the Chinese military were the first of their kind. Some said they could not be brought. But this indictment alleges, with particularity, specific actions on specific days by specific actors to use their computers to steal valuable information from across our economy.
It alleges that while the men and women of our businesses spent their work-days innovating, creating, and developing strategies to compete in the global marketplace, these members of Unit 61398 spent their work days in Shanghai stealing the fruits of our labor.
It alleges that they stole information particularly beneficial to Chinese companies, and took communications that would provide competitors with key insight into the strategy and vulnerabilities of the victims.
We should not and will not stand idly by, tacitly giving permission to anyone to steal from us. We will hold accountable those who steal—no matter who they are, where they are, or whether they steal in person or through the Internet.
Because cyber crime affects us all, including those here in Pennsylvania who have suffered at the hands of cyber thieves.
While cases like the one brought here in Pittsburgh are extremely challenging, we proved that they are possible. The criminal justice system is a critical component of our nation’s cyber security strategy.
At the Justice Department, we follow the facts and evidence where they lead. Sometimes, the facts and evidence lead us to a lone hacker in the United States, or a sophisticated organized crime syndicate in Russia. And sometimes, they lead us to a uniformed member of the Chinese military.
Other times, as we recently saw, they may lead us to a foreign businessman alleged to have conspired to hack in and steal information from Boeing and other defense contractors.
Information that included more than six hundred thousand data files of sensitive information related to U.S. military aircraft and other defense matters.
And yet other times, they may lead to other types of criminals, like those investigated and prosecuted by DOJ’s Criminal Division for spyware, botnets, and similar conduct.
But, no matter where they lead, there can be no free passes because the stakes are too high. The list of threats out there is significant and it is expanding.
We have all seen the harms inflicted by state actors and criminals, and we have responded. But we know they are not the only ones interested in cyber activity.
Terrorists are also using cyberspace to further their goals. They are using it to communicate and plan. They are using it for propaganda and recruitment. And they are intent on getting to the point where they can conduct cyber attacks themselves.
That last category is a relatively new one. But we know that terrorists are looking to launch cyber attacks. They have that intent now.
Over the past few years, we have seen al-Qaeda issue calls for cyberattacks against networks such as the electric grid, comparing vulnerabilities in the United States’ critical cyber networks to the vulnerabilities in the country’s aviation system before 9/11.
If successful, terrorists could use cyber attacks to bring about economic or physical damage, or even, in extreme cases, serious injury or death.
These are serious threats. To disrupt them, we take an all-tools approach, deeply rooted in our Division’s history.
While the Pittsburgh case was the first of its kind in some ways, it was not the first charges we have brought against individuals who steal from Americans to benefit state-owned enterprises.
As just one example, in March, we successfully obtained a significant conviction against Walter Liew for economic espionage.
What Liew stole was something Americans see and use daily. Something that does not have a national security implication. Something that simply brings a profit.
Liew stole the formula for the color white from Dupont and passed it to a large Chinese state-owned company. Just this month, he was brought to justice -- sentenced to 180 months’ incarceration and ordered to pay restitution of about half a million dollars.
Our success in the cyber arena builds upon a solid foundation. But its roots go back even farther, and extend well beyond the economic espionage context.
NSD was created in response to the grave threat of terrorism.
After the devastating attacks of September 11, it became clear that the Justice Department needed to reorganize to tackle terrorism and national security threats more effectively.
We needed a single Division to integrate the work of prosecutors and law enforcement officials with intelligence attorneys and the Intelligence Community.
So, in 2006, Congress created the Department’s first new litigating division in almost half a century: NSD.
NSD works closely with partners throughout the government to ensure we leverage all available tools to combat the terrorism threat. And we’ve proven, in that context, that the criminal justice system is a vital part of our nation’s counterterrorism strategy.
Just this spring, Abu Hamza al-Masri was convicted by a jury in New York on eleven counts. He was involved in an attack in Yemen in December 1998 that resulted in the deaths of four hostages.
And he provided material support to terrorists, including al Qaeda and the Taliban.
In March, Sulaiman Abu Ghaith was convicted of conspiring to kill Americans and other terrorism charges. Abu Ghaith was the son-in-law of Usama bin Laden and a senior member of al Qaeda. He was the face and voice of al Qaeda in the days and weeks after the 9/11 attacks.
In both of these cases, it took more than a decade; but, as a result of our integrated approach to combating terrorism, we brought these men to justice.
These cases are the two most recent in a long line of successful terrorism prosecutions.
At NSD, we took the lessons we learned from counterterrorism and applied them to our work on national security cyber threats. In the face of escalating threats, we recognized the need to reorganize. To integrate.
When I was chief of staff for Director Mueller, the FBI undertook a transformation to meet the growing cyber threat—a transformation built around the type of collaboration, coordination, and cooperation that the Director discussed in his speech right here in Pennsylvania. In 2011, NSD did the same.
In late fall of 2011, ten years after 9/11, we established a review group to evaluate NSD’s existing work on national security threats and chart out a plan for the future.
Six months later, that team issued recommendations that shaped what NSD’s national security cyber program looks like today.
Most significantly, in 2012, we created and trained the National Security Cyber Specialists’ Network to focus on combating cyber threats to the national security.
This Network—known as NSCS—includes prosecutors from every U.S. Attorney’s Office around the country, along with experts from the Department’s Computer Crime and Intellectual Property Section (or “CCIPS”) and attorneys from across all parts of NSD.
Adopting the successful counterterrorism model, we now have prosecutors nationwide routinely meeting with the FBI to review intelligence and investigative files.
The creation of the NSCS Network was motivated by a desire to increase the Department’s contribution to U.S. cybersecurity efforts through criminal investigation and prosecution.
By December 2012, we made public predictions that with the establishment of the NSCS—by empowering more than a hundred prosecutors in the field working with the FBI on these cases—one would be brought.
And, in May, we made good on that promise. It is this new, integrated approach that made the Pittsburgh case possible.
As part of the creation of the NSCS, we brought prosecutors from around the country—Wisconsin, New York, and Georgia—to help NSD build this case.
We partnered with colleagues across the government, like U.S. Attorney David Hickton here in the Western District of Pennsylvania, where entities were repeatedly hit. And we worked with offices across the FBI—from California, to Oregon, to Oklahoma, and back in D.C.
Our team thought creatively. They worked collaboratively. They explored all available options for stopping this activity.
That’s how we were able to indict five members of the Third Department of the People’s Liberation Army. And now these men stand accused of cyber intrusions targeting a range of U.S. industries.
But we recognize that charges are just one tool – albeit a very effective one – in our toolbox. We are committed to working with our colleagues throughout the government to ensure we bring all tools to bear to disrupt cyber threats – both criminal and national security.
A great example is yet another Pittsburgh story. Back in June, our colleagues in the Criminal Division, the Western District of Pennsylvania, and the Bureau undertook an operation that disrupted the GameOver Zeus botnet.
This criminal threat was significant – losses attributable to the botnet were estimated to be more than $100 million. But disruption involved more than just criminal charges – it also involved civil court orders, significant information sharing, and seizures of servers in many foreign countries.
This is just one example. In the national security context, we look to the viability of sanctions, designations, diplomatic options, and other enforcement mechanisms. Through collaboration and creative thinking, our toolset continues to grow.
But we at NSD recognize that stopping attacks before they ever take place is the ultimate goal. That we will succeed when there are no more criminal charges to bring.
To that end, we also worked hard to improve cyber defenses, both in Government and with the private sector. We’ve emphasized precisely the type of collaboration that Director Mueller discussed here in Pennsylvania seven years ago.
Through the FBI’s InfraGard, the FBI works closely with companies that have been the victims of hackers.
That program, which has grown to more than 25,000 active members, continues to bring together individuals in law enforcement, government, the private sector, and academia to talk about how to protect our critical infrastructure.
Likewise, the Department of Homeland Security, the Department of Energy, and other departments and agencies routinely work closely with companies to protect critical infrastructure.
We at the Justice Department heard from such companies. And we are taking steps to respond to the concerns of the private sector.
In April, we teamed up with the Federal Trade Commission to issue a policy statement making it clear that antitrust law is not and should not be a bar to legitimate cyber security information sharing.
And in May, the Justice Department issued a white paper, which clarifies that the Stored Communications Act doesn’t ordinarily restrict network operators from sharing certain data with the Government to guard information.
This guidance will help the private sector collaborate more freely to protect itself.
All of this is just a start. Going forward, we need legislation to facilitate greater information sharing between the private sector and the government.
In conclusion, we’ve come a long way in seven years.
In Pennsylvania seven years ago, we warned that “[c]yber criminals and terrorists seek to harm our economy, our infrastructure, and our way of life.” That was true then; and it’s even more true now.
We noted that “[o]ur capabilities are strong, but they rely on key partnerships with other federal agencies, law enforcement, private industry, academia, and citizens alike.” That was true then; and it’s even more true now.
Finally, the Director of the FBI issued an imperative: “we must continue to work closely with all of you—members of the privacy sector and the academic community.”
I’m here today with a new FBI Director to reaffirm that call. Because it was true then; and, as the 9/11 Commission’s recent report makes clear, it’s even more true now.
Through charges like the ones announced in the Pittsburgh case, we at the Justice Department continue to protect Americans from being victimized through cyberspace as they were here in Pittsburgh. We need your support. Talk with us; share with us; work with us. Build trust.
Together, we can ensure that, here in America’s heartland and throughout this country, the hard work of Americans doesn’t fall prey to cyber criminals. Together, we can stay connected, and also stay safe.
Thank you for your attention. I look forward to your questions.
# # #
Ramah Navajo Man Sentenced for Aggravated Sexual Abuse of Navajo TeenagerRead the Press Release
ALBUQUERQUE – Sabastiano Coho, 23, a member of the Ramah Chapter of the Navajo Nation, was sentenced today to 50 months in federal prison followed by ten years of supervised release for his aggravated sexual abuse conviction. Coho will be required to register as a sex offender after he completes his prison sentence.
Coho was arrested in Feb. 2011, on a criminal complaint charging him with aggravated sexual abuse and subsequently indicted in March 2011. According to court filings, Coho attempted to sexually assault the victim, a 19-year-old Navajo woman, on Jan. 25, 2011, in a location within the Navajo Indian Reservation in Cibola County, N.M. Proceedings in the case were delayed as a result of competency evaluations.
On April 3, 2014, Coho pled guilty to the indictment and admitted that he attempted to engage in a sexual act, by using force, with the victim on Jan. 25, 2011.
This case was investigated by the Gallup office of the FBI and the Ramah Navajo Tribal Police Department and was prosecuted by Special Assistant U.S. Attorney David Adams.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Pound of Cocaine Gets Birmingham Man 10-Year Federal Prison SentenceRead the Press Release
TUSCALOOSA -- A federal judge on Tuesday sentenced a Birmingham man to 10 years in prison for possessing and intending to distribute about a pound of cocaine, announced U.S. Attorney Joyce White Vance and Drug Enforcement Administration Assistant Special Agent in Charge Clay A. Morris.
U.S. District Judge L. Scott Coogler varied upward from federal guidelines in sentencing BINIAM ASGHEDOM, 40, an Eritrean national, for the possession with intent to distribute cocaine. The judge found that Asghedom had played a significant role in a larger conspiracy to distribute cocaine and heroin in the Birmingham metro area.
Judge Coogler also ordered Asghedom to serve 30 years of supervised release after completing his prison term, but indicated that Asghedom would be deported to Eritrea.
A federal jury convicted Asghedom, following a two-day trial in March, for possessing and intending to distribute the pound of cocaine.
According to evidence at trial, Birmingham police stopped Asghedom for a traffic violation on Dec. 1, 2010, after federal agents had followed him from a known drug location. Asghedom was one of a number of targets of a larger DEA investigation. After obtaining Asghedom’s consent, officers searched the 2000 GMC Sierra pick-up truck he was driving and found the cocaine and $14,500. Forensic testing later revealed that the outside packaging of the cocaine had two latent fingerprints that matched Asghedom's.The DEA investigated the case, which Assistant U.S. Attorney Gregory R. Dimler prosecuted.
###Pittston Man Sentenced to Nearly Two Months in Prison for Bringing Gun into Federal BuildingRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 58-year-old Pittston resident pleaded guilty and was sentenced yesterday by U.S. Magistrate Judge Karoline Mehalchick to nearly two months in prison for unlawfully possessing and causing to be present a loaded firearm inside the William J. Nealon Federal Building in Scranton on June 5, 2014.
According to United States Attorney Peter Smith, the defendant, Jerome Vantaggi, was sentenced to time already served in prison, which totaled 55 days.
The charge against Vantaggi resulted from an investigation by the United States Marshals Service.
Vantaggi must also pay a $25 special assessment, and serve a year on supervised release. Judge Mehalchick ordered that Vantaggi may not possess a firearm while on supervised release and must undergo a mental health evaluation.
The case was prosecuted by Assistant U.S. Attorney Francis P. Sempa.
****Pennsylvania Man Sentenced to 33 Months in Prison for Role in $65 Million Stolen Identity Income Tax Refund Fraud SchemeRead the Press Release
NEWARK, N.J. – A Moscow, Pennsylvania, man was sentenced today to 33 months in prison for his role in one of the nation’s largest and longest running stolen identity refund fraud schemes ever identified, U.S. Attorney Paul J. Fishman announced today.
The scheme caused more than 8,000 fraudulent U.S. income tax returns to be filed, which sought more than $65 million in tax refunds and which resulted in losses to the United States of more than $12 million.
Michael Senatore, 44, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with conspiracy to defraud the United States and theft of government property. Judge Cecchi imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Stolen Identity Refund FraudStolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that results in more than $2 billion in losses annually to the United States Treasury. SIRF schemes generally share a number of hallmarks:
- SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico.
- SIRF perpetrators complete Form 1040 Individual Income Tax Returns using the fraudulently obtained information and falsifying wages earned, taxes withheld and other data. Perpetrators use data to make it appear that the “taxpayers” listed on the fraudulent 1040 forms are entitled to tax refunds – when in fact, the various tax withholdings indicated on the fraudulent 1040s have not been paid by the listed “taxpayers,” and no refunds are due.
- Perpetrators direct the U.S. Treasury Department to issue the refunds through checks generated by the fraudulent 1040 forms to locations they control or can access.
- With checks now in hand, SIRF perpetrators generate cash proceeds. Certain SIRF perpetrators sell refund checks at a discount to face value. In turn, the buyers then cash the checks, either themselves or using straw account holders, by cashing checks at banks or check cashing businesses or by depositing checks into bank accounts. When cashing or depositing checks, SIRF perpetrators often present false or fraudulent identification documents in the names of the “taxpayers” to whom the checks are payable.
The Investigation
Federal law enforcement agencies created a multi-agency task force in New Jersey composed of investigators from the IRS and the U.S. Postal Inspection Service, along with the U.S. Secret Service and with assistance from the Drug Enforcement Administration (New Jersey Task Force).
An investigation led by the New Jersey Task Force, with assistance from U.S. Immigration and Customs Enforcement, Homeland Security Investigations, revealed that from at least 2007, dozens of individuals in the New Jersey and New York area have been engaged in a large-scale, long-running SIRF scheme that caused more than 8,000 fraudulent 1040 forms to be filed, seeking more than $65 million in tax refunds, with more than $12 million in losses to the U.S. Treasury.
Defense Counsel: Christopher Patella Esq., Bayonne, New Jersey
Senatore and others obtained personal identifiers, such as dates of birth and Social Security numbers, belonging to Puerto Rican citizens. They used those identifiers to create fraudulent 1040 forms, which falsely reported wages purportedly earned by the “taxpayers” and taxes purportedly withheld, to create the appearance that the “taxpayers” were entitled to tax refunds. The returns were filed electronically. By tracing the specific IP addresses that submitted the electronically-filed 1040s, law enforcement officers learned that just a handful of IP addresses created many of the fraudulent 1040 forms that lead to the issuance of tax refund checks.
Conspirators purchased mail routes, that is, lists of addresses covered by a single mail carrier. Conspirators applied for refunds, inserted addresses along the mail route as the purported home addresses of the “taxpayers,” and obtained the refund checks sent to the addresses. They also applied for checks using addresses otherwise controlled by, or accessible by, certain conspirators and collected the checks after they were delivered to those addresses. During the course of the scheme, hundreds of refund checks were mailed to just a few different addresses in a few different towns, including Nutley, Somerset and Newark, New Jersey, and Shirley, New York.
After receiving the refund checks, Senatore and others caused the checks to be cashed at check cashing institutions, and then causing the proceeds to be divided among the conspirators.
During the course of the investigation, members of the task force identified certain “hot spots” of activity and intercepted more than $22 million in refund checks – that had been applied for fraudulently – before they were delivered to members of the conspiracy.
In addition to the prison term, Judge Cecchi sentenced Senatore to three years of supervised release and fined him $6,000.
U.S. Attorney Fishman praised special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; and the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl Kotowski, for the investigation.
The government is represented by Assistant U.S. Attorneys Mala Ahuja Harker, Lakshmi Srinivasan Herman, Zach Intrater and Danielle Walsman of the U.S. Attorney’s Office Criminal Division in Newark.
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Operators of Healthcare Company Convicted of Fraud and KickbacksRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced that IMEH U. EBERE, age 55, of Baton Rouge, Louisiana, and SHEILA R. HIVES, age 51, of Baker, Louisiana, have each been convicted of health care fraud offenses in connection with their roles at Golden Medical Equipment & Supply, Inc. (“Golden”), a Baton Rouge-based company that provided durable medical equipment in the Baton Rouge area since 2003.
In 2012, a federal grand jury indicted EBERE and HIVES, charging them with a variety of offenses arising out of a fraudulent scheme through which EBERE and Golden submitted false reimbursement claims to Medicare for enteral nutrition that Golden had purportedly provided to Medicare beneficiaries. Enteral nutrition is designed for individuals who suffer from health conditions that prevent food from reaching the digestive tract, therefore preventing the individuals from maintaining their weight and strength. Enteral nutrition is administered via a feeding tube.
Yesterday, on July 29, 2014, EBERE pled guilty before Chief U.S. District Judge Brian A. Jackson to conspiracy to commit health care fraud, in violation of Title 18, United States Code, Section 1349. EBERE faces up to ten (10) years in federal prison and a fine of $250,000, or twice the gross gain or gross loss derived from her offense. EBERE will also be required to forfeit the proceeds of her crime. In her plea agreement with the United States, EBERE admitted that, through her company, she submitted numerous fraudulent claims to Medicare for enteral nutrition related products that she had purportedly provided to Medicare beneficiaries, even though the beneficiaries did not have feeding tubes and therefore did not need enteral nutrition and did not qualify for it. EBERE admitted that, from September 2003 through November 2011, through Golden Medical, she submitted approximately $800,000 in enteral nutrition related claims alone. Judge Jackson scheduled EBERE’s sentencing for November 20, 2014.
On July 23, 2014, HIVES pled guilty before Chief Judge Jackson to receiving health care kickbacks, in violation of Title 18, United States Code, Section 1320a-7b(b)(1)(A). HIVES faces a maximum possible sentence of five (5) years in prison and a fine of $250,000. HIVES will also be required to forfeit the proceeds of her crime. In her plea agreement, HIVES admitted that she received illegal kickbacks from EBERE to induce HIVES to refer Medicare beneficiaries to EBERE and Golden Medical. Judge Jackson scheduled HIVES’s sentencing for November 7, 2014.
The case was investigated by the Office of Inspector General for the U.S. Department of Health and Human Services (DHH-OIG), the Federal Bureau of Investigation (FBI), and the Medicaid Fraud Control Unit of the Louisiana State Attorney General’s Office (MFCU), and was brought as part of the Medicare Fraud Strike Force, under the supervision of the United States Attorney’s Office and the Fraud Section of the Criminal Division of the U.S. Department of Justice. This case is being prosecuted by Assistant U.S. Attorney Shubhra Shivpuri, with assistance from DOJ Trial Attorney Dustin M. Davis.
Nixa Man Pleads Guilty to Producing Child PornRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today a Nixa, Mo., man has pleaded guilty in federal court to producing child pornography.
Michael John Kinney, 40, of Nixa, pleaded guilty before U.S. Magistrate Judge David P Rush on Tuesday, July 29, 2014, to one count of producing child pornography and one count of possessing child pornography. Kinney was taken into federal custody at the conclusion of yesterday’s plea hearing.
By pleading guilty, Kinney admitted that he used a minor victim to produce child pornography between Jan. 27, 2007, and Jan. 26, 2009. Kinney also admitted that he was in possession of child pornography on April 29, 2011.
Federal agents executed search warrants at Kinney’s home and business addresses and seized two laptop computers from his home. Investigators discovered 10 videos of child pornography that were made from a hidden camera in Kinney’s home and additional videos and images of child pornography, including children under the age of six engaged in acts of sexual intercourse with adults or other children. Investigators also discovered numerous images of child erotica, including a child victim in various stages of undress. Kinney must forfeit those computers to the government.
Under the terms of Kinney’s plea agreement, the government will recommend a sentence of 15 years in federal prison without parole. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Randall D. Eggert. It was investigated by the FBI, IRS-Criminal Investigation and the Christian County, Mo., Sheriff’s Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Newark Man Sentenced to More Than 18 Years in Prison for 14 Armed Robberies of New Jersey StoresRead the Press Release
NEWARK, N.J. – A Newark man was sentenced today to 225 months in prison for committing 14 armed robberies of commercial establishments throughout Union, Essex, Hudson and Bergen counties, U.S. Attorney Paul J. Fishman announced.
Jamar Darby, aka “Rhino,” 27, previously pleaded guilty to two counts of an indictment charging him with conspiracy to commit Hobbs Act robberies and with brandishing a firearm during one of those robberies. U.S. District Judge William H. Walls imposed the sentenced today in Newark federal court.
According to documents filed in this case and statements made in court:
Darby conspired with others to rob these commercial establishments:
Pao Da Terra
Newark
Dec. 29, 2012
Newark
Jan. 20, 2013
Newark Community Pharmacy
Newark
Jan. 24, 2013
Linden Stationary
Linden
Feb. 1, 2013
Delta Gas Station
Newark
Feb. 1, 2013
Shoppers Express
Belleville
Feb. 2, 2013
Krauszers
Kearny
Feb. 10, 2013
Krauszers
Bloomfield
Feb. 13, 2013
Pat’s Deli
Newark
Feb. 19, 2013
Smashburger
Paramus
March 16, 2013
Krauszers
Bloomfield
March 29, 2013
South Wood Discount Liquor
Linden
April 17, 2013
Newark Community Pharmacy
Newark
May 1, 2013
Subway Restaurant
Verona
May 20, 2013
Darby and his conspirators robbed each establishment at gunpoint, stealing cash, cigarettes and other items. In 13 of the 14 robberies, they used zip ties or duct tape to restrain their victims. During the Pat’s Deli robbery on Feb. 19, 2013, Darby and a conspirator restrained several victims with duct tape after threatening one victim with a .45 caliber semi-automatic handgun.
In addition to the prison term, Judge Walls sentenced Darby to three years of supervised release and ordered restitution $73,324.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s guilty plea. He also thanked the Belleville, Bloomfield, Kearny, Linden, Maplewood, Newark, Paramus, Verona and West Orange police departments, along with the N.J. State Police and the Essex County Prosecutor’s Office, for their work on this case.
The government is represented by Assistant U.S. Attorneys Jamari Buxton and Rahul Agarwal of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Anthony C. Mack Esq., NewarkNatchitoches Man Sentenced to 60 Months in Prison for Cocaine, Meth DistributionRead the Press Release
SHREVEPORT, La. – A Natchitoches man was sentenced last week to 60 months in prison and three years of supervised release for his part in a cocaine and methamphetamine distribution operation in parts of northwest and southwest Louisiana, U.S. Attorney Stephanie A. Finley announced.
Michael R. Casson, 38, of Natchitoches, La., was sentenced on Friday by U.S. District Court Judge Elizabeth E. Foote, for one count of conspiracy to possess with intent to distribute crack cocaine and methamphetamine. According to evidence presented at the March, 12, 2014 guilty plea, law enforcement agents investigated Casson as part of a DEA Task Force investigation into cocaine and methamphetamine trafficking in Bossier, Caddo, Natchitoches, and Vernon parishes and the state of Texas in 2012 and 2013. Agents recorded Casson and another suspect discussing drug trafficking on several occasions. Casson later set up a sale of cocaine to the suspect in April of 2013.
Casson was indicted on August 28, 2013, along with Eric Hunter, 43, of Natchitoches; Marquis Williams, 28, and Melvin Bobby Morris Jr., 25, both of Leesville, La.; and Isaiah Golston III, 42, of Shreveport. Golston was sentenced to 21 months in prison on June 12, 2014. Hunter was sentenced to 100 months in prison, and Williams was sentenced to 35 months in prison on June 13, 2014. Morris was sentenced to 20 months in prison on July 23, 2014. They were also sentenced to three years of supervised release.
“My office, along with our federal, state and local partners, is committed to keeping our communities safe and will continue to prosecute those who distribute illegal narcotics,” Finley stated. “I hope those who choose to traffic understand that there are consequences when they pollute our communities with drugs.”
The defendants were prosecuted as part of OCDETF Operation Styrofoam Cookies. The Drug Enforcement Administration investigated the case. Assistant U.S. Attorney James G. Cowles Jr. prosecuted the case.The OCDETF program 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.
Mortgage Fraud Conspirators Operating in the Charlotte Area Sentenced to PrisonRead the Press Release
CHARLOTTE, N.C. – Two defendants involved in a mortgage fraud conspiracy that targeted Charlotte-area homes were sentenced to prison late Tuesday, July 29, 2014, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Gregory D. Anderson, 47, of Kingstree, S.C. was sentenced to 15 years (180 months) in prison and his co-defendant Anthony C. Carrothers, 49, of Charlotte, was sentenced to 10 months. U.S. District Judge Max O. Cogburn, Jr. also ordered Anderson to serve three years of supervised release and Carrothers two years supervised release following their prison terms.
In August 2012, Anderson pleaded guilty to bank fraud conspiracy and bank fraud, HUD fraud, concealment of money laundering, and assaulting and causing bodily harm to a person assisting the United States. In October 2012, a federal jury found Carrothers guilty of bank fraud conspiracy and bank fraud.
U.S. Attorney Tompkins is joined in making today’s announcement by Nadine Gurley, Special Agent in Charge, Office of the Inspector General, Office of Investigation of the Department of Housing and Urban Development (HUD-OIG) and John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation, Charlotte Division.
According to filed court documents and today’s sentencing hearings, from 2006 to 2009, the defendants were involved in a mortgage fraud conspiracy that generated over $1.7 million in fraudulent loans. Court records indicate that Anderson was the operator and promoter of the scheme and facilitated the conspiracy using a network of straw buyers, real estate professionals and mortgage loan processors, among others. Court records indicate that Anderson executed the scheme by purchasing homes at inflated prices, either in his name or in the name of “straw” buyers. Straw buyers are individuals who agree to purchase targeted properties in their names in exchange for a kickback. Court records indicate that some of Anderson’s straw buyers were individuals he recruited through his temporary employment agency.
According to court records, Anderson executed the scheme by arranging with the sellers to purchase their homes at inflated prices. Then, using fraudulent documents and false information on loan applications, he caused lenders to issue loans in Anderson’s name or in the straw buyers’ names at the inflated home prices. At closing, Anderson would profit by keeping the difference between the homes’ original and inflated prices.
According to filed documents and statements made in court, the proceeds sometimes went directly to Anderson after closing on a home. Other times, the money was funneled to Anderson through the shell “remodeling companies” Anderson had created solely for the purpose of perpetuating the scheme, according to court records. Additionally, as court records reflect, Anderson used other individuals, including Carrothers, who were willing use their own bank accounts in exchange for a kickback. Court documents show that Carrothers received approximately $1,000 for each of the fraudulent transactions in which he was involved. In all, over the course of the conspiracy Anderson obtained over $647,943 and three houses from the fraudulently obtained loans. The houses have been subsequently foreclosed. Carrothers received over $8,900 in kickbacks from Anderson for his role in the conspiracy.
In pronouncing the sentence, Judge Cogburn noted that Anderson’s offenses were especially aggravated by his past criminal record and his conduct in the charged scheme including being a leader/organizer of the scheme and recklessly endangering others in his attempt to flee arrest by Charlotte-Mecklenburg Police Department Officers, several of whom were injured attempting to arrest Anderson. Judge Cogburn ordered Anderson to pay restitution in the amount of $2,189,641.28. In sentencing CSarrothers, a former Charlotte fireman, Judge Cogburn accepted a joint recommendation from the defense and the government to sentence him to a lower term based on his acceptance of responsibility and work with disabled persons after his jury conviction on two felony counts. Carrothers was also order to pay $184,344.02 in restitution and to pay a forfeiture money judgment in the amount of $62,000.
A third named defendant, Maria Mejia Herrera, 45, of Rock Hill, S.C. pleaded guilty in August 2012 to one count of bank fraud conspiracy. Herrera was one of Anderson’s straw buyers and was sentenced to one year of probation in August 2013. She was also ordered to pay $632,289 as restitution.
Anderson has been in federal custody since April 2011. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. Carrothers has been released on bond and will be ordered to self-report. Federal sentences are served without the possibility of parole.
The investigation was handled by HUD-OIG and FBI. U.S. Attorney Tompkins also thanked the Charlotte-Mecklenburg Police Department for the assistance in the case. The prosecution was handled by Assistant U.S. Attorneys Michael E. Savage and Jennifer L. Dillon, of the U.S. Attorney’s Office in Charlotte.
Mortgage Company Owner Sentenced to over 3 Years in Prison in $1.3 Million Fraud SchemeRead the Press Release
Falsified Home Buyers’ Information to Generate Fraudulent Loan Applicationsin Order to Collect Commissions, Origination and Broker’s Fees
Greenbelt, Maryland – U.S. District Judge Peter J. Messitte sentenced Shola Risikat Balogun, age 48, of Upper Marlboro, today to 37 months in prison followed by three years of supervised release for conspiring to commit wire fraud in connection with a mortgage fraud scheme that she organized and managed which resulted in over $1.352 million of actual losses to mortgage lenders. Judge Messitte also entered an order that Balogun pay restitution and forfeit $1,352,378, the amount lost by mortgage lenders.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kathy A. Michalko of the United States Secret Service, Washington Field Office; Special Agent in Charge, A. Derek Evans, of the Federal Deposit Insurance Corporation Office of Inspector General; and Special Agent in Charge Cary A. Rubenstein of the Housing and Urban Development Office of Inspector General - Office of Investigations.
According to her plea, Balogun was a licensed mortgage broker and sole proprietor of Newgate Mortgage. Balogun and others contacted individuals who wished to purchase homes. The buyers typically had moderate to low incomes, and provided the conspirators with accurate income and employment information.
The conspirators then typically inflated the buyer’s income and created bogus employment information in an effort to qualify these individuals for loans that they otherwise were unqualified to secure. In some cases, no payments were made and the property went swiftly into default. In other cases, the borrowers attempted to make mortgage payments for a period of time until they could no longer make payments. Balogun and others profited from these fraudulent transactions by collecting origination fees, commissions, yield spread premiums and broker’s fees from each loan that closed. Balogun was a leader of the scheme.
Balogun admitted that as the result of Newgate brokering at least 20 fraudulent transactions, mortgage lenders lost $1,352,378.
Emeka Udeze, age 39, of Bowie, Maryland, a licensed mortgage broker who worked at Newgate and other companies, previously pleaded guilty to his participation in this conspiracy, as well as to a separate fraud scheme. Udeze’s sentencing has not yet been scheduled.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available http://www.justice.gov/usao/md/priorities_financialfraud.html.
Today’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.
United States Attorney Rod J. Rosenstein commended the U.S. Secret Service, FDIC and HUD-OIG for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Sujit Raman, who prosecuted the case.Mississippi Man, Dwayne E. Hupp, Admits to Committing Four Bank RobberiesRead the Press Release
U.S. Attorney Kenneth Allen Polite, Jr. announced today that DWAYNE E. HUPP, age 51, a resident of Bay St. Louis, Mississippi, pled guilty before the U.S. District Judge Kurt D. Engelhardt, to four counts of bank robbery.
According to court documents, HUPP admitted that he robbed the Liberty Bank on August 6, 2013 and on September 10, 2013; and the Crescent Bank and Trust on September 4, 2013 and September 19, 2013. Documents filed in the matter reveal that the defendant was tackled by the security supervisor and the facilities manager as he exited the bank after the last robbery. HUPP was held until the New Orleans Police Department (NOPD) and the Federal Bureau of Investigation (FBI) arrived on the scene. HUPP was questioned shortly thereafter by the FBI and admitted to robbing all four banks. When shown surveillance photographs of the robbery suspect in each of the four robberies, HUPP identified himself as the person in those photographs. HUPP admitted that he was a heroin addict and would regularly travel from Bay St. Louis, Mississippi to New Orleans to obtain heroin. In order to support his habit, HUPP began to rob local banks.
The maximum penalty for bank robbery is twenty years imprisonment and a $250,000 fine. Any term of imprisonment must be followed by a term of supervised release of three years. HUPP may face a maximum of life imprisonment as a result of his two prior convictions for armed robbery in Jefferson Parish. Sentencing is scheduled for November 5, 2014 at 9:00 am.
The case was investigated by the Federal Bureau of Investigation with the invaluable assistance of New Orleans Police Department. Assistant United States Attorneys Mark A. Miller and Michael M. Simpson are prosecuting the case.
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Mexican National Trafficking Cocaine Worth over $10 Million Is Sentenced to Life in PrisonRead the Press Release
CHARLOTTE, N.C. – Today, Chief U.S. District Judge Frank D. Whitney sentenced Freddie Andaya, a/k/a “Raymond Garcia,” 42, of Mexico to serve life plus five years in prison on drug trafficking conspiracy, money laundering and gun charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Tompkins is joined in making today’s announcement by Brock D. Nicholson, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas and Sheriff Kevin L. Auten of the Rowan County Sheriff’s Office.
According to court documents and proceedings, Andaya was the leader of a drug conspiracy that operated in Mecklenburg, Iredell, Union and Rowan Counties and elsewhere between 2010 and August 2011, and trafficked more than 300 kilograms of cocaine, with a street value of over $10 million. Court records indicate that Andaya had a stash house in Concord, N.C., from which law enforcement seized 3.5 kilograms of cocaine, 62 kilogram-sized wrappers, $342,000 in cash and an AK-47 assault rifle. Law enforcement also recovered from the stash house notebook ledgers, which accounted for more than $9 million in drug transactions in just a three-month period, from April to July 2011. According to court records and today’s sentencing hearing, during the investigation law enforcement seized a total of 11 kilograms of cocaine, more than $600,000 in cash and three firearms. Also according to court records, during Andaya’s prosecution the defendant obstructed justice by threatening a co-defendant and by producing false exculpatory documents to authorities.
Andaya has been in custody since his arrest in August 2011. He was indicted on federal charges in January 2012 and pleaded guilty in March 2012 to drug trafficking conspiracy, money laundering and possession of a firearm in furtherance of drug trafficking. Andaya will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
This prosecution is part of an extensive Organized Crime Drug Enforcement Task Force (OCDETF) investigation that has resulted in the conviction of 14 defendants for cocaine trafficking, money laundering, and firearms violations. OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and it 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.
In addition to Andaya, the following prosecutions stem from the same investigation:
• Marlon Twain Scott (3:11-cr-363) – Sentenced to 120 months in prison, followed by 5 years of supervised release.
• Brandon Antowine Barnette (3:12-cr-20) – Sentenced to 37 months in prison, followed by 2 years of supervised release.
• Juan Antonio Molina-Sanchez (3:12-cr-25) – Sentenced to 57 months in prison, followed by 3 years of supervised release.
• Bautista Medrano Andaya (3:12-cr-27) – Sentenced to 210 months in prison, followed by 5 years of supervised release.
• Luis Alberto Castrejon (3:12-cr-28) – Sentenced to 180 months in prison, followed by 5 years of supervised release.
• Vonita Alberto Mondragon (3:12-cr-29) – Sentenced to 50 months in prison, followed by 2 years of supervised release.
• Freddie Delgado-Mercado (3:12-cr-31) – Sentenced to 78 months in prison, followed by 3 years of supervised release.
• Levaric Samuel Johniken (3:12-cr-34) – 168 months imprisonment followed by 5 years of supervised release.
• Eric Lewis Feimster (3:12-cr-38) – Sentenced to 108 months in prison, followed by 3 years of supervised release.
• Matthew Thomas Jones (3:12-cr-48) – Sentenced to 211 months in prison, followed by 5 years of supervised release.
• Lloyd Avery Allen (3:12-cr-88) – Sentenced to 78 months in prison, followed by 5 years of supervised release.
• Christopher Cortez Coleman (3:12-cr-140) – Sentenced to 108 months in prison, followed by 4 years of supervised release.
• Jorge Molina-Sanchez (3:12-cr-316) – Pending sentencing.The investigation was led by HSI and Rowan County Sheriff’s Office. U.S. Attorney Tompkins also thanked the Sheriff’s Offices for Cabarrus, Iredell, Union and Mecklenburg Counties and the Charlotte-Mecklenburg Police Department for their assistance with the investigation. Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte prosecuted the case.